MANILA, Philippines - The CIIF Oil Mills Group (CIIF OMG) supports the plan of the Senate to liquidate, privatize or convert the approximately P75 billion worth of coconut-levy assets into a special trust fund that will be channeled specifically for projects benefiting coconut farmers.
Jesus L. Arranza, CIIF-OMG president and CEO, said this will hasten the process of distributing the full benefits of the coco levy fund to the coconut farmers, most of whom are already in their twilight years, and some have passed away already.
“It will be a welcome development as long as the fund is safeguarded and specifically earmarked for the coconut farmers and coconut industry as a whole with full transparency,” Arranza said after the Senate hearing on the reported P1.5 billion in losses that were incurred by the CIIF OMG from 2005 to 2007.
On Tuesday, Senate President Juan Ponce Enrile told reporters “we are exploring the possibility of passing a law to authorize the liquidation or privatization of companies or assets purchased or funded by coconut levy and earmark it for the coconut farmers.”
The coco levy funded the acquisition or formation of certain corporations including the United Coconut Planters Bank (UCPB), CIIF-OMG, the 14 CIIF Holding Companies, United Coconut Chemicals, Inc. (COCOCHEM), United Coconut Planters Assurance Co. (COCOLIFE) and United Coconut Planters International (UCPI).
The 14 CIIF holding companies own roughly P800-million preferred shares in San Miguel Corporation that is now valued at P60 billion, Arranza said.
The proposal of Enrile, he said, is a good indication that the investigation into the losses of CIIF-OMG and the UCPB under their former management is serving its legislative objective.
Also at the hearing, Sen. Ralph Recto, who presided over the inquiry, said criminal charges should be filed against erring officials of UCPB and CIIF-OMG.
However, Arranza said to make the probe more thorough, the financials of other sequestered companies that were acquired through the coco levy fund should also be scrutinized “so we can look at the totality before the liquidation of the fund.”
UCPB sources said COCOCHEM and UCPI, a trading company in France, are presently losing heavily.
Arranza stressed that although the UCPB and CIIF-OMG incurred losses before, the two sequestered companies are now in good health under the new management.
“The CIIF-OMG is now in good hands and in good health financially,” he said. In 2009, when Mr. Arranza took over the helm of CIIF-OMG, the company posted an operating profit of P82 million. In 2010, operating profit rose to P172 million.