SC voids four sections of Aquino's EO on disbursing coco levy funds

The Supreme Court (SC) has voided four sections of one of the two executive orders issued by former President Benigno Aquino III on the use of P74 billion in coconut levy funds for the benefit of coconut farmers and the industry.

Declared void were Section 6 (Approval of Roadmap), Section 7 (Funding Source), Section 8 (Utilization of Funds) and Section 9 (Implementing Rules) of Executive Order 180, which mandate the reconveyance of all the funds and assets to the government and utilization of the coco levy assets.

"Through these sections, the President went beyond the authority delegated by law in the disbursement of the coconut levy funds," the August 8 decision stated.

According to the Court, the provision of Presidential Decree 1468 or the Revised Coconut Industry Code on the investments for the benefit of coconut farmers are "simply too broad to limit the amount of spending that may be done by the implementing authority."

"Considering that no statute provides for specific parameters on how the SAGF [Special Accounts in the General Fund] may be spent, Congress must first provide a law for the disbursement of the funds, in line with its constitutional authority. The absence of the requisite legislative authority in the disbursement of public funds cannot be remedied by executive fiat," the SC said through then Associate Justice Jose Mendoza.

The SC also lifted the temporary restraining order it issued on June 30, 2015 on EO 179, which provides the administrative guidelines for the inventory and privatization of coco levy assets, and EO 180.

As for E0 179, the Court held that the order “does not create a new special fund but merely reiterates that revenues arising out of or in connection with the privatization of coconut levy funds shall be deposited in the SAGF."

"An automatic appropriation law is not necessarily unconstitutional for as long as there are clear legislative parameters on how the amounts appropriated are to be disbursed. The president should not have unlimited discretion as to its disbursement since the funds are allocated for a specific purpose," it said.

The decision came more than two years after the Confederation of Coconut Farmers Organization (CCFOP) questioned the constitutionality of the EOs on May 20, 2015, arguing Aquino issued the two orders without prior legislation.
 
Coco levy was imposed on coconut farmers from 1973 to 1982. However, the farmers reportedly did not benefit from their contribution because it was used to prop up the businesses of allies of the late President Ferdinand Marcos.

SC rulings indicate that the funds were used to buy shares of stock in the United Coconut Planters Bank (UCPB) and diversifying conglomerate San Miguel Corporation.

A separate decision in 2011, however, said businessman Eduardo "Danding" Cojuangco Jr.'s 20-percent equity in SMC was legally acquired, denying the government’s claim that it was also acquired through coco levy funds. —KBK, GMA News