Farmers urge Duterte to veto coco levy bills – not favorable to them and against Supreme Court doctrine
by Ka Efren M. Villasenor and Ka Charlie Avila
CCFOP (Confederation of Coconut Farmers’ Organizations of the Philippines)
Lopez, Quezon, 6th February 2019
They came from all over the provinces of Bicolandia and Southern Tagalog – provincial and regional elected officers of coconut farmers’ organizations – to study and to take a stand on two bills submitted to them the day before, February 1st, by the Department of Agriculture’s PCAF or Philippine Council on Agriculture and Fisheries. They stayed over in Naga City February 2 and 3 and went through what PLLO or Presidential Legislative Liaison Office Undersecretary Antonio A.Gallardo called the “enrolled bills” of the proposed coco-levy-related laws. Gallardo explained that these bills could lapse into law if not signed by President Duterte by 17th February.
For all of last year the nation witnessed an unusual, extra-constitutional, extra-legal way of making laws. The normal way, as everybody knows, is that after bills have passed both House and Senate and given final touches at a Bicameral Committee and then given back to the two chambers for final approval, they are sent to Malacañang for the President’s signature. If he approves them, they become “R.A.” or Republic Acts. If he sits on them for a period of time, even without his signature they lapse into law. Or he can veto them, and the two chambers could override the veto by two-thirds vote. Most people who have gone to school know this process.
However, the bills that came out of both law-making houses regarding the disposal of the long-controverted multi-billion-peso coco-levy funds and assets experienced an incredible on-again-off-again bicameral treatment. They (twin bills on establishing a coco trust fund and on strengthening the PCA or Philippine Coconut Authority) were submitted to Malacañang and then returned twice to the legislature in an unprecedented Legislative-Executive volleyball game. This did not deter the propaganda surrounding the “historic character” of the proposed laws from gaining intensity. The farmers were supposed to rejoice exceedingly. But they sensed that all the announcements were mere “propa,” given that no bill on coco levy utilization had yet been signed into law by Duterte.
Where are the funds?
The talk became loud among peasant leaders that the levy funds described by the Court as public trust funds, which were the subject of the proposed laws, were not intact. The unusual phenomenon we were witnessing was a government dribbling the ball some more, or volleying the ball to-and-fro to have more time to recover illegally used trust funds. We noted that the government budget deficit had soared to more than P300-billion, inexplicably. But was there any basis to the rumor? Had trust funds ever been used before, say, to balance the budget in the event of poor revenue collection? In fact, yes, in 2015: the coco levy funds were used for window dressing to cover up a P25.5-billion government collection deficit with a P62.1-billion pseudo-collection. The (then) DOF Undersecretary Beltran admitted publicly that “we got the revenues (of P62.1-billion) from the transfer of coco levy funds” that the PCGG illegally moved from the secure world of being in escrow with UCPB, DBP and the LBP, as ordered by the Supreme Court, to the vulnerable state of general public funds deposited and disguised with a new name in the Bureau of Treasury.
Senator Grace Poe had filed a resolution in the Senate to have this technical malversation investigated but meantime PCGG Chairman Andres Bautista had already become COMELEC Chairman Andres Bautista (before his wife shot him down for corruption). At that particular time, political candidates, including senators, crossed the powerful Bautista at the risk of not having their votes favorably counted.
So, today, coconut farmer leaders are asking the President, a lawyer supposedly with a heart for the farmers, to look at the case by himself, personally. He should not overly depend on his economic “experts’” reports and advice.
Advantage of the Delay – Veto and Start Anew
The delay, in any case, may not all be that bad. It has been more than bad enough to date if you look at the state of the industry and the fate of the coco farmers. And yet, farmer leaders are now convinced, especially after seeing the real “enrolled bills,” that these proposed laws should be vetoed by the President.
The proposed laws are two:
- “The Coconut Farmers and Industry Development Act” and
- “The Strengthened Philippine Coconut Authority (PCA) Law.”
In sum, the first bill seeks to create a Trust Fund out of the coco levy monies recovered from the CIIF’s (Coconut Industry Investment Fund) investment in San Miguel Corporation, with a projected augmentation of those funds from the privatization of the coco levy assets – including the CIIF Oil Mills and the United Coconut Planters Bank or UCPB.
And it is a reconstituted PCA that will supposedly manage and invest the Trust Fund Principal. The new PCA will be dominated by the government’s economic team and faithfully follow the mandate of Section 8 of the first bill that “all of the Trust Fund shall be placed only in Philippine government securities” – government bonds, a nice term for government debt.
The proposed laws will continue to dismantle the CIIF Oil Mills and get rid of the UCPB, rather than transform the CIIF Oil Mills Group into a modern, more appropriate, farmer-friendly constellation of processing plants that can function as the leading edge of an authentic coconut industry in the making.
The Supreme Court doctrine was very clear on the purpose of the funds, namely, the development of the coconut industry and the benefit of all the coconut farmers, as stated in no uncertain terms in the case we elevated to them a few years ago: : “The coconut levy funds are special funds allocated for a specific purpose and can never be used for purposes other than for the benefit of the coconut farmers or the development of the coconut industry. Any attempt to appropriate the said funds for another reason, no matter how noble or beneficial, would be struck down as unconstitutional” (G.R.No.217965, CONFED versus Pres. B.S. Aquino III et al.).
However, the laws as now proposed want to kill off the coconut industry as industry. It is quite obvious that our own processing units are starving. The CIIF Oil Mills Group is twisting in the wind with no government support although it can rise to the challenges immediately if given proper financial assistance and a visionary strong leadership. Meanwhile, new plants are being built with insufficient regulation and rationalization while others are on knee-jerk expansion mode as more products derived from coconut are coming up in the market. Past governments’ terrible neglect of so-called sequestered corporations have been cruel to coconut farmers and only understandable in the obvious bias towards privatization.
The court doctrine is anchored on recognizing the levy funds and assets as public trust with all the coconut farmers as the true beneficial owners and the development of the industry its goal. It was a long drawn-out fight on the part of the coconut farmers before they could come to this point of victory in the public trust fund doctrine. Will the court now look kindly on legislation that ignores this resolution? Of course not. To reiterate, “Any attempt to appropriate the said funds for another reason, no matter how noble or beneficial, would be struck down as unconstitutional.”
Using the Levy Funds to Pay Government Debts
President Duterte must reject the bills before him because they are just a way of using the levy funds to invest in public debt. Investing only in public debt is surely not in the best interest of the beneficial owners of the coco levy funds.
It is a terribly bad habit of government to think of government ownership of anything as in the nature of absolute rather than, at times, trust ownership. The government is not the absolute owner of the coconut levy funds, public as they are, having originated from special taxation; rather, the government is merely a trust owner and the true beneficial owners are all the coconut farmers.
The bills now before the President would entrust the coco levy funds to the Treasury, placing them only in Philippine government bonds, and the assets to the privatization agency (PMO). This ultimately means outsourcing to government completely the decision what to do with the money and who will benefit from it. This is very deceitful. The coconut farmers are being forced to give up the economic potential on their money to someone else – in fact, their participation in the proposed New PCA is classic tokenism.
We need a separate farmer-and-government-controlled Management Corporation to focus on the levy funds and assets. The PCA can remain a regulatory agency and manager of GAA Funds (not the Coconut Levy Funds and Assets.
In the Southern Luzon Assembly, the farmer leaders warned their various chapters and member organizations that if we merely give up everything to government, we would be defeating the very purpose why we are supposedly setting up a Trust fund with a specific purpose in the first place.
The coconut farmers know their interests very well. Mr. President, we urge you to veto these bills and let’s hurry slowly to get some good ones in their place – fast. FINIS
EMV/ca/February 6, 2019