Proceeds will go to trust fund for coconut farmers
MANILA - The government plans to sell the sequestered shares in United Coconut Planters Bank (UCPB), after the Supreme Court ruled with finality that the state, and not Danding Cojuangco and his allies, owns 72 percent of the bank.
The sequestered shares are valued at roughly P14.4 billion, based on the bank's P20-billion net worth.
Philippine Deposit Insurance Corp. (PDIC) President Valentin Araneta said proceeds from the sale of those shares will go to a trust fund that the government will put up for coconut farmers.
"The inclination of government is not to keep the bank [UCPB] but to privatize that," he said.
"One of the discussions in the government is that there will be legislation that all of these proceeds coming out of the coco levy fund will be put into an investment pool or trust fund for coconut farmers," Araneta added.
A farmer's group, the Coconut Industry Reform Movement (COIR), said a trust fund will be better than distributing all the proceeds at once to coconut farmers.
However, it added that government should declare that the trust fund should be exclusive to coconut farmers.
It said coconut farmers should have a say in how the fund will be handled, including buying processing facilities and small-scale lending.
The group estimates up to P4 billion in interest alone could be raised from the trust fund each year, counting proceeds from other coco levy cases won by the government.
"Dahil ito'y pondong pampubliko, dapat talaga na respsondiblidad ng gobyerno na gamitin ito para magkaron ng program para sa benepisyo ng magniniyog. Hindi ho puwedeng ibigay ito sa bulsa ng bawa't isa. Hindi ito private fund, Ito'y public fund," said COIR executive director Joey Faustino.
The PDIC controls UCPB management after it rescued the bank with a P20-billion loan.
If PDIC can't pay, the loan is convertible to about 70 percent of UCPB, which PDIC can sell to an investor.
That would dilute the stake the government has won, but Araneta said he is confident UCPB can pay up by the end of its rehabilitation plan in 2018. - ANC