Question & AnswerQ&A (EXECUTIVE ORDER NO. 277)
The four general classes are: (a) the Coconut Investment Fund under R.A. 6260; (b) the Coconut Consumers Stabilization Fund under P.D. 276; (c) the Coconut Industry Development Fund under P.D. 582; and (d) the Coconut Industry Stabilization Fund under P.D. 1841.
The coconut levy funds were created to support and advance the development of the coconut industry for the ultimate benefit of the coconut farmers.
The Supreme Court declared that the coconut levy funds are "clearly affected with public interest" and are subject to government concern and measures to prevent concealment and dissipation.
It refers to Section 2 of the 1987 Constitution which grants the Commission on Audit the power to examine, audit, and settle all accounts pertaining to the government funds, including government-owned corporations and entities receiving government subsidies.
The Commission on Audit opined that the coconut levy funds constitute government funds and are subject to government audit and accountability.
All money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for that purpose only; if the purpose is fulfilled or abandoned, the balance shall be transferred to the government's general fund.
The BIR ruled that the coconut levy is a tax, as it is a forced contribution levied by the taxing power on coconut farmers, and thus, the funds are public funds subject to government administration.
The Order directs that the coconut levy funds and all income, interest, proceeds, or assets derived from them be treated, utilized, administered, and managed as public funds consistent with the original purposes and government development priorities for the coconut industry.
The Secretary of Agriculture is designated as the chairman of the ad-hoc committee.
The ad-hoc committee is composed of the heads of the Department of Agriculture, Presidential Commission on Good Government, Philippine Coconut Authority, United Coconut Planters Bank, and The Coconut Industry Investment Fund.
All existing laws, rules, and regulations governing custodianship, use, disposition, disbursement, and/or divestment of public funds and properties apply to the coconut levy funds.
The Supreme Court upheld the sequestration of enterprises funded by coconut levy proceeds and emphasized that the levy funds are affected with public interest and government concern.