No.

2012-02

May 2012

Coco Levy Funds:

A Fiscal Stimulus to the
Coconut Industry?*
Background
The Supreme Court (SC) in January 2012 affirmed the 2004 ruling of the Sandiganbayan that awarded a 24%
block shares in San Miguel Corporation (SMC) to the government held it in trust for the countrys coconut
farmers. The 24% block of San Miguel shares was part of the 47% block of shares that the Presidential
Commission on Good Government (PCGG) had sequestered in 1986 on suspicion that they were illegally
acquired by the cronies of then President Ferdinand Marcos using the coco levy funds. At current value,
this was estimated at P150 billion or more, inclusive of earnings, interest and other increments.
The coco levy was imposed on the coconut farmers from 1971 to 1982. Purportedly, it was collected
to subsidize the sale of coconut-based products and to finance coconut research, extension and credit
services, and among others, to benefit the coconut industry in general. Yet, the funds were apparently not
used for their intended purposes.
The coconut industry has remained an orphan child of Philippine agriculture. Over the years, it has
received scant government attention as evidenced by the lack of sustained roadmap, as well as funding,
for the coconut industry. This malaise is in stark contrast with the resources committed by the government
to irrigated rice in line with its rice self-sufficiency drive.
However, with the resolution of the coconut levy fund cases, fund management and utilization can spell
a big difference in the capacity of the sector and the government to introduce effective and sustainable
development interventions. Prior to any decisions on the use of the recovered assets, it is imperative to
determine viable, transparent and inclusive structures and mechanisms that will ensure the delivery of
development programs to the farmers and the industry.
Industry Impact on Poverty Reduction
The development of the coconut sector is central to the objective of reducing poverty especially in the
rural areas. There are about 3.4 million farmers and workers dependent on coconut-based livelihood. The
coconut industry comprises the largest farm area or about 30% of farmlands (3.3 million hectares and 1.4
million farms) in Philippine agriculture.1
Prepared by John Paul S. Quieta in consultation with Director Novel V. Bangsal and CPBRD OIC Director General Dr. Romulo E.M. Miral, Jr.
The views, opinions and interpretations in this report do not necessarily reflect the views of the House of Representatives as an institution or its
individual members.
*

Page 1

The industry has performed badly over the years. While coconut products contribute nearly half of agriculture
exports, many coconut farmers and farm workers live below the poverty lineconsidering the industrys
contribution to the economy.2 Moreover, coconut regions host the largest number of rural poor in the
countryside. In fact, regions with disproportionately big coconut areas tend to have high poverty incidence.3
This is certainly the case for Bicol with 40.5% of families poor in 2003, Eastern Visayas (35.5%), Zamboanga
Peninsula (44.1%) and Caraga (47.3%) and ARMM (45.7%). This is even more evident at provincial levels.
The coconut industry has great potentials for growth from both production expansion and market-led product
diversification. The potential for non-traditional products is immense but the Philippines currently produces
a small amount of these coconut products. Maximizing the production of non-traditional products such as
geotextiles and nutriceuticals4 can advance the development of the industry.
More importantly, the sector has a huge, untapped resource pool (the coconut levy funds) for industry
development which has been locked in legal battles since 1986. With these potentials, the development of
coconut industry is vital to poverty reduction in rural areas.
Industry Status and Performance
The coconut industry has been a consistent contributor to the Philippine economy. On the average, it
accounts for 5.97% of the countrys gross value added (GVA) and 1.14% of the gross national product
(Table 1).5 Coconut products are among the top five net foreign exchange earners, averaging at least
US$760 million annually. Moreover, the industry has a 59% share in world coconut exports.6
Despite the good performance of the sector, the countrys coconut industry is in crisis. It is plagued by
poor productivity, unstable prices, under-utilization of coconut farms, under-employment and inadequate
industrialization. As cited earlier, poverty among coconut farmers and farm workers has been widespread.
There are about 90% of the 3.4 million farmers who live below the poverty line.7
Table 1.
Coconut Industry: Share to National Economy

GVA of Coconut
Share to Exports
Share to Employment
Poverty Incidence of Coconut Farmers

Annual average contribution of 5.97%

Annual average of US $760 million
3.4 million coconut farmers
90% live below poverty line

Source: Philippine Coconut Authority 2005

Centro Saka 2006

Coconut production is declining. The Philippines is the second biggest coconut producing country in the
world, just behind Indonesia and ahead of India, producing 21% or 12 billion nuts of world nut production.8
Coconut production peaked in 1976, 1986 and 1995. However, other years saw decreased production. At
present, the average productivity has gone down drastically to 38-40 nuts per tree/year from the ideal 75
nuts per tree/year.9
Mindanaos share was formerly pegged at 52% of the total coconut production. At present, it has risen to
almost 60%, not because of increased production in the south but rather due to the steadily decreasing
production in the Visayas and Luzon areas where senile trees abound. Estimates show that of the more
than three (3) million hectares devoted to coconuts, there are 750,000 hectares planted to senile trees and
490,000 hectares to nutrient-deficient trees.10
It is the unstable trend in production coupled with fluctuating world market prices that lead some to view the
industry as a sunset industry that will eventually die down and cease to bring income to those who depend
on it.
Page 2

During the last few decades, data from the Philippine Coconut Authority (PCA) shows decreasing annual
coconut production (Table 2). In 1999 and 2002, coconut production significantly declined by 45% and
19%, respectively. In 2004, production also declined by 9.6%, from 2.54 million metric tons (MT) in 2003 to
only 2.37 million MT in 2004.

Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

Table 2.
Coconut Production, 1997-2010
Copra Terms (million
Net Equivalent
MT)
(billion)
2.600
13.627
2.500
13.102
1.374
7.201
2.572
13.480
2.842
15.031
2.315
12.133
2.549
13.789
2.377
12.458
2.652
14.825
2.554
14.958
2.213
14.853
2.387
15.320
2.758
15.656
3.030
15.540

Growth Rate
-3.85
-45.04
87.20
11.51
-19.28
13.65
-9.65
19.00
0.90
-0.70
13.14
-2.15
0.75

Source: Philippine Coconut Authority 2010

Production areas are shrinking. Coconut lands account for almost a third of the whole Philippine
agricultural area at 3.2 million hectares. Coconut lands are spread in 68 of the 79 provinces in the country.
As of 2002, coconut had the largest production area in the country with a total of 3.3 million hectares (Table
3). However, in recent years, rice land became much larger with an average of 4.3 million hectares of
production area.
Table 3.
Selected Crops: Area Planted/Harvested (000 has), 2002, 2008-2010
Item
2002
2008
2009
Palay
2,467.2
4,460.0
4,532.3
Corn
1,354.4
2,661.0
2,683.9
Coconut
3,325.4
3,379.7
3,401.5
Sugarcane
362.9
398.0
404.0
All Types Total Area
9,670.8
12,894.5
13,031.5

2010
4,354.2
2,499.0
3,575.9
354.9
12,805.6

Source: Census of Agriculture 2002

Bureau of Agricultural Statistics 2011

Massive coconut tree cutting and land conversion have drastically reduced the coconut lands. Examples
of land conversion are the regional industrial centres set up by government such as the CALABARZON
and the Cagayan-Iligan corridor. These areas that used to be devoted to coconuts are now industrial
parks and world-class golf courses. The governments policy towards rice self-sufficiency also explains the
decreasing areas for coconut and the increasing areas for rice.11
But export remains strong. Philippine coconut is still a major source of foreign exchange, earning an
average P32 billion per year from export trades and contributing about 5% of the countrys total annual
merchandise exports receipts.12 It is the top export earner on net basis considering that its raw materials
and labor components are domestically based unlike other export products. The Philippines also supplies
64% of global coconut oil requirements.13
Page 3

In 2007, the Philippines was the number one exporter of coconut products in terms of both volume and
value with total export value of approximately US$1 billion.14 In 2010, its export value peaked at $1.2 billion,
comprising 31% of the total value of the countrys agricultural exports.
Exported coconut products come from 37 products and by-products that are exported to 114 countries.
The major exports are crude and refined oil, copra meal, desiccated coconut, activated carbon, and oleochemicals (Table 4). Exports account for 80% of production and 20% are consumed locally.

Table 4.
Export of Major Coconut Products, Selected Years

Value (US$ million, FOB)

Crude coconut oil
Refined coconut oil
Dessicated coconut
Activated carbon
Copra meal/cake
Quantity (ton)
Crude coconut oil
Refined coconut oil
Dessicated coconut
Activated carbon
Copra meal/cake

1985

1995

2000

2005

328.5
18.8
75.7
14.3
35.5

690.6
26.3
60.7
22.0
54.0

350.9
135.5
73.2
31.0
23.4

482.8
174.5
127.1
39.2
28.1

622,191
28,415
64,752
12,412
443,701

1,059,257
75,284
75,341
20,219
643,922

832,952
227,998
73,693
31,546
530,999

864,422
287,894
125,540
33,843
430,241

Source: National Statistics Office 2006

Issues and Challenges in the Industry

Based on the performance of the sector, the coconut industry has been beset by serious production and
policy problems that hinder its development in the last couple of decades.
Low farm productivity. The average farm production per hectare per year is only less than one metric ton.
Government claims that two to three metric tons per year per hectare is possible through proper agricultural
technology, hybridization and fertilization.15 Some of the factors that contribute to low productivity includes:
(a) 25% of coconut bearing trees are of old age or over 60 years, (b) more than 98% of total land planted
is planted to talls16 that bear fruits only after seven years and yield approximately one-half that of hybrids,
(c) absence of fertilizer application especially in nutritionally deficient coconut land, (d) improper harvesting
and post-harvest practices resulting in poor copra quality, and (e) inadequate intercropping in coconut lands
with less than 40% of coconut farmers practice intercropping.17
At about 40 nuts per hectare, coconut has the lowest farm value per hectare among crops. It is only half of
corn, a fifth of rice, and a sixth of sugarcane. It generates less than a third of the average for all crops due
to low yield, mono-cropping, and land underutilization.
Both government and industry leaders cite low productivity as the main barrier to the industrys development.
The lack of resources of farmers to buy agricultural inputs, tenurial problems, limited access to credit, lack
of irrigation facilities, inadequate farm to market roads and post harvest and processing facilities, and
the indiscriminate cutting of productive trees are the main reasons why productivity level of coconut has
remained low.

Page 4

Low farmgate price. Over the past two decades, farmgate price of coconut has been fluctuating. In the
1990s, farmgate prices peaked at P3-4 per coconut but dropped to about P2 per coconut in the early
2000s. It started to recover in 2002 up until present (Table 5). However, the trend shows that farmgate price
for coconut remains low. A study by Rivera (2009) noted that the low prices given to farmers are usually
attributed to the low world prices for coconut products.18 From 1990 to 1995, coconut products suffered
from low international market value and competition from copra substitutes.19 Thus, amidst volatile price
fluctuations, there has been a long term decline in world copra prices since the 1950s.
Other reasons cited for low farmgate price include: the many layers of middlemen, expensive transport and
handling cost, and cartelized pricing from coconut processors/exporters. For instance, at current rate a
farmer can only sell his coconut at P10 each compared to the market price of P20 to P30 almost double
or triple of what he worked for.20
Table 5.
Philippine Farmgate Price of Coconut
(Peso per Coconut), 1990-2011

Source: Bureau of Agricultural Statistics 2012

Inadequacy of infrastructure support. The coconut industry lacks infrastructure support. Common
service facilities in the country are lacking. Common drying facilities that could help small farmers lower
the aflatoxin levels in their copra and produce better quality coconut coir/husk are not available. There is
also a lack of processing infrastructure in the non-traditional coconut by-product sector.
Thus, there is a dire need for building facilities, feeder roads and irrigation support to boost the productivity
of coconut farmers. Infrastructure like bridges, farm to market roads, coco processing complex and small
water impounding facilities can increase production and lessen the cost of transportation and agricultural
losses due to mishandling. However, funds are needed to finance these infrastructure projects.
Lack of research and development. Basically due to lack of funds, aggressive research and development
have stayed at the backseat. The bulk of the coconut products are exported in practically raw forms as
crude coconut oil, copra meal, copra, desiccated coconut and young coconuts.
Past administrations saw no need to diversify coconut products and by-products in their raw forms which
can deliver more income. Due recently to the serious competition of lauric and vegetable oils in the world
market, government is slowly realizing the need for the production of non-traditional products and byproducts from coconuts.

Page 5

Lack of funds. For decades, government has allocated limited funds to develop the coconut industry due
to lack of financial resources and the ever-growing domestic budget deficit. Also, government policies are
generally biased against tree crops in general, and coconut in particular. Public sector investments have
focused on irrigated rice as a result of the decades-old drive for rice self-sufficiency (Table 6). 21
The long-term bias for rice self-sufficiency and, therefore, for irrigation projects have inadvertently led to
the neglect of coconut development as an instrument of poverty reduction. While the government is willing
to fund irrigation projects to the tune of P100,000 to P400,000 per hectare, in addition to the operations
and maintenance subsidy for national irrigation systems, support for coconut has been far less.22 Today,
rehabilitation of national irrigation systems requires at least P150,000 per hectare.23 By contrast, coconut
replanting would only require P50,000 per hectare. This means that three coconut farmers can be benefited
for every irrigated rice farmer.
Table 6.
Expenditure Program of NFA and PCA
(In Billion Pesos)

AGENCY
2008
Budgetary Support to Government Corporations
Department of Agriculture
44.05
National Food Authority
41.10
Philippine Coconut Authority
0.43

2009

2010

2011

2012

27.11
24.52
0.59

42.05
38.39
0.59

3.38
2.50
0.55

7.67
4.00
0.69

Source: Budget of Expenditures and Sources of Financing 2012

The Coco Levy Funds

Legal framework. The coco levy funds were imposed on the coconut industry to support government
programs that would advance its development. Notable among these programs are those focusing on
replanting, vertical integration, subsidy and welfare. 24
A number of laws have been enacted since 1971 to institute various levies on the coconut industry such
as: the Coconut Investment Fund, the Coconut Consumer Stabilization Fund, the Coconut Industry
Development Fund, the Coconut Industry Stabilization Fund and the Coconut Reserve Fund.25
n The Coconut Investment Fund (CIF). The first coconut levy started in 1971 upon the enactment of
RA 6260, otherwise known as the Coconut Investment Act. The purpose of the fund is to advance
the development of the coconut industry through the provision of medium and long-term financing
for capital investments in the coconut industry.26 It shall be used to finance technical and economic
research studies, promotional programs, scholarship grants and industrial manpower development
program for the coconut industry.
n The Coconut Consumer Stabilization Fund (CCSF). On August 1973, Presidential Decree (PD)
276 established CCSF to address the cooking oil crisis. The PD called for the collection of P15/
copra per kilo copra levy from coconut farmers for a period of one year until the crisis is deemed
solved.27 The purpose of the fund is to provide subsidy for coconut based-products and to set aside
funds for investment in processing plants, research and development, and extension services to the
coconut industry.
n The Coconut Industry Development Fund (CIDF). On November 1974, PD 582 was passed
creating another fund the CIDF. PD 582 specified that at least P0.20 per kg of copra or its
equivalent out of the current CCSF collections shall be paid to the CIDF.28 The purpose of the fund
is to finance the establishment, operation and maintenance of a hybrid coconut seed nut farm to
ensure continuous supply of high yielding highbred seed nuts, and to finance the establishment,

Page 6

operation and maintenance of extension services, model plantations and other activities that would
ensure farmers of the proper methods of replanting hybrid seed nuts.
n On June 1978, PD 1468 was issued, also known as the Revised Coconut Industry Code. The
decree created the Philippine Coconut Authority (PCA) and restructured and further authorized the
continued collections of the CCSF and CIDF.
n The Coconut Industry Stabilization Fund (CISF). On October 1981, PD 1841 was passed
establishing the CISF. It called for the collection of P50 for every 100 kilos of copra or its equivalent
in other coconut products from copra exporters, oil millers, refiners, dessicators and other endusers of copra.29 The CISF is used for the implementation of socio-economic and development
programs such as replanting programs, scholarship programs, life and accident insurance, and to
finance the coconut industry rationalization program.
n Coconut Reserve Fund (CRF). By virtue of PD 1842, issued on January 1982, the fixed P50/copra
per kilo CISF was revised to an amount equivalent to a specific percentage of the prevailing world
market price of coconut oil. It also created the Coconut Reserve Fund to ensure continued financial
support to critical socio-economic and development programs.30 Under the Marcos administration,
pursuant to EO 490 and PD 1468, the fund was declared as private in nature.
Post-coco levy era. From the time the coconut levy was imposed up to 1982, total collections reached
P9.7 billion. The money was sequestered by the PCGG in 1986 in response to the protests from NGOs and
POs on the unconstitutionality of the private character of the funds. They argued that only the government
has the sole authority to impose a tax and the levy collected cannot be used for private purposes. The
Philippine Coconut Producers Federation (COCOFED),31 on the other hand, filed a counter case before
the SC questioning the sequestration move by the PCGG. They contested that the coco levy fund is private
property with the coconut farmers as owners.
Under the Cory Aquino administration, the PCGG declared that the coco fund is a result of systematic
plunder of the coconut industry led by Marcos cronies and COCOFED. Thus, the fund was sequestered
by the government. During the Ramos administration, the issuance of Executive Orders 277 and 481
declared coco levy funds as public funds. However, the courts stopped the implementation of the EOs. In
the Estrada administration, the possession and control of the funds were returned to Danding Cojuangco
despite pending cases against him. Moreover, President Estrada issued EO 313, declaring the funds
as private in nature. Finally, under the Arroyo administration, the EO 313 of Estrada was deemed still
operational since President Arroyo did not issue any new EO on the coco levy funds.
Nature and Status. The public ownership of the coconut levy funds becomes crucial when one considers
the state of the coconut industry. There are around 3.4 million coconut farmers and farm workers whose
average income is less than a dollar a day.32 Coconut farming is the principal source of income for most of
them. These farmers are poor partly because of inadequate support coming from the government towards
making the industry more modern and democratic.
Without a doubt, the coconut levy fund is the most practicable source of fund that could address the
economic difficulties of the coconut farmers, farm workers and the coconut industry in general. The private
nature of the fund has not helped the small farmers. The inherent interest of private money is for maximum
profit and not for the common good of the famers and for the whole industry, as well. Only through the use
of public money can the interest of the coconut farmers be protected.33
In light of the SC decision, coconut farmers have asked President Benigno Aquino III to release an Executive
Order directing the PCGG to free up interests and dividends from the SMC shares. The COCOFED has also
filed a motion for reconsideration, claiming the shares in behalf of the farmers. The Aquino administration
has deferred actions regarding the urgent use of frozen funds arising from the sequestered shares of SMC
worth at least P85 billion to rehabilitate the coconut industry pending the final decision of the SC.34

Page 7

Despite the huge capital requirement to rehabilitate the coconut industry, the government cannot proceed
with the disposition of the shares to develop the industry because there is still a pending motion filed by the
COCOFED and the SC has not yet decided on it.35
Reform Measures in Congress
It is imperative that government undertake the necessary steps to prevent the dissipation and assure the
preservation and conservation of these funds for the benefit of the countrys coconut farmers. There are
several pending proposals seeking to declare the coconut levy fund as public in nature and to protect the
right of coconut farmers to the fund.
n Senate Bill 2978 or the Coconut Farmers Trust Fund Act of 2011, declares the Coconut Industry
Investment Fund (CIIF) Oil Mills Group (OMG) block of shares in SMC and all other coco levy
recovered assets as public funds.

It also seeks to place 27% of the CIIF SMC shares and all other coco levy fund proceeds and assets
in a trust fund to be known as the Coconut Farmers Trust Fund. The fund shall be established for
the development of the coconut industry for the ultimate benefit of the small coconut farmers.
Its purpose shall include the financing of programs or assistance for the benefit of the coconut
farmers, for increased productivity of the coconut industry, and for the development of coconutbased enterprises.

The Trust Fund shall be administered by a committee headed by the President of the Philippines
sitting as its chairperson, and twelve other members, as follows: three representatives from the
government, three representatives from the finance and banking sector, three representatives from
coconut farmers organizations, two representatives from the CIIF group, and one representative
from Civil Society Organization.
n House Bill 469 declares and affirms that the coconut levy funds and the assets acquired through
these funds are public in nature. This affirmation and declaration are essential in expediting the
utilization of these funds to serve the interests of the small coconut farmers. The salient features of
the bill include: (a) adoption of the necessary measures that will address the serious problems that
beset the industry, threatening its viability; (b) promotion of the rapid integrated development and
growth of the coconut and other palm oil industry in all its aspects and to ensure that the coconut
farmers, especially the small coconut farmers, become direct participants in, and beneficiaries
of, such development and growth; and (c) promotion and institutionalization of the participation
of peoples organizations and non-government organization in the coconut industry development
process.
n House Bill 3443 declares policies which include the protection of rights and interest of coconut
farmers to the fund, and the utilization of funds to promote the welfare of coconut farmers. The bill
adopts measures to secure and safeguard the coconut levy funds, empower the coconut farmers
to enable them to directly and fully exercise their ownership and proprietary rights to the funds,
and institute such programs and mechanisms as necessary that will ensure the funds shall be
exclusively used for their own benefits. It also pursues a program of coconut farmers-led integrated
development of the coconut industry geared toward increasing the productivity of coconut farmers.

The bill creates the Coconut Industry Development Council (CIDC) and the Coconut Farmers
Fund for the Rehabilitation and Development of the Coconut Industry (CFFRDCI). The Council will
manage the coco levy funds and facilitate their return to the small coconut farmers. Through this
body, the government will empower and enable coconut farmers to exercise their ownership of and
propriety rights to the funds; ensure that the funds are used for the exclusive benefit of coconut
farmers; and pursue a coconut farmers-led program geared towards higher productivity on the part
of coconut farmers, and the integrated development of the coconut industry.
Page 8

House Resolution 1045 directs the Committee on Agriculture and Food to conduct an inquiry, in aid
of legislation, on the total amount of the coconut levy fund dividends in private corporations where
the coconut levy funds have been invested, and in other coconut levy fund-acquired corporations
as well as the disbursements made therein, if any.
Despite problems confronting the government from using the coco levy assets for the coconut farmers, the
Aquino administration is investing extensively in the coconut industry. It identified the coconut industry as
one of three agricultural crops/products that will make huge investments under this term. Investments will
be in the areas of massive replanting, extensive intercropping, and coco processing.
Way Forward
The industry has good potentials for growth from both production expansion and market-led product
diversification. Likewise, coconut lands have tremendous scope for farm diversification. These potentials
can be realized by: (a) a stakeholder, market-driven roadmap; (b) budget allocation based on social economic
returns; (c) engaging the civil society in program design, implementation and monitoring;36 and (d) prior
to liquidation of any recovered coconut levy asset, it is important to determine viable, transparent and
inclusive structures and mechanisms that shall ensure the delivery of meaningful development programs
for the farmers and the industry.
In addition, the passage of the reform measures should also be pursued to finally protect the interest of
coconut farmers and to render them social justice as the rightful owners of the fund. With the passage of
these bills, farmers may exercise their ownership rights over the funds and may dispose these in line with
the development of the local coconut industry.
In the event of the final ruling and the total liquidation of the fund, a mechanism for its distribution and
utilization should be put in place --- a mechanism designed according to the original purpose of the fund
which is to improve the economic welfare of coconut farmers and to advance the development of the
coconut industry as a whole.

Endnotes:
1
Joey Faustino, Facing the Challenges of the Philippine Coconut Industry: The Lifeblood of 3.4 Million Coconut Farmers and Farm Workers
(2006).
2
Rolando Dy and Senen Reyes, The Philippine Coconut Industry: Performance, Issues and Recommendations.
3
Ibid.
4
Geotextiles are synthetic permeable textile materials which are used in making high-standard quality roads. Nutriceuticals is a term used for
a mix of food and medicinal values with coconut oil derivatives. It is used for the treatment of a variety of ailments.
5
Philippine Coconut Authority Department of Agriculture (2005)
6
Menchie Flore-Obanil, Agrarian Reform in Coconut Areas Vital to Development, Centro Saka (2006)
7
Faustino, op. cit., p. 17
8
Prosperity Initiative, Coconuts in the Mekong Delta: An Assessment of Competitiveness and Industry Potential (2009)
9
Faustino, op. cit., p.11
10
Ibid.
11
Rolando Dy, The Philippine Coconut Industry: Performance, Issues and Recommendation (2006)
12
Agri-center, Philippine Coconut Industry Situationer (2008)
13
Ibid.
14
Prosperity Initiative, op. cit., p. 36
15
Faustino, op. cit., p. 15
16
Talls are grasses that can be found growing in low, damp pastures and wet meadowlands. Talls tolerate low fertility.
17
Ibid., 16.
18
Susan Rivera, Market Integration and Efficiency of the Philippine Coconut Industry (2009)
19
Food and Agriculture Organization Regional Office for Asia and the Pacific. FAO Corporate Document Repository. Pasture-CattleCoconut Systems (1995)
20
Melissa Manalac, Cash in on Coconut, Biolife (2008)
21
Dy and Reyes, op. cit., p. 3
22
World Bank, Philippines Tree Crops for Rural Development: Issues and Strategy. Volumes I and II. Report No. 19281-PH (1999)

Page 9

Dy and Reyes, op. cit., p. 3

The burden of the coconut levy fell on the farmers. On the average, it accounted for close to 41% of the farm price of their products from
1974 to 1978. While the programs financed by the levy were supposedly designed to benefit them, the bulk of the benefits have not gone back to
them.
25
The subsidy program generated collections of P1.7 million from 1973 to 1979. The bulk of this amount was paid to the edible oil
manufacturers. A subsidy surplus was registered at P37.1 million from 1973 to 1978. The surplus was a major factor that led industry leaders to
continue the CCSF levy to implement other government programs such as the vertical integration program. The vertical integration program was
intended to transform farmers into traders, bankers and processors. However, it turned out to be a concession to big planters allowing them to own
banks and mills at the expense of the farmers. In addition, the replanting program indirectly taxed farmers. However, they were not aware that they
were taxed and how the tax was utilized. They were also not aware that they were entitled to a free replanting of their coconut with the superior
hybrid. Thus, the coconut farmers only benefitted slightly in the imposition of the coco levy fund.
26
Dy, op. cit., p. 33
27
Ibid., 33.
28
Ibid., 34.
29
Ibid., 34.
30
Ibid., 35.
31
COCOFED was originally named the Philippine Coconut Planters Association when it was established in 1947. It was renamed COCOFED
in 1956. In 1971, it was recognized by the Marcos government as the national organization of coconut farmers with the largest membership.
COCOFED aims to increase and improve the productivity of coconut and farm income through continued productivity measures, with the direct
participation and involvement of coconut farmers, government, and other sectors of the industry.
32
Romeo Royandoyan, Long and Tortuous Road to Coconut Levy Recovery, Centro Saka (2007)
33
Ibid., 7.
34
Norman Bordadora, P-Noy defers action on coco levy funds, Philippine Daily Inquirer (2012)
35
Ibid.
36
Dy, op. cit., p. 25
23
24

Congressional Policy and Budget Research Department

3/F Main Building, House of Representatives, Quezon City, Metro Manila
p: (0632) 931-5001 Local: 7594
cpbrd_hrep@yahoo.com
Printed by the House Printing Service
Administrative Department
May 2012

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