Credit Policy for Coconut Farmers' Bank

Presidential Decree No. 232, as amended enjoins the Philippine Coconut Authority (PCA) to formulate and recommend credit policies affecting production, marketing and processing of coconut and other palm oils.
Presidential Decree No. 582 authorizes the Coconut Industry Development Fund referenced in the funding structure.
Presidential Decree No. 711 is referenced for determining whether certain collections and levies are treated as general national government funds.
The Decree implements “Agreement for the Acquisition of a Commercial Bank for the benefit of the Coconut Farmers” executed by the PCA, and incorporates the agreement’s terms by reference.

The policy of the State is to provide readily available credit facilities to coconut farmers at preferential rates.
The policy is to be realized through the acquisition and operation of a commercial bank for coconut farmers under the incorporated acquisition agreement.
The acquisition and distribution of bank shares to coconut farmers is intended to accelerate the growth and development of the coconut industry and to achieve vertical integration.
Coconut farmers are intended to become participants in, and beneficiaries of, the industry’s growth and development through ownership of the commercial bank.

The PCA is directed to draw and utilize collections under the Coconut Consumers’ Stabilization Fund authorized to be levied by Presidential Decree No. 232, as amended to enable coconut farmers to comply with their contractual obligations under the acquisition agreement.
The Decree requires that, except for budgetary requirements of the PCA as approved by its Governing Board, the following must be deposited with the coconut farmers’ bank:
- All collections under the Coconut Consumers’ Stabilization Fund Levy, and
- Fifty percent (50%) of the collections under the Coconut Industry Development Fund.
Deposits must be interest free and must be made with the coconut farmers’ bank.
Deposits must not be withdrawn until the Board of Directors of the Bank and the Governing Board of the PCA jointly ascertain that the bank has sufficient equity capital to service in full the coconut farmers’ credit requirements.
Collections and levies authorized for the PCA—including the Coconut Consumers’ Stabilization Levy and the Coconut Industry Development Fund as prescribed by Presidential Decree No. 582—must not be treated as special and/or fiduciary funds and must not form part of the general funds of the national government within the contemplation of Presidential Decree No. 711.
The PCA’s operations and activities are declared to be in accord with the Government’s social and economic plans and programs.

The PCA is authorized to distribute, for free, the shares of stock of the bank it acquired to coconut farmers.
Share distribution must be made under rules and regulations promulgated by the PCA.

Despite the National Internal Revenue Code and other laws, the delivery to and receipt by the parties of the bank shares pursuant to the acquisition agreement is declared exempt from taxation.
The exemption covers the transfer and receipt of shares under the acquisition agreement that benefits coconut farmers.

Any provision of law in conflict with Presidential Decree No. 755 is revoked or amended accordingly.
The Decree takes effect immediately upon issuance.