AN ACT TO FINANCE THE COCONUT REPLANTING PROGRAM

• Number: Presidential Decree No. 1972
• Sections: 7

Preamble

WHEREAS, a large majority, including domestic and

international agencies and institutions assisting the Government in the

implementation of the structural economic adjustment program for the country

have unanimously recommended that the Government restart the coconut replanting

program throughout the country;

WHEREAS, these recommendations recognize that, unless

replanting program is implemented, the coconut industry must be reduced to a

domestic industry rather than a major export industry as most of the coconut

tree population of the country are senile and the coconut trees in major coconut

producing areas in the country were destroyed by natural calamities in

1982-1984;

WHEREAS, even international financial institutions had

offered to finance the restart of the replanting program by way of assisting the

country to overcome and survive the economic crisis and to preserve the role of

the coconut industry as a major export industry;

WHEREAS, in its comprehensive report on the coconut

industry, the National Economic Development Authority ("NEDA") studied different

sources of financing and recommended that, in accordance with the self-reliance

program of the country, financing for the replanting program be internally

generated and that for this purpose, the export duty and the additional export

duty on coconut products be utilized as the initial source of financing;

WHEREAS, in accordance with the self-reliance program the

country, there is a need to enlist the resources of the private sector in the

efforts to increase the coconut sector production of the country and to

encourage the private sector to devise and implement its own new area planting

and/or replanting program throughout the country;

NOW, THEREFORE, I FERDINAND E. MARCOS, by virtue of the

powers vested in me by the Constitution and the laws, particularly Sections 514

and 515 of Presidential Decree No. 1464, as amended,President of the

Philippines, do hereby decreed and order the following:

Section 1

SECTION 1. The basic export duty imposed by Section 514 of

Presidential Decree No. 1464, and the additional export duty imposed by

Executive Order No. 920-A, on coconut products, as identified and at the rates

prescribed by Executive Order No. 920-A, which is hereby incorporated made part

hereof any reference, are hereby made permanently constituted as the initial

source of financing for the coconut replanting program to be implemented by the

Philippine Coconut Authority ("PCA"), with the active assistance and

participation of the recognized organization of the coconut farmers pursuant to

the provisions of Act No. 6260.

Section 2

SEC. 2. In the implementation of the replanting program, the

PCA shall service the requirements of small coconut farmers owning not more than

twenty-four (24) hectares who volunteer to participate in the replanting

program. Initially, the PCA shall give priority to the devastated areas in the

Visayas and Mindanao.

Section 3

SEC. 3. In accordance with the self-reliance program of the

country, and to encourage the private sector to device and implement their own

area planting and/or replanting program, copra millers/refiners and other

exporters of coconut products which voluntarily form associations and/or

cooperatives in accordance with the provisions of Presidential Decree No. 1960,

are hereby exempted from payment of the basic export duty and the additional

export duty on coconut products herein imposed, Provided, they conform

with the following conditions:

The association or cooperative is composed of not less than ten (10)

millers/refiners and other exporters of coconut products with an aggregate

export volume of not less than 200,000 MT of coconut products in copra terms per

annum, Provided the association or cooperative includes one or more of

the coconut oil mills/refineries owned or controlled by the coconut farmers

pursuant to the provisions of Sections 9 and 10, Article III, Presidential No.

1468, as amended, and may include one or more of the millers/refiners which

service principally the domestic market.

The association or cooperation has a viable coconut new area planting and/or

replanting scheme on a plantation scale initially of not less than two thousand

hectares from which the members can source a portion of their copra

requirements, which need not be continuous and may evolve coconut farmers, duly

approved by the President of the Philippines. For this purpose, the association

or cooperative, or their members, or any corporation they may organize, may

acquire lands or interests therein, notwithstanding any prohibitions or

restrictions imposed by Commonwealth Ad, No. 141, as amended, otherwise known oh

the Public Land Act, Provided the proposed owner qualifiers under the

nationality requirements of the Constitution of the Philippines.

The members should establish or continue whatever funding scheme they have

established tar their mutual assistance, by contributing the amounts of not less

than the export duties herein prescribed for coconut products that in exported,

which shall include the cost of such new mm planting and. or replanting program

as envisioned and authorized under Section 11, Article III, Presidential Decree

No. 1468, as amended. The contribution made, or to be made, by such members to

the funding scheme are hereby declared, notwithstanding any general or special

law or regulation to the contrary, to be ordinary and necessary business

expenses paid or incurred in carrying on the respective business of the

contributors relating to the coconut industry and deductible, foe income tax

purposes, as such ordinary business expense and are hereby exempted from the

payment of the donors and the donees taxes. Any and all benefits received,

including but not limited to, shares of stock, or other evidence of

participation derive by the members pursuant to their dules, are likewise exempt

from the payment of any and all taxes, fees, imposts, charges, of whatever kind

and nature, including but not limited to, the income tax and the donors and

donees taxes.

Section 4

SEC. 4. Any violation of the provisions of this Presidential

Decree, and/or the rules and regulations issued pursuant hereto, shall be

punished and penalized in accordance with Section 1, Article IV of Presidential

Decree No. 1468, as amended.

Section 5

SEC. 5. All laws, executive and administrative orders,

and/or rules and regulations respectively issued the governmental agencies

concerned, inconsistent herewith except the provisions and tax exemptions

provided in the Presidential Decree No. 1960 and Presidential Decree

No. 1468, as amended, are hereby repealed, amended or modified accordingly.

Section 6

SECTION 6. This Decree shall be effective immediately

Done in the City of Manila, this 8th day of April, in the year of Our Lord

nineteen hundred and eighty-five.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JUAN C. TUVERA

Presidential Executive Assistant