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Coco Levy Fund scam

January 12, 2023

The Coco Levy Fund Scam was a controversy in the 1970s and 1980s in the Philippines involving former President Ferdinand Marcos and his cronies. It is alleged that Marcos, Danding Cojuangco, Juan Ponce Enrile, and others conspired to tax coconut farmers, promising them the development of the coconut industry and a share of the investments, but on the contrary used the collection fund for personal profit, particularly in the purchase of United Coconut Planters Bank (UCPB) and a majority stake in San Miguel Corporation (SMC), to name a few.[1]

The issue is still ongoing up to this day, with coconut farmers fighting for justice against the forced taxation, and a share of the Coco Levy Fund's investments. The Coco Levy Fund is estimated to have ballooned anywhere in the range of ₱100 billion to 150 billion in assets.[2][3]

In 2012, a Supreme Court decision[4] awarding ₱71 billion in coconut levy funds to coconut farmers was only part of the goals of a 50-year struggle to bring to the poor farmers the benefits of the Marcos-era levies gouged from them.[5][6]

Background

The Philippine coconut industry was responsible for 26% of the volume of the agricultural sector and was reportedly present in 68 of the 81 provinces of the country.[7] Next to sugar, coconut products was also the leading agricultural export of the Philippines, with 37 products and by-products that were exported to 114 countries. The major exports were crude and refined oil, copra meal, desiccated coconut, activated carbon, and oleo-chemicals.[8] About one-third of the Philippine population depended mainly on coconut production for its livelihood.[9]

The legal beginnings of the levy can be found in Republic Act 1145 enacted on 17 June 1954 under President Ramon Magsaysay which calls for the creation of the Coconut Development Fund. Subsequent amendments were made with the enactment of Republic Act 6260 on 19 June 1971 under President Ferdinand Marcos. The act calls for the creation of a Coconut Investment Fund and a Coconut Investment Company (CIC). The objective of the CIC was to: (a) To fully tap the potential of the coconut planters in order to maximize their production and give them greater responsibility in directing and developing the coconut industry; (b) to accelerate the growth of the coconut industry and other related coconut products from the raw material stage to the semi-finished and finally, the finished product stage; (c) to improve, develop and expand the marketing system; and (d) to ensure stable and better incomes for coconut farmers. President Marcos created other funds through P.D. 276, 582, 1468, 961, and 1841, all were to be paid by farmers. Under the promise of 'developing PH coco industry', coco farmers paid ₱15-₱30 per ₱100 kilos of copras, constituting only 10-25% of their income.[10]

On 30 June 1973, President Marcos created the Philippine Coconut Authority through P.D. 232. The PCA's mandate was "to promote accelerated growth and development of the coconut and other palm oils industry so that the benefits of such growth shall accrue to the greatest number, and to provide continued leadership and support in the integrated development of the industry." The said decree also consolidated the responsibilities and activities of the Coconut Coordinating Council (CCC), the Philippine Coconut Administration (PHILCOA), and the Philippine Coconut Research Institute (PHILCORIN), under one office. P.D. 961 created the Coconut Industry Investment Fund (CIIF), which was used by Danding Cojuango to purchase shares of San Miguel Corporation, which was then majority owned by the Soriano family and was then the largest company and single largest contributor to the national GDP and treasury.[11] CIIF was also used to purchase cronies big oil mills (known as CIIF-Oil Mills Group) and shares of coco trading and insurance corporations. While the other decrees made ballooning funds, P.D. 1468 revised the Coco Industry Code, giving crony oil mills control over the said funds. Most coconut farmers and tenants received receipts for paying, but weren't registered by PhilCoA (PCA).

In 1975, for two years, coco levy funds paid by coco farmers amounted to ₱2.14 million, but only 32% of receipts were registered. After P.D. 961 of 1976, and public display of cronyism, such as turning over coco funds to Cojuangco and Defense Minister Juan Ponce Enrile, coco farmers defied martial law in protests. Small protests and defiance were shown by turning CocoFed groups into anti-Marcos meetings. Coco farmers coops/protests grew by 1980 and became a solid foundation of the anti-Marcos movement in the countryside. The Marcos dictatorship met the coco farmers' resistance with violence. Most notable of which are the Daet and Guinayangan (Quezon) massacres.[12][13][14]

By 1982, coco levy funds extracted ₱70 billion from coco farmers. Every penny was used by Marcos cronies to entrench themselves in wealth. The funds were siphoned by Marcos and his cronies into at least 14 holding companies: Soriano Shares Inc., ASC Investors Inc., Roxas Shares Inc., ARC Investors Inc., Toda Holdings Inc., AP Holdings Inc., Fernandez Holdings Inc., SMC Officers Corps Inc., Te Deum Resources Inc., Anglo Ventures Inc., Randy Allied Ventures Inc., Rock Steel Resources Inc., Valhalla Properties Ltd Inc., and First Meridian Development Inc.[15]

Additionally, over the 10 years of collection, Cojuangco, Lobregat, Enrile, Eleazar, dela Cuesta, et al. were Board of Directors or Chairs of PCA, UCPB, COCOFED and Unicom. Enrile, then Senate President, was chair of PCA and Unicom, which he used to get equities from Primex Coco, Pacific Royal, Clear Mineral, and other entities. Danding Cojuangco used his coco levy positions to steal money and was used as leverage to further his businesses. Most notable of Cojuangco's spoils were the UCPB and the SMC, both of which were purchased directly through coco levy money by Imelda Marcos and Danding Cojuangco.

After the Marcos regime was toppled by the People Power Revolution of 1986, coconut farmers filed numerous cases against Marcos, Cojuangco, and Enrile for squandering farmers' money.[16]

The Coco Levy litigations

The Coco Levy Case (Sandiganbayan Civil Case No. 33) is subdivided into a total of eight cases that involves different parties and properties. Arguably, the most important case is Case No. 33-F, which involves 51% of the shares of mega-conglomerate San Miguel Corporation. This majority stake at San Miguel has been further subdivided into three separate litigations, each of which reaching the Supreme Court in highly contentious proceedings.

The first case involved 4% of San Miguel shares, which, in the case of San Miguel Corporation vs. Sandiganbayan,[17] was awarded by the Supreme Court to the government. The second case, Republic of the Philippines vs. Sandiganbayan and Eduardo Cojuangco Jr.,[18] involved a 20% block that the Supreme Court, voting 7–4, awarded to Eduardo "Danding" Cojuangco. The most recent High Court pronouncement came in 2012, Philippine Coconut Producers Federation, Inc. (COCOFED) vs. Republic of the Philippines,[19] where the Court, voting 11–0, declared that the remaining 27% of San Miguel is owned by the government.[5] (Note: The 27% had been diluted to 24% due to the government's failure to subscribe to the increased authorized capital stock of San Miguel.)

In 2015, the government certified a bill creating a trust fund for farmers as urgent. The bill passed in the House of Representatives but stalled in the Senate.[20]

On February 26, 2021, President Rodrigo Duterte signed the Coconut Farmers and Industry Trust Fund Act, creating a trust fund for the country's coconut farmers.[21] In June 2022, Duterte signed an executive order implementing the Coconut Farmers and Industry Development Plan, which aims to increase productivity and income of coconut farmers, modernize the coconut industry, and pave the way for the release of the ₱75 billion trust fund for coconut farmers consisting of coco levy assets declared state property by the Supreme Court.[22][23]

References

  1. ^ Panesa, Edmer F. "Cojuangco loses claim to UCPB block". Manila Bulletin. Retrieved 4 December 2007.
  2. ^ Requinta, Elka Krystle R. "UCPB exec talks on coco levy scam". Varsitarian. The Varsitarian Online. Retrieved 16 May 2011.
  3. ^ Tubeza, Philip. . Philippine Daily Inquirer. Archived from the original on 11 June 2010. Retrieved 8 June 2008.
  4. ^ . Archived from the original on 20 July 2014. Retrieved 14 January 2013.
  5. ^ a b The Coco Levy Funds: Is the Shell Game Approaching Its End? The CenSEI Report, 16 April 2012
  6. ^ Ranada, Pia (10 December 2014). "SC affirms decision to give coco levy funds to farmers". Rappler. Retrieved 4 June 2021.
  7. ^ "Coconut Statistics". pca.gov.ph. Republic of the Philippines: Department of Agriculture. Retrieved 6 October 2019.
  8. ^ Dy, Rolando PhD. "The Philippine Coconut Industry: Performance Issues and Recommendations". Ateneo De Manila University. Retrieved 1 August 2006 – via Scribd.
  9. ^ Castro, Manuel. "The Philippine Coconut Industry and the Coconut Levy". Philippine European Solidarity Centre (PESC-KSP). PESC-KSP. Archived from the original on 8 March 2001.
  10. ^ "Republic Act 6260, the Coconut Investment Act". Chan Robles Virtual Law Library. Philippine Congress. 19 June 1971.
  11. ^ "Our Company". www.sanmiguel.com.ph. San Miguel Corporation. Retrieved 5 June 2021.
  12. ^ Doyo, Ma Ceres P. (22 September 2016). "Martial law massacres". INQUIRER.net. Retrieved 5 June 2021.
  13. ^ Gavilan, Jodesz (23 October 2018). "Massacres, incidents of violence against farmers". Rappler. Retrieved 5 June 2021.
  14. ^ Elemia, Camille (21 January 2017). "Coco levy fund scam: Gold for the corrupt, crumbs for farmers". Rappler. Retrieved 5 June 2021.
  15. ^ "Republic Act 11524". www.officialgazette.gov.ph. Official Gazette of the Republic of the Philippines. Retrieved 5 June 2021.
  16. ^ "Presidential Decree No. 232, Creating a Philippine Coconut Authority". The LawPhil Project. The LawPhil Project, Philippine Laws and Jurisprudence Databank. Arellano Law Foundation. 30 June 1973.
  17. ^ . Archived from the original on 4 March 2016. Retrieved 14 January 2013.
  18. ^ . Archived from the original on 27 August 2011. Retrieved 14 January 2013.
  19. ^ . Archived from the original on 20 July 2014. Retrieved 14 January 2013.
  20. ^ Elemia, Camille (22 January 2017). "The politics of the coco levy scam: From Marcos to Noynoy Aquino". Rappler. from the original on 3 October 2020. Retrieved 11 October 2021.
  21. ^ Aguilar, Krissy (26 February 2021). . Philippine Daily Inquirer. Archived from the original on 26 February 2021.
  22. ^ Cordero, Ted (8 June 2022). . GMA News Online. Archived from the original on 8 June 2022.
  23. ^ Jocson, Luisa Maria Jacinta C. (8 June 2022). . BusinessWorld. Archived from the original on 8 June 2022.

External links

  • The Coco Levy Funds: Is the Shell Game Approaching Its End? The CenSEI Report, 16 April 2012

January 12, 2023
coco, levy, fund, scam, coco, levy, fund, scam, controversy, 1970s, 1980s, philippines, involving, former, president, ferdinand, marcos, cronies, alleged, that, marcos, danding, cojuangco, juan, ponce, enrile, others, conspired, coconut, farmers, promising, th. The Coco Levy Fund Scam was a controversy in the 1970s and 1980s in the Philippines involving former President Ferdinand Marcos and his cronies It is alleged that Marcos Danding Cojuangco Juan Ponce Enrile and others conspired to tax coconut farmers promising them the development of the coconut industry and a share of the investments but on the contrary used the collection fund for personal profit particularly in the purchase of United Coconut Planters Bank UCPB and a majority stake in San Miguel Corporation SMC to name a few 1 The issue is still ongoing up to this day with coconut farmers fighting for justice against the forced taxation and a share of the Coco Levy Fund s investments The Coco Levy Fund is estimated to have ballooned anywhere in the range of 100 billion to 150 billion in assets 2 3 In 2012 a Supreme Court decision 4 awarding 71 billion in coconut levy funds to coconut farmers was only part of the goals of a 50 year struggle to bring to the poor farmers the benefits of the Marcos era levies gouged from them 5 6 Contents 1 Background 2 The Coco Levy litigations 3 References 4 External linksBackground EditThe Philippine coconut industry was responsible for 26 of the volume of the agricultural sector and was reportedly present in 68 of the 81 provinces of the country 7 Next to sugar coconut products was also the leading agricultural export of the Philippines with 37 products and by products that were exported to 114 countries The major exports were crude and refined oil copra meal desiccated coconut activated carbon and oleo chemicals 8 About one third of the Philippine population depended mainly on coconut production for its livelihood 9 The legal beginnings of the levy can be found in Republic Act 1145 enacted on 17 June 1954 under President Ramon Magsaysay which calls for the creation of the Coconut Development Fund Subsequent amendments were made with the enactment of Republic Act 6260 on 19 June 1971 under President Ferdinand Marcos The act calls for the creation of a Coconut Investment Fund and a Coconut Investment Company CIC The objective of the CIC was to a To fully tap the potential of the coconut planters in order to maximize their production and give them greater responsibility in directing and developing the coconut industry b to accelerate the growth of the coconut industry and other related coconut products from the raw material stage to the semi finished and finally the finished product stage c to improve develop and expand the marketing system and d to ensure stable and better incomes for coconut farmers President Marcos created other funds through P D 276 582 1468 961 and 1841 all were to be paid by farmers Under the promise of developing PH coco industry coco farmers paid 15 30 per 100 kilos of copras constituting only 10 25 of their income 10 On 30 June 1973 President Marcos created the Philippine Coconut Authority through P D 232 The PCA s mandate was to promote accelerated growth and development of the coconut and other palm oils industry so that the benefits of such growth shall accrue to the greatest number and to provide continued leadership and support in the integrated development of the industry The said decree also consolidated the responsibilities and activities of the Coconut Coordinating Council CCC the Philippine Coconut Administration PHILCOA and the Philippine Coconut Research Institute PHILCORIN under one office P D 961 created the Coconut Industry Investment Fund CIIF which was used by Danding Cojuango to purchase shares of San Miguel Corporation which was then majority owned by the Soriano family and was then the largest company and single largest contributor to the national GDP and treasury 11 CIIF was also used to purchase cronies big oil mills known as CIIF Oil Mills Group and shares of coco trading and insurance corporations While the other decrees made ballooning funds P D 1468 revised the Coco Industry Code giving crony oil mills control over the said funds Most coconut farmers and tenants received receipts for paying but weren t registered by PhilCoA PCA In 1975 for two years coco levy funds paid by coco farmers amounted to 2 14 million but only 32 of receipts were registered After P D 961 of 1976 and public display of cronyism such as turning over coco funds to Cojuangco and Defense Minister Juan Ponce Enrile coco farmers defied martial law in protests Small protests and defiance were shown by turning CocoFed groups into anti Marcos meetings Coco farmers coops protests grew by 1980 and became a solid foundation of the anti Marcos movement in the countryside The Marcos dictatorship met the coco farmers resistance with violence Most notable of which are the Daet and Guinayangan Quezon massacres 12 13 14 By 1982 coco levy funds extracted 70 billion from coco farmers Every penny was used by Marcos cronies to entrench themselves in wealth The funds were siphoned by Marcos and his cronies into at least 14 holding companies Soriano Shares Inc ASC Investors Inc Roxas Shares Inc ARC Investors Inc Toda Holdings Inc AP Holdings Inc Fernandez Holdings Inc SMC Officers Corps Inc Te Deum Resources Inc Anglo Ventures Inc Randy Allied Ventures Inc Rock Steel Resources Inc Valhalla Properties Ltd Inc and First Meridian Development Inc 15 Additionally over the 10 years of collection Cojuangco Lobregat Enrile Eleazar dela Cuesta et al were Board of Directors or Chairs of PCA UCPB COCOFED and Unicom Enrile then Senate President was chair of PCA and Unicom which he used to get equities from Primex Coco Pacific Royal Clear Mineral and other entities Danding Cojuangco used his coco levy positions to steal money and was used as leverage to further his businesses Most notable of Cojuangco s spoils were the UCPB and the SMC both of which were purchased directly through coco levy money by Imelda Marcos and Danding Cojuangco After the Marcos regime was toppled by the People Power Revolution of 1986 coconut farmers filed numerous cases against Marcos Cojuangco and Enrile for squandering farmers money 16 The Coco Levy litigations EditThe Coco Levy Case Sandiganbayan Civil Case No 33 is subdivided into a total of eight cases that involves different parties and properties Arguably the most important case is Case No 33 F which involves 51 of the shares of mega conglomerate San Miguel Corporation This majority stake at San Miguel has been further subdivided into three separate litigations each of which reaching the Supreme Court in highly contentious proceedings The first case involved 4 of San Miguel shares which in the case of San Miguel Corporation vs Sandiganbayan 17 was awarded by the Supreme Court to the government The second case Republic of the Philippines vs Sandiganbayan and Eduardo Cojuangco Jr 18 involved a 20 block that the Supreme Court voting 7 4 awarded to Eduardo Danding Cojuangco The most recent High Court pronouncement came in 2012 Philippine Coconut Producers Federation Inc COCOFED vs Republic of the Philippines 19 where the Court voting 11 0 declared that the remaining 27 of San Miguel is owned by the government 5 Note The 27 had been diluted to 24 due to the government s failure to subscribe to the increased authorized capital stock of San Miguel In 2015 the government certified a bill creating a trust fund for farmers as urgent The bill passed in the House of Representatives but stalled in the Senate 20 On February 26 2021 President Rodrigo Duterte signed the Coconut Farmers and Industry Trust Fund Act creating a trust fund for the country s coconut farmers 21 In June 2022 Duterte signed an executive order implementing the Coconut Farmers and Industry Development Plan which aims to increase productivity and income of coconut farmers modernize the coconut industry and pave the way for the release of the 75 billion trust fund for coconut farmers consisting of coco levy assets declared state property by the Supreme Court 22 23 References Edit Panesa Edmer F Cojuangco loses claim to UCPB block Manila Bulletin Retrieved 4 December 2007 Requinta Elka Krystle R UCPB exec talks on coco levy scam Varsitarian The Varsitarian Online Retrieved 16 May 2011 Tubeza Philip PCGG exec doubts coconut levy fund s recovery Philippine Daily Inquirer Archived from the original on 11 June 2010 Retrieved 8 June 2008 Philippine Coconut Farmers Federation COCOFED vs Republic of the Philippines Archived from the original on 20 July 2014 Retrieved 14 January 2013 a b The Coco Levy Funds Is the Shell Game Approaching Its End The CenSEI Report 16 April 2012 Ranada Pia 10 December 2014 SC affirms decision to give coco levy funds to farmers Rappler Retrieved 4 June 2021 Coconut Statistics pca gov ph Republic of the Philippines Department of Agriculture Retrieved 6 October 2019 Dy Rolando PhD The Philippine Coconut Industry Performance Issues and Recommendations Ateneo De Manila University Retrieved 1 August 2006 via Scribd Castro Manuel The Philippine Coconut Industry and the Coconut Levy Philippine European Solidarity Centre PESC KSP PESC KSP Archived from the original on 8 March 2001 Republic Act 6260 the Coconut Investment Act Chan Robles Virtual Law Library Philippine Congress 19 June 1971 Our Company www sanmiguel com ph San Miguel Corporation Retrieved 5 June 2021 Doyo Ma Ceres P 22 September 2016 Martial law massacres INQUIRER net Retrieved 5 June 2021 Gavilan Jodesz 23 October 2018 Massacres incidents of violence against farmers Rappler Retrieved 5 June 2021 Elemia Camille 21 January 2017 Coco levy fund scam Gold for the corrupt crumbs for farmers Rappler Retrieved 5 June 2021 Republic Act 11524 www officialgazette gov ph Official Gazette of the Republic of the Philippines Retrieved 5 June 2021 Presidential Decree No 232 Creating a Philippine Coconut Authority The LawPhil Project The LawPhil Project Philippine Laws and Jurisprudence Databank Arellano Law Foundation 30 June 1973 San Miguel Corporation vs Sandiganbayan G R No 104637 September 2000 Archived from the original on 4 March 2016 Retrieved 14 January 2013 Republic of the Philippines vs Sandiganbayan and Eduardo Cojuangco Jr G R No 166859 April 2011 Archived from the original on 27 August 2011 Retrieved 14 January 2013 Philippine Coconut Producers Federation Inc COCOFED vs Republic of the Philippines G R No 177857 January 2012 Archived from the original on 20 July 2014 Retrieved 14 January 2013 Elemia Camille 22 January 2017 The politics of the coco levy scam From Marcos to Noynoy Aquino Rappler Archived from the original on 3 October 2020 Retrieved 11 October 2021 Aguilar Krissy 26 February 2021 Duterte signs law creating coco levy trust fund Philippine Daily Inquirer Archived from the original on 26 February 2021 Cordero Ted 8 June 2022 Duterte issues EO on coconut industry dev t allowing release of 75 B coco levy trust fund GMA News Online Archived from the original on 8 June 2022 Jocson Luisa Maria Jacinta C 8 June 2022 Duterte signs EO implementing coconut industry dev t plan BusinessWorld Archived from the original on 8 June 2022 External links EditThe Coco Levy Funds Is the Shell Game Approaching Its End The CenSEI Report 16 April 2012 Retrieved from https en wikipedia org w index php title Coco Levy Fund scam amp oldid 1097967098, wikipedia, wiki, book, books, library,

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