103
Republic o f the Philippine s CONGRESS OF THE PHILIPPINES SENA TE Pas a y Ci t y COMMI T TEE ON AGRICUL TURE AND FOOD joint wi t h COMMI T TEES ON TRADE AND COMMERCE AND FINANCE Dat e: Tue s da y , De c ember 13, 2011 Ti me : 10:00 a.m. Venue: - Sen. A. B. Padi ll a R oom 2nd Fl oor , Sena t e o f t he Philippine s Financ i al Cen t er , Roxas Boul e v ar d Pa s a y Ci t y Agenda: SBN 2978 - Es t abli shmen t o f t he Coc onut F armer s Trus t Fund ( Sen. Enr il e ) T aking int o c onsi der a t i on SBN 2050 - Coc onut Emer genc y Me asur e s @ Ac t (Sen. Angar a) \ SR 302 - inquir y o f t he Condi t i on o f Filipino F ar mer s (Sen. Vil lar ) PSR 587 - Inquiry o f t he S t at e o f Philippine Coc onu t I ndus t r y (Sen. Vill ar ) A T TENDANCE SENA TORS PRESENT: HON. FRANCI S N. 'p ANGIL INAN ' - Chair man @ HON. EDGARDO J. ANGARA - Member HON. JUAN PONCE ENR ILE - Senat e Pr e s i dent 0 0 0 1

Coco Levy Senate Hearing - Transcript

Embed Size (px)

DESCRIPTION

The Senate hearing where Senate President Enrile makes reference to the "shenanigans."

Citation preview

Page 1: Coco Levy Senate Hearing - Transcript

Republic of the PhilippinesCONGRESS OF THE PHILIPPINES

SENATEPasay City

COMMITTEE ON AGRICULTURE AND FOODjoint with

COMMITTEES ON TRADE AND COMMERCE ANDFINANCE

Date: Tuesday, December 13, 2011

Time: 10:00 a.m.

Venue: - Sen. A. B. Padilla Room

2nd Floor, Senate of the Philippines

Financial Center, Roxas Boulevard

Pasay City

Agenda: SBN 2978 - Establishment of the CoconutFarmers Trust Fund (Sen. Enrile)Taking into considerationSBN 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 PhilippineCoconut Industry (Sen. Villar)

ATTENDANCE

SENATORS PRESENT:

HON. FRANCIS N.'pANGILINAN ' -Chairman @

HON. EDGARDO J. ANGARA - Member

HON. JUAN PONCE ENRILE - Senate President

0001

Page 2: Coco Levy Senate Hearing - Transcript

Committee Agriculture and Foodjoint with Committees on TradeAnd Commerce and FinanceTuesday, December 13, 2011Page 2

GUESTS/RESOURCE PERSONS:

Mr. Joel S. Rudinas

.Mr..Edilberto M. De LunaMr. Euclides G. Forbes

Ms. Karen Singson

Atty. Christine Antonio

Atty. Marco Antonio Sardillo III

Mr. Jesus L. Arranza

Mr. Jeronimo U. Kilayko

Atty. Jose A. Barcelon

Mr. Edgardo Amistad'Mr.'Adelmp.Arandela

Mr. Vicente Fabe

Atty. Oscar F. Santos

Mr. Eduafdo Mora

-.Undersecretary, FieldOperations, Department ofAgriculture (DA)

- Field-Operations, DA@ Administrator, PhilippineCoconut Authority (PCA)

@ Chief Privatization OfficerPrivatization andManagement Office (PMO)Department of Finance (DOF)

@ Deputy Privatization OfficerPMO- DOFChief of Staff, PresidentialCommission on Good Governance

(PCGG)@ President and CEO, Coconut

Industry Investment Fund (CIIF)

@ President and CEO, UnitedCoconut Planters Bank (UCPB)Senior Vice-President andCorporate Secretary, UnitedCoconut Planters BankPresident, UCPB CIIF FoundationVice-president, NagkakaisangUgnayan ng mga Magsasaka saNiyugan (NIUGAN)Chairman EmeritusPambansang Kilusan ng mgaSamahan g Magsasaka(PAKISAMA)Chairman Emeritus CoconutIndustry Reform Movement, Inc.

(COIR)Chairman, Pambansang KaisahanNg mga Magbubukid ng Pilipinas @

0002

Page 3: Coco Levy Senate Hearing - Transcript

Committee Agriculture and Foodjoint with Committees on TradeAnd Commerce and FinanceTuesday, December 13, 2011Page 3

SENATORS' STAFF:

SENATE SECRETARIAT:

@Mr.'Horace. R. Cruda

Ms. Remedios L. TumamposMs. Ciridel B. GealanMs. Norma G. Dizon .

Ms. Jocelyri.B. dela CruzMs. Zenaida Laurel

@'Mr. Eric Cana

Mr. Hizar B. SarmientoMs. Rubirosa F. Manalo

@ Mr. Abigael d.G. OlsonMr. J. Alzadon

- Cite.' Secretary

-Ctte. Stenographer-do-

-do-

-do-

@ Leg.Com.Clerk

-do-

@ Operator@ Leg. Page

-do-

@ GCP Ctte. Secretary

(For complete list, please see attached Attendance Sheet)

0003

Mr.

Ms.

Mr:Ms.Ms.

MarkEvangelistaCecilePa'linesE.P. MikoNacino

JulieLaconicoNyl Mendoza

-O/SAngara-O/SPangilinan-O/SRecto-O/SPangilinan-O/SPEstrada

Page 4: Coco Levy Senate Hearing - Transcript

Republic of the PhilippinesCONGRESS OF THE PHILIPPINES

SENATEPasay City

COMMITTEE ON AGRICULTURE AND FOOD, Joint with the

COMMITTEES ON TRADE AND COMMERCE 8FINANCE

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}ATTENDANCE

0004

i-2. iP.U. fW.c, .

@ '':'v MEMBERS.. @..;/*@.@ @".:.: @@'@':@fS' 'r

1.SEN.FRANCISN.PANGILINAN,Chairman,CommitteeonAgricultureandFood

2.SEN.MANNYVILLAR,Chairman,CommitteeonTradeandCommerce

3.SEN.FRANKLINM.DRILON,Chairman,CommitteeonFinance

4.SEN.EDGARDOJ.ANGARA

5.SEN.LORENB.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-OfficfoMember

21.SEN.ALANPETER S.CAYETANO,Ex-OfUcbMember

Representedby

Page 5: Coco Levy Senate Hearing - Transcript

SENATE SECRETARIAT

NAME

HORACE R. CRUDA

ERIC CANA

ZENY LAUREL(M-)iro\ A V-'ff\ ,na\i

flbiogd d-Qv. Dkon

/, 'Ms- Ab JWas- B.gU1* Cu<i

I

DESIGNATION/OFFICE(js~\y~<y

Vyt-.. Ci -iax

lea. (Me

& W LL^^L ck^A|.

@SIGNATURE

UfftiAAJL-

0005

Page 6: Coco Levy Senate Hearing - Transcript

0008

. . . . ;,;^;SENA^|S||Tf^;,:

NAME , :

LECllB MLlHg:

\ vj(k L-Cic'oc\ cg

DESIGNATION/OFFICE

Oft1 /t^D@/! ftj.

@''- ..@' ' @' @

:SIGNATURE

Page 7: Coco Levy Senate Hearing - Transcript

lo

0007

GUESTS/RESOURCEPERSONS

NAME(PLS PRINT)

&U(\ \ ffiS

DESIGNATION/OFFICE

PN\ f nnr

CONTACT NO.

Page 8: Coco Levy Senate Hearing - Transcript

000815i/ .o- l,..u .,,. V. . o-t-. @

GUESTS/RESOURCEPERSONS

NAME(PLS PRINT)

r'px.i\ mm

$.k/;Ult\ ccon-F^mJs

-J(ntiH %erixn(kci.

ftCfiz-070 'oa^f-prv "v"~"

DESIGNATION/OFFICE

rlKICAyi'A-

/^/^ClAfC

CONTACT NO.

Page 9: Coco Levy Senate Hearing - Transcript

0009

GUESTS/RESOURCEPERSONS

NAME(PLS PRINT)

1//r fi> Rt

DESIGNATION/OFFICE

D/7fAlPcf.P/lSi. 'd/t^x-niHA-

CONTACT NO.

XfRSOT/511

Page 10: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-1 December 13, 2011 10:15 a.m. 1

AT 10:15 A.M., HON. FRANCIS N. PANGILINAN,CHAIRMAN OF THE COMMITTEE ON AGRICULTUREAND FOOD, CALLED THE HEARING TO ORDER.

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

hearing of the Committee' on 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. In

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 in today's meeting:

Senate Bill 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? And then Proposed Senate

Resolution 587, Inquiry on the State of Philippine Coconut Industry.

Both the Senate resolutions were filed by Senator Villar.

So- we-can proceed.

0010

Page 11: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS . 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 Office of the Department of

Finance, we have- Ms. Karen Singson. 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

Page 12: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-1 December 13, 2011 10:15 a.m. 3

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,

agriculture export product of the country. And therefore, we are looking

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

Page 13: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-1 December 13, 2011 10:15 a.m. 4

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. With that, we would

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

head. . Magandang umaga, Oca. Ang atin hong kasalakuyang PCA head,

si Atty. Forbes;- Asec. de Luna, si Jess, and Atty. Barcelon. At lahat.na

hong kayong mga kaibigan natjn sa coconut industry.

I think as you put it, Mr. Chairman, coconut suddenly has become

so valuable nowadays. And that's highlighted by the fact that the

President, when he 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

Page 14: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-1 December 13, 2011 10:15 a.m. 5

maybe just knows him, his name is Rodrigo Alvarez, His company in

Brazil was able to come up together with their scientist on how to

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 in all coconut-producing

provinces in this country are just thrown away, have suddenly

acquired value. And he told me, Mr. Chairman, that he negotiated a

one-billion peso coconut water supply. And I asked him, "With whom?"

He said, "With- Peter Paul of Candelaria." Candelaria ba sila? And with

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,

we are interested in coconut and we found that coconut h.as so many

uses now including the husk which again was just a farm waste@"

THE CHAIRMAN (SEN. PANGILINAN). (off-mike) Two million

tons of husk.

SEN. ANGARA. Ang coconut husk ngayon, total?

VOICE, (off-mike)...per year.

0014

Page 15: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-1 December 13, 2011 10:15 a.m. 6

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

Page 16: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-l December 13, 2011 10:25 A.M. 1

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). Five thousand metric

tons out of 500,000?

MR. FORBES. Ah, 300,000 po.

THE CHAIRMAN (SEN. PANGILINAN). (off-mike) Three

hundred thousand.

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

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

0018

Page 17: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-l December 13, 2011 10:25 A.M. 2

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. Ito ba 'yong@Chairman, ito ba'y tubig sa

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-retrieve lamang po natin 'yong namimili ng buko 'yong

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

0017

Page 18: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-l December 13, 2011 10:25 A.M. 3

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. Tayo po ay estimated at 320 million coconut

trees po.

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

Page 19: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-l December 13, 2011 10:25 A.M. 4

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. Doon po sa ano@xyon pong sa paggawa po ng

kotse@

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. At

lalung-lalo na po lyong katulad po 'yong sa Aurora doon po naman...

SEN. ANGARA. Slopes-Of/

0019

Page 20: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-1 December 13, 2011 10:25 A.M. 5

MR. FORBES. ...slope po ng bandang highway. %Yon po@do'n

ginagamitan ng coir.

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.

THE CHAIRMAN (SEN. PANGILINAN). 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

Page 21: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-l December 13, 2011 10:25 A.M. 6

milling plants@coconut milling plants at that time were all being

exported to foreign users. And there came when the manufacturers of

coconut-based products in the country like soap, filled milk, cooking oil

and others were short or bereft of any supply to produce the products

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 Martial

Law, President Marcos asked me to find a solution to the problem.

So what I did was to convoke a meeting of all the parties

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(?), Martinez, Miranda and so forth, and all of

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

Page 22: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-l December 13, 2011 10:25 A.M. 7

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

0022

Page 23: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon 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. That's in all the decrees issued by

President Marcos. It was not a government money. It was a

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

Page 24: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-l December 13, 2011 10:35 A.M. 2

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

resecada, yata iyon, would be charged. I think it's 50 or 55

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.

THE CHAIRMAN (SEN. PANGILINAN). One hundred

million.

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

Page 25: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-l December 13, 2011 10:35 A.M. 3

farmers for producing copra would be represented by coco fund

receipts so that that is their share participation in the residual

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

Page 26: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-l December 13, 2011 10:35 A.M. 4

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)

Page 27: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-l December 13, 2011 10:35 A.M. 5

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. And he said,

"Can you 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

better ask the permission of President Marcos for me to get

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

Page 28: Coco Levy Senate Hearing - Transcript
Page 29: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz 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

Page 30: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-1 December 13, 2011 10:45 A.M. 2

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 importation of fertilizers to

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 fertilizer

and how can I be sure if I release this money to you that all the

farmers will benefit out of the importation of these agricultural

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 fertilizers, you must borrow

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 import the agricultural machineries and you

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 further into a

0030

Page 31: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-1 December 13, 2011 10:45 A.M. 3

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

Page 32: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-1 December 13, 2011 10:45 A.M. 4

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

Page 33: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-1 December 13, 2011 10:45 A.M. 5

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

Page 34: Coco Levy Senate Hearing - Transcript

COMMITTEE ON.AGRICULTURE AND FOOD joint with COMMITEESON TRADE AND COMMERCE and FINANCERLTUMAMPOS 1-2 December 13, 2011 10:55 a.m. 1

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. At this

point, there was some disagreement among the cousins, all Sorianos,

who are cousins 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

interested.' I said, "I do not have that kind of money. So let me ask my

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

Page 35: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITEESON TRADE AND COMMERCE and FINANCERLTUMAMPOS 1-2 December 13, 2011 10:55 a.m. 2

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

wanted too much for it. "How much," I said "P50 per share." The

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

Page 36: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITEESON TRADE AND COMMERCE and FINANCERLTUMAMPOS 1-2 December 13, 2011 10:55 a.m. 3

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 more than a

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

the individual coconut farmers that contributed to this fund. There is no

way because in the meantime there are so many people who now claim

0036

Page 37: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITEESON TRADE AND COMMERCE and FINANCERLTUMAMPOS 1-2 December 13, 2011 10:55 a.m. 4

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 by the

people assigned to handle them. And I think it's time that the

government will now make a decision. And the only solution that can

think of is Congress now to act without waiting for the courts to make a

decision because they are in a quandary how to handle this also. I am

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

Page 38: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITEESON TRADE AND COMMERCE and FINANCERLTUMAMPOS 1-2 December 13, 2011 10:55 a.m. 5

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

Page 39: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 1

THE SENATE PRESIDENT. ...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.

THE CHAIRMAN (SEN. PANGILINAN). 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.

THE CHAIRMAN (SEN. PANGILINAN). That is another

firsthand account. (Laughter)

Literally, an account.CM

0039

Page 40: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 2

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

Page 41: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 3

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) Oil mill

lang.

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. Okay that would be@round figure lang, it's

about 60 billion also.

THE SENATE PRESIDENT. So 120 billion.

MR. KILAYKO. About 120 billion.

THE SENATE PRESIDENT. That's why I said at least 100

billion.

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

Page 42: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 4

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.

THE CHAIRMAN (SEN. PANGILINAN). Now could we have

the foundation's position also before we go to the question and

answers and of course the other-

Go 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. No, Your Honor. This is a separate company

from the oil mills group.

THE SENATE PRESIDENT. Yeah, I know t hatful

0042

Page 43: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 5

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

Page 44: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGcalan II-2 December 13, 2011 11:05 A.M. 6

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.

THE CHAIRMAN (SEN. PANGILINAN). Is there a PCA

representative in your foundation, meron ba?

MR. AMISTAD. 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

Page 45: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 7

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

Page 46: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 8

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. Oft

0046

Page 47: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 9

THE SENATE PRESIDENT. 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.

THE CHAIRMAN (SEN. PANGILINAN). As suggested by

Senator Angara.

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. Ito ho >ong mga kompanyang nag-e-export ng

crude coconut@

SEN. ANGARA. Mr. Chairman@ Or

0047

Page 48: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-2 December 13, 2011 11:05 A.M. 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.../cbgfJ

'0048

Page 49: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon 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

Page 50: Coco Levy Senate Hearing - Transcript

Uffly- TrTHT^-IBilBffBSl

K?^4^^^^^ ^^2^^^HSj Uffl^^H

FEMifiBlifiHnSlffliH^ffilifli

PIIBBMMIMsHa

Page 51: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-2 December 13, 2011 11:15 A.M. 3

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 San Miguel

investment.

MR. ARRANZA. Yes, Your Honor.

SEN. ANGARA. Huh?

MR. ARRANZA. Eight percent ho.

SEN. ANGARA. Eight percent. Because it was converted

into preferred.

MR. ARRANZA. Into preferred. Before, it was only@I think

1 percent.

SEN. ANGARA. Guaranteed na iyan, di ba?

-4sj 051

Page 52: Coco Levy Senate Hearing - Transcript

IZm^Pil A .fil JCTil^^3iB^KEl!8Hip|8p|Sjp[8 ^^ |j B8E^BjHjKH

Page 53: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-2 December 13, 2011 11:15 A.M. 5

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. Mayroon ho

tayong Granex, iyon ho sa Iligan.

SEN. ANGARA. Iligan, oo.

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

Jf3

Page 54: Coco Levy Senate Hearing - Transcript

IfcWhhKhBiiblbh'ifcMMIliM

U 5IISHB l5BHMia g

B3sTn^KTn^iiTy^^B^BiflfflBMirt3BgMi BB

Page 55: Coco Levy Senate Hearing - Transcript

|sa^iijyjuiibKttUUiWHftU|jftUtiSMV4WV4|i|

@@JUtHTiyT?Tt*flVt^37W^7lVLCtmi J^p lp}M&>dfchlJijT5

KHmIHSIbW ra!BBBMWmii B iB tumwa iMaii.iMwwi S

Page 56: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-2 December 13, 2011 11:15 A.M. 8

THE SENATE PRESIDENT. 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 mag-divide-divide

na lang tayo. Kung hindi, di sayang naman.

So a key element to this proposal is a program, annual

program where you put this money. Okay. It can be securitized

00.56

Page 57: Coco Levy Senate Hearing - Transcript

^^^^^^^^^^^^^^^^^^^^^Q

^^^^^^^^^^^^^^^^^^^^^^^^Q^^^^^^^I^^^^^^^^I^^^^^JmalBsffBMBEMBHiHBal

@aatwii?itfJ;liW!lliEBJElBEro3iBIEffiliB!B

MmW HB MVIBH|||HHM

Ij^BjIlgljJS]

@.r..: rlllMlf.milTmi-lff.EIEBSag

EMZMSSaSna

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^9

Page 58: Coco Levy Senate Hearing - Transcript
Page 59: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-2 December 13, 2011 11:25 A.M. 1

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 industries?

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

Page 60: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULlUKt aimu ruuu juiiil kiui meCOMMITTEES ON FINANCE and TRADE AND COMMERCEiAr-> i-,i-K,,, tv-7 December 13, 2011 11:25 A.M. 2

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 ay 13 million

coconut trees po iyon. Para sa@

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

Page 61: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURb AINU i-uud jomi wim meCOMMITTEES ON FINANCE and TRADE AND COMMERCE' n<.i=rn,, tv-2 December 13, 2011 11:25 A.M. 3

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

trees na iyan. Wala na talagang potential increase iyan. Very few

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.

ooei

Page 62: Coco Levy Senate Hearing - Transcript

|^ ^^Q^MM^^ra23 ^ ^ ^ ^^nH^M^Q ^9 ^M^^^ ^^^^|^^ ^XM^ABi^^9^^|^ ^M

^^^^^^^^^s^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^S@ .-,>@.r.. -B...B.. -Pc.w.... ,..a IIEIIIPI""""""'@""-''""'^@

Page 63: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-2 December 13, 2011 11:25 A.M. 5

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. Oh, you are talking of the two

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,

pag hindi tayo nagkonsultahan at nagkaroon tayo ng consensus kung

006&

Page 64: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULIUKt Ainu ruuu juhh. wit.ii ....^COMMITTEES ON FINANCE and TRADE AND COMMERCE""-'-'@'"@@ t\ --> Deremher 13. 2011 11:25 A.M. 6

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.

SEN. ANGARA. Marami tayong mga niyugan sa kabundukan,

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

Page 65: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTUKt AIMU ruuu jumi wn... t..cCOMMITTEES ON FINANCE and TRADE AND COMMERCE-..r^i-,,-..,,, TX/_, Dpcember 13, 2011 11:25 A.M. 7

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 Department of Agriculture really supports the

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

Page 66: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-2 December 13, 2011 11:25 A.M. 8

more efficiently. Right now, per our assessment, there is a lot of

infrastructure support that is further needed and we are still on the

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 support to bring down costs in

terms of transport, consolidation and distribution would be another

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, importante

yung mga processing and other post-harvest facilities. But to me,

)ffiS

Page 67: Coco Levy Senate Hearing - Transcript
Page 68: Coco Levy Senate Hearing - Transcript

^9IIiHilB4I^HUIinHillAGlKlllI2nH[i]IHUS||llHSn|HH|MfSH|l|n^^nifn

MSMH ailCT

Page 69: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint witn CUMMll ittsON TRADE AND COMMERCE AND FINANCE.RiTUMAMPOS 1-3 December 13, 2011 11:35 a.m. 2

even beat us because nga we are sleeping on our very impuridiii.

industry. @ '

THE SENATE PRESIDENT. 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 to the

government. 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). Earlier-

THE 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

Page 70: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-3 December 13, 2011 11:35 a.m. 3

Just a time, check, it is 11:35. Siguro yung at'ing mga coconut

farmers maaaring magbigay 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. Pero yun

pong binigay na history 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

Page 71: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-3 December 13, 2011 11:35 a.m. 4

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

Page 72: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-3 December 13, 2011 11:35 a.m. 5

Alam po naman natin taas-baba, taas-baba at malamang yung

baba. Ngayon kung wala ng presyo ang kopras, marami po sa amin

talagang tatamarin mag-kopras. At sasapihin ko na po ang totoo.

Nakakalungkot mang sabihin, yun pong usapin kasi ng coco cutting

ito po yun ay nagagawa din mismo ng mga magsasaka: Kung talagang

ang buhay ng magsasaka'ay walang kokoprasin, mababa ang presyo,

yun pong coco cutting ay nangyayari ngayon sa Pilipinas, Southern

Tagalog. Yan po ang isa din asa dahilan kung bakit humihina@

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 paano kami kukuha ng

ibubuhay sa arriing pamilya.

Pangalawa ho dito, iybn pong Bondoc Peninsula, nagkaroon po ng

kalsada diyan. Yun pong pagkakaroon ng kalsada, hindi namin

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

Page 73: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-3 December 13, 2011 11:35 a.m. 6

So ito po. yung gusto naming ihapag ngayon. Ako po kasama sa

naglakbay mula Lucena nung November 24 hanggang 30. Amin pong

nilalaban yun pong usaping coco levy ay maibalik sa mga magniniyog o

mga magkokopras sa niyog. Sana po ay paunlarin ang industriya ng

niyog sa Pilipinas. @

Yun pong nagustuhan namin nung panahon na yun. Ang

nakakalungkot ngayon dito ay pag hinahanap po namin yun, pumunta

po kayo doon sa mga niyugan, makikita mo doon mga pinutol na niyog,

mayroong mga niyog diyan na hindi maunlad. Mayroong@talaga pong

pagka 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. Ito po kung-

malamang ito mayroon naman talagang para sa amin, yun po ang

aming sasaluduhan. Basta. ang aming panawagan, ang amin pong

kampanya ilang dekada na ito, ay ibalik at makinabang yung mga

magsasaka sa niyugan at sila naman po talaga ang nakinabang at

naglikha nito ay @maibalik naman sa aming .mga magsasaka sa anyo ng

pakinabang sa usapin ng agrikultura.

0073

Page 74: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-3 December 13, 2011 11:35 a.m. 7

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. Halimbawa yung

usapin 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

Page 75: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-3 December 13, 2011 11:35 a.m. 8

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

Page 76: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-3 December 13, 2011 11:45 A.M. 1

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 pinag-

uusapan 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

Page 77: Coco Levy Senate Hearing - Transcript

COMMITTEES ON FINANCE and TRADE AND COMMERCE@ - " @* ncMmhorn.?mi 11:45A.M. 2

Salamat po.

THE CHAIRMAN (SEN. PANGILINAN). 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

Page 78: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-3 December 13, 2011 11:45 A.M. 3

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. Pero saDi n9a P 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

mapaunlad natin para matulungan natin 'yung atin pong mga

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

Page 79: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURb AND i-u<jl> juiiii wimCOMMITTEES ON FINANCE and TRADE AND COMMERCE'"^"i" tt-t December 13, 2011 11:45 A.M. 4

pong mga kababayan natin may maiinit na rectory u yaw any auny

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. At sa edukasyon po, noon

r = rami_rami ann naakaroon nq scholarship@nakatapos, subaliti

0079

Page 80: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint withCOMMITTEES ON FINANCE and TRADE AND COMMERCECBGealan II-3 December 13, 2011 11:45 A.M. 5

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 nagkawindang-

windang na. Ito po'y panahon ni Mr. Coronacio, 'yon pong pinalitan

ninyo. 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

Page 81: Coco Levy Senate Hearing - Transcript

^^^^^^^^^^^^H^^^^^^^^^^^^^^^^H^^^^^B

Ig lllj^^^Q ^^@f^ ^^^ ^^nufl^^^ H^S^^H ^^KV^ iii ^^fl

[email protected]..

^^^^^^^^Q

Page 82: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND I-UUU joint wunCOMMITTEES ON FINANCE and TRADE AND COMMERCEi-n^oaian TT-3 December 13, 2011 11:45 A.M. 7

'yung kanilang kidney para lamang matuDos yuny@dL nu pu y

dokumentado.

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

Page 83: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULIUKt /\ u ruuu jumi v *...THE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCEk.-^:@@ ttt--5 nprpmher 13. 2011 11:55 A.M. 1

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-export, paglalaruan pa tayo ng

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,

...-,[@@<-, ^i^ nn ann kiln noon. Doon pa po. 0, ay hindi po ito

,0083

Page 84: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-3 December 13, 2011 11:55 A.M. 2

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 noon pong November 20

hanggang 26. Pinadala po ako ng 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

Page 85: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-3 December 13, 2011 11:55 A.M. 3

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 (SEN. PANGILINAN). Maraming

salamat, Mr. Arandela.

MR. ARANDELA. Ito po may dala pa po akong ano, 1973

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

Page 86: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-3 December 13, 2011 11:55 A.M. 4

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

Page 87: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-3 December 13, 2011 11:55 A.M. 5

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. Ay, sige po. Bago

kayo@

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

Page 88: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-3 December 13, 2011 11:55 A.M. 6

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

Page 89: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD JOINT WITHTHE COMMITTEES ON FINANCE; AND TRADE ANDCOMMERCENGDizon III-3 December 13, 2011 11:55 A.M. 7

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

Page 90: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTUKb anu ruuu jumi wilu meCOMMITTEES ON FINANCE and TRADE AND COMMERCEt rw,/-@.,-, T\ -^ December 13, 2011 12:05 P.M. 1

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.

10090

Page 91: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz 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

Page 92: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-3 December 13, 2011 12:05 P.M. 3

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 privatization officer from DOF,

Ms. Karen Singson, for your position on the proposals.

MS. SINGSON. Good morning.

You know, we are, at the DOF, very supportive of the measures

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&

Page 93: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-3 December 13, 2011 12:05 P.M. 4

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.

THE CHAIRMAN (SEN. PANGILINAN). 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.

i0093

Page 94: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-3 December 13, 2011 12:05 P.M. 5

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. We will submit a report and a sum.mary of

assets ho from our side.

THE CHAIRMAN (SEN. PANGILINAN). Yes. Maraming

salamat.

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

10094

Page 95: Coco Levy Senate Hearing - Transcript

mniKmmmwsvmntmmSER^BSMSIBf.

K!l fliyilI'ITIIIII'l'JBgniBiHiB*gBHEBEgffi

IwaaBlHSreBlBSli

@@@@|ijj|l!!lllj!i|!|H|i|iMfiIwllElMlBlBHlliilllMlliiAiHGflMllEIIEiiIlllaXMH^^HSEG^MEEfiHISIIBB

IBSHHEEliKE

E^m^^^^aB^BK^^^^BffiEB^^EaTiliiWlE

Page 96: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-3 December 13, 2011 12:05 P.M. 7

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. Tama ho. Tama ho iyon. Kaya nga isina-

suggest ko iyon at@

THE CHAIRMAN (SEN. PANGILINAN). Saka billion dollars

ang pinag-uusapan.

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

Page 97: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD Joint with theCOMMITTEES ON FINANCE and TRADE AND COMMERCEJADelaCruz IV-3 December 13, 2011 12:05 P.M. 8

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

y0097

Page 98: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 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, yun ay ginagawa

nila ngayon na fiber at ginagawang muebles. 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 in

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." Sa probinsya ng Cagayan.

Ngayon, sinasabi ko lang sa inyo, sa PCA pag-aralan ninyo ang

climatic condition ng bawat lugar sa Pilipinas, huh? Hindi pare-pareho

yung niyog na tutubo diyan at lalo na sa hangin. 'Yung ginamit namin

na hybrid noon is not suitable for Luzon, it is suitable for Mindanao,

0098

Page 99: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-4 December 13, 2011 12:15 p.m. 2

Palawan and all those areas na walang bagyo. Sa binabagyo, kailangan

ay special variety na coconut.

Marami tayong magagandang variety dito eh. Mayroong seed

garden ang gobyerno sa Davao. They produce good variety. Mayroon

sa San Ramon, mayroon sa Quezon. 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. I think yung native natin ay mga seven

years, eight years, huh? Doon mag-start. But there are varieties now

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 nuts, the shells, the

water and so forth and 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

Page 100: Coco Levy Senate Hearing - Transcript

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ffi

^^^^^pppBiBBpi|H^Bp)P^^jjpnmpmniijmpipjj^p^i^j^iipjpuipip^

Page 101: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-4 December 13, 2011 12:15 p.m. 4

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, also heard@

well, heard this resolution and we have discussed this with Senator

Recto.

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

Page 102: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-4 December 13, 2011 12:15 p.m. 5

Having said that, and as an administrative matter, we will be ready

to defend this measure, Mr. President, when we resume the sessions on

January.

THE SENATE PRESIDENT. 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 produce

0102

Page 103: Coco Levy Senate Hearing - Transcript

COMMITTEE ON AGRICULTURE AND FOOD joint with COMMITTEESON TRADE AND COMMERCE AND FINANCERLTUMAMPOS 1-4 December 13, 2011 12:15 p.m. 6

and the steadiness, predictability. And, therefore, the program must

precisely address this, Mr. President.

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. That's why that is the purpose of this proposal to create this

fund now.

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. And

may we request for 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