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EXECUTIVE ORDERS
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EXECUTIVE ORDER NO. 481 - DIRECTING
THE USE, DISPOSITION, AND ADMINISTRATION OF THE COCONUT LEVY FUNDS TO
REHABILITATE THE COCONUT INDUSTRY
WHEREAS,
the following laws established the coconut levy funds to support and
advance the development of the coconut industry for the ultimate
benefit of the coconut farmers:
(1)
(2)
(3)
a)
b)
c)
(4)
WHEREAS, in the case of Philippine Coconut Producers Federation, Inc. (COCOFED) v. PCGG (GR No. 75713, 02 October 1989, 178 SCRA 236), the Supreme Court stated that certain agencies or enterprises “were organized and financed with revenue derived from coconut levies imposed under a succession of laws of the late dictatorship . . . with deposed President Ferdinand Marcos and his cronies as the suspected authors and chief beneficiaries of the resulting “coconut industry monopoly”.
WHEREAS, the Presidential Commission on Good Government (PCGG), pursuant to Executive Order Nos. 1, 2, and 14, sequestered the said enterprises organized and financed with the proceeds of the coconut levy;
WHEREAS, in the same COCOFED case, the Supreme Court ruled that:
“The
coconut levy funds are clearly affected with public interest. Until it
is demonstrated satisfactorily that they have legitimately become
private funds, they must prima facie and by reason of the circumstances
in which they were raised and accumulated be accounted subject to the
measures prescribed in Executive Order Nos. 1, 2, and 14, to prevent
their concealment, dissipation, etc., which measures include the
sequestration and other orders of the PCGG complained of.”
WHEREAS, the Supreme Court declared in the Republic vs. Sandiganbayan case (GR 96073, 16 February 1993, 240 SCRA 376) that:
“the
coconut levy funds being ‘clearly affected with public interest’, it
follows that the corporations formed and organized from those funds,
and all assets acquired therefrom, should also be regarded as clearly
affected with public interest.”
WHEREAS, the Commission on Audit, relying upon the declaration of the Supreme Court in the Republic vs. Sandiganbayan case, opined on 15 January 1993 that the coconut levy funds are public funds and therefore subject to government audit;
WHEREAS, the Bureau of Internal Revenue, in an answer to a query by the Philippine Coconut Authority Administrator as to the character of the coconut levy funds, relied upon the same Supreme Court ruling and held that “the coconut levy is not a public trust fund for the benefit of the coconut farmers, but is in the nature of a tax and, therefore, are public funds that are subject to government administration and disposition”;
WHEREAS, in the case of Gaston vs. Republic Planters Bank (L-77194, March 15, 1988, 158 SCRA 626) which involved the sugar levy funds, the Supreme Court laid down the principle that:
“The
stabilization fees collected are in the nature of a TAX which is within
the power of the State to impose for the promotion of the sugar
industry. The collections made accrue to a special fund. . . . The tax
collected is not a pure exercise of the taxing power. It is levied in
the regulatory purpose, to provide means for the stabilization of the
sugar industry. The levy is primarily in the exercise of the police
power of the State.”
WHEREAS, in the same case, the Supreme Court held that:
“The
stabilization fees in question are levied by the State upon sugar
millers, planters, and producers for a special purpose — that of
‘financing the growth and development of the sugar industry and all its
components, stabilization of the domestic market including the foreign
market.’ The fact that the State has taken possession of moneys
pursuant to law is sufficient to constitute them as state funds, even
though they are held for a special purpose (Lawrence vs. American
Surety Co., 263 Mich, 586, 249 ALR 535, cited in 42 Am. Jur. Sec. 2, p.
718). Having been levied for a special purpose, the revenues collected
are to be treated as a special fund, to be, in the language of the
statute, ‘administered in trust’ for the purpose intended. Once the
purpose has been fulfilled or abandoned the balance, if any, is to be
transferred to the general funds of the Government. That is the essence
of the trust intended (see 1987 Constitution, Art. VI , Sec. 29 [3],
lifted from the 1935 Constitution, Article VI , Sec. 23[1]).”
WHEREAS, the above-stated principle is likewise applicable to the coconut levy funds, since these funds are not the same nature as the sugar levy funds, both being special public funds acquired through the taxing and police powers of the State;
WHEREAS, Executive Order No. 277, promulgated on 24 September 1995, directing the mode of treatment, utilization, administration and management of the coconut levy funds, provided that:
“(a)
WHEREAS, after the issuance of Executive Order No. 277, s. 1995, the Ad Hoc Committee therein established called for the formulation of a Master Plan for the rehabilitation of the coconut industry and the alleviation of the economic plight of coconut farmers, which plan which should now be fully implemented;
WHEREAS, there is an urgent need to address the issues confronting the coconut levy funds and the coconut industry, any further delay in which can worsen the state of the industry and cause further suffering to the coconut farmer.
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, pursuant to the powers vested in me by law, declare and order that:
1.
2.
3.
4.
DONE in the City of Manila, this 1st day of May, in the year of Our Lord, Nineteen Hundred and Ninety-Eight.
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