Coco Levy Act to benefit 3.5 million Filipino farmers, spur dev’t of PH coconut industry

Published March 1, 2021, 11:43 AM

by Manila Bulletin

Boosting the local coconut industry and helping Filipino coconut farmers are the main goals of the Coco Levy Act.

The Coconut Levy Act that President Duterte recently signed, and which seeks to create a trust fund for coconut farmers through the sale of assets procured through the coco levy fund, would benefit the country’s 3.5 million coconut farmers from 68 coconut producing provinces, who have owned no more than five hectares for the last 10 years, said Sen. Cynthia A. Villar, chairperson of the Senate Committee on Agriculture and Food. 

Senator Cynthia Villar, the principal sponsor of Senate Bill No. 1396, hopes that the “Coconut Farmers and Industry Trust Fund Act” will resolve the decades-old issue surrounding the coco levy fund.

“The coconut farmers are the poorest in the country. They earn only about P1,500 a month. This fund, which rightfully belongs to the coconut farmers, should be plowed back to them for their own direct benefit,” said Villar. 

Villar, principal sponsor  of Senate Bill No. 1396, or the Coconut Farmers and Industry Trust Fund Act, stressed the law was in consonance with the declared policy of the state to consolidate the benefits due to coconut farmers, and to expedite their delivery to attain increased incomes for them and to alleviate poverty and achieve social equality. 

She hopes this law  will finally resolve the decades-old issue surrounding the coco levy fund. She said it will carry out its two-pronged goal—to help coconut farmers and develop the coconut industry.

Under Senate Bill 1396, which was adopted by the House of Representative, the government is also mandated to turn over P75 billion cash from the coconut levy assets in the next five years to create a trust fund for our coconut farmers. 

Immediately after the passage of the bill into law, Villar said the Bureau of Treasury (BTr) shall transfer P10 billion to the trust fund and for the succeeding years, according to the following schedule: P10 billion in the second year,

P15 billion on the third year; P15 billion, fourth year; and P25 billion, fifth year.

Furthermore, she said the trust fund will be augmented with all the proceeds of privatization or disposition of the Coconut Levy Assets remitted directly by the BTr and the Privatization and Management Office.

Villar said P5 billion in the trust fund will be used upon enactment of the law for the following programs. This will be in addition to the programs of the Philippine Coconut Authority which will be given a separate budget. The minimum disbursement per year will be P5 billion, but this could become bigger.


 • 15% for planting and replanting of hybrid coconut seedlings and  production of hybrid coconut seedlings by the Philippine Coconut Authority.

•    5 percent for research and production of hybrid coconut seedlings by the Department of Science and Technology – Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development (DOST-PCAARRD);

•    10 percent to be shared equally for farm improvements through diversification and intercropping with livestock, dairy, poultry, coffee and cacao production by the National Dairy Authority and the Department of Agriculture; Native Animal Program; and High Value Crop Program to be divided equally

•    10 percent for shared facilities for processing by the Philippine Center for Postharvest Development and Mechanization (PHilMech); to be given to cooperatives. If there’s no cooperative in the town, it will go to LGUs;

•    5 percent for organizing and empowering coconut farmer organizations and their cooperatives under the Cooperative Development Authority;

•    5 percent for research, marketing and promotion by the Bureau of Micro Small and Medium Enterprise Development under the Department of Trade and Industry;

•    4 percent for crop insurance to be implemented by the Philippine Crop Insurance Corporation;

CREDIT – 10%

•    10 percent to be shared equally for the credit programs of the Development Bank of the Philippines and the Land Bank of the Philippines

INFRA – 10%

•    10 percent for infrastructure development  to be implemented by the, Department of Public Works and Highways in coconut producing LGUs


•    8 percent for Scholarship programs for farmers and their families to be implemented by the Commission on Higher Education;

•    8 percent for the training of coconut farmers and their families as listed in the coconut farmers registry in farm schools through Technical Education and Skills Development Authority and Agricultural Training Institute to be shared equally;

HEALTH – 10%

 •    10 percent for health and medical programs for farmers and their families to be implemented by agency created by the Philippine Coconut Authority, for this purpose

Senator Cynthia Villar and PCA Administrator Benjamin Madrigal planting coconut and cacao trees in the Villar SIPAG Farm School to teach farmers intercropping.

Under the measure, the Philippine Coconut Authority Board (PCA) has been reconstituted and strengthened to ensure the participation of coconut farmers in the crafting and implementation of the Coconut Farmers and Industry Development Plan. 

The PCA Board shall be composed of the  secretaries of the Departments of Agriculture (as chairperson), Trade and Industry, Budget and Management,  Finance, and DOST and PCA, and three farmer-representatives from Luzon, Visayas and Mindanao.