MANILA REALTORS BOARD INC.

CPE/CRESAR SEMINAR MANOR HOTEL , MANILA January 26, 2014

Land reform in the Philippines has long been a contentious issue rooted in the Philippines's Spanish Colonial Period. Some efforts began during the American Colonial Period with renewed efforts during the Commonwealth, following independence, during Martial Law and especially following the People Power Revolution in 1986. The current law, the Comprehensive Agrarian Reform Program, was passed following the revolution and recently extended until 2014.

Rural land use has basically been agricultural. For decades, agricultural land in our country was tilled by tenants working for landlords under a share-tenancy arrangement. In order to improve give them ownership of land they tilled, a policy of agrarian reform was adopted. Here are some of the important laws on agrarian reform.

Title: Decreeing the emancipation of tenants from the bondage of the soil, transferring to them the ownership of the land they till and providing the instruments and mechanisms therefor. PD 27 applied to rice and corn tenants who were awarded a family-size farm of 5 hectares if not irrigated and 3 hectares if irrigated. In all cases, the landowner was given the right to retain 7 hectares. Farm land valuation was set at 2.5 times the average harvest of 3 normal crop years. Tenants paid for awarded land at cost plus 6% interest in 15 equal annual amortization, guaranteed by the farmers cooperative and stocks in GOCCs.

Declaration of Policy. 1) To establish owner-cultivatorship and the economic family-size farm as the basis of Philippine agriculture and divert landlord capital in agriculture to industrial development; 2) To achieve a dignified existence for the small farmers; 3) To create a viable social and economic structure in agriculture conducive to productivity; 4) To apply all labor laws equally to both industrial and agricultural wage earners; 5) To provide a more vigorous and systematic land resettlement and public land distribution; 6) To make the small farmers more independent, self-reliant and responsible citizens..

Lessees Right of Pre-emption. - In case the agricultural lessor decides to sell the landholding, the agricultural lessee shall have the preferential right to buy the same; Lessees Right of Redemption. - In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same; Affidavit Required in Sale of Land Subject to Right of Preemption. - No deed of sale of agricultural land under cultivation by an agricultural lessee or lessees shall be recorded in the Registry of Property unless accompanied by an affidavit of the vendor that he has given the written notice required or that the land is not worked by an agricultural lessee. Right of Pre-emption and Redemption Not Applicable to Land to be Converted into Residential, Industrial and Similar Purposes

Any premature selling of farmlands is prohibited by law, (Sec. Reyes) referring to the Comprehensive Agrarian Reform Law (Carl), which sets the limit to five hectares of farmland After the 10-year holding period, a farmer-beneficiary could sell his/her Carp-acquired land to any individual be s/he an ordinary buyer or a previous owner since the law does not distinguish who are eligible to buy Carp-covered land for as long as the buyer will cumulatively own no more than five hectares. Carp-covered land could also be sold five years after it was awarded, provided that a farmer-beneficiary files an application for its conversion to non-agricultural uses and the DAR subsequently approves . ( Sec Reyes)

1) To have possession and peaceful enjoyment of the land; 2) To work on the land in a manner and method which conform to proven farm practices; 3) To mechanize all or any phase of his farm work; and 4) To deal with millers and processors Right to a Home Lot. - The agricultural lessee shall have the right to continue in the exclusive possession and enjoyment of any home lot he may have occupied; Right to be Indemnified for Labor. - The agricultural lessee shall have the right to be indemnified for the cost and expenses incurred in the cultivation, planting or harvesting and other expenses incidental to the improvement of his crop in case he surrenders or abandons his landholding for just cause or is ejected therefrom.

The consideration for the lease of riceland and lands devoted to other crops shall not be more than the equivalent of 25% of the average normal harvest during the three agricultural years immediately preceding the date the leasehold was established after deducting the amount used for seeds and the cost of harvesting, threshing, loading, hauling and processing, whichever are applicable:

Exemption from Leasehold of Other Kinds of Lands. Fishponds, saltbeds, and lands principally planted to citrus, coconuts, cacao, coffee, durian, and other similar permanent trees. Rights for Agricultural Labor. 1) Right to self-organization; 2) Right to engage in concerted activities; 3) Right to minimum wage 4) Right to work for not more than eight hours; 5) Right to claim for damages for death or injuries sustained while at work; 6) Right to compensation for personal injuries, death or illness; and 7) Right against suspension or lay-off.

The first approach to agrarian reform was R.A. 3844 which abolished share tenancy and substituted for it a leasehold opportunity for tenants. Despite an extensive program with many support agencies, the leasehold system did not lead to ownership of the land for tenants. The key policies adopted were -1. Abolition of Agricultural Share Tenancy. Agricultural share tenancy, as herein defined, is hereby declared to be contrary to public policy and shall be abolished: 2. Establishment of Agricultural Leasehold Relation. - The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other cases, either orally or in writing, expressly or impliedly.

3. Creation of the Land Authority. Created to carry out the policy of establishing owner-cultivatorship; under the control and supervision of the President of the Philippines. 4. Organization of Cooperative Associations. - For the purpose of more efficient management, the farmer beneficiaries may organize themselves into cooperative associations. 5. Distribution of Agricultural Lands of the Public Domain The President may reserve public agricultural land for disposition. Such land shall be surveyed, titled and transferred to the Land Bank, which shall reduce said title into individual titles for specific parcels. 6. Creation of the Land Bank. - The Land Bank of the Philippines was established.

7. Reorganization of ACCFA to Align Its Activities. The Agricultural Credit and Cooperative Financing Administration created under R.A. 821, as amended by R.A. 1285, was reorganized. 8. Creation of the Agricultural Productivity Commission. The Bureau of Agricultural Extension of the Department of Agriculture and Natural Resources was placed directly under the President and renamed Agricultural Productivity Commission. 9. Creation of National Land Reform Council. A Council composed of the Governor of the Land Authority, who shall act as Chairman, the Administrator of the Agricultural Credit Administration, the Chairman of the Board of Trustees of the Land Bank, the Commissioner of the Agricultural Productivity Commission and another member appointed by the President.

10. Land Survey to Conform to Legal Requirements. - The Land Authority was tasked to undertake a land capability survey and classification for agricultural planning and other purposes. 11. Cadastral Survey. - To resolve the rights of landholders holding unregistered property, the Bureau of Lands was directed to undertake an expanded cadastral survey and land registration program commencing within three months from the passage of this Code. 12. Courts of Agrarian Relations was organized and established in 15 regions throughout the country. 13. Creation of Office of Agrarian Counsel. - The Tenancy Mediation Commission was expanded and shall hereafter be known as the Office of the Agrarian Counsel.

Declaration of Principles and Policies. Comprehensive Agrarian Reform Program (CARP) Promote social justice and to move the nation toward sound rural development and industrialization Establishment of owner cultivatorship of economic-size farms as the basis of

Agrarian Reform - redistribution of lands, regardless of crops or fruits produced, to farmers and regular farmworkers who are landless, irrespective of tenurial arrangement.. Agriculture, Agricultural Enterprise or Agricultural Activity cultivation and harvesting of crops, fruit trees, livestock, poultry or fish, and other farm activities and practices.. Agricultural Land - land devoted to agricultural activity and not classified as mineral, forest, residential, commercial or industrial land. Agrarian Dispute - any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture.. Idle or Abandoned Land - any agricultural land not cultivated, tilled or developed to produce any crop nor devoted to any specific economic purpose continuously for a period of three (3) years.. Farmer - person whose primary livelihood is cultivation or the production of agricultural crops.. Farmworker - person who renders service for value as an employee or laborer

Regular Farmworker - employed on a permanent basis by an agricultural enterprise or farm. Seasonal Farmworker - person employed on a recurrent, periodic or intermittent basis; such as "dumaan", "sacada", and the like. Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and (i). Cooperatives - organizations composed primarily of small agricultural producers, farmers, farmworkers, or other agrarian reform beneficiaries.. Coverage. --- (a) All alienable and disposable lands of the public domain suitable for agriculture. (b) All lands of the public domain in excess of the specific limits as determined by Congress. (c) All other lands owned by the Government devoted to or suitable for agriculture; and (d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon

Retention Limits. retention of landowner - 5 hectares plus 3 hectares per child who is at least 15 and is actually tilling the land or directly managing the farm.. Landowner has the right to choose; provided - If area selected for retention is tenanted, the tenant shall have the option to choose - a) To remain therein as a leaseholder; b) To be a beneficiary in the same or another agricultural land with similar or comparable features. The tenant must exercise this option within a period of one (1) year. Multinational Corporations. All lands of the public domain leased, held, possessed or operated by multinational corporations shall be acquired/distributed within 3 years. Ancestral Lands. The right of these communities to their ancestral lands shall be protected..

Exemptions and Exclusions. parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds, and mangroves, national defense, school sites and campuses including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production centers, church sites, convents, mosque sites, Islamic centers, communal burial grounds and cemeteries, penal colonies and penal farms, government and private research and quarantine centers and all lands with 18% slope and over,

Commercial Farming. Commercial farms.. shall be subject to immediate compulsory acquisition and distribution after (10) years from the effectivity of the Act. Registration: Landowners shall register within 180 days; Beneficiaries shall be listed by DAR in coordination with the Barangay Agrarian Reform Committee (BARC). Land Acquisition (a) DAR shall send its notice to acquire the land. (b) Within 30 days landowner shall reply. (c) If landowner accepts, LBP pays within 30 after deed and surrender of title. (d) If landowner rejects summary proceedings, 15 days; DAR decision in 30 days. (e) DAR deposits with bank compensation in cash or in LBP bonds and requests RD to issue TCT, thereafter proceed with the redistribution; (f) Any party who disagrees may go to court.

Valuation and Mode of Compensation. 1) Cash payment, under the following terms and conditions; Excess of 50 hectares 25% cash, balance in bonds; 24 to 50 hectares 30% cash balance in bonds; 24 hectares and below 35% cash, balance in bonds (2) Shares of stock in GOCCs, LBP preferred shares, (3) Tax credits which can be used against any tax liability; (4) LBP bonds, which are -- 10-year bonds at market interest rates aligned with 91-day T-bill rates; may be used to buy government land, APT assets, shares of GOCCs, surety for bail bonds, performance bonds, loans with government institution; payment for taxes, tuition fees, hospital fees, etc. Incentives for Voluntary Offers for Sales. additional five percent (5%) cash payment. Voluntary Land Transfer. Subject to notice and approval by DAR.

Land Redistribution Priority: (a) agricultural lessees and share tenants; (b) regular farmworkers; (c) seasonal farmworkers; (d) other farmworkers; (e) actual tillers or occupants of public lands; (f) collectives or cooperatives of the above beneficiaries; and (g) others directly working on the land. Distribution Limit. No qualified beneficiary may own more than three (3) hectares of agricultural land.award shall be completed (180) days from DARs actual possession of the land. Shall be evidenced by a Certificate of Land Ownership Award, to be recorded in the Register of Deeds concerned and annotated on the Certificate of Title.

Payment by Beneficiaries.

To the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. payments for the first three (3) years may be at reduced rates; provided, that the first 5 annual payments need not be more than 5% of the value of the annual gross production.. The LBP shall have a lien by way of mortgage on the land awarded and this mortgage may be foreclosed for non-payment of an aggregate of three (3) annual amortizations..

Transferability of Awarded Lands. may not be sold, transferred or conveyed except through hereditary succession, or to the government, or the LBP, or to other qualified beneficiaries for a period of ten (10) years.. children or the spouse of the transferor shall have a right to repurchase within 2 years.

Corporate Farms Farms Owned or Operated by Corporations or Other Business Associations. In general, lands shall be distributed directly to the individual worker-beneficiaries. Homelots and Farmlots for Members of Cooperatives. The individual members of the cooperatives or corporations mentioned in the preceding section shall be provided with homelots and small farmlots for their family use, to be taken from the land owned by the cooperative or corporation.

Support Services under the DAR shall provide general support and coordinative services -1) Irrigation facilities, 2) Infrastructure development and public works projects ; 3) Government subsidies for irrigation facilities; 4) Price support and guarantee for all agricultural produce; 5) Necessary credit, 6) Financial assistance to small-and medium-scale industries in agrarian reform areas; 7) Agricultural extension workers to farmers' organizations; 8) R&D on agrarian reform 9) Development of cooperative management skills; 10) Identification of markets for agricultural produce and 11) Administration and funding of support services, programs and projects including pilot projects as developed by the DAR.

Funding for Support Services. at least (25%) of all appropriations for agrarian reform shall be immediately set aside and made available for this purpose. Special Areas of Concern : (1) Subsistence Fishing. (2) Logging and Mining Concessions (3) Sparsely Occupied Public Agricultural Lands (4) Idle, Abandoned, Foreclosed and Sequestered Lands. (5) Rural Women. (6) Veterans and Retirees. (7) Agriculture Graduates. Program Implementation Presidential Agrarian Reform Council (PARC); Executive Committee; Secretariat; Provincial Agrarian Reform Coordinating Committee (PARCCOM); Barangay Agrarian Reform Committee (BARC).

Financing. Funding Source. (a) Proceeds of the sales of the Assets Privatization Trust; (b) ..sales of ill-gotten wealth recovered through the PCGG; (c) Proceeds of the disposition of the properties of the Government in foreign countries; (d) Portion of amounts accruing to the Philippines from all sources of official foreign grants and concessional financing from all countries, to be used for the specific purposes of financing production credits, infrastructures, and other support services required by this Act; (e) Other government funds not otherwise appropriated. Financial Intermediary for the CARP. Land Bank of the Philippines.

General Provisions Conversion of Lands. After 5 years from award, DAR may authorize the reclassification or conversion of the land.. provided, that the beneficiary shall have fully paid. Exemptions from Taxes and Fees of Land Transfers. exempted from taxes arising from capital gains, registration fees, and all other taxes and fees for the conveyance.. Disposition of Private Agricultural Lands. Submit to Register of Deeds and the BARC an affidavit that total landholdings will not exceed the landholding ceiling.

1. Awards. 3 hectares per tenant under a Certificate of Land Ownership Award (CLOA). Tenants may opt to stay as leaseholder or relocate as beneficiary but must decide within one year. Beneficiaries can not sell acquired land for 10 years.

2. Retention. Landowners can retain a maximum of 5 hectares; plus 3 hectares to each child 15 yrs old, actually tilling/managing farm. Landowners can choose location of their retention; 3. Compensation to Landowner: partly in cash and balance in financial instruments (Land Bank bonds) 50 hectares or more - 25% cash; 24-50 hectares 30% cash; Below 24 hectares 35% cash;

Exemption: LGUs exempt from 5 hectare retention limit; Payment for awarded land: Beneficiaries shall pay LBP in 30 years at 6% interest. LBP shall have a lien by way of mortgage, and can foreclose if 3 years delinquent; Holding period: Awarded lands can not be transferred 10 years, except by hereditary succession, or to the government, LBP, or other beneficiaries through DAR ; Right to repurchase: Children or spouse of the transferor may repurchase within 2 years; Conversion: 5 years from award DAR may approve conversion but irrigated and irrigable lands, shall not be subject to conversion.