Two top government corporations in the coconut industry may be in hot water for failing to remit to the national government 50 percent of their earnings.
Justice Secretary Jesus Crispin Remulla identified the delinquent government corporations as United Coconut Chemicals Inc. or CocoChem, and the Coconut Industry Investment Fund-Oil Mills Group or CIIFF-OMG which have reportedly not been remitting their dividends to the national government through the Bureau of the Treasury.
As government-owned and controlled corporations, or GOCCs, they are required to remit at least 50 percent of their reported net earnings to the BTr, Remulla said in his legal opinion that was sought by BTr Trust Fund Management Committee Secretariat Head Rosalia V. de Leon.
The non-remittance of their net earnings by CocoChem and CIIFF-OMG was discovered during the 11th TFMC meeting held on 13 March.
Citing the Supreme Court ruling on Leyson v. Ombudsman, Remulla said the Administrative Code of 1987 mentioned three requisites for GOCCs.
“First, any agency organized as a stock or non-stock corporation; second, vested with functions relating to public needs whether government proprietary in nature; and, third, owned by the Government directly or through its instrumentalities either wholly or, where applicable as in the case of stocks corporations, to the extent of at least 51 percent of its capital stock,” he said.
Remulla said CocoChem is a stock corporation certified by the Securities and Exchange Commission.
Based on the corporation’s amended general information sheet, “the stock certificates owned by the Republic of the Philippines amount to 681,985,073 representing 92.85 percent.”
He said the firm is the country’s leading manufacturer of oleochemicals, with an abundant supply of coconut products located in the Philippines which is the largest coconut-producing nation.
Oleochemical products are derived from naturally occurring fats and oils from vegetable and animal sources and are present in hundreds of daily household items such as soap, laundry detergent and cosmetics.
Using local coconut oil as its only feedstock and with the production of the local coconut oil, CocoChem helps the Philippine coconut industry thrive and the coconut farmers sustain their livelihood, which in itself upholds public interest for the benefit of the coconut farmers and their community.
“Further, the company’s corporate aim is to lead the national effort in increasing the downstream utilization of coconut oil and contribute to the worldwide effort to increase the use of natural oils in the production of higher value-added products,” he said.
He added: “Hence, CocoChem performs governmental roles in the interest of health, safety, and for the advancement of the public good and welfare, affecting the public in general.”
It was learned that CIIF-OMG claimed to be exempted from remitting its earnings pursuant to Section 4 of Republic Act 7656, the Dividends Law, which says that GOCCs not covered by the law are those “created or organized by law to administer real or personal properties or funds held in trust for the use and the benefit of its members” such as the Government Service Insurance System, the Home Development Mutual Fund, the Employees Compensation Commission, the Overseas Workers Welfare Administration, and the Philippine Medical Care Commission.
The CIIF-OMG is a conglomeration of six government-owned and -controlled coconut oil mills that is mandated to establish and maintain a profitable business platform that will contribute to the development of the coconut industry in the country.
Remulla pointed out that CIFF-OMG, which was created under Presidential Decree 582 signed by then President Ferdinand E. Marcos, has “funds from part of the levy imposed on the initial sale by coconut farmers of copra and other coconut products.”
It should therefore provide a sustainable and recurring source of revenue for the support of coconut farmers nationwide, either singly or through cooperatives, through the provision of a ready and capable market for their locally produced copra.