EXECUTIVE ORDER NO. 854 December 6, 1982

PROVIDING FOR THE RATIONALIZATION OF THE DESICCATED COCONUT INDUSTRY

WHEREAS, it is the declared policy of the State to promote the rapid integrated development and growth of the coconut and other palm oils industry in all its aspects;

WHEREAS, the coconut industry is one of the major earners of foreign exchange for the country and, therefore, its continued survival, growth and development is vital to the national economy;

WHEREAS, a major sector of the coconut industry, the desiccated coconut industry, is presently in a state of financial distress brought about, among others, by:

a) The overcapacity of the existing desiccated coconut processing plants;

b) The cutthroat competition for desiccated coconut; and

c) Underselling and smuggling of poor quality products.

WHEREAS, the state of financial distress of the desiccated coconut industry is of such serious nature that most, if not all, of the persons or entities engaged in the said business will be rendered insolvent to the ultimate prejudice of the coconut farmers, in particular, and of the country, as a whole, if not rationalized;

WHEREAS, the Philippine Coconut Authority ("Authority") was authorized under Executive Order No. 826 to regulate the capacity of existing desiccated coconut processing plants as a solution to the problem of overcapacity which threatens the very existence of the aforesaid labor intensive industry;

WHEREAS, studies conducted by the Authority under Section 3 of Executive Order No. 826 which directed the latter to formulate and recommend measures to further insure the viability of the industry, have shown that a mere freeze in the present capacity of existing plants will not afford a viable solution to the problem considering that the total available limited market is not adequate to support all the existing processing plants, making it imperative to reduce the number of existing processing plants;

WHEREAS, it appears that there are processing plants which are willing to sell out their production facilities;

WHEREAS, it is to the national interest that the government rationalize the desiccated coconut industry in order to insure its survival, growth and viability;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the power vested in me by the Constitution and laws, do hereby order the following:

Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be necessary to reduce the number of existing desiccated coconut processing plants to a level which will insure the survival of the remaining plants. The Authority is hereby directed to determine which of the existing processing plants should be phased out and to enter into appropriate contracts with such plants for the above purpose.

Sec. 2. To finance the acquisition of the facilities of the plants to be phased out and such other contracts which the Authority may enter into, the Authority is hereby authorized to incur such loans as may be necessary. To repay the above loans, the remaining desiccators are hereby assessed such amounts as the Authority may deem reasonable for the purpose. The Authority is hereby authorized to promulgate such rules and regulations as may be necessary to fully and effectively implement this Order, specifically in respect to the acquisition of the excess production facilities and their disposition. The assessment shall take effect upon such time as the Authority may determine.

Sec. 3. The assessment herein authorized as well as the assets to be acquired, will be subject to the exclusive audit by a reputable public accounting firm to be designated by the Authority upon consultation with the desiccated coconut industry.

Sec. 4. This Order shall take effect immediately.

DONE in the City of Manila, this 6th day of December 1982.


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