This is a reaction to your article entitled "PCGG dragging its feet on coco levy, farmers say" (PDI 3/18,2006). Mr. Eduardo Cojuangco, Jr. is trying, yet again, to pull a fast one over the coconut farmers. Under the guise of being the victim in the long-drawn trial over the ownership of the coconut levy funds invested in San Miguel Corporation (SMC), Mr. Cojuangco now intends to use a portion of the 20% SMC shares to pay his financial obligations (totaling P6 billion) with the United Coconut Planters Bank (UCPB).

The collateral that Cojuangco intends to use is under contention—it is the pledged 84.9 million SMC shares (with a market value of PhP6.27 billion as of August 23, 2005), which form part of the 20% SMC shares. Since public funds (coconut levy funds) were used to finance the acquisition of the 20% SMC shares, these rightfully belong to government and the small coconut farmers. In effect, Mr. Cojuangco intends to use public funds to pay for his obligations to UCPB. But Mr. Cojuangco should use his own money and not the contested shares, to settle his obligations.

Should the Sandiganbayan grant Mr. Cojuangco's petition to sell 13% of the contested 20% SMC shares, government would end up paying for Mr. Cojuangco's obligations. But the more dangerous consequence is that the graft court would have practically declared Cojuangco as the owner of said shares.

It would also be interesting to ask the position of the Presidential Commission on Good Government (PCGG) on the issue. PCGG Chair Camilo Sabio also sits as a member of the UCPB Board of Directors. Is he in favor of Cojuangco using a portion of the 20% SMC shares to pay the bank, notwithstanding that the funds are public in character? Mr. Sabio has demonstrated that he is inclined to endorse a compromise agreement on the coco levy between the small coconut farmers and the camp of Mr. Cojuangco. How would Mr. Sabio articulate the interests of the small coconut farmers in this case? 

Omi Royandoyan
Centro Saka

Centro-Saka is a farmer-based advocacy non-government organization located at Rm. 321, PSSC Bldg., Commonwealth Ave., Diliman, Quezon City with telephone numbers 929-6211 and 924-3767.