Press Release
March 19, 2018

Explanation of Vote Coconut Farmers and Industry Development Act
Senate President Pro Tempore Ralph G. Recto
19 March 2018

I vote yes to this bill because the fund will remain a trust to be invested safely, administered simply by a body dominated by farmers, matched with bigger government funds, and spent in a manner pursuant to a menu that will benefit the many coconut farmers as quickly as possible.

First, the levies will remain a public trust, but will be transparent.

So it will not suffer the fate of typical off-budget accounts like the lamentable Road Users Tax Fund, and the lost Malampaya collections, its usage, reporting and expenditure will strictly follow budget, accounting, procurement and auditing rules.

The trust income can only be spent in obedience to the industry roadmap, and must be line-itemized in the PCA budget. It will never be considered new appropriations--which means that while it can be subject to scrutiny, it cannot be spent for other purposes.

Second, the original proposal was for a Coconut Industry Development Fund that will only use interest income from the coco levy trust.

This will amount to P2 billion to P2.5 billion a year. Pero bakit coco levy lang ang gagamitin? Bakit hindi magbigay ng counterpart fund ang pamahalaan?

Thus, the Senate version adds a guaranteed budgetary support of P10 billion to the PCA on top of trust income.

Third, this bill jettisons the idea of a "perpetual" rehabilitation of an industry in crisis.

Instead, it mandates a 25-year timetable, for good reason. If the patient is in ICU, then the treatment must be immediate, and the assistance massive.

Kung namamatay na sa uhaw, bakit isang kutsarita lang ang ibibigay, through a drip-drip of funds? When World War II ended and Pinatubo erupted, the government vowed quick and not "forever" rehabilitation.

Ang gusto ba natin sa Marawi at Yolanda reconstruction, wala ring katapusan?

Fourth, the trust will be invested in the safest instrument there is: the Republic-backed government securities. Fancy derivatives will have no place in fund stewardship, nor will subprime products.

Fifth, the original proposal called for a creation of a 13-person Trust Committee, separate from the PCA, plus a multi-agency ad hoc committee that will draft the "Coconut Industry Road Map."

Why create so many bureaucratic layers and overlaps, when it can be done by an expanded and strengthened PCA, dominated by farmers, who will occupy 6 out of the 11 seats?

Kung isa lang ang paglalagakan ng pera at wala nang ibang investment picks, bakit pa bubuo ng hiwalay at napakalaking grupo na mangangasiwa? If the spending is pursuant to a farmers-drafted roadmap, then why create a bigger and separate oversight committee?

We can embrace the orthodoxy of "the more the merrier" oversight or opt for a practical compact body, whose membership does not go against the interests which must be represented.

There is no government agency today that is by law dominated by private individuals. The proposed expanded PCA breaks tradition by reserving majority of its seats for farmers.

The PCA will be the lead initiator of the Coconut Industry Roadmap, in which all stakeholders will participate. It will be empowered with the right to ratify the stewardship or disposal of coco levy assets.

Thus, why maintain two bodies, when, for purposes of efficiency, transparency, accountability and savings, it can be done by one body -the PCA - that is dominated by coconut farmers?

Mr. President, I maintain there is no debate as to the need that the levies must now be enjoyed by the people who paid for it. The divergence is on how to plow it back.

I vote yes to this bill because it mandates a system that will lead to the efficient use of public money.

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