Coco Levy Senate Hearing - Transcript

Republic of the Philippines CONGRESS OF THE PHILIPPINES
SENATE
Pasay City
COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEES ON TRADE AND COMMERCE AND FINANCE
Date: Time :
Venue: -
Tuesday, December 13, 2011 10:00 a.m.

Sen. A. B. Padilla Room
2nd Floor, Senate of the Philippines Financial Center, Roxas Boulevard
Pasay City
Agenda: SBN 2978 - Establishment of the Coconut Farmers Trust Fund (Sen. Enrile)
Taking into consideration

SBN 2050 - Coconut Emergency Measures
@ Act (Sen. Angara) \ SR 302 - inquiry of the Condition of Filipino Farmers (Sen. Villar) PSR 587 - Inquiry of the State of Philippine Coconut Industry (Sen. Villar)
ATTENDANCE
SENATORS PRESENT:
HON. FRANCIS N.'pANGILINAN HON. EDGARDO J. ANGARA
' - Chairman - Member
HON. JUAN PONCE ENRILE
- Senate President
0001
Committee Agriculture and Food joint with Committees on Trade And Commerce and Finance Tuesday, December 13, 2011 Page 2
GUESTS/RESOURCE PERSONS:
Mr. Joel S. Rudinas -.Undersecretary, Field Operations, Department of
Agriculture (DA)
.Mr..Edilberto M. De Luna Mr. Euclides G. Forbes Ms. Karen Singson - Field-Operations, DA @ Administrator, Philippine
Coconut Authority (PCA)

@ Chief Privatization Officer Privatization and
Management Office (PMO) Department of Finance (DOF)

Atty. Christine Antonio Atty. Marco Antonio Sardillo III @ Deputy Privatization Officer
PMO- DOF
Chief of Staff, Presidential Commission on Good Governance
(PCGG)
Mr. Jesus L. Arranza
@ President and CEO, Coconut Industry Investment Fund (CIIF) @ President and CEO, United Coconut Planters Bank (UCPB) Senior Vice-President and Corporate Secretary, United Coconut Planters Bank President, UCPB CIIF Foundation Vice-president, Nagkakaisang Ugnayan ng mga Magsasaka sa
Mr. Jeronimo U. Kilayko At y. Jose A. Barcelon t
Mr. Edgardo Amistad

'Mr.'Adelmp.Arandela
Niyugan (NIUGAN)
Mr. Vicente Fabe Chairman Emeritus Pambansang Kilusan ng mga Samahan g Magsasaka
(PAKISAMA)
Atty. Oscar F. Santos
Chairman Emeritus Coconut

Industry Reform Movement, Inc.
Mr. Eduafdo Mora
(COIR)
Chairman, Pambansang Kaisahan Ng mga Magbubukid ng Pilipinas @
0002
Committee Agriculture and Food joint with Committees on Trade And Commerce and Finance Tuesday, December 13, 2011 Page 3
SENATORS' STAFF:
Mr. Ms.
Mark Evangelista Cecile Pa'lines
Mr: E.P. Miko Nacino Ms. Julie Laconico Ms. Nyl Mendoza
- O/S Angara - O/S Pangilinan - O/S Recto - O/S Pangilinan - O/SP Estrada
SENATE SECRETARIAT:
@Mr.'Horace. R. Cruda - Cite.' Secretary
Ms. Remedios L. Tumampos Ms. Ciridel B. Gealan

Ms. Norma G. Dizon .
-Ctte. Stenographer
-do-do-do@ Leg.Com.Clerk -do-
Ms. Jocelyri.B. dela Cruz Ms. Zenaida Laurel

@ ' Mr. Eric Cana
Mr. Hizar B. Sarmiento Ms. Rubirosa F. Manalo @ Mr. Abigael d.G. Olson Mr. J. Alzadon
@ Operator
@ Leg. Page -do-
@ GCP Ctte. Secretary
(For complete list, please see attached Attendance Sheet)
0003
Republic of the Philippines
CONGRESS OF THE PHILIPPINES
SENATE
Pasay City
COMMITTEE ON AGRICULTURE AND FOOD

, Joint with the
COMMITTEES ON TRADE AND COMMERCE 8 FINANCE

Tuesday, 13 December 2011,10:00 A.M.
Sen. A.B Padilla Room Senate of the Philippines, Pasay City AGENDA: S.B. N. 2050, S.B N. 2978, P.S R. 302, & P.S R. 587
{BILLS ON COCO LEVY}

ATTEN DANCE
@ '' :' v M EMBERS.. @..;/*@.@@".:.: @@'@':@ fS'^r ' 1. SEN. FRANCIS N. PANGILINAN, Chairman,CommitteeonAgrcultureandFood i 2.SEN.MANNYVILLAR, Chairman,CommitteeonTradeandCommerce 3.SEN.FRANKLINM.DRILON, Chairman,CommiteeonFinance t
Representedby
4.SEN.EDGARDOJ.ANGARA 5.SEN.LOREN B.LEGARDA 6.SEN.GREGORIOB.HONASANII 7.SENRALPHG.RECTO 8.SEN.PANFILOM.LACSON 9.SEN.FERDINANDR. MARCOS,JR. 10.SEN.AOUILINO"KOKO"PIMENTELIII 11.SEN.MIRIAMDEFENSORSANTIAGO
12.SEN. MANUEL"LITO"M. LAPID
13.SEN.PIAS.CAYETANO 14SEN.RAMON "SOWCREVILLAJR. 15.SEN.TEOFISTOL.GUINGONAIII 16.SEN.SERGIOR.OSMENIAIII 17.SEN.FRANCIS "CH/Z"G.ESCUDERO 18.SEN.JOKERP.ARROYO 19SEN.JINGGOYEJERCITOESTRADA,Ex-OfftcbMember

20. SEN.VICENTEC.SOTTO,Bt-Of cf Member i f o 21.SEN.ALAN PETER S.CAYETANO, Ex-OfUcbMember i-2. iP.U. fW.c, .
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0009
RLTUMAMPOS 1-1 December 13, 2011 10:15 a.m. 1
AT 10:15 A.M., HON. FRANCIS N. PANGILINAN,
CHAIRMAN OF THE COMMITTEE ON AGRICULTURE AND FOOD, CALLED THE HEARING TO ORDER.
THE CHAIRMAN (SEN. PANGILINAN). We'd like to call this

hear ng of the Committee' on i Agriculture and Food joint with the
Committees on Finance and Trade and Commerce. We would like to call this meeting to order. I'm informed that Senator Enrile will be joining
us later on. He is the principal author of the measure that we are now tackling. We would like to thank our resource persons who are here with us.
Some are still on their way but I'd like to get things going and not
waste the time waiting for the others to come forward or to join us. the meantime, we have the following here: Well, before we acknowledge the resource persons, we have, one, two, three, four measures that are being tackled Senate Bill in today's meeting: In
2978, Establishment of the Coconut Farmers Trust Fund.
This is ' Senator 'Enrile; Senate Bill 2050, Coconut Emergency Measures Act; Senate Resolution 302, Inquiry on the Condition of Filipino Farmers. Is it farmers or coconut farmers? Resolution 587, Inquiry on And then Proposed Senate
the State of Philippine Coconut Industry.
Both the Senate resolutions were filed by Senator Villar.

So- we-can proceed.
0010
RLTUMAMPOS . 1-1 December 13, 2011 10:15 a.m. 2
For the record, the following resource persons are with us this morning: Field Operations for the DA, Asec. Edilberto de Luna; Mr.
Euclides Fo.rbes of the PCA, our'administrator; Chief Privatization Officer of the Privatization and Management Finance, we have- Ms. Karen Singson. Office of the Department of Hello Karen; Atty. Christine
Antonio, Deputy Privatization Officer. Is that you? Yes, that's you. Mr. Eduardo Mora, chairman ng Pambansan'g Kaisahan ng
Magbubukid sa Pilipinas; Mr. Jess Arranza, CEO and president, Coconut Industry Investment Fund; Atty. Jose Barcelon, senior vice-president and corporate secretary of UCPB; Mr. Edgardo Amistad, president UCPB CIIF Foundation; Atty.1 Oca Santos, former congressman and chairman emeritus, Coconut Industry Reform Movement or COIR. Isa pong haligi sa industriya ng magbubuko o magnunyog. Taga-Quezon po ito. So the others who will come, we will just acknowledge. Again, for the record, this Committee is'interested to look into how a portion of the coco levy funds based on the Senate bills and measures now referred to us--what we are to do with these pending measures in the light of the plight of our coconut farmers, and the industry. As Chairman of the Agriculture and Food Committee in the Senate, our primary concern here is how we are to address the challenges of the
coconut industry, in particular, but specifically how do we uplift the plight
'@
0011
of our coconut farmers and how do we raise their incomes and make the industry more profitable, well, primarily for the-coconut farmers and their families. Malaki ang coconut industry. It is larger than the rice@in terms of hectarage, it's larger than rice; in terms of-number of farmers, it is also larger than the rice/palay industry. It is the biggest export product, And therefore, we are looking
@
agriculture export product of the country.

at@ ..
We would like to acknowledge the presence of our former Senate President, former chairman of the Committee on Agriculture, former secretary of Agriculture and a current farmer as well, the author of Coconut Emergency Measures Act, Senator Angara. For the record, he is joining us this morning. Thank you Senator Angara.So', we are looking at the aspect of how these measures will address the challenges .facing the coconut industry. How we are to level up the
quality of@well, the productivity of our coconut farmers and how do we address' their plight in terms of improving the quality of their lives. Because, ultimately, all that we do in terms of agriculture should redound to being able to ensure that the quality of life of the primary producers-,
00.12
our fanners, are addressed. There is a saying that@or a tenet that for us to address food security, we must secure'our farmers and agriculture. So, although, @ of course, the coconut industry has a lot of
potentials still in terms of@if the support is given in terms of'research, in terms of infrastructure, in terms of technology, we can actually be a@ more than just, you know, a lead exporter. We can be the world power with respect to coconut and its related industries. like to hear the positions of our resource persons. .'But before that, Senator Angara, would you like to have an opening statement? Thank you. SEN. ANGARA. Thank you very much, Mr. Chairman. Let me greet our former colleague, Governor Santos, and PCA With that, we would
head. . Magandang umaga, Oca. Ang atin hong kasalakuyang PCA head, si Atty. Forbes;- Asec. de Luna, si Jess, and Atty. Barcelon. hong kayong mga kaibigan natjn sa coconut industry. I think as you put it, Mr. Chairman, coconut suddenly has become so valuable nowadays. President, when he And that's highlighted by the fact that the At lahat.na
came back,
was so -enthusiastic about coconut
water'. And two weeks after, I went to the United States and tried to look for that man he talked to, who convinced him that coconut water is such a valuable commodity. And I found him. He is a Brazilian. He
0013
COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEES
ON TRADE AND COMMERCE AND FINANCE

maybe just knows him, his name is Rodrigo
Alvarez, His company in to
Brazil was able to come up together with their scientist on how preserve coconut water for at least eight months.
And it became a best
seller because they found out that coconut water has a better mineral content and potassium than Gatorade, the favorite sports drink. So suddenly, coconut water, which provinces in this country are just in all coconut-producing have suddenly
thrown away,
acquired value.
And he told me, Mr. Chairman, that he negotiated a And I asked him, "With whom?" Candelaria ba sila? And with
one-billion peso coconut water supply.
He said, "With- Peter Paul of Candelaria."
Celebes Coconut Oil owned by a young entrepreneur, Rory Ong, who I happened to help, Mr. Chairman, when I was secretary of Agriculture. -I helped .him get a-license to operate an oil mill and a desiccated coconut. And now, he is so big in Mindanao. But anyway, I told him that, "Yes, h.as so many
we are interested in coconut and we found that coconut
uses now including the husk which again was just a farm waste@"
THE CHAIRMAN (SEN. PANGILINAN).

tons of husk.
(off-mike) Two million
SEN. ANGARA. Ang coconut husk ngayon, total?

VOICE, (off-mike)...per year.
0014
THE CHAIRMAN (SEN. PANGILINAN). But how many million

tons of husk? We would like to acknowledge the presence of our Senate President, the principal author of SB 2978, Senate President Enrile. Thank you for joining us. Please go ahead. SEN. ANGARA, Yes. Ilan ang demand for coconut husk
ngayon?.../rlt
0015
COMMITTEE ON AGRICULTURE AND FOOD Joint COMMITTEES ON FINANCE and TRADE AND COMMERCE
CBGealan II-l December 13, 2011 10:25 A.M. 1
with
SEN. ANGARA. ...Yes.
Ilan ang demand for coconut husk ngayon? There are 15 billion
coconut taun-taon.
MR. FORBES, (off-mike) Ang capacity po ng Pilipinas@
THE CHAIRMAN (SEN. PANGILINAN). Paki-ano po ng mic,

Administrator. MR. FORBES. Sa coconut husk po ang capacity po ng Pilipinas na mag-produce out of the 15 billion husks per year ay 500,000 metric tons@300,000 metric tons pero unfortunately, ang atin pong dinadala lamang sa export ay nasa 5,000 metric tons lang ho, *yong sa coir industry. THE CHAIRMAN (SEN. PANGILINAN). One percent. MR. FORBES. Wala pa pong 10 percent. 'Yun po ang@ THE CHAIRMAN (SEN. PANGILINAN). tons out of 500,000? MR. FORBES. Ah, 300,000 po. Five thousand metric

hundred thousand. MR. FORBES.
(off-mike)
Three
Uh-huh. 'Yon po kasi Viing puwang sa coir.
SEN. ANGARA. That's coir.O^/
0018
with
MR. FORBES. Doon naman po sa coconut water@ SEN. ANGARA. Oo. MR. FORBES. I had a report where are@'yon pong ating ine-
export ang nare-retrieve (retrieve) lang po'y@usually po'y nari-retrieve lamang ng mga dessicators ay 'yon po ay 15 percent lang ng total coconut water na nai-produce mula doon sa ating mga niyog. 'Yon po
ang@so ang natatapon po na coco water natin ay nasa 85 percent pa. SEN. ANGARA. matured coconut o buko? MR. FORBES. Sa matured coconut po 'yan. SEN. ANGARA. Uh-huh. MR. FORBES. 'Yon po 'yung@kaya po natatapon 'yong marami 'di po ba pag 'yong nagsa@'yong sa lalo na kung malayo sa@ang niyogan 'di 'yong pagtabas ng niyog, tapon na po natin 'yan. Ang nari-retr eve lamang po natin 'yong namimili ng buko 'yong i mga dessicators@ SEN. ANGARA. Uh-huh. MR. FORBES. They don't@katulad po ng Franklin Baker at saka nung ano@ng@'yong nasa Candelaria, 'yon lang, sila lang po ang QV Ito ba 'yong@Chairman, ito ba'y tubig sa
0017
with
nakaka-retrieve do'n sa factory nila.
So 15 percent lang po 'yon sa
total na coco water na nai-produce ng Pilipinas. SEN. ANGARA. Teka muna. Anong estimated coconut trees we
have in the Philippines?

MR. FORBES.
trees po.
Tayo po ay estimated at 320 million coconut
SEN. ANGARA.
Three hundred twenty million@320.
Per
coconut year? Forty-six nuts xdi ba, a year? MR. FORBES. "Yon po ang dapat na usual natin 46 to 60, pero
ang average na po natin ngayon nasa 33 nuts@ SEN. ANGARA. Bumagsak na? MR. FORBES. Opo, nasa 33 nuts per year na lang po per tree. SEN. ANGARA. Bakit ho? MR. FORBES. Ah 1y n9~maralT1i pong@ SEN. ANGARA. Matanda na? MR. FORBES. Medyo po matanda na at *yong iba po naman po ay hindi na po napi-fertilize. SEN. ANGARA. Okay. So mabalik nga ako, ganon kalaki
ngayon ang demand for coconut coir. Dahil sa amin, sa Aurora, laging(QV
0018
with
pumupunta ang mga agent ng mga mainland Chinese naghahanap ng coconut coir and there is not enough production on coconut coir. MR. FORBES. EhTyong@ SEN. ANGARA. So kung estimeytin (estimate) mo ang demand
for coconut coir@
MR. FORBES.
Napakalaki po ng demand kaya lamang po dito
po pala sa@kaya po namamatay ang ating coir industry kasi po 'y n9 napuntang sa coconut farmer kakaunti po at ang nakikinabang lamang ng marami 'yon pong mga consolidators. Napakalaki po ng demand ng China at lalo po sa Europe. SEN. ANGARA. Sa'n nila ginagamit sa Europe? MR. FORBES.
kotse@
Doon po sa ano@xyon pong sa paggawa po ng
SEN. ANGARA. 'Yong mattress? Mattress? MR. FORBES. xYong mattresses po. Sa China naman po dahil po xyong mga disyerto'y pumapasok na sa city, ginagawa po@ ginagamit po nilang pang-arrest nung pagpasok ng disyerto. lalung-lalo na po lyong katulad po 'yong sa Aurora doon po naman... At
SEN. ANGARA. Slopes-Of/
0019
CBGealan II-1 December 13, 2011 10:25 A.M. 5
with
MR. FORBES. ginagamitan ng coir.
...slope po ng bandang highway. %Yon po@do'n
SEN. ANGARA. So, kaya nga ang proposal under my bill, Mr. Chairman, together with the Senate President, is to utilize now that long@that long idle...
THE CHAIRMAN (SEN. PANGILINAN). Sleeping@

SEN. ANGARA. ...sleeping...
THE CHAIRMAN (SEN. PANGILINAN). Sleeping El Dorado@

pot of gold. SEN. ANGARA. ...pot of gold to revitalize our coconut industry.
Senator Enrile, the
Senate President, would you like to have your opening statement? THE SENATE PRESIDENT. You know, I'm quite familiar with
this fund *no, how it started, how it was used, where it came from and what was the agreement in the beginning when it was initiated by the Marcos government. And my knowledge is based on the fact that I
was directed by then President Marcos initially to solve a problem that involved the coconut industry. And the problem was that, in 1973, the price of copra in the world market became inordinately very high and all copra production in the country including coconut oil milled by the
0020
with
milling plants@coconut milling plants at that time were all being expor ed to foreign users. And there came when the manufacturers of t coconut-based products in the country like soap, filled milk, cooking oil and others were shor or bereft of any supply to produce the products t that would be consumed in the local market. As a consequence, there was a big howl in the domestic market among our consumers and President Marcos got alarmed, so he planned to ban the exportation of copra including coconut fruit@coconut oil. Then we were under Mar ial t Law, President Marcos asked me to find a solution to the problem. So what I did was to convoke a meeting of all the par ies t involved in the Camelot Hotel in Quezon City. I was the one presiding. And in that meeting of course, the Secretary of Agriculture, Bong Tangco, was there with his Undersecretary Col. Joe Drilon; the members of the Coconut Federation headed by Caling Lobregat, Pepot Eleazar, Old Manimano(?), Mar inez, Miranda and so for h, and all of t t them. Then the users, the companies using coconut oil were there@ Herminigildo Zayco was there; the executive secretary was there; Troadio Quiazon, who was the Trade secretary, was there; General Ramos was there, he was the chief of Constabulary and the operating
0021
with
arm of the Martial Law Government to enforce orders, and many others. I think Ben Olivas was there. So we were@I explained to the participants of this conference the desire of President Marcos to find a solution. So the coconut
farmers represented by the COCOFED, Coconut Federation of the Philippines, proposed to put up a fund to subsidize the coconut-based consumer products in the country so that the farmers will not be deprived of their profits because of the high price in the world market. And the fund would come from a charge per 100 kilos of copra sold at farm gate@a certain percentage of the farm gate at that time. I
cannot@these are all in the ethics of the Martial Law Government.
Now@but the basic understanding /cbg O^
i Of
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COMMITTEE ON AGRICULTURE AND FOOD JOINT WITH THE COMMITTEES ON FINANCE; AND TRADE AND COMMERCE
NGDizon III-l December 13, 2011 10:35 A.M. 1
THE SENATE PRESIDENT. ...
Now, but the basic
understanding was that the government will utilize the fund to

subsidize the consumer-based products in order not to make it
very difficult for the local consumers and at the same time the coconut producers, copra producers and the oil millers could export their product. So it was actually Joe Drilon that provided this concept of subsidy and we have to recognize that. But the basic
understanding was that any amount left after the government spent the amount needed to subsidize the coconut-based
products for the benefit of the local consumers would remain the
fund of the coconut farmers.

President Marcos.
That's in all the decrees issued by

It was a
It was not a government money.
private money of the coconut farmers.
And, by the way, this
formula was based on a Republic Act that was authored by the

late former senator, later on Vice President Emmanuel Pelaez. I think it is Republic Act 62, 64 or 60. I'm not sure. It is the so-
called Coconut Investment Company Act. THE CHAIRMAN (SEN. PANGILINAN). 6260.
0023
THE SENATE PRESIDENT. Ah, 6260. Yes. That's the@ The formula there was a certain amount per one hundredths@ what do you call that? Skate(?)@Hundred kilos of copra I think it's 50 or 55
resecada, yata iyon, would be charged.
centavos, I think at that time under the old law per kilo.
MR. ARRANZA. Fifty-five centavos.
THE SENATE PRESIDENT. Ah, 55 centavos. But the collection was supposed to be up to a certain amount, 100 million 'no? Kaya there's a limit of the total collection. Once they have reached that limit to capitalize this coconut investment company,
the levy would stop. There was a sunset provision and this was
supposed to handle the development of the coconut industry.

million.
One hundred
THE SENATE PRESIDENT. One hundred million. And the

participation of the coconut farmers@The charge to them is
represented by so-called coconut funds receipt. So we copied that formula and in the levy that was imposed in 1983, the same
procedure was used- that every contribution of the coconut
0024
farmers for producing copra would be represented by coco fund receipts so that that is their share par icipation in the residual t fund of the subsidy. Anyway, the total collection@There were several subsidies later on. The initial amount was increased, reduced, increased again. And then in addition to this original subsidy, there was another subsidy that was imposed particularly and specifically intended for the replanting program of the government which we also adopted in late 1974 when we put up the Bugsuk Seed Garden. But, again, the same concept was introduced in the bill that authorized it or the P.D. that authorized it that whatever residual value existed or remained after we have set up the Bugsuk seed garden would remain the money of the coconut
farmers.
All told, what we have collected out of all of these subsidies

was P9.6 billion of which P7.1 billion was used for the purposes
for which these subsidies were set up for subsidization of consumer products and then later on including the export tax. There was an export tax also that was covered by this. Some
0025
monies were used to provide scholarship fund for the children of coconut farmers and then the amount spent for the Bugsuk Seed Garden. This amounted to about P7.1 billion. The remainder, P2.5 billion was actually transferred. The depository of this fund used to be the Philippine National Bank. And later on, it was
transferred to the United Coconut Planters Bank when we
organized it sometime in 1975, I think, when we organized the United Coconut Planters Bank as a credit institution for the coconut industry. So the capitalization, by the way, of the
United Coconut Planters Bank was taken from the share of the Philippine Coconut Authority out of the coconut levy because a portion of the coconut levy was given to the Philippine Coconut Authority for the uses of the coconut federation and for the modernization supposedly of the coconut industry by the Philippine Coconut Authority. I did not even know that there was such a money until later on when I was asked to do something about it. And I was not really involved in the coconut industry except my participation in setting up the subsidy in 1973 and supervising its application for the purposes for which it was
J32Q
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COMMITTEE ON AGRICULTURE AND FOOD JOINT WITH
THE COMMITTEES ON FINANCE; AND TRADE AND COMMERCE

intended. And later on, because I was asked by Danding to help him in setting up the coconut seed garden project of the government which was languishing for three years in the hands of the late Executive Secretary Alejandro Melchor that I got involved in it directly and deeply. So late 1974, Danding Cojuangco went to my office in the Department of Defense and asked me for help. "Can you And he said,
help us, help me put up a coconut seed garden
because this is the desire of President Marcos." And I said, "For what is that? What is a coconut seed garden?" He said, "We have
to replant our aging coconut trees all over the country." "How
many millions of hectares are we going to replant?" He said, "About two million hectares and we have to replant all these aging trees in a cycle of 40 years." That was the understanding. Anyway, it's a lengthy discussion. So I told him, "You
bet er ask the permission of President Marcos for me to get t involved." Because I never volunteered to get involved in
anything in those days except to supervise the Department of Defense. So right then and there, he called President Marcos
00,27
COMMITTEE ON AGRICULTURE AND FOOD Joint with the COMMITTEES ON FINANCE and TRADE AND COMMERCE
JADelaCruz IV-1 December 13, 2011 10:45 A.M. 1
THE SENATE PRESIDENT.
...because they did not know how
to set it up. So I organized a team in the Philippine National Bank, in
the@actually the Philippine national investment arm of the Philippine

National Bank. And in two months, we were able to set up the Bugsuk of Seed Garden. So after I've finished the Bugsuk Seed Garden
project, this time it was from 100 hectares it was expanded to 1,000 hectares. President Marcos asked me to act@to serve concurrently as Philippine Coconut Authority@direct chairman of the Philippine Coconut Authority. And it was here that@ the program for the coconut industry. The first thing that happened was, it was about a week after I was appointed, I was requested for a meeting by the Coconut Federation. I cannot forget this because I was having a fever and I was roused from bed because it was urgent. So I met the@for the first time@the leaders of the coconut industry at the mezzanine floor of the Intercontinental Hotel in Makati, at--above the coffee shop, there is a mezzanine floor there. And in this meeting, the urgent problem presented to me by the coconut leaders was for the release of 90 million, P90 million for the importation of fertilizers and farm
implements/farm machineries. So I asked them, "What is this for? Where will we get the money?" And then they told me that the
0029
chairman of the Philippine Coconut Authority board has the disposition

of funds in the hands of the Philippine Coconut Authority. So this was the first time I knew that there were funds available for investments.
So they were asking me 60 million for the impor ation of fertilizers to t be distributed to the coconut farmers and then 30 million for the
importation of farm implements. So I asked them, "How can we be sure that all the coconut farmers will get their share of this fer ilizer t and how can I be sure if I release this money to you that all the
farmers will benefit out of the impor ation of these agricultural t

machineries?" And we went into a lengthy discussion. They could not explain to me. So I said, "I refuse, I will not release to you this 90 million. We will create a fund. And anybody, any one of you in the coconut industry who would want to have fer ilizers, you must borrow t from the fund and pay interest. In the same manner, anyone who would want to have farm implements for your coconut farm could borrow from this fund to impor the agricultural machineries and you t pay implement@interest so that those coconut farmers who could not avail of these credit facilities would be equalized." They will have@ Their fund will earn interest for those who will use it and that will become a part of their wealth. So then, we went fur her into a t
0030
discussion and finally we agreed to make a bank for the coconut

industry. Then the question was where. Where can we find a bank? The window for new banks in the Central Bank at that point was closed. Now, I remember that when I was doing the Seed Garden for Danding, he mentioned to me@he was inviting me to join him in buying the People's Bank of the Aranetas, Amado Araneta, the one in Cubao. And I said, "I am not interested to these businesses, Danding.
But anyway I just join you." Then he mentioned to me in passing that

he had an option over the First United Bank of his uncle Jose@Don Jose Cojuangco, the father of Cory and the grandfather of Noynoy, who was my client before I joined the government. And he said he wanted to buy it because some people were interested to get it from him. At that point, President Marcos and Greg Licaros decided to increase the capitalization of banks in the country with the minimum capital of 100 billion and very few of the banks could comply. So the Cojuangco family, Don Jose, finally decided to give this option to Danding. So because of this discussion with the government@leaders of the coconut farmers, I asked Colonel Honasan to call Danding to the
0031
meeting which he did; and when he arrived there, I told him, "Will you
kindly discuss a joint venture between the coconut farmers and you and we'll buy the First United Coconut Planters Bank. I will pay your option with 10 percent free shares of the resulting bank." And after the discussion, I assigned@I contacted Joe Concepcion of ACCRA, the law office of Ed Angara which we formed by the way in 1871. I was supposed to be in that law office together when I lost the election in 1971 but I left it to them when I got back to the government. So I
assigned this project to the ACCRA Law Office and they were the ones who formed the United Coconut Planters Bank with money that I provided, the 90 million plus more in order to comply with the 100
million capitalization for First United Coconut Planters Bank. That is the United Coconut Planters Bank. We organized it.
What happened was Danding got 10 percent plus an additional

17 Vi percent for the private sector and the remaining 72.5 percent became the property of the coconut farmers under the CIIF fund@No,
under the money controlled by the Philippine Coconut Authority

because that was not funded out of the CIIF fund. So this is@I am just giving you this structure. Then later you, the CIIF fund was invested in coco chemical plant that was set up in Batangas. We bought Legaspi
0032
Oil because at this point many of the coconut oil refining plants in the country were losing. There was fierce competition for copra and they were not making money except very few. So we finally decided to consolidate all of these coconut oil plants under the control of the coconut industry. And so we bought Legaspi Oil, the three mills@one in Davao, the one I think in Legaspi and in Jimenez. We bought Granex, Cagoil in Cagayan de Oro, Ilicoco in Iligan. Well, while Sindangan was bought by Danding directly and their Solcom so forth and so on. All told, we acquired all the.../jad
0033
COMMITTEE ON.AGRICULTURE AND FOOD joint with COMMITEES ON TRADE AND COMMERCE and FINANCE
THE SENATE PRESIDENT. ...All told, we acquired all the coconut
oil mills including, the oil mill of Dimaporo (?) which was losing a lot of
money.
So we invested the monies through the@by using the coconut levy fund. The residue of the coconut levy fund. Then I think, in 1979, if I am not mistaken, Ramon Silay, who was a very good friend of mine and owner of Solid Mills, came to me one morning and told me about the desire of the Ayalas to sell their 20 percent share in San Miguel. point, there was some disagreement among the cousins, all who are cousins At this
Sor anos, i
of the Zobels, and who were all in San Miguel. And
Enriquito Zobel who was managing Ayala at that time wanted to get out
of San Miguel. So I got this information, and @ Ramon @ Silay asked me if I was my
interested.' I said, "I do not have that kind of money. So let me ask friends if they would want to try their luck on it."
So on my way to the. Batasan Pamba'nsa, I called up Danding,
through my mobile phone in my car and told him about this information that I got and I told him to get in touch with Enriquito Zobel. And
because of that Danding started negotiating .with Enriquito Zobel. And I saw Danding and Enriquito, Andres Soriano, Jr. also in Malacanang
talking to President Marcos one morning about it.
0034
COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITEES ON TRADE AND COMMERCE and FINANCE
But anyway, I think/ about two weeks or three weeks past then I had a meeting in the United Coconut Planters Bank one evening. It was our normal monthly meeting . in the board of the bank, I was the
chairman of the bank at that time, and I asked Dandin "What happened
to the San Miguel shares of the
Ayalas?"
And he told me that they

The
wanted too much for it. "How much," I said "P50 per share." market at that time, I think was about P20 or P22 per share.
So, I tol'd him, "Danding, if you can ask Enriquito to help you get enough@more shares and enough to control San Miguel and manage it, P50 is not a very expensive price for that share." And so, I think what
happened was Danding negotiated with Benny Toda, Rosemarie Toda, his wife, and the Ortols, the Recoletos, the Augustinians and. the Dominicans and the Franciscans because they were stockholders of the San Miguel and I was able to assemble additional 27 percent.
At this point, ACCRA, the law office of ACCRA organized I think 11

corporations or 14?
Ed, huh?
SEN. ANGARA. Fourteen. THE SENATE PRESIDENT. Fourteen corporations to hold , the
shares to the different owners, different corporation. But all of these 14
0035
COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITEES
ON TRADE AND COMMERCE and FINANCE

corporations are supposed to be owned by the coconut farmers because the funding came from the CIIF. In return for the acquisition of the, shares, San Miguel, if I
remember correctly, the transaction decided to make UCPB its depository bank, and invested P700,000 in different shares of the United Coconut Planters Bank. So there was a marrying between UCPB and San Miguel and
Danding became the president, I think, or chairman of San Miguel. And
this was the relationship San Miguel prospered, UCPB prospered, became a very profitable bank until the Edsa Revolution happened.
So, at that point government came in because they thought -the bank was actually a crony bank, and then the problem started. This is the history of this thing. Now, today, the value of what was left of the 9.6 billion levy that was invested in the bank, insurance company, and all the oil mills and other allied business I think would amount to about hundred billion pesos, if my calculation is correct. So-, then the question now is how. to give this back to the coconut industry, to the coconut farmers? It is no longer possible to give it to There is no more than a
the individual coconut farmers that contributed to this fund.
way because in the meantime there are so many people who now claim
0036
to be
coconut farmers
and contributors to this.
But the real
representation of the coconut industry, when
all of this was happening,
was the Coconut Federation of the Philippines. Because by the law, under
Republic Act 6260, the Coconut Federation of the Philippines was

designated as the1 representative of the coconut industry. It is, by law, . the only recognized organization to represent the coconut industry. So, today, that is the problem that we are facing. How to deal with
this value? For as long as you allow this to hang on and stay in the
courts, the -funds will be dissipated. We have seen this. So much of the money of the coconut industry was lost because shenanigan people assigned to handle them. by the the
And I think it's time that
government will now make a decision. think of is Congress now to act without
And the only solution that can waiting for the courts to make a I am
decision because they are in a quandary how to handle this also. sure they do not .know who are the owners.
So the only way is the
government as a. parens patrie must now make a decision through Congress to declare this fund@the values of the@coming from all of
these assets as a public fund but earmarked it for the coconut industry alone where'it came from.
0037
Now--and my suggestion is this money must not be spent for the industry instead we liquidate the assets, create, liquefy it and reduce it into cash and let this cash be borrowed by the national government and use it for infrastructure development. Hard assets for the country and
pay market interest on it and that interest will be used to develop the coconut industry- @ That, in a nutshell, is the concept that I proposed which was
picked - up by
-Bobby Tanada when we . had a meeting about the
anniversary of the celebration of the nonratification of the military bases agreement and then they translate it into a bill which they, filed in the House and they asked me to file a counterpart bill here in the Senate.../rlt
0038
with
...and they asked me to file a
counterpart bill here in the Senate which is the subject matter of this discussion. I just want to give you this background so that we know what we are doing.
Thank you to the
Senate President for the backgrounder, he is a walking history book, and the very interesting insights as well as firsthand account, I don't think we can ever get something like that.
THE SENATE PRESIDENT. By the way, Ed Angara's ACCRA has

2 percent of United Coconut Planters Bank. SEN. ANGARA, (off-mike) I.don't know how much it is worth. THE SENATE PRESIDENT. I have one percent but I did not@ You see when we organized the bank, Danding wanted me to stay in the bank and he gave me 3 percent but I said, "I do not need this." So I was returning it though he said, "You better stay." So I gave ACCRA 2 percent and I retained the 1 percent.

firsthand account. (Laughter) Literally, an account.CM
That is another
0039
with
THE SENATE PRESIDENT. I want to put all of these on record because they think that we stole the money of the coconut farmers and in fact I still have a pending case, I guess@but I can sleep very well because I know that they have no case against me.
THE CHAIRMAN (SEN. PANGILINAN). Thank you, Mr. Senate

President, for the backgrounder. We can now proceed with the positions of our resource persons on the pending measures that are now being tackled. Perhaps we can
begin with UCPB. We would like to acknowledge the presence and

recognize Mr. Geronimo Kilayko, CEO and President of UCPB. We'd like to really@just the salient points of your position because we're more interested in the exchange in terms of asking the questions and then getting mga clarifications on the positions taken so kung maaari let's limit the position presentation to the salient points, the highlights, and then we can go through the others and then we can go through exchange of questions and answers. Please proceed. MR. KILAYKO. Thank you. I just want to be short. As you know, UCPB is supposed to be the@is the administrator of the CIIF, xno and I was listening to the
0040
with
Senate President and yes, according to our records, the appraised value of all the coconut mills is about close to about 60 billion.
THE SENATE PRESIDENT. About?

MR. KILAYKO. Sixty@six, zero@billion. I don't know, but
that's the appraised value so@
THE CHAIRMAN (SEN. PANGILINAN). (off-mike)

lang.
Oil mill
MR. KILAYKO. Oil mill lang. The oil@the coconut oil.
THE SENATE PRESIDENT. Oil mills only?

MR. KILAYKO. Yes. Yes.
THE SENATE PRESIDENT. How about the San Miguel shares?

MR. KILAYKO. about 60 billion also. Okay that would be@round figure lang, it's
THE SENATE PRESIDENT. So 120 billion.

MR. KILAYKO. About 120 billion.

billion.
That's why I said at least 100
MR. KILAYKO. Yes, at least@about 120@Whether we can get the 60 billion in the fixed asset in the coconut mill, well that depends on the actual sale but we can say that it's about 120 billion in, well,QV
0041
with
what you called, maybe fund, 'no. So it's there, UCPB as administrator is looking out for this, xno and we are very supportive of whatever the good Senators would suggest on how to really deal with this fund once and for all because it's been affecting the bank also in the past . because of a lot of opinions being given. So if this is solved, UCPB
itself will also benefit from whatever solution that you will give. Thank you.
Now could we have
the foundation's position also before we go to the question and answers and of course the otherGo ahead, Mr. Amistad. MR. AMISTAD. Thank you, Your Honors. Since the foundation is under the bank, UCPB, we honor the position of the bank. The foundation is actually trying to help the
coconut farmers at present@
THE SENATE PRESIDENT. Why was the CIIF converted into a

foundation, when was it converted? MR. AMISTAD. from the oil mills group. No, Your Honor. This is a separate company
THE SENATE PRESIDENT. Yeah, I know t hatful
0042
with
MR. AMISTAD. Yeah. THE SENATE PRESIDENT. We were the one who set it up in the United Coconut Planters Bank. MR. AMISTAD. Yeah. It was@yes@ THE SENATE PRESIDENT. At that time it was just a trust fund in the bank. It was never a foundation. MR. AMISTAD. Your Honor, the foundation is a small
organization with a capitalization of@or an endowment fund of something like, at present, P50 million. It was organized by the bank to assist the coconut farms@the small coconut farmers so basically the programs are scholarship@
THE SENATE PRESIDENT. But why duplicate the work of the

Philippine Coconut Authority? You are spending money@this money@ the trust fund for@the purpose of the Philippine Coconut Authority is precisely to handle the coconut industry and here you are duplicating, what can you do? MR. AMISTAD. It's actually, Your Honor@ THE SENATE PRESIDENT. Have you studied the entire coconut
industry? My goodness! Ql/
0043
CBGcalan II-2 December 13, 2011 11:05 A.M. 6
with
MR.
AMISTAD.
It's
the
social
corporate
responsibility
undertaking of the group that is handled by the Coco Foundation, Your

Honor.
SEN. ANGARA.
Pinapaliwanag ho lang ni Mr. Amistad na
kinreate (create) itong foundation na ito as an instrument to helping out the small farmers through@by discharging the@ THE SENATE PRESIDENT. How small is the small farmer? One hectare? Half a hectare? Ten hectares? Twenty hectares? MR. AMISTAD. Your Honor, we followed the definition of PCA. It should be not more than five hectares and there is a minimum limit of the number of trees@coconut trees planted, so on and so forth,
Your Honor.

representative in your foundation, meron ba? MR. AMISTAD.
Is there a PCA
At present wala po but we@we closely
coordinate with PCA regarding@
THE SENATE PRESIDENT. Is that by law or that was the@that was just done by the bank?
MR. AMISTAD. By the bank, Your Honor. Of
0044
with
THE SENATE PRESIDENT. What is the power of the bank to do

that? It's supposed to be a trust fund. SEN. ANGARA. Hindi naman@hindi naman, Mr. President.
Ininkorporeyt (incorporate) na nila %y ng trust fund eh. This is just a vehicle to perform like charitable work. So hindi ho@ THE SENATE PRESIDENT. That's the bank, that's the function of the bank@ SEN. ANGARA. Yes, yes.
THE SENATE PRESIDENT. But the bank cannot use the trust
fund for that purpose. If it wants to put up a foundation then it uses its own profit. Selfless. SEN. ANGARA. Sa'n nanggaling@nadi-divert itong attention
natin eh@Sa'n nanggaling ang funding ng foundation, sa bangko? MR. AMISTAD. Nag-umpisa po sa mga officers ng UCPB... SEN. ANGARA. Bangko? Bangko? Kaya'nga. MR. AMISTAD. ...from their personal funds. SEN. ANGARA. So wala kayong pakialam sa management ng
CIIF?
MR. AMISTAD. Wala po. SEN. ANGARA. So I think that's what@nk
0045
with
THE CHAIRMAN (SEN. PANGILINAN). So the fund is intact,

it is not@ SEN. ANGARA. Oo. Oo. Okay. THE SENATE PRESIDENT. Sorry huh, but I reacted to the
word "CIIF Foundation" because that is the special name used to identify the trust fund in the bank, you know.
THE CHAIRMAN (SEN. PANGILINAN). So the fund is in a

@ trust account and it is not used by the foundation for its programs. MR. AMISTAD. Opo. Yes, Your Honor.
THE CHAIRMAN (SEN. PANGILINAN). Okay.

Mr. Arranza, would you like to also give your position? THE SENATE PRESIDENT. Alam mo nung primero ang
pangalan n'yan is CISF (Coconut Industry Stabilization Fund), xdi ba? MR. ARRANZA. CCSF.
THE SENATE PRESIDENT. Ah, C-?

MR. ARRANZA. CCSF (Coconut Consumer Stabilization Fund). THE SENATE PRESIDENT. Yeah. Coconut@Well, that was the subsidy. MR. ARRANZA. Ah, yes po. Yes, sir.
Ah ito, CIDF. Of t
0046
with
But later on it became Coconut
Industry Stabilization Fund when the subsidization was finished but then later on it was changed into Coconut Industry Investment Fund. SEN. ANGARA. Siguro, Mr. Chairman, para makuha natin ang substance at body nitong oil mills maybe Jess can explain to us the 60 billion worth of asset. THE CHAIRMAN (SEN. PANGILINAN). Please proceed. SEN. ANGARA. Jess. MR. ARRANZA. Yeah. Good Morning.

Senator Angara.
As suggested by
MR. ARRANZA. The Coconut Industry Investment Fund OMG@ palagi hong may kadugtong kami@Oil Mills Group@kaya CIIF para hindi maging@magkagulo, CIIF OMG@Oil Mills Group is composed of six ho ngayon. We have Legazpi Oil in Davao, Legaspi Oil in Arimbay, we have Iligan@Granex in Iligan, we have Cagayan de Oro Oil Mills, lahat ho ito may mga refinery at meron kami sa San Pablo and meron din sa Batangas. crude coconut@ SEN. ANGARA. Mr. Chairman@ O r Ito ho >ong mga kompanyang nag-e-export ng
0047
CBGealan II-2 December 13, 2011 11:05 A.M.
with
10
MR. ARRANZA. Yes, po. SEN. ANGARA. Ilan ang operating mill ngayon? MR. ARRANZA. Ang operating mills po ay apat. SEN. ANGARA. Apat. MR. ARRANZA. Apat ho. SEN. ANGARA. Ilan ang turnover n'yo? Let's say last year, ilan ang gross revenue n'yo? MR. ARRANZA. Ang@nag-gross ho kami ng@nag-umpisa ho
ako 2OO9.../cbgf^J
'0048
NGDizon III-2 December 13, 2011 11:15 A.M. 1
MR. ARRANZA. ... Nag-umpisa ho ako 2009. SEN. ANGARA. Hindi, last year na lang para ...
MR. ARRANZA. Last year, nasa 172 million kami before

tax.
SEN. ANGARA. Ano ang net n'yo?
MR. ARRANZA. Hundred forty something po. SEN. ANGARA. Hundred forty million.
MR. ARRANZA. Yes.
SEN. ANGARA. So, at least, you have turned it into profit.

MR. ARRANZA. Yes.
SEN. ANGARA. Dahil what I know is talagang we are

losing our shirt.
MR. ARRANZA. When I came in, the company lost about

1.5 billion. SEN. ANGARA. Kaya nga. So@ MR. ARRANZA. And then, first half, tumubo na ho tayo ng
72. Second year is about 172. And this year despite the shortage of copra ay tutubo tayo ng mga more than 200 million. SEN. ANGARA. Two hundred million,
0049
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MR. ARRANZA. Ang dividend ho noong mag-convert sa preferred shares because at that time pabagsak nang pabagsak iyong share, so noong kinonbert (convert) iyon, may
guaranteed buyback po na worth about 58 billion. Ang dibidendo na nakukuha natin is 1.1 billion per quarter, sa 8 percent ho iyan
at naka-deposito ho sa UCPB. Naka-escrow ho iyan. So walang
puwedeng gumalaw noong pera. SEN. ANGARA. To round it off, you get five billion a year. MR. ARRANZA. Four point four billion po. SEN. ANGARA. Four point four from the
investment. MR. ARRANZA. Yes, Your Honor.
San Miguel
SEN. ANGARA. Huh? MR. ARRANZA. Eight percent ho.

SEN. ANGARA. Eight percent. Because it was into preferred. MR. ARRANZA. Into preferred. Before, it was only@I think 1 percent. converted
SEN. ANGARA. Guaranteed na iyan, di ba?
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MR. ARRANZA. Noong mga nakaraan, nabenta na ho. Ang
naiwan lang ho sa akin, senator, Legaspi Oil Davao at saka Legaspi Oil Arimbay sa Bicol.
THE SENATE PRESIDENT. Huh?

MR. ARRANZA. Running ho iyan. Legaspi Oil Davao and Legaspi Oil, Arimbay, Bicol, sa Tabaco, Albay. THE SENATE PRESIDENT. Kaya nga. That is the original. MR. ARRANZA. Yeah. Iyan ang original. tayong Granex, iyon ho sa Iligan.
SEN. ANGARA. Iligan, oo.
Mayroon ho
MR. ARRANZA. At mayroon
din
tayong@Iyon
ang
pinakamalaki, iyong Iligan, as a single mill. At mayroon tayong Cagayan de Oro Oil Mills. THE SENATE PRESIDENT. Iyong Granex is owned by an
American Group. SEN. ANGARA. Americans.
MR. ARRANZA. Sila John Baker noon. Tapos, mayroon ho tayong Solcom na hindi tumatakbo
ngayon sapagkat hindi ho talaga tayo maka-compete sa pagbili
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Mr. Chairman, the reason
why I'm suggesting this, the impact of this if we do this is tremendous to the country. We can inject some activities in the
economy because we'll use this money to, of course, modernize
our infrastructures especially our road system and also we will put these operating units in the hands of really capable people. All of these companies were losing until Jess Arranza came because he understands the coconut industry. Probably he's one of the very few in this country who understand this industry. Now, then government will get out of business, hold this
money, borrow it, use it to revitalize the economy and then start
the modernization of the coconut industry again. SEN. ANGARA. Tama ho iyon. Ngayon, to me ang critical, Mr. Chairman, is mayroon tayong piano, program dahil kung hindi aba'y mag-away-away
tayong mga coconut farmers, na gusto kong na lang tayo. Kung hindi, di sayang naman. mag-divide-divide
So a key element to this proposal is a program, annual program where you put this money. Okay. It can be securitized
00.56
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SEN. ANGARA.
... the loan itself that we are going to put out
must already have an outline of the program. THE SENATE PRESIDENT. You know, I am sorry to dampen your enthusiasm. I don't think there is anyone here who understands the coconut industry. We better liquefy it first and then plan the usage of the money. Where are you going to use it? What kind of industr es? i The first is we have to replant our old trees. SEN. ANGARA. Fortunately, there is already seven billion in
liquid cash. We don't have to liquefy. We don't have to sell anything at
this time. So the program can be immediately started starting with the
seven billion that is locked up. And then, you start winding down the hard asset and start selling although unloading 27 percent of San Miguel will probably dampen the price. So it has to be an orderly disposal of hard asset into soft asset. But what I am saying is we can immediately do this program because we have seven billion.
Napakaraming pera niyan eh. THE CHAIRMAN (SEN. PANGILINAN). That's seven times of what the government is allocating for the industry.
MR.
FORBES. Sa amin po kung bibigyan lang kami ng two
billion@Katulad po ngayon sa amin, para sa program po namin sa
0059
COMMITTEE iAr-> i-,i-K,,,
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COMMITTEES ON FINANCE and TRADE AND COMMERCE

tv-7 December 13, 2011 11:25 A.M.
fertilization at saka sa replanting, yung more or is^b x.j. umuuu, yun
pong binibigay po ng Senado at ng Kongreso sa amin ngayon, iyon po ay na-program na namin ngayon. Iyon po ay aming i-programa
ngayon, ay iyon po ay para sa aming replanting program for the year
2012. Yung amin pong budget na ibinigay sa amin

coconut trees po iyon. Para sa@
ay 13 million
THE SENATE PRESIDENT. Mr. Administrator, sorry to tell you this. Once you use this money for fertilization, forget it. I don't want to be a party to it. This has to be used@ SEN. ANGARA. Hindi. Mga suggestion lang ito, Mr. President.
MR. FORBES. Oo. SEN. ANGARA. Mga suggestion pa lang tayo. MR. FORBES. Opo, sige po. SEN. ANGARA. Hindi naman tayo sumusulat ng@
MR. FORBES. Pero ganito po ang ano@ SEN. ANGARA. We entertain all ideas ngayon. MR. FORBES. Yun pong@may budget din po tayo sa
fertilization, iyon ay para sa 20 million coconut trees. At ang gamit po natin para mahirap ma-corrupt ay iyon lamang pong asin.
006
COMMITTEE ON AGRICULTURb AINU

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11:25 A.M.
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December 13, 2011
MR. FORBES. Iyon lamang pong asm ang Dinioin ncani ai iyun po ay pinapadaan po natin sa bidding at ang ginagawa ko po duon para makaabot yung mga ano@mabuhay yung ating salt industry ay regionalized bidding po. Duon po sa region, ibinababa po ng PCA ang pera sa region at sila po ang namimili ng asin. SEN. ANGARA. Pero, Administrator, tama si Senador eh. Kaya ang kailangang priority natin is replanting. MR. FORBES. Tama po. SEN. ANGARA. Ipe-fertilize mo iyan, mga ancient, antique potential increase iyan. Very few
trees na iyan. Wala na talagang
provinces ang mga bata pa, between 10 to 25 years old. MR. FORBES. Tama po. SEN. ANGARA. Isa diyan yung@ MR, FORBES. Kaya nga po mas malaki ang ating budget sa@ Ito pong taong ito, ang atin pong budget sa replanting ay mahigit pong kalahating bilyon. Ang atin po naman budget sa ano@sa fertilization, sapagkat meron pa rin po naman po tayong natitirang konting trees katulad po sa Mindanao, mga 325 po to 350 million kaya po mas
i-nalaM ca rpnlanrina.
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diyes porsyento yon ng total population po ng ating coconuts. Iyon pong ating fertilization na iyon ay para lamang po na ma-encourage sila na dito pala sa mga murang fertilizer na ito na pwede naman po nilang gawin po sa kanilang bakuran sapagkat, kung malapit sila sa dagat, na pwede po silang mag-fertilize in their own way. Hindi po napakalaki iyon kung ikukumpara@ THE SENATE PRESIDENT. Kung gagawin mo iyan, sabi mo 10
percent lang iyong 300 million?

MR. FORBES. Wala pa po.
THE SENATE PRESIDENT. Huh?

MR. FORBES. Wala pa pong 10 percent.
THE SENATE PRESIDENT. Wala pang 10 percent?

MR. FORBES. Opo. THE SENATE PRESIDENT. million hectares of coconut land. MR. FORBES. Three point two po... THE SENATE PRESIDENT. Three point@O sige nga. Oh ayon. MR. FORBES. ...million. SEN. ANGARA. Tingnan mo. Eto'ng example ng sinasabi ko, Oh, you are talking of the two
pag hindi tayo nagkonsultahan at nagkaroon tayo ng consensus kung
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t\ --> Deremher 13. 2011 11:25 A.M.
ano ang paggagamitan nito ay magKaKaguiu idyu. uilu iany =,u ut.,.y
issue on fertilization
hindi na tayo magkasundo eh. Kaya kaiiangan
siguro meron na tayong outline ng programa at kung@Para naman hindi nga pagtalunan ang general principle dahil kami naman ang talagang gumagawa ng general principle, ito ang outline ng mga
program.
THE SENATE PRESIDENT. Better use it only for replanting. Yung operational expense in maintaining it, fertilizing it, and weeding it and bringing it to fruition, let it be a function of the coconut farmers. Eh di at least nakikita mo nandiyan, oh eh di ginamit. SEN. ANGARA. Isang perspective iyon. Kaya nga sinabi ko
kanina kaiiangan@ importante rin yung imprastraktura eh.
MR. FORBES.
Opo. Marami tayong mga niyugan sa kabundukan,
SEN. ANGARA.
wala naman@hindi mo naman madala sa palengke. Walang access eh,
yung transportation, logistics. THE SENATE PRESIDENT. Trabaho na ng kwan yon, ng
Department of Agriculture. SEN. ANGARA. Hindi. Hindi.

-rue ccmatp drfstdent. Infrastructure iyon eh.
006
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TX/_, Dpcember 13, 2011 11:25 A.M.
SEN.
ANGARA.
Hindi.
Ang sinasaDi
naun,
lyun dny
nyo
kailangan ng mga coconut farmers. Don't shoot it down immediately. We are trying to throw up ideas that can go into that plan, into that program, hindi ba? Importante ang access. Tingnan mo, ang mahal na
ng freight ah, ng transport ng@
THE CHAIRMAN (SEN. PANGILINAN). Uh-huh.

SEN. ANGARA. Lalo na sa Bondoc Peninsula. So isang item lang
iyon na kailangan natin.
THE CHAIRMAN (SEN. PANGILINAN). Perhaps we can ask

the DA since Usec Joel Rudinas is here. What is your position on the matter and perhaps respond as well to some of the issues raised in connection with the points being raised also by Mr. Forbes earlier. Please go ahead. MR. RUDINAS. Yes. Thank you very much, Your Honor. Essentially, the Depar ment of Agriculture really supports the t plan for the utilization of the fund for the purpose of the development of the coconut industry. Likewise, in the pursuit of the so-called commodity programs, we will as much as possible prioritize' coconut areas so this will complement so that the necessary infrastructure
""in"rt =>n^ invest-mpni-q in the coconut industry will indeed be utilized
0065
more efficiently. Right now, per our assessment, there is a lot of infrastructure support that is fur her needed and we are still on the t process of catching up our investments as far as all the sectors is concerned. So our feelings is since there is still a big gap in terms of infrastructure and facility support for the industry, this might be a very good source as long as we agree and we raise the consensus to really invest in this particular aspect. Among the things that we have more or less, looked at is, of course, the replanting, the intercropping and value adding activities which should@especially near, very close to the production areas. And other assistance suppor to bring down costs in t terms of transpor , consolidation and distribution would be another t area which we see that the costs in the production can now be lowered and more of the incomes can now go into net profits for the producers.
SEN. ANGARA. Mr. Chairman...
THE CHAIRMAN (SEN. PANGILINAN). Go ahead.

SEN. ANGARA. ...if I may.
So
far
ang
na-discuss
natin
importante
ang
replanting,
importante yung mga access road and other infrastructure, impor ante t yung mga processing and other post-harvest facilities. But to me,
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Ri TUMAMPOS 1-3 December 13, 2011 11:35 a.m. 2
even beat us because nga we are sleeping on our very impuridiii. industry. @ '
I suggest that we first provide the
supply because once you have the supply, industry will come in and use it. You will have people who will put up plants to produce sugar out of the coconut shell. Some people will put up a coir factory. Some
people will put an oil mill
in your area. But if you are not going to put
up the supply first,' who cares to go in the bundoks to put up a plant? And once a businessman goes there, if there is a supply of copra, then
he puts the infrastructure. I know this. I'm in coconut industry. I am a dessicator. My God! I'm telling you, I have been operating coconut plantations bigger than you can imagine in Mindanao but I sold it already. I gave it government. to the
If you are going to use this in pitsi-pitsi operation, like
fertilizer, roads and so forth, you dissipate the money.
THE CHAIRMAN (SEN. PANGILINAN). EarlierTHE SENATE PRESIDENT. You will not benefit the coconut
farmers, you will benefit the pockets of people who will raid it. THE CHAIRMAN (SEN. PANGILINAN). Could we hear from our
0069
Just a time, check, it is 11:35. farmers maaaring magbigay
Siguro yung at'ing mga coconut
po ng kanilang mga inputs dito po sa
proposal na ito, itong mga minumungkahing batas? Sino po ba ang@nauna ho dito si Mr. Mora, tapos si Mr. Fabe, tapos si Mr. Arandela. Kung mayroon po kayong nais banggitin sino ho ang
gustong mag-volunteer muna? Sino ho ba? Oh, kayo na po? Okay. Go ahead, Mr. Mora. Tutal kayo po ang pinaka-subject matter nito dahil sa inyo po.galing yung pondong ito, sa hanay po ninyo. MR. MORA. .Una ho, talagang inagahan ko kanina kaya ako ang
pinakauna para yung usapin po kasi ng coco levy, yung dugtong bituka
namin ito eh, sa mga magsasaka sa niyugan. Yun pong proposed na batas ay ngayon ko lang nakita. pong binigay na history Pero yun
ni Mr. President Enrile ay yun po ang tumama
sa aking puso ngayon. Kasi yun pong@nung nawagan po nung panahon ni Marcos na paunlarin ang industriya ng niyog sa Pilipinas, kaya
mangongolekta ang coco levy sa mga magsasaka, ang paliwanag po sa amin ay-ito ay proyekto ng mga magsasaka 'at saka ng ating pamahalaan kaya mangongolekta ng coco levy para paunlarin ang coco industry sa Pilipinas.
0.070
Yun po ay para sa amin. Yun po ang aming tinutungtungan mula doon sa@nung 1980's na yun hanggang sa kasalukuyan kayo po ang
hinahanap namin.' Pangalawa ho nito, yun pong usapin po ng coco levy, alam naman po nating lahat na mula ito sa mga magkokopras. Mula 55 percent
nga hanggang sa tumaas mahigit piso ng itigil ang pangulekta ng coco levy, nung panahong dekada otsenta na nung panahon na yah. Ngayon po, ang nakakalungkot po dito mahigit na pong dekada o tatlong dekada na kung hahanapin ay paunlarin yung kanayunan sa usapin hg punto na ito, ay katunayan po sa kasalukuyan ay ito na ang babanggitin namin. .Unang una po, yung sinasabing maliit na magsasaka, kami na nga po yun'. ' Ang pag-aari namin ay isang kalahating ektarya hanggang
isang ektarya hanggang ang pinakamalaki'tatlong ektarya. And ito po yung mga magsasaka na naghihirap doon sa mga lugar po ng taniman ng niyog sa kanayunan diyan sa Pilipinas.
Kaya ang totoo po nito, nung pumalo ang krisis, kaya kami naghahanap ng pondo na ito para paunlarin ang coconut industry, dito po nagkaroon -ng miserableng buhay kami sa kanayunan. Una, dahil bagsak ang presyo ng kopras.
0071
Alam po naman baba.
natin
taas-baba, taas-baba at malamang yung
Ngayon kung wala ng presyo ang kopras, marami po sa amin tatamarin mag-kopras. At sasapihin ko na po ang totoo. usapin kasi ng coco cut ing t Kung talagang
talagang
Nakakalungkot mang sabihin, yun pong
ito po yun ay nagagawa din mismo ng mga magsasaka: ang buhay ng magsasaka'ay walang kokoprasin, yun
mababa ang presyo,
pong coco cutting ay nangyayari ngayon sa Pilipinas, Southern Yan po ang isa din asa dahilan kung bakit humihina@
Tagalog.
bumababa ang produkto ng ating kopras kasi hindi maunlad yung

pagsasaka sa usaping industriya ng niyog.
Una, -pag wala pang presyo, talaga namang sabihin pa man natin ang katotohanan ay kami po ay umiiyak na kung ibubuhay sa arr ing pamilya. i Pangalawa ho dito, iybn pong Bondoc Peninsula, nagkaroon po ng kalsada diyan. Yun pong pagkakaroon ng kalsada, hindi namin paano kami kukuha ng
naramdaman. Ang nakikinabang lang po 'sa kalsada ay yung may mga sasakyan, mga negosyante sapagkat yun pong presyong mula sa aming kopras ay napakababa lalo, lalong nababarat. So ibig sabihin, hindi
nagkaroon@significant yung pag-unlad nung kalsada, nung infrastraktura sa aming lugar kasi ang presyo ng kopras ay lalong bumaba. So ang
kumikita ngayon yung namimili, yung personero, yung may sasakyan.
0072
So ito po. yung gusto naming ihapag ngayon.
Ako po kasama sa Amin pong
naglakbay mula Lucena nung November 24 hanggang 30.
nilalaban yun pong usaping coco levy ay maibalik sa mga magniniyog o mga magkokopras sa niyog. niyog sa Pilipinas. @ Yun pong nagustuhan namin nung panahon na yun. nakakalungkot ngayon dito ay pag hinahanap po namin Ang Sana po ay paunlarin ang industriya ng
yun, pumunta
po kayo doon sa mga niyugan, makikita mo doon mga pinutol na niyog, mayroong mga niyog diyan na hindi maunlad. pagka Mayroong@talaga pong
hindi maganda ang presyo ay hindi talaga maunlad yung ating
industriya sa niyugan. Kaya po ang aming panawagan dito, hindi ko pa po nababasa yung batas na pino-propose po ninyo, mahal na mga senador. malamang ito mayroon naman aming sasaluduhan. talagang para sa Ito po kung-
amin, yun po ang amin pong
Basta. ang aming panawagan, ang ito,
kampanya ilang dekada na
ay ibalik at makinabang yung mga talaga ang nakinabang at
magsasaka sa niyugan at sila naman po
naglikha nito ay @maibalik naman sa aming . mga magsasaka sa anyo ng pakinabang sa usapin ng agrikultura.
0073
Kaya nga po, ang panawagan namin po ng ano, ito po ay ipapakita ko na para@ang panawagan po namin mula doon sa Lucena ito ang panawagan namin: Coco levy fund ibalik sa mga magniniyog. Ito po yung panawagan- namin. Kaya kahit anong oras ay laging dala-dala ko at kinakabit ko dito sa dibdib na ito para lamang@iyon pong tatay ko kasi ay mahina na hanggang sa ngayon ay sana
mapakinabangan man lamang ng mga matatahdang nagtanim ng niyog. Yun po ang position namin. Kinakailangan ang totoong
makinabang ay yung mga magsasaka sa niyugan sapagkat sila po

mula sa pagtatanim, pagkokopras, pagdati.ng sa kumprada mismong
pawis at dugo nila ang ginamit dito para- matipon ng ating gobyerno yung gaanong kalaking bilyong piso na kasalukuyang pinag-uusapan natin. Magandang umaga po. THE CHAIRMAN (SEN. PANGILINAN). Maraming salamat. Actually yun nga ang tinatalakay natin ngayon. usapin Halimbawa yung
ng replanting, eh kayo rin ang makikinabang doon bilang mga
magni.niyog dahil pagka nagkaroon ng replanting ay gaganda yung ani, hindi pp ba? Yung dami ng niyog na makukuha po natin. So yun yung mga tinatalakay po natin.. Kaya pagka'tapos po ngang mabasa p'o yung ating programa, yung mga batas, yung panukala, kung maaari lang po kung ano yung mga
0074
programang palagay niyong dapat bigyan ng diin, para po ang inyong

hanay . ay makikinabang. Saan dapat ilaan sa palagay po ninyo ang
pondong ito sa usapin po ng inyong pagsasaka bilang magniniyog. So, si Mr. Fabe po. MR. FABE. Maraming salamat po, Mr. Chair.
Sa bilang pakisama as a chairperson po kami ay sumusuporta dito sa propqsed^ bill po na ito, 2978, Senate Bill, Kasi, in fact, katapat ito ng bill sa House ni Congressman Erin Tanada at kami po ay nakunsulta ni Congressman Erin at kami ay sumusuporta ho.../rlt
0075
with
MR. FABE. ...at kami po ay nakonsulta ni Congressman Erin at kami'y sumusuporta ho dito sa bill na ito. Although may konti sana
kaming dagdag kasi kung maaari pang dagdagan 'yung representation ng mga coconut farmers. Mas marami kasi dito ay representation ng hindi mga coconut farmers mas maganda kung@dahil ang pinaguusapan dito ay coconut industry development at pondo ito galing sa mga magsasaka, mas sana gusto namin ay mas marami sana >ung
coconut farmers@small farmers representation. "Yon po.
At siyempre mahalaga po "yung mga programa na nabanggit

kanina, 'yung mga infrastructure. Ngayon 'yung hindi nababanggit po na importante rin sa tingin namin *yung mga small water impounding. Kung gusto natin i-develop 'yung mga magniniyog at mag-intercrop ay dapat may pandilig pag tag-init. So 'yon po 'yung problemang malaki. Kasi ngayon nung nag-init lamang ng limang buwan so nawalan ng bunga ang niyog dahil walang water impounding na maliliit sa mga kabundukan. Mayroon ho tayong mga malalaking irrigation pero sa
rice area po vy n- So nung uminit, patay agad ang industriya, biglang gumintas ang bunga ng niyog at maliliit@magkabunga man, maliliit po. Kaya 'yon isa din pong hinihiling namin na makasama 'yan sa programa ng industriya.Op
0076

@ " @* ncMmhor n. ?m i 11:45 A.M. 2
Salamat po.
Ginoong Arandela,
kayo po. Magandang umaga po. MR. ARANDELA. Magandang umaga po sa lahat pong nandirito. Ako po si Ginoong Adelmar Arandela mula po sa Lopez, Quezon. Ako po ay second generation na; 'yung tatay ko po ay namatay na, nakakuha naman po ng insurance na halagang sampung libo pandagdag po doon sa kabaong. Kung makukuha 'yung insurance sa@ 'yon pong Coco Life Insurance, pag namatay na. So ito pong ating pinag-uusapan 'yon pong matulungan nga po 'yung mga magsasaka sa niyogan. At sana po ay hindi lang 'yung
niyog ang makita natin sapagkat sabi nga po ni Senator Enrile, 'yon pong niyog tumatanda po 'yan, 'yung lupa po hindi tumatanda. Ang ginagamit lamang po nating lupa sa tinataniman ng niyog 20 percent lamang po. Meron pa po tayong natitirang 80 percent kaya't
kinakailangan po natin maximum utilization of land. Isa po 'yan. So ito po 'yung ano natin at kinakailangan natin d'yan 'yung mga intercropping. At 'yon pong atin pong ano@'yon pong maximum
utilization ng atin pong@'yon pong niyog sapagkat sa ngayon poQ^
0077
with
marami po sa amin sa Quezon 'yon pong bunot sinisilaban lang 'yan doon sa bundok samantalang 'yon pong niyog@'yung buo lang na niyog kung ito po 'yung mula sa bunot hanggang sa sabaw ay magiging pera, makakatulong po ito sa. mga magsasaka. At ako po'y nalulungkot sabi nga po natin 'yun pong ating coconut ay tree of life. Totoo po 'yon. Per saDi n9a P o ngayon, sabi po ni Senator Joker
Arroyo, tree of injustice na ito. At nakakalungkot po sa atin po@sa amin po sa bukid ang kilala lang pong@alam lang ibenta 'yon lamang pong kopra. Tapon po 'yung tubig, tapon po 'yung bunot. 'Yon naman pong bao, ito po'y ginagamit na lang panggatong doon. So ito po lahat ay sana maging pera. At ako po'y nalulungkot at medyo natutuwa rin sapagkat nung pumunta ang ating Pangulo sa Amerika 'yon palang coco juice pala ay meron dun. At ako po'y nalulungkot din sapagkat dito sa atin ilang
taon na dito may maliliit tayong mga factory na nag-e-export na ng buko juice sa ibang bansa po ilang taon na. Sana po ito sana ang mga
mapaunlad natin para matulungan natin 'yung atin pong
kababayan na may maliliit na factory, hindi po 'yung mga malalaking@ mga multinational na ang papapasukin natin dito at sila pa ang@sila po ang magde-develop no'n. Ano tayo, tauhan laang nila? Kung ito
0078
COMMITTEE
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December 13, 2011 11:45 A.M.
pong mga kababayan natin may maiinit na r ctory u yaw any auny e tutulungan, mapapaunlad pa po natin 'yung ating mga kababayan. Sana po ito'y makita. Hang taon na po tayong nag-e-export ng buko
juice, ngayon laang nakita ng iba. At'yon pong sinasabi livelihood po na technology marami po nito sa PCA naka-stock lamang doon pero hindi po nakakarating sa mga karamihan ng magsasaka. Tulad po na laang ng suka. Ano po nung una, hindi naman tayo nabili ng suka, hindi naman@ang gusto pa nga ngayon *yung sukang iloko. Kaya tayo po'y hindi nabili noon ng suka, ng sabon, sapagkat ito kayang gawin do'n. Kaya't ibalik po natin sana tayo@back to basic sana po tayo. Kaya't ito po ay ipaparating natin. At 'yon pong ating@'yon pong sinasabi kaninang asin, alam naman po natin nagkaroon po ng anomalya "yan noon pong nakaraang administrasyon na ang asin ay binili pa sa Australia. So ito po 'yung ating@maganda po 'yung P'ano ng PCA na dito na gumawa ng asin sapagkat ito'y kayang gawin dito. Kaya naman po ako'y nagtataka
hanggang ngayon yata, isang taon na, wala pang nagagawang maliliit
na asinan.
So ito po 'yung mga point ko.

r^ = rami_rami ann naakaroon nq
At sa edukasyon po, noon

subaliti
scholarship@nakatapos,
0079
with
ngayon po alam po ninyo sa Quezon, apatnapung bayan ng Quezon, dadalawang eskuwelahan lamang d'yan ang accredited ng UCPB CIIF Foundation@scholarship foundation. At *y n po ay ang@nandun tig
kabilang dulo. At alam po ba ninyo ang kinukuha laang nila sa isang taon labindalawa lamang iskolar sa apatnapung bayan. So edukasyon po ay napakaimportante pero ah laking probinsya ng Quezon, apatnapung bayan, labindalawa lamang ang kinukuhang iskolar sa loob ng isang taon. At ang amin pong samahan, ito pong samahan namin noon po'y nakaraang administrasyon at hindi pa kay Mr. Arranza sumali po kami nakakuha po kami ng isang project 'yon po sa CFDP. Ito po 'yong
Coconut Farm Development Program at ito po'y pinondohan ng walong daang milyon. Ito po ay para magtayo ng 100 nurseries at ito po'y
may apat na component subalit ang naibigay lamang po nila ay %yon pong isang component, pagtatayo laang ng nursery at nagkawindangwindang na. ninyo. Ito po'y panahon ni Mr. Coronacio, 'yon pong pinalitan
So ito pong perang itong 800 million karamihan d'yan
pinaglaruan lamang at ako po'y humihingi na ito'y imbestigahan, itong proyektong ito sapagkat ito iisang component lamang po ang naibigay nila, hindi po namin nalaman kung 'yon pong ibang component nitc(
0080
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December 13, 2011 11:45 A.M.
'yung kanilang kidney para lamang matuDos dokumentado.
yuny@dL nu pu y
Kaya't sana po 'yung atin pong pinag-iisipan ngayon, ang perang Van na napakalaki ay mapunta na at mapakinabangan na po ng mga magsasaka sa niyogan. Dahil sa totoo lamang po 'y n pong sinasabi natin, maganda 'yon pong ating intercropping, ano po; at 'yon pong atin pong sinasabi na pagtatanim po ng niyog, maganda rin po 'yon para mapaganda ang biihay at dumami ang ani pero tandaan po natin sabi nga sa ingles 'yon pong law of supply and demand, "Pagdami ng produkto, pagbaba ng presyo." At noon po'y dumating sa amin 'yung presyo na 250 lamang po ang kilo doon po sa bundok. Papaano pa po namin maibebenta 'yon? Tayo po ay hawak ngayon ng mga
multinational na kumpanya, ang presyo po ng kopra ay hindi po hawak ng Pilipinas. Kaya't kung dumami po ang supply ng kopra@ng niyog, nangangamba po ako baka naman po 'yung ating presyo ay bababa sapagkat hanggang ngayon po ang ine-export laang natin na malaki, ito ponq crude coconut oil.../cbg Qp
0082
COMMITTEE ON AGRICULIUKt /\
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THE
COMMITTEES
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11:55 A.M. 1
COMMERCEttt--5 k.-^:@@
nprpmher 13. 2011
MR. ARANDELA. ...
coconut on. Miny mnui pu noun |_iay-
iisipan ito, na produktong ito, na matagal na na hanggang ngayon ito lang po ang ating ine-expor , paglalaruan pa tayo ng t iba pang bansa. Mayroon pong mga produkto na mataas ang presyo, bakit hindi po ito pagtuunan? Nandiyan po ang ating malalaking oil mills para iyon po ang@Iyan po ay nakaka-produce na ngayon ng mga CNO. Subalit mayroon po tayo diyan na sino po ang nakikinabang noong mga produktong ito? Iyon pong mga multi-national, pagawaan ng shampoo, pagawaan ng pabango. So sana po ay pag-isipan naman noong ating mga magagaling na
nandiyan po sa gobyerno. Hindi po naman na natatapon lamang.
Tayo po'y natatali, eh. Pinagbibigyan natin multi-nationals. Saan napupunta po 'yung pera natin? Saan ang nakikinabang? Iyon
pong mga magsasaka, nananatiling magsasaka. Iyon na lamang
pong
coir fiber, dadalhin natin doon semi-finished product
dadalhin pa sa China. Doon ima-manufacture. Ayun pong mga
magsasaka doon, magkano lang binibili ang isang buong niyog? Beinte singko sentimos. Kung ito po ay mailalabas natin doon,
...-,[@@<-, î^ nn ann kiln noon. Doon pa po. 0, ay hindi po ito
,0083
nangyayari samantalang mayroon naman pong nakakaisip sana. Kami naman pong mga magsasaka konsultahin. Hindi lang iyong mga technocrats na nakaupo lamang sa mga maialamig na
opisina.
SEN. ANGARA. Sino iyon? (Laughter) MR. ARANDELA. Iyon pong iba, sir. (Laughter) Sana po ay mapakinggan kami sapagkat kami po ang bumababa sa bundok. Nakikita namin ang sitwasyon. At iyon nga po, ito po sana ay magkatotoo na sapagkat iyon pong buko juice@Ako po ay galing sa Vietnam hanggang 26. Pinadala po ako ng noon pong November 20 UNFAO at doon ko po
nalaman na iyon palang produkto nila doon, talaga po sila ay nagmamadali na ng pagpaparami ng coconut. SEN. ANGARA. Tatalunin natin, ha? MR. ARANDELA. Opo. Iyon po nakinig ko kanina at ako
po doon ay kararating lang nitong November 26 at nalaman ko
doon na ang produkto nila, agricultural product, libre po sa

buwis. Pero ako po'y@parang nagmamalaki ako sapagkat ang
coconut sa Pilipinas iyan po ang number one dollar earner natin
_#84
in terms of@sa agrikultura.
Hindi
po dapat anuhin natin
ipagmalaki iyong ating pong pag-e-export ng mga tao. Dapat sila po'y nandito at tumutulong sa atin pong sa ekonomiya hindi lang iyong kanilang kinikita doon. Ako po ay nagpapasalamat sa Senado sapagkat ngayon po sana magtulong-tulong tayo. Iyan pong batas na iyan, ito po ay sana maaprubahan. Kaya naman po may kahilingan po ako. Iyon pong COA huwag po natin kalilimutan. Lagi pong kasama iyan. Kung ang perang iyan ay rmailabas ng walang COA audit sa paggamit, nakakalungkot po baka po wala na namang
makarating sa mga magsasaka. Iyon lamang po. Maraming salamat.
THE CHAIRMAN
salamat, Mr. Arandela.
(SEN. PANGILINAN).
Maraming
MR. ARANDELA. It po may dala pa po akong ano, 1973 o

pa po ito. Ito po Vun9 unang cocofund receipt na inerehisto
noong tatay ko at pinadalhan po siya ng share, stock certificate,

na noong tingnan ko, tuwang-tuwa iyong tatay ko. Tingnan ko
iyonq kanyanq stock certificate, piso lamang pala ang halaga. Ito
0085
po 1973 pa po ito. Ito po iyong unang cocofund na kinukuha

diyan po sa atin sa copra.
THE CHAIRMAN (SEN. PANGILINAN). Okay. Sige po. Maraming salamat po.
Si Atty. Oca Santos po. Can we have your@from the
Coconut Industry Reform Movement. MR. SANTOS. Salamat po, Mr. Chairman. Salamat sa inyong lahat, Senate President at sa inyo po, Senator Angara, sapagkat pinagbigyan na n'yo ang pagkakataong maisawalat ang kaloobin ng mga magniniyog na katulad nitong nasa harap ko. Sila po ay naglakad pa magmula Lucena hanggang Korte
Suprema noong two weeks ago. Nagpilit po rin akong sumama
pero naha-high blood na ako. Hindi na maari, 82 na po, eh. Mabuti po si Senate President at a very ripe age@Sinasabi ko, Senate President, po na mabuti pa kayo at a very ripe age of 88,
eh napakatalas pa ng inyong memorya.
THE SENATE PRESIDENT. Magkasama tayo noong araw sa bufete di ba?
c^g?6
MR. SANTOS. Ay oo nga. Ako po'y assistant ninyo, eh. (Laughter) Pero kayo po ay mas@I am probably five, six years younger pero mas matalas pa kayo. Ako'y marami nang
nalilimutan.
Well, anyway, salamat po sa inyong lahat at kung anuman iyong mga nakalipas ay napakahalaga iyong mga sinabi nitong mga kinatawan ng mga magniniyog. Sila ang mga magniniyog na talagang@Palagay ko po ito ang biggest social injustice na nangyari sa bansa na ang layunin noon pong mga presidential decrees ay talaga namang pakinabangan noong mga
magniniyog.
Pero hindi po ganoon ang nangyari, eh. Tama po
iyong sinabi ninyo, Mr. Senate President, sapagkat karamihan nitong perang ito'y napunta sa bulsa ng mga shenanigans. Sana po ay huwag na huwag nang mangyari muli ito sapagkat hindi po maganda sa ating bansa at mamamayan.
kayo@
Ay, sige po. Bago
THE SENATE PRESIDENT. Alam ko na ang sasabihin mo, eh. (Laughter) At saka matalino ito, eh. MR. SANTOS. Maganda po iyong nadidinig sana ninyo, eh.
0087
Ako po ay nagagalak, Mr. Chairman, sapagkat sabi nga po e kung anuman iyong mga nakalipas na sinasabi nitong explanatory note ng Senate President na "The coco levy funds were invested supposedly on behalf of the coconut farmers but were allegedly redirected to investments that effectuated their
misuse." Iyon po 'yung sinasabi n'yang malaki dito'y napunta
sa bulsa ng mga shenanigans. Iwasan na po natin iyon sapagkat hindi makabubuti sa ating lahat. Salamat po at ako'y nabigyan ng kopya nito, natanggap ko two days ago. Binabasa ko and basically, talagang dapat po ito'y ipasa sapagkat napaka@Tingin ko'y social justice oriented itong panukalang batas na ito sapagkat palaging sinasabi dito na ito hong proposed trust fund ay talagang ang pakay ay for the ultimate benefit of the coconut farmers. Huwag po natin kalimutan iyon. Sana ay huwag laang sa papel kung hindi talaga maisabuhay sapagkat ang nakalipas na naging karanasan nitong mga magniniyog ay hindi mainam. Binasa ko po iyong declaration of policy at lalo na iyong purpose noong proposed trust fund na ulit-ulit na sinasabing for
COMMITTEE ON AGRICULTURE AND FOOD JOINT WITH THE COMMITTEES ON FINANCE; AND TRADE AND
COMMERCE
the benefit of the small coconut farmers and farm workers. Its purpose shall include the various concerns na palaging sinasabing for the benefit of the coconut farmers. Noon pong mga nakalipas, Mr. Chairman, ay ganito kakapal iyong mga presidential decrees at iyan ay ulit-u lit ding
sinasabing for the benefit of the coconut farmers. Pero hindi po iyon ang nangyari kaya nga't napilitang maglakad itong mga magniniyog two weeks ago. At sana po kung ito'y papasa, itong mapupunta dito sa Trust Fund Committee, talaga naman ang puso ay sara para magniniyog. Hindi po iyong sinasabi ni Senate President na ang inintinde ay para mapunta sa bulsa nila, sinasabi n'yang mga shenanigans. Huwag na po iyong ganoon sapagkat dalang-dala na po ang ating mga kababayan, eh. At sana ito ay mangyari sapagkat talagang matagal nang inaasahan ito sapagkat@Mabuti po't bumalik kayo, Mr. Senate President,
sapagkat ang pinag-uusapan po dito ay kabuhayan .../ngdizon
<-n
89
COMMITTEE ON AGRICULTUKb anu ruuu jumi wilu
me
1

t rw,/-@.,-, T\ -^ December 13, 2011 12:05 P.M.
MR.
SANTOS.
... sapagKat ang pinag-uubapan pu unu u,
kabuhayan ng halos ika-apat na bahagi ng ating mga kababayan. Since sila po yung nagdarahop duon sa mga almost 21,000 coconut producing barangays na sinasabi ng PCA. Sila rin po yung sinasabi ng National Anti-Poverty Commission, isa po itong ahensya ng
pa'mahalaan na ang mandato kung maaari ay mapawi na ang kahirapan dito sa bansa. Kung hindi man mapawi ay mabawasan. Sila po yung nagsasabing yun daw pong mga coconut farmers ang the poorest of the poor, the most socially insecure sector of society. THE SENATE PRESIDENT. Alam mo, Oscar, kung sinundan nila yung programa na itinayo namin nung panahon ni Presidente Marcos, hindi ganyan ngayon ang katayuan nila eh. Ang hirap eh kami gumawa kami ng programa, eh pinagbibintangan kami na nagnanakaw ng pera ng mga nagniniyog. Eh sinabi ko nga kung kami ay nagnakaw, ibigay ninyo sa akin yang mga assets na iyan at ako ay magpi-plead guilty.
MR. SANTOS. Kaya po, Mr. Senator@
THE SENATE PRESIDENT. Kaya yung mga nagsasalita diyan,

...-!-.@@ n,ij@M t-nnnknl sa industriva nq niyoq.
1
0090
JADelaCruz IV-3 December 13, 2011 12:05 P.M. 2
MR. SANTOS. Kaya po ang mungkahi ko sa inyo, isulat nga ninyo sa libro yung inyong natatandaan pang pangyayaring ito sapagkat dapat na ituwid yung hindl@
THE SENATE PRESIDENT. Sa katotohanan nga eh yung aking

retirement pay sa UCPB nanduon pa sa kanila. Ewan ko kung ano ang ginagawa ninyo duon sa pera ko duon. Sinabi sa akin ni Oscar,
"Iwanan mo na iyan, Johnny, sa coconut farmers." Iniwan ko nga
duon. Magkano na iyon, ilang milyon na iyon na naiwan sa bangko.
Ano ba ang ginagawa ninyo duon? Eh di gawin ninyo iyan scholarship

fund para sa mga coconut farmers@mga anak ng coconut farmers. Huh? Oh, nandiyan, nakadeposito sa bangko yung aking retirement pay. Ibigay ninyo sa mga coconut farmers para makapag-aral yung mga magagaling na mga anak nila. THE CHAIRMAN (SEN. PANGILINAN). Merry Christmas.
(Laughter)
MR. SANTOS. Akala ko po ay nalimutan na ninyo iyon. Akala ko'y ako'y pagagalitan ninyo nung sinabi kong, "Huwag na huwag mo nanq kunin iyan at hindi mo naman kailangan."
009
THE SENATE PRESIDENT. Kaya nga sinundan kita. Sayang nga eh. Kung hindi mo sinabi sa akin iyon, ginamit ko sa@binigay ko sa UP iyon. THE CHAIRMAN (SEN. PANGILINAN). Maraming salamat po. Perhaps we can have yung--the pr vatization officer from DOF, i Ms. Karen Singson, for your position on the proposals. MS. SINGSON. Good morning. You know, we are, at the DOF, very suppor ive of the measures t that you have introduced. Assuming and, you know, hoping that the legislation will be passed and all the legal issues are resolved, we are here to offer services to help with restructuring and preparing for the privatization especially of those that are liquid assets. For those that are liquid, obviously we would also provide assistance to the investment committee to understand what is the best, you know, allocation policy for the investment so that a target return rate would be achieved for the farmers to benefit from them later on. As of now, we don't have so much transparent documents on@because when we evaluated it, you know, we are really looking at it from the outside. We don't have the information obviously from UCPB because as
administrator, they obviously have confidential information there that
0092
&
they need to protect as well. So from our evaluation pa lang we do come up with the similar number which is a hundred@you know, a
little bit above a hundred billion. I would say that one from the oil mills
because of some cross holdings from the SMC shares. Actually our valuation for the 14 oil mills is probably a little bit lower kasi the value is actually pretty low there. And we will continue to evaluate obviously UCPB, Cocolife and the other assets that are associated with coco levy funds. But we are supportive of the measures and we offer any help
we might be able to provide from the Department of Finance so that all

of these assets could be financially evaluated. While they are in the trust also that they could be given adequate custody to preserve the value of the assets and eventually privatize them at a high price so that it could benefit the farmers. Thank you.
You could give us,
well, you know, a briefer on what you have regarding the assets that are in question or the assets that are considered or being considered in the measures, we will appreciate it as we finalize the committee
report.
i 0093
MR. SANTOS. Mr. Chairman, may we be furnished a copy of
that? THE CHAIRMAN (SEN. PANGILINAN). Yes.

MR. SANTOS. Para naman nauunawan ng mga magniniyog. Ako
po ay palaging tinatanong, eh hindi ko maibigay ang detalye at hindi

ko alam.
THE CHAIRMAN (SEN. PANGILINAN). We will do that... MR. ARRANZA. Maraming salamat. THE CHAIRMAN (SEN. PANGILINAN). ...as soon as we are able to secure the position and the briefer. MS. SINGSON. assets ho from our side. THE
salamat.
We will submit a report and a sum.mary of
CHAIRMAN
(SEN.
PANGILINAN).
Yes.
Maraming
Are there other inputs? MR. ARRANZA. Pwede ho bang ma@ THE CHAIRMAN (SEN. PANGILINAN). Yes, please. MR. ARRANZA. ..matugunan ko lang yung nabanggit. Sa ngayon ho, nung pumasok ho ako ay na-allocate ho iyon lahat. Ang problema ho duon, imbes na ang iba sa coconut@kooperatiba ng
0094
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Malaysia ay sinisira yung habitat ng mga orangutan. So dahil duon, they would prefer an alternative to palm oil for their chocolate industry and they are looking at coconut oil, confectionary@ano ang tawag po duon@as a substitute to the palm oil. MR. ARRANZA. Mga cocoa butter substitute.
THE SENATE PRESIDENT. Palm kernel oil iyon, yung sinasabi

nila equivalent of the coconut oil. Merong kernel yung palm oil dahil yung oil sa palm oil ay k'wan eh nasa pulp iyon eh, pero yung kernel nuon binabasag din iyon at ikina-crush iyon. Ang oil nuon equivalent to the quality of the coconut oil.
THE CHAIRMAN (SEN. PANGILINAN). And that is why they

were saying this is a potential high value@value added product ng coconut na maaring maging market. MR. ARRANZA. suggest ko iyon at@ Tama ho. Tama ho iyon. Kaya nga isina-

ang pinag-uusapan.
Saka billion dollars
MR. ARRANZA. Bilang tulong naman namin sa farmers, sa coir ho halimbawa, si Joey Faustino, ina-allow ho namin ang farmers ngayon na magdala kayo ng copra sa ami, anumang oil mills. Iwanan
0098
ninyo ang copra para hindi tayo@para kayo ho ay maging kasabay rin sa pagbenta ng finished products, kinacrush namin iyon hanggang sa maibenta ng edible oil o kaya CNO. Kung hindi ho nyo alam ibenta, tinutulungan namin sa pagbenta. Tinuturuan din ho namin ang mga coconut farmers sapagkat naloloko lang ng mga buyers. Yung mga copra dealers ho iyon talaga ang kumikita. Pag nagbigay ho kayo ng copra, pasa ang gagawin. Pasa ho, eh maski hindi sabay sa sakada(?), pero dinadaya ho sa moisture. Kaya ho kung minsan kami ho sa oil mills, talagang laboratory ang nagte-test sa oil moisture. Gusto ko ho sanang makausap din ang mga farmers para maipaliwanag ko kung ano ang ginagawa ng CIIF oil mills para sa pagtulong sa mga farmers. THE SENATE PRESIDENT. Ito ang masasabi ko lang. Sinabi nila na mahirap ang buhay ng mga coconut farmers sapagkat ang kanilang produkto lang ay kopra. Pero hindi nila nalalaman na lahat ng@iyong niyog, napakaraming produkto na magagawa mo diyan eh. Ngayon lang meron kaming k'wan dito exhibit, tingnan ninyo. Mga kwan@Mga produkto na galing sa k'wan, yung front. Ano ba iyong k'wan, yung dahon ng niyog.../jad
0097
RLTUMAMPOS 1-4 December 13, 2011 12:15 p.m. 1
THE SENATE PRESIDENT. ...yung dahon ng niyog, yung palapa. Hindi yung dahon ha, yung kinakapitan nung dahon, nila ngayon na fiber at ginagawang muebles. yun ay ginagawa
Kaya kung lahat yan ay
magagamit ng mga coconut farmers na ipagbibili, may balor yan, lalaki ang income nila. Ngayon, yung sinasabi na pag nagtanim tayo ng maraming niyog, bababa ang presyo ng kopra, hindi. Tataas po sapagkat ngayon
natuklasan nila na hindi pala totoo yung propaganda ng
mga vegetable
oil producers abroad, yung sunflower, yung soya bean oil at mga ibang oil producers na masama yung coconut oil. They found out that coconut oil is anti-cancer, anti-alzheimer. Gagamitin xyan ngayon sa
pharmaceutical product. Kaya we have to produce a big quantity of copra and coconut oil the country to participate in this emerging big demand. Kaya doon sa aking probinsya, sinabihan ko na sila: "Tanim kayo lahat ng niyog sa lahat ng inyong lupain." Ngayon, sinasabi ko lang sa inyo, Sa probinsya ng Cagayan. sa PCA pag-aralan ninyo ang Hindi pare-pareho in
climatic condition ng bawat lugar sa Pilipinas, huh? yung niyog na tutubo diyan at lalo na sa hangin. na
'Yung ginamit namin
hybrid noon is not suitable for Luzon, it is suitable for Mindanao,
0098
Palawan and all those areas na walang bagyo. ay special variety na coconut.
Sa binabagyo, kailangan
Marami tayong magagandang variety dito eh. garden ang gobyerno sa Davao. They produce good sa San Ramon, mayroon sa Quezon.
Mayroong seed variety. Mayroon
xYun ay kung Vun ang kukunin
natin na seedling, we will improve the quantity, the meat production of the coconut farmers and their income. Now, isa pa, ay kailangan talaga integrated ang ating program. We plant first the trees. Alam mo, matatanda na ang ating@karamihan
ng ating niyugan. Kailangan we have to replant and we'll have to find a variety that is suitable to our climate that can produce@that will start fruiting at less than the usual. years, eight years, huh? I think yung native natin ay mga seven But there are varieties now
Doon mag-star . t
that can start fruiting at five, hindi ba? At saka bigger quantity of seed
nuts.
At saka kailangan kung malaki ang volume sa isang probinsya, sigurado na madali ang gathering of the husked water and so forth and nuts, the shells, the
so on, then you can market all of that.
O, ngayon, tungkol sa asin naman, Mr. Administrator, hindi mo na kailangang bilhin yun eh. Turuan mo yung mga coconut farmers natin
0^99
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^f i f
^^^^^pppBiBBpi|H^Bp)P^^jjpnmpmniijmpipjj^pî^jîipjpuipip^
Well, we can already wrap up.
Just some administrative matters.
We officially place on record that a similar resolution, Senate Resolution 389, introduced by the Senate President, and referred to the Committee on Government Corporations, chaired by Senator Recto, heard this also heard@
well, Recto.
resolution and we have discussed this with Senator
Let me just read on, for the record:
"A Resolution Directing the
Proper Senate Committees to Conduct an Inquiry, in aid of Legislation, Into the Reported 1.5 Billion Net Operating @ Losses Incurred by the Coconut Industry Investment Fund, Oil Mills Group from 2005 to 2007," and so forth and so on. And we were informed, Mr. President, by Senator Recto that he has heard this measure, he has given his recommendations. They are now preparing the committee report. And since the subject matter is
intimately linked and related to the Senate bill that the Senate President
had filed and was referred to our committee, we will place on record that we will harmonize both committee reports and present it sa joint committee@joint report both the Committees on Agriculture and
Committee on Government Corporations for plenary debates.
0101
Having said that, and as an administrative matter, we will be ready to defend this measure, Mr. President,
January.
when we resume the sessions on
Yeah.
I just want to make a
statement that yung sinasabi kanina na programa, kung mayroon tayong mga nyugan sa mga probinsya, well, the coconut farmers themselves can put up an oil mill to crush their oil so that they will maximize their income. Hindi na kailangan yung mga mutlinational. May iba dito na
magagawa niyan, oh.
You can do that and then gather the oil mill and sell it in bulk and
export it. Oh. It's just a question of program@imagination, but we
need the supply first before we can think of how to do the marketing.
THE CHAIRMAN (SEN. PANGILINAN). In fact, Mr. President, if I

may just add. Precisely why we need to provide the support for the
producers, the farmers because the supply will@ultimately it begins from them. Sabi nga nila yung demand, hindi problema eh. And therefore the weakest link really is the producer and, therefore, the programs that we are to put in place must support the producer. Because in all other areas, Mr. President@in all other produce or commodities, it's always, they say "Hindi problema ang demand." Hindi nila makuha yung consistency of supply and'the quality of the pr duce o
01 02
and the steadiness, predictability. precisely address this, Mr. President.
And, therefore, the program must
THE SENATE PRESIDENT. But for us to have that program we

must have a stable, sure, certain source of fund to support it, not just tomorrow, not just next month, next year or next decade but for a long, long time.
fund now.
That's why that is the purpose of this proposal to create this
THE CHAIRMAN (SEN. PANGILINAN). Maraming salamat. And

if I may I place on record, if the Senate President's backing, we will be able to get this measure passed sooner rather than later. So with that, we would like to thank our resource persons. may we request for And
written position papers and your comments on the
measures so that we can consolidate them as we prepare for the defense of this measure. With this, we would like to thank our resource persons. This
:ommittee hearing of the Senate Committee on Agriculture and Food is adjourned. Maraming salamat.
(THE HEARING WAS ADJOURNED AT 12:25 P.M)
0103

Coco Levy Senate Hearing - Transcript

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Coco Levy Senate Hearing - Transcript

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Republic of the Philippines CONGRESS OF THE PHILIPPINES

Tuesday, December 13, 2011 10:00 a.m.

2nd Floor, Senate of the Philippines Financial Center, Roxas Boulevard

Taking into consideration

HON. FRANCIS N.'pANGILINAN HON. EDGARDO J. ANGARA

' - Chairman - Member

HON. JUAN PONCE ENRILE

Coconut Authority (PCA)

Management Office (PMO) Department of Finance (DOF)

Mr. Jeronimo U. Kilayko At y. Jose A. Barcelon t

Mr. Edgardo Amistad

Chairman Emeritus Coconut

Mr. Eduafdo Mora

Mark Evangelista Cecile Pa'lines

Ms. Remedios L. Tumampos Ms. Ciridel B. Gealan

Ms. Jocelyri.B. dela Cruz Ms. Zenaida Laurel

@ GCP Ctte. Secretary

(For complete list, please see attached Attendance Sheet)

Republic of the Philippines

CONGRESS OF THE PHILIPPINES

COMMITTEE ON AGRICULTURE AND FOOD

COMMITTEES ON TRADE AND COMMERCE 8 FINANCE

{BILLS ON COCO LEVY}

13.SEN.PIAS.CAYETANO 14SEN.RAMON "SOWCREVILLAJR. 15.SEN.TEOFISTOL.GUINGONAIII 16.SEN.SERGIOR.OSMENIAIII 17.SEN.FRANCIS "CH/Z"G.ESCUDERO 18.SEN.JOKERP.ARROYO 19SEN.JINGGOYEJERCITOESTRADA,Ex-OfftcbMember

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AT 10:15 A.M., HON. FRANCIS N. PANGILINAN,

THE CHAIRMAN (SEN. PANGILINAN). We'd like to call this

2978, Establishment of the Coconut Farmers Trust Fund.

the State of Philippine Coconut Industry.

Both the Senate resolutions were filed by Senator Villar.

coconut industry, in particular, but specifically how do we uplift the plight

agriculture export product of the country.

was so -enthusiastic about coconut

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEES

ON TRADE AND COMMERCE AND FINANCE

maybe just knows him, his name is Rodrigo

Alvarez, His company in to

And it became a best

one-billion peso coconut water supply.

He said, "With- Peter Paul of Candelaria."

we are interested in coconut and we found that coconut

THE CHAIRMAN (SEN. PANGILINAN).

(off-mike) Two million

SEN. ANGARA. Ang coconut husk ngayon, total?

THE CHAIRMAN (SEN. PANGILINAN). But how many million

SEN. ANGARA. ...Yes.

MR. FORBES, (off-mike) Ang capacity po ng Pilipinas@

THE CHAIRMAN (SEN. PANGILINAN). Paki-ano po ng mic,

THE CHAIRMAN (SEN. PANGILINAN).

Uh-huh. 'Yon po kasi Viing puwang sa coir.

SEN. ANGARA. That's coir.O^/

nakaka-retrieve do'n sa factory nila.

So 15 percent lang po 'yon sa

have in the Philippines?

Tayo po ay estimated at 320 million coconut

Three hundred twenty million@320.

Napakalaki po ng demand kaya lamang po dito

Doon po sa ano@xyon pong sa paggawa po ng