Implementation of Coconut Productivity Program

November 13, 1985

EXECUTIVE ORDER NO. 1064

IMPLEMENTING THE COCONUT PRODUCTIVITY PROGRAM

WHEREAS, an accelerated coconut productivity program involving the use of high-yielding and precocious coconut hybrid varieties is imperative if we are to ensure the survival, growth and viability of the coconut industry.

WHEREAS, in view of its limited resources, the Government is constrained to mobilize the private sector and to call on private investors to contribute in this national endeavor to increase coconut productivity; asia dc

WHEREAS, to encourage the private sector to participate actively in this undertaking, necessary tax and fiscal incentives in addition to those provided by existing laws, including among others P.D. 1789, Title VII, Article 57, should be granted to persons or entities that engage in coconut planting/replanting program on a commercial scale:

NOW, THEREFORE, by virtue of the powers vested in me by the Constitution and the law, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order the following:

SECTION 1. The Philippine Coconut Authority (PCA) is hereby directed to immediately formulate and implement an accelerated coconut hybrid planting and replanting program (the Program) aimed at increasing farm productivity. The annual program (January-December) shall be prepared by the PCA Board in consultation with the private sector and reviewed by the Cabinet and shall be effective upon approval of the President and 30 days after publication of the same in newspapers of general circulation. The Program shall include the rehabilitation of existing coconut trees as well as intercropping of areas planted to coconut with suitable crops and the replanting shall, together with the project(s) as hereinafter defined involve approximately 30,000 hectares per annum. PCA shall implement the Program with the active assistance and participation of the recognized organization of coconut farmers pursuant to the provisions of RA 6260 and shall service the requirements of small coconut farmers owning not more than twenty-four (24) hectares who volunteer to participate in the Program. Initially, the devastated areas in Visayas and Mindanao shall be given priority.

SECTION 2. In order to finance the Program, all collection from the basic export duty imposed by Section 514 of PD 1464 and the addition export duty under Executive Order No. 920-A as amended, on coconut products shall accrue to the general fund to meet the requirements of the Program. To assure the continuity of the Program in the long term, Government shall allocate sufficient resources from the general revenues to finance the requirements of the Program. The Minister of Budget is hereby directed to release to PCA its funding requirements in accordance with the annual budgetary process duly prepared by the PCA Board and approved by the President.

The Program shall be subject to annual review by the President.

SECTION 3. In order to step up coconut planting and replanting activities at a commercial scale, and particularly to encourage the private sector to actively participate in this endeavor, financial assistance as defined and enumerated in Section 4 hereof is hereby granted to any person or entity, who shall engage and implement, singly or in association with others, a project for the planting or replanting with high-yielding and precocious coconut planting materials (the "Project").

For purposes of this Section, the Project shall comply with the following guidelines:

1. The Project shall be prepared in accordance with the farm developmental plan as approved by the President. Each project shall be defined and prescribed in a farm developmental plan, which shall include, among others, the total reasonable project cost and the method and source of financing of the project.

2. The Project proponents shall commit for the full development of the area, including the maintenance cost for four (4) years from time of field planting of suitable intercrop as well as the establishment of farm infrastructures. cd

3. The Project shall be fully developed and implemented within seven (7) years from date of approval of the farm developmental plan.

SECTION 4. Any person or entity participating in the financing of the Project or of any planting and/or replanting program under PD 1972 shall be entitled to the following benefits and incentives:

1. To the extent of the amounts actually spent and invested for the Project or the Program as verified by the PCA to be in accordance with the approved farm development plan, any exported of coconut products shall be given tax credits or duty rebates for the export duties actually paid by the exporter.

Any person or entity other than an exporter of coconut products which spends and invests to an approved Project or the Program shall be granted a tax credit with a face value equal to its actual investment. An exporter of coconut products shall likewise be granted a tax credit with a face value equal to its actual investment less the amount actually covered by tax credits or duly rebates for export duties actually paid.

The tax credit herein authorized shall be evidenced by a tax credit certificate which shall be issued by the Minister of Finance upon certification by PCA of the progress of development in accordance with the approved farm development plan. PCA shall verify on quarterly basis the progress of work on the approved Project and shall certify the extent of completion thereof and the amount of contribution paid by a participant. The certification by PCA shall be final and conclusive for the Ministry of Finance to issue tax credit certificates within ten (10) days from receipt hereof.

No tax credit certificate shall be issued until and unless the PCA certification states that the particular work for a given quarter has been completed and no tax credit shall be granted for the cost of maintenance of a portion or portions of the Project are which have been brought to the productive stage.

The tax credit certificate shall be negotiable and may be used or applied against any or all taxes including but not limited to income taxes, specific taxes ad valorem taxes, sales taxes, percentage taxes, duties, charges, wharfage fees due the National Government. The tax credit issued pursuant herewith shall be valid only for a period of ten (10) years from date of the tax credit certificate.

2. At his option, a refund in lieu of a tax credit shall be given to any person or entity who invests in the Project. A corresponding refund certificate shall be issued by the Ministry of Finance upon certification by PCA of the amounts actually spent and invested in the Project or the Program upon certification by PCA of the progress of development in accordance with the approved farm development plan. PCA shall verify on quarterly basis the progress of work on the Project and shall certify the extent of compliance with the farm development plans as approved under Section 3 hereof. cd i

Within fifteen (15) days from every end of quarter, the PCA shall certify to the Ministry of Finance the amount of refund to which the investors are entitled.

The certification by PCA and COA shall be final and conclusive for the Ministry of Finance to issue refunds within ten (10) days from receipt thereof subject to the usual auditing regulation.

In no case shall the refund exceed the amount spend or invested from the development in progress and no refund shall be issued after the lapse of four (4) years from field planting or seven (7) years from the date of issuance of the certificate of eligibility whichever comes first.

3. Within the development period of the Project as determined by the farm development plan, and upon certification of the PCA that the capital equipment to be imported shall be utilized for the development of a Project, all importations of a Project for machinery and equipment including the initial supply of spare parts thereof shall be fully exempted from payment of tariff duties and taxes.

4. Any amount contributed to the Program and/or the Project shall be exempted from the payment of donor's and donee's taxes. Receipt by the participants of evidence of participation in an approved Project such as but not limited to associational rights, partnership interests, cooperative shares of stock, shares of stock in a corporation shall not form part of the gross income of the recipient participant and are likewise exempted from payment of all taxes and duties.

5. For a period of ten (10) years from date of approval of the Project, no real property taxes shall be imposed and collected on the lands included in the Project as well as on all improvements introduced therein and all machinery and equipment therein located.

SECTION 5. Except for causes beyond the control of the proponents of the Project, the failure to complete the Project within the period specified in Section 3(3) shall result in the forfeiture of the incentives and benefits herein granted. acd

SECTION 6. Any violation of the provisions of this Executive Order, and/or the rules and regulations issued pursuant hereto, shall be punished and penalized in accordance with Section 1, Article IV of Presidential Decree No. 1468, as amended.

SECTION 7. All laws, executive and administrative orders, and/or rules and regulations respectively issued by the governmental agencies concerned, inconsistent herewith, except those promulgated to implement the provisions and tax exemptions provided in Presidential Decree No. 1960 and Presidential Decree No. 1468, as amended, are hereby repealed, amended or modified accordingly.

SECTION 8. This Order shall take effect immediately.

DONE in the City of Manila, this 13th day of November, in the year of Our Lord, Nineteen Hundred and Eighty-Five.

Published in the Official Gazette, Vol. 82 No. 2 page 98 on January 6, 1986.