EXECUTIVE ORDER NO. 313
EXECUTIVE ORDER NO. 313 -
RATIONALIZING THE USE OF THE COCONUT LEVY FUNDS BY CONSTITUTING A “FUND
FOR ASSISTANCE TO COCONUT FARMERS” AS AN IRREVOCABLE TRUST FUND AND
CREATING A COCONUT TRUST FUND COMMITTEE FOR THE MANAGEMENT THEREOF
WHEREAS,
several legislations were enacted imposing coconut levies intended to
establish funds for the support and development of the coconut industry
and for the benefit of coconut farmers;
WHEREAS, pursuant to said legislations, the United Coconut Planters
Bank as the designated Administrator of the Coconut Levy Funds under
the statutory provisions of Presidential Decree No. 755 and
Presidential Decree No. 1468, invested a portion (hereinafter referred
to as the Coconut Industry Investment Fund [“CIIF”] of the Coconut
Consumers Stabilization Fund and the Coconut Industry Development
Fund), not required to be utilized for the purposes for which said
Funds were established, in shares of stock of various corporations,
including San Miguel Corporation (“SMC”);
WHEREAS, the shares of stock in the SMC acquired through the use of the
CIIF (hereinafter referred to as the “CIIF SMC Shares”) are registered
in the names of various corporations (hereinafter referred to as the
“CIIF Holding Companies”) which are likewise owned and controlled by
the CIIF;
WHEREAS, the CIIF Holding Companies have been sequestered by the
Presidential Commission on Good Government (“PCGG”) by virtue of
Executive Order Nos. 1, 2, 14 and 14-A;
WHEREAS, by reason of the sequestration of businesses established and
the assets and properties acquired through the use of the coconut levy
funds, including the CIIF SMC Shares, such businesses, property and
assets and the CIIF SMC Shares have not been utilized for the benefit
of their intended beneficiaries;
WHEREAS, the issue of the ownership of the coconut levy funds, as well
as the businesses and assets established therewith, including the CIIF
SMC Shares, is presently pending before the Sandiganbayan in Civil Case
No. 0033, entitled “Republic of the Philippines vs. Eduardo Cojuangco,
Jr., et al.”;
WHEREAS, the Supreme Court had declared in G.R. No. 75713 that:
“The
utilization and proper management of the coconut levy funds, raised as
they were by the State’s police and taxing powers, are certainly the
concern of the Government. It cannot be denied that it was the welfare
of the entire nation that provided the prime moving factor for the
imposition of the levy. It cannot be denied that the coconut industry
is one of the major industries supporting the national economy. It is,
therefore, the State’s concern to make it a strong and secure source
not only of the livelihood of a significant segment of the population
but also of export earnings the sustained growth of which is one of the
imperatives of economic stability. The coconut levy funds are clearly
affected with public interest.” (Philippine Coconut Producers
Federation Inc. (COCOFED), et al. vs. Presidential Commission on Good
Government (PCGG), et al., G.R. No. 75713, October 2, 1989, 178 SCRA
236, 252-253).
WHEREAS, the Supreme Court, in a
Resolution issued on December 13, 1994 in G.R. No. 96073, entitled
“Republic vs. Sandiganbayan (First Division), et al.” resolved “to DENY
the Solicitor General’s (a) Urgent Motion to Resolve Legal Question on
the Character of the Coconut Levy Funds and to Declare as
Unconstitutional Sec. 5, Article III of P.D. 1468 filed in behalf of
the PCGG. Further, in its resolution of March 26, 1996 in the same
case, the Supreme Court, in considering the motion for reconsideration
filed by the Solicitor General, resolved “to DENY the Solicitor
General’s prayer to (a) declare the coconut levies collected pursuant
to various issuances as public funds; (b) declare unconstitutional
Sec. 5, Article III of P.D. 1468.”;
WHEREAS, the delay in the resolution of the aforestated issues relating
to the nature and ownership of the CIIF Investments has been inimical
to the coconut industry and the coconut farmers;
WHEREAS, to immediately address the problems besetting the coconut
industry and alleviate the socio-economic well-being of the coconut
farmers, the rationalization of the use and disposition of the coconut
levy funds, including the CIIF SMC Shares, through the creation and
establishment of a permanent trust fund to finance various programs of
assistance to the coconut farmers and the coconut industry would
effectively prevent further deterioration of the coconut industry and,
at the same time, provide relief to the continuing hardships
experienced by the coconut farmers;
NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the Republic
of the Philippines, by virtue of the powers vested in me by law, hereby
direct and order, as follows:
Section 1. Creation of the Coconut Trust Fund. —
There is hereby created an irrevocable trust fund, to be known as the
Coconut Trust Fund (hereinafter referred to as the “Trust Fund”), which
shall be capitalized, managed, utilized and accounted for in the manner
hereinafter provided.
Sec. 2. Purpose of the Fund. — The Fund shall be
established for the purpose of financing programs of assistance for the
benefit of the coconut farmers, the coconut industry, and other
agri-related programs intended to maximize food productivity, develop
business opportunities in the countryside, provide livelihood
alternatives, and promote anti-poverty programs.
Sec. 3. Capitalization of the Trust Fund. — The
CIIF SMC Shares, consisting of approximately 27% of the outstanding
capital stock of SMC, shall form the initial capital of the Trust Fund.
For this purpose, the CIIF Holding Companies, acting through the
Administrator of the coconut levy funds, shall convey the CIIF SMC
Shares to the Trustee as provided in Sec. 4 hereof, under such terms
and conditions not inconsistent with the Executive Order. The CIIF
Holding Companies, acting through the Administrator of the coconut levy
funds, shall sign, execute and deliver such documents, deeds or
contract, not inconsistent with this Executive Order, as may be
necessary or desirable to implement the provisions of this Executive
Order. Nothing in this Executive Order shall be understood to prevent
or prohibit any person, group or entity from conveying to the Trustee
any other additional properties and/or assets, which shall form part of
the Trust Fund.
In order to insure the enduring character of the Fund, the principal
thereof shall be maintained intact but may be augmented from time to
time by grants, donations and other lawful transfers by public or
private entity, the disposition of the income of which shall be
governed by the terms and conditions hereinafter specified, as well as
the rules and regulations promulgated by the Coconut Trust Fund
Committee created pursuant to Sec. 6 hereof:
(a)
The Trust Fund shall be perpetually maintained and preserved to ensure
the full implementation and realization of the objectives identified
and sought to be attained under this Executive Order;
(b) In the
event that the Trust Fund (or any portion thereof, as the case may be)
is subsequently sold, alienated or disposed of, the proceeds and
revenues arising out of and realized from such sale, alienation or
disposition:
(i)
shall be, to the extent established by the Coconut Trust Fund
Committee, used to settle in full any outstanding liability or
obligation of the Trust Fund due in favor of creditors; and
(ii) after the
settlement of obligations specified in the immediately preceding
paragraph, the remaining balance of such proceeds and revenues shall
automatically form part of the Trust Fund which remains under the
exclusive management of the Coconut Trust Fund Committee;
(c) Only the
income, interest earnings, and monetary benefits realized by and
accruing on the Trust Fund shall be used and disposed of by the Coconut
Trust Fund Committee for such purposes and endeavors specified under
the provision of this Executive Order (such income, interest earnings
and monetary benefits shall be referred to as the “Trust Income”).
The Trust Fund shall be managed and administered so as to maximize its
earnings in a prudent manner consistent with its character as a
perpetual trust.
Sec. 4. Designation of Trustee Bank. — The United
Coconut Planters Bank (UCPB), through its Trust Department, is hereby
designated as the Trustee Bank of the Trust Fund and shall: (i) manage,
utilize and account for the Trust Fund in the manner hereinafter
provided and (ii) exercise the tasks, functions and duties determined
and established by the Coconut Trust Fund Committee created under the
provisions of this Executive Order, to the extent allowed under
applicable laws.
Sec. 5. Extent of the Trust Fund. — The Trust Fund
shall be composed of the following:
(a)
the CIIF SMC Shares consisting of approximately 27% of the outstanding
capital stock of SMC; and
(b) such other
properties and/or assets, intended for the purposes herein stated, and
conveyed or transferred to the Trustee in accordance with this
Executive Order.
Sec. 6. Creation of the Coconut Trust Fund
Committee. — A Committee is hereby created to administer, manage and
supervise the operations of the Trust Fund, chaired by the President
with ten (10) members, as follows:
(a)
four (4) representatives from the government sector, two of whom shall
be the Secretary of Agriculture and the Secretary of Agrarian Reform
who shall act as Vice Chairmen;
(b) four (4)
representatives from coconut farmers’ organizations, one of whom shall
come from a list of nominees from the Philippine Coconut Producers
Federation Inc. (“COCOFED”);
(c) a
representative from the CIIF; and
(d) a
representative from a non-government organization (NGO) involved in
agricultural and rural development.
All decisions of the Coconut Trust Fund Committee shall be determined
by a majority vote of all the members.
The Coconut Trust Fund Committee shall perform the functions and duties
set forth in Sec. 7 hereof, with the skill, care, prudence and
diligence necessary under the circumstances then prevailing that a
prudent man acting in like capacity would exercise.
The members of the Coconut Trust Fund Committee shall be appointed by
the President and shall hold office at his pleasure.
The Coconut Trust Fund Committee is authorized to hire administrative,
technical and/or support staff as may be required to enable it to
effectively perform its functions and responsibilities.
Sec. 7. Functions and Responsibilities of the
Committee. — The Coconut Trust Fund Committee shall have the following
functions and responsibilities:
(a)
set the investment policy of the Trust Fund;
(b) establish
priorities for assistance giving preference to small coconut farmers
and farmworkers which shall be reviewed periodically and revised as
necessary in accordance with changing conditions;
(c) receive,
process and approve project proposals for financing by the Trust Fund;
(d) decide on
the use of the Trust Fund’s income or net earnings including final
action on applications for assistance, grants and/or loans;
(e) avail of
professional counsel and services by retaining an investment and
financial manager, if desired;
(f) formulate
the rules and regulations governing the allocation, utilization and
disbursement of the Fund; and
(g) perform
such other acts and things as may be necessary proper or conducive to
attain the purposes of the Fund.
Sec. 8. Non-impairment of Trust Fund. — In order
to ensure its enduring character, it is hereby declared and ordered
that the Trust Fund shall be operated strictly as a capital fund for
investment and re-investment, and that it shall be maintained intact
with only the Trust Income, being authorized to be utilized for
financing programs of assistance as provided in Sec. 9 hereof.
Sec. 9. Use and Disposition of the Trust Income. —
The Coconut Trust Fund Committee, on an annual basis, shall determine
and establish the amount comprising the Trust Income. After such
determination, the Committee shall earmark, allocate and disburse the
Trust Income for the following purposes, namely:
(a)
Not more than three percent (3%) of the Trust Income shall be used to
defray the direct and validated costs and expenses incurred for the
maintenance, administration and preservation of the Trust Fund,
inclusive of the mandatory supervision fees and charges, if any,
imposed by the Bangko Sentral ng Pilipinas;
(b) Twenty
percent (20%) of the Trust Income shall be allocated and disbursed to
the Philippines Coconut Producers Federation, Inc. (COCOFED) under the
relevant provisions of existing statutes, rules and regulations;
(c) Thirty
percent (30%) of the Trust Income shall be disbursed to other existing
coconut farmers’ organizations, associations and federations such as
the Pambansang Koalisyon ng mga Samahang Magsasaka at Manggagawa sa
Niyugan (PKSMMN), Coconut Industry Reform Movement (COIR), National
Federation of Small Coconut Farmers Organizations (NFSCFO),
Nagkakaisang Ugnayan ng Maliliit na Magsasaka at Manggagawa sa Niyugan
(NIUGAN), and those which may be determined by the Coconut Trust Fund
Committee, for the purpose of providing an immediate source of funds to
finance socio-economic programs and endeavors for the benefit of their
members consistent with the guidelines set forth in Section 10 hereof;
(d) Thirty
percent (30%) of the Trust Income shall be used to assist and fund
agriculturally-related programs for the Government, as reasonably
determined by the Trust Fund Committee, implemented for the purpose of:
(i) maximizing food productivity in the agriculture areas of the
country, (ii) enhancing the upliftment and well-being of the living
conditions of farmers and agricultural workers, (iii) developing viable
industries and business opportunities in the countryside, (iv)
providing alternative means of livelihood to the direct dependents of
agriculture businesses and enterprises, and (v) providing financial
assistance and support to coconut farmers in times of economic hardship
due to extremely low prices of copra and other coconut products,
natural calamities, world market dislocation and similar occurrences,
including financial support to the ERAP’s Sagip Niyugan Program
established under Executive Order No. 312 dated November 3, 2000; and
(e) The
remaining balance of the Trust Income shall revert to the Trust
Fund.
The aforesaid releases and disbursements shall be in accordance with
the rules and regulations formulated by the Coconut Trust Fund
Committee.
Sec. 10. Guidelines for Trustee Decisions. — In
arriving at decisions on project applications for financial assistance,
grants, loans or other forms of financing from the Trust Fund, the
Coconut Trust Fund Committee shall be guided by the following
considerations:
(a)
the project’s relations and impact to the development and improvement
of the coconut industry in relation to the government’s
agriculturally-related programs, food productivity, livelihood and
anti-poverty programs;
(b) the
amounts of funds requested for the project as consistent with the fund
assistance to as many institutions and/or associations as possible; and
(c) an
assessment of the institution’s or association’s past and current
efforts to improve the quality of life of the coconut farmers and the
development of the coconut industry and agriculture in the Philippines.
Sec. 11. Cooperation with the Committee. — The
Coconut Trust Fund Committee may call upon any department, bureau,
office, agency or instrumentality of the Government of the Republic of
the Philippines, including government-owned and controlled
corporations, for such assistance as it may desire and need in pursuit
of the purposes and objectives of the Trust Fund in the discharge of
its functions and responsibilities.
Sec. 12. Meetings and Annual Report and
Compensation. — The Coconut Trust Fund Committee shell meet at such
time as may be determined by the Chairman and shall render to the
President an annual report of its activities. The members of the
Coconut Trust Fund Committee shall receive such compensation,
allowances and per diems as may be approved by the President of the
Philippines.
Sec. 13. Accounting. — The Coconut Trust Fund
Committee shall maintain appropriate records and accounts of all
investments, receipts, disbursements and other transactions relating to
the management, administration and disposition of the Trust Fund and
Trust Income.
The Fund shall be audited annually or as often as necessary by an
external auditor designated by the Committee. The Committee may also
request the Commission on Audit to conduct an audit of the Fund.
Sec. 14. Implementation. — The Presidential
Commission on Good Government, the Office of the Solicitor General and
other appropriate government instrumentality are hereby directed to
exclude the 27% CIIF SMC shares from Civil Case No. 0033 entitled
“Republic of the Philippines vs. Eduardo Cojuangco, Jr. et al.” pending
before the Sandiganbayan, lift the sequestration over such shares, and
take all the necessary steps to implement the purposes and objectives
of this Executive Order.
Sec. 15. Repealing Clause. — This Order repeals
Executive Order Nos. 481 and 277 dated May 1, 1998 and September 24,
1995, respectively.
Sec. 16. Effectivity Clause. — This Order shall
take effect immediately.
DONE in the City of Manila,
this 8th day of November, in the year of Our Lord, Two Thousand.
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