"The farmers will be the ones to enter in a compromise agreement. But the government has to approve it. And I am for it," said Presidential Commission on Good Government Chairman Camilo Sabio in an interview during his visit at the Philippine Coconut Authority (PCA).

The process for the compromise agreement has yet to be determined, but the court has to uphold farmers’ welfare and the law in this process.

"The job of the court is make sure that the agreement is not grossly disadvantageous to farmers and not contrary to morals, public order, and public policy," he said.

The government has arrived at pursuing an amicable settlement on the coconut levy fund after 10 regional consultations and two national conferences were conducted from July to November last year during which coconut farmers agreed for the compromise, government said.

Farmers’ agreement anchors on the hope that the fund can immediately be drawn to finance coconut projects rather than wait for another 20 years before this can be used.

"(Since the case was filed in 1987), the trial of merit has not yet started. (That’s why) there is a consensus to enter in an amicable settlement," said Sabio.

The fund consists of the Coconut Industry Investment Fund’s 27 percent interest in San Miguel Corp. (CIIF-SMC block) which has a market value of P60 billion; the 20 percent interest of SMC Chairman Eduardo Cojuangco worth P39 billion, and investments in the United Coconut Planters Bank (UCPB).

Whether ownerships on all the SMC and UCPB investments could be settled is one of the subject of the future talks.

Under pending eight levy-related cases with the Sandiganbayan, farmers continue to claim Cojuangco’s 20 percent share while Cojuangco disputes a Supreme Court ruling that the 27 percent CIIF interest in SMC is prima facie public (or owned by farmers).

An industry authority said a possible scenario of the amicable settlement is that the 27 percent will be rightfully granted to farmers, and the 20 percent interest will be retained by Cojuangco.

And a "realistic timeframe" will be from "six months to one year" since even the government is supportive of a compromise that could be struck before political twists in 2007 and beyond could dash the hope of using the fund for envisioned coconut programs.

"We should have the consensus on its utilization. It has to be used for its original purpose for which it was collected — for coconut planting and replanting, credit assistance to farmers, socio-economic programs for farmers like insurance and scholarships, research and development, and investment in an integrated industry development," the official said.

Negotiations are expected to begin between the stakeholders so that an amicable settlement can be filed with the court subject to the Sandiganbayan and Supreme Court’s (SC) approval.

"This compromise has been envisioned since early 2001 in a meeting between farmers and COCOFED’s (Philippine Coconut Farmers Federation Inc.then chairman Ma. Clara) Lobregat. But it could not proceed because (the late) PCGG Chairman Heidi Yorac was not for it," the official said.

Despite a compromise process, litigations will continue.

Coconut farmers may have the government’s Office of Solicitor General (OSG) as counsel for the settlement.

The OSG earlier filed in August 2005 a writ execution on the 27 percent’s use for public purpose (farmers’ use) based on the Dec. 12, 2001 SC ruling of the fund’s prima facie public ownership.

However, in November 2005, the SC ruled that despite the December 2001 ruling, this decision was only preliminary and that the characterization of the fund then only aimed to determine whether government through PCGG may vote on the sequestered UCPB shares.

"The question of whether it is public or private is still under determination. That’s why there’s still room for negotiation or an amicable settlement," the official said.