Press Release
August 5, 2007


Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today cautioned the Arroyo government against its plan to sell sequestered coconut levy-funded shares in the San Miguel Corporation (SMC) and to use the proceeds to narrow down the budgetary deficit and to fund priority projects of the administration.

Pimentel was reacting to the statement of Finance Secretary Margarito Teves that the government expects to raise at least P50 billion from the disposition of the 27 percent shareholding in the SMC acquired through the coconut levy to make up for the shortfall in tax collection and prevent the budget deficit from exceeding the targetted P63 billion deficit this year.

He reminded President Gloria Macapagal-Arroyo and Secretary Teves of government policy that the proceeds of the sale of the sequestered SMC shares should be used to address the plight of the coconut farmers in the same manner that the ill-gotten wealth of the Marcoses and their cronies should be used exclusively to fund the Comprehensive Agrarian Reform Program and to compensate victims of martial law atrocities.

The minority leader cited a Supreme Court ruling declaring that the coconut levy funds are special funds to be used solely for the rehabilitation and development of the ailing coconut industry and the upliftment of the lives of marginalized coconut farmers and workers.

"Simply stated, the proceeds of the sale of the coconut levy-funded SMC shares cannot be diverted to projects and purposes other than what they are intended for the amelioration of the long-neglected and impoverished farmers ad workers in the coconut industry. To do otherwise will be a breach of government policy and judicial rulings," Pimentel said.

This policy was upheld by the Sandiganbayan in its decision on May 11, 2004 that the sequestered 27 percent SMC shareholding should be considered public fund and should be held in trust by the government on behalf of coconut farmers.

Pimentel voiced apprehension over the possible misuse of the proceeds of the sale of the SMC shares similar to illegal diversion of portions of the recovered Marcos bank deposits and the multi-billion peso fertilizer fund to the Arroyo campaign in the 2004 presidential election.

"It is bad enough that the economic condition of coconut farmers continues to deteriorate due to the steady decline of the coconut industry. This problem could have been remedied had the government acted decisively in recovering the coconut levy assets which, have remained idle since they were sequestered by the government in 1986," he said.

Noting the Arroyo government's efforts to forge an out-of-court settlement on the 20-year old coconut levy cases, Pimentel warned that farmers will not agree to a compromise deal that will stray from the basic policy that the disposition of such assets should primarily redound to their benefits.

Earlier, Pimentel questioned the Arroyo government's decision to negotiate with the group of business tycoon and SMC chairman Eduardo "Danding" Cojuangco, Jr. and the coconut farmers for an out-of-court settlement of the coconut levy cases, particularly involving the 27 percent SMC shares.

He said such compromise deal was illogical because the government, through the Presidential Commission on Good Government, had scored a series of victories in the coconut levy cases and the cases were about to be wrapped up in the courts.

Pimentel said the government's decision to follow this course of action looked ridiculous because the Arroyo government had opted to reject and invalidate an already completed out-of-court settlement that was worked out by the Estrada government in November, 2000.

He bewailed that the Arroyo government's wishy-washy handling of the coconut levy controversy has caused an unwarranted delay in the unfreezing of the SMC assets to the detriment of the coconut farmers, and the nation as a whole.

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