WHEREAS, unlike other copra producing countries, the Philippines has not exerted concerted efforts towards the development and planting of an early-breeding and high-yielding hybrid variety of coconut trees capable of producing at least five (5) tons of copra per hectare per year compared to the present national average of less than one (1) ton per hectare;

WHEREAS, to enable the country to compete in the international market of vegetable fats and oils and thereby ensure stable and better incomes for the coconut farmers, it is imperative that the country should pursue a vigorous program of replanting existing coconut farms and idle lands with superior hybrid coconut trees;

WHEREAS, to attain that objectives the Government should channel part of what the coconut farmers are presently paying as coconut consumers stabilization levy to their ultimate direct benefit;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, in order to effect the desired changes and objectives, do hereby decree the further amendment of Presidential Decree No. 232, as follows:

SECTION 1. Section 3 of Presidential Decree No. 232, as amended, is hereby amended by inserting new paragraphs to read as follows:

"o) To formulate and implement within the next five (5) years a nationwide coconut replanting program using precocious high-yielding hybrid seednuts;
p) To distribute, for free, to coconut farmers the hybrid coconut seednuts herein authorized to be acquired."

SEC. 2. A new section, to be known as Section 3-B, is hereby inserted to read as follows:

"SEC. 3-B. Coconut Industry Development Fund. — There is hereby created a permanent fund to be known as Coconut Industry Development Fund which shall be deposited with, and administered and utilized by, the Philippine National Bank through it subsidiary the National Investment and Development Corporation for the following purposes:

1. To finance the establishment, operation and maintenance of a hybrid coconut seednut farm under such terms and conditions that may be negotiated by the National Investment and Development Corporation with any private person, corporation, firm or entity as would insure that the country shall have, at the earliest possible time, a proper, adequate and continuous supply of high yielding hybrid seednuts;
2. To purchase all of the seednuts produced by the hybrid coconut seednut farm which shall be distributed, for free, by the Authority to coconut farmers in accordance with, and in the manner prescribed in, the nationwide coconut replanting program that it shall devise and implement; Provided, That farmers who have been paying the levy herein authorized shall be given priority;
3. To finance the establishment, operation and maintenance of extension services, model plantations and other activities as would insure that the coconut farmers shall be informed of the proper methods of replanting their farms with the hybrid seednuts.

As the initial funds of the Coconut Industry Development Fund, the Authority is hereby directed to pay to the Coconut Industry Development Fund the amount of One Hundred Million Pesos (P100,000,000.00) out of its collections of the coconut consumers stabilization levy and thereafter the Authority shall pay to the said Fund an amount equal to at least twenty centavos (P0.20) per kilogram of copra resecada or its equivalent out of its current collections of the coconut consumers stabilization levy. In the event that the coconut consumers stabilization levy is lifted, a permanent levy of twenty centavos (P0.20) is thereafter automatically imposed on the first sale of every kilogram of copra or its equivalent in terms of other coconut products which shall be collected and paid to the Coconut Industry Development Fund by the Authority in accordance with the mechanics presently followed in the collection of the coconut consumers stabilization levy. The Philippine National Bank is hereby authorized to invest any unutilized portion of the Fund in easily convertible investments and all earnings therefrom shall form part of the Fund.

The sale or transfer of the hybrid coconut seednuts herein authorized to be acquired is hereby declared exempt from the payment of the coconut consumers stabilization levy and any and all taxes and fees of whatever kind and nature."

SEC. 3. Repealing Clause. — All laws, executive and administrative orders, rules and regulations inconsistent with the foregoing provisions are hereby repealed or amended accordingly.

SEC. 4. This Decree shall take effect immediately.

Done in the City of Manila, this 14th day of November, in the year of Our Lord, nineteen hundred and seventy-four.