Group warns vs privatization of coco levy assets

March 27, 2015

by superadmin

IBON NEWS | 27 March 2015 | Possible privatization of coco levy assets contradicts SC rule stating funds must be used only to benefit coconut farmers, develop the industry

Research group IBON warns that Executive Order (EO) Nos. 179 and 180 issued by Pres. Aquino may pave the way for the privatization of coco levy assets. This could further strengthen the control of large agribusiness firms over the entire coconut industry and reverse the gains made by farmers in their decades-long struggle to regain control of the coco levy funds.

IBON expressed concern over the EOs’ provision instructing various government agencies like the Philippine Coconut Authority (PCA), Department of Finance, etc. to recommend the possible privatization of the coco levy assets. It noted that this contradicts the Supreme Court (SC) ruling stating that the funds must be used ‘only for the benefit of all coconut farmers and for the development of the coconut industry.’ The SC in 2012 ruled that the San Miguel Corporation (SMC) and United Coconut Planters Bank (UCPB) shares bought with funds levied from small coconut farmers, landless tenants and farm workers in the 1970s, belong to government.

According to IBON the EOs’ inclination towards privatization may prove harmful to an estimated 28 million Filipinos that depend on the coconut industry, which is effectively the largest single field of employment in the country. IBON added that aside from the SMC and UCPB shares, which may already exceed Php270 billion in monetary value, other coco levy assets include government-sequestered Coconut Industry Investment Fund-Oil Mills Group (CIIF-OMG) comprised of six oil mills and refineries. The group, which includes three companies among the top 1000 Philippine corporations — Granexport Manufacturing, Legaspi Oil Company, and Manila Refining Corp — posted foreign exchange earnings of US$207 million in exports in 2012. These assets, when effectively managed, will benefit not only the local coconut industry but could contribute to other industries.

Privatizing these coco levy assets will mean placing these back into the hands of a profit-oriented sector, said IBON. This will be a total reversal of whatever gains have been gradually achieved by decades-long efforts of small coconut farmers to finally determine the use of the funds to boost their livelihood and genuinely develop the industry.

If the tasked government agencies recommend the privatization of coco levy assets, the group fears that big agribusiness firms including those owned by the Cojuangcos and the Enriles will again have access to the coco levy shares. These are massive sources of profits to these firms but will be at the detriment of millions of small coconut Filipino farmers.

The group reiterated that there is great potential to develop Filipino industrial sectors from the coconut industry, and even serve as a key platform for national industrialization. The possibility of harnessing this potential becomes unlikely if coco levy assets were placed under the private sector, said IBON. (end)