Ownership Dispersal of PPI Fertilizer Shares

The letter orders ownership dispersal of PPI among all fertilizer-consuming farmers and other fertilizer end-users on a reasonably proportionate basis.
The letter links the ownership-dispersal plan to enabling the Government to fully support the necessary expansion of domestic fertilizer production.
The letter directs government officials to take steps necessary so that company ownership is dispersed beyond the sugar industry and reaches fertilizer end-users generally.

PPI must convert itself from a cooperative into an ordinary stock corporation.
SPCMA is given the option to subscribe anew to whatever portion of the capital stock of PPI it is willing and able to pay up.
SPCMA must exercise the option within 30 days from the date of the letter.
SPCMA must pay up the new subscription in full within 6 months after exercising the option.
SPCMA waives its right to all shares of stock that it has not subscribed to.

10% of PPI’s total equity must be allocated to PPI officers and employees.
The allocation to officers and employees must come from shares of PPI stock that are not subscribed to and paid up by SPCMA under the re-subscription option.

The remaining shares (after the 10% employee allocation) must be dispersed to end-users of fertilizer in the following reasonably proportionate basis:
- Rice and corn farmers: 60%
- Sugar farmers: 30%
- Others: 10%

A non-stock and non-profit Foundation must be established to carry out the dispersal of PPI equity.
The Foundation must:
- Assume the portion of PPI stock not subscribed and paid up by SPCMA, less the 10% allocated to PPI officers and employees.
- Take over and hold title to those PPI shares.
- Redistribute the shares in accordance with the equity-dispersion guidelines stated in the letter.
- In the interim, vote and exercise rights pertaining to undistributed shares.
- Exercise other powers and functions necessary to implement the ownership-dispersal plan.
The Foundation must be authorized to assume the obligations and indebtedness pertaining to the shares it holds, for its own account or for the account of future farmer-owners of PPI shares.

The Board of Trustees of the Foundation must also serve as its incorporators.
The Board must consist of the following members:
- Arturo R. Tanco, Jr. — Chairman
- Panfilo O. Domingo — Member
- Roberto S. Benedicto — Member
- Leonides Gonzales (representing PPI officers & employees) — Member
- Senen Gabaldon (representing rice & corn farmers) — Member
- Armando Gustilo (representing SPCMA) — Member
- Alfredo Montelibano (representing other farmers thru Chamber of Agriculture) — Member

To enable fertilizer end-users to pay for the shares of PPI stock they acquire under the ownership distribution scheme, the price of fertilizer may be increased by an amount sufficient for users to pay for the shares over a period of time.

The Philippine National Bank (PNB) must effect the transfer from SPCMA to the Foundation of all PPI shares not otherwise subscribed and paid up by SPCMA in accordance with the re-subscription option.
The PNB must also ensure transfers involving shares to be held by the Foundation and affected by payments made for releases of collateral shares.
The PNB must release the Foundation’s PPI shares now held as collateral, and these releases must be made as payments are made for those shares.
The PNB must transfer all obligations and indebtedness pertaining to the shares transferred in a manner that protects the Government’s interests.

The Secretary of Agriculture and Natural Resources, in his concurrent capacity as Chairman of the Fertilizer Industry Authority, and the President of the Philippine National Bank must submit to the President a full report on steps taken to implement the letter.
The report must be submitted within 45 days.
All other Government agencies and instrumentalities involved in the arrangement—such as the Agricultural Credit Administration and the Securities and Exchange Commission—are enjoined to extend assistance and cooperation necessary to implement the letter.

The plan targets dispersal of PPI ownership among fertilizer end-users as the main outcome of Government financing and support.
SPCMA’s re-subscription is tied to a defined timeline: option exercise within 30 days, full payment within 6 months after option exercise.
The Foundation serves as the interim holder and voting actor over undistributed shares until redistribution is completed in line with the stated equity percentages.