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Manila Bulletin devider Philippines devider National devider Earnings from coconut levy assets must be remitted to trust fund to benefit farmers – DOJ

Earnings from coconut levy assets must be remitted to trust fund to benefit farmers – DOJ

Published Feb 19, 2024 04:26 am

Dividends and proceeds in the use of the multi-billion-peso coconut levy assets by government-owned and controlled corporations (GOCCs) should be remitted to the Coconut Farmers and Industry Trust Fund for the benefit of farmers, the Department of Justice (DOJ) said.

In a five-page legal opinion dated Feb. 12, DOJ Undersecretary Raul T. Vasquez, on behalf of Justice Secretary Jesus Crispin C. Remulla, stated that “the dividends and/or proceeds of the GOCCs forming part of the Coconut Levy Assets shall be transmitted to the Trust Fund in accordance with the provisions of Republic Act No. 11524.”

Vasquez cited that RA 11524, the Coconut Farmers and Industry Fund Act, states that: “[A]ll Coconut Levy Assets xxx shall be transferred to the Trust Fund for the benefit of the coconut farmers.”

“The Trust Fund, specially created under RA No. 11524, shall be maintained in such manner for fifty (50) years under the Coconut Farmers and Industry Development Plan and shall be used for the benefit of the coconut farmers and the development of the coconut industry,” he explained.

The DOJ issued the legal opinion to Undersecretary Catherine L. Fong of the Privatization and Corporate Affairs Group and trust fund manager.

Fong sought a clarification of the DOJ’s May 31, 2023 legal opinion which stated that United Coconut Chemicals, Inc. (CocoChem) and the Coconut Industry Investment Fund-Oil Mill Group (CIIF-OMG) are GOCCs and required to remit at least 50 percent of their reported net earnings to the national government (NG), through the Bureau of Treasury (BTr), pursuant to RA 7656, the Dividends Law.

She told the DOJ that during the 13th Trust Fund Management Committee (TFMC) meeting held last Oct. 3, 2023, it was determined that the remittance of the dividends of CocoChem to the national government could reduce CocoChem’s selling price and should be used as investment and earn additional income.

Vasquez said “CocoChem and the CIFF-OMG, as part of the Coconut Levy Assets, are corporations or properties acquired through the Coconut Levy Fund, which are generated from levies, taxes, charges, and other fees exacted or imposed pursuant to or in connection with the sale of copra rececada or its equivalent in other coconut products, and collected for the most part from coconut farmers, planters, millers, refiners, processors, exporters, desiccators, and other end-user of copra rececada or its equivalent in other coconut products.
“Applying the principle of generalia specialibus non derogant (general things do not derogate from specific things) wherein a general law does not nullify a special law - the general law will yield to the special law in specific and particular subject matter in the latter. RA No. 11524 was enacted to consolidated the benefits due to coconut farmers under various statutes and expedite its delivery; RA 7656, on the other hand, seeks to realize additional revenues for the National Government by requiring GOCCs to share a substantial amount of their net income,” Vasquez explained.

Fong also asked the DOJ if the TFMC, through the Trust Fund Manager (TFM), can withhold remittance of dividends and proceeds of disposition to improve the sale of coconut levy assets.

To this, Vasquez said: “Defer to the TFM to set any investment strategy necessary and proper for the Coco Levy Assets in furtherance of the benefit that may accrue to the coconut farmers and the whole coconut industry.”

 

 

 

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