MANILA – The Supreme Court has declared void four sections of Executive Order No. 180 issued by former President Benigno Aquino III in 2015 on the disbursement of coconut levy funds.
In a 21-page decision penned by (now retired) Justice Jose Catral Mendoza in GR No. 217965 (Confederation of Coconut Farmers Organization of the Philippines, Inc. v. President Aquino III, et al.) and promulgated on August 8, 2017, the Court En Banc ruled that President Aquino “went beyond the authority delegated by law in the disbursement of the coconut levy funds.”
Thus, the Court partially granted the Petition for Prohibition and declared “that Sections 6, Section 7, Section 8 and Section 9 of Executive Order No. 180, series of 2015, are not in conformity with law.” Section 6 is the section on Approval of Roadmap; Sec. 7, Funding Source; Sec. 8, Utilization of Funds, and Sec. 9, Implementing Rules. EO 180 mandates the reconveyance and utilization of coconut levy assets for the benefit of coconut farmers and the development of the coconut industry.
The Court also lifted effective immediately the temporary restraining order it issued on June 30, 2015.
The Court held that “[t]he provision of PD 1468 (Revised Coconut Industry Code) 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.”
Aside from EO 180, petitioners had also questioned the validity of EO 179, which calls for the inventory and privatization of all coco levy assets.
The Court, however, held that EO 179 “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 [Special Accounts in the General Fund]. 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.”
The Court noted that COCOFED v. Republic (679 Phil. 508 [2012]) and Republic v. COCOFED (423 Phil. 735 [2001]) “had definitely settled the public nature of coconut levy funds, which included the CCSF [Coconut Consumers Stabilization Fund]) and the CIDF [Coconut Industry Development Fund]. The most compelling reasons to treat coconut levy funds as public funds are the fact that it was raised through the State’s taxing power and it was for the development of the coconut industry as a whole and not merely to benefit individual farmers.”
The Court further noted that with the finality of the decision in COCOFED, “there is no question that the coconut levy assets are public funds. Thus, the government may take the necessary steps to preserve them and to be able to utilize them.”
The Court recognized petitioner organization CCFOP as among those representing coconut farmers on whom the burden of the coco levies attached.
Also named as respondents were Presidential Commission on Good Government Acting Commissioner Richard Roger Amurao, Governance Commission for GOCCs Chair Cesar L. Villanueva, and Justice Secretary (now Senator) Leila M. De Lima.