Duterte: Bill for coconut industry trust fund unconstitutional

Published February 18, 2019, 11:47 AM

by Patrick Garcia

By Argyll Cyrus Geducos

President Duterte vetoed the bill creating the coconut farmers and industry trust fund as it may possibly violate the Constitution.


This came after Duterte also vetoed an earlier related bill on the Philippine Coconut Authority (PCA).

In his message to both houses of Congress, Duterte said that while he was keen on ensuring the well-being of coconut farmers, he had to veto Senate Bill No. 1233 / House Bill No. 5745.

“As desirous as I am to sign into law the long awaited measures that will enable us to attain these objectives, it is with much regret that I express serious concerns on the bill as presently formulated,” he said.

“After much deliberation, I have come to the conclusion that the bill may be violative of the Constitution and is lacking in vital safeguards to avoid repetition of painful mistakes committed in the past,” he added.

According to Duterte, the establishment of a perpetual Trust Fund would violate Article VI, Section 29(3) of the Constitution which provides that “all money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only. If the purpose for which the special fund was created has been fulfilled or abandoned, the balance, if any shall be transferred to the general fund of the Government.”

Duterte also said the absence of a limit on a covered land area for entitlement to the benefits of the Trust Fund may disproportionately benefit wealthy coconut farm owners more than the smallholders who desperately need the government’s affirmative assistance.

He pointed out lastly that the broad powers given to the PCA would undermine relevant regulations and safeguards that were established precisely to avoid abuses.

Duterte, however, hopes that the Congress will be able to come up with a better bill since the one he vetoed did not reflect their goal of advancing the welfare of small coconut farmers.

“The aforestated provisions do not reflect our ultimate goal of accelerating the full utilization of coco levy assets and funds for the benefit of marginalized coconut farmers and our coconut industry, with due regard to relevant constitutional provisions,” he said.

“I am hopeful that Congress and the Executive will continue working together towards a formulation of the relevant bill that is acceptable to all,” he added.

Early this month, Duterte vetoed Senate Bill 1976 and House Bill 8522, an Act to Further Strengthen the Philippine Coconut Authority, amending Presidential Decree No. 1468, otherwise known as Revised Coconut Industry Code, as amended, and Appropriating Funds Therefor.

According to Presidential Spokesperson Salvador Panelo, Duterte thought that the said enrolled bill was vulnerable to corruption.

“The P10-billion in annual appropriation for the development of an industry whose implementation is placed on an agency not required to seek approval from the Executive Branch is susceptible to corruption akin to creating pork barrel funds,” he said.

“The oversight functions over the Philippine Coconut Authority (PCA) is placed only with Congress. Specifically, the strengthened PCA Bill mentions of an oversight to be exercised by the Coconut Farmers and the Industry Oversight Committee to the exclusion of the Executive Branch,” he added.

The Palace official noted that a reconstituted PCA would given various functions including but not limited to the sale, disposition, or dissolution of coco levy assets without checks and balances.

“Such condition will diminish the ability of the Department of Justice, through the Office of the Solicitor-General in coordination with the Presidential Commission on Good Government to act on cases relating to coco levy assets,” Panelo explained.

Panelo also mentioned that the addition of seven members from the private sector to the reconstituted 15-member PCA board under the new bill will allow private persons to influence the disbursement of public funds.

He then said that the PCA, under the new bill, is being set up like the Road Board which Duterte wanted dissolved because it has become the milking cow of corrupt politicians.

“The PCA is set up like the Road Board which is heavily criticized for allegations of corruption and misappropriation of funds. The PCA Board, like the Road Board which disburses the Motor Vehicle User’s Charge, is given full authority to disburse P10-billion every year in perpetuity without a terminal date, and subject only to review by Congress after six years,” Panelo said.