(NAR) VOL. 9 NO. 4 / OCTOBER - DECEMBER 1998
a. To finance the establishment, operation and maintenance of a hybrid coconut seednut farm xxx;4. The Coconut Industry Stabilization Fund, created under PD 1841 (effective October 2, 1981), which shall be collected and used for several "socio-economic and developmental programs for the benefit of the coconut farmers, in particular, and the coconut industry, as a whole xxx" [Sec. 1].
b) To purchase all the seednuts produced by the hybrid coconut seednut fund xxx;
c) To finance the establishment, operation and maintenance of extension services, model plantations and other activities as would ensure that the coconut farmers shall be informed of the proper methods of replanting their farms with the hybrid seednuts" [Sec. 2];
"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;
"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. xxx 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;
"(a) The coconut levy funds, which include all income, interests, proceeds or profits derived therefrom, as well as all assets, properties and shares of stocks procured or obtained with the use of such funds, shall be treated, utilized, administered and managed as public funds consistent with the uses and purposes under the laws which constituted them and the development priorities of the government, including the government's coconut productivity, rehabilitation, research extension, farmers organizations and market promotions programs, which are designed to advance the development of the coconut industry and the welfare of the coconut farmers."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.