Farmers Slam Supreme Court Ruling on Coco Levy Funds, Will File Appeal


The peasant group Kilusang Magbubukid ng Pilipinas (KMP) is outraged over the Supreme Court’s recent ruling declaring tycoon Eduardo “Danding” Cojuangco, uncle of President Benigno Aquino III, as the rightful owner of the contested shares in San Miguel Corporation (SMC). It is set to file a motion to intervene and a motion of consideration against it at the High Court.

“The SC decision is an insult to small coconut farmers long denied of their just and rightful ownership of the multi-billion coco levy funds. It’s like rubbing salt on the wounds of small coconut farmers. These wounds were inflicted by by the Marcos-Cojuangco political partnership,” said KMP chairman and Anakpawis Representative Rafael Mariano.

Mariano assailed the High Court, saying that it deliberately ignored and distorted historical facts.

“The coco levy funds were forcibly exacted from small coconut farmers during the Marcos dictatorship through fascist decrees. By itself, the fund is concrete proof of how the Marcos martial law regime stole from small coconut farmers to provide capital to expand Cojuangco’s business empire. It is a classic example of bureaucrat capitalism in the country,” the activist lawmaker said.

Mariano maintained that no amount of judicial swindling can legitimize Cojuangco’s plunder of the coco levy funds.

Coco levy funds in San Miguel Corporation

From 1973 to 1982, during the term of the late dictator Ferdinand Marcos, Cojuangco and other ranking Marcos government officials bought the United Coconut Planters Bank (UCPB) using coco levy funds.
Marcos imposed the coconut levy through Presidential Decree 276 as amended. It was stated in PD 276 that a levy initially of P15 per 100 kilograms of copra resecada or its equivalent in other coconut products would be imposed on every first sale beginning August 20, 1973.

The levy was called the Coconut Consumer Stabilization Fund (CCSF) and it was initially intended to subsidize domestic consumption of coconut-based commodities premised on a crisis brought about by high prices in the world market for fats and oils.

Through the issuance of a series of other presidential decrees, however, the original purpose was soon changed to “investment for coconut farmers.” It was made to appear as “private” funds even though it was exacted from the millions of coconut farmers.

The CCSF levy that was originally P15, was hiked to P100 per 100 kilos of copra in the following nine years, depending largely on its export price, or P60 on the average. Small coconut farmers were forced to shoulder the coco levy because it was deducted from the usual price of the copra they sold based on levy rates.

The levy collected was valued at P9.7 billion, and is estimated by the Philippine Coconut Authority (PCA) to be worth P100 billion ($2.314 billion) as of 1999.

In 1983, using the UCPB, Cojuangco was able to acquire shares of SMC.

In its decision, the Supreme Court (SC) said PCGG failed to show that the SMC shares were bought with “ill-gotten” money from government funds used by Marcos or his “close associates.”It dismissed a petition seeking a reversal of a Sandiganbayan ruling that Cojuangco’s 20-percent share in the SMC is not part of the coco levy funds. The petition was filed by the Presidential Commission on Good Government (PCGG).

The controversial ruling served as legal closure to almost two decades of legal battle between the government represented by the PCGG and Cojuangco.

In its 74-page en banc decision written by Associate Justice Lucas Bersamin, the SC declared that the block of shares in SMC in the names of respondent Cojuangco is the exclusive property of Cojuangco as a registered owner.

Those who voted in favor of the decision were Chief Justice Renato Corona, Associate Justices Presbitero Velasco Jr., Teresita Leonardo-de Castro, Mariano del Castillo, Roberto Abad, Martin Villarama, and Jose Perez. Opposing it were Associate Justices Conchita Carpio-Morales, Arturo Brion, Jose Catral-Mendoza, and Maria Lourdes Sereno.

Cojuangco’s stake in the SMC is divided in 44 companies. It is worth some P37 billion ($855 million) which the holding company Top Frontier has secured the right to to acquire until November 19, 2012.

Acccording to reports, the 44 firms signed an agreement last May 2010 giving Top Frontier a two-year option to buy a total of 493.37 million shares at the same price per share of P75 ($1.73). The holding firm paid minority shareholders under a tender offering. In the meantime, Top Frontier is 49-percent owned by SMC itself. it has the continuing and exclusive option to purchase and acquire Cojuangco’s shares, and even if it has yet to use this option, it has already been given voting rights under the agreement, making it the single most influential voting bloc in the SMC.

Noynoy’s Silence on SC Decision Suspicious

Mariano said that farmers’ apprehensions are further bolstered by President Aquino’s deafening silence on his uncle’s legal victory. Recent reports reveal the President’s reluctance to state his stand on the ruling.

“There are so many details and I just want to get the clearest picture of what transpired and what appropriate courses of action will be taken, depending on the recommendations of the legal counsel,” the President said to reporters. Aquino said that if the PCGG had already formed its opinion, he will merely wait for its official briefing before he makes a comment.

But Mariano said Cojuangco’s political and economic clout is a big factor behind Aquino’s dilly-dallying and indecisiveness on the coco levy fund issue.

“Does Aquino have prior knowledge of the SC decision? Before, Danding and the Aquinos had estranged personal and political relationships. Now, they’re all engaging in economic concessions and political accommodation. Is this a result of a long-hatched sweetheart deal or a Supreme Court-brokered deal?” he asked.

Mariano said that it was common knowledge that through the years, the cash-strapped government has been desperate to monetize the coco levy funds.

Mariano also announced that “lawyers of small coconut farmers are set to file a motion for reconsideration before the SC.

“Definitely we will file a motion for reconsideration before the SC,” Mariano said.

The KMP has previously filed a plunder case against Cojuangco before the Ombudsman.

The KMP’s secretary-general Wilfredo Marbella in the meantime said that the SC’s decision further exposes the anti-farmer character of the Aquino government.

“The SC’s ruling is congruent with, reflective of the character of its co-equal executive branch headed by a landlord himself – Noynoy Aquino,” Marbella said.

Marbella said that the SC’s ruling has already become part of Philippine jurisprudence, and as such it will automatically be used, copied and adapted in the drafting and promulgation of decisions that will go against the welfare of farmers all over the country.

The militant farmer leader, himself a victim of Cojuangco’s manipulation of the coco levy fund, said that the cruelty coconut farmers endured in the hands of the presidential uncle and campaign war chest benefactor, is a sample of the effects of a public-private partnership Danding Cojuangco forged with his former patron the ousted dictator Marcos.

“Cojuangco used the public funds he was provided to make himself even wealthier.This was standard operating procedure for corrupt officials when Cojuangco was at the helm of the Marcos-directed coconut industry and the UCPB. This framework is now being implemented to the letter in Aquino’s own Public-Private Partnership Program,” he said.

In the meantime, Felix Paz, chairman of KMP-Bikol and concurrent national council member of KMP said that their suspicions regarding Aquino’s recognition of Chief Justice Corona’s appointment last year were confirmed.

“It seems there was political accommodation in exchange for a favorable decision on the Cojuangco cases, among them are the coco levy funds and the junking of the stock distribution option (SDO) in Luisita. We coconut farmers have long struggled and waited for the P150 billion coconut levy funds to be returned to us, but it seems that this administration is just pretending to work toward returning it to genuine small coconut farmers and will just give it to the president’s relatives” said Paz.

“What we want is for justice to be served and to again have control over our lives, something we lost when Danding stole our money. The government is pushing farmers to take to the streets and look for more effective means to defend our rights, reclaim funds stolen from us, and own the land we till,” he said. (

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3 Comments - Write a Comment

  1. while noy speaks with one tongue when it comes to honest and non-corrupt govt. his other tongue becomes very quiet about this unjust raping of the very poor who till the lands day in and day out.

    Where is your other tongue mr. president ?? I doubt anyone will ever hear that one ! except maybe your uncle in as much as you share also in this wealth at the hands of the very very poor

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