The Philippine Coconut Industry: Status, Policies and Strategic

Directions for Development

Our coconut industry is woefully distressed. Not only is its productivity low and stagnant, it is
losing ground in the highly competitive global vegetable oils market.the coconut industry
suffered yet another social media blast in the continuing polemic of the US soybean lobby against
coconut oil. A supposed quote from a Harvard researcher that “Coconut Oil is Pure Poison” has
gone viral. This contention ignores the counter factual that the fatty acids in coconut, unique
among vegetables oils, are medium-chain fatty acids which are readily digested and metabolized
as energy, and NOT DEPOSITED AS FAT in the liver.
The demand for coconuts has skyrocketed in the last few years. Coconut everything can be found
in the natural food market. Coconut oil, coconut sugar, coconut water. Not to mention just plain
old coconuts!At the same time, coconut producers are having a hard time keeping up. Supply on
coconuts has also gone down slowly over time, which as a matter of simple economics, has driven
prices up. If you are using coconut oil in your production — or even thinking about using it —
here’s what you need to know.Demand for trending products like coconut water and coconut
sugar have skyrocketed in the last few years, leaving less raw coconut material for turning into
oil. Each of the different pieces of the coconut are used for different, and sometimes multiple,
products. Therefore, oil competes with all of the other coconut products for the simple
availability of the coconut plant.As an illustration of this increase in demand, you can track the
word “coconut” in google to see how online searches using this keyword have increased over
time. This data shows us what is being searched out and talked about online — which is a good
indicator for demand in the natural foods industry and the retail market around the globe.Below
is the google trend data on the term “coconut” from 2004 - 2016. As you can see, the popularity
of coconut products have increased exponentially starting around 2011.

After more than four decades, the country’s coconut farmers may finally enjoy the fruits of the
coco levy as the Congress ratified two legislative measures that institutionalize the system on
how to plow the P76-billion fund back to farmers.The House of Representatives on Wednesday
ratified the bicameral committee report on House Bill 5745 or “An Act Establishing the Coconut
Farmers and Industry Development Trust Fund (CIDTF), Providing for its Management and
Utilization.”On the same day, the House also ratified the bicameral committee report on House
Bill 8552 or “An Act Further Strengthening the Philippine Coconut Authority.”The coco levy bill is
authored by House committee on agriculture and food chairman Rep. Jose Panganiban Jr.,
Deputy Speaker Sharon Garin, Reps. Karlo Alexei Nograles, Angelina Tan, and Feliciano Belmonte,
among others.The PCA bill, on the other hand, is authored by Panganiban, Speaker Gloria
Macapagal-Arroyo, Reps. Ramon Rocamora, Raul del Mar, Deputy Speaker Arthur Yap, and Rep.
Edcel Lagman, among others.Majority Leader Rolando Andaya, Jr. described the approval of the
twin measures as "timely and necessary" given the continuous decline in the price of copra, a
major issue facing the coconut sector for the past years.According to the PCA, there are currently
3.5 million coconut farmers from 68 coconut producing provinces with the average annual
income of P15,000, or about P41 a day. It was also reported that the coconut industry is suffering
from a decline in production.Coconut lands cover 30% of the country's total agricultural
area.Aside from helping farmers ride out low copra price cycle, the coco levy measure also aims
to improve incomes of coconut farmers, who are the among the poorest, and improve
productivity of farms, though replanting and intercropping with high yield cash crop.

President Rodrigo Duterte vetoed the bill reconstituting the Philippine Coconut Authority (PCA),
a measure critical to the proposed coco levy bill which is supposed to ensure coconut farmers get
to benefit from coco levy funds.A letter received by the Senate on Friday, February 8, states that
Duterte is "constrained to veto" the Strengthened Philippine Coconut Authority Law.It is the first
time Duterte used his presidential veto powers to veto an entire enrolled bill, instead of specific
provisions.While Duterte supposedly sees the urgency of addressing concerns of coconut
farmers, "the present formulation of the proposed legislative measure regrettably lacks vital
safeguards to avoid the repetition of painful mistakes in the past." The letter does not expound
on the supposed deficiencies of the enrolled bill. However, Duterte had previously threatened to
veto a related bill because he wanted government officials, and not coconut farmers, to have a
majority of seats in the PCA board. The membership of the PCA board is critical because it is
assigned to manage the coco levy funds.