JPE seeks use of P130-B coco levy funds for infra

The government has been urged yesterday to put into productive use coconut levy funds invested in some government corporations, including in the food and beverage giant San Miguel Corp. (SMC) which had accumulated to some P130 billion by putting these into a trust fund for relending to develop the coun-try’s antiquated infrastructure.

Senate President Juan Ponce Enrile has proposed a bill to create the special trust fund which he said can be used as capital in a loan program for infrastructure development in the country.

Interests earned from the loans, in turn, will then be used to modernize the coconut industry to benefit farmers who depend on coconut products for their families’ livelihood.

Enrile estimates that the coco levy funds had grown to about P130 billion mainly through the Coconut Industry Investment Fund (CIIF)-Oil Mills Group (OMG) block of shares in SMC as well as all other properties and assets emanating from investments using proceeds of the coco levy.

“We collected P9.6 billion in terms of coconut levy from the coconut farmers of the country and out of this, P7.1 billion was used to subsidize (the production of) coconut-based consumer products like soap, cooking oil and others. There was a balance left of P2.5 billion. This was deposited with the United Coconut Planters Bank (UCPB) under the CIIF. Some of these funds have been invested in shares of stocks of San Miguel.

I think the totality of the investment of this fund in San Miguel is 27 percent and then some are invested in the UCPB. Some were invested in Cocolife, Coconut Life Insurance Corp., in a coco-chemical plant in Batangas and in coconut oil refining plants all over the country,” Enrile noted.

“This money has grown to a very huge sum. If we liquidate it today and convert it to actual cash, the estimate is that this balance of P2.5 billion out of the P9.6 billion would now amount to about P130 billion,” he said.

Enrile made the proposal even before the Supreme Court issued a recent ruling, clearing him along with business tycoon and former Ambassador Eduardo “Danding” Cojuangco from graft charges filed against them by the government in relation to alleged behest loans granted during their stint as directors of UCPB and invesments made in the United Coconut Oil Mills Inc. (UNICOM).

The SC dismissed the government petition against Cojuangco and Enrile with a vote of six against three and said in its ruling that Enrile, Cojuangco and 16 others could no longer be prosecuted for the crime of graft and corruption as the charges against them had already prescribed.

In his proposal, Enrile called for the creation of a Coconut Farmers Trust Fund, intended to provide adequate financial protection to the coconut industry and its workers.

He said the Coconut Farmers Trust Fund will finance programs for the benefit of the coconut farmers, for increased productivity of the coconut industry, and for the development of coconut-based enterprises.

Enrile recalled that it was during the administration of former President Ferdinand Marcos that a policy for the coconut industry was set up with the creation of Philippine Coconut Authority (Philcoa).

“I was the chairman of Philcoa because I was requested by SMC chairman Eduardo Cojuangco to help him win the approval of President Marcos to set up a seed garden for the coco industry,” Enrile said.

He said the land was owned by Cojuangco but the program implemented on it was Philcoa’s and was aimed mainly at replacing the aging coconut trees of the country along with new species along with local species.

But many people started to attack the program “accusing us to have pilfered from the fund,” said Enrile. Out of frustration Marcos decided to stop the program all together.

A trust fund was then placed at United Coconut Planters’ Bank, more than 73 percent of which belong to the farmers and 27 percent belong to private individuals.

Cojuangco, he said, was made the president of that bank because he was knowledgeable in banking out of his experience with Bank of Commerce.
UCPB was one of the most profitable banks in the country before the Edsa Revolution in 1986. The bank was later sequestered by the Presidential Commission on Good Government.

After sequestration, the bank almost collapsed and has to be rescued by the Philippine Deposit Insurance Corp. (PDIC).

“They suspected that we were scoundrels. They suspected that we stole the coconut levy. Even Imelda thought that we were dissipating the cocolevy funds. I had a meeting with her at Sheraton and told her that she was mistaken on the allegations,” Enrile said.

According to Section 6 of the bill, the Trust Fund, which shall be perpetually maintained and preserved, shall be composed of the CIIF SMC Shares consisting of approximately 27 percent of the outstanding capital stock of SMC, including all accrued cash and stock dividends, including all properties or assets emanating from all coco levy recovered assets.

“The most controversial investment of the coco levy is the acquisition of the 33.133 Million common shares in San Miguel Corporation (SMC), representing 27 percent share,” Enrile said, adding that the “27 percent share, once this bill is enacted into law, will form part of the initial capital of the fund,” te senator said.

To ensure that the benefits and gains arising out of the Trust Fund directly go to, and are received by the small coconut farmers and farm workers, a Coconut Farmers Trust Fund Committee will be created for the proper administration, disposition and utilization of the earnings and incomes of the Fund of the trust fund, the bill said.

“The coco levy funds were intended to subsidize the sale of coconut-based products and to finance various coconut planting and replanting programs, research, extension and credit services programs, establishment of model plantations including the propagation of hybrids, and acquisition of coconut related industries and the operations of such industries, all for the benefit of the coconut industry in general and coconut farmers in the country in particular,” he explained. -Angie M. Rosales, Daily Tribune