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Duterte Finally Signs EO on Coconut Industry Development, Paving Way for Release of P75-Billion Coco Levy Fund

What's next for the country's coconut industry?
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President Rodrigo Duterte might be entering the final weeks of his term, but that hasn't deterred him from finally fulfilling some of his earliest vows to the nation: to revitalize the Philippines' coconut industry and to protect coconut farmers.

On June 2, the outgoing president signed Executive Order (EO) No. 172, or the Coconut Farmers and Industry Development Plan (CFIDP).

According to a release by the Department of Agriculture, the CFIDP should set the "direction toward the coconut industry’s rehabilitation, modernization, and industrialization while aiming to improve the livelihoods of 2.5 million coconut farmers."

It will be up to the Philippine Coconut Authority (PCA) and concerned agencies to implement the programs and projects, pursuant to Republic Act No. 11524 or Coconut Farmers and Industry Trust Fund (CFITF) Act, which was signed in February 2021. Regular reviews and updates will be made every five years subject to the president's approval.

“The issuance of Executive Order 172, which approves the CFIDP, is yet another manifestation of the Duterte Administration’s commitment to uplift our farmers and foster a competitive Philippine agriculture,” Agriculture Secretary William D. Dar explained.

Among the parties consulted for the CFIDP are the Department of Finance (DOF), Department of Trade and Industry (DTI), National Economic and Development Authority (NEDA). The NEDA, in particular, aligned this with the Updated Philippine Development Plan 2017-2022 and the Philippine Coconut Farmers and Industry Roadmap 2021-2040.

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What Happened to the Original Coco Levy Fund?

During the rule of former President Ferdinand Marcos, Sr., the state collected money from coconut farmers through the imposition of taxes, charges, and additional fees. The original intent was to create a fund that would strengthen the country's coconut industry through funds that would then be used to aid coconut research, credit services, and modernization, among others.

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But decades later, coconut farmers, together with the Presidential Commission on Good Government (PCGG), would file lawsuits against administration cronies who allegedly used the funds for their own interests. In 2012, the Supreme Court settled the dispute, with the state declaring ownership of the funds.

Three years later, President Benigno "Noynoy" Aquino III had also tried to file EOs 179 and 180, which would supposedly recover coco levy assets and privatize them. The High Court ruled against it.

“The Court issued a Temporary Restraining Order effective immediately and until further orders from the Court against the implementation of Executive Order Numbers 179 and 180,” Information Chief Theodore Te said at the time.

State of the Current Coconut Industry

Coconut is planted in 69 provinces, spanning 3.6 hectares with more or less 347 million fruit-bearing trees. In 2019, these trees produced 14.8 million metric tons. That same year, the Philippines' coconut sector contributed more than $1 billion (About P52 trillion) in export revenues.

This was due, in large part, to coconut oil, making the Philippines the top exporter in the world. In 2020, the country maintained its global position in the coconut product exports. Our exports of coconut oil and desiccated coconut accounted for 52.48 percent and 35.91 percent of the global market.

The PCA claimed that coconut products had an average export revenue of P91.4 billion from 2014 to 2018. Meanwhile, Philippine Statistics Authority (PSA) data showed that exports of coconut products reached a four-year high in 2021. They reached nearly $2 billion (Roughly P105 trillion), which was up by 58.7 percent from the year prior.

From January to March 2022, production of coconut (with husk) was at 3.20 million metric tons, which was up two percent from the same quarter the previous year. Davao Region was the top coconut producer in the country with 15.7 percent of the share, followed by Zamboanga Peninsula at 14.9 percent and Northern Mindanao at 13.6 percent.

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What About the Coconut Farmers?

With the approval of the CFIDP, the P75-billion coco levy fund will now be distributed through the trust fund created by the CFTIF Act. This law previously recovered the said coco levy assets. An initial P10 billion shall immediately be released upon the enactment.

For the succeeding years, the schedule of disbursement is follows:

  • Second Year, P10 Billion
  • Third Year, P15 Billion
  • Fourth Year, P15 Billion
  • Fifth Year (and any amount accruing, including interest), P25 Billion

“After more than four decades of waiting, the law for the management and utilization of the coco levy fund that was enacted last year will now be finally implemented in fulfillment of President Duterte’s campaign promise to our coconut farmers," said PCA Administrator Benjamin Madrigal, Jr.

He continued: "This shall be the lasting legacy of the President in improving the lives and the livelihood of our dear coconut farmers."

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Bryle B. Suralta
Assistant Section Editor
Bryle B. Suralta is the Assistant Section Editor of Esquire Philippines.
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