DoF wants trust fund to be sole source of financing for coco farmer insurance, warns against ‘double-dipping’

PHILSTAR FILE PHOTO

FINANCE Secretary Carlos G. Dominguez III said the coconut trust fund needs to be the sole disburser of financing for coconut farmer health and crop insurance, citing the danger of duplication should other funds be used to support such benefits.

“As the Trust Fund Management Committee, we need to ensure that there is no double-dipping of funds, that the crop and health insurance coverage to the coconut farmers should only come from the coco levy trust fund,” Mr. Dominguez was quoted as saying in a Department of Finance (DoF) statement. The remarks were delivered at a June 16 meeting.

Mr. Dominguez chairs the Trust Fund Management Committee (TFMC), which oversees how coconut levy funds are used.

He also urged the TFMC in the next government to also ensure that insurance funds are “commercially viable and therefore sustainable.”

Republic Act No. 11524 created the Coconut Farmers and Industry Trust Fund (CFITF), which aims to raise coconut output, bring farmers out of poverty, and modernize the industry.

Budget Undersecretary Kim Robert C. de Leon said that the Department of Budget and Management will review budget proposals by the Philippine Crop Insurance Corp. (PCIC) and the Philippine Health Insurance Corp., and other agencies receiving allocations from the CFITF to ensure no duplication of funding.

Under the CFITF, P200 million is allocated to the PCIC every year for crop insurance for coconut farmers, while P500 million is allocated every year for health and medical programs for coconut farmers and their families.

In order for crop insurance coverage to be sustainable, Mr. Dominguez said that premiums charged by the PCIC should consider factors such as geographical and weather-related risks, and reinsurance options with the private sector, “in order to reduce the financial burden on the coconut levy trust fund.”

During the meeting, the Bureau of the Treasury (BTr) reported that the TFMC received from  Land Bank of the Philippines (LANDBANK) a certificate of indebtedness, with a total principal amount of P1.12 billion at a fixed interest rate of 1.75% in connection with the sale of United Coconut Planters Bank (UCPB) shares.

LANDBANK received nearly P300 billion in additional assets after its merger with UCPB earlier in March.

The BTr also reported that the TFMC also received P102.74 million from the sale of disputed UCPB shares and rights.

These shares were classified by the Presidential Commission on Good Government as Coconut Levy Assets under the control of the CFITF.

Funds from these disputed shares will be transferred to an escrow account, or a third party, pursuant to the Implementing Rules and Regulations of Sections 9 to 11 of the CFITF, which states that non-cash levy assets may be disposed of pending dispute, provided that the proceeds are held in escrow. — Tobias Jared Tomas