Press Release
January 16, 2008


Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today deplored the continued freeze on the multibillion peso coconut levy assets which has deprived the government of much-needed funds to rehabilitate the ailing coconut industry.

Pimentel warned that the coconut industry is fast declining as a consequence of indiscriminate cutting of trees for lumber, conversion of coconut plantations into subdivisions and industrial sites, pest infestation, typhoons and other natural disaster and stiff competition from other forms of vegetable oil.

He said nut production is steadily dwindling in traditional coconut-producing provinces, particularly in Luzon where the old trees are yielding less and less fruits and should be replaced by new ones, preferably high-yielding varieties.

Pimentel said the acute problems plaguing the coconut industry are clearly illustrated in the impending closure of the Franklin Baker Desiccated Coconut Co. in San Pablo City which will cause about 1,200 workers to lose their jobs.

Franklin Baker, a leading manufacturer and distributor of desiccated and specialty coconut products in the country for the last 83 years, has decided to shut down its plant by the end of the year due to declining coconut supply.

Pimentel said he was told that several coconut oil mills in Quezon and Laguna have either closed down or are operating below capacity because there is not enough copra to process.

Noting the current high prices of coconut, he said that farmers and workers ironically are hardly benefiting from this market trend because of the dwindling coconut yields.

Pimentel said the decreasing coconut production can be arrested only by a massive coconut replanting program, prevention of pest infestation, ban on the cutting of productive coconut trees and moratorium on the conversion of coconut plantations into residential and other commercial areas.

"We should not wait for the coconut industry - a backbone of the national economy - to sink deeper and collapse. The government and the private sector should act decisively to save an industry which directly employs and provides livelihood for about 16 million Filipino farmers and workers," he said.

The senator from Mindanao said that while the Philippine Coconut Authority is doing its task in the coconut replanting program, its resources are very limited to benefit as many farmers as possible and to offset the diminution of coconut hectarage.

Pimentel said the funding constraints for the coconut replanting and the rehabilitation of the industry can be solved if the government will finally recover and spend the coconut levy assets invested in San Miguel Corporation worth more than P100 billion.

He expressed dismay over the inordinate delay in recovering these assets due to the conflicting strategies of the Arroyo government to resolve the coconut levy cases in the Sandiganbayan.

"The government has already scored victories in the coconut levy cases, in both the Sandiganbayan and the Supreme Court. And yet, why does the Presidential Commission on Good Government still insist on entering into a court-settlement with the litigants in the cases?" Pimentel said.

"The compromise deal being sought by the PCGG is only prejudicing the government's chances of having a favorable final verdict in court."

Pimentel said the unfreezing of the coconut levy assets and their judicious use in resuscitating the coconut industry would have a tremendous impact in accelerating the country's economic growth.

He said part of the coconut levy money should be used in the research and development of high-yielding coconut hybrids that will be distributed to all coconut-producing provinces.

The government, he said, should also set aside money for alternative livelihood projects that will keep farmers and their families busy while waiting for the next coconut harvest season.

Pimentel, a principal author of the Bio-Fuels Act, also emphasized that the government's program to expand coco-diesel production will not be viable if coconut production continue to go down instead of increasing.

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