The Supreme Court on Friday nullified four provisions of former President Benigno Aquino III’s Executive Order No. 180, effectively stopping the government from disbursing the disputed multi-billion-peso coconut levy funds.
In a 21-page en banc decision penned by Associate Justice Jose Catral Mendoza, the SC partially granted the petition of Confederation of Coconut Farmers Organization of the Philippines Inc. and instead ruled that President Aquino “went beyond the authority delegated by law in the disbursement of the coconut levy funds.”
In particular, the high court declared “that Sections 6, Section 7, Section 8 and Section 9 of Executive Order No. 180, series of 2015, are not in conformity with law.”
EO 180 mandates the reconveyance and utilization of coconut levy assets for the benefit of coconut farmers and the development of the coconut industry.
Section 6 refers to section on Approval of Roadmap; Section 7, Funding Source; Section 8, Utilization of Funds, and Section 9, Implementing Rules.
The tribunal also lifted effective immediately the temporary restraining order it issued on June 30, 2015.
The SC held that the “provision of PD (Presidential Decree) 1468 (Revised Coconut Industry Code) are simply too broad to limit the amount of spending that may be done by the implementing authority. Considering that no statute provides for specific parameters on how the SAGF [Special Accounts in the General Fund] may be spent, Congress must first provide a law for the disbursement of the funds, in line with its constitutional authority.”
“The absence of the requisite legislative authority in the disbursement of public funds cannot be remedied by executive fiat,” said the SC decision dated August 8.
Aside from EO 180, petitioners also questioned the validity of EO 179, which calls for the inventory and privatization of all coco levy assets.
However, the SC ruled that EO 179 “does not create a new special fund but merely reiterates that revenues arising out of or in connection with the privatization of coconut levy funds shall be deposited in the SAGF [Special Accounts in the General Fund].”
“An automatic appropriation law is not necessarily unconstitutional for as long as there are clear legislative parameters on how the amounts appropriated are to be disbursed. The president should not have unlimited discretion as to its disbursement since the funds are allocated for a specific purpose,” it said.
Citing the case on COCOFED v. Republic (679 Phil. 508 [2012]) and Republic v. COCOFED, the SC noted that it “had definitely settled the public nature of coconut levy funds, which included the CCSF [Coconut Consumers Stabilization Fund]) and the CIDF [Coconut Industry Development Fund].
“The most compelling reasons to treat coconut levy funds as public funds are the fact that it was raised through the State’s taxing power and it was for the development of the coconut industry as a whole and not merely to benefit individual farmers,” it said.
According to the SC, with the finality of the decision in COCOFED, “there is no question that the coconut levy assets are public funds. Thus, the government may take the necessary steps to preserve them and to be able to utilize them.”
The tribunal recognized the petitioner organization CCFOP as among those representing coconut farmers on whom the burden of the coco levies attached.
Besides President Aquino, the other respondents in the case were Presidential Commission on Good Government Acting Commissioner Richard Roger Amurao, Governance Commission for GOCCs Chair Cesar L. Villanueva, and then Justice Secretary and now Senator Leila M. De Lima.