Prescribing Measures for the Structural Economic Adjustment Program for the Coconut Industry

January 11, 1985

PRESIDENTIAL DECREE NO. 1960

PRESCRIBING MEASURES FOR THE STRUCTURAL ECONOMIC ADJUSTMENT PROGRAM FOR THE COCONUT INDUSTRY

WHEREAS, a rationalization program for the coconut industry was mandated by LOI 926 in 1979 to save the coconut oil milling industry from financial collapse whereby a cooperative endeavor was organized among coconut farmers, oil millers and exporters of coconut products to pool and coordinate their respective resources in the buying, milling and marketing of copra and its by-products; casia

WHEREAS, a self-reliance energy program was instituted by the Government whereby the energy requirements of the country would be serviced from indigenous and renewable local sources and thereby diminish its dependence on imported energy;

WHEREAS, the Coco-Diesel Program was conceived and implemented as a substantial element in the country's self-reliance energy program such that coconut oil, one of the country's indigenous and renewable sources, would be utilized as a diesel fuel extender and fuel blending stock;

WHEREAS, to ensure a continuous supply of coconut oil for the Coco-Diesel Program and at the same time strengthen the rationalization program for the coconut industry, Presidential Directive dated 1 September 1982 was issued mandating that the coconut oil production of intermittent exporters of coconut products and the excess production of those primarily engaged in the domestic market be instead channeled into the Coco-Diesel Program rather than into the world market, and pursuant to which, the Philippine Coconut Authority ("PCA") issued Administrative Order No. 002, Series of 1982 establishing Rules and Regulations to implement the said Presidential Directive;

WHEREAS, the severe drought in 1982-83 caused a substantial reduction in the copra production of the country and compelled the Government thru PCA to adopt measures to meet Philippine and world market requirements for coconut oil; to prevent cutthroat competition for copra; and to forestall short term cycles of artificially high prices of coconut products in the domestic and world market including the issuance of PCA Administrative Order No. 002, Series of 1983;

WHEREAS, since the promulgation of the Presidential Directive and the PCA Administrative Orders, copra production of the country has dropped even further as a result of numerous typhoons in late 1983 and two (2) super typhoons in 1984;

WHEREAS, in 1974, the Government launched a national hybrid coconut replanting program with actual replanting commencing in 1979 as a viable means of increasing copra production and thereby enhance the country's competitiveness in the international market of fats and oils, which was however suspended in 1982 in response to the public clamor against the coconut levy which financed the replanting program;

WHEREAS, pending review of alternative schemes for financing the replanting program, the Government ordered, as a result of the super typhoons in 1984, the replanting of the devastated areas with high-yielding hybrids with this limited replanting program not bearing fruit until the 1990's; casia

WHEREAS, external forces beyond the control of the Government plunged the country into a severe economic and financial crisis compelling the Government to seek a standstill and a restructuring of its external debts;

WHEREAS, to enable the country to restructure its external debts, the Government has implemented a series of substantial economic policy measures which include reforms in the production, pricing, marketing, credit and institutional arrangements of the coconut industry;

WHEREAS, after a thorough review, it is deemed to be in the interest of all that there be less Government intervention in the marketing of coconut products and allow the private sector greater access to the markets, and at the same time encourage and require the private sector to establish and adopt appropriate measures to enhance the competitiveness of coconut products in the world market;

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

SECTION 1. PCA Administrative Order No. 002, Series of 1982, and PCA Administrative Order No. 002, Series of 1983, and all other rules and regulations promulgated by various governmental agencies in consonance with the aforesaid PCA Administrative Orders are hereby repealed and all oil millers are hereafter permitted and authorized to export their coconut products to the world market subject only to such rules and regulations that the Ministry of Trade and Industry, the Central Bank and the PCA may prescribe to ensure that coconut products are sold at competitive prices in relation to other fats and oils and that the proceeds of such sales, less actual expenses, are remitted to the country; Provided, however, that no rule or regulation shall be promulgated which may delay or restrict the expeditious exportation of coconut products to the world market.

SECTION 2. To help planters and processors organize themselves into associations and/or cooperatives to give them greater control in the marketing of their products, the coconut farmers, and/or the copra buyers and/or millers/refiners and/or exporters of coconut products are encouraged and authorized to form such cooperatives or associations as may be appropriate to achieve economies of scale; avoid the ruinous competition for copra which pushed the coconut oil milling industry to the brink of financial collapse in late 1979; maximize foreign exchange earnings; ensure that the coconut farmers receive a fair share of the proceeds from export and/or domestic sales, and at the same time continue to assure consuming countries an adequate and continuous supply of coconut products at fair and reasonable prices; provided however, that the Government or any of its agencies or instrumentalities, including government owned or controlled corporations, shall not, unless expressly permitted by law, or by the President of the Philippines, directly or indirectly engage in the marketing of coconut products in the world market.

SECTION 3. To ensure the survival of the coconut oil milling/refining industry while there is an excess of copra crushing/refining capacity and to encourage fresh equity to be invested in existing coconut oil milling/refining capacities, no new copra crushing/refining capacity and/or increase in existing copra crushing/refining capacity shall be allowed without the respective approvals of the Ministry of Trade and Industry, the Ministry of Agriculture and Food and the PCA, all of which agencies are hereby required to respectively promulgate the necessary rules and regulations to enforce the foregoing. The Central Bank shall not authorize the opening of letters of credit for the importation of capital equipment without the respective prior approval by the said agencies. For this purpose, the crushing/refining capacities fixed opposite each coconut oil miller/refiner listed in Annex "A" hereof, shall be utilized in determining whether there is basis for expanding existing crushing/refining capacities and/or allowing new crushing/refining capacities to be established. The governmental agencies concerned shall accord priority to coconut oil millers/refiners listed in Annex "A" for the establishment of new facilities, or, within their respective areas, the expansion of their existing facilities, or the restart of mills that have been mothballed by the cooperative endeavor.

Any person or entity who may be aggrieved by the accuracy of Annex "A" hereof, may within thirty (30) days from the date of promulgation of this Presidential Decree, submit its perceived grievances to the Ministry of Trade and Industry, the Ministry of Agriculture and Food and the PCA which shall respectively submit their recommendations for the maintenance or modification of Annex "A", as the case may be, to the President of the Philippines for final decision.

SECTION 4. To assure the coconut farmers a return on their investment and to honor the commitments of the cooperative endeavor and the country as well, in the domestic and international markets, including the financial markets, all rights and obligations acquired or incurred by the cooperative endeavor in implementation of the rationalization program for the coconut industry mandated by LOI 926 and duly approved by appropriate governmental agencies such as the Ministry of Trade and Industry, and/or the PCA, and/or the Central Bank, must necessarily be assigned, transferred or sold, pro rata and under reasonable terms and conditions to preserve the interests of the creditors and the contractual commitments of the cooperative endeavor, to the coconut oil millers/refiners who desire to service the world market, including oil mills/refineries owned or controlled by the coconut farmers of the Philippines as provided in Presidential Decrees No. 961 and 1468, as amended.

SECTION 5. To encourage full and faithful compliance with the structural economic adjustment program for the coconut industry herein prescribed and the acquisition and the assumption of the rights and the obligations of the cooperative endeavor as prescribed in Section 4 hereof, all persons or entities, including the cooperative endeavor and their respective stockholders who have participated in the pooling and coordination of their respective resources as required by LOI 926, as so certified by the cooperative endeavor, are hereby exempt from any and all taxes, fees, imposts, charges of whatever kind and nature, which any, some or all of them may, or might have incurred as a consequence of, or arising out of, or by reason of, or in connection with, such steps, measures and/or procedures which they may adopt in compliance with or in obedience to the structural economic adjustment program for the coconut industry which they may deem necessary or useful or beneficial to them, and their respective stockholders.

 

SECTION 6. Any violation of the provisions of this Presidential Decree, and/or the rules and regulations herein authorized to be issued by the governmental agencies concerned, shall be punished and penalized in accordance with the respective enabling act or charter of the governmental agency or instrumentality concerned.

SECTION 7. All laws, executive and administrative orders, and/or rules and regulations respectively issued by the governmental agencies concerned inconsistent herewith, are hereby repealed, amended or modified accordingly.

SECTION 8. This Decree shall be effective immediately.

DONE in the City of Manila, this 11th day of January, in the year of Our Lord, Nineteen Hundred and Eighty-Five.

CRUSHING/REFINING CAPACITIES OF RP COCONUT OILMILLS/REFINERIES

 

	Plant	Plant Site	Crushing	Capacities	Refined Capacities
			Daily	Annual	Daily	Annual
Metro Manila Area		Copra MT	(Copra MT)	Max. Refined Oil (MT)
1.	Metroplex	Muntinlupa, Metro
	Commodities	Manila	330	99,000
2.	Imperial Veg. Oil Co.	Pandacan, Manila	310	93,000	70	23,130
3.	Int'l. Oil Factory	San Juan, Metro
	Manila	288	86,400	150	49,510
4.	Phil. Refining Co.	Paco, Manila	275	82,500	35	11,550
5.	Procter & Gamble,	Tondo, Manila	250	75,000	150	49,400
	PMC
6.	Central Veg. Oil Co.	Paco, Manila	150	45,000	60	19,100
7.	Liberty Oil Factory	EDSA, Quezon City	100	30,000	65	21,450
8.	Royal Ind. Dev. Corp.	Murphy, Quezon City	50	16,500
9.	Crystal Oil Milling	Tandang Sora, Q.C.	35	11,550
10.	Tayabas Oil (B)	Taguig, Metro Manila
11.	Malabon Soap & Oil	Malabon, Metro Manila	120	39,600
12.	Pacific Oil Products	Malabon, Metro Manila	60	19,800
13.	Royal Oil Products	Makati, Metro Manila			106	34,930
			———	———	———	———
		Sub-Total	1,703	510,900	901	297,330
LAGUNA/QUEZON AREA
14.	San Pablo Mfg. Corp.	San Pablo City	500	150,000	150	49,500
					300	99,000
					(C.O)
15.	SMC-Lucena Oil Mill	Lucena City	381	114,300	85	28,050
16.	Coco-Chemicals Phils.
	Inc.	Atimonan, Quezon	268	80,400	50	16,500
17.	Southern Luzon
	Coconut Oil Mill	Mulanay, Quezon	213	63,900
18.	PCY Oil Mfg. Corp.	Sta. Cruz, Laguna	165	49,500
19.	Royal Mfg. Corp. (B)	Lucena City	150	45,000
20.	New Sun Ripe Coco
	Products	Magdalena, Laguna	55	16,500
21.	Red V Coco Products	Lucena City	50	15,000
22.	Atson Coco, Inc.	San Pablo City	50	15,000
23.	Unideco Consolidated
	Mfg.	Lucena City	50	15,000
24.	Laguna Insular
	Comm'l.	Cabuyao, Laguna	50	15,000
25.	Licup Oil Mill	Candelaria, Quezon	50	15,000
26.	Peter Paul Phils. Corp.	Candelaria, Quezon	40	12,000
27.	Blue Bar Coconut
	Phils.	Tiaong, Quezon	27	8,100
28.	Francklin Baker Co.	San Pablo City	27	8,100
29.	Mina Oil Mills	Cabuyao, Laguna	25	7,500
30.	People's Ind'l. &
	Comm'l Corp.	Cavite City	25	7,500	100	33,000
31.	Quezon Champion (B)	Candelaria, Quezon	25	7,500
32.	Coco Resources (B)	Pagbilao, Quezon
33.	Tantuco (B)	Lucena City			80	26,400
34.	Banahaw (B)	Sta. Cruz, Laguna
35.	Po Man Hing (B)	Cabuyao, Laguna
36.	Apo Oil Mills (B)	Candelaria, Quezon
37.	Countryside Millers,
	Inc.	San Pablo City			350	115,500
			———	————	————	———
		Sub-Total	2,151	645,300	1,115	367,950
BICOL AREA
38.	Legaspi Oil Co., Inc.
	SMC-COMRO	Arimbay, Legaspi City	450	135,000
39.	Coco Complex Phils.	Camarines Norte	250	75,000
40.	Bicol Oil Mill	Pasacao, Camarines Sur	75	22,500
			——	————
		Sub Total	775	232,500
VISAYAS AREA
41.	Lu Do & Lu Ym Corp.	Cebu City	600	180,000	35	11,550
					100	33,550
					(C.O)
42.	NIDC Leyte	Tanauan, Leyte	125	37,500
43.	West Visayas Coco
	Dev.	Iloilo City	100	30,000
44.	Visayan Mfg. Co.	Iloilo City	50	15,000	30	9,900
45.	Calixto Yongco	Cebu City	45	13,500
46.	La Prueba	Cebu City, Cebu City	20	6,000
47.	Nor Oil (B)	Tayasan, Negros Or.
48.	Samarland (B)
			———	————	——	———
		Sub Total	940	282,000	165	54,450
MINDANAO AREA
49.	Granex Mfg. Corp.	Iligan City	1,000	300,000
50.	Leg-Oil Davao	Davao City	800	240,000	150	49,500
					(C.O)
51.	SMC-Iligan Oil Mill	Iligan City	600	180,000
52.	Interco Mfg.	Zamboanga City	600	180,000
53.	Southern Islands	Roxas, Zamboanga
	Oil Mills	del Norte	605	181,000
54.	Indo Phil (OLA)
	Oil Mills	Gingoog City	423	126,900
55.	Cagayan de Oro
	Co., Inc.	Cagayan de Oro City	385	115,500
56.	Davao Gulf Oil
	Co., Inc.	Mati, Davao City	300	90,000
57.	Phil. Int'l. Dev. Corp.	Zamboanga City	280	84,000
58.	Lim Ket Kai	Cagayan de Oro City	200	60,000	75	24,750
59.	Pacific Oil Products
	Inc.	Davao City	125	37,500
60.	NIDC-Davao	Davao City	125	37,500
61.	NIDC-Jimenez	Jimenez, Mis. Occ.	125	37,500
62.	South Davao Dev.
	Co.	Davao City	25	7,500
63.	Ozamiz Coco Oil Mill	Ozamiz City	25	7,500
64.	Bislig Coco Oil Mill	Bislig, Surigao del Sur	15	4,500
65.	Phil.-Agro Edible Oil
	Mill	Zamboanga City	350	105,000
66.	IDMC (B)	Kauswagan, Lanao
		del Norte
67.	Mincoco (B)	Kauswagan, Lanao
		del Norte
68.	Eastern Davao Oil
	Mill	Maco, Davao del Norte
69.	Sucodeco (B)	Lipatas, Surigao City
70.	Countryside Millers,
	Inc.	Pres. Roxas, Zambo			350	115,500
		del Norte			(CO/LAO)
71.	Countryside Millers,
	Inc.	Sta. Filomena, Iligan			350	115,500
					(C.O)
			———	———	———	———
		Sub Total	5,983	1,794,900	925	305,250
		GRAND TOTAL	11,552	3,465,600	3,106	1,024,980
			=======	=======	=======	=======

 

 

NOTE:

1-Dessicator whole milling capacity is utilized mainly for production of paring oil

B-UNICOM mothballed mills (B-mills)

Published in the Official Gazette, Vol. 81 No. 4 Page 217 on January 28, 1985.