Department of Justice (DOJ) Secretary Jesus Crispin C. Remulla said two corporations in the coconut industry are owned and controlled by the government and should be remitting at least 50 percent of their earnings to the Bureau of Treasury (BTr). In a legal opinion sought by BTr Trust Fund Management Committee (TFMC) Secretariat Head Rosalia V. De Leon, Remulla said the two corporations are the United Coconut Chemicals, Inc. (CocoChem) and the Coconut Industry Investment Fund-Oil Mills Group (CIIFF-OMG). “We confirm that both CocoChem and the CIIF-OMG are GOCCs (government-owned and controlled corporations) that are required to remit at least 50 percent of their reported net earnings to the National Government, through the BTr,” Remulla said. De Leon sought a confirmatory legal opinion from the DOJ after it was discovered during the 11th TFMC meeting held last March 13 that Cocochem and CIIF-OMG have not been remitting their dividends to the national government. Citing the Supreme Court (SC) ruling on Leyson vs. Ombudsman, Remulla said the high tribunal explained that the Administrative Code of 1987 mentioned three requisites for GOCCs. He said the three requisites are: “First, any agency organized as a stock or non-stock corporation; second, vested with functions relating to public needs whether government proprietary in nature; and, third, owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stocks corporations, to the extent of at least fifty-one (51) percent of its capital stock.” He pointed out that CocoChem is a stock corporation as certified to by the Securities and Exchange Commission (SEC) and, based on the corporation’s amended general information sheet (GIS), “the stock certificates owned by the Republic of the Philippines amounts to 681,985,073 representing 92.85 percent.” “CocoChem is the country’s leading manufacturer of oleochemicals, with an abundant supply of coconut products located in the Philippines, which is the largest coconut producing nation, CocoChem uses local coconut oil as its only feedstock. With the production of the local coconut oil, CocoChem helps the Philippine coconut industry thrive and the coconut farmers sustain their livelihood. This in itself upholding public interest for the benefit of the coconut farmers and their community,” he said. “Further, the company’s corporate aim is to lead the national effort in increasing the downstream utilization of coconut oil and contribute to the worldwide effort to increase the use of natural oils in the production of higher value-added products. Hence, CocoChem performs governmental roles in the interest of health, safety and for the advancement of public good and welfare, affecting the public in general,” he added. While CIIF-OMG did not contest being a GOCC, it claimed being exempted to remit its earnings pursuant to Section 4 of Republic Act (RA) No. 7656, the Dividends Law, which cited that GOCCs not covered by the law are those “created or organized by law to administer real or personal properties or funds held in trust for the use and the benefit of its members” such as the Government Service Insurance System (GSIS), the Home Development Mutual Fund (HDMF), the Employees Compensation Commission (ECC), the Overseas Workers Welfare Administration (OWWA), and the Philippine Medical Care Commission (PMCC). But Remulla reminded that CIFF was created under Presidential Decree (PD) No. 582 and is “a fund from part of the levy imposed on the initial sale by coconut farmers of copra and other coconut products.” “The coco levy funds are not of the same footing as the funds held in trust by the GSIS, HDMF, ECC, OWWA and PMCC for the use and benefits of its members,” he said. “The coco levy funds are in the nature of taxes and can only be used for public purpose, Consequently, they cannot be used to purchase shares of stocks to be given for free to private individuals, similarly in this case, the coconut levy funds were sourced from forced exactions decreed under P.D. Nos. 232, 276 and 582, among others, with the end-goal of developing the entire coconut industry,” he also said. “Clearly, to hold therefore, even by law, that the revenues from the imposition of the coconut levies be used purely for private purposes to be owned by private individuals in their private capacity and for their benefit, would contravene the rationale behind the imposition of taxes or levies,” Remulla stressed.