EO revival pushed to help coconut sector

Coconut stakeholders are pushing for the reimplementation of Executive Order No. 259, which required the use of local crude coconut oil (CNO)-derived surfactants in all detergent formulations as a way to keep the local coconut industry afloat.

In a webinar hosted by the Philippine Coconut Authority (PCA) on Wednesday, United Coconut Chemicals president Evelina Patino said the nonimplementation of the directive led to the shutdown of two oleochemical plants, which eventually resulted in the reduction of the country’s coconut exports and an increase in the imports of petroleum-based detergent raw materials.

It also cut the local consumption of coconut oil by 150,000 metric tons (MT) after losing a steady market.

These developments further stall the growth of the industry.

In 2000, the Board of Investments moved to stop the implementation of EO 259, citing the Philippines’ signing of the General Agreement on Tariff and Trade (GATT)—a legal agreement that aims to promote international trade by reducing or eliminating trade barriers like tariffs and quotas.

Patino said the reimplementation of the EO would create an additional market for coconut oil, noting that the country’s per capita consumption for detergents was currently at 5.2 kilos annually.

The directive mandates the 20-percent use of CNO-derived surfactants in detergent formulations, which should eventually increase to 60 percent after three years.

Trade Undersecretary Rafaelita Aldaba said the government must develop the coconut industry now, citing the various raw materials that were coming and could potentially come from the commodity.

“We should capacitate our farmers and empower them not only by growing their farm but also through managing their operations so that processing companies could directly deal with them,” he said.

The push for the reimposition of EO 259 is similar to the industry leaders’ request to increase the coco methyl ester content in local biodiesel—another program that never saw implementation.

PCA governing board member Benjamin Madrigal Jr. said the agency continued to talk with the Department of Energy to push for the program, but the latter said copra prices were too high.

He noted that the problem lies with multilevel trader systems that dominate the industry, resulting in farm-gate pri­ces to balloon to P13 a kilo in the oil mills from P5 a kilo in the farms.

“There is no actual connection between farmers and processors. There is a seeming animosity between them,” he said.