The so-called “philantrophist” may have already died, but how about those farmers deprived of the coco levy funds?
By Joaquin Gonzalez
In a statement regarding the death of Eduardo “Danding” Cojuangco Jr., Presidential Communications Secretary Martin Andanar has called him a “philanthropist to the people and a reliable partner of the government in poverty alleviation and economic development.”
But almost a month after his passing, a myriad of Filipino farmers are still haunted by his deceitful schemes.
During the Marcos administration, Rosing Valdeavilla and her departed husband relied mainly on coconut and rice farming to support their six children.
They had been paying the government taxes from their copra sales and were promised that their investments would eventually reward them, but Aling Rosing was only compensated a measly total of Php 10,150 after several decades. For the sum she received, Aling Rosing is considered lucky as other coconut farmers have received not a single centavo from their payments.
Meanwhile, in 2018, Paulino Malvez joined a funeral procession that took slain Ben Ramos to the Sipalay City Public Cemetery. Malvez lived in a concrete-block home in the Danding-owned Hacienda Balatong in Negros Occidental, where he raised eight children in poverty.
Ramos was a human rights lawyer who had been defending Malvez and other farmers of Hacienda Balatong from the tactics of their landlord, Danding.
While Danding was able to amass great wealth, power, and influence, for millions of farmers like Aling Rosing and Malvez, Danding also left a legacy of oppression and exploitation. He was the chairman of San Miguel Corporation (SMC) and several other companies, a landlord of over 4,600 hectares of land, and had put his personal wealth at over one billion US dollars prior to his death.
Coco levy exploitation
The coco levy was a tax on copra exacted from coconut farmers from 1973 to 1982. Farmers paid an average of Php 60 per 100 kilos of copra. It was supposed to be used to develop the Philippine coconut industry, but the funds were instead funneled to the personal financial interests of Danding, the Marcos family, and other Marcos cronies.
On 19 June 1971, Republic Act (RA) 6260 which called for the creation of a Coconut Investment Fund and a Coconut Investment Company (CIC), was enacted under President Ferdinand Marcos. The stated objective of the CIC was to ”fully tap the potential of the coconut planters, accelerate the growth of the coconut industry, to improve, develop and expand the marketing system, and to ensure stable and better incomes for coconut farmers.”
The amount levied on coconut farmers was initially 55 centavos per 100 kilos of copra. Marcos subsequently created other funds through Presidential Decrees (PD) 276, 582, 1468, 961, and 1841, which were amended by PD 1842. These PDs increased the total amount that the farmers would pay and included the Coconut Industry Development Fund and Coconut Consumers Stabilization Fund.
Two years later, in June 1973, President Marcos created the Philippine Coconut Authority (PCA) through PD 232, wherein Danding became one of its directors; its stated mandate was “to promote accelerated growth and development of the coconut and other palm oils industry.”
Two years later, the PCA purchased a 72.2 percent stake in the First United Bank from Danding’s uncle, Jose Cojuangco, and renamed it United Coconut Planters Bank (UCPB) to become the depository for the coco levy funds.
For brokering the deal, Danding secured a tenth of the 72.2 percent stake as compensation and was also awarded a management contract that made him president and CEO of the bank. A loan from UCPB enabled Danding to gain a 20 percent share in SMC and another 27 percent stake in the same company was placed under the name of Coconut Industry Investment Fund (CIIF) Companies.
In 1986, after the Marcos administration had been ousted, Danding fled the country and went into exile. All these assets were then sequestered by the Presidential Commission on Good Government (PCGG), the government agency established by President Corazon Aquino to recover ill-gotten wealth accumulated by Marcos, his family, and his cronies.
Danding returned to the Philippines in 1989, during the presidency of his cousin, Corazon Aquino. However, Danding was eventually able to regain power in SMC. In 1998, just over a week after Joseph Estrada became president. Danding was elected chairman and CEO of SMC, positions which he held until his death; Estrada denies that he had anything to do with Danding’s rise to power in SMC.
In April 2011, the Supreme Court (SC) affirmed a 2007 decision of the Sandiganbayan, the country’s anti-graft court, that Danding was the owner of the 17 percent stake in SMC (reduced from 20 percent) in which the SC ruled that Danding’s claim on his 17 percent stake was not illegal since he did not use coco levy funds to acquire it.
The PCGG had argued that Danding taking a loan from UCPB was illegal because it violated rules restricting bank officials from benefiting their own assets and deposits. The SC then refuted the PCGG’s argument and stated that Danding had not broken the rules.
Two years later, in September 2012, the SC affirmed a 2004 decision of the Sandiganbayan that the 24 percent stake in SMC under the CIIF Companies (reduced from 27 percent) were government-owned. Later that year, SMC bought back the government’s stake for P57.6 billion.
While Danding won his battle for SMC, he was not able to do the same with his 7.2 percent stake in UCPB. In November 2012, the SC affirmed a 2003 decision of the Sandiganbayan that the 72.2 percent stake in UCPB bought by PCA which included Danding’s stake was owned by the state.
Attempts to return the coco levy funds
After the coco levy assets were sequestered by the Aquino administration, there have since been several initiatives to establish management of the coco levy fund which is now estimated to be worth around P100 billion.
During the term of President Fidel Ramos, he issued Executive Orders (EO) 277 and 481. The Coconut Industry Reform Act (COIR) said that these EOs were ineffective because no concrete action had taken place.
His successor, President Joseph Estrada, after his first 100 days in office, promised that he would make sure that every centavo of the coco levy trust fund would be returned to the coconut farmers. It was a promise that he was never able to fulfill.
After Estrada was ousted and eventually replaced by Gloria Macapagal Arroyo, the SC declared that the coco levy funds were “public in character,” leaving the decision on who owned the assets acquired with the funds, to the Sandiganbayan.
In 2016, then-presidential candidate, now President Rodrigo Duterte made a promise before coconut farmers in his campaign that he would return the coco levy fund in his first 100 days in office. “Pag ako’y nahalal na presidente, pinagpala ng Diyos, ibabalik ko sa inyo ‘yung coco levy,” Duterte said.
However, in February 2019 he vetoed the bill reconstituting the PCA, SB (Senate Bill) 1976, or the Strengthened Philippine Coconut Authority Law for “lacking in vital safeguards to avoid the repetition of painful mistakes committed in the past.”
A week later, Duterte vetoed accompanying bill SB 1233, or the Coconut Farmers and Industry Development Act which created the Coconut Farmers and Industry Trust Fund, and provided for its management and utilization by the reconstituted PCA.
While the two bills were far from what the coconut farmers had originally wanted and proposed, Duterte’s decision to veto the two bills left the farmers feeling betrayed by their president with his unfulfilled promises.
The farmers affected by his manipulation, most of whom are now already elderly or dead, are still not able to obtain the justice they have been fighting for decades.
The Corporative Scheme
It is not just coconut farmers that Danding has oppressed and exploited. Danding owned at least 11 haciendas spanning more than 4,600 hectares located in the central and southern parts of Negros Occidental.
The haciendas are planted with mango, durian, pili, banana, and sugarcane. Just like Danding’s other assets, the haciendas are believed by many to be ill-gotten, but no administration has ever been successful in sequestering them.
During the term of Estrada, Danding’s haciendas were placed under the Comprehensive Agrarian Reform Program (CARP). However, instead of distributing the land to the farmer-beneficiaries, Danding put up a joint venture agreement (JVA) scheme dubbed this the “corporative scheme”.
In this scheme, farmers would be able to buy the land directly under the condition that it would automatically be placed under a JVA between Danding’s company and the farmer-beneficiaries’ cooperative.
Danding would provide farm equipment and facilities, while the farmer-beneficiaries’ would allow the joint venture corporation to use the lands in exchange for shares of stock in the corporation.
Furthermore, the farmer-beneficiaries’ would be given only 30 percent of the shares while Danding would keep the remaining 70 percent. The scheme would allow farmer-beneficiaries to technically own the land but Danding would retain control over it.
A potential beneficiary could not refuse the deal, as failure to agree with the terms of the scheme would cancel his eligibility to “own” the land. Danding was believed to have purged from the list of beneficiaries, several farmers who were critical of his scheme.
Danding made a surprise announcement during Estrada’s visit to his hacienda in 1998. He said that from the price of P350,000 per hectare, he was instead giving his lands for free to the farmers but they would still be put under the JVA.
From then, Estrada proclaimed Danding as the “godfather of land reform.” There, however, has been no legal evidence of the free distribution of land taking place.
The corporative scheme has enabled Danding to retain control of his haciendas while stripping the farmer-beneficiaries of the benefits that agrarian reform is supposed to give them.
For years, farmers of Danding’s haciendas have been demanding that the Department of Agrarian Reform (DAR) terminate the scheme and continue to press for the actual land distribution of Danding’s haciendas.
Leonardo Montemayor, a former Secretary of Agriculture puts the situation this way: “The Philippines is still really a semi-feudal democracy. We have a democratic veneer. We have judges, trials, and due process. But the longer the due process takes, the longer it takes for a farmer to secure substantial justice.”
Sama-samang Artista para sa Kilusang Agraryo (SAKA) has stated that “Few people can embody the ruthlessness of the semi-feudal and semi-colonial system ruled by big landlords and compradors the way Danding Cojuangco did.”
Kilusang Magbubukid ng Pilipinas (KMP) chairperson Danilo Ramos, for his part, called Danding “the embodiment of the landlord-comprador-bourgeoisie ruling class who have enriched and empowered themselves through exploiting the Filipino masses, especially workers and farmers.”
More than five months after vetoing the two bills that would have established a trust fund, Duterte, in his 2019 State of the Nation Address (SONA), said establishing a trust fund was what he had really wanted. He likewise said that he had “not forgotten (his) commitment to uplift the lives of coconut farmers and further develop the coconut industry.”
Nearly a year later, on 4 March 2020, SB 1396 was submitted to the Senate; it is a consolidation of bills filed by Senators Francis Pangilinan, Ralph Recto, Imee Marcos, and Cynthia Villar. This SB attempts to address Duterte’s concern over the “lack of safeguards” by creating a trust fund management committee which shall be responsible for setting the investment strategy of the trust fund.
Meanwhile, the case on the corporative scheme is in limbo. On 26 June 2020, the World Bank said that its board of directors approved financing for the DAR’s $473.6-million Support to Parcelization of Lands for Individual Titling project.
Only time will tell if this loan will be the solution to the decades-old problem of achieving proper land reform. The CARP had been in place since 1988 and was even reformed to the Comprehensive Agrarian Reform Program Extension with Reforms (CARPER) in 2009.
However, the CARPER still enables deceptive measures such as the corporative scheme, and despite its implementation, millions of farmers continue to wait to be given the land that they are entitled to.
Former Senator JV Ejercito has called Danding a “very nice person with a kind heart.” But millions of farmers and their families would beg to differ. The farmers affected by his manipulation, most of whom are now already elderly or dead, are still not able to obtain the justice they have been fighting for decades.