Coconut is among the top ten export products of the country both in the form of traditional and non-traditional products. The coconut is a strategic commodity in the Philippines. More than one-third of its population is directly or indirectly involved in the coconut industry sector. The paper pointed out that compared with other major Philippine exports, like electronics which is an import-based export, the coconut industry can be considered a truly Filipino because the processing of coconut products does not require considerable import components. In spite of the gains, the Philippine coconut industry has yet to realize its full potential. The industry is threatened by global trade liberalization and stiff competition with other vegetable oils in the world market. Thus, there is a need to modernize the coconut industry not only in the production aspects but also in the processing and marketing areas. The paper also stressed that the coconut processing and downstream industries must be improved by modernizing its facilities and improving its technical and economic efficiency, including the various components in the supply chain.