AN ACT TO FINANCE THE COCONUT REPLANTING PROGRAM

WHEREAS, a large majority, including domestic and
international agencies and institutions assisting the Government in the
implementation of the structural economic adjustment program for the country
have unanimously recommended that the Government restart the coconut replanting
program throughout the country;

WHEREAS, these recommendations recognize that, unless
replanting program is implemented, the coconut industry must be reduced to a
domestic industry rather than a major export industry as most of the coconut
tree population of the country are senile and the coconut trees in major coconut
producing areas in the country were destroyed by natural calamities in
1982-1984;

WHEREAS, even international financial institutions had
offered to finance the restart of the replanting program by way of assisting the
country to overcome and survive the economic crisis and to preserve the role of
the coconut industry as a major export industry;

WHEREAS, in its comprehensive report on the coconut
industry, the National Economic Development Authority (“NEDA”) studied different
sources of financing and recommended that, in accordance with the self-reliance
program of the country, financing for the replanting program be internally
generated and that for this purpose, the export duty and the additional export
duty on coconut products be utilized as the initial source of financing;

WHEREAS, in accordance with the self-reliance program the
country, there is a need to enlist the resources of the private sector in the
efforts to increase the coconut sector production of the country and to
encourage the private sector to devise and implement its own new area planting
and/or replanting program throughout the country;

NOW, THEREFORE, I FERDINAND E. MARCOS, by virtue of the
powers vested in me by the Constitution and the laws, particularly Sections 514
and 515 of Presidential Decree No. 1464, as amended,President of the
Philippines, do hereby decreed and order the following:

SECTION 1. The basic export duty imposed by Section 514 of
Presidential Decree No. 1464, and the additional export duty imposed by
Executive Order No. 920-A, on coconut products, as identified and at the rates
prescribed by Executive Order No. 920-A, which is hereby incorporated made part
hereof any reference, are hereby made permanently constituted as the initial
source of financing for the coconut replanting program to be implemented by the
Philippine Coconut Authority (“PCA”), with the active assistance and
participation of the recognized organization of the coconut farmers pursuant to
the provisions of Act No. 6260.

SEC. 2. In the implementation of the replanting program, the
PCA shall service the requirements of small coconut farmers owning not more than
twenty-four (24) hectares who volunteer to participate in the replanting
program. Initially, the PCA shall give priority to the devastated areas in the
Visayas and Mindanao.

SEC. 3. In accordance with the self-reliance program of the
country, and to encourage the private sector to device and implement their own
area planting and/or replanting program, copra millers/refiners and other
exporters of coconut products which voluntarily form associations and/or
cooperatives in accordance with the provisions of Presidential Decree No. 1960,
are hereby exempted from payment of the basic export duty and the additional
export duty on coconut products herein imposed, Provided, they conform
with the following conditions:

1. The association or cooperative is composed of not less than ten (10)
   millers/refiners and other exporters of coconut products with an aggregate
   export volume of not less than 200,000 MT of coconut products in copra terms per
   annum, Provided the association or cooperative includes one or more of
   the coconut oil mills/refineries owned or controlled by the coconut farmers
   pursuant to the provisions of Sections 9 and 10, Article III, Presidential No.
   1468, as amended, and may include one or more of the millers/refiners which
   service principally the domestic market.
2. The association or cooperation has a viable coconut new area planting and/or
   replanting scheme on a plantation scale initially of not less than two thousand
   hectares from which the members can source a portion of their copra
   requirements, which need not be continuous and may evolve coconut farmers, duly
   approved by the President of the Philippines. For this purpose, the association
   or cooperative, or their members, or any corporation they may organize, may
   acquire lands or interests therein, notwithstanding any prohibitions or
   restrictions imposed by Commonwealth Ad, No. 141, as amended, otherwise known oh
   the Public Land Act, Provided the proposed owner qualifiers under the
   nationality requirements of the Constitution of the Philippines.
3. The members should establish or continue whatever funding scheme they have
   established tar their mutual assistance, by contributing the amounts of not less
   than the export duties herein prescribed for coconut products that in exported,
   which shall include the cost of such new mm planting and. or replanting program
   as envisioned and authorized under Section 11, Article III, Presidential Decree
   No. 1468, as amended. The contribution made, or to be made, by such members to
   the funding scheme are hereby declared, notwithstanding any general or special
   law or regulation to the contrary, to be ordinary and necessary business
   expenses paid or incurred in carrying on the respective business of the
   contributors relating to the coconut industry and deductible, foe income tax
   purposes, as such ordinary business expense and are hereby exempted from the
   payment of the donors and the donees taxes. Any and all benefits received,
   including but not limited to, shares of stock, or other evidence of
   participation derive by the members pursuant to their dules, are likewise exempt
   from the payment of any and all taxes, fees, imposts, charges, of whatever kind
   and nature, including but not limited to, the income tax and the donors and
   donees taxes.

SEC. 4. Any violation of the provisions of this Presidential
Decree, and/or the rules and regulations issued pursuant hereto, shall be
punished and penalized in accordance with Section 1, Article IV of Presidential
Decree No. 1468, as amended.

SEC. 5. All laws, executive and administrative orders,
and/or rules and regulations respectively issued the governmental agencies
concerned, inconsistent herewith except the provisions and tax exemptions
provided in the Presidential Decree No. 1960 and Presidential Decree
No. 1468, as amended, are hereby repealed, amended or modified accordingly.

SECTION 6. This Decree shall be effective immediately

Done in the City of Manila, this 8th day of April, in the year of Our Lord
nineteen hundred and eighty-five.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JUAN C. TUVERA
		Presidential Executive Assistant