Aquino defers action on coconut levy funds
MANILA THE Aquino administration has ruled out urgent use of frozen funds arising from sequestered shares of San Miguel Corp (SMC) worth at least P85 billion to rehabilitate the troubled coconut industry pending a final decision of the Supreme Court on the issue.
Budget Secretary Florencio Abad and Administrator Euclides G Forbes of the Philippine Coconut Authority (PCA) said Malacañang could not act on demands by militant farmer groups that President Benigno Aquino III issue an executive order directing the Presidential Commission on Good Government (PCGG) to free up interests and dividends from the SMC shares.
The Supreme Court in January ruled that a 24-percent bloc of SMC shares acquired with funds from a coconut levy imposed during the martial law years and sequestered upon the ouster in 1986 of the dictator Ferdinand Marcos belonged to the government and should now be used to ease the lives of 3.5 million farmers and their families comprising a quarter of the country’s population regarded as the “poorest of the poor.” The Philippine Coconut Producers Federation, or Cocofed, has filed a motion for reconsideration, claiming the portfolio in behalf of some 1 million unnamed coconut farmers.
The 700 million SMC shares, along with interest and dividends, were officially valued at P84.3 billion in January.
Quarterly dividends alone from the stocks over the last two years had reached P8.8 billion, which farmer groups are demanding that Mr Aquino unfreeze to ease conditions in the coconut industry wracked by falling harvests as a result of senile trees, fertilisation problems and the adverse impact of climate change.
“Despite the huge funding requirements to rehabilitate the coconut industry, the shares and dividends cannot be deployed to help the industry because they are tied up in suits,” Abad said in a series of text messages to the Philippine Daily Inquirer over the Holy Week on the 24-percent portfolio designated as SMC-CIIF, after the Coconut Industry Investment Fund which purchased the bloc under an elaborate scheme that involved 14 holding companies.
“The government cannot proceed with the disposition of the shares as Cocofed filed a motion for reconsideration and no decision has so far been made,” Abad said. “We hope that the Supreme Court doesn’t take much longer in declaring as final its decision on the case.” Reacting to a three-part Inquirer special report on the coconut industry, Forbes said: “President Aquino has no control of the P9-billion fund mentioned because it is held in escrow upon orders of the Supreme Court. Even as this decision is unanimous, its finality is delayed by the motion for reconsideration of the losing parties.” “The President cannot by his own power free such fund in escrow. The only thing the government may do during the pendency of the resolution on the motion for reconsideration is to file a motion to release the dividend pendente lite. But again the release of such fund rests on the discretion of the Supreme Court,” Forbes said in a letter to the Inquirer.
The funds are deposited in state-owned United Coconut Planters Bank (UCPB).
UCPB, then under the control of Eduardo “Danding” Cojuangco, Mr Aquino’s uncle and a major contributor to his presidential campaign in May 2010, provided the funds used to acquire the 24-percent SMC package in 1983.