CREBA v Sec.

of Agrarian Reform
The Supreme Court (SC) has affirmed the legality of ban on
conversion of agricultural lands into commercial use imposed by the
administration of former President Arroyo two years ago to address
rice shortage in the country then.
The first division of the High Court chaired by Chief Justice Renato
Corona junked a petition of Chamber of Real Estate and Builders
Associations (CREBA) questioning the legality of Memorandum No.
88 issued by former Agrarian Reform secretary Nasser
Pangandaman and approved by Mrs. Arroyo that temporarily
suspended the processing and approval of all land use conversion
applications nationwide.
In a unanimous decision penned by Associate Justice Jose Perez
and promulgated last June 18, the Court upheld the exclusive
authority of the Department of Agrarian Reform (DAR) to approve or
disapprove conversion of agricultural lands to non-agricultural uses
such as residential, commercial and industrial.
The DAR order was issued amid concerns that the worsening rice
shortage at that time was an offshoot of the unabated conversion of
prime agricultural lands for real estate development.
CREBA, umbrella organization of some 3,500 companies and
individuals working in the real estate industry, argued that the
memorandum was not a valid exercise of police power and that it
was unconstitutional because it suspended the land use conversion
without any basis.
The High Court, however, dismissed this argument: It bears
emphasis that said Memorandum No. 88 was issued upon the
instruction of the President in order to address the unabated
conversion of prime agricultural lands for real estate development
because of the worsening rice shortage in the country at that time.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

Such measure was made in order to ensure that there are enough
agricultural lands in which rice cultivation and production may be
carried into. The issuance of said Memorandum No. 88 was made
pursuant to the general welfare of the public, thus, it cannot be
argued that it was made without any basis, it added.
Chief Justice Corona and three other members of the division
Associate Justices Presbitero Velasco Jr., Teresita Leonardo-de
Castro and Mariano del Castillo concurred in the ruling.
The Court used as basis a previous ruling that the Secretary of
Agrarian Reform has the exclusive authority to classify and identify
landholdings either for conversion or CARP (Comprehensive
Agrarian Reform Program) coverage.
It pointed out that as the agency responsible for implementing the
CARP, DAR is authorized by law to establish and promulgate
operational policies, rules and regulations, and priorities for agrarian
reform implementation.
The SC stressed that DAR is given such an authority as it is
mandated to preserve and maintain agricultural lands with increased
productivity.
Likewise, the court made a distinction between reclassification and
conversion of agricultural lands to non-agricultural uses.
It explained that conversion is the act of changing the current use of
a piece of agricultural land into some other use while reclassification
is the act of specifying how agricultural lands shall be utilized for nonagricultural uses, as embodied in the land use plan, subject to the
requirements and procedures for land use conversion.
The High Court said reclassification alone will not suffice to use the
agricultural lands for other purposes as conversion is needed to
change the current use of reclassified agricultural lands.

For reclassified agricultural lands, therefore, to be used for the

purpose to which they are intended there is still a need to change the
current use thereof through the process of conversion, it added.
The SC said that even reclassification of agricultural lands by way of
Presidential Proclamations to non-agricultural uses, such as school
sites, needs conversion clearance from the DAR.
With this, the SC likewise sustained the validity of DAR
Administrative Order (AO) 01-02 issued by former Agrarian Reform
secretary Hernani Braganza on Feb. 28, 2002, which was also
questioned by CREBA.
Known as the DAR Conversion Rules, AO 01-02 sought to regulate
the conversion of agricultural lands to non-agricultural uses and
identify those that were wrongly exempted from the coverage of the
CARP.
Braganzas directive deemed as agricultural lands those that are not
reclassified as residential, commercial, industrial or other nonagricultural uses before Republic Act 6657 or the CARP Law took
effect on June 15, 1988.
CREBA claimed Braganza, DAR secretary during the early years of
the Arroyo administration, acted without jurisdiction as he had no

authority to expand or enlarge the legal definition of the term

agricultural lands through an administrative order.
But the SC held that in issuing the conversion rules, the former
agrarian reform chief only made clear what are the lands that can be
the subject of DARs conversion authority, thus, serving the very
purpose of the land use conversion provisions of RA 6657.
It noted that the date of effectivity of RA 6657 served as the cut-off
period for automatic reclassifications or rezoning of agricultural lands
that no longer require any DAR conversion clearance or authority.
It necessarily follows that any reclassification made after June 15,
1988 can be the subject of DARs conversion authority, the court
said.
Having recognized the DARs conversion authority over lands
reclassified after 15 June 1988, it can no longer be argued that the
Secretary of Agrarian Reform was wrongfully given the authority and
power to include lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988 in the
definition of agricultural lands, the court said.