Arroyo vows to use coco levy fund for poor farmers

President Arroyo vowed yesterday that the coconut levy fund, which is at the center of the government’s 16-year legal battle with businessman Eduardo "Danding" Cojuangco Jr., will go to impoverished coconut farmers as she had promised last year.

The Presidential Commission on Good Government (PCGG), on the other hand, said the Sandiganbayan’s ruling on Friday that the coco levy funds are public funds effectively sealed Cojuangco’s fate and all properties bought through the funds, now estimated at P150 million.

The Sandiganbayan decision also stripped from Cojuangco, majority control of the United Coconut Planters Bank (UCPB), which was also created from the coco levy funds.

The Sandiganbayan ruled that Cojuangco’s 95,304 shares in UCPB, which allegedly came from the government’s 72.2 percent stake in the bank, were "conclusively owned by the Republic of the Philippines."

The ruling would likely have an impact on Cojuangco’s management position in one of the country’s top corporations, San Miguel Corp. (SMC), since the UCPB owns a 27-percent stake in the food and beverage giant which Cojuangco now heads as chairman and chief executive officer.

The President, on the other hand, said she would fulfill the vow she made last year that the coconut levy funds would go back to the people from whom it was levied in the 1970s.

"The coco levy fund must benefit the coconut farmers. We will continue to take all feasible measures to ensure that this principle is fully implemented," she said in a statement aired on radio. "The coconut fund will be used for the security of the coconut farmers."

The President said she intends to resume the distribution of coco levy checks for medical and health insurance to coconut farmers, a practice she started earlier this last year using the dividends from the coco levy funds, also known as the Coconut Industry Investment Fund (CIIF).

Mrs. Arroyo said she would resume the distribution of these checks to coconut farmers in Iloilo, Leyte, Samar and Bicol, where she is scheduled to go on provincial sorties from Tuesday to July 24.

She said that during these sorties, she will launch and strengthen various government anti-poverty programs under her Kapit-Bisig Laban sa Kahirapan program.

"I would also give out coco levy fund checks, patents and certificates of ancestral domain titles to various beneficiaries," the President said.

Mrs. Arroyo said she started giving coco levy fund checks to some beneficiaries and coconut farmers in the Visayas and Southern Luzon.

"The funds from the coco levy would also be used as insurance for coconut farmers," she said.

‘Welcome development’

Presidential Spokesman Ignacio Bunye, for his part, said that the ruling is a "welcome development" although Cojuangco’s lawyers are expected to appeal the Sandiganbayan ruling.

"If you recall, this Sandiganbayan ruling was based on the Supreme Court decision about 19 months ago when the High Tribunal ruled that the coco levy is a fund with public character and tossed to the Sandiganbayan to determine who owns it," he said.

Bunye added that the government will have to wait for Cojuangco’s lawyers to make the next move.

The ruling does not stop the government from distributing CIIF dividends to coconut farmers, he said.

Bunye vehemently dismissed claims made by Cojuangco on the supposedly suspicious timing of the ruling.

Opposition politicians earlier questioned the timing of the court decision when Cojuangco is reportedly weighing whether he will run in next year’s elections.

"The case has been in the courts for the last 17 years. The defendants had not been denied due process," Bunye said. "They had all the opportunity to present their case during that period."

He said that no less than Mrs. Arroyo expressed the view that the coco levy funds, as declared by the Supreme Court ruling, are "prima facie public funds."

Former Presidents Fidel Ramos and Corazon Aquino share this view, he added.

"It is for the court to resolve other issues pending before it, such as the ownership of the SMC shares," Bunye said.

He noted that it is up to the PCGG, which is under the Office of the President, to implement the Sandiganbayan ruling.

PCGG Commissioner William Dichoso said the Sandiganbayan ruling "proved that the position of the government that the coco levy funds are owned by the coco farmers is correct. After waiting so many years, the position of the government was proven valid and this will benefit the coco farmers."

He added that the decision has virtually left Cojuangco with no other recourse but to return the fund to its rightful owners, because it was based on an earlier ruling of the Supreme Court.

PCGG chief Haydee Yorac said that while Cojuangco’s lawyers would most likely appeal the Sandiganbayan’s ruling with the Supreme Court, she believes that this will still be decided in favor of the coconut farmers.

"The coconut farmers, they’ll have to wait a while… but they waited for (16) years, what is several more months?" she said.

Yorac said she expects the Sandiganbayan ruling to be final and executory by the end of the year.

PCGG Commissioner Victoria Avena, for her part, said there might be a slim chance that the Supreme Court would reverse itself should Cojuangco appeal the case with the Supreme Court, but "chances are great that the Supreme Court will reaffirm the Sandiganbayan decision… It’s only a matter of time."

She added that they expect the Sandiganbayan ruling to set a precedent for other pending coco levy cases of the PCGG.

"That shows that the root source of UCPB is the coco levy funds. The same goes for other corporations (acquired and put up using the fund)," Avena said.

These companies include the Philippine Coconut Producers Federation Inc. (Cocofed), Cocofed Marketing Corp., Cocofed Life Insurance Corp. and the United Coconut Oil Mills Inc.

Avena said the PCGG has already filed motions in court for partial summary judgment on pending coco levy cases.

Meanwhile, Finance Secretary Jose Isidro Camacho said the Arroyo administration would now consider privatizing its interests in UCPB and SMC.

He said that settling the issue of ownership of the UCPB would stabilize the bank and expand the government’s options.

"This (Sandiganbayan) decision will clarify a lot of things," Camacho said. "It can also free up the 25 percent of SMC that the government controls."

When UCPB was sequestered in 1986, the government ended up controlling 27 percent of SMC that the UCPB was administering on behalf of the CIIF.

The government-controlled SMC shares have since been reduced to 25 percent after Kirin Brewery of Japan bought into SMC in 2000. Camacho, who was an investment banker at that time, introduced Kirin in the Philippines.

Camacho expressed optimism that there would be interested and eager buyers should the government decide to sell its interests in either SMC or UCPB.

The finance chief said UCPB would likely attract considerable attention. The Philippine Deposit Insurance Corp. has already agreed to infuse P20 billion into the bank.

In a related development, former Solicitor General Frank Chavez called on the government to file criminal charges against Cojuangco and Cocofed officers — led by Zamboanga City Mayor Ma. Clara Lobregat — as well as their associates for the illegal use of coconut levy funds to acquire 72.2 percent ownership of the UCPB.

Chavez, who filed the complaint against Cojuangco and the Cocofed officials in July 1987, said one of the possible charges could be plunder since it involved public funds.

He added that the UCPB and SMC directors appointed by Cojuangco and his camp should be removed from office.

Chavez also said that Cojuangco and his associates should be made to account for the income they received since they started tapping into the coconut levy fund.

"They should refund the government," he said.

Chavez said he sees no more hope for Cojuangco to regain the shares he acquired since the Sandiganbayan ruling would be irreversible even on appeal to the Supreme Court.

He added that there should be a "mechanism" on how to divide coconut levy funds.

Small coconut farmers, on the other hand, hailed the Sandiganbayan ruling and called on the Arroyo administration to immediately replace the "Cojuangco nominees in the board of directors of the UCPB, unless the said board members have enough delicadeza and just resign before they are removed."

Five of the fifteen members of the UCPB board of directors are nominees and representatives of Cojuangco.

Bayan Muna Rep. Crispin Beltran said the Sandiganbayan’s ruling should be a basis for Cojuangco to be disqualified from running for the presidency due to "his anti-people record."

Cojuangco’s record "is a political and economic history steeped in cronyism, corruption and opportunism. If he will still be allowed to run, the standards and qualifications for the presidency would yet again have hit rock-bottom," Beltran said.

He challenged the government to support the PCGG’s move to untangle the complex web of "lies, documents and records behind Cojuangco’s ill-gotten wealth." – With Des Ferriols, Rainier Allan Ronda, Aurea Calica, Artemio Dumlao, AFP