The Development of Post-War Philippine Land Reform: Political and

Sociological Explanations

Introduction
The history of Philippine agrarian policy since independence is a sadly monotonous one
for the scholar, a bitterly disappointing one for the hopeful tenant cultivator. It is a story
of repeated initiative from the center of government that did not result in anywhere near
the announced change in the countryside. Explanations for this series of ineffectual
reforms have varied from insincerity and corruption to lack of peasant interest in getting
ownership of the land. The most convincing analysis, however, seems to relate to the
political and economic interests of the top decision makers, those initiating policy and
supervising its implementations, and to the socioeconomic characteristics of the
agrarian systems being reformed. The cumulative political consequences of agrarian
policy also find both political and socioeconomic explanations.

Agrarian reform is a complex of policies designed to transform rural society in the

direction of greater equality of wealth and power among groups and classes, and greater
equality of opportunity for individuals. Where agrarian reform has followed a successful
revolution it has usually involved the uncompensated redistribution of land. A much
more modest attempt at transformation may be the creation of cooperatives in which
small cultivators are given greater opportunities than their large competitors. But the
type of reform on which we will focus here is the redistribution of tenanted land with
compensation to the original owner, land for which the beneficiary of reform must repay
the government. Despite all the permutations in Philippine policy over more than 30
years, these basic elements of land reform have remained constant: government
purchase of tenanted land and its resale to tenants.

Philippine land reform has been further restricted over the years to grain cropsrice and
corn-for domestic consumption. Export crops have consistently been exempted, the
official argument being that land reform might disrupt production and thus jeopardize
foreign exchange earnings. Perhaps a more important reason, however, was that large
landowners in sugar, coconuts, and tobacco were politically too powerful to be touched.
The scope and nature of the reforms thatwere implemented posed no threat to the
interests of the political elite, but were, in fact, perceived as strengthening their position.
The changes in the content of reform from the 1940s to the 1970s indicated the waning
influence of rice and corn landlords within that elite.
Land Reform Under Roxas and Quirino (1946-1953)
Agrarian policy initiatives had for the most part begun in the 1930s under President
Quezon who was sensitive to the peasant unrest in Central Luzon and wanted to appear
to meet some of its demands, without too seriously discomforting his landlord friends
and allies. (His national political organization depended on local leaders who were
usually either landlords or their proteges.) Components of that policy included
regulation of tenancy relations, organized land settlement in Mindanao for the landless
of Luzon and Cebu, the long-standing anti-usury law, issuance of free patents to
homesteaders on cultivable public land, and a landed estates policy which provided
funds for the negotiated purchase of large holdings for resale to the tenants.1

Before World War II, the Rural Progress Administration (RPA) had purchased tenant
homesites on four estates and the agricultural land of two more; the area of the six
totaled to little more than 6,000 hectares.2 The RPA had also leased the huge 27,000
hectare Buenavista Estate with future prospect of redistribution. But disputes about
tenant rights abounded and none had become amortizing owners. The American
liberation of Manila was terribly destructive of government offices, so that landed
estate records after the war were either chaotic or nonexistent.

Nevertheless, the acquisition of estates by the RPA resumed in 1947, so that by 1950
another 19 had been purchased amounting to over 10,000 hectares in addition to the
vast Buenavista Estate. Over 3/4 of this area was owned by some official or agency of the
Catholic Church. Most of the land acquired was in Central Luzon where the Huk
rebellion made many villages unsafe for landlords or their agents; much of the area was
uncultivated. Some of the estates were purchased from persons whose legal ownership
was in question. Clearly the landed estates policy was not land reform primarily
designed to transform tenants into owner-cultivators, but was a social service agency for
landlords with shaky titles or poor profit ratios. Landlords who were opposed to
appropriation were usually able to stop it in the courts. In fact, it was RPA policy to
discourage tenant petitions for estate purchases by the impossible requirement that
petitioners deposit an amount equivalent to the assessed value of the land in question
on the date the petition was approved) The RPA was starved for funds, receiving no
post-war appropriation; they operated largely with borrowed funds. Even when landed
estates were purchased, the cultivating tenant was not likely to be the main beneficiary.
Many of the estates had cash tenants who in turn sublet to cultivating sharecroppers.
The tenants who were allocated lots for purchase often had farms of 10 to 50 hectares,
while the average size of a cultivators plot was under 3 hectares.3

Many of the cultivating tenants who were fortunate enough to acquire purchase rights
could not afford to keep them. Despite the explicit rules against transfer, such rights had
become a saleable commodity. Poor tenants deeply in debt surrendered their rights to
creditors. The same processes that resulted in concentration of land ownership in the
Philippines generally operated within the government estates. Thus, large portions of
the estates under RPA administration continued to be cultivated by share tenants with
no prospect of becoming owners. The landed estates policy had simply displaced some
large landlords to create many medium sized ones. And since the RPA, a government
agency, became directly involved in the burgeoning disputes over land rights, that
traditional source of peasant anger and frustration more quickly than before produced
political unrest. Not surprisingly the Bell Mission to the Philippines appointed by
President Truman in 1950 concluded that the land problem remains the same or worse
than four years ago.

The Bell Mission Report was, in fact, expected by many to be the impetus for the next
stage of land reform. It recommended that a broad program should be inaugurated of
acquiring large estates at fair value for resale in small holdings to tillers of the soil. At
the same time the report recommended expanded programs of agricultural credit,
organized land settlement on virgin land, and the improved administration of land
registration and homesteading on public land. Each of these other recommendations,
less threatening to elite interests, was backed with some U.S. aid, but not land
redistribution. The U.S. land reform advisor drew up a detailed proposal, but it was
blasted by leading Filipino congressmen, and not even supported by the U.S. aid
mission. In fact, in 1950 the Rural Progress Administration was abolished and its
functions transferred to a newly created landed Estates Division of the Bureau of Lands.
No new estates were purchased throughout the remainder of the Quirino
administration, and redistribution policy on RPA-acquired estates dropped even the
pretense of preference for the tiller. The simulation of land reform was suspended in the
early 1950s.

This was the same period in which the Huk rebellion peaked and then was put down.
The Liberal Partys political elite under Quirino certainly did not view land reform as a
cure for peasant unrest, though a number of opposition figures did make the
connection. Liberals were, in fact, even less interested in land reform in 1953, when the
Huks had been largely defeated, than in 1950 when the rebellion was at its height. The
election of Ramon Magsaysay as president in 1953 made some difference in this regard,
however.

Land Reform Under Magsaysay and Garcia (1954-61)

Magsaysay had brought his campaign directly to the peasantry in a manner
unprecedented. After he was elected, several of his advisors understood the importance
of taking concrete action to meet peasant complaints and thus reduce unrest. Since the
landed estates policy remained in the Bureau of lands, the aggressive new
Undersecretary of Agriculture, Jaime Ferrer, had an important role, as did some of the
pro-tenant young officers in the Tenancy Division of the Judge Advocate Generals
Office. In two instances, in San Luis, Pampanga and San Pedro Tunasan, Laguna, within
a few months of Magsaysays assuming the presidency, the Executive Office took
initiative directly to acquire landed estates. The landed Estates Division began a number
of negotiations and expropriations, and within the estates they already administered,
dramatically increased the rate of redistribution, giving clear preference for the first
time to cultivating occupants of the land. All this activity clearly raised the expectation
of tenants. During FY 1955 the Bureau of lands received 116 petitions for the
expropriation of landed estates covering more than 113,000 hectares.4

But those expectations could not be adequately met without new legislation and new
implementing agencies. The Inter-Departmental Committee on land Tenure, appointed
by the President in March 1954, worked at unusual speed and produced a draft of the
land reform bill by 6 May which was immediately introduced into the House of
Representatives. At about the same time, however, legislation to improve landlord
tenant relations was introduced and this received priority attention. No action was taken
on land reform in the 1954 regular session, and it did not even appear on the agenda of
the special session of that year.

In his 1955 State of the Nation message Magsaysay did reiterate his desire for new land
reform legislation. But just as the President announced that he would take land reform
seriously, so did its opponents. At every stage of the legislative process landlord
interests attacked both directly and with subtle indirection. Magsaysay was neither so
persistent nor so skillful. He never issued a public statement in favor of any portion of
the bill. His only significant effort was to call a special session with the land tenure bill
as highest priority. Nevertheless, the bill was almost scuttled at the conference
committee stage. The final legislative product was so inadequate that Atty. Fernando
Santiago, one of the authors of the first draft, sent a memo to the President
recommending that he veto it and ask for a simple appropriation instead. 5 Congressman
Casas of la Union tried to amend the bills title at the last minute, so that it would read
ironically but accurately An act defining a landlord tenure policy, Republic Act
14006, signed by the President in September, had only one improvement over
preexisting legislation, a modest appropriation and authorization of a bond issue.

The power of expropriation was more restricted than it had been under Commonwealth
legislation. It was limited to that portion of individual land holdings in excess of 300
contiguous hectares, and corporate holdings of more than 600, though there were no
such restrictions on negotiated purchase. Petitions signed by a majority of tenants in the
whole estate were required to initiate an expropriation, or negotiations.

The Land Tenure Authority (LTA) established by the Act to implement this policy, did
not begin to actually function until January 1956; Magsaysay had named a defeated
Congressman to head it. In large part, perhaps, because of the administrative reshuffle
resulting from the closing of the Landed Estates Division in the Bureau of Lands and
transfer of its personnel to LTA, the pace of activities slowed down in early 1956: only
one estate with 187 tenants was purchased. Within the same 6 months petitions from
tenants came in at a rate of one a day.7Aspirations had clearly been raised by the new
Act, but were not being fulfilled. (Yet not all such petitions could be regarded as
indicative of pure tenant aspirations; there were many cases in which tenants were
manipulated by landlords .who wanted to sell unproductive, partially idle or improperly
titled land.)

Strangely enough, landlords sometimes seemed to favor expropriation over negotiated

sale. They had friends in court. The price set by courts in expropriation proceedings
were sometimes nearly double those of negotiated settlements, disadvantaging the
tenant who had to repurchase the land at the same price. (Landlords were paid in cash
and/or negotiable bonds.)8 Rights of repurchase remained confusing with LT A policy
often failing to protect the actual cultivator.9Only on estates where cultivating tenants
were well organized could they be assured of priority in land redistribution, and most
were not. Even when lots were allocated, and before they were fully paid for, the transfer
of rights for cash especially to non-cultivators-was rampant.10 Nor could tenants on
sugar estates expect to benefit from LT A programs in any way; there was an informal
understanding that petitions for the expropriation of sugar land would not be acted
upon favorably.11

Despite confusions in implementation, the LTA increased the pace of land acquisition
several times over in FY 1957; seven estates were purchased. The rising number of
investigations in 1957 resulted in the acquisition of 18 estates in FY 1958 encompassing
over 14,000 hectares with more than 5,200 tenants. But in March 1957 President
Magsaysay died, succeeded by his Vice-President, Carlos P. Garcia. Within a year many
of the officials committed to land reform left the Administration. In the next two fiscal
years only 6 estates were acquired, and corruption in the process became more
widespread.12

During the time of President Garcia there was what amounts to a stalemate between
landlords and their allies in Congress and in the executive departments, and the
elements favoring land reform.13 The hopes of accomplishment raised in 1954 had again
been dashed. Though other agrarian programs may have somewhat improved the
bargaining position of the tenant vis--vis the landlord, only an insignificant portion of
the nations tenant farmers were on the way to becoming owners. The land acquired for
redistribution by the LT A in the first 5 years of its existence amounted to less than 10
percent of the area of landed estates over ISO hectares in the five provinces of Central
Luzon alone!14

At the rate of progress maintained under Magsaysay and Garcia it would have taken
approximately 700 years to repurchase and redistribute the 1.8 million hectares of
tenanted agricultural land in the Philippines.15

The defeat of President Garcia in the 1961 election was not, therefore, a great loss to the
cause of land reform. Nor did it appear to be any particular gain. It was hardly
mentioned in the campaign, nor was it referred to at the inauguration of the victor,
Diosdado Macapagal. Though a congressman in the 1950s, Macapagal had not
participated in the land reform debate in 1954 or 1955, and had not even voted on the
bill that became R.A. 1400.16

But in January 1963 President Macapagal appointed a special committee on land

reform, headed by Acting Secretary of Labor Bernadino Abes, to draft what eventually
came to be known as the Agricultural Land Reform Code of 1963. It was introduced into
Congress in March and adopted by both houses in July. What had led the President to
issue an emotional call in his State of the Nation Address: We must give the tenants
liberty from economic peonage, in which they have long languished? In part it seemed
to be the arguments of his top economic advisor, Sixto Roxas, that land reform was a
necessary component of a strategy for rapid economic development, permitting, for
instance, the transfer of capital in land to industry. It was also apparent to many that
Macapagal intended to create mass support among tenants, thus insuring his
reelection.17 Nor was he unresponsive to the views of American advisors.

Macapagal was not the popular leader Magsaysay was, coming into office on a wave of
proreform sentiment. But Macapagal was a much more skillful strategist, using
successfully what influence he had to gain early passage, even though the Senate was not
under his partys control. He had appointed Federation of Free Farmers leader
Jeremias Montemayor and Philippines Free Press editor Teodoro Locsin to his special
committee, thus helping to provide some active support for his legislation in the press
and from tenant groups. And when the legislation had not yet been passed by Senate at
the end of the regular session, he called sevenspecial sessions of a few days each until it
was adopted, helping to direct tactics from Malacaang.

The Land Reform Code of 1963 was the most comprehensive piece of legislation ever
enacted in the Philippines on the subject. It reorganized and strengthened land
settlement, small farmer credit, the dissemination of new agricultural technology, legal
assistance to tenants and small farmers, and created a structure for better coordination
of all these functions, as well as dealing with land reform more narrowly defined. A Land
Authority was created to take over most of the activities of the LTA and a Land Bank was
established to handle the financial aspect of land acquisition.

Though the initial bill was somewhat weakened before final passage, the emasculation
was nowhere nearly as great as in 1955. The most serious excision was the chapter on
land taxation which would have imposed a progressive tax based on assessment of
potential productivity and could have greatly improved collection. A major incentive for
landlords acceptance of government purchase and redistribution was thus lost.

The Code had several advantages over previous legislation, especially the authorization
for the Land Authority to acquire estates of more than 75 hectares, whether owned by
individuals or corporations, removing the term contiguous. However, the earlier
absence of any effective restraints on landlord evasion by transforming land use or
transferring ownership to family members remained. And while in 1955 sugar and
coconut were excluded from land reform by tacit agreement, in 1963 this exclusion was
made legislatively specific, with fruits and other crops added to the list. Furthermore,
the provision that the National Land Reform Council needed to declare all government
agencies dealing with land reform fully operative in a region before implementation
could begin was, while logical from one standpoint, an additional juncture at which
landlord pressure and bureaucratic wrangling could delay any action.

Perhaps the greatest tragedy, however, was that after President Macapagal had shown
considerable political sophistication in getting the Code enacted, he was lax in pushing
its implementation. It. was a dramatic example of the politics of symbolism that has so
permeated Philippine public affairs. It was as if Macapagal, having signed an important
document, found little compulsion to act on it. The new agencies established by the code
were not fully operative until March 1964.18As late as 1966 no agricultural land had yet
been purchased under the terms of the Code!19 Even under the provisions of previous
legislation in the 2 years following enactment of the Code only 1,610 hectares were
purchased, or less than theannual average under Magsaysay and Garcia.20 A few months
before the November 1965 election Macapagal panicked, and made vigorous efforts to
implement the Code.21 But it was too late to turn the political tide against him.

President Marcos came to office, like his immediate predecessor, without any record of
interest in land reform. The fact that machinery for implementation was established by
his defeated rival may have caused him to be even less enthused. Certainly the
commitment of funds was modest. None other than Conrado Estrella, appointed
chairman of the Land Reform Council by Marcos and later secretary of the Department
of Agrarian Reform, called attention in early 1972 to the fact that in 1965 the total
appropriation for all land reform agencies was PI56 million, but that out of this amount
only 20 percent was released. This trend has continued through the years. The
proportion of the amount released against appropriations ranged from 20 to 30
percent. In 1971 only 24 percent [was] released from an appropriation of PI82
million.22 As of September 1971 land reform, had not even been proclaimed in more
than 236 of the nations 1,506 cities and municipalities (varying in size from a country to
a township), Agricultural land purchase and redistribution had fallen to a low level:
during the first 4 years of the Marcos presidency approximately 2,600 hectares had been
purchased by the Land Authority and another 1,500 by the Land Bank, or about 1,000
hectares per year. Though slightly above the pace of activity in Macapagals last 2 years
in office, this was only {%} of the annual average during the Magsaysay/Garcia years.
The way in which Mr. Marcos won reelection in 1969 with charges of massive fraud,
inducement and intimidation, triggered a political reaction that had a profound impact
on the national attention to and perception of land reform. It marked the beginning of a
new stage in the history of Philippine agrarian reform.

Land Reform Since 1971

The raucous demonstrations that accompanied President Marcos second inauguration
marked the tenor of the times. Students were aroused and were making common cause
with tenants and trade unionists. The only positive response in the Presidents State of
the Nation address was a proposal to sell military camps near Manila to generate funds
for land reform. Later special committees in both chambers of Congress conducted
hearings which heard representatives of peasant groups and land reform Agencies. 23 On
5 May as a consequence of those hearings, omnibus bills were introduced to promote
land reform in both the Senate and the House, but the problems and costs which
became associated with the idea of selling military land scuttled that plan. For the first
time in Philippine history legislative initiative on land reform did not come from the
President, but resulted in large part from popular clamor heeded by Congress.

The Senate bill was favored by peasant organizations since it incorporated their
demands for a lowering of the retention limit to 24 hectares and a prohibition on the
creation of subdivisions or the resumption of personal cultivation (through wage
laborers) as justification for the ejection of tenants, and thus avoidance of land reform.
(Both were widespread practices since 1955.) They were less enthusiastic about the
Estrel1a-favored bill to create a Department of Agrarian Reform. But the regular session
ended without any land reform related bills being passed. The first and second special
sessions saw little progress either, and before the third special session was called a
meeting of Congressional leaders with the President agreed to strike land reform from
the agenda.24 It was decided to suspend action on land reform while a special committee
conducted an in-depth study, submitting its report to the regular session beginning in
January 1971. Peasant and student groups were angry.25 Jeremias Montemayor,
President of the Federation of Free Farmers, questioned the sincerity of President
Marcos for saying that land reform would become the epicenter of all government
activities.

Soon after the January regular session began sitting, debate on land reform was again
suspended to refer the matter to another subcommittee, chaired by Senator Salvador
Laurel. The peasant-favored Senate Bill 478 was amended, omitting the lowered
retention of 24 hectares. Despite 2 days of demonstrations at Malacaang in May by
5,000 farmer-members of the Cooperative League of the Philippines, demanding to see
the President, the regular session ended without land reform legislation having been
certified as urgent.26 Both peasant leaders and progressive legislators increasingly
blamed the President for inaction.

With the calling of the first special session of 1971 there was launched a unique form of
political action, the live-in picket. On 1 June hundreds of small farmers, supported by
students, priests, nuns, and urban trade unions, encamped in front of the Congress
building to insist on effective reform legislation. At the beginning of the second special
session, when legislative action on land reform was still far from complete, the
demonstration had already lasted for 2 months.27 Peasant organizations, especially the
Free Farmers, brought in buses and jeeps loaded with tenants from villages as far as 200
kilometers away. During each legislative day small groups badgered individual
Congressmen demanding to know how they would vote on each article of each pending
land reform bill, and why, and explaining the importance of the reforms proposed.
Members of Congress had increasing difficulty in handling this unprecedented pressure.
In the early days of the second special session they began to question the legality of such
action; debates on land reform were even suspended, to reinforce the demand that
demonstrators abandon their round-the-clock picket.28 But the picketers only gained
greater mass support. Representatives of the Philippine Public School Teachers
Federation joined the demonstration. The 87,OOO-member Philippine Federation of
Labor threatened to strike nationwide if farmer demonstrators were evicted from the
Congress building.29 Finally on 9 August House Speaker Villareal announced that the
leadership had decided to withdraw their demand for the pickets removal and to
resume debate on land reform. Said a spokesman for the Philippine Congress of Trade
Unions, this proved that democracy, if given a chance, can still work in this country.
One observant Congressman threw light on the motivation for the turnabout when he
commented, those who would evict the demonstrators would be doing exactly what the
Russian aristocracy did just before the October revolution began 30 From then on
debate on land reform, especially in the House, was more constructive. Two bills had
been enacted, R.A. 6389 and R.A. 6390, when the fifth special session ended on 5
September.
Unlike every experience in the past, the final version of the first piece of 1971 land
reform legislation was in some ways more favorable to the tenant than the first.
Certainly lowering the retention limit to 24 hectares and preventing landlords from
claiming personal cultivation or subdivision as an excuse for ejectment of tenants
would not have survived the legislative process without intense peasant pressure.
Furthermore, the piecemeal approach was ended and the whole country was declared a
land reform area. R.A. 6390, the funding bill, was more disappointing, providing
appropriation for on1y P50 million, no higher than the funding level in the previous few
years, and much less than the original Senate bill. It was, in fact, the Presidents
intervention which tipped the scale for the much more modest figures in the House
version.31 Only the provision in R.A. 6389 creating a Department of Agrarian Reform
(DAR) received consistent Administration backing.

There are two major conclusions to be drawn from this legislative history. The more
general one was articulated by both conservative solons and radical peasant leaders: the
democratic process works, the people may peaceably assemble to redress their
grievances. More specifically, genuine progress toward land reform was possible
through Congress if small farmers were organized. Neither of these conclusions was
consistent with the contentions in September and October 1972 that only through the
setting aside of Congress and presidential rule by decree could genuine land reform be
accomplished. The evidence of peasant mobilization in 1971 and the implications it had
for the future of the Philippine political system, were undoubtedly factors that helped
President Marcos decide to reduce mass participation through Martial law. (A fuller
explanation for the abrupt transition in September 1972 to authoritarian rule must be
found elsewhere, however.)

Presidential Decree No. 17

In the early years of martial law agrarian reform was given great prominence. One
month after its declaration the President issued Presidential Decree No. 27 for the
emancipation of the tiller from the bondage of the soil. And on the first anniversary of P
.D. 27 he went so far as to say: land reform is the only gauge for the success or failure of
the New Society. If land reform fails, there is no New Society. 32

In the decrees preamble President Marcos hinted at one of the motivations for this
emphasis: Inasmuch as the old concept of land ownership by a few has spawned valid
and legitimate grievances that gave rise to violent conflict and social tension, the redress
of such grievances [becomes] one of the fundamental objectives of the New
SocietyThe fear of agrarian unrest, and Communist leadership thereof, was certainly
the explanation for the fact that only 2 weeks after martial law had been declared, Dr.
Roy Prostermann, of the University of Washington, author of the

1970 land reform in Vietnam (and the subsequent program in El Salvador) arrived in the
Philippines with a draft decree in his pocket. (His draft influenced but did not determine
the final document.) About the same time, Executive Secretary Alejandro Melchor was
in Washington trying to justify martial law on the grounds that it was necessary for the
quick implementation of broad social reforms. But for the President himself, land
reforms most important political function was to strike a blow at the oligarchy, those
wealthy elite who had formed the core of his political opposition. Not surprisingly the
Aquino estates were among the first to be expropriated. The subsequent pattern of
implementation helped to confirm this interpretation. The President simply lost his
originally keen interest after the owners with more than 100 hectares had been
dispossessed.

In sum, the political purpose of land reform and its ancillary policies was to create mass
support for the New Society and its leader, legitimize him abroad, and undermine
support for alternative leadership on both the right and the left. Since great estates in
sugar, coconut and other export crops were excluded from its coverage in any case, it is
probably fair to say that in the long run none of these goals were accomplished. In the
first few years of martial law, however, agrarian policy did help create support for
Marcos in the countryside, blunted foreign criticism of his regime, and put the landed
elite on the political defensive.

In principle P.D. 27 was a great improvement over previous legislation because allrice
and corn tenants whose landlords owned more than 7 hectares were to be sold the land
they tilled at a price 2 1/2 times the average annual production; they were given 15 years
to pay the land Bank at 6 percent Interest. No tenant initiative was required. When the
tenant fully paid, and only then, he would receive a title transferable exclusively to his
heirs. (Landlords were to be paid 10 percent in cash and 90 percent in Land Bank
bonds.) In the meantime the eligible tenant would receive a Certificate of Land
Transfer (CLT) identifying his cultivated area and promising him the right to purchase
the land.
The number of tenants to benefit from this decree quickly became a controversial
question. In the first month the Department of Agrarian Reform (which had already
been created before martial law) announced that over I million tenants tilled 1.44
million hectares of rice and corn land. But research in 1975 established that 57 percent
of tenants farmed land owned by persons with less than 7 hectares.
Subsequently DAR announced that based on its own field identification, its goal was to
service more than 390,000 tenants on 730,000 hectares, or little more than 1/3 of all
rice and corn tenants. By 1980, DAR claimed to have issued CLTs to 90 percent of the
targeted tenants, but best estimates are that nearly half of those printed in Manila never
actually reached the hands of the cultivator.

CL T holders were still being asked to pay rent to their landlords. Not until the price of
the land was fixed and the tenant began to pay installments to the land Bank was he an
amortizing owner. Only 86,500, or 22 percent of the target, had reached that stage;
and of that number only 1,667 had completed payments early and become full
owners.33 Most amortizing owners were delinquent.34

Delay in fixing the price, and delinquency in amortization resulted from the fact that
instead of setting land price on the basis of production as the decree provided, landlords
were allowed to negotiate with tenants and DAR field officials sometimes aided the
landlord, already the stronger party. On other occasions, to be sure, when DAR officials
stood up for tenant rights under the law, they were verbally threatened or judicially
harassed by landlords. Many DAR officials had court cases initiated against them for
merely doing their duty.35 Landlord foot-dragging could postpone a pricing agreement
indefinitely. Thus by 1977, the average price per hectare being paid by the tenant of
nearly P7,000 was 44 percent higher than it would have been if it had been based on the
average yield as reported by the Ministry of Agriculture.36 Since land Bank bonds could
be sold for cash by landlords, at a discount to be sure, in order to make other
investments, or could be invested in approved projects at face value, the loss of land
usually did not involve a significant loss of wealth. By 1980, 5,860 landowners had been
paid by the Land Bank an average of P207,347 each.

The net result of land redistribution was to put more than 86,000 tenants on the road to
ownership (with only 2 percent completing the process); while this was less than 9
percent of a very conservative estimate of all rice and corn tenants, it was, nevertheless,
a greater accomplishment than in any previous administration. However, since the
announcement and the early stages of implementation gave the vast majority of all
tenants a feeling that they personally were going to benefit, the consequence was that for
every farmer who was grateful to the government for having achieved a new status, and
perhaps improved income, there were many resentful that their hopes had been
frustrated. Probably the thousands of tenants who first received CLTs, and then had
them recalled either because of simple bureaucratic confusion or because of landlord
intervention were most upset. Though the thousands more who were illegally ejected
from their tenant holdings in 1972-74 by foresighted landlords wishing to evade the
reform may have been at least equally frustrated.

The slow pace of implementation was due partly to a chronic bureaucratic complaint,
lack of personnel because of lack of budget. Even though there was a real increase in
funds (even after compensating for inflation) for agrarian reform between FY 1973 and
FY 1977, the priority for the Ministry of Agrarian Reform within the total national
budget continued to slide, however. In 1973 it was 0.8 percent of the total, in 1977 only
0.7 percent and in 1981 down to 0.5 percent).37More serious, however, was the delay,
and even retreat, in the face of landlord pressure by top decision makers. Nor was this
the result of inattention by the President; Minister of Agrarian Reform Conrado Estrella,
who remained in office from before the declaration until after the lifting of martial law,
boasted of easy access to President Marcos to consult on problems within the ministry.
There was apparently a feeling in Malacaang that more was to be gained politically by
easing the pressure on landlords (especially those with less than 24 hectares) than by
pushing through to the full extent of the law. Foreign analysts, however, were more
inclined to conclude that half measures were worse than none at all, i.e., that incomplete
reform raised expectations and thus intensified the frustration of those who did not
benefit. Revolutionary political organization in the countryside by 1981 would seem to
have justified that conclusion. Some prime land reform areas had become bases for the
Communist-led New Peoples Army (NPA).

In any case, government spokesmen did not bother themselves with trying to explain
shortcomings; they proclaimed complete success. The government-owned Philippine
News Agency release on the eve of the 8th anniversary of P.D. 27 stated: 359,000
farmers now own the land they till via the issuance of 501,364certificates of land title
[sic]. The figures represent 82 percent of the total target. 38 The previously subtle
attempt to equate CL Ts with titles had lost its subtlety. Some foreign publications used
the language of the release, thus perpetuating the gross inaccuracy. Even AID officials in
Washington bought this line, though their Philippine specialists knew otherwise.
The AID presentation to the House Foreign Affairs sub-Committee on Asia and Pacific
Affairs hearings in Washington in March 1981 reported flatly that 88 percent of eligible
families had received land titles under Philippine agrarian reform.39

Conclusion
To look at the sweep of policy over more than 30 years raises the very basic question
whether conservative land reform is possible, i.e., whether the announced goals, to
transform cultivators into owners, can be accomplished by any regime dominated by
men of great private wealth. Does its achievement either require a period of foreign
domination, as in Japan, or a prior sociopolitical revolution, as in China? Or, posed
another way, does the goal of peasant ownership require rapid industrialization as the
context for agrarian change, as in Japan? And is the only alternative agrarian revolution
that ultimately denies the principle of cultivator ownership anyway, as in China?
Perhaps farmer owners are a transitory breed in any case; both Japan and Western
societies that were long based on peasant ownership are seeing the rise of the corporate
farm.

These questions lead us into the broad field of comparative history, fascinating, but
sometimes speculative. The questions which are more directly related to the historical
survey of Philippine land reform policy here presented are: Why was this type of policy
enacted? Why was implementation so consistently frustrated? And what are the political
consequences of such programs?

It is abundantly clear that until 1911 peasant demands had no direct effect on policies
enacted. Thus heroic rhetoric, e.g., The evolution of the various land reform legislations
since 1905 is the story of accumulated piecemeal concessions bitterly fought for by the
Filipino peasantry, sometimes lacks historical accuracy.40 The presence of the
Federation of Free Farmers (FFF) president on Macapagals special committee gave an
opportunity for a peasant leader (balanced by an influential landlord on the same
committee) to present his ideas in the drafting process. But peasant mobilization was
insignificant; thus it was only the perceptions of the political elite about possible future
peasant reactions that affected policy. And those perceptions were important to decision
makers primarily as they entered into broader calculations of self interest, i.e., how elite
interests are influenced by peasant reaction.
Insofar as peasant protests were violent, and constituted a threat to system stability,
they stimulated concern within the elite, though without legislative consequence at least
until the 19205.41 As early as 1933, however, the Rice Share Tenancy Act may be seen to
be a kind of response to the furious Tayug uprising of January 1931. The more extensive
peasant mobilization in Central Luzon of the late 1930s frightened President Quezon
into launching the landed estates policy, though the more short-sighted members of the
National Assembly effectively hamstrang other agrarian reform measures. Ultimately,
Quezons desire simultaneously to placate both landlords and tenants pleased
neither, and in 1941 rural class conflict was more acute than ever. 42 This
characterization of the 1930s aptly fits, as we shall see, the interactions in later stages of
land reform policy.

The Roxas Administration, the first after independence, was closely linked, as had been
Quezon, to the landed elite of Central Luzon. Its response to the rising Huk Rebellion
was the mailed fist, thus contributing to mobilization of the peasantry by the left.
Roxas Vice-President and successor, Elpidio Quirino, was himself from the Ilocos
region and was therefore less closely tied to the great landowners of the Philippines
ricebowl. He saw some political advantage in wooing the dissidents, called for a cease-
fire, granted amnesty to the Huks and seated Taruc in Congress. But the accumulated
distrust was too great; militants on both sides sabotaged the cease-fire and the guerrilla
movement was resumed. Under U.S. prodding, Quirino did attempt, however, to mount
some agrarian reform programs except for land reform. The Hardie Report from the
U.S. aid mission, which proposed a sweeping land redistribution, was branded as
communist by vehement congressmen, undoubtedly speaking for the landed elite.
Land reform had to wait until after the election of Magsaysay.

In the Magsaysay Administration the elite composition again changed, bringing in

younger, and more middle class elements, dedicated to solve the underlying problems
that caused unrest. Magsaysay himself had aroused the expectation of reform among the
masses. But Magsaysay was, in politics, a tactical neophyte. And the landed interests in
Congress were still strong. Since he delayed more than a year in pushing land reform
legislation, the threat of the Huk Rebellion had drifted into the hazy past for most
parliamentarians they lost interest in forestalling unrest. Community development
was a more comfortable concept, without implications of class conflict; it was thus a
high priority program. Garcia, who became president on Magsaysays death, was
fortunate to inherit a relatively tranquil society, which could afford an interlude of old
fashioned politics.

Macapagal had indeed grown up a poor boy, but he had been co-opted by the landed
Pampanga elite. His sudden conversion to the virtues of agrarian reform in 1963 is thus
all the more surprising. Certainly he was respectful of American advice, and like every
other Filipino politician adored the prospect of new agencies to fill with his appointees,
and the Agricultural Land Reform Code created several of them. But his reaching out for
mass support on the land reform issue was a harbinger of change in the Philippine
system, a harbinger of trends that many thought had died with Magsaysay. But
Macapagal started too late in the building of a new mass base to succeed.

With Marcos during his first term, as with Garcia, there was little interest shown in land
reform. There were no new agencies to staff and Central Luzon was comparatively quiet.
The quiet was deceptive, however, and by the end of the 19605 a new rebellion had been
launched by the New Peoples Army. The landed elite was not as influential in Congress
as it once was and peasant organizations were larger and more politically skilled than
ever.43 For the first time they had the commitment, the leadership and the allies to put
direct pressure on Congress for reform..

The reaction of Marcos to the land reform debate of 1971 is curious. He was certainly not
displeased with the prospect of a new administrative structure, the Department of
Agrarian Reform, which would allow him to make new appointments. But his negative
approach to other peasant demands reflected either a serious miscalculation of the
changing political realities or a hidden agenda. One could almost imagine that there was
a desire to see land reform efforts in the Old Society frustrated, while plans for the
unveiling of the New were being quietly laid down. His discomfort with the oligarchy
was already apparent, thus his posing as the champion of land reform might have
seemed appropriate. But that role was saved until after the declaration of martial law.
And when the purposes of land reform after 1972 seemed to enjoy short-term success,
the program was allowed to languish.

Tai has quite rightly pointed out that political elites initiate land reform to gain political
legitimacy, i.e., to strengthen popular support for a new political order or to safeguard
an existing regime against threatened political changes.44 The first case may fit land
reform after martial law, and the latter is typical of the earlier examples. Tai continues,
Elites are sensitive to the danger that in initiating reform they may immediately
encounter the opposition of the landed class but only slowly gain the support of the
peasants. Conceivably, they may lose the loyalty of the former before gaining that of the
latter. In fact, this sensitivity is sometimes developed only after the reform process has
begun, thus inclining the same leadership which initiated it to leave it half finished.
(This seemed particularly apparent in the Philippines in the late 1970s.)

The incomplete reform is also a function of the nature of the Philippine political elite. It
is in Tais classification a conciliatory elite, 45 one in which landlord interests are
strong enough that they must be conciliated. Conciliatory elites, he says, Hare generally
more committed to passing some kind of law than to fighting for its effective
implementation.46 He also recognizes that it is in countries where land reform has
made the least progress, as in the Philippines that the greatest threats to stability
persist.47

Land reform exacerbates class conflict in rural communities, especially when landlord
evasion causes suffering for peasants, e.g., eviction to make way for mechanization and
wage labor, inappropriately termed personal cultivation in Philippine parlance. If such
a period of conflict is only a brief transition to full peasant ownership it is not
destabilizing to the whole political system. But when it continues indefinitely and is
exploited by sophisticated radical leadership, the consequences can be devastating. The
spread of guerrilla warfare in land reform areas in the 1980s is such a consequence.

The lack of follow through in land reform may have explanations other than the
character of a conciliatory elite. It may be the result of the rampant ritualism that
characterizes so much of Philippine politics, the belief that appearance isreality, that to
make a declaration is to create a condition. This style is so pervasive that many leaders
may not even be conscious of the lack of substance to their declarations.

The acceptance of ritual may also result from the clogging of communication channels in
an authoritarian regime, where the opportunity for bad news to reach the top is very
limited. In a centralized system of decision making, when the reality is not fully known
at the center there can be no rectification of errors. Authoritarianism does not provide
efficient feedback. Yet many authors have extolled the advantages of highly centralized
regimes for implementing land reform. Samuel Huntington has been one of these. He
adds, however, that in addition to concentration of power in an elite committed to
reform there must be the mobilization of the peasantry and their organized
participation in the implementation of reform. That is an intriguing combination, with
a severe internal contradiction.

A concentration of power is not compatible with freedom of organization, which is based

on the assumption that various interests in society have a right to share in the decision-
making process. That sharing took place for the first time in 1971. When power was
concentrated in 1972, independent peasant organizations were crushed. By the late
1970s even those groups that had been domesticated by martial law tried to bring to the
President and Secretary Estrella the complaints of small farmers, but their message fell
on deaf ears. They had no legitimacy within the decision-making process; they were
powerless.

The critique of a close observer of the Philippine program, one who follows the
Huntington school of thought, reveals a similar inconsistency. He points out that land
reform has been handicapped since 1972 because the relationship between central
authority and the peasantry has been one of central dominance.49 He emphasizes the
value of greater local initiative, then in the next paragraph recommends that wider use
might be made of the military in implementing land reform! One wonders what such
analysts mean by local initiative. The military constitute the greatest single constraint
on autonomous peasant political activity especially in relation to agrarian questions.

The final point that must be made in the attempt to understand the inconclusive
character of Philippine land reform relates to the differences between central and local
elites. While it is true that in the last decade landed elements in the national political
elite have declined in influence, permitting ever stronger legislation in 1963, 1971 and
1972, changes in local elites have been much slower. Despite the highly centralized
character of Philippine public administration since the Spanish times local political
leaders expected to be able to intervene in administrative matters to protect their own
interests, and did so with impunity. Furthermore, at the provincial and municipal level
civil servants were often relatives or recommendees of local politicians. And even
though local politicians from the 1950s or 1960s had become a distinct category from
the landlords, they were usually closely linked. The habits of nearly three generations of
electoral politics died hard after 1972, so that local political leaders did not easily accept
the supremacy of the bureaucracy, continuing to manipulate into their own ends. Thus
the failure to implement land reform was often the gap between central policy and local
practice, which could not be effectively corrected from the center. A mix of both
authoritarian and democratic elements combined to frustrate the implementation of
reform.

If land reform is to be fully implemented, there must be a cleansing of the bureaucracy

of those who do not support it, along with much greater autonomy for peasant
organization and an adequately funded, clearly committed central authority. It is
difficult to foresee when these conditions may prevail.
REPUBLIC ACT No. 6389

AN ACT AMENDING REPUBLIC ACT NUMBERED THIRTY-EIGHT HUNDRED AND FORTY-

FOUR, AS AMENDED, OTHERWISE KNOWN AS THE AGRICULTURAL LAND REFORM CODE,
AND FOR OTHER PURPOSES

Section 1. Section 1, 2, 3 and 4 of Republic Act No. thirty eight hundred and forty-four, otherwise
known as the Agricultural Land Reform Code, are hereby amended to read as follows:

"Sec. 1. Title. - This Act shall be known as the Code of Agrarian Reforms of the Philippines."

"Sec. 2. Declaration of Policy. - It is the policy of the State:

"(1) To establish cooperative-cultivatorship among those who live and work on the land as
tillers, owner-cultivatorship and the economic family-size farm as the basis of Philippine
agriculture and, as a consequence, divert landlord capital in agriculture to industrial
development;

"(2) To achieve a dignified existence for the small farmers free from pernicious institutional
restraints and practices;

"(3) To create a truly viable social and economic structure in agriculture conducive to greater
productivity and higher farm income through a cooperative system of production, processing,
marketing, distribution, credit and services;

"(4) To apply all labor laws equally and without discrimination to both industrial and
agricultural wage e earners;

"(5) To provide a more vigorous and systematic land resettlement program and public land
distribution;

"(6) To make the small farmers more independent, self-reliant and responsible citizens, and
a source of genuine strength in our democratic society;

"(7) To give first priority to measures for the adequate and timely financing of the Agrarian
Reform Program pursuant to House Joint Resolution Numbered Two, otherwise known as
the Magna Carta of Social Justice and Economic Freedom; existing laws; executive and
administrative orders; and rules and regulations to the contrary notwithstanding;

"(8) To involve local governments in the implementation of the Agrarian Reform Program;
and

"(9) To evolve a system of land use and classification."

"Sec. 3. Composition of Code. - In pursuance of the policy enunciated in Section two, the following
are established under this Code:

"(1) An agricultural leasehold system to replace all existing share tenancy systems in
agriculture;

"(2) A system of crediting rental as amortization payment on purchase price;

 "(3) A declaration of rights for agricultural labor;

"(4) A machinery for the acquisition and equitable distribution of agricultural land;

"(5) An institution to finance the acquisition and distribution of agricultural land;

"(6) A machinery to extend credit and similar assistance to agricultural lessees, amortizing
owners-cultivator, and cooperatives;

"(7) A machinery to provide marketing, management, and other technical assistance and/or
services to agricultural lessees, amortizing owners-cultivator, owners-cultivator, and
cooperatives;

"(8) A machinery for cooperative development;

"(9) A department for formulating and implementing projects of agrarian reform;

"(10) An expanded program of land capability survey, classification, and registration;

"(11) A judicial system to decide issues arising under this Code and other related laws
regulations; and

"(12) A machinery to provide legal assistance to agricultural lessees, amortizing owners-

cultivator, and owners-cultivator."

"Sec. 4. Automatic Conversion to Agricultural Leasehold. - Agricultural share tenancy throughout the
country, as herein defined, is hereby declared contrary to public policy and shall be automatically
converted to agricultural leasehold upon the effectivity of this section.

"The credit assistance traditionally extended by a land-owner and a local lender to a tenant under
the share tenancy systems in agriculture for production loans and loans for the purchase of work
animals, tillage equipment, seeds, fertilizers, poultry, livestock feed and other similar items, and
advances for the subsistence of a lease and his family, may be continued by said landowner and
local lender: Provided, That the total charges on these loans, including interest and service,
inspection and issuance fees, shall not exceed fourteen per cent per calendar year and the principal
thereof shall not be subject to upward adjustment even in case of extraordinary inflation and/or
devaluation: Provided, further, That on all loans or advances other than money, the interest shall be
computed on the basis of current price of the goods at the time when the loans or advances were
made.

"Any work animal and tillage equipment in the possession of a share tenant but owned by a
landowner shall automatically be sold to said tenant on installment for a period not exceeding five
years and at a price agreed upon by the parties: Provided, however, That the tenant shall pay in
advance ten per cent of the price agreed upon.

"Existing share tenancy contracts may continue in force and effect in any region or locality, to be
governed in the meantime by the pertinent provisions of Republic Act Numbered Eleven hundred
and ninety-nine, as amended, until the end of the agricultural year when the President of the
Philippines shall have organized by executive order the Department of Agrarian Reform in
accordance with the provisions of this amendatory Act, unless such contracts provide for a shorter
period or the tenant sooner exercises his option to elect the leasehold system: Provided, That in
order not to jeopardize international commitments, lands devoted to crops covered by marketing
allotments shall be made the subject of a separate proclamation by the President upon the
recommendation of the department head that adequate provisions, such as the organization of
cooperatives, marketing agreement, or other similar workable arrangements, have been made to
insure efficient management on all matters requiring synchronization of the agricultural with the
processing phases of such crops.

"In case some agricultural share tenants do not want to become agricultural lessees of their
respective landholding, they shall, with the assistance of the Bureau of Agrarian Legal Assistance,
notify in writing the landowners concerned. In such a case, they shall have one agricultural year from
the date of the notice to accept leasehold relationship, otherwise the landowner may proceed to their
ejectment."

Section 2. Sections 11 and 12 of the same Code are hereby amended to read as follows:

"Sec. 11. Lessee's 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 under
reasonable terms and conditions: Provided, That the entire landholding offered for sale must be pre-
empted by the Department of Agrarian Reform upon petition of the lessee or any of them: Provided,
further, That where there are two or more agricultural lessees, each shall be entitled to said
preferential right only to the extent of the area actually cultivated by him. The right of pre-emption
under this Section may be exercised within one hundred eighty days from notice in writing, which
shall be served by the owner on all lessees affected and the Department of Agrarian Reform.

"If the agricultural lessee agrees with the terms and conditions of the sale, he must give notice in
writing to the agricultural lessor of his intention to exercise his right of pre-emption within the balance
of one hundred eighty day's period still available to him, but in any case not less than thirty days. He
must either tender payment of, or present a certificate from the land bank that it shall make payment
pursuant to section eighty of this Code on, the price of the landholding to the agricultural lessor. If
the latter refuses to accept such tender or presentment, he may consign it with the court.

"Any dispute as to the reasonableness of the terms and conditions may be brought by the lessee or
by the Department of Agrarian Reform to the proper Court of Agrarian Relations which shall decide
the same within sixty days from the date of the filing thereof: Provided, That upon finality of the
decision of the Court of Agrarian Relations, the Land Bank shall pay to the agricultural lessor the
price fixed by the court within one hundred twenty days: Provided, further, That in case the Land
Bank fails to pay within that period, the principal shall earn an interest equivalent to the prime bank
rate existing at the time.

"Upon the filing of the corresponding petition or request with the department or corresponding case
in court by the agricultural lessee or lessees, the said period of one hundred and eighty days shall
cease to run.

"Any petition or request for pre-emption shall be solved within sixty days from the filing thereof;
otherwise, the said period shall start to run again."

"Sec. 12. Lessee's 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 at a
reasonable price and consideration: Provided, That where there are two or more agricultural
lessees, each shall be entitled to said right of redemption only to the extent of the area actually
cultivated by him. The right of the redemption under this Section may be exercised within one
hundred eighty days from notice in writing which shall be served by the vendee on all lessees
affected and the Department of Agrarian Reform upon the registration of the sale, and shall have
priority over any other right of legal redemption. The redemption price shall be the reasonable price
of the land at the time of the sale.

"Upon the filing of the corresponding petition or request with the department or corresponding case
in court by the agricultural lessee or lessees, the said period of one hundred and eighty days shall
cease to run.

"Any petition or request for redemption shall be resolved within sixty days from the filing thereof;
otherwise, the said period shall start to run again.

"The Department of Agrarian Reform shall initiate, while the Land Bank shall finance, said
redemption as in the case of pre-emption."

Section 3. Section fourteen of the same Code is hereby repealed.

Section 4. Section 32 of the same Code is hereby amended to read as follows:

"Sec. 32. Cost of Irrigation System. - The cost of construction of a permanent irrigation system,
including distributary canals, may be borne exclusively by the agricultural lessor who shall be entitled
to an increase in rental proportionate to the resultant increase in production: Provided, That if the
agricultural lessor refuses to bear the expenses of construction the agricultural lessee/or lessees
may shoulder the same, in which case the former shall not be entitled to an increase in rental and
shall, upon the termination of the relationship, pay the lessee or his heir the reasonable value of the
improvement at the time of the termination: Provided, further, That if the irrigation system
constructed does not work, it shall not be considered as an improvement within the meaning of this
Section: Provided, furthermore, That the lessees, either as individuals or as groups, shall undertake
the management and control of irrigation systems with their respective jurisdiction. However, those
constructed and operated by the government may be given to the lessees either as individuals or as
groups at their option with the right to maintain, manage and operate such irrigation systems and to
collect and receive rentals therefrom: Provided, still further, That the lessees, either as individuals or
as groups, shall allocate not more than twenty-five per cent of their collection for rentals to the
government if the irrigation systems has obligations to meet until paid, otherwise such irrigation
system will be maintained, managed and operated solely by the lessees either as individuals or as
groups, subject to such rules on water rights and water use promulgated by the National Irrigation
Administration or such other government agencies authorized by law: Provided, finally, That if the
irrigation system is installed and/or constructed at the expense of the landowner or agricultural
lessor, the Department of Agrarian Reform shall initiate, while the Land Bank shall finance, the
acquisition of such irrigation system at its current fair market value so that the ownership thereof
may be vested in the lessees as individuals or groups."

Section 5. Section 34 of the same Code is hereby amended to read as follows:

"Sec. 34. Consideration for the Lease of Riceland and Lands Devoted to Other Crops. - The
consideration for the lease of riceland and lands devoted to other crops shall not be more than the
equivalent of twenty-five per centum of the average normal harvest or if there have been no normal
harvests, then the estimated 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: Provided,
That if the land has been cultivated for a period of less than three years, the initial consideration
shall be based on the average normal harvest or if there have been no normal harvests, then the
estimated normal harvest during the preceding years when the land was actually cultivated, or on
the harvest of the first year in the case of newly cultivated lands, if that harvest is normal harvests,
the final consideration shall be based on the average normal harvest during these three preceding
agricultural years.

"In the absence of any agreement between the parties as to the rental, the Court of Agrarian
Relations shall summarily determine a provisional rental in pursuance of existing laws, rules and
regulations and production records available in the different field units of the department, taking into
account the extent of the development of the land at the time of the conversion into leasehold and
the participation of the lessee in the development thereof. This provisional rental shall continue in
force and effect until a fixed rental is finally determined. The court shall determined the fixed rental
within thirty days after the petition is submitted for decision.

"If capital improvements are introduced on the farm not by the lessee to increase its productivity, the
rental shall be increased proportionately to the consequent increase in production due to said
improvements. In case of disagreement, the Court shall determine the reasonable increase in
rental."

Section 6. A new section is hereby inserted after Section 34, to be designated as Section "34-A",
which shall read as follows:

"Sec. 34-A. Rental credited as amortization payment on purchase price. - The rental paid under the
preceding section after the approval of this amendatory Act shall be credited as amortization
payment on the purchase price of the landholding tilled by the lessee in any of the following
instances:

"(1) When the landholding is expropriated by the government for the lessee; and

"(2) When it is redeemed.

"The purchase price of the landholding shall be determined by the parties or the government
agencies concerned on the same basis prescribed under section fifty-six of this Code: Provided,
That whatever balance remains after crediting as amortization the rental paid, the same may be
financed by the Land Bank in the same ratio and mode of payment as provided under section eighty
of this Code.

"The provisions of Act Numbered Four hundred ninety-six, as amended, and other laws to the
contrary notwithstanding, the Land Registration Commission is hereby authorized concurrently with
the Bureau of Lands to approve survey plans of lands intended for original registration and to issue
transfer certificate of title in favor of the new amortizing-owner-beneficiaries under this section and
the Registries of Deeds to register the same. For this purpose, the Land Registration Commissioner
shall issue the necessary rules and regulations for the implementation of this provision.

"The Department and/or the Bank, in appropriate cases, shall facilitate the immediate issuance of
the corresponding transfer certificate of title of the landholding to the new amortizing owner with the
encumbrance thereof duly annotated.

"Provisions of existing laws, rules and regulations to the contrary notwithstanding, any amortizing
owner may use this transfer certificate of title to obtain a loan from any public or private lending
institution and he shall be entitled to borrow therefor an amount not less than sixty per centum of the
fair market value of the property: Provided, That the proceeds of such loan shall be applied as
follows: fifty per centum as partial payment of any unpaid balance on the landholding and the
remaining fifty per centum for the capital improvement of the land and operating capital for farm
operations of the amortizing owner.

"The payment of all loans obtained pursuant to the provisions of this section shall be guaranteed by
the Land Bank and for this purpose, it shall set aside a sinking fund in such amount as may be
necessary to be determined by its Board of Trustees.

"In case of default in the payment of three consecutive installments on the loan, the lender shall
immediately notify, among others, the Land Bank and the department of such default, and thereafter,
these agencies shall take the appropriate steps either:

"(1) To answer for the default in case the reason therefor is due to fortuitous event, or

"(2) In any other case, to take over the ownership and administration of said property.

"In the latter case mentioned under the preceding paragraph, the government shall endeavor to
substitute the defaulting amortizing owner with a new one who does not own any land and who shall
be subrogated to the rights, and shall assume the obligations, of the former amortizing owner.

"The rules prescribed in the two immediately preceding paragraphs shall apply in case the lessee
defaults in the payment of at least three consecutive rental amortizations, with the former landowner
giving the required notice in proper cases.

"In all instances where default is due to fortuitous events the Land Bank shall be answerable for
such default and the farmers shall be released from the obligations to pay such installment or
installments due together with interest thereon."

Section 7. Section 36(1) of the same Code is hereby amended to read as follows:

"(1) The landholding is declared by the department head upon recommendation of the
National Planning Commission to be suited for residential, commercial, industrial or some
other urban purposes: Provided, That the agricultural lessee shall be entitled to disturbance
compensation equivalent to five times the average of the gross harvests on his landholding
during the last five preceding calendar years;"

Section 8. Section 39(2) of the same Code is hereby amended to read as follows:

"(2) Right to engage in concerted activities as defined under Republic Act Numbered Eight
hundred and seventy-five."

Section 9. The Titles of Chapter III and Article I and Section 49 and 50 of the same Code are hereby
amended to read as follows:

"Chapter III
Department of Agrarian Reform.

"Article I
Organization and Functions of the Department of Agrarian Reform.

"Sec. 49. Creation of the Department of Agrarian Reform. - For the purpose of carrying out the policy
of establishing owner-cultivatorship and the economic family size farm as the basis of Philippine
agriculture and other policies enunciated in this Code, there is hereby created a Department of
Agrarian Reform, hereinafter referred to as Department, which shall be directly under the control and
supervision of the President of the Philippines. It shall have authority and responsibility for
implementing the policies of the state on agrarian reforms as provided in this Code and such other
existing laws as are pertinent thereto.

"The Department shall be headed by a Secretary who shall be appointed by the President with the
consent of the Commission on Appointments.

"He shall be assisted by one Undersecretary who shall be appointed by the President with the
consent of the Commission on Appointments.

"Sec. 50. Qualifications and Compensations of Secretary and Undersecretary. - No person shall be
appointed Secretary or Undersecretary of the Department unless he is a natural born citizen of the
Philippines, with proven executive ability and adequate background and experience in land reform
here and/or elsewhere for at least five (5) years, and at least thirty-five years of age: Provided,
however, That the Undersecretary shall be a career administrator and, at the time of his
appointment, shall not be more than fifty-seven (57) years of age, unless the President has
determined that he possesses special qualifications and his services are needed.

"The Secretary and the Undersecretary shall have, among other qualifications, demonstrated
interest in, and concern for, the needs and problems of the rural and farm populations and the
solutions thereto: Provided, That no person who owns any farmholding shall be appointed as
Secretary or Undersecretary unless such farmholding is under the leasehold system or the system of
agricultural land ownership transfer direct to the tiller.

"The Secretary shall receive an annual compensation equivalent to any other executive department
secretary; the Undersecretary shall receive an annual compensation equivalent to any other
executive department undersecretary."

Section 10. The following new sections are hereby inserted after Section 50, to be designated as
Sections "50-A to 50-I," which shall read as follows:

"Sec. 50-A. Powers and functions of the Secretary. - In addition to the powers and functions
specified in this Code, the Secretary shall exercise such powers and perform such functions and
duties as are required of any executive department secretary under existing laws."

"Sec. 50-B. Powers and functions of the Undersecretary. - In addition to the powers and functions
specified in this Code, the Undersecretary shall exercise such powers and perform such functions
and duties as are required of any executive Department Undersecretary under existing laws."

"Sec. 50-C. Vacancy in office or incapacity. - In case of vacancy in the office of Secretary or inability
of the Secretary to exercise his powers and perform his functions and duties due to his illness,
absence or any other cause, the Undersecretary shall temporarily perform the functions of the said
office."

"Sec. 50-D. Office of the Secretary; Appointment of Personnel. - The office of Secretary shall be
composed of the Secretary, the Undersecretary, the chiefs of the staff services or units directly
under the department proper, together with the personnel thereof.
"All personnel of the department proper shall be appointed by the Secretary in accordance with
applicable civil service law and rules."

"Sec. 50-E. Creation of Staff Services; Functions. - There shall be created in the department a
planning service, a financial and management service, an administrative service, and such other
staff services as the Secretary may deem necessary to establish in accordance with this section,
each to be headed by a chief, which shall be organized and shall perform the functions as follows:

"(1) Planning Service

"The Planning Service shall be responsible for providing the department with economical,
efficient, and effective services relating to planning, programming and project development.

"(2) Financial and Management Service

"The Financial and Management Service shall be responsible for providing the department
with staff advice and assistance on budgetary, financial, and management improvement
matters.

"(3) Administrative Service

"The Administrative Services shall be responsible for providing the department with economical,
efficient, and effective services relating to personnel, legal assistance, information, records, supplies,
equipment, collection, disbursements, security, and custodial work.

"Sec. 50-F. Creation of Bureaus; Functions. - There shall be under the department the following
bureaus each to be headed by a Director who shall be assisted by an Assistant Director, charged
with the direct implementation of the programs and policies of the Department:

"(1) The Bureau of Farm Management which shall be responsible for the development and
implementation of programs on increased productivity, home improvement, and rural youth
development;

"(2) The Bureau of Land Acquisition, distribution and development which shall be responsible
for the distribution of lands to bona fide farmers, for conducting land capability survey and
classification, and for the improvement of lands acquired by the Department;

"(3) The Bureau of Resettlement which shall be responsible for the resettlement of displaced
farmers, landless families, and urban workers in the settlement projects of the Department,
the construction of houses, roads and other facilities, and the taking of a census of all
proclaimed and unproclaimed resettlements; and

"(4) The Bureau of Agrarian Legal Assistance which shall be responsible for extending legal
assistance to farmers including those provided under Republic Act Numbered Forty-eight
hundred and eighty-six, the execution of leasehold contracts and apprising the farmers with
their rights and duties under the law.

"Each of these bureaus may establish such divisions as are necessary for the economical, efficient
and effective performance of its functions."
"Sec. 50-G. Appointment, Qualifications and Compensations of Directors and the Assistant
Directors; Appointment of Personnel. - The Director of a Bureau and his assistant shall each receive
the equivalent compensation and shall be appointed in the same manner as any other director or
assistant director of a bureau.

"No person shall be appointed director or assistant director of a bureau unless he is a natural-born
citizen of the Philippines, with proven executive ability and adequate background and experience in
land reform here and/or elsewhere for at least three (3) years, and at least twenty-five years of age;
Provided, That the Director or Assistant Director shall be a career administrator and; at the time of
his appointment, shall not be more than fifty-seven (57) years of age, unless the President has
determined that he possesses special qualifications and his services are needed: Provided, further,
That the Director or Assistant Director shall have, among other qualifications, demonstrated interest
in, and concern for, the needs and problems of the rural and farm population and the solutions
thereto: Provided, finally, That no persons who owns any farmholding shall be appointed as Director
or Assistant Director unless such farmholding is under the leasehold system or the system of
agricultural land ownership-transfer direct to the tiller.

"All personnel of the Bureaus shall be appointed by the Secretary, upon recommendation of their
respective Director, in accordance with applicable civil service law and rules."

"Sec. 50-H. Functions of Directors and Assistant Directors. - The Director or in his absence, the
Assistant Director, shall exercise such powers and perform such functions and duties as are
provided for under existing laws, in addition to the powers and functions provided for in this Code."

"Sec. 50-I. Regional and Field Offices. - The Department may have regional and other field offices,
the number, location and organization of which shall be determined by the Department in conformity
with the area pattern prescribed hereunder:

"(1) The Department, in the establishment of regional and other field offices, shall follow the
field service area pattern authorized below. There are established ten regions, each with
definite regional centers within the region as follows:

"a. Region No. 1 is called the Ilocos Region, and comprises the provinces of
Batanes, Ilocos Norte, Ilocos Sur, Abra, La Union, Benguet, and Mountain Province
and the cities of Baguio, and Laoag, with the regional center at San Fernando, La
Union;

"b. Region No. 2 is called the Cagayan Valley Region, and comprises the provinces
of Cagayan, Isabela, Nueva Vizcaya, Quirino (Sub-province), Ifugao, and Kalinga-
Apayao, with the regional center at Tuguegarao, Cagayan;

"c. Region No. 3 is called the Central Luzon Region, and comprises the provinces of
Pangasinan, Tarlac, Nueva Ecija, Pampanga, Zambales, Bulacan, Bataan, and the
cities of Angeles, Cabanatuan, Dagupan, Olongapo, Palayan, San Carlos
(Pangasinan) and San Jose (Nueva Ecija), with the regional center at San Fernando,
Pampanga;

"d. Region No. 4 is called the Southern Tagalog Region, and comprises the
provinces of Rizal, Cavite, Laguna, Batangas, Quezon, Marinduque, Oriental
Mindoro, Occidental Mindoro, Romblon, Aurora (Sub-province), and Palawan, and
the cities of Batangas, Caloocan, Cavite, Lipa, Lucena, Manila, Pasay, Puerto
 Princesa, Quezon, San Pablo, Tagaytay, and Trece Martires with the regional center
at greater Manila;

"e. Region No. 5 is called the Bicol Region, and comprises the provinces of
Camarines Norte, Camarines Sur, Albay, Catanduanes, Masbate, and Sorsogon,
and the cities of Iriga, Legazpi and Naga, with the Regional center at Legazpi City;

"f. Region No. 6 is called the Western Visayas Region, and comprises the provinces
of Negros Occidental, Iloilo, Guimaras (Sub-province), Antique, Aklan and Capiz, and
the cities of Bacolod, Bago, Cadiz, Iloilo, La Carlota, Roxas, San Carlos (Negros
Occidental) and Silay, with regional center at Iloilo City;

"g. Region No. 7 is called the Central and Eastern Visayas Region, and comprises
the provinces of Negros Oriental, Siquijor (Sub-province), Cebu, Bohol, Northern
Samar, Eastern Samar, Western Samar, Leyte, Southern Leyte, and Biliran (Sub-
province) and the cities of Bais, Calbayog, Canlaon, Catbalogan, Cebu, Danao,
Dumaguete, Lapu-lapu, Ormoc, Mandawe, Tacloban, Tagbilaran, and Toledo, with
the regional center at Cebu City;

"h. Region No. 8 is called the Western Mindanao Region, and comprises the
provinces of Misamis Occidental, Lanao del Norte, Lanao del Sur, Zamboanga del
Norte, Zamboanga del Sur, and Sulu, and the cities of Basilan, Dapitan, Dipolog,
Iligan, Marawi, Oroquieta, Ozamis, Pagadian, Tangub, and Zamboanga with the
regional center at Zamboanga City;

"i. Region No. 9 is called the Central Mindanao Region, and comprises the provinces
of Camiguin, Misamis Oriental, Bukidnon, Cotabato, and South Cotabato, and the
cities of Cagayan de Oro, Cotabato, General Santos, and Gingoog, with the Regional
center at Cagayan de Oro City;

"j. Region No. 10 is called the Eastern Mindanao Region, and comprises the
provinces of Surigao del Norte, Surigao del Sur, Agusan del Norte, Agusan del Sur,
Davao del Norte, Davao Oriental, and Davao del Sur, and the cities of Butuan,
Davao, and Surigao, with the regional center at Davao City;

"(2) The Department shall organize an integrated and department-wide field services as the
exigencies of the Agrarian Reform Program may require: Provided, That the Department
shall establish in every regional or other field office organized, a consultative and
coordinating body which shall include in its membership a tiller-lessee representing the
agricultural lessees and a representative from the local governments of the area where said
office is operating.

"(3) The regional office shall be headed by a Regional Director who may be assisted,
whenever necessary, by an Assistant Regional Director. The Regional Director and Assistant
Director, if any, shall be appointed by the Secretary in accordance with applicable civil
service law and rules; Provided, however, That the Regional Director and Assistant Regional
Director shall have the same qualifications as Bureau Director and Assistant Director,
respectively.

"All personnel of the Regional and other offices shall be appointed by the Secretary upon
recommendation of their respective regional director, in accordance with applicable civil
service law and rules: Provided, That applicants from the region, who possess the required
 qualifications, shall be appointed to vacant positions in the said region, unless nobody
among the said applicants is qualified; in which case, applicants from other regions may be
considered.

"(4) The Regional Director shall be responsible in carrying out the policies and implementing
the plans and programs of the Department in the regional area under his jurisdiction:
Provided, however, That when the department's function or activity transcends regional
boundaries and requires central and/or inter-regional action, said functions may be
performed under the direct supervision and control of the department.

"(5) The Regional offices shall have units on agricultural extension, credit and legal
assistance, as well as cooperative development; or personnel in which the functional areas
of the department may be represented. There shall be in these regional units as much
combination of related functions as possible.

"(6) The functions of a regional office shall be as follows:

"a. Implement laws, policies, plans, programs, rules and regulations of the
Department in the regional areas;

"b. Provide economical, efficient, and effective service to the people in the area;

"c. Coordinate with regional offices of other departments, bureaus, agencies in the
area;

"d. Coordinate with local government units in the area; and

"e. Perform such related functions as may be provided by other existing laws."

Section 11. The Land Reform Project Administration and its governing body, the National Land
Reform Council, under the Office of the President, are hereby abolished; and their functions are
transferred to the Department, together with applicable appropriations, records, equipment, property
and all the organic, contributed and/or assigned personnel to the Land Reform Project
Administration pursuant to this Code, other existing laws and Executive Order Numbered Seventy-
five, Series of Nineteen hundred and sixty-four, as well as such personnel as may be necessary
from its governing body, the National Land Reform Council.

Section 12. The Land Authority under the Office of the President and a member-agency of the Land
Reform Project Administration is hereby abolished; and its functions are transferred to the
Department, together with applicable appropriations, records, equipment, property, and such
personnel as may be necessary.

Section 13. The Secretary shall, in consultation with the Undersecretary and Bureau Directors,
allocate by Department Order to the different bureaus, agencies and regional offices of the
Department the functions of the agencies, offices and/or units abolished and not otherwise assigned
by this Amendatory Act or by the organization plan of the Department to a particular agency or
office.

Section 14. The Land Bank of the Philippines is hereby attached to the Department as its land
financing arm and shall devote all of its resources to agrarian reforms.
The Land Bank of the Philippines and the Agricultural Credit Administration, in addition to the
functions and duties assigned to them under existing laws, executive and administrative orders, and
rules and regulations, shall be responsible for rendering staff advice and assistance to the Secretary
of the Department. The regional offices or field units of these entities and/or instrumentalities shall
likewise coordinate and cooperate with the regional office or field units of the Department,
respectively.

Section 15. Within sixty (60) days from the approval of this Amendatory Act, the President by
Executive Order shall, upon recommendation of the Special Technical Committee created under
Special Order Numbered Eleven, Series of Nineteen hundred and seventy-one, of the Land Reform
Project Administration, and the Commission on Reorganization created pursuant to Republic Act No.
5435, as amended, organize the said Department in accordance with the provisions of this
Amendatory Act with the end in view of achieving economy and maximum efficiency and
effectiveness and of strictly observing the merit system in the retention and promotion of the best
qualified personnel: Provided, That the administrative machineries of the entities attached and/or
required under this Code to coordinate and cooperate with the Department, as well as the agencies
servicing the same, shall also be reorganized to enable them to align their activities with the
requirements and objectives of this Code: Provided, further, That not more than ten per cent of the
personnel of the Department and the bureaus, offices, agencies and/or entities under, coordinating
or servicing it shall be stationed in the Central Office; Provided, finally, That not more that five per
cent of the total personnel in the regional, team, resettlement agency or equivalent field offices shall
be stationed in such offices.

Section 16. Section 51 of the same Code is hereby amended to read as follows:

"Sec. 51. Powers and Functions. - It shall be the responsibility of the Department:

"(1) to initiate and prosecute expropriation proceedings for the acquisition of private
agricultural lands as defined in Section one hundred sixty-six of Chapter XI of this Code for
the purpose of subdivision into economic family-size farm units and resale of said farm units
to bona fide tenants, occupants and qualified farmers: Provided, That the powers herein
granted shall apply only to private agricultural lands subject to the terms and conditions and
order of priority herein below specified.

"a. all idle or abandoned private agricultural lands, except those held or purchased
within one year from the approval of this Code by private individuals or corporations
for the purpose of resale and subdivision into economic family-size farm units of not
more than six (6) hectares each in accordance with the policies enunciated in this
Code: Provided, That the subdivision and resale shall be substantially carried out
within one year from the approval of this Code;

"b. all private agricultural lands suitable for subdivision into economic family-size farm
units of not more that six (6) hectares owned by private individuals or corporation
worked by lessees, no substantial portion of whose landholding in relation to the area
sought to be expropriated, is planted to permanent crops under labor administration,
in excess of twenty-four hectares except all private agricultural lands under labor
administration: Provided, That private agricultural lands occupied and cultivated
continuously for not less that ten years by tillers or their ascendants who are not farm
laborers or lessees may be subject to expropriation under this Code: Provided,
further, That any court action filed for the ejectment of the tiller shall not interrupt the
running of the ten-year period unless such action is filed within three years from the
date of occupancy: Provided, finally, That if the final decision rendered in the court
 action is favorable to the tiller, the ten-year period shall be considered as continuous
and uninterrupted; and

"c. in expropriating private agricultural lands declared by the Department of Agrarian

Reform to be necessary for the implementation of the provisions of this Code, the
following order of priority shall be considered;

1. idle or abandoned lands;

2. those whose area exceeds of 1,024 hectares;

3. those whose area exceeds 500 hectares but is not more than 1,024
hectares;

4. those whose area exceeds 144 hectares but is not more than 500
hectares;

5. those whose area exceeds 75 hectares but is not more than 144 hectares;
and

6. those whose area exceeds 24 hectares but is not more than 75 hectares.

"(2) To acquire private agricultural lands regardless of area through negotiated purchase
subject to approval of the court as to price for distribution and sale at cost to their actual
occupants who are tillers of the land in lots of not more than six hectares: Provided, That
where there are several groups or individuals of such tillers petitioning for the acquisition of
their respective occupancy, priority shall be given to the group with a greater number of tillers
who first filed the petition over a group with a lesser number of tillers, and the latter over
individual tillers: Provided, further, That the group or individual who has continuously tilled
the land longest shall have the first priority;

"(3) To help bona fide farmers without lands or agricultural owner-cultivators of uneconomic
size farms to acquire and own economic family-size farm units of not more than six hectares
each;

"(4) To administer and dispose of agricultural lands of the public domain under the custody
and administration of the National Resettlement and Rehabilitation Administration and the
Economic Development Corps of the Armed Forces of the Philippines prior to the approval of
this Amendatory Act and such other public agricultural lands as may hereafter be reserved
by the President of the Philippines or by law for resettlement and sale, in accordance with
such terms and conditions as are set forth under this chapter: Provided, That the exercise of
the authority granted herein, as well as the preceding subparagraph, shall not contravene
public policy on the permanency of forest reserves or other laws intended for the
preservation and conservation of public national and municipal forests, parks and
watersheds: Provided, further, That said authority shall not be construed to exclude the other
modes of disposition of public agricultural lands under the public land Act or to contravene
the authority granted by law to the Department of Agriculture and Natural Resources over all
public agricultural lands not covered by the Agrarian Reform Program: Provided, finally, That
the Secretary of the Department of Agriculture and Natural Resources shall within a period of
ten years from the approval of this Amendatory Act, release to the Department of Agrarian
Reform for resettlement and sale all lands of the public domain reserved for agricultural
resettlement and sale except public agricultural lands which are reserved as settlements for
the national cultural minorities under the administration of the Commission on National
Integration;

"(4) To develop plans and initiate actions for the systematic opening of alienable and
disposable lands of the public domain for speedy distribution to and development by
deserving and qualified persons who do not own any land in sizes of not more than six
hectares;

"(5) To recommend to the President, from time to time after previous consultation with the
Secretary of Agriculture and Natural Resources, what portion of the alienable, or disposable
public lands shall be reserved for resettlement or disposition under this Chapter;

"(6) To give economic family-size farms of not more than six hectares to landless citizens of
the Philippines who need, deserve, and are capable of cultivating the land personally,
through organized resettlement, under the terms and conditions the Department may
prescribe, giving priority to qualified and deserving farmers in the province where such lands
are located;

"(7) To reclaim swamps and marshes for agricultural purposes only, obtain titles thereto
whenever feasible and subdivide them into economic family-size farms of not more than six
hectares for distribution to deserving and qualified farmers;

"(8) To undertake measures which will insure the early issuance of titles to persons or
corporations who have actually settled and cultivated alienable lands of the public domain;

"(9) To survey, subdivide and set aside lands or areas of land-holdings under its custody and
administration for economic family-size farms, large-scale farm operations, town sites, roads,
parks, government centers and other civic improvements as circumstances may warrant:
Provided, That the Bureau of Lands and the Land Registration Commission, as the case may
be, shall verify the said surveys or subdivisions, and after such verifications, approve or
disapprove the same; and issue, in case of approval of said surveys or subdivisions, the
corresponding patents and titles thereto;

"(10) To inform the Agricultural Productivity Commission and the Department of Agriculture
and Natural Resources of the problems of settlers and farmers on lands under its
administration and in land reform areas: Provided, That it is mandatory for the said
Commission and Department to provide field agricultural extension service to these areas
upon being informed of the problems obtaining: Provided, further, That settlement projects
and lands reform areas, especially private agricultural lands acquired by the government,
shall be given first priority in the diffusion of useful and practical information, knowledge and
skills on agriculture, soil conservation, livestock, fisheries, forest conservation, public lands
and natural resources laws, home economics and rural life, in order to encourage their
application through field demonstrations, lectures and conferences, publications and other
means of imparting information, stimulation, promotion and organization of agricultural
cooperatives and encouragement in the formation and growth of private associations, study
clubs, committees and other groups of farmers and members of their family that will enhance
their social and economic conditions;

"(11) To acquire for agricultural lessees exercising their right to pre-emption and redemption
under Chapter I of this Code, any land-holdings mentioned thereunder;
 "(12) To conduct land capability survey and classification of the entire country and print
maps;

"(13) To make such arrangements with the Land Bank with respect to titles of agricultural
lands of the public domain under its administration as will be necessary to carry out the
objectives of this Code;

"(14) To expropriate home lots occupied by agricultural lessees outside their landholdings for
resale at cost to said agricultural lessees;

"(15) To see to it that all agricultural lands, either public or private, distributed by the
government to the beneficiaries of the Agrarian Reform Program shall be sold only by the
said beneficiaries to the government; and

"(16) To submit to the President of the Philippines and to both Houses of Congress through
their presiding officers, to the Secretary of Finance and to the Auditor General within sixty
days of the close of the fiscal year, an annual report showing its Accomplishments during the
year; the expropriation proceedings it has undertaken; the expenditures it has incurred and
other financial transactions undertaken with respect thereto;"

Section 17. Section 56 of the same Code is hereby amended to read as follows:

"Sec. 56. Just Compensation. - In determining the just compensation of the land to be expropriated
pursuant to this Chapter, the Court shall consider as basis, the fair market value, without prejudice to
considering the assessed value and other pertinent factors.

"The owner of the land expropriated shall be paid in accordance with Section eighty of this Code by
the Land Bank and pursuant to an arrangement herein authorized."

Section 18. Section 71 of the same Code is hereby amended to read as follows:

"Sec. 71. Power of the Department of Agrarian Reform to sell to Holders of Bonds Issued to Former
Landowners whose Land have been Purchased for Redistribution. - The Department of Agrarian
Reform shall sell, for a price not less than the appraised value, any portion not exceeding one
hundred forty-four hectares in the case of individuals of the public agricultural lands transferred to
the Land Bank which is suitable for large-scale farm operations to any holder, who is qualified to
acquire agricultural lands through purchase, of bonds issued to former landowners whose lands
have been purchased for redistribution under this Code, subject to condition that the purchaser shall,
within two years after acquisition, place under cultivation at least thirty per centum of entire area
under plantation administration and the remaining seventy per centum within five years from the date
of acquisition. The Secretary shall issue the title of said land upon showing that the purchaser has
developed and cultivated at least one-fourth of his land under plantation administration.

Any public agricultural land sold as hereinabove specified shall not be the object of any expropriation
as long as the same is developed and cultivated for large-scale production under farm labor
management: Provided, however, That after the capital invested therein for development, plus a
reasonable margin of profit shall have been fully recovered, or after the lapse of twenty-five years
from the date of acquisition, whichever comes earlier, said land shall become expropriable.

The selling price of the portion of the public agricultural land sold under this Section shall be credited
to the Land Bank. As payment for the land sold under this Section, the Land Bank shall accept as
sole instruments of payment the bonds issued pursuant to Section seventy-six. Issued bonds
accepted as payment for the land sold shall be cancelled to the extent of the amount paid.

All sales under this Code shall be subject to the rules and regulations which the Department of
Agrarian Reform in consultation with the Land Bank, shall prescribe insofar as they are not
inconsistent with the provisions of this Code.

Section 19. Sec 76 of the same Code is hereby amended to read as follows:

"Sec. 76. Issuance of Bonds. - The Land Bank shall, upon recommendation by the Board of Trustees
and approval of the Monetary Board of the Central Bank, issue bonds, debentures and other
evidences of indebtedness at such terms, rates and conditions as the Bank may determine up to an
aggregate amount not exceeding, at any one time, five times its unimpaired capital and surplus.
Such bonds and other obligations shall be secured by the assets of the Bank and shall be fully tax
exempt both as to principal and income. Said income shall be paid to the bondholders every six (6)
months from the date of issue. These bonds and other obligations shall be fully negotiable and
unconditionally guaranteed by the Government of the Republic of the Philippines and shall be
redeemable at the option of the Bank at or prior to maturity, which in no case shall exceed twenty-
five years. These negotiable instruments of indebtedness shall be mortgageable in accordance with
established banking procedures and practice to government institutions, existing charters and/or
laws to the contrary notwithstanding, not to exceed sixty per centum of their face value to enable the
holders of such bonds to make use of them in investments in productive enterprises. They are
eligible as legal reserves against deposit liabilities of banks, subject to the terms and conditions
which the Central Bank of the Philippines may impose. They shall also be accepted as payments for
reparation equipment and materials, the provisions of Republic Act Numbered Seventeen hundred
and eighty-nine, as amended, to the contrary notwithstanding.

The Board of Trustees shall have the power to prescribe rule and regulations for the registration of
the bonds issued by the Bank at the request of the holders thereof."

Section 20. Section 80 of the same Code is hereby amended to read as follows:

"Sec. 80. Making Payment to Owners of Landed Estates. - The Land Bank shall make payments in
the form herein prescribed to the owners of the land acquired by the Department of Agrarian Reform
for division and resale under this Code. Such payment shall be made in the following manner: twenty
per centum in cash and the remaining balance in six per cent, tax-free, redeemable bonds issued by
the Bank in accordance with Section twenty-six, unless the landowner desires to be paid in shares of
stock issued by the Land Bank in accordance with Section seventy-seven in an amount not
exceeding thirty per centum of the purchase price.

"In the event there is an existing lien or encumbrance on the land in favor of any Government
institution at the time of acquisition by the Land Bank, the bonds and/or shares, in that order, shall
be accepted as substitute collaterals to secure the indebtedness, existing charters of these
institutions to the contrary notwithstanding.

"The profits accruing from payment shall be exempt from the tax on capital gains."

Section 21. Section 85 of the same Code is hereby amended to read as follows:

"Sec. 85. Use of Bonds. - The bonds issued by the Land Bank may be used by the holder thereof
and shall be accepted in the amount of their face value as any of the following:
 "(1) Payment for agricultural lands or other real properties purchased from the Government;

"(2) Payment for the purchase of shares of stock of all or substantially all of the assets of the
following Government owned or controlled corporations: The National Development
Company; Philippine National Bank; Philippine National Railways; Cebu Portland Cement
Company; National Shipyards and Steel Corporations; Manila Gas Corporation; and the
Manila Hotel Company.

"Upon offer by the bondholder, the corporation owned or controlled by the Government shall,
through its Board of Directors, negotiate with such bondholders with respect to the price and
other terms and conditions of the sale. In case there are various bondholders making the
offer, the one willing to purchase under terms and conditions most favorable to the
corporations shall be preferred. If no price is acceptable to the corporation, the same shall be
determined by the Committee of Appraisers composed of three members, one to be
appointed by the corporation, another by the bondholder making the highest or only offer,
and the third by the two members, so chosen. The expense of appraisal shall be borne
equally by the corporation and the successful purchaser.

"Should the Government offer for sale to the public any or all of the shares of stock or the
assets of any of the Government owned or controlled corporation enumerated herein, the
bidder who offers to pay bonds of the Land Bank shall be preferred provided that the various
bids be equal in every respect except in the medium of payment.

"(3) Surety, bail bonds for the provisional release of accused persons or performance bonds
in all cases where the government may require or accept real property as bonds;

"(4) Payment for reparations goods, the provisions of Republic Act Numbered Seventeen
hundred and eighty-nine, as amended, to the contrary notwithstanding;

"(5) Security for loans applied with the Philippine National Bank, Development Bank of the
Philippines, Government Service Insurance System, Social Security System, and other
government financial institution, existing charters of these institutions to the contrary
notwithstanding; and

"(6) Legal reserves against deposit liabilities of banks, subject to the terms and conditions
which the Central Bank of Philippines may impose pursuant to the General Banking Act."

Section 22. Section 101 of the same Code is hereby amended to read as follows:

"Sec. 101. Reorganization of ACA to align its activities. - The administrative machinery of the
Agricultural Credit Administration, shall be reorganized to enable it to align its activities with the
requirements and objectives of this Code: Provided, That the Board of Governors established by
Republic Act Numbered Eight hundred and twenty-one, as amended, shall be composed of a
chairman and four (4) members, three (3) of whom shall be the Undersecretary of Agrarian Reform
who shall be the Chairman ex-officio, the Administrator of the Agricultural Credit Administration who
shall be the Vice-Chairman ex-officio and the Vice-President in charge of agricultural loans of the
Philippine National Bank, who shall be ex-officio member thereof. The two other members shall be
appointed by the President of the Philippines with the consent of the Commission of Appointments
for a term of three years, one of whom shall represent the farmers-beneficiary of the Agrarian
Reform Program and shall be appointed upon recommendation of either or both the farmers and/or
cooperatives movement, federation or league existing at the same time such recommendation is
submitted, and the other to represent the political party receiving the second highest number of
votes in the immediately preceding presidential elections: Provided, however, That the term of the
farmers' representative shall ipso facto terminate when such member cease to be in the farmers
and/or cooperatives movement, federation or league, and that of the minority party at the pleasure of
the nominating political party.

"The Administrator shall be the Chief Executive of the Administration and shall serve for a term of six
years unless he resigns or is removed for cause. The compensation of the Administrator shall be
fixed by the President but shall not be less that twenty-four thousand pesos per annum. The
members of the Board shall receive per diems of not more than fifty pesos for each session of the
Board that they attend: Provided, however, That the total per diems, including all other
remunerations, shall not exceed six hundred pesos a month.

"No person shall be appointed as Administrator unless he is a natural-born citizen of the Philippines,
with proven executive ability and experience in the field of agricultural cooperatives and/or banking
and finance, adequate background and experience in land reform here and/or elsewhere for at least
five (5) years, and at least thirty-five years of age: Provided, however, That he shall have, among
other qualifications, demonstrated interest in, and concern for, the needs and problems of the rural
population and/or peasantry and the solutions thereto: Provided, further, That no person who owns
any farmholding shall be appointed as Administrator unless such farmholding is under the leasehold
system or the system of agricultural land ownership-transfer direct to the tiller."

Section 23. Section 105 and 106 of the same Code are hereby amended to read as follows:

"Sec. 105. Loaning Activities. - Loaning activities of the Agricultural Credit Administration shall be
directed to stimulate the development and operation of farmers' cooperatives. The term "Farmers
Cooperatives" shall be taken to include all cooperatives relating to the production and marketing of
agricultural products and these formed to manage and/or own, on a cooperative basis, agricultural
farmlands, services and facilities, such as irrigation and transport systems, established to support
production and/or marketing of agricultural products.

"Under such rules and regulations in accordance with generally accepted banking practices and
procedures as may be promulgated by the Agricultural Credit Administration, Rural Banks,
Cooperative Banks, and Development Banks may, in their respective localities, be designated to act
as agents of the Agricultural Credit Administration in regard to its loaning activities."

"Sec. 106. Credit to Small Farmers and/or Tillers of the land. - Production loans and loans for the
purchase of work animals, tillage equipment, seeds, fertilizers, poultry, livestock, feed and other
similar items, may be extended to small farmers as defined in Republic Act Numbered Eight hundred
twenty-one and/or tillers of the land, based upon their paying capacity and such securities as they
can provide, and under such terms and conditions as the Agricultural Credit Administration may
impose, provided the amount thereof does not exceed two thousand pesos, or such amount as may
be fixed by the President at any given agricultural year: Provided, That his total outstanding
obligations shall not exceed five thousand pesos, but in no case shall the amount of loan exceed
eighty per centum of the value of the collateral pledged. In instance where credit is extended for
items which are not consumed in their use, such items may be pledged as security thereof. The
Agricultural Credit Administration shall promulgate such rules and regulations as may be necessary
in the extension of the loans herein authorized so as to assure their repayment: Provided, That such
rules and regulations shall follow and be in accordance with generally accepted financing practices
and procedures."

Section 24. Section 108 of the same Code is hereby amended to read as follows:
"Sec. 108. Loans to Cooperatives. - The Agricultural Credit Administration is hereby authorized to
extend such types of loans as it may deem necessary for the effective implementation of this Code
to eligible farmers' cooperatives as herein defined, under such terms and conditions as it may
impose and with such securities as it may require: Provided: That the said Administration is hereby
authorized to extend production loans to cooperatives at not more than eight per cent interest per
calendar year and directly to the farmers at not more than twelve per cent per calendar year:
Provided, further, That cooperatives are hereby authorized to extend loans directly to their members
at not more than twelve per cent per calendar year. A farmers' cooperative that has been registered
with the Agricultural Credit Administration shall be eligible for loans if, in the judgment of the latter, its
organization, management and business policies are of such character as will insure the safety and
effective use of such loans."

Section 25. Section 110 of the same Code is hereby amended to read as follows:

"Sec. 110. Total charges on Loans. - The total charges including interest, insurance fees and
inspection, notarization and other service charges on all kinds of loans shall not be more than twelve
per centum per calendar year: Provided, That if an impairment of the capitalization of the Agricultural
Credit Administration is imminent by reason of the limitation appropriated out of the unappropriated
funds in the National Treasury such amounts as is necessary to cover the losses of the Agricultural
Credit Administration, but not exceeding six million pesos for any one year."

Section 26. Section 112 of the same Code is hereby amended to read as follows:

"Sec. 112. Registration of and guidance to Cooperatives, Associations and Organizations. - The
Agricultural Credit Administration shall have the power to register, finance and supervise all
agricultural cooperatives, including multi-purpose cooperatives, and farm associations or
organizations; and provide credit guidance or assistance to all agricultural, irrigation, and other
cooperative associations, multi-purpose cooperatives, farm organizations or fund corporations:
Provided, That all cooperatives, associations or organizations registered under this Section shall
have juridical personality."

Section 27. Section 124 of the same Code is hereby amended to read as follows:

"Sec. 124. Function of Extension Workers. - In addition to their functions under Republic Act
Numbered six hundred eighty, it shall be the duty of extension workers:

"(1) To reside in the locality where they are assigned, to disseminate technical information to
farm families, and to demonstrate improved farm and home management practices and
techniques;

"(2) To work with individual farmers in farm planning and budgeting, guide them in the proper
conduct of farm business and work out schedules of re-payment of loans obtained by
farmers;

"(3) To assist farmers in securing the services or assistant of other agencies, or their
personnel, having to do relevant activities and problems of farmers;

"(4) To visit newly-established independent farm operators either singly or collectively at

least once a month;
 "(5) To promote and stimulate the growth and development of the youth towards improved
farm and home management practices and techniques, as well as the development of their
skills for small-scale industries and the like;

"(6) To encourage the formation and growth of private associations, study clubs, committees
and other organized groups of farmers, familiarize them with modern methods of farming and
interest them to actively participate, collaborate or take the initiative in agricultural research,
experimentation and implementation of projects in cooperation with the Agricultural
Productivity Commission and other agencies; and

"(7) To promote, stimulate and assist in the organization of farmers' cooperatives, including
multi-purpose cooperatives."

Section 28. Sections One hundred twenty-six and One hundred twenty-seven of the same Code is
hereby repealed.

Section 29. A new section is hereby inserted after Sec. 128, to be designated therein as "Section
128-A," which shall read as follows:

"Sec. 128-A. Participation of Local Governments. - The Department of Agrarian Reform shall, in
every way possible to insure the successful implementation of the Agrarian Reform Program, involve
local governments and secure their participation in the various aspects of the program, such as the
leasehold system, the acquisition and distribution of private and public agricultural lands, the
development of cooperatives and small-scale industries and the like, and the other corollary
operational activities that should be carried out through barrio, municipal, provincial and city
governments.

"In pursuing this approach, however, the Department shall formulate the policies and programs
necessary in the implementation of this Code.

"The Department shall also render technical assistance to local governments necessary to carry out
the objective of agrarian reforms."

Section 30. Section 155 of the same Code is hereby amended to read as follows:

"Sec. 155. Powers of the Court; Rules of Procedure. - The Courts of Agrarian Relations shall have
all the powers and prerogatives inherent in or belonging to the Court of First Instance.

"The Courts of Agrarian Relations shall be governed by the Rules of Court: Provided, That in the
hearing, investigation and determination of any question or controversy pending before them, the
Courts without impairing substantial rights, shall not be bound strictly by the technical rules of
evidence and procedure, except in expropriation cases: Provided, further, That in case the persons
referred to under Section one hundred sixty-three hereof, are not represented by a lawyer of their
own choice, the duly authorized leaders of duly registered farmers organizations may enter their
appearances as counsel for their respective member and/or organization before the Court of
Agrarian Relations, if the Court is fully convinced that the said leader could competently protect the
interest of his client subject to the basic duties and obligations as officers of the Court.

"The Court of Agrarian Relations is hereby authorized to conduct compulsory arbitration between
agricultural labor and agricultural management, agricultural share tenants and agricultural landlords,
and agricultural lessees and agricultural lessors in conflicts arising out of, and in connection with,
their agrarian relations upon certification by the Secretary of Justice.

"The rights and duties of the parties to the proceedings, the functions and responsibilities of the
Court, and the bidding effect of awards, orders and processes of the Court shall be covered by
Section six to twenty-four of Commonwealth Act Numbered One hundred three.

"Where the litigant is an agricultural tenant, tiller or lessee, he shall be entitled to the rights of a
pauper litigant under the rules of Court and the privileges of an indigent litigant under Republic Act
Numbered Sixty hundred and thirty-five, without further proof thereof."

Section 31. Section 163 of the same Code, as amended by Republic Act No. 4886, is further
amended to read as follows:

"Sec. 163. Functions of the Office of the Agrarian Counsel. - It shall be the responsibility of the Office
of the Agrarian Counsel upon proper notification by the party concerned or by the association or
organization to which he belong, to represent tenants, agricultural lessees, agricultural farm workers
and agricultural owner-cultivators or the members of their immediate farm household referred to in
this Code who cannot engage the services of competent private counsel in cases before the Court of
Agrarian Relations. This responsibility shall include representation before courts, including appellate,
in cases civil or criminal, instituted by or against said tenant, agricultural lessees, farm workers or
owners-cultivator or the members of their immediate farm household, where the cases arise from or
are connected with, or results or effects of an agrarian dispute. The decision of the Office of the
Agrarian Counsel to provide legal assistance shall be final."

Section 32. Section 164 of the same Code is hereby amended to read as follows:

"Sec. 164. Authority to Administer Oath and Acknowledgment. - The Agrarian Counsel, the Deputy
Agrarian Counsel and the Special Attorneys of the Office of the Agrarian Counsel are hereby
authorized to administer oaths and acknowledgment free of charge."

Section 33. Section 167 of the same Code is hereby amended by adding after paragraph (5)
thereof, the following two paragraphs which shall read as follows:

"(6) Any collusion between an agricultural lessee and an agricultural lessor and between a
vendor and a vendee on installment sales to simulate agricultural contracts, agricultural
loans, or any application for benefits under the Agrarian Reform program shall be punishable
by imprisonment of not more than five years and a fine not exceeding five thousand pesos.

"The period for filing the corresponding criminal action for any criminal violation falling under the
foregoing provisions of this section shall cease to run, whenever a case is filed before the Court of
Agrarian Relations for the determination of a prejudicial question in relation to the criminal action,
until said determination has become final."

Section 34. To carry out the objectives of this Amendatory Act, and notwithstanding any provisions
of existing laws, rules and regulations to the contrary, all lending institutions, whether public or
private, shall set aside at least twenty-five per cent of their loanable funds and make it available for
agricultural credit to agricultural lessees, owner-cultivator, amortizing owners, and cooperatives,
including multi-purpose cooperatives and farm associations and organizations owned and operated
by those who live and work on the land as tillers and registered with the Agricultural Credit
Administration.
Section 35. Notwithstanding any provision of existing laws, rules and regulations to the contrary, the
Department of Agrarian Reform is hereby authorized to segregate any area of three thousand
hectares out of any of its reservations as demonstration farm or pilot project for the resettlement
program of the Department on the moshave-type of communal agriculture.

Section 36. The personnel of the agencies, offices and/or units abolished, merged, renamed and/or
reorganized under this Amendatory Act shall have the same rights and privileges afforded to the
personnel of abolished or reorganized agencies under the Agricultural Land Reform Code and in
pursuance of Section One hundred sixty-nine thereof.

To carry out the provisions of this Section, there is hereby appropriated the sum of One million
pesos out of the unappropriated funds in the National Treasury: Provided, That ten per cent of this
appropriation or so much thereof as may be necessary is hereby set aside for the expenses of the
organizing staff created under Section 15 hereof.

Section 37. Any reference to the Land Reform Project Administration, the National Land Reform
Council and the Land Authority in the Agricultural Reform Code or under any other existing laws
shall be understood to refer to the Department of Agrarian Reform.

Section 38. If, for any reason, any section or provisions of this Amendatory Act shall be held
unconstitutional or invalid, no other section or provision of the same shall be affected thereby.

All laws or parts of any law inconsistent with the provisions of this Amendatory Act are hereby
repealed and/or modified accordingly.

Section 39. This Act shall take effect upon its approval.

Approved: September 10, 1971

 MALACAANG
MANILA

BY THE PRESIDENT OF THE PHILIPPINES

EXECUTIVE ORDER NO. 228

DECLARING FULL LAND OWNERSHIP TO QUALIFIED FARMER BENEFICIARIES

COVERED BY PRESIDENTIAL DECREE NO. 27; DETERMINING THE VALUE OF
REMAINING UNVALUED RICE AND CORN LANDS SUBJECT OF P.D. NO. 27; AND
PROVIDING FOR THE MANNER OF PAYMENT BY THE FARMER BENEFICIARY
AND MODE OF COMPENSATION TO THE LANDOWNER

WHEREAS, Presidential Decree No. 27, for purposes of determining the cost of the
land to be transferred to the tenant-farmer, provided that valuation shall be determined
by crop productivity;

WHEREAS, there is a need to complete Operation Land Transfer and accelerate the
payment to landowners of lands transferred to tenant-farmers; and

WHEREAS, there is also a need to maintain the financial viability of the Land Bank of
the Philippines, the financing arm of the agrarian reform program of the government;

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue

of the powers vested by the Constitution, hereby order that:

SECTION 1. All qualified farmer beneficiaries are now deemed full owners as of
October 21, 1972 of the land they acquired by virtue of Presidential Decree No. 27
(hereinafter referred to as P.D. No. 27).

SECTION 2. Henceforth, the valuation of rice and corn lands covered by P.D. No. 27
shall be based on the average gross production determined by the Barangay
Committee on Land Production in accordance with Department Memorandum Circular
No 26, series of 1973, and related issuances and regulations of the Department of
Agrarian Reform. The average gross production per hectare shall be multiplied by two
and a half (2.5), the product of which shall be multiplied by Thirty Five Pesos (35.00),
the government support price for one cavan of 50 kilos of palay on October 21, 1972, or
Thirty One Pesos (31.00), the government support price for one cavan of 50 kilos of
corn on October 21, 1972, and the amount arrived at shall be the value of the rice and
corn land, as the case may be, for the purpose of determining its cost to the farmer and
compensation to the landowner.

Lease rentals paid to the landowner by the farmer beneficiary after October 21, 1972,
shall be considered as advance payment for the land. In the event of dispute with the
landowner regarding the amount of lease rental paid by the farmer beneficiary, the
Department of Agrarian Reform and the Barangay Committee on Land Production
concerned shall resolve the dispute within thirty (30) days from its submission pursuant
to Department of Agrarian Reform Memorandum Circular No. 26, series of 1973, and
other pertinent issuances. In the event a party questions in court the resolution of the
dispute, the landowners compensation claim, shall still be processed for payment and
the proceeds shall he held in trust by the Trust Department of the Land Bank in
accordance with the provisions of Section 5 hereof, pending the resolution of the
dispute before the court.

SECTION 3. Compensation shall be paid to the landowners in any of the following

modes, at the option of the landowners:

(a) Bond payment over ten (10) years, with ten percent (10%) of the value of the land
payable immediately in cash, and the balance in the form of LBP bonds bearing market
rates of interest that are aligned with 90-day treasury bills rates, net of applicable final
withholding tax. One-tenth of the face value of the bonds shall mature every year from
the date of issuance until the tenth year.

The LBP bonds issued hereunder shall be eligible for the purchase of government
assets to be privatized.

(b) Direct payment in cash or kind by the farmer-beneficiaries with the terms to be
mutually agreed upon by the beneficiaries and landowners and subject to the approval
of the Department of Agrarian Reform; and

(c) Other modes of payment as may be prescribed or approved by the Presidential

Agrarian Reform Council.

SECTION 4. All outstanding Land Bank bonds that are retained by the original
landowners-payee or by their heirs, are deemed matured up to one-twenty fifth (1/25) of
their yearly face value from their date of issue to the date of this Executive Order and
may be claimed by the original land owner-payee by surrendering the bonds to the Land
Bank. The original landowner-payee may claim payment for the remaining unmatured
period of the surrendered bonds under any of the modes of compensation provided in
Section 3, subsections (a), (b) or (c) hereof.

In order to meet the financial requirements mentioned in this Section, the Central Bank
shall remit to the Land Bank such sums as may be necessary from the Sinking Fund
established by the Land Bank from the retirement of its bonds and other long-term
obligations and which Sinking Fund is administered by the Central Bank: Provided,
however, That there is no change in maturity of other outstanding Land Bank bonds
acquired and held by transferees from original bondholders.

The landowner is exempt from capital gains tax on the compensation paid to him under
this Executive Order.
SECTION 5. In the event the landowner does not accept payment of the compensation
due him, his compensation shall be held in trust for him by the Trust Department of the
Land Bank. The cash portion of the compensation and such portions that mature yearly
shall be invested by the Trust Department only in government securities fully
guaranteed by the Republic of the Philippines. All the net earnings of the investment
shall be for the benefit of the landowner, his heirs or successors in interest.

The rights of the landowner may be exercised by his heirs upon his death.

SECTION 6. The total cost of the land including interest at the rate of six percent (6%)
per annum with a two percent (2%) interest rebate for amortizations paid on time, shall
be paid by the farmer-beneficiary or his heirs to the Land Bank over a period of up to
twenty (20) years in twenty (20) equal annual amortizations. Lands already valued and
financed by Land Bank are likewise extended a 20-year period of payment of twenty
(20) equal annual amortizations. However, the farmer-beneficiary if he so elects, may
pay in full before the twentieth year or may request the Land Bank to structure a
repayment period of less than twenty (20) years if the amount to be financed and the
corresponding annual obligations are well within the farmers capacity to meet.
Ownership of lands acquired by the farmer-beneficiary may be transferred after full
payment of amortizations.

SECTION 7. As of the date of this Executive Order, a lien by way of mortgage shall
exist in favor of the Land Bank on all lands it has financed and acquired by the farmer-
beneficiary by virtue of P.D. No. 27 for all amortizations, both principal and interest, due
from the farmer-beneficiary or a valid transferee until the amortizations are paid in full.

SECTION 8. Henceforth, failure on the part of the farmer-beneficiary to pay three (3)
annual amortizations shall be sufficient cause for the Land Bank to foreclose on the
mortgage.

SECTION 9. Thirty (30) days after final notice for payment to the defaulting tenant-
farmer, a copy of which notice shall be furnished to the Department of Agrarian Reform,
the Land Bank may foreclose on the mortgage by registering a certification under oath
of its intent to foreclose with the Registry of Deeds of the city or province where the land
is located attaching thereto: a copy of the final notice for payment; proof of service to
the tenant-farmer and the Department of Agrarian Reform of the final notice for
payment; and a certification that at least three (3) annual amortizations on the land or
the sum thereof remain unpaid. The mortgage is deemed foreclosed upon registration of
said documents with the Registry of Deeds.

In the event the defaulting tenant-farmer could not be served the final notice for
payment, the Land Bank shall post the notice for payment in the town hall, public market
and barangay hall or any other suitable place frequented by the public of the barangay
where the defaulting tenant-farmer resides. A certification by the Land Bank to this
effect will substitute for the proof of service of the final notice of payment for purposes of
foreclosure.
The Register of Deeds of all cities and provinces are directed to have a separate
registry book to enter all the requirements of foreclosure as provided herein.

SECTION 10. The tenant-farmer, or any of his compulsory heirs may lift the foreclosure
within a period of two (2) years from its registration by paying the Land Bank all unpaid
amortizations on the land with interest thereon of six percent (6%) per annum. In case
of failure to lift the foreclosure within the said period, ownership of the land shall be
deemed transferred to the Land Bank.

SECTION 11. The Land Bank, not later than three (3) months after its acquisition of the
land, shall sell the foreclosed land to any interested landless farmer duly certified to as a
bona fide landless farmer by the Department of Agrarian Reform of the barangay or the
two closest barangays where the land is situated. The cost of the land is the unpaid
amortizations due on the land as of the date of the sale with interest thereon of six
percent (6%) per annum. In the event that there is more than one interested buyer, the
actual buyer shall be determined by lottery in the presence of all the buyers or their
representatives and a representative of the Department of Agrarian Reform. The Deed
of Conveyance executed by the Land Bank in favor of the farmer transferee shall be
registered with the Register of Deeds of the city or province where the land is located.
Ownership shall transfer to the farmer transferee only upon registration with the
Registry of Deeds. The lien of the Land Bank by way of mortgage on the remaining
unpaid amortizations shall subsist on the title of the transferee.

SECTION 12. The Land Bank, at least one (1) month prior to the sale, shall furnish the
Department of Agrarian Reform with a notice of sale and shall post a similar notice in
the town hall, public market and barangay hall or any other suitable place frequented by
the public of the barangay where the property is located. The notice shall state the
description of the property subject of the sale, the price, the date and place of sale.

SECTION 13. The National Land Titles and Deeds Registration Administration is hereby
authorized to issue such rules and regulations as may be necessary relative to the
registration with the Register of Deeds of ail transactions/activities required herein
taking into consideration the need to protect the integrity of the Torrens System, the
interests of the parties and innocent third parties.

All transactions/activities and their corresponding documents that are registered with the
Register of Deeds pursuant to the requirements of P.D. No. 27 and this Executive Order
shall be free from all documentary stamps and registration fees.

SECTION 14. The Department of Agrarian Reform and the Land Bank are authorized to
issue the additional implementing guidelines of this Executive Order which shall not be
later than sixty (60) days from the date hereof.

SECTION 15. To ensure the successful implementation of the Agrarian Reform

Program, an Agrarian Reform Operating Fund (Agrarian Fund) shall be set up by the
National Government in the Land Bank. The amount of this Agrarian Fund, to be
determined by the Government Corporation Monitoring and Coordinating Committee
(hereinafter referred to as GCMCC), will source the funding requirements for Land Bank
to carry out the full implementation of this program which will include the net operating
losses directly and indirectly attributable to this program and the credit facilities to
farmers and farmers organizations. Within thirty (30) days from the effectivity of this
Executive Order, the Land Bank shall submit to the GCMCC its funding requirements for
1987. Thereafter, within sixty (60) days after the end of each calendar year, the Land
Bank shall submit to the GCMCC an accounting of all drawings the Land Bank had
made against the Fund. At the same time, it will also submit its prospective funding
requirements for the current year for review and validation of the GCMCC. The amount
approved by the GCMCC shall be deemed appropriated and the amount programmed
for release in coordination with the Departments of Finance, Budget and Management
and the National Economic and Development Authority. Within thirty (30) days from
GCMCCs approval, such funds shall be remitted to the Land Bank for credit to the
Agrarian Fund.

SECTION 16. If any part of this Executive Order is declared invalid or unconstitutional, it
shall not affect any other part thereof.

SECTION 17. All laws, presidential decrees, orders, letters of instructions, rules and
regulations, and other issuances or parts thereof inconsistent with this Executive Order
are hereby repealed or modified accordingly.

SECTION 18. This Executive Order shall take effect upon its signing and publication as
provided by law.

DONE in the City of Manila, this 17th day of July, in the year of Our Lord, nineteen
hundred and eighty-seven.
EXECUTIVE ORDER NO. 129-A July 26, 1987

MODIFYING ORDER NO. 129 REORGANIZING AND STRENGTHENING THE DEPARTMENT OF

AGRARIAN REFORM AND FOR OTHER PURPOSES

WHEREAS, Executive Order No. 129 dated January 30, 1987 was suspended;

WHEREAS, Presidential Proclamation No. 131 and Executive Order No. 229, both dated July 22,
1987 instituted a Comprehensive Agrarian Reform Program (CARP) and provided the mechanisms
for its implementation;

WHEREAS, Executive Order No. 229 vests on the Department of Agrarian Reform quasi-judicial
powers to determine and adjudicate agrarian reform matters;

WHEREAS, there is a need to strengthen and expand the functions of the Department of Agrarian
Reform to be more effective in implementing the Comprehensive Agrarian Reform Program;

WHEREAS, under Article XVIII, Section 6, of the 1987 Constitution, the President shall continue to
exercise legislative powers until the First Congress convenes;

NOW, THEREFORE, I, CORAZON C. AQUINO, PRESIDENT OF THE PHILIPPINES, by virtue of

the powers vested in me by the Constitution, do hereby order:

Sec. 1. Title. This Executive Order shall otherwise be known as the Reorganization Act of the
Department of Agrarian Reform.

Sec. 2. Reorganization. The Department of Agrarian Reform is hereby reorganized structurally and
functionally, hereinafter referred to as the Department, in accordance with the provisions of this
Executive Order.

Sec. 3. Declaration of Policy. It is the declared policy of the State of completely abolish all remnants
of feudalism and all other types of unjust tenurial arrangements, implement the comprehensive
agrarian reform program, increase the productivity of the direct producers, and strengthen the
agricultural base for increased industrialization.

Pursuant to this policy, the State shall:

a) Establish owner-cultivated economic, family-size farms and collectively-

owned/cooperatively-cultivated farms as the foundation of Philippine agriculture;

b) Prohibit absentee land ownership;

c) Rechannel and divert landlord capital in agriculture to industrial development;

d) Assist in the preservation and conservation of prime lands for agricultural purposes;

e) Encourage the establishment and protect the autonomy and independence of institutions
of farmers and farmworkers that will safeguard their interests and ensure their dignified
existence, free from pernicious restraints and practices;
 f) Create just and viable socio-economic structures in agriculture conducive to greater
productivity and higher incomes through the cooperative system of production, processing,
marketing, distribution, and credit services;

g) Accelerate the disposition of public alienable, disposable, and cultivable land to actual
cultivators and other qualified beneficiaries and develop agrarian communities for full
utilization of land for human growth and development;

h) Institutionalize partnerships between government and organizations of farmers and

farmworkers in agrarian reform policy formulation, program implementation, and evaluation;

i) Provide specific investment opportunities, alternative employment, and other incentives for
landowners affected by agrarian reform;

j) Ensure adequate funding support for the agrarian reform program as well as timely,
affordable, and appropriate financing schemes to its beneficiaries;

k) Implement an agricultural land tax scheme that will prevent land hoarding and/or
speculation.

Sec. 4. Mandate. The Department shall be responsible for implementing the Comprehensive
Agrarian Reform Program and, for such purpose, it is authorized to:

a) Acquire, determine the value of, subdivide into family-size farms or organize into collective
of cooperative farms and develop private agricultural lands for distribution to qualified tillers,
actual occupants, and displaced urban poor;

b) Administer and dispose all cultivable portions of the public domain declared as alienable
and disposable for agricultural purposes transferred to it by the Department of Environment
and Natural Resources;

c) Acquire, by purchase or grant, real estate properties suited for agriculture that have been
foreclosed by the national government;

d) Undertake land consolidation, land reclamation, land forming, and conservation in areas
subject to agrarian reform;

e) Facilitate the compensation of landowners covered by agrarian reform;

f) Issue emancipation patents to farmers and farmworkers who have been given lands under
the agrarian reform program as may be provided for by law;

g) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts
and land tenure problems;

h) Develop and implement alternative land tenure systems such as cooperative farming and
agro-industrial estates, among others;

i) Undertake land use management and land development studies and projects in agrarian
reform areas;
 k) Approve or disapprove the conversion, restructuring or readjustment of agricultural lands
into non-agricultural uses;

l) Monitor and evaluate the progress of agrarian reform implementation;

m) Assist the Office of the Solicitor General in providing evidence for the reversion
proceedings to be filed with respect to lands of the public domain, occupied by private
individuals and their tenants or farmworkers which are subject to land reform, and real rights
connected therewith which have been acquired in violation of the Constitution or the public
land laws or through corrupt practices;

n) Submit progress reports to the Office of the President, to Congress, and to the people at
the end of each year and at all times make available to the general public information on the
current status of its programs.

Sec. 5. Powers and Functions. Pursuant to the mandate the Department, and in order to ensure the
successful implementation of the Comprehensive Agrarian Reform Program, the department is
hereby authorized to:

a) Advise the President and the Presidential Agrarian Reform Council on the promulgation of
executive/administrative orders, other regulative issuances and legislative proposals
designed to strengthen agrarian reform and protect the interests of the benefeciaries thereof;

b) Implement all agrarian laws, and for this purpose, punish for contempt and issue
subpoena, subpoena duces tecum, writs of execution of its decisions, and other legal
processes to ensure successful and expeditious program implementation; the decisions of
the Department may in proper cases, be appealed to the Regional Trial Courts but shall be
immediately executory notwithstanding such appeal;

c) Establish and promulgate operational policies, rules and regulations and priorities for
agrarian reform implementation;

d) Coordinate program implementation with the Land Bank of the Philippines and other
relevant civilian and military government agencies mandated to support the agrarian reform
program;

e) Acquire, administer, distribute, and develop agricultural lands for agrarian reform
purposes;

f) Undertake surveys of lands covered by agrarian reform;

g) Issue emancipation patents to farmers and farmworkers covered by agrarian reform for
both private and public lands and when necessary make administrative corrections of the
same;

h) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts
and land-tenure related problems as may be provided for by law;

i) Promote the organization and development of cooperatives and other associations of

agrarian reform beneficiaries;
 j) Conduct continuing education and promotion programs on agrarian reform for
beneficiaries, land-owners, government personnel, and the general public;

k) Institutionalize the participation of farmers, farmworkers, other beneficiaries, and agrarian

reform advocates in agrarian reform policy formulation, program implementation, and
evaluation;

l) Have exclusive authority to approve or disapprove conversion of agricultural lands for

residential, commercial, industrial, and other land uses as may be provided for by law;

m) Call upon any government agency, including the Armed Forces of the Philippines, and
non-governmental organizations (NGOs) to extend full support and cooperation to program
implementation;

n) Exercise such other powers and functions as may be provided for by law or directed by
the President, to promote efficiency and effectiveness in the delivery of public services.

Sec. 6. Structural Organization. The Department shall consist of the Department Proper, the staff
offices, the staff bureaus and the regional/provincial/municipal agrarian reform offices.

The Department Proper shall consist of the following:

a) Office of the Secretary;

b) Offices of the Undersecretaries;

c) Offices of the Assistant Secretaries;

d) Public Affairs Staff;

e) Special Concerns Staff;

f) Agrarian Reform Adjudication Board.

The staff sectoral bureaus, on the other hand, shall be composed of:

a) Bureau of Land Acquisition and Distribution;

b) Bureau of Land Development;

c) Bureau of Agrarian Legal Assistance;

d) Bureau of Agrarian Reform Information and Education;

e) Bureau of Agrarian Reform Beneficiaries Development.

The field offices shall consist of the Department regional offices, the provincial offices and the
municipal agrarian reform office.
Sec. 7. Secretary of Agrarian Reform. The authority and responsibility for the exercise of the
mandate of the Department and the discharge of its powers and functions shall be vested in the
Secretary of Agrarian Reform, hereinafter referred to as Secretary, who shall have supervision and
control over the Department and shall be appointed by the President.

Sec. 8. Office of the Secretary. The Office of the Secretary shall consist of the Secretary, his
immediate staff, the Public Affairs Staff and the Special Concerns Staff.

Sec. 9. Undersecretary. The Secretary shall be assisted by four (4) Undersecretaries who shall be
appointed by the President upon the recommendation of the Secretary. The Secretary is hereby
authorized to delineate, assign and/or reassign the respective functional areas of responsibility of the
Undersecretaries, provided, That such responsibility shall be with respect to the mandate and
objectives of the Department; and provided, Further, that no Undersecretary shall be assigned
primarily administrative responsibilities.

Sec. 10. Assistant Secretary. The Secretary and the Undersecretaries shall also be assisted by
seven (7) Assistant Secretaries, who shall be appointed by the President upon the recommendation
of the Secretary. The Secretary is hereby authorized to delineate, assign and/or reassign the
respective functional areas of responsibility of the Assistant Secretaries, provided, That such
responsibility shall be with respect to the mandate and objectives of the Department.

Sec. 11. Public Affairs Staff. There is hereby created a Public Affairs Staff, under the office of the
Secretary, to be headed by a Director and assisted by an Assistant Director, which shall serve as the
public information arm of the Department. It shall be responsible for disseminating information and
agrarian reform policies, plans, programs and projects; and respond to public queries related to the
implementation of the agrarian reform program.

Sec. 12. Special Concerns Staff. There is hereby created a Special Concerns Staff under the Office
of the Secretary, to be headed by a Director and assisted by an Assistant Director, which shall be
responsible for handling priority areas/subjects identified by the Secretary that necessitate special
and immediate attention.

Sec. 13. Agrarian Reform Adjudication Board. There is hereby created an Agrarian Reform
Adjudication Board under the Office of the Secretary. The Board shall be composed of the Secretary
as Chairman, two (2) Undersecretaries as may be designated by the Secretary, the Assistant
Secretary for Legal Affairs, and three (3) others to be appointed by the President upon the
recommendation of the Secretary as members. A Secretariat shall be constituted to support the
Board. The Board shall assume the powers and functions with respect to the adjudication of agrarian
reform cases under Executive Order No. 229 and this Executive Order. These powers and functions
may be delegated to the regional offices of the Department in accordance with rules and regulations
to be promulgated by the Board.

Sec. 14. Planning and Project Management Office. There is hereby created a Planning and Project
Management Office within the Department Proper which shall be responsible for coordinating and
initiating the development, integration and prioritization of plans, programs and projects of the
Department; monitoring and evaluating agrarian reform program implementation; establishing
linkages with foreign funding institutions; and coordinating the activities of the different Offices,
Bureaus and Attached Agencies of the Department.

Sec. 15. Policy and Strategic Research Office. There is hereby created a Policy and Strategic
Research Office within the Department Proper which shall be responsible for establishing and
implementing a computerized management information system as well as for coordinating and/or
initiating research and studies for planning and policy formulation purposes.

Sec. 16. Finance, Management and Administrative Office. There is hereby created a Finance,
Management and Administrative Office within the Department Proper which shall be responsible for
the proper and timely allocation of funds to support approved programs, projects and activities; the
appropriate management control and accounting of funds; the management of the Department's
physical assets; and the provision of services to ensure effective and efficient personnel
management and manpower career development, and for the establishment of management
systems and procedures.

Sec. 17. Field Operations Office. There are hereby created Field Operations Offices for Luzon,
Visayas and Mindanao within the Department Proper which shall monitor and assess the
implementation of the Department's policies, plans and programs at the regional, provincial and
municipal levels.

Sec. 18. Legal Affairs Office. There is hereby created a Legal Affairs Office within the Department
Proper which shall be responsible for the review of contracts and other legal matters, the rendition of
legal assistance to Department personnel and those who will be affected by the agrarian reform
program.

Sec. 19. Bureau of Land Acquisition and Distribution. There is hereby created the Bureau of Land
Acquisition and Distribution which shall absorb the relevant functions of the Bureaus of Land
Acquisition, Distribution and Development, and of Land Tenure Improvement. The Bureau of Land
Acquisition and Distribution, to be headed by a Director and assisted by an Assistant Director, shall
be responsible for the development of policies, plans, programs, standard operating procedures, and
for providing technical assistance, relative to the acquisition and distribution of private agricultural
lands covered by the agrarian reform program, including land tiller-landowner identification, land
valuation, and landowners compensation, transfer of ownership to actual tillers, leasehold
arrangements, stewardship, and land transfer actions.

Sec. 20. Bureau of Land Development. There is hereby created the Bureau of Land Development
which shall absorb the relevant functions of the Bureau of Land Acquisition, Distribution and
Development. The Bureau of Land Development, to be headed by a Director and assisted by an
Assistant Director, shall responsible for the development of policies, plans and programs, and for
providing technical assistance, relative to land surveys, land use, capability and classification,
engineering services, and land consolidation.

Sec. 21. Bureau of Agrarian Legal Assistance. The Bureau of Agrarian Legal Assistance shall be
strengthened and shall be responsible for developing guidelines, plans and programs for legal
assistance including developing, maintaining and coordinating para-legal services for those who will
be affected by the Comprehensive Agrarian Reform Program. It shall be headed by a Director and
assisted by an Assistant Director.

Sec. 22. Bureau of Agrarian Reform Information and Education. There is hereby created the Bureau
of Agrarian Reform Information and Education which shall absorb the functions of the Agrarian
Reform Education Service which is abolished by this Executive Order. The Bureau of Agrarian
Reform Information and Education, to be headed by a Director and assisted by an Assistant
Director, shall be responsible for developing and conducting continuing training and education
programs for the acquisition of knowledge, value formation, and development of skills and favorable
attitudes among benefeciaries and personnel of the Department and other agencies, and the
increase of awareness, participation and acceptance of agrarian reform by the public through the
dissemination of information and communication materials.

Sec. 23. Bureau of Agrarian Reform Benefeciaries Development. There is hereby created the
Bureau of Agrarian Reform Beneficiaries Development which shall absorb the relevant functions of
the Bureau of Resettlement. The Bureau of Agrarian Reform Beneficiaries Development, to be
headed by a Director and assisted by an Assistant Director, shall be responsible for the development
of policies, plans and programs, and for providing technical assistance, relative to the development
of settlement areas into viable agrarian communities. It shall also be responsible for promoting the
organization of agrarian reform beneficiaries, liaison with farmer and farm workers organizations to
ensure the raising or farm incomes, the promotion of all forms of farm cooperation, the achievement
of a dignified existence and the creation of a viable economic structure conducive to greater
productivity and higher farm income.

Sec. 24. Regional Offices The Department shall have twelve (12) Regional Offices. Each Regional
Office shall be headed by a Regional Director who shall be assisted by an Assistant Regional
Director for operations and an Assistant Regional Director for Administration.

The Regional Offices shall be responsible for the implementation of laws, policies, plans, programs,
projects, rules and regulations of the Department in its administrative region. For such purpose, it
shall have the following functions:

a) Prepare and submit plans and programs for the region on:

1) Land acquisition and distribution;

2) Information and education;

3) Land use management and land development;

4) Agrarian reform beneficiaries development;

b) Provide technical assistance to Provincial Offices and Municipal Agrarian Reform Offices
in the implementation of approved plans and programs;

c) Conduct operations research and evaluation of agrarian reform implementation within the
region;

d) Coordinate with other government and private agencies and farmer and farm workers
organizations at the regional level, to carry out the programs/projects for the general welfare
of agrarian reform beneficiaries;

e) Maintain an information system in coordination with the established monitoring systems;

f) Review and evaluate reports and other documents submitted by the Provincial Offices and
Municipal Agrarian Reform Offices and agrarian reform clientele;

g) Submit periodic feedback as may be necessary in the service of the Department's

clientele.
Sec. 25. Provincial Offices. The Agrarian Reform District Offices are hereby abolished and in their
stead the Department shall create Provincial Agrarian Reform Offices as may be necessary in
promoting efficiency and effectiveness in the delivery of its services. Each Provincial Agrarian
Reform Office shall be headed by a Provincial Agrarian Reform Officer.

The Provincial Agrarian Reform Offices shall be responsible for directing and coordinating the
operations and activities of the Municipal Agrarian Reform Offices operating within the province and
has the following functions:

a) Set priorities, specific targets, schedules, and deadlines for the execution of approved
plans, programs, and projects on:

1) Land acquisition, distribution, transfer of land ownership to actual tillers, including

land-tiller-landowner identification, tenurial security, leasehold arrangements, land
surveys, land valuation and landowner's compensation as may be provided for by
law;

2) Continuing information and education programs on agrarian reform;

3) Encouraging the organizational development of agrarian reform beneficiaries

cooperatives and other associations and institutionalizing farmer-government
partnership in agrarian reform policy formulation, program implementation, and
evaluation;

4) Landowners' compensation and rechanneling landowner capital to industrial

development;

5) Development and implementation of alternative land tenure systems such as

cooperative farming, cooperative cultivatorship schemes, and agro-industrial estates,
among others;

6) Land use management;

7) Compact farming, integrated farming system, sloping agricultural land technology,

and other land conservation measures in agrarian reform areas, in coordination with
farmer and farm workers organizations;

8) Provision of legal services to those affected by agrarian reform and resolution of

agrarian conflicts and land tenure problems;

b) Provide administrative services to the Municipal Agrarian Reform Offices within the
province;

c) Provide legal services to agrarian reform beneficiaries in cases arising from or connected
with agrarian reform disputes, handling of expropriation proceedings, registering
cooperatives and reviewing and acting on all matters initially investigated and elevated by
Municipal Agrarian Reform Office;

d) Provide technical assistance to Municipal Agrarian Reform Offices in the implementation

of approved plans and programs;
 e) Coordinate with governmental, private agencies, and farmer and farm worker
organizations at the provincial level, to carry out programs;

f) Conduct periodic performance audit survey in collaboration with the regional office and
monitor agrarian reform program accomplishments, including operational problems and
constraints, and recommend appropriate remedial measures for effective program
implementation;

g) Perform such other functions as may be necessary in the service of the Department's
clientele;

Sec. 26. Municipal Agrarian Reform Offices. The Department shall have as many Municipal Agrarian
Reform Offices as may be necessary in promoting efficiency and effectiveness in the delivery of its
services, which shall be headed by a Municipal Agrarian Reform Officer.

The Municipal Agrarian Reform Office shall be responsible for directly implementing agrarian reform
programs and delivering expected results at the municipal level. For such purpose, it shall have the
following functions:

a) Implement policies and programs on land acquisition and distribution and transfer of
landowners to actual tillers, including identification of farms, landowners, and beneficiaries,
leasehold arrangements, land valuation, landowner's compensation and transfer actions as
determined in accordance with law;

b) Undertake continuing information and education programs on agrarian reform among the
beneficiaries thereof;

c) Encourage and promote the organization and development of agrarian reform

beneficiaries and assist in the registration of organized cooperatives;

d) Institutionalize beneficiaries' participation in agrarian reform policy formulation and

program implementation;

e) Organize/establish compact farms, land consolidation, integrated farm system, sloping

agricultural land technology and other cooperative-cultivatorship schemes;

f) Provide assistance in agrarian reform research;

g) Provide assistance to various legal services, including legal information and legal
counselling, documentation and preliminary processing of applications for patents and
applications to purchase lots, preliminary investigation of conflicting claims of lot boundaries
and appraisal of properties, and mediation of different problems arising from implementation
of the agrarian reform program; execution and registration of lease contracts, initial
investigation of administrative cases, and other legal services;

h) Provide assistance on project identification, formulation, and development that would uplift
the socio-economic status of the beneficiaries including projects that would channel landlord
capital to industrial development;

i) Cooperative with other government and private agencies and farmer and farm worker
organizations within the area of coverage for effective program/project implementation;
 j) Submit periodic reports on program/projects accomplishments including identified
problems and recommended solutions thereto;

k) Implement projects supportive of national priority programs which the Department is

committed to assist;

l) Perform such other functions as may be assigned from time to time, to promote efficiency
and effectiveness in the delivery of public services.

Sec. 27. Attached Agency

a) The Department shall, subject to the approval of the Presidential Agrarian Reform Council,
create the Foundation for the Agrarian Reform Movement of the Philippines (FARM-
Philippines) to administer, operate, and manage programs and projects developed by the
Department and initiate alternative livelihood projects for displaced small landowners. It shall
be attached to the office of the Secretary and shall be governed by a Board of Trustees. The
Foundation will be authorized to raise funds and to contract foreign and domestic loans for its
projects.

Sec. 28. Transitory Provisions. In accomplishing the acts of reorganization herein prescribed, the
following transitory provisions shall be complied with, unless otherwise provided elsewhere in this
Executive Order;

a) The transfer of a government unit shall include the functions, appropriations, funds,
records, equipment, facilities, chosen in action, rights, other assets, and liabilities, if any, of
the transferred unit as well as the personnel thereof, as may be necessary, who shall, in a
hold-over capacity, continue to perform their respective duties and responsibilities and
receive the corresponding salaries and benefits. Those personnel from the transferred unit
whose positions are not included in the Department's new position structure and staffing
pattern approved and prescribed by the Secretary or who are not reappointed shall be
deemed separated from the service and shall be entitled to the benefits provided in the
second paragraph of Section 29 hereof.

b) The transfer of functions which results in the abolition of the government unit that
exercised them shall include the appropriations, funds, records, equipment, facilities, chosen
in action, rights, other assets and personnel as may be necessary to the proper discharge of
the transferred functions. The abolished unit's remaining appropriations and funds, if any,
shall revert to the General Fund and its remaining assets, if any, shall be allocated to such
appropriate units as the Secretary shall determine or shall otherwise be disposed in
accordance with the Government Auditing Code and other pertinent laws, rules and
regulations. Its liabilities, if any, shall likewise be treated in accordance with the Government
Auditing Code and other pertinent laws, rules and regulations. Its personnel shall, in a hold-
over capacity, continue to perform their duties and responsibilities and receive their
corresponding salaries and benefits. Its personnel whose positions are not included in the
Department's structure and staffing pattern approved and prescribed by the Secretary under
Section 29 hereof or who are not reappointed, shall be deemed separated from the service
and shall be entitled to the benefits provided in the second paragraph of the same Section
29.

c) Any transfer of functions which does not result in the abolition of the government unit that
has exercised them shall include the appropriations, funds, records, equipment, facilities,
chosen in action, rights, and assets and personnel as may be necessary to the proper
discharge of the transferred functions. The liabilities, if any, that may have been incurred in
connection with the discharge of the transferred functions, shall be treated in accordance
with the Government Auditing Code and other pertinent laws, rules and regulations. Such
personnel shall, in a hold-over capacity, continue to perform their duties and responsibilities
and receive their corresponding salaries and benefits unless in the meantime they are
separated from the service. Any personnel, whose positions are not included in the
Department's new position structure and staffing patter approved and prescribed by the
Secretary under Section 29 hereof or who are not reappointed, shall be deemed separated
from the service and shall be entitled to the benefits provided in the second paragraph of the
same Section 29.

d) In case of the abolition of a government unit which does not result in the transfer of its
functions to another unit, the appropriations and funds of the abolished entity shall revert to
the General Fund, while the records, equipment, facilities, chosen in action, rights, and other
assets thereof shall be allocated to such appropriate entities as the Secretary shall
determine or shall otherwise be disposed in accordance with the Government Auditing Code
and other pertinent laws, rules and regulations, The liabilities of the abolished units shall be
treated in accordance with the Government Auditing Code and other pertinent laws, rules
and regulations, while the personnel thereof, whose position, is not included in the
Department's new position structure and staffing pattern approved and prescribed by the
Secretary under Section 29 hereof or who has not reappointed, shall be deemed separated
from the service and shall be entitled to the benefits provided in the second paragraph of the
same Section 29.

e) In case of merger or consolidation of government units, the new or surviving unit shall
exercise the functions (subject to the reorganization herein prescribed and the laws, rules
and regulations pertinent to the exercise of such functions) and shall acquire the
appropriations, funds, records, equipment, facilities, chosen in action, rights, other assets,
liabilities, if any, and personnel, as may be necessary, of the units that compose the merged
unit shall in a hold-over capacity, continue to perform their respective duties and
responsibilities and receive their corresponding salaries and benefits unless in the meantime
they are separated from the service. Any such personnel, whose positions are not included
in the Department's new position structure and staffing pattern approved and prescribed by
the Secretary under Section 29 hereof or who are not reappointed, shall be deemed
separated from the service and shall be entitled to the benefits provided in the second
paragraph of the same Section 29.

f) In case of termination of a function which does not result in the abolition of the government
unit which performed such function, the appropriations and funds intended to finance the
discharge of such function shall revert to the General Fund while the records, equipment,
facilities, chosen in action, rights and other assets used in connection with the discharge of
such function shall be allocated to the appropriate units as the Department shall determine or
shall otherwise be disposed in accordance with the Government Auditing Code and other
pertinent laws, rules and regulations, The liabilities, if any, that may have been incurred in
connection with the discharge of such function shall likewise be treated in accordance with
the Government Auditing Code and other pertinent laws, rules and regulations. The
personnel who have performed such function, whose positions are not included in the
Department's new position structure and staffing pattern approved and prescribed by the
Secretary under Section 29 hereof or who have not been reappointed, shall be deemed
separated from the service and shall be entitled to the benefits provided in the second
paragraph of the same Section 29 hereof.
Sec. 29. New, Structure and Pattern. Upon approval of this Executive Order, the officers and
employees of the Department shall, in a hold-over capacity, continue to perform their respective
duties and responsibilities and receive the corresponding salaries and benefits unless in the
meantime they are separated from government service.

The new position structure and staffing pattern of the Department shall be approved and prescribed
by the Secretary within sixty (60) days from the effectivity of this Executive Order and the authorized
positions created thereunder shall be filled with regular appointments by him or by the President as
the case may be. Those incumbents whose positions are not included therein or who are not
reappointed shall be deemed separated from the service. Those separated from the service shall
receive the retirement benefits to which they be entitled under existing laws, rules and regulations.
Otherwise, they shall be paid the equivalent of one (1) month basic salary for every year of service in
the government, or a fraction thereof, computed on the basis of the highest salary received, but in no
case shall such payment exceed the equivalent of twelve (12) months salary. lawphi1.net

Sec. 30. Periodic Performance Evaluation. The Department of Agrarian Reform is hereby required to
formulate and enforce a system of measuring and evaluating periodically and objectively the
performance of the Department and submit the same annually to the President.

Sec. 31. Notice or Consent Requirement. If any reorganizational change herein authorized is of such
substance or materiality as to prejudice third persons with rights recognized by law or contract such
that notice to or consent of creditors is required to be made or obtained pursuant to any agreement
entered into with any of such creditors, such notice or consent requirement shall be complied with
prior to the implementation of such reorganizational change.

Sec. 32. Prohibition Against Structural Changes. No change in the reorganization herein prescribed
shall be valid except upon prior approval of the President for the purpose of promoting efficiency and
effectiveness in the delivery of public services.

Sec. 33. Funding. Funds needed to carry out the provisions of this Executive Order shall be taken
from funds available in the Department.

Sec. 34. Implementing Authority of the Secretary. The Secretary shall issue orders, rules and
regulations and other issuances as may be necessary to ensure the effective implementation of the
provisions of this Executive Order.

Sec. 35. Separability. Any portion or provision of this Executive Order that may be declared
unconstitutional shall not have the effect of nullifying other portions or provisions hereof as long as
such remaining portions or provisions can still subsist and be given effect in their entirety. l awphi1.net

Sec. 36. Repealing Clause. All laws, ordinances, rules and regulations and other issuances or parts
thereof, which are inconsistent with this Executive Order, are hereby repealed or modified
accordingly. lawphi 1.net

Sec. 37. Effectivity. This Executive Order shall take effect immediately.

APPROVED in the City of Manila, Philippines, this 26th day of July, in the Year of Our Lord,
Nineteen Hundred and Eighty-Seven.
What is CARP (Comprehensive Agrarian Reform Program), or RA 6657?
CARP, or the Comprehensive Agrarian Reform Program, is the redistribution of public and private
agricultural lands to farmers and farmworkers who are landless, irrespective of tenurial arrangement.
CARPs vision is to have an equitable land ownership with empowered agrarian reform beneficiaries who
can effectively manage their economic and social development to have a better quality of life.

One of the major programs of CARP is Land Tenure Improvement, which seeks to hasten distribution of
lands to landless farmers. Similarly, the Department offers Support Services to the beneficiaries such as
infrastructure facilities, marketing assistance program, credit assistance program, and technical support
programs. Furthermore, the department seeks to facilitate, resolve cases and deliver Agrarian Justice.

The legal basis for CARP is the Republic Act No. 6657 otherwise known as Comprehensive Agrarian
Reform Law (CARL) signed by President Corazon C. Aquino on June 10, 1988. It is an act which aims to
promote social justice and industrialization, providing the mechanism for its implementation, and for other
purposes.

REPUBLIC ACT NO. 6657

(June 10, 1988)

AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE

SOCIAL JUSTICE AND INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES

CHAPTER I
Preliminary Chapter

SECTION 1. Title. This Act shall be known as the Comprehensive Agrarian Reform Law of 1988.

SECTION 2. Declaration of Principles and Policies. It is the policy of the State to pursue a
Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers
will receive the highest consideration to promote social justice and to move the nation toward sound
rural development and industrialization, and the establishment of owner cultivatorship of economic-size
farms as the basis of Philippine agriculture.

To this end, a more equitable distribution and ownership of land, with due regard to the rights of
landowners to just compensation and to the ecological needs of the nation, shall be undertaken to provide
farmers and farmworkers with the opportunity to enhance their dignity and improve the quality of their
lives through greater productivity of agricultural lands.

The agrarian reform program is founded on the right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive a
just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of
all agricultural lands, subject to the priorities and retention limits set forth in this Act, having taken into
account ecological, developmental, and equity considerations, and subject to the payment of just
compensation. The State shall respect the right of small landowners, and shall provide incentives for
voluntary land-sharing.

The State shall recognize the right of farmers, farmworkers and landowners, as well as cooperatives and
other independent farmers' organizations, to participate in the planning, organization, and management of
the program, and shall provide support to agriculture through appropriate technology and research, and
adequate financial production, marketing and other support services.

The State shall apply the principles of agrarian reform, or stewardship, whenever applicable, in
accordance with law, in the disposition or utilization of other natural resources, including lands of the
public domain, under lease or concession, suitable to agriculture, subject to prior rights, homestead rights
of small settlers and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farmworkers in its own agricultural estates, which shall be
distributed to them in the manner provided by law. By means of appropriate incentives, the State shall
encourage the formation and maintenance of economic-size family farms to be constituted by
individual beneficiaries and small landowners. The State shall protect the rights of subsistence fishermen,
especially of local communities, to the preferential use of communal marine and fishing resources,
both inland and offshore. It shall provide support to such fishermen through appropriate technology and
research, adequate financial, production and marketing assistance and other services. The State shall
also protect, develop and conserve such resources. The protection shall extend to offshore fishing
grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from
their labor in the utilization of marine and fishing resources.

The State shall be guided by the principles that land has a social function and land ownership has a
social responsibility. Owners of agricultural lands have the obligation to cultivate directly or through labor
administration the lands they own and thereby make the land productive.

The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to
promote industrialization, employment and privatization of public sector enterprises. Financial instruments
used as payment for lands shall contain features that shall enhance negotiability and acceptability in the
marketplace. The State may lease undeveloped lands of the public domain to qualified entities for the
development of capital-intensive farms, and traditional and pioneering crops especially those for exports
subject to the prior rights of the beneficiaries under this Act.

SECTION 3. Definitions. For the purpose of this Act, unless the context indicates otherwise:

(a) Agrarian Reform means redistribution of lands, regardless of crops or fruits produced, to farmers and
regular farmworkers who are landless, irrespective of tenurial arrangement, to include the totality of
factors and support services designed to lift the economic status of the beneficiaries and all other
arrangements alternative to the physical redistribution of lands, such as production or profit-sharing, labor
administration, and the distribution of shares of stocks, which will allow beneficiaries to receive a just
share of the fruits of the lands they work.

(b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil, planting of
crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm
products, and other farm activities and practices performed by a farmer in conjunction with such farming
operations done by person whether natural or juridical.
(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified
as mineral, forest, residential, commercial or industrial land.

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning
farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing,
or seeking to arrange terms or conditions of such tenurial arrangements.

It includes any controversy relating to compensation of lands acquired under this Act and other terms and
conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform
beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee.

(e) Idle or Abandoned Land refers to 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
immediately prior to the receipt of notice of acquisition by the government as provided under this Act, but
does not include land that has become permanently or regularly devoted to non-agricultural purposes. It
does not include land which has become unproductive by reason of force majeure or any other fortuitous
event, provided that prior to such event, such land was previously used for agricultural or other economic
purpose.

(f) Farmer refers to a natural person whose primary livelihood is cultivation of land or the production of
agricultural crops, either by himself, or primarily with the assistance of his immediate farm household,
whether the land is owned by him, or by another person under a leasehold or share tenancy agreement
or arrangement with the owner thereof.

(g) Farmworker is a natural person who renders service for value as an employee or laborer in an
agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly, monthly
or "pakyaw" basis. The term includes an individual whose work has ceased as a consequence of, or
in connection with, a pending agrarian dispute and who has not obtained a substantially equivalent and
regular farm employment.

(h) Regular Farmworker is a natural person who is employed on a permanent basis by an agricultural
enterprise or farm.

(i) Seasonal Farmworker is a natural person who is employed on a recurrent, periodic or intermittent basis
by an agricultural enterprise or farm, whether as a permanent or a non-permanent laborer, such as
"dumaan", "sacada", and the like.

(j) Other Farmworker is a farmworker who does not fall under paragraphs

(g), (h) and (i).

(k) Cooperatives shall refer to organizations composed primarily of small agricultural producers, farmers,
farmworkers, or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose
of pooling land, human, technological, financial or other economic resources, and operated on the
principle of one member, one vote. A juridical person may be a member of a cooperative, with the same
rights and duties as a natural person.
 CHAPTER II
Coverage

SECTION 4. Scope. The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands, as provided in
Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable
for agriculture.

More specifically the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of
this Act until Congress, taking into account ecological, developmental and equity considerations, shall
have determined by law, the specific limits of the public domain.

(b) All lands of the public domain in excess of the specific limits as determined by Congress in the
preceding paragraph;

(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.

SECTION 5. Schedule of Implementation. The distribution of all lands covered by this Act shall be
implemented immediately and completed within ten (10) years from the effectivity thereof.

SECTION 6. Retention Limits. Except as otherwise provided in this Act, no person may own or retain,
directly or indirectly, any public or private agricultural land, the size of which shall vary according to
factors governing a viable family-size farm, such as commodity produced, terrain, infrastructure, and
soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in
no case shall retention by the landowner exceed five (5) hectares.

Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications:
(1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly
managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree
No. 27 shall be allowed to keep the areas originally retained by them thereunder: Provided, further, That
original homestead grantees or their direct compulsory heirs who still own the original homestead at the
time of the approval of this Act shall retain the same areas as long as they continue to cultivate said
homestead.

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner: Provided, however, That in case the area selected for retention by the landowner is tenanted,
the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or
another agricultural land with similar or comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this
Act. In case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a
leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of
one (1) year from the time the landowner manifests his choice of the area for retention. In all cases, the
security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be
respected.

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of
possession of private lands executed by the original landowner in violation of the Act shall be null and
void: Provided, however, That those executed prior to this Act shall be valid only when registered with the
Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all
Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) days of any
transaction involving agricultural lands in excess of five (5) hectares.

SECTION 7. Priorities. The Department of Agrarian Reform (DAR) in coordination with the Presidential
Agrarian Reform Council (PARC) shall plan and program the acquisition and distribution of all agricultural
lands through a period of ten (10) years from the effectivity of this Act. Lands shall be acquired and
distributed as follows:

Phase One: Rice and corn lands under Presidential Decree No. 27; all idle or abandoned lands; all
private lands voluntarily offered by the owners for agrarian reform; all lands foreclosed by the
government financial institutions; all lands acquired by the Presidential Commission on Good Government
(PCGG); and all other lands owned by the government devoted to or suitable for agriculture, which shall
be acquired and distributed immediately upon the effectivity of this Act, with the implementation to be
completed within a period of not more than four (4) years;

Phase Two: All alienable and disposable public agricultural lands; all arable public agricultural lands
under agro-forest, pasture and agricultural leases already cultivated and planted to crops in accordance
with Section 6, Article XIII of the Constitution; all public agricultural lands which are to be opened for new
development and resettlement; and all private agricultural lands in excess of fifty (50) hectares, insofar as
the excess hectarage is concerned, to implement principally the rights of farmers and
regular farmworkers, who are the landless, to own directly or collectively the lands they till, which shall be
distributed immediately upon the effectivity of this Act, with the implementation to be completed within a
period of not more than four (4) years.

Phase Three: All other private agricultural lands commencing with large landholdings and proceeding to
medium and small landholdings under the following schedule:

(a) Landholdings above twenty-four (24) hectares up to fifty (50) hectares, to begin on the fourth (4th)
year from the effectivity of this Act and to be completed within three (3) years; and

(b) Landholdings from the retention limit up to twenty-four (24) hectares, to begin on the sixth (6th) year
from the effectivity of this Act and to be completed within four (4) years; to implement principally the right
of farmers and regular farmworkers who are landless, to own directly or collectively the lands they till.

The schedule of acquisition and redistribution of all agricultural lands covered by this program shall be
made in accordance with the above order of priority, which shall be provided in the implementing rules to
be prepared by the Presidential Agrarian Reform Council (PARC), taking into consideration the following;
the need to distribute land to the tillers at the earliest practicable time; the need to enhance agricultural
productivity; and the availability of funds and resources to implement and support the program.

In any case, the PARC, upon recommendation by the Provincial Agrarian Reform Coordinating
Committee (PARCCOM), may declare certain provinces or region as priority land reform areas, in which
the acquisition and distribution of private agricultural lands therein may be implemented ahead of the
above schedules. In effecting the transfer within these guidelines, priority must be given to lands that are
tenanted.

The PARC shall establish guidelines to implement the above priorities and distribution scheme, including
the determination of who are qualified beneficiaries: Provided, That an owner-tiller may be a beneficiary
of the land he does not own but is actually cultivating to the extent of the difference between the area of
the land he owns and the award ceiling of three (3) hectares.

SECTION 8. Multinational Corporations. All lands of the public domain leased, held or possessed by
multinational corporations or associations, and other lands owned by the government or by government-
owned or controlled corporations, associations, institutions, or entities, devoted to existing and
operational agri-business or agro-industrial enterprises, operated by multinational corporations and
associations, shall be programmed for acquisition and distribution immediately upon the effectivity of this
Act, with the implementation to be completed within three (3) years.

Lands covered by the paragraph immediately preceding, under lease, management, grower or service
contracts, and the like, shall be disposed of as follows:

(a) Lease, management, grower or service contracts covering such lands covering an aggregate area in
excess of 1,000 hectares, leased or held by foreign individuals in excess of 500 hectares are deemed
amended to conform with the limits set forth in Section 3 of Article XII of the Constitution.

(b) Contracts covering areas not in excess of 1,000 hectares in the case of such corporations and
associations, and 500 hectares, in the case of such individuals, shall be allowed to continue under their
original terms and
conditions but not beyond August 29, 1992, or their valid termination, whichever comes sooner, after
which, such agreements shall continue only when confirmed by the appropriate government agency.
Such contracts shall likewise continue even after the lands has been transferred to beneficiaries
or awardees thereof, which transfer shall be immediately commenced and implemented and completed
within the period of three (3) years mentioned in the first paragraph hereof.

(c) In no case will such leases and other agreements now being implemented extend beyond August 29,
1992, when all lands subject hereof shall have been distributed completely to qualified beneficiaries or
awardees. Such agreements can continue thereafter only under a new contract between the government
or qualified beneficiaries or awardees, on the one hand, and said enterprises, on the other. Lands leased,
held or possessed by multinational corporations, owned by private individuals and private non-
governmental corporations, associations, institutions and entities, citizens of the Philippines, shall be
subject to immediate compulsory acquisition and distribution upon the expiration of the applicable
lease, management, grower or service contract in effect as of August 29, 1987, or otherwise, upon its
valid termination, whichever comes sooner, but not later than after ten (10) years following the effectivity
of the Act. However during the said period of effectivity, the government shall take steps to acquire these
lands for immediate distribution thereafter.

In general, lands shall be distributed directly to the individual workerbeneficiaries. In case it is not
economically feasible and sound to divide the land, then they shall form a workers' cooperative or
association which will deal with the corporation or business association or any other proper party for the
purpose of entering into a lease or growers agreement and for all other legitimate purposes. Until a new
agreement is entered into by and between the workers' cooperative or association and the corporation or
business association or any other proper party, any agreement existing at the time this Act takes effect
between the former and the previous landowner shall be respected by both the workers' cooperative or
association and the corporation, business, association or such other proper party. In no case shall the
implementation or application of this Act justify or result in the reduction of status or diminution of any
benefits received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the
time this Act becomes effective,.

The provisions of Section 32 of this Act, with regard to production and income-sharing shall apply to
farms operated by multinational corporations. During the transition period, the new owners shall be
assisted in their efforts to learn modern technology in production. Enterprises which show a willingness
and commitment and good-faith efforts to impart voluntarily such advanced technology will be given
preferential treatment where feasible.

In no case shall a foreign corporation, association, entity or individual enjoy any rights or privileges better
than those enjoyed by a domestic corporation, association, entity or individual.

SECTION 9. Ancestral Lands. For purposes of this Act, ancestral lands of each indigenous cultural
community shall include, but not be limited to, lands in the actual, continuous and open possession and
occupation of the community and its members: Provided, That the Torrens Systems shall be
respected. The right of these communities to their ancestral lands shall be protected to ensure their
economic, social and cultural well-being. In line with the principles of self-determination and autonomy,
the systems of land ownership, land use, and the modes of settling land disputes of all these communities
must be recognized and
respected.

Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of this
Act with respect to ancestral lands for the purpose of identifying and delineating such lands: Provided,
That in the autonomous regions, the respective legislatures may enact their own laws on ancestral
domain subject to the provisions of the Constitution and the principles enunciated in this Act and
other national laws.

SECTION 10. Exemptions and Exclusions. Lands actually, directly and exclusively used and found to
be necessary for 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 and convents appurtenant thereto, mosque sites and Islamic
centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms
actually worked by the inmates, government and private research and quarantine centers and all lands
with eighteen percent (18%) slope and over, except those already developed shall be exempt from the
coverage of the Act.

SECTION 11. Commercial Farming. Commercial farms, which are private agricultural lands devoted to
commercial livestock, poultry and swine raising, and aquaculture including saltbeds, fishponds and prawn
ponds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations,
shall be subject to immediate compulsory acquisition and distribution after (10) years from the effectivity
of the Act. In the case of new farms, the ten-year period shall begin from
the first year of commercial production and operation, as determined by the DAR. During the ten-year
period, the government shall initiate the steps necessary to
acquire these lands, upon payment of just compensation for the land and the improvements thereon,
preferably in favor of organized cooperatives or associations,
which shall hereafter manage the said lands for the worker-beneficiaries. If the DAR determines that the
purposes for which this deferment is granted no
longer exist, such areas shall automatically be subject to redistribution. The provisions of Section 32 of
the Act, with regard to production-and incomesharing,
shall apply to commercial farms.

CHAPTER III
Improvement of Tenurial and Labor Relations

SECTION 12. Determination of Lease Rentals. In order to protect and improve the tenurial and
economic status of the farmers in tenanted lands under the retention limit and lands not yet acquired
under this Act, the DAR is mandated to determine and fix immediately the lease rentals thereof in
accordance with Section 34 of Republic Act No. 3844, as amended: Provided, That the DAR shall
immediately and periodically review and adjust the rental structure for different crops, including rice and
corn, or different regions in order to improve progressively the conditions of the farmer, tenant or lessee.

SECTION 13. Production-Sharing Plan. Any enterprise adopting the scheme provided for in Section 32
or operating under a production venture, lease, management contract or other similar arrangement and
any farm covered by Sections 8 and 11 hereof is hereby mandated to execute within ninety (90) days
from the effectivity of this Act, a production-sharing plan, under guidelines prescribed by the appropriate
government agency.

Nothing herein shall be construed to sanction the diminution of any benefits such as salaries, bonuses,
leaves and working conditions granted to the employeebeneficiaries
under existing laws, agreements, and voluntary practice by the enterprise, nor shall the enterprise and its
employee-beneficiaries be prevented from entering into any agreement with terms more favorable to the
latter.

CHAPTER IV
Registration

SECTION 14. Registration of Landowners. Within one hundred eighty (180) days from the effectivity of
this Act, all persons, natural or juridical, including government entities, that own or claim to own
agricultural lands, whether in their names or in the name of others, except those who have already
registered pursuant to Executive Order No. 229, who shall be entitled to such incentives as may be
provided for the PARC, shall file a sworn statement in the proper assessor's office in the form to be
prescribed by the DAR, stating the following information:

(a) the description and area of the property;

(b) the average gross income from the property for at least three (3) years;
(c) the names of all tenants and farmworkers therein; cda
(d) the crops planted in the property and the area covered by each crop as of June 1, 1987;
(e) the terms of mortgages, lease, and management contracts subsisting as of June 1, 1987, and
(f) the latest declared market value of the land as determined by the city or provincial assessor.

SECTION 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian
Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and
farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the
assistance of the BARC and the DAR shall provide the following data:

(a) names and members of their immediate farm household;

(b) owners or administrators of the lands they work on and the length of
tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages received.

A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the
barangay hall, school or other public buildings in the barangay where it shall be open to inspection by the
public at all reasonable hours.

CHAPTER V
Land Acquisition

SECTION 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of private lands,
the following procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to
acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in a
conspicuous place in the municipal building and barangay hall of the place where the property is
located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with
the valuation set forth in Sections 17, 18, and other pertinent
provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail,
the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of
the offer.

(c) If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LBP) shall pay the
landowner the purchase price of the land within thirty (30) days after he executes and delivers a deed of
transfer in favor of the government and surrenders the Certificate of Title and other muniments of title.

(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to
determine the compensation for the land requiring the landowner, the LBP and other interested parties to
submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of
the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR
shall decide the case within thirty (30) days after it is submitted for decision.

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response
from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.
(f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation.

CHAPTER VI
Compensation

SECTION 17. Determination of Just Compensation. In determining just compensation, the cost of
acquisition of the land, the current value of the like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the assessment made by government assessors
shall be considered. The social and economic benefits contributed by the farmers and the farmworkers
and by the Government to the property as well as the non-payment of taxes or loans secured from any
government financing institution on the said land shall be considered as additional factors to determine its
valuation.

SECTION 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such
amounts as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally
determined by the court, as the just compensation for the land.

The compensation shall be paid on one of the following modes, at the option of the landowner:
(1) Cash payment, under the following terms and conditions;
(a) For lands above Twenty-five percent fifty (50) hectares, insofar (25%) cash, the balance to as the
excess hectarage is be paid in government concerned. financial instruments negotiable at any time.
(b) For lands above Thirty percent (30%) cash, twenty-four (24) hectares the balance to be paid in and
up to fifty (50) hectares. government financial instruments negotiable at any time.
(c) For lands twenty-four Thirty-five percent (35%) (24) hectares and below. cash, the balance to be
paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical
assets or other qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the
bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That should
the landowner choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors in
interest or his assigns, up to the amount of their face value, for any of the following:
(i) Acquisition of land or other real properties of the government, including assets under the
Asset Privatization Program and other assets foreclosed by government financial institutions in the
same province or region where the lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of governmentowned or -controlled corporations or shares of
stocks owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or performance
bonds;
(iv) Security for loans with any government financial institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in a small-and medium-scale industry, in the same
province or region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government; Provided, That the use of these bonds for these
purposes will be limited to a certain percentage of the outstanding balance of the financial instruments:
Provided, further, That the PARC shall determine the percentage mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder in government universities,
colleges, trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and

(viii) Such other uses as the PARC may from time to time allow.

In case of extraordinary inflation, the PARC shall take appropriate measures to protect the economy.

SECTION 19. Incentives for Voluntary Offers for Sales. Landowners, other than banks and other
financial institutions, who voluntarily offer their lands for sale shall be entitled to an additional five percent
(5%) cash payment.

SECTION 20. Voluntary Land Transfer. Landowners of agricultural lands subject to acquisition under
this Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries
subject to the following guidelines:

(a) All notices for voluntary land transfer must be submitted to the DAR within the first year of the
implementation of the CARP. Negotiations between the landowners and qualified beneficiaries covering
any voluntary land transfer which remain unresolved after one (1) year shall not be recognized and such
land shall instead be acquired by the government and transferred pursuant to this Act.

(b) The terms and conditions of such transfer shall not be less favorable to the transferee than those of
the government's standing offer to purchase from the landowner and to resell to the beneficiaries, if such
offers have been made and are fully known to both parties.

(c) The voluntary agreement shall include sanctions for non-compliance by either party and shall be duly
recorded and its implementation monitored by the DAR.

SECTION 21. Payment of Compensation by Beneficiaries Under Voluntary Land Transfer. Direct
payments in cash or in kind may be by the farmer-beneficiary to the landowner under terms to be
mutually agreed upon by both parties, which shall be binding upon them, upon registration with the
approval by the DAR. Said approval shall be considered given, unless notice of disapproval is received by
the farmer-beneficiary within thirty (30) days from the date of registration. In the event they cannot agree
on the price of land, the procedure for compulsory acquisition as provided in Section 16 shall apply. The
LBP shall extend financing to the beneficiaries for purposes of acquiring the land.

CHAPTER VII
Land Redistribution

SECTION 22. Qualified Beneficiaries. The lands covered by the CARP shall be distributed as much as
possible to landless residents of the same barangay, or in the absence thereof, landless residents of the
same municipality in the following order of 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. Provided, however, That the children of landowners who are qualified under Section 6 of this Act
shall be given preference in the distribution of the land of their parents: and Provided, further, That actual
tenant-tillers in the landholdings shall not be ejected or removed therefrom. Beneficiaries under
Presidential Decree No. 27 who have culpably sold, disposed of, or abandoned their land are disqualified
to become beneficiaries under this Program. A basic qualification of a beneficiary shall be his
willingness, aptitude, and ability to cultivate and make the land as productive as possible. The DAR shall
adopt a system of monitoring the record or performance of each beneficiary, so that any beneficiary
guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to continue
as such beneficiary. The DAR shall submit periodic reports on the performance of the beneficiaries to the
PARC. If, due to the landowner's retention rights or to the number of tenants, lessees, or workers on the
land, there is not enough land to accommodate any or some of them, they may be granted ownership of
other lands available for distribution under this Act, at the option of the beneficiaries. Farmers already in
place and those not accommodated in the distribution of privately-owned lands will be given preferential
rights in the distribution of lands from the public domain.

SECTION 23. Distribution Limit. No qualified beneficiary may own more than three (3) hectares of
agricultural land.

SECTION 24. Award to Beneficiaries. The rights and responsibilities of the beneficiary shall
commence from the time the DAR makes an award of the land to him, which award shall be completed
within one hundred eighty (180) days from the time the DAR takes actual possession of the land.
Ownership of the beneficiary shall be evidenced by a Certificate of Land Ownership Award, which shall
contain the restrictions and conditions provided for in this Act, and shall be recorded in the Register of
Deeds concerned and annotated on the Certificate of Title.

SECTION 25. Award Ceilings for Beneficiaries. Beneficiaries shall be awarded an area not exceeding
three (3) hectares which may cover a contiguous tract of land or several parcels of land cumulated up to
the prescribed award limits. For purposes of this Act, a landless beneficiary is one who owns less than
three (3) hectares of agricultural land. The beneficiaries may opt for collective ownership, such as co-
ownership or farmers cooperative or some other form of collective organization: Provided, That the total
area that may be awarded shall not exceed the total number of co-owners or member of the cooperative
or collective organization multiplied by the award limit above prescribed, except in meritorious cases as
determined by the PARC. Title to the property shall be issued in the name of the co-owners or the
cooperative or collective organization as the case may be.

SECTION 26. Payment by Beneficiaries. Lands awarded pursuant to this Act shall be paid for by the
beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The
payments for the first three (3) years after the award may be at reduced amounts as established by the
PARC: Provided, That the first five (5) annual payments may not be more than five percent (5%) of the
value of the annual gross production as established by the DAR. Should the scheduled annual payments
after the fifth year exceed ten percent (10%) of the annual gross production and the failure to produce
accordingly is not due to the beneficiary's fault, the LBP may reduce the interest rate or reduce the
principal obligations to make the repayment affordable. The LBP shall have a lien by way of mortgage
on the land awarded to the beneficiary; and this mortgage may be foreclosed by the LBP for non-
payment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR of
such proceedings and the latter shall subsequently award the forfeited landholdings to other qualified
beneficiaries. A beneficiary whose land, as provided herein, has been foreclosed shall thereafter be
permanently disqualified from becoming a beneficiary under this Act. cd

SECTION 27. Transferability of Awarded Lands. Lands acquired by beneficiaries under this Act 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: Provided, however, That the
children or the spouse of the transferor shall have a right to repurchase the land from the government or
LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to
the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is situated. The
Provincial Agrarian Reform Coordinating Committee (PARCCOM) as herein provided, shall, in turn, be
given due notice thereof by the BARC. If the land has not yet been fully paid by the beneficiary, the
rights to the land may be transferred or conveyed, with prior approval of the DAR, to any heir of
the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall
cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which
shall give due notice of the availability of the land in the manner specified in the immediately preceding
paragraph. In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one
lump sum for the amounts the latter has already paid, together with the value of improvements he has
made on the land.

SECTION 28. Standing Crops at the Time of Acquisition. The landowner shall retain his share of any
standing crops unharvested at the time the DAR shall take possession of the land under Section 16 of
the Act, and shall be given a reasonable time to harvest the same.

CHAPTER VIII
Corporate Farms

SECTION 29. Farms Owned or Operated by Corporations or Other Business Associations. In the case
of farms owned or operated by corporations or other business associations, the following rules shall be
observed by the PARC: In general, lands shall be distributed directly to the individual worker-
beneficiaries. In case it is not economically feasible and sound to divide the land, then it shall be owned
collectively by the workers' cooperative or association which will deal with the corporation or business
association. Until a new agreement is entered into by and between the workers' cooperative or
association and the corporation or business association, any agreement existing at the time this Act takes
effect between the former and the previous landowner shall be respected by both the workers'
cooperative or association and the corporation or business association.

SECTION 30. 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.

SECTION 31. Corporate Landowners. Corporate landowners may voluntarily transfer ownership over
their agricultural landholdings to the Republic of the Philippines pursuant to Section 20 hereof or to
qualified beneficiaries, under such terms and conditions, consistent with this Act, as they may agree
upon, subject to confirmation by the DAR. Upon certification by the DAR, corporations owning agricultural
lands may give their qualified beneficiaries the right to purchase such proportion of the capital stock of the
corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the
company's total assets, under such terms and conditions as may be agreed upon by them. In no case
shall the compensation received by the workers at the time the shares of stocks are distributed be
reduced. The same principle shall be applied to associations, with respect to their equity or participation.
Corporations or associations which voluntarily divest a proportion of their capital stock, equity or
participation in favor of their workers or other qualified beneficiaries under this section shall be deemed to
have complied with the provisions of the Act: Provided, That the following conditions are complied with: a)
In order to safeguard the right of beneficiaries who own shares of stocks to dividends and other financial
benefits, the books of the corporation or association shall be subject to periodic audit by certified public
accountants chosen by the beneficiaries; b) Irrespective of the value of their equity in the corporation or
association, the beneficiaries shall be assured of at least one (1) representative in the board of directors,
or in a management or executive committee, if one exists, of the corporation or association; and c) Any
shares acquired by such workers and beneficiaries shall have the same rights and features as all other
shares. d) Any transfer of shares of stocks by the original beneficiaries shall be void ab initio unless said
transaction is in favor of a qualified and registered beneficiary within the same corporation. If within two
(2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized
or the plan for such stock distribution approved by the PARC within the same period, the agricultural land
of the corporate owners or corporation shall be subject to the compulsory coverage of this Act. acd

SECTION 32. Production-Sharing. Pending final land transfer, individuals or entities owning, or
operating under lease or management contract, agricultural lands are hereby mandated to execute a
production-sharing plan with their farm workers or farmworkers' reorganization, if any, whereby three
percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of
the end of the fiscal year as compensation to regular and other farmworkers in such lands over and
above the compensation they currently receive: Provided, That these individuals or entities realize gross
sales in excess of five million pesos per annum unless the DAR, upon proper application, determines a
lower ceiling. In the event that the individual or entity realizes a profit, an additional ten percent (10%) of
the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of
the end of the fiscal year. To forestall any disruption in the normal operation of lands to be turned over to
the farmworker-beneficiaries mentioned above, a transitory period, the length of which shall be
determined by the DAR, shall be established. During this transitory period, at least one percent (1%) of
the gross sales of the entity shall be distributed to the managerial, supervisory and technical group in
place at the time of the effectivity of this Act, as compensation for such transitory managerial and
technical functions as it will perform, pursuant to an agreement that the farmworker-beneficiaries and the
managerial, supervisory and technical group may conclude, subject to the approval of the DAR.

SECTION 33. Payment of Shares of Cooperative or Association. Shares of a cooperative or

association acquired by farmers-beneficiaries or workersbeneficiaries shall be fully paid for in an amount
corresponding to the valuation as determined in the immediately succeeding section. The landowner and
the LBP shall assist the farmers-beneficiaries and workers-beneficiaries in the payment for said shares by
providing credit financing.

SECTION 34. Valuation of Lands. A valuation scheme for the land shall be formulated by the PARC,
taking into account the factors enumerated in Section 17, in addition to the need to stimulate the growth
of cooperatives and the objective of fostering responsible participation of the workers-beneficiaries in the
creation of wealth. In the determination of price that is just not only to the individuals but to society as
well, the PARC shall consult closely with the landowner and the workersbeneficiaries. In case of
disagreement, the price as determined by the PARC, if accepted by the workers-beneficiaries, shall be
followed, without prejudice to the landowner's right to petition the Special Agrarian Court to resolve the
issue of valuation.
 CHAPTER IX
Support Services

SECTION 35. Creation of Support Services Office. There is hereby created the Office of Support
Services under the DAR to be headed by an Undersecretary. The Office shall provide general support
and coordinative services in the implementation of the program particularly in carrying out the provisions
of the following services to farmer-beneficiaries and affected landowners: 1) Irrigation facilities, especially
second crop or dry season irrigation facilities; 2) Infrastructure development and public works projects in
areas and settlements that come under agrarian reform, and for this purpose, the preparation of the
physical development plan of such settlements providing suitable barangay sites, potable water and
power resources, irrigation systems and other facilities for a sound agricultural development plan; 3)
Government subsidies for the use of irrigation facilities; 4) Price support and guarantee for all agricultural
produce; 5) Extending to small landowners, farmers' organizations the necessary credit, like concessional
and collateral-free loans, for agro-industrialization based on social collaterals like the guarantees of
farmers' organization: 6) Promoting, developing and extending financial assistance to small-and medium-
scale industries in agrarian reform areas; 7) Assigning sufficient numbers of agricultural extension
workers to farmers' organizations; 8) Undertake research, development and dissemination of information
on agrarian reform and low-cost and ecologically sound farm inputs and technologies to minimize reliance
on expensive and imported agricultural inputs; 9) Development of cooperative management skills through
intensive training; 10) Assistance in the identification of ready markets for agricultural produce and
training in other various prospects of marketing; and cdtai 11) Administration operation management and
funding of support services, programs and projects including pilot projects and models related to agrarian
reform as developed by the DAR.

SECTION 36. Funding for Support Services. In order to cover the expenses and cost of support
services, at least twenty-five percent (25%) of all appropriations for agrarian reform shall be immediately
set aside and made available for this purpose. In addition, the DAR shall be authorized to package
proposals and receive grants, aid and other forms of financial assistance from any source.

SECTION 37. Support Services to the Beneficiaries. The PARC shall ensure that support services to
farmers-beneficiaries are provided, such as: (a) Land surveys and titling; (b) Liberalized terms on credit
facilities and production loans; (c) Extension services by way of planting, cropping, production and
postharvest technology transfer, as well as marketing and management assistance and support to
cooperatives and farmers' organizations; (d) Infrastructure such as access trails, mini-dams, public
utilities, marketing and storage facilities; and (e) Research, production and use of organic fertilizers and
other local substances necessary in farming and cultivation. The PARC shall formulate policies to ensure
that support services to farmerbeneficiaries shall be provided at all stages of land reform. The Bagong
Kilusang Kabuhayan sa Kaunlaran (BKKK) Secretariat shall be transferred and attached to the LBP, for
its supervision including all its applicable and existing funds, personnel, properties, equipment and
records. Misuse or diversion of the financial and support services herein provided shall result in sanctions
against the beneficiary guilty thereof, including the forfeiture of the land transferred to him or lesser
sanctions as may be provided by the PARC, without prejudice to criminal prosecution.

SECTION 38. Support Services to Landowners. The PARC with the assistance of such other
government agencies and instrumentalities as it may direct, shall provide landowners affected by the
CARP and prior agrarian reform programs with the following services: (a) Investment information financial
and counseling assistance; (b) Facilities, programs and schemes for the conversion or exchange of
bonds issued for payment of the lands acquired with stocks and bonds issued by the National
Government, the Central Bank and other government institutions and instrumentalities; (c) Marketing of
LBP bonds, as well as promoting the marketability of said bonds in traditional and non-traditional financial
markets and stock exchanges; and (d) Other services designed to utilize productively the proceeds of the
sale of such lands for rural industrialization. A landowner who invests in rural-based industries shall be
entitled to the incentives granted to a registered enterprise engaged in a pioneer or preferred area of
investment as provided for in the Omnibus Investment Code of 1987, or to such other incentives as the
PARC, the LBP, or other government financial institutions may provide. The LBP shall redeem a
landowner's LBP bonds at face value, provided that the proceeds thereof shall be invested in a BOI-
registered company or in any agribusiness or agro-industrial enterprise in the region where the landowner
has previously made investments, to the extent of thirty percent (30%) of the face value of said LBP
bonds, subject to guidelines that shall be issued by the LBP.

SECTION 39. Land Consolidation. The DAR shall carry out land consolidation projects to promote
equal distribution of landholdings, to provide the needed infrastructures in agriculture, and to conserve
soil fertility and prevent erosion.

CHAPTER X
Special Areas of Concern

SECTION 40. Special Areas of Concern. As an integral part of the Comprehensive Agrarian Reform
Program, the following principles in these special areas of concern shall be observed:

(1) Subsistence Fishing. Small fisherfolk, including seaweed farmers, shall be assured of greater
access to the utilization of water resources.

(2) Logging and Mining Concessions. Subject to the requirement of a balanced ecology and
conservation of water resources, suitable areas, as determined by the Department of Environment and
Natural Resources (DENR), in logging, mining and pasture areas, shall be opened up for agrarian
settlements whose beneficiaries shall be required to undertake reforestation and conservation production
methods. Subject to existing laws, rules and regulations, settlers and members of tribal communities shall
be allowed to enjoy and exploit the products of the forest other than timer within the logging concessions.

(3) Sparsely Occupied Public Agricultural Lands. Sparsely occupied agricultural lands of the public
domain shall be surveyed, proclaimed and developed as farm settlements for qualified landless people
based on an organized program to ensure their orderly and early development. cda Agricultural land
allocations shall be made for ideal family-size farms as determined by the PARC. Pioneers and other
settlers shall be treated equally in every respect. Subject to the prior rights of qualified beneficiaries,
uncultivated lands of the public domain shall be made available on a lease basis to interested and
qualified parties. Parties who will engaged in the development of capitalintensive, traditional or pioneering
crops shall be given priority. The lease period, which shall not be more than a total of fifty (50) years, shall
be proportionate to the amount of investment and production goals of the lessee. A system of evaluation
and audit shall be instituted.

(4) Idle, Abandoned, Foreclosed and Sequestered Lands. Idle, abandoned, foreclosed and
sequestered lands shall be planned for distribution as home lots and family-size farmlots to actual
occupants. If land area permits, other landless families shall be accommodated in these lands.
(5) Rural Women. All qualified women members of the agricultural labor force must be guaranteed and
assured equal right to ownership of the land, equal shares of the farm's produce, and representation in
advisory or appropriate decision-making bodies.

(6) Veterans and Retirees. In accordance with Section 7 of Article XVI of the Constitution, landless war
veterans and veterans of military campaigns, their surviving spouse and orphans, retirees of the Armed
Forces of the Philippines (AFP) and the Integrated National Police (INP), returnees, surrenderees, and
similar beneficiaries shall be given due consideration in the disposition of agricultural lands of the public
domain.

(7) Agriculture Graduates. Graduates of agricultural schools who are landless shall be assisted by the
government, through the DAR, in their desire to own and till agricultural lands.

CHAPTER XI
Program Implementation

SECTION 41. The Presidential Agrarian Reform Council. The Presidential Agrarian Reform Council
(PARC) shall be composed of the President of the Philippines as Chairman, the Secretary of Agrarian
Reform as Vice-Chairman and the following as members; Secretaries of the Departments of Agriculture;
Environment and Natural Resources; Budget and Management; Local Government: Public Works and
Highways; Trade and Industry; Finance; Labor and Employment; Director-General of the National
Economic and Development Authority; President, Land Bank of the Philippines; Administrator, National
Irrigation Administration; and three (3) representatives of affected landowners to represent Luzon,
Visayas and Mindanao; six (6) representatives of agrarian reform beneficiaries, two (2) each from Luzon,
Visayas and Mindanao, provided that one of them shall be from the cultural communities.

SECTION 42. Executive Committee. There shall be an Executive Committee (EXCOM) of the PARC
composed of the Secretary of the DAR as Chairman, and such other members as the President may
designate, taking into account Article XIII, Section 5 of the Constitution. Unless otherwise directed by
PARC, the EXCOM may meet and decide on any and all matters in between meetings of the PARC:
Provided, however, That its decisions must be reported to the PARC immediately and not later than the
next meeting.

SECTION 43. Secretariat. A PARC Secretariat is hereby established to provide general support and
coordinative services such as inter-agency linkages; program and project appraisal and evaluation and
general operations monitoring for the PARC. The Secretariat shall be headed by the Secretary of
Agrarian Reform who shall be assisted by an Undersecretary and supported by a staff whose composition
shall be determined by the PARC Executive Committee and whose compensation shall be chargeable
against the Agrarian Reform Fund. All officers and employees of the Secretariat shall be appointed by the
Secretary of Agrarian Reform.

SECTION 44. Provincial Agrarian Reform Coordinating Committee (PARCCOM). A Provincial Agrarian
Reform Coordinating Committee (PARCCOM) is hereby created in each province, composed of a
Chairman, who shall be appointed by the President upon the recommendation of the EXCOM, the
Provincial Agrarian Reform Officer as Executive Officer, and one representative each from the
Departments of Agriculture, and of Environment and Natural Resources and from the LBP, one
representative each from existing farmers' organizations, agricultural cooperatives and non-governmental
organizations in the province; two representatives from landowners, at least one of whom shall be a
producer representing the principal crop of the province, and two representatives from farmer and
farmworker-beneficiaries, at least one of whom shall be a farmer or farmworker representing the principal
crop of the province, as members: Provided, That in areas where there are cultural communities, the
latter shall likewise have one representative. The PARCCOM shall coordinate and monitor the
implementation of the CARP in the province. It shall provide information on the provisions of the CARP,
guidelines issued by the PARC and on the progress of the CARP in the province.

SECTION 45. Province-by-Province Implementation. The PARC shall provide the guidelines for a
province-by-province implementation of the CARP. The ten-year program of distribution of public and
private lands in each province shall be adjusted from year by the province's PARCCOM in accordance
with the level of operations previously established by the PARC, in every case ensuring that support
services are available or have been programmed before actual distribution is effected.

SECTION 46. Barangay Agrarian Reform Committee (BARC). Unless otherwise provided in this Act,
the provisions of Executive Order No. 229 regarding the organization of the Barangay Agrarian Reform
Committee (BARC) shall be in effect.

SECTION 47. Functions of the BARC. In addition to those provided in Executive Order No. 229, the
BARC shall have the following functions: (a) Mediate and conciliate between parties involved in an
agrarian dispute including matters related to tenurial and financial arrangements; acd (b) Assist in the
identification of qualified beneficiaries and landowners within the barangay; (c) Attest to the accuracy of
the initial parcellary mapping of the beneficiary's tillage; (d) Assist qualified beneficiaries in obtaining
credit from lending institutions; (e) Assist in the initial determination of the value of the land; (f) Assist the
DAR representatives in the preparation of periodic reports on the CARP implementation for submission to
the DAR; (g) Coordinate the delivery of support services to beneficiaries; and (h) Perform such other
functions as may be assigned by the DAR. (2) The BARC shall endeavor to mediate, conciliate and settle
agrarian disputes lodged before it within thirty (30) days from its taking cognizance thereof. If after the
lapse of the thirty day period, it is unable to settle the dispute, it shall issue a certificate of its proceedings
and shall furnish a copy thereof upon the parties within seven (7) days after the expiration of the thirty-day
period.

SECTION 48. Legal Assistance. The BARC or any member thereof may, whenever necessary in the
exercise of any of its functions hereunder, seek the legal assistance of the DAR and the provincial, city, or
municipal government.

SECTION 49. Rules and Regulations. The PARC and the DAR shall have the power to issue rules and
regulations, whether substantive or procedural, to carry out the objects and purposes of this Act. Said
rules shall take effect ten (10) days after publication in two (2) national newspapers of general
circulation.

CHAPTER XII

Administrative Adjudication

SECTION 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of agrarian reform except those falling under the
exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and
Natural Resources (DENR). It shall not be bound by technical rules of procedure and evidence but shall
proceed to hear and decide all cases, disputes or controversies in a most expeditious manner, employing
all reasonable means to ascertain the facts of every case in accordance with justice and equity and the
merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just,
expeditious and inexpensive determination for every action or proceeding before it. It shall have the
power to summon witnesses, administer oaths, take testimony, require submission of reports, compel the
production of books and documents and answers to interrogatories and issue subpoena, and subpoena
duces tecum, and enforce its writs through sheriffs or other duly deputized officers. It shall likewise have
the power to punish direct and indirect contempts in the same manner and subject to the same penalties
as provided in the Rules of Court. Responsible farmer leaders shall be allowed to represent themselves,
their fellow farmers, or their organizations in any proceedings before the DAR: Provided, however, That
when there are two or more representatives for any individual or group, the representatives should
choose only one among themselves to represent such party or group before any DAR proceedings.
Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately
executory.

SECTION 51. Finality of Determination. Any case or controversy before it shall be decided within thirty
(30) days after it is submitted for resolution. Only one (1) motion for reconsideration shall be allowed. Any
order, ruling or decision shall be final after the lapse of fifteen (15) days from receipt of a copy thereof.

SECTION 52. Frivolous Appeals. To discourage frivolous or dilatory appeals from the decisions or
orders on the local or provincial levels, the DAR may impose reasonable penalties, including but not
limited to fines or censures upon erring parties.

SECTION 53. Certification of the BARC. The DAR shall not take cognizance of any agrarian dispute or
controversy unless a certification from the BARC that the dispute has been submitted to it for mediation
and conciliation without any success of settlement is presented: Provided, however, That if no certification
is issued by the BARC within thirty (30) days after a matter or issue is submitted to it for mediation or
conciliation the case or dispute may be brought before the PARC.

CHAPTER XIII

Judicial Review

SECTION 54. Certiorari. Any decision, order, award or ruling of the DAR on any agrarian dispute or on
any matter pertaining to the application, implementation, enforcement, or interpretation of this Act and
other pertinent laws on agrarian reform may be brought to the Court of Appeals by certiorari except as
otherwise provided in this Act within fifteen (15) days from the receipt of a copy thereof. The findings of
fact of the DAR shall be final and conclusive if based on substantial evidence.

SECTION 55. No Restraining Order or Preliminary Injunction. No court in the Philippines shall have
jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its
duly authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or
in connection with the application, implementation, enforcement, or interpretation of this Act and other
pertinent laws on agrarian reform.

SECTION 56. Special Agrarian Court. The Supreme Court shall designate at least one (1) branch of
the Regional Trial Court (RTC) within each province to act as a Special Agrarian Court. The Supreme
Court may designate more branches to constitute such additional Special Agrarian Courts as may be
necessary to cope with the number of agrarian cases in each province. In the designation, the Supreme
Court shall give preference to the Regional Trial Courts which have been assigned to handle agrarian
cases or whose presiding judges were former judges of the defunct Court of Agrarian Relations. The
Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in
addition t

o the regular jurisdiction of their respective courts. The Special Agrarian Courts shall have the powers
and prerogatives inherent in or belonging to the Regional Trial Courts. SECTION 57. Special Jurisdiction.
The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners, and the prosecution of all criminal offenses under this
Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified
by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction
within thirty (30) days from submission of the case for decision.

SECTION 58. Appointment of Commissioners. The Special Agrarian Courts, upon their own initiative
or at the instance of any of the parties, may appoint one or more commissioners to examine, investigate
and ascertain facts relevant to the dispute including the valuation of properties, and to file a written report
thereof with the court.

SECTION 59. Orders of the Special Agrarian Courts. No order of the Special Agrarian Courts on any
issue, question, matter or incident raised before them shall be elevated to the appellate courts until the
hearing shall have been terminated and the case decided on the merits.

SECTION 60. Appeals. An appeal may be taken from the decision of the Special Agrarian Courts by
filing a petition for review with the Court of Appeals within fifteen (15) days receipt of notice of the
decision; otherwise, the decision shall become final. An appeal from the decision of the Court of Appeals,
or from any order, ruling or decision of the DAR, as the case may be, shall be by a petition for review with
the Supreme Court within a non-extendible period of fifteen (15) days from receipt of a copy of said
decision.

SECTION 61. Procedure on Review. Review by the Court of Appeals or the Supreme Court, as the
case may be, shall be governed by the Rules of Court. The Court of Appeals, however, may require the
parties to file simultaneous memoranda within a period of fifteen (15) days from notice, after which the
case is deemed submitted for decision.

SECTION 62. Preferential Attention in Courts. All courts in the Philippines, both trial and appellate,
shall give preferential attention to all cases arising from or in connection with the implementation of the
provisions of this Act. All cases pending in court arising from or in connection with the implementation of
this Act shall continue to be heard, tried and decided into their finality, notwithstanding the expiration of
the ten-year period mentioned in Section 5 hereof.

CHAPTER XIV

Financing

SECTION 63. Funding Source. The initial amount needed to implement this Act for the period of ten
(10) years upon approval hereof shall be funded from the Agrarian Reform Fund created under Sections
20 and 21 of Executive Order No. 229. Additional amounts are hereby authorized to be appropriated as
and when needed to augment the Agrarian Reform Fund in order to fully implement the provisions of this
Act. Sources of funding or appropriations shall include the following: a) Proceeds of the sales of the
Assets Privatization Trust; b) All receipts from assets recovered and from sales of ill-gotten wealth
recovered through the Presidential Commission on Good Government; 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; cdt (e) Other government funds not otherwise appropriated. All funds appropriated to implement
the provisions of this Act shall be considered continuing appropriations during the period of its
implementation.

SECTION 64. Financial Intermediary for the CARP. The Land Bank of the Philippines shall be the
financial intermediary for the CARP, and shall insure that the social justice objectives of the CARP shall
enjoy a preference among its priorities.

CHAPTER XV

General Provisions

SECTION 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land
ceases to be economically feasible and sound for agricultural purposes, or the locality has become
urbanized and the land will have a greater economic value for residential, commercial or industrial
purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected
parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its
disposition: Provided, That the beneficiary shall have fully paid his obligation.

SECTION 66. Exemptions from Taxes and Fees of Land Transfers. Transactions under this Act
involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes
arising from capital gains. These transactions shall also be exempted from the payment of registration
fees, and all other taxes and fees for the conveyance or transfer thereof; Provided, That all arrearages in
real property taxes, without penalty or interest, shall be deductible from the compensation to which the
owner may be entitled.

SECTION 67. Free Registration of Patents and Titles. All Registers of Deeds are hereby directed to
register, free from payment of all fees and other charges, patents, titles and documents required for the
implementation of the CARP.

SECTION 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining
order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian
Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural
Resources (DENR), and the Department of Justice (DOJ) in their implementation of the program.

SECTION 69. Assistance of Other Government Entities. The PARC, in the exercise of its functions, is
hereby authorized to call upon the assistance and support of other government agencies, bureaus and
offices, including governmentowned or -controlled corporations.

SECTION 70. Disposition of Private Agricultural Lands. The sale or disposition of agricultural lands
retained by a landowner as a consequence of Section 6 hereof shall be valid as long as the total
landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not
exceed the landholding ceilings provided for in this Act. Any sale or disposition of agricultural lands after
the effectivity of this Act found to be contrary to the provisions hereof shall be null and void. Transferees
of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an affidavit attesting
that his total landholdings as a result of the said acquisition do not exceed the landholding ceiling. The
Register of Deeds shall not register the transfer of any agricultural land without the submission of this
sworn statement together with proof of service of a copy thereof to the BARC.

SECTION 71. Bank Mortgages. Banks and other financial institutions allowed by law to hold mortgage
rights or security interests in agricultural lands to secure loans and other obligations of borrowers, may
acquire title to these mortgaged properties, regardless of area, subject to existing laws on compulsory
transfer of foreclosed assets and acquisition as prescribed under Section 13 of this Act. acd

SECTION 72. Lease, Management, Grower or Service Contracts, Mortgages and Other Claims. Lands
covered by this Act under lease, management, grower or service contracts, and the like shall be disposed
of as follows: (a) Lease, management, grower or service contracts covering private lands may continue
under their original terms and conditions until the expiration of the same even if such land has, in the
meantime, been transferred to qualified beneficiaries. (b) Mortgages and other claims registered with the
Register of Deeds shall be assumed by the government up to an amount equivalent to the landowner's
compensation value as provided in this Act.

SECTION 73. Prohibited Acts and Omissions. The following are prohibited: (a) The ownership or
possession, for the purpose of circumventing the provisions of this Act, of agricultural lands in excess of
the total retention limits or award ceilings by any person, natural or juridical, except those under collective
ownership by farmer-beneficiaries. (b) The forcible entry or illegal detainer by persons who are not
qualified beneficiaries under this Act to avail themselves of the rights and benefits of the Agrarian Reform
Program. (c) The conversion by any landowner of his agricultural land into any nonagricultural use with
intent to avoid the application of this Act to his landholdings and to dispossess his tenant farmers of the
land tilled by them. (d) The willful prevention or obstruction by any person, association or entity of the
implementation of the CARP. (e) The sale, transfer, conveyance or change of the nature of lands outside
of urban centers and city limits either in whole or in part after the effectivity of this Act. The date of the
registration of the deed of conveyance in the Register of Deeds with respect to titled lands and the date of
the issuance of the tax declaration to the transferee of the property with respect to unregistered lands, as
the case may be, shall be conclusive for the purpose of this Act. (f) The sale, transfer or conveyance by a
beneficiary of the right to use or any other usufructuary right over the land he acquired by virtue of being a
beneficiary, in order to circumvent the provisions of this Act.

SECTION 74. Penalties. Any person who knowingly or willfully violates the provisions of this Act shall
be punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of
not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00), or
both, at the discretion of the court. If the offender is a corporation or association, the officer responsible
therefor shall be criminally liable.

SECTION 75. Suppletory Application of Existing Legislation. The provisions of Republic Act No. 3844
as amended, Presidential Decree Nos. 27 and 266 as amended, Executive Order Nos. 228 and 229, both
Series of 1987; and other laws not inconsistent with this Act shall have suppletory effect.

SECTION 76. Repealing Clause. Section 35 of Republic Act No. 3834, Presidential Decree No. 316,
the last two paragraphs of Section 12 of Presidential Decree No. 946, Presidential Decree No. 1038, and
all other laws, decrees executive orders, rules and regulations, issuances or parts thereof inconsistent
with this Act are hereby repealed or amended accordingly. cdt
SECTION 77. Separability Clause. If, for any reason, any section or provision of this Act is declared null
and void, no other section, provision, or part thereof shall be affected and the same shall remain in full
force and effect.

SECTION 78. Effectivity Clause. This Act shall take effect immediately after publication in at least two
(2) national newspapers of general circulation.

Approved: June 10, 1988

 Republic of the Philippines
Congress of the Philippines
Metro Manila

Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-fifth day of July, nineteen
hundred and ninety-four.

[REPUBLIC ACT NO. 7881]

AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 6657,

ENTITLED AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM
PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION,
PROVIDING THE MECHANISM FOR ITS IMPLEMETATION, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

SECTION 1. Section 3, Paragraph (b) of Republic Act No. 6657 is hereby amended to
read as follows:

SECTION 3. Definitions. For the purpose of this Act, unless the context indicates
otherwise:

(b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of

the soil, planting of crops, (growing of fruit trees, including the harvesting of such farm
products, and other farm activities and practices performed by a farmer in conjunction
with such farming operations done by persons whether natural or juridical.

SEC. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as follows:

SECTION 10. Exemptions and Exclusions.

a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves,
reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall
be exempt from the coverage of this Act.

b) Private lands actually, directly and exclusively used for prawn farms and fishponds
shall be exempt from the coverage of this Act: Provided, That said prawn farms and
fishponds have not been distributed and Certificate of Land Ownership Award (CLOA)
issued to agrarian reform beneficiaries under the Comprehensive Agrarian Reform
Program.
In cases where the fishponds or prawn farms have been subjected to the
Comprehensive Agrarian Reform Law by voluntary offer to sell, or commercial farms
deferment or notices of compulsory acquisition, a simple and absolute majority of the
actual regular workers or tenants must consent to the exemption within one (1) year
from the effectivity of this Act When the workers or tenants do not agree to this
exemption the fishponds or prawn farms shall be distributed collectively to the worker-
beneficiaries or tenants who shall form a cooperative or association to manage the
same.

In cases where the fishponds or prawn farms have not been subjected to the
Comprehensive Agrarian Reform Law the consent of the farm workers shall no longer
be necessary however, the provision of Section 32-A hereof on incentives shall apply.

c) Lands actually, directly and exclusively used and found to be necessary for 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 center, church sites and convents appurtenant thereto, mosque sites
and Islamic centers appurtenant thereto, communal burial grounds and cemeteries,
penal colonies and penal farms actually worked by the inmates, government and private
research and quarantine centers and all lands with eighteen percent (18%) slope and
over, except those already developed, shall be exempt from the coverage of this Act.

SEC. 3. Section 11, Paragraph 1 is hereby amended to read as follows:

SECTION 11. Commercial Farming. Commercial farms, which are private agricultural
lands devoted to saltbeds, fruit farms, orchards, vegetable and cut-flower farms, and
cacao, coffee and rubber plantations, shall be subject to immediate compulsory
acquisition and distribution after ten (10) years from the effectivity of this Act.In the case
of new farms, the ten-year period shall begin from the first year of commercial
production and operation, as determined by the DAR.During the ten-year period, the
Government shall initiate steps necessary to acquire these lands, upon payment of just
compensation for the land and the improvements thereon, preferably in favor of
organized cooperatives or associations which shall thereafter manage the said lands for
the workers-beneficiaries.

SEC. 4. There shall be incorporated after Section 32 of Republic Act No. 6657 a new
section to read as follows:

SECTION 32-A. Incentives. Individuals or entities owning or operating fishponds and

prawn farms are hereby mandated to execute within six (6) months from the effectivity
of this Act an incentive plan with their regular fishpond or prawn farmworkers or
fishpond or prawn farm workers organization, if any, whereby seven point five percent
(7.5%) of their net profit before tax from the operation of the fishpond or prawn farms
are distributed within sixty (60) days at the end of the fiscal year as compensation to
regular and other pond workers in such ponds over and above the compensation they
currently receive.
In order to safeguard the right of the regular fishpond or prawn farm workers under the
incentive plan, the books of the fishpond or prawn farm owners shall be subject to
periodic audit or inspection by certified public accountants chosen by the workers.

The foregoing provision shall not apply to agricultural lands subsequently converted to
fishpond or prawn farms provided the size of the land converted does not exceed the
retention limit of the landowner.

SEC. 5. There shall be incorporated after Section 65 of Republic Act No. 6657 new
sections to read as follows:

SECTION 65-A. Conversion into Fishpond and Prawn Farms. No conversion of

public agricultural lands into fishponds and prawn farms shall be made except in
situations where the provincial government with the concurrence of the Bureau of
Fisheries and Aquatic Resources (BFAR) declares a coastal zone as suitable for
fishpond development. In such case, the Department of Environment and Natural
Resources (DENR) shall allow the lease and development of such areas: Provided,
That the declaration shall not apply to environmentally critical projects and areas as
contained in title (A) sub-paragraph two, (B-5) and (C-1) and title (B), number eleven
(11) of Proclamation No. 21-+6, entitled Proclaiming Certain Areas and Types of
Projects as Environmentally Critical and Within the Scope of the Environmental Impact
Statement (EIS) System established under Presidential Decree No. 1586,' to ensure
the protection of river systems, aquifers and mangrove vegetations from pollution and
environmental degradation: Provided, further. That the approval shall be in accordance
with a set of guidelines to be drawn up and promulgated by the DAR and the
BFAR: Provided, furthermore, That small-farmer cooperatives and organizations shall
be given preference in the award of the Fishpond Lease Agreements (FLAs).

No conversion of more than five (5) hectares of private lands to fishponds and prawn
farms shall be allowed after the passage of this Act, except when the use of the land is
more economically feasible and sound for fishpond and/or prawn farm, as certified by
the Bureau of Fisheries and Aquatic Resources (BFAR), and a simple and absolute
majority of the regular farm workers or tenants agree to the conversion, the Department
of Agrarian Reform, may approve applications for change in the use of the
land: Provided, finally, That no piecemeal conversion to circumvent the provisions of
this Act shall be allowed. In these cases where the change of use is approved, the
provisions of Section 32-A hereof on incentives shall apply.

SECTION 65-B. Inventory. Within one (1) year from the effectivity of this Act, the
BFAR shall undertake and finish an inventory of all government and private fishponds
and prawn farms, and undertake a program to promote the sustainable management
and utilization of prawn farms and fishponds. No lease under Section 65-A hereof may
be granted until after the completion of the said inventory.

The sustainable management and utilization of prawn farms and fishponds shall be in
accordance with the effluent standards, pollution charges and other pollution control
measures such as, but not limited to, the quantity of fertilizers, pesticides and other
chemicals used, that may be established by the Fertilizer and Pesticide Authority (FPA),
the Environmental Management Bureau(EMB),and other appropriate government
regulatory bodies, and existing regulations governing water utilization, primarily
Presidential Decree No. 1067, entitled A Decree Instituting A Water Code, Thereby
Revising and Consolidating the Laws Governing the Ownership, Appropriation,
Utilization, Exploitation, Development, Conservation and Protection of Water
Resources.

SECTION 65-C. Protection of Mangrove Areas. In existing Fishpond Lease

Agreements (FLAs) and those that will be issued after the effectivity of this Act, a
portion of the fishpond area fronting the sea, sufficient to protect the environment, shall
be established as a buffer zone and be planted to specified mangrove species to be
determined in consultation with the regional office of the DENR. The Secretary of
Environment and Natural Resources shall provide the penalties for any violation of this
undertaking as well as the rules for its implementation.

SECTION 65-D. Change of Crops. The change of crops to commercial crops or high
value crops shall not be considered as a conversion in the use or nature of the land.
The change in crop should however, not prejudice the rights of tenants or leaseholders
should there be any and the consent of a simple and absolute majority of the affected
farm workers, if any, shall first be obtained.

SEC. 6. There shall be incorporated after Section 73 of Republic Act No. 6657 a new
section to read as follows:

SECTION 73-A. Exception. The provisions of Section 73, paragraph (E), to the
contrary notwithstanding, the sale and/or transfer of agricultural land in cases where
such sale, transfer or conveyance is made necessary as a result of a banks foreclosure
of the mortgaged land is hereby permitted.

SEC. 7. Separability Clause. If, for any reason, any section or provision of this Act is
declared null and void, no other section, provision or part thereof shall be affected and
the same shall remain in full force and effect.

SEC. 8 Effectivity Clause. This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.

Approved,

(Sgd.) JOSE DE VENECIA, JR.

(Sgd.) EDGARDO J. ANGARA
Speaker of the House of
President of the Senate
Representatives
This Act which is a consolidation of Senate Bill No. 740 and House Bill No. 918, was
finally passed by the Senate and the House of Representatives on February 7, 1995
and February 8, 1998, respectively.
Republic Act No. 9700 August 7, 2009

AN ACT STRENGTHENING THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP),

EXTENDING THE ACQUISITION AND DISTRIBUTION OF ALL AGRICULTURAL LANDS,
INSTITUTING NECESSARY REFORMS, AMENDING FOR THE PURPOSE CERTAIN
PROVISIONS OF REPUBLIC ACT NO. 6657, OTHERWISE KNOWN AS THE COMPREHENSIVE
AGRARIAN REFORM LAW OF 1988, AS AMENDED, AND APPROPRIATING FUNDS
THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled::

Section1. Section 2 of Republic Act No. 6657, as amended, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, is hereby further amended to read as follows:

"SEC. 2. Declaration of Principles and Policies. - It is the policy of the State to pursue a
Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and
farmworkers will receive the highest consideration to promote social justice and to move the
nation toward sound rural development and industrialization, and the establishment of owner
cultivatorship of economic-size farms as the basis of Philippine agriculture.

"The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of
human and natural resources, and which are competitive in both domestic and foreign
markets: Provided, That the conversion of agricultural lands into industrial, commercial or
residential lands shall take into account, tillers' rights and national food security. Further, the
State shall protect Filipino enterprises against unfair foreign competition and trade practices.

"The State recognizes that there is not enough agricultural land to be divided and distributed
to each farmer and regular farmworker so that each one can own his/her economic-size
family farm. This being the case, a meaningful agrarian reform program to uplift the lives and
economic status of the farmer and his/her children can only be achieved through
simultaneous industrialization aimed at developing a self-reliant and independent national
economy effectively controlled by Filipinos.

"To this end, the State may, in the interest of national welfare or defense, establish and
operate vital industries.

"A more equitable distribution and ownership of land, with due regard to the rights of
landowners to just compensation, retention rights under Section 6 of Republic Act No. 6657,
as amended, and to the ecological needs of the nation, shall be undertaken to provide
farmers and farmworkers with the opportunity to enhance their dignity and improve the
quality of their lives through greater productivity of agricultural lands.

"The agrarian reform program is founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the State shall
encourage and undertake the just distribution of all agricultural lands, subject to the priorities
and retention limits set forth in this Act, taking into account ecological, developmental, and
equity considerations, and subject to the payment of just compensation. The State shall
respect the right of small landowners, and shall provide incentive for voluntary land-sharing.
"As much as practicable, the implementation of the program shall be community-based to
assure, among others, that the farmers shall have greater control of farmgate prices, and
easier access to credit.

"The State shall recognize the right of farmers, farmworkers and landowners, as well as
cooperatives and other independent farmers organizations, to participate in the planning,
organization, and management of the program, and shall provide support to agriculture
through appropriate technology and research, and adequate financial, production, marketing
and other support services.

"The State shall recognize and enforce, consistent with existing laws, the rights of rural
women to own and control land, taking into consideration the substantive equality between
men and women as qualified beneficiaries, to receive a just share of the fruits thereof, and to
be represented in advisory or appropriate decision-making bodies. These rights shall be
independent of their male relatives and of their civil status.

"The State shall apply the principles of agrarian reform, or stewardship, whenever applicable,
in accordance with law, in the disposition or utilization of other natural resources, including
lands of the public domain, under lease or concession, suitable to agriculture, subject to prior
rights, homestead rights of small settlers and the rights of indigenous communities to their
ancestral lands.

"The State may resettle landless farmers and farm workers in its own agricultural estates,
which shall be distributed to them in the manner provided by law.

"By means of appropriate incentives, the State shall encourage the formation and
maintenance of economic-size family farms to be constituted by individual beneficiaries and
small landowners.

"The State shall protect the rights of subsistence fishermen, especially of local communities,
to the preferential use of communal marine and fishing resources, both inland and offshore.
It shall provide support to such fishermen through appropriate technology and research,
adequate financial, production and marketing assistance and other services. The State shall
also protect, develop and conserve such resources. The protection shall extend to offshore
fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive
a just share from their labor in the utilization of marine and fishing resources.

"The State shall be guided by the principles that land has a social function and land
ownership has a social responsibility. Owners of agricultural land have the obligation to
cultivate directly or through labor administration the lands they own and thereby make the
land productive.

"The State shall provide incentives to landowners to invest the proceeds of the agrarian
reform program to promote industrialization, employment and privatization of public sector
enterprises. Financial instruments used as payment for lands shall contain features that shall
enhance negotiability and acceptability in the marketplace.

"The State may lease undeveloped lands of the public domain to qualified entities for the
development of capital-intensive farms, and traditional and pioneering crops especially those
for exports subject to the prior rights of the beneficiaries under this Act."
Section 2. Section 3 of Republic Act No. 6657, as amended, is hereby further amended to read as
follows:

"SEC. 3. Definitions. - For the purpose of this Act, unless the context indicates otherwise:

"x x x

"(f) Farmer refers to a natural person whose primary livelihood is cultivation of land or the
production of agricultural crops, livestock and/or fisheries either by himself/herself, or
primarily with the assistance of his/her immediate farm household, whether the land is owned
by him/her, or by another person under a leasehold or share tenancy agreement or
arrangement with the owner thereof.

"x x x

"(1) Rural women refer to women who are engaged directly or indirectly in farming and/or
fishing as their source of livelihood, whether paid or unpaid, regular or seasonal, or in food
preparation, managing the household, caring for the children, and other similar activities."

Section 3. Section 4 of Republic Act No. 6657, as amended, is hereby further amended to read as
follows:

"SEC. 4.Scope. -The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless
of tenurial arrangement and commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the
public domain suitable for agriculture:Provided, That landholdings of landowners with a total
area of five (5) hectares and below shall not be covered for acquisition and distribution to
qualified beneficiaries.

"More specifically, the following lands are covered by the CARP:

"(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account
ecological, developmental and equity considerations, shall have determined by law,
the specific limits of the public domain;

"(b) All lands of the public domain in excess of the specific limits as determined by
Congress in the preceding paragraph;

"(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.

"A comprehensive inventory system in consonance with the national land use plan shall be
instituted by the Department of Agrarian Reform (DAR), in accordance with the Local
Government Code, for the purpose of properly identifying and classifying farmlands within
one (1)year from effectivity of this Act, without prejudice to the implementation of the land
acquisition and distribution."
Section 4. There shall be incorporated after Section 6 of Republic Act No. 6657, as amended, new
sections to read as follows:

"SEC. 6-A. Exception to Retention Limits. - Provincial, city and municipal government ,units
acquiring private agricultural lands by expropriation or other modes of acquisition to be used
for actual, direct and exclusive public purposes, such as roads and bridges, public markets,
school sites, resettlement sites, local government facilities, public parks and barangay plazas
or squares, consistent with the approved local comprehensive land use plan, shall not be
subject to the five (5)-hectare retention limit under this Section and Sections 70 and 73(a) of
Republic Act No. 6657, as amended: Provided, That lands subject to CARP shall first
undergo the land acquisition and distribution process of the program: Provided, further, That
when these lands have been subjected to expropriation, the agrarian reform beneficiaries
therein shall be paid just compensation."

"SEC. 6-B. Review of Limits of Land Size. - Within six (6) months from the effectivity of this
Act, the DAR shall submit a comprehensive study on the land size appropriate for each type
of crop to Congress for a possible review of limits of land sizes provided in this Act."

Section 5. Section 7 of Republic Act No. 6657, as amended, is hereby further amended to read as
follows:

"SEC. 7. Priorities. - The DAR, in coordination with the Presidential Agrarian Reform Council
(PARC) shall plan and program the final acquisition and distribution of all remaining
unacquired and undistributed agricultural lands from the effectivity of this Act until June 30,
2014. Lands shall be acquired and distributed as follows:

"Phase One: During the five (5)-year extension period hereafter all remaining lands above
fifty (50) hectares shall be covered for purposes of agrarian reform upon the effectivity of this
Act. All private agricultural lands of landowners with aggregate landholdings in excess of fifty
(50) hectares which have already been subjected to a notice of coverage issued on or before
December 10, 2008; rice and corn lands under Presidential Decree No. 27; all idle or
abandoned lands; all private lands voluntarily offered by the owners for agrarian
reform: Provided, That with respect to voluntary land transfer, only those submitted by June
30, 2009 shall be allowed Provided, further, That after June 30, 2009, the modes of
acquisition shall be limited to voluntary offer to sell and compulsory
acquisition: Provided, furthermore, That all previously acquired lands wherein valuation is
subject to challenge by landowners shall be completed and finally resolved pursuant to
Section 17 of Republic Act No. 6657, as amended: Provided, finally, as mandated by the
Constitution, Republic Act No. 6657, as amended, and Republic Act No. 3844,as amended,
only farmers (tenants or lessees) and regular farmworkers actually tilling the lands, as
certified under oath by the Barangay Agrarian Reform Council (BARC) and attested under
oath by the landowners, are the qualified beneficiaries. The intended beneficiary shall state
under oath before the judge of the city or municipal court that he/she is willing to work on the
land to make it productive and to assume the obligation of paying the amortization for the
compensation of the land and the land taxes thereon; all lands foreclosed by government
financial institutions; all lands acquired by the Presidential Commission on Good
Government (PCGG); and all other lands owned by the government devoted to or suitable
for agriculture, which shall be acquired and distributed immediately upon the effectivity of this
Act, with the implementation to be completed by June 30, 2012;

"Phase Two: (a) Lands twenty-four (24) hectares up to fifty (50) hectares shall likewise be
covered for purposes of agrarian reform upon the effectivity of this Act. All alienable and
disposable public agricultural lands; all arable public agricultural lands under agro-forest,
pasture and agricultural leases already cultivated and planted to crops in accordance with
Section 6, Article XIII of the Constitution; all public agricultural lands which are to be opened
for new development and resettlement: and all private agricultural lands of landowners with
aggregate landholdings above twenty-four (24) hectares up to fifty (50) hectares which have
already been subjected to a notice of coverage issued on or before December 1O, 2008, to
implement principally the rights of farmers and regular farmworkers, who are landless, to
own directly or collectively the lands they till, which shall be distributed immediately upon the
effectivity of this Act, with the implementation to be completed by June 30, 2012; and

"(b) All remaining private agricultural lands of landowners with aggregate landholdings in
excess of twenty-four (24) hectares, regardless as to whether these have been subjected to
notices of coverage or not, with the implementation to begin on July 1, 2012 and to be
completed by June 30, 2013;

"Phase Three: All other private agricultural lands commencing with large landholdings and
proceeding to medium and small landholdings under the following schedule:

"(a) Lands of landowners with aggregate landholdings above ten (10) hectares up to twenty-
four (24)hectares, insofar as the excess hectarage above ten (10) hectares is concerned, to
begin on July 1,2012 and to be completed by June 30, 2013; and

"(b) Lands of landowners with aggregate landholdings from the retention limit up to ten (10)
hectares, to begin on July 1, 2013 and to be completed by June 30, 2014; to implement
principally the right of farmers and regular farmworkers who are landless, to own directly or
collectively the lands they till.

"The schedule of acquisition and redistribution of all agricultural lands covered by this
program shall be made in accordance with the above order o f priority, which shall be
provided in the implementing rules to be prepared by the PARC, taking into consideration the
following: the landholdings wherein the farmers are organized and understand ,the meaning
and obligations of farmland ownership; the distribution of lands to the tillers at the earliest
practicable time; the enhancement of agricultural productivity; and the availability of funds
and resources to implement and support the program: Provided, That the PARC shall design
and conduct seminars, symposia, information campaigns, and other similar programs for
farmers who are not organized or not covered by any landholdings. Completion by these
farmers of the aforementioned seminars, symposia, and other similar programs shall be
encouraged in the implementation of this Act particularly the provisions of this Section.

"Land acquisition and distribution shall be completed by June 30, 2014 on a province-by-
province basis. In any case, the PARC or the PARC Executive Committee (PARC EXCOM),
upon recommendation by the Provincial Agrarian Reform Coordinating Committee
(PARCCOM), may declare certain provinces as priority land reform areas, in which case the
acquisition and distribution of private agricultural lands therein under advanced phases may
be implemented ahead of the above schedules on the condition that prior phases in these
provinces have been completed: Provided, That notwithstanding the above schedules, phase
three (b) shall not be implemented in a particular province until at least ninety percent (90%)
of the provincial balance of that particular province as of January 1, 2009 under Phase One,
Phase Two (a), Phase Two (b),,and Phase Three (a), excluding lands under the jurisdiction
of the Department of Environment and Natural Resources (DENR), have been successfully
completed.
 "The PARC shall establish guidelines to implement the above priorities and distribution
scheme, including the determination of who are qualified beneficiaries: Provided, That an
owner-tiller may be a beneficiary of the land he/she does not own but is actually cultivating to
the extent of the difference between the area of the land he/she owns and the award ceiling
of three (3) hectares: Provided, further, That collective ownership by the farmer beneficiaries
shall be subject to Section 25 of Republic Act No. 6657, as amended: Provided, furthermore,
That rural women shall be given the opportunity t o participate in the development planning
and implementation of this Act: Provided, finally, That in no case should the agrarian reform
beneficiaries' sex, economic, religious, social, cultural and political attributes adversely affect
the distribution of lands."

Section 6. The title of Section 16of Republic Act No. 6657, as amended, is hereby further amended
to read as follows:

"SEC. 16. Procedure for Acquisition and Distribution of Private Lands."

Section 7. Section 17of Republic Act No. 6657, as amended, is hereby further amended to read as
follows:

"SEC. 17. Determination of Just Compensation. - In determining just compensation, the cost
of acquisition of the land, the value of the standing crop, the current: value of like properties,
its nature, actual use and income, the sworn valuation by the owner, the tax declarations, the
assessment made by government assessors, and seventy percent (70%) of the zonal
valuation of the Bureau of Internal Revenue (BIR), translated into a basic formula by the
DAR shall be considered, subject to the final decision of the proper court. The social and
economic benefits contributed by the farmers and the farmworkers and by the Government t
o the property as well as the nonpayment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors to determine its
valuation."

Section 8. There shall be incorporated after Section 22 of Republic Act No. 6657, as amended, a
new section to read as follows:

"SEC. 22-A. Order of Priority. - A landholding of a landowner shall be distributed first to

qualified beneficiaries under Section 22, subparagraphs (a) and (b) of that same landholding
up to a maximum of three (3) hectares each. Only when these beneficiaries have all received
three (3) hectares each, shall the remaining portion of the landholding, if any, be distributed
to other beneficiaries under Section 22, subparagraphs (c), (d), (e), (f), and (g)."

Section 9. Section 24 of Republic Act No. 6657, as amended, is hereby further amended to read as
follows:

"SEC. 24. Award to Beneficiaries. - The rights and responsibilities of the beneficiaries shall
commence from their receipt of a duly registered emancipation patent or certificate of land
ownership award and their actual physical possession of the awarded land. Such award shall
be completed in not more than one hundred eighty (180) days from the date of registration of
the title in the name of the Republic of the Philippines:Provided, That the emancipation
patents, the certificates of land ownership award, and other titles issued under any agrarian
reform program shall be indefeasible and imprescriptible after one (1) year from its
registration with the Office of the Registry of Deeds, subject to the conditions, limitations and
qualifications of this Act, the property registration decree, and other pertinent laws. The
emancipation patents or the certificates of land ownership award being titles brought under
 the operation of the torrens system, are conferred with the same indefeasibility and security
afforded to all titles under the said system, as provided for by Presidential Decree No. 1529,
as amended by Republic Act No. 6732.

"It is the ministerial duty of the Registry of Deeds to register the title of the land in the name
of the Republic of the Philippines, after the Land Bank of the Philippines (LBP) has certified
that the necessary deposit in the name of the landowner constituting full payment in cash or
in bond with due notice to the landowner and the registration of the certificate of land
ownership award issued to the beneficiaries, and to cancel previous titles pertaining thereto.

"Identified and qualified agrarian reform beneficiaries, based on Section 22 of Republic Act
No. 6657, as, amended, shall have usufructuary rights over the awarded land as soon as the
DAR takes possession of such land, and such right shall not be diminished even pending the
awarding of the emancipation patent or the certificate of land ownership award.

"All cases involving the cancellation of registered emancipation patents, certificates of land
ownership award, and other titles issued under any agrarian reform program are within the
exclusive and original jurisdiction of the Secretary of the DAR."

Section 10. Section 25 of Republic Act So. 6657, as amended, is hereby further amended to read
as follows:

"SEC.25. Award Ceilings for Beneficiaries. - Beneficiaries shall be awarded an area not
exceeding three (3) hectares, which may cover a contiguous tract of land or several parcels
of land cumulated up to the prescribed award limits. The determination of the size of the land
for distribution shall consider crop type, ,soil type, weather patterns and other pertinent
variables or factors which are deemed critical for the success of the beneficiaries.

"For purposes of this Act, a landless beneficiary is one who owns less than three (3)
hectares of agricultural land.

"Whenever appropriate, the DAR shall encourage the agrarian reform beneficiaries to form
or join farmers' cooperatives for purposes of affiliating with existing cooperative banks in their
respective provinces or localities, as well as forming blocs of agrarian reform beneficiaries,
corporations, and partnerships and joining other farmers' collective organizations, including
irrigators' associations: Provided, That the agrarian reform beneficiaries shall be assured of
corresponding shares in the corporation, seats in the board of directors, and an equitable
share in the profit.

"In general, the land awarded to a farmer- beneficiary should be in the form of an individual
title, covering one (1)contiguous tract or several parcels of land cumulated up to a maximum
of three (3) hectares.

"The beneficiaries may opt for collective ownership, such as co-workers or farmers
cooperative or some other form of collective organization and for the issuance of collective
ownership titles: Provided, That the total area that may be awarded shall not exceed the total
number of co-owners or members of the cooperative or collective organization multiplied by
the award limit above prescribed, except in meritorious cases as determined by the PARC.

"The conditions for the issuance of collective titles are as follows:

 "(a) The current farm management system of the land covered by CARP will not be
appropriate for individual farming of farm parcels;

"(b) The farm labor system is specialized, where the farmworkers are organized by
functions and not by specific parcels such as spraying, weeding, packing and other
similar functions;

"(c) The potential beneficiaries are currently not farming individual parcels hut
collectively work on large contiguous areas; and

"(d) The farm consists of multiple crops being farmed in an integrated manner or
includes non- crop production areas that are necessary for the viability of farm
operations, such as packing plants, storage areas, dikes, and other similar facilities
that cannot be subdivided or assigned to individual farmers.

"For idle and abandoned lands or underdeveloped agricultural lands to be covered by CARP,
collective ownership shall be allowed only if the beneficiaries opt for it and there is a clear
development plan that would require collective farming or integrated farm operations
exhibiting the conditions described above. Otherwise, the land awarded to a farmer-
beneficiary should be in the form of a n individual title, covering one (1) contiguous tract or
several parcels of land cumulated up to a maximum of three (3) hectares.

"In case of collective ownership, title to the property shall be issued in the name of the co-
owners or the cooperative or collective organization as the case may be. If the certificates of
land ownership award are given to cooperatives then the names of the beneficiaries must
also be listed in the same certificate of land ownership award.

"With regard to existing collective certificates of land ownership award, the DAR should
immediately undertake the parcelization of said certificates of land ownership award,
particularly those that do not exhibit the conditions for collective ownership outlined above.
The DAR shall conduct a review and redocumentation of all the collective certificates of land
ownership award. The DAR shall prepare a prioritized list of certificates of land ownership
award to be parcelized. The parcelization shall commence immediately upon approval of this
Act and shall not exceed a period of three (3) years. Only those existing certificates of land
ownership award that are collectively farmed or are operated in an integrated manner shall
remain as collective."

Section 11. Section 26 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 26. Payment by Beneficiaries. - Lands awarded pursuant to this Act shall be paid for
by the beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest
per annum. The annual amortization shall start one (1) year from the date of the certificate of
land ownership award registration. However, if the occupancy took place after the certificate
of land ownership award registration, the amortization shall start one (1) year from actual
occupancy. The payments for the first three (3) years after the award shall be at reduced
amounts as established by the PARC: Provided, That the first five (5) annual payments may
not be more than five percent (5%) of the value of the annual gross production as
established by the DAR. Should the scheduled annual payments after the fifth (5th) year
exceed ten percent (10%) of the annual gross production and the failure to produce
accordingly is not due to the beneficiary's fault, the LBP shall reduce the interest rate and/or
reduce the principal obligation to make the repayment affordable.
 "The LBP shall have a lien by way of mortgage on the land awarded to the beneficiary; and
this mortgage may be foreclosed by the LBP for non-payment of an aggregate of three (3)
annual amortizations. The LBP shall advise the DAR of such proceedings and the latter shall
subsequently award the forfeited landholding to other qualified beneficiaries. A beneficiary
whose land, as provided herein, has been foreclosed shall thereafter be permanently
disqualified from becoming a beneficiary under this Act."

Section 12. Section 27 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 27. Transferability of Awarded Lands. - Lands acquired by beneficiaries under this Act
or other agrarian reform laws shall not be sold, transferred or conveyed except through
hereditary succession, or to the government, or to the LBP, or to other qualified beneficiaries
through the DAR for a period of ten (10) years: Provided, however, That the children or the
spouse of the transferor shall have a right to repurchase the land from the government or
LBP within a period of two (2) years. Due notice of the availability of the land shall be given
by the LBP to the BARC of the barangay where the land is situated. The PARCCOM, as
herein provided, shall, in turn, be given due notice thereof by the BARC.

"The title of the land awarded under the agrarian reform must indicate that it is an
emancipation patent or a certificate of land ownership award and the subsequent transfer
title must also indicate that it is an emancipation patent or a certificate of land ownership
award.

"If the land has not yet been fully paid by the beneficiary, the rights to the land may be
transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to
any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the
land himself/herself. Failing compliance herewith, the land shall be transferred to the LBP
which shall give due notice of the availability of the land in the manner specified in the
immediately preceding paragraph.

"In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one
lump sump for the amounts the latter has already paid, together with the value of
improvements he/she has made on the land."

Section 13. Section 36 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 36. Funding for Support Services. - In order to cover the expenses and cost of support
services, at least forty percent (40%) of all appropriations for agrarian reform during the five
(5) year extension period shall be immediately set aside and made available for this
purpose: Provided, That the DAR shall pursue integrated land acquisition and distribution
and support services strategy requiring a plan to be developed parallel to the land acquisition
and distribution process. The planning and implementation for land acquisition and
distribution shall be hand-in-hand with support services delivery: Provided, further, That for
the next five (5) years, as far as practicable, a minimum of two (2) Agrarian Reform
Communities (ARCs) shall be established by the DAR, in coordination with the local
government units, non-governmental organizations, 'community-based cooperatives and
people's organizations in each legislative district with a predominant agricultural
population: Provided, furthermore, That the areas in which the ARCS are to be established
shall have been substantially covered under the provisions of this Act and other agrarian or
land reform laws: Provided, finally, That a complementary support services delivery strategy
 for existing agrarian reform beneficiaries that are not in barangays within the ARCs shall be
adopted by the DAR.

"For this purpose, an Agrarian Reform Community is composed and managed by agrarian
reform beneficiaries who shall be willing to be organized and to undertake the integrated
development of an area and/or their organizations/ cooperatives. In each community, the
DAR, together with the agencies and organizations abovementioned, shall identify the
farmers' association, cooperative or their respective federations approved by the farmers-
beneficiaries that shall take the lead in the agricultural development of the area. In addition,
the DAR, in close coordination with the congressional oversight committee created herein,
with due notice to the concerned representative of the legislative district prior to
implementation shall be authorized to package proposals and receive grants, aids and other
forms of financial assistance from any source"

Section 14. Section 37 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 37. Support Services for the Agrarian Reform Beneficiaries. - The State shall adopt
the integrated policy of support services delivery to agrarian reform beneficiaries. To this
end, the DAR, the Department of Finance, and the Bangko Sentral ng Pilipinas (BSP) shall
institute reforms to liberalize access to credit by agrarian reform beneficiaries. The PARC
shall ensure that support services for agrarian reform beneficiaries are provided, such as:

"(a) Land surveys and titling;

"(b) Socialized terms on agricultural credit facilities;

"Thirty percent (30%) of all appropriations for support services referred to in Section
36 of Republic Act No. 6657, as amended, shall be immediately set aside and made
available for agricultural credit facilities: Provided, That one-third (1/3) of this
segregated appropriation shall be specifically allocated for subsidies to support the
initial capitalization for agricultural production to new agrarian reform beneficiaries
upon the awarding of the emancipation patent or the certificate of land ownership
award and the remaining two-thirds (2/3) shall be allocated to provide access to
socialized credit to existing agrarian reform beneficiaries, including the
leaseholders: Provided, further, the LBP and other concerned government financial
institutions, accredited savings and credit cooperatives, financial service
cooperatives and accredited cooperative banks shall provide the delivery system for
disbursement of the above financial assistance to individual agrarian reform
beneficiaries, holders of collective titles and cooperatives.

"For this purpose, all financing institutions may accept as collateral for loans the
purchase orders, marketing agreements or expected harvests: Provided, That loans
obtained shall be used in the improvement or development of the farm holding of the
agrarian reform beneficiary or the establishment of facilities which shall enhance
production or marketing of agricultural products of increase farm income
therefrom: Provided, further, That of the remaining seventy percent (70%) for the
support services, fifteen percent (15%) shall be earmarked for farm inputs as
requested by the duly accredited agrarian reform beneficiaries' organizations, such
as, but not limited to: (1) seeds, seedlings and/or planting materials; (2) organic
fertilizers; (3) pesticides; (4)herbicides; and (5) farm animals,
 implements/'machineries; and five percent (5%) for seminars, trainings and the like to
help empower agrarian reform beneficiaries.

"(c) Extension services by way of planting, cropping, production and post-harvest

technology transfer, as well as marketing and management assistance and support
to cooperatives and farmers' organizations;

"(d) Infrastructure such as, but not limited to, access trails, mini-dams, public utilities,
marketing and storage facilities;

"(e) Research, production and use of organic fertilizers and other local substances
necessary in farming and cultivation; and

"(f) Direct and active DAR assistance in the education and organization of actual and
potential agrarian reform beneficiaries, at the barangay, municipal, city, provincial,
and national levels, towards helping them understand their rights and responsibilities
as owner-cultivators developing farm- related trust relationships among themselves
and their neighbors, and increasing farm production and profitability with the ultimate
end of empowering them to chart their own destiny. The representatives of the
agrarian reform beneficiaries to the PARC shall be chosen from the 'nominees of the
duly accredited agrarian reform beneficiaries' organizations, or in its absence, from
organizations of actual and potential agrarian reform beneficiaries as forwarded to
and processed by the PARC EXCOM.

"The PARC shall formulate policies to ensure that support services for agrarian reform
beneficiaries shall be provided at all stages of the program implementation with the
concurrence of the concerned agrarian reform beneficiaries.

"The PARC shall likewise adopt, implement, and monitor policies and programs to ensure
the fundamental equality of women and men in the agrarian reform program as well as
respect for the human rights, social protection, and decent working conditions of both paid
and unpaid men and women farmer-beneficiaries.

"The Bagong Kilusang Kabuhayan sa Kaunlaran (BKKK) Secretariat shall be transferred and
attached t o the LBP, for its supervision including all its applicable and existing funds,
personnel, properties, equipment and records.

"Misuse or diversion of the financial and support services herein provided shall result in
sanctions against the beneficiary guilty thereof, including the forfeiture of the land transferred
to him/her or lesser sanctions as may be provided by the PARC, without prejudice to criminal
prosecution."

Section 15. There shall be incorporated after Section 37 of Republic Act No. 6657, as amended, a
new section to read as follows:

"SEC. 37-A. Equal Support Services for Rural Women. - Support services shall be extended
equally to women and men agrarian reform beneficiaries.

"The PARC shall ensure that these support services, as provided for in this Act, integrate the
specific needs and well-being of women farmer- beneficiaries taking into account the specific
requirements of female family members of farmer- beneficiaries.
 "The PARC shall also ensure that rural women will be able to participate in all community
activities. To this effect, rural women are entitled to self-organization in order to obtain equal
access to economic opportunities and to have access to agricultural credit and loans,
marketing facilities and technology, and other support services, and equal treatment in land
reform and resettlement schemes.

"The DAR shall establish and maintain a women's desk, which will be primarily responsible
for formulating and implementing programs and activities related to the protection and
promotion of women's rights, as well as providing an avenue where women can register their
complaints and grievances principally related t o their rural activities."

Section 16. Section 38 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 38. Support Services for Landowners. - The PARC, with the assistance of such other
government agencies and instrumentalities as it may direct, shall provide landowners
affected by the CARP and prior agrarian reform programs with the following services:

"(a) Investment information, financial and counseling assistance, particularly

investment information on government-owned and/or -controlled corporations and
disposable assets of the government in pursuit of national industrialization and
economic independence:

"(b) Facilities, programs and schemes for the conversion or exchange of bonds
issued for payment of the lands acquired with stocks and bonds issued by the
National Government, the BSP and other government institutions and
instrumentalities;

"(c) Marketing of agrarian reform bonds, as well as promoting the marketability of

said bonds in traditional and non-traditional financial markets and stock exchanges:
and/or

"(d) Other services designed t o utilize productively the proceeds of the sale of such
lands for rural industrialization.

"A landowner who invests in rural-based industries shall be entitled to the incentives granted
to a registered enterprise engaged in a pioneer or preferred area of investment as provided
for in the Omnibus Investment Code of 1987,or to such other incentives as the PARC, the
LBP, or other government financial institutions shall provide.

"The LBP shall redeem a landowner's agrarian reform bonds at face value as an incentive:
Provided, That at least fifty percent (50%) of the proceeds thereof shall be invested in a
Board of Investments (BOI)-registered company or in any agri-business or agro-industrial
enterprise in the region where the CARP-covered landholding is located. An additional
incentive of two percent (2%) in cash shall be paid to a landowner who maintains his/her
enterprise as a going concern for five (5) years or keeps his/her investments in a BOI-
registered firm for the same period: Provided, further, That the rights of the agrarian reform
beneficiaries are not, in any way, prejudiced or impaired thereby.

"The DAR, the LBP and the Department of Trade and Industry shall jointly formulate the
program to carry out these provisions under the supervision of the PARC: Provided, That in
 no case shall the landowners' sex, economic, religious, social, cultural and political attributes
exclude them from accessing these support services."

Section 17. Section 41 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 41. The Presidential Agrarian Reform Council. - The Presidential Agrarian Reform
Council (PARC) shall be composed of the President of the Philippines as Chairperson, the
Secretary of Agrarian Reform as Vice-Chairperson and the following as members:
Secretaries of the Departments of Agriculture; Environment and Natural Resources; Budget
and Management; Interior and Local Government; Public Works and Highways; Trade and
Industry; Finance; and Labor and Employment; Director-General of the National Economic
and Development Authority; President, Land Bank of the Philippines; Administrator, National
Irrigation Administration; Administrator, Land Registration Authority; and six (6)
representatives of affected landowners to represent Luzon, Visayas and Mindanao; six (6)
representatives of agrarian reform beneficiaries, two (2) each from Luzon, Visayas and
Mindanao: Provided, That at least one (1) of them shall be from the indigenous
peoples: Provided, further, That at least one (1)of them shall come from a duly recognized
national organization of rural women or a national organization of agrarian reform
beneficiaries with a substantial number of women members: Provided, finally, That at least
twenty percent (20%) of the members of the PARC shall be women but in no case shall they
be less than two (Z)."

Section 18. Section 50 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive
original jurisdiction over all matters involving the implementation of agrarian reform, except
those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the
DENR.

"It shall not be bound by technical rules of procedure and evidence but shall proceed to hear
and decide all cases, disputes or controversies in a most expeditious manner, employing all
reasonable means to ascertain the facts of every case in accordance with justice and equity
and the merits of the case. Toward this end, it shall adopt a uniform rule of procedure to
achieve a just, expeditious and inexpensive determination of every action or proceeding
before it.

"It shall have the power to summon witnesses, administer oaths, take testimony, require
submission of reports, compel the production of books and documents and answers to
interrogatories and issuesubpoena, and subpoena duces tecum and to enforce its writs
through sheriffs or other duly deputized officers. It shall likewise have the power to punish
direct and indirect contempts in the same manner and subject to the same penalties as
provided in the Rules of Court.

"Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers,
or their organizations in any proceedings before the DAR Provided, however, That when
there are two or more representatives for any individual or group, the representatives should
choose only one among themselves to represent such party or group before any DAB
proceedings.
 "Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be
immediately executory except a decision or a portion thereof involving solely the issue of just
compensation."

Section 19. Section 50 of Republic Act No. 6657, as amended, is hereby further amended by adding
Section 50-A to read as follows:

"SEC. 50-A. Exclusive Jurisdiction on Agrarian Dispute. - No court or prosecutor's office shall
take cognizance of cases pertaining to the implementation of the CARP except those
provided under Section 57 of Republic Act No. 6657, as amended. If there is an allegation
from any of the parties that the case is agrarian in nature and one of the parties is a farmer,
farmworker, or tenant, the case shall be automatically referred by the judge or the prosecutor
to the DAR which shall determine and certify within fifteen (15) days from referral whether an
agrarian dispute exists: Provided, That from the determination of the DAR, an aggrieved
party shall have judicial recourse. In cases referred by the municipal trial court and the
prosecutor's office, the appeal shall be with the proper regional trial court, and in cases
referred by the regional trial court, the appeal shall be to the Court of Appeals.

"In cases where regular courts or quasi-judicial bodies have competent jurisdiction, agrarian
reform beneficiaries or identified beneficiaries and/or their associations shall have legal
standing and interest to intervene concerning their individual or collective rights and/or
interests under the CARP.

"The fact of non-registration of such associations with the Securities and Exchange
Commission, or Cooperative Development Authority, or any concerned government agency
shall not be used against them to deny the existence of their legal standing and interest in a
case filed before such courts and quasi-judicial bodies."

Section 20. Section 55 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 55. No Restraining Order or Preliminary Injunction. -Except for the Supreme Court, no
court in the Philippines shall have jurisdiction to issue any restraining order or writ of
preliminary injunction against the PARC, the DAR, or any of its duly authorized or designated
agencies in any case, dispute or controversy arising from, necessary to, or in connection with
the application, implementation, enforcement, or interpretation of this Act and other pertinent
laws on agrarian reform."

Section 21. Section 63 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 63. Funding Source. - The amount needed to further implement the CARP as
provided in this Act, until June 30, 2014, upon expiration of funding under Republic Act No.
8532 and other pertinent laws, shall be funded from the Agrarian Reform Fund and other
funding sources in the amount of at least One hundred fifty billion pesos
(P150,000,000,000.00).

"Additional amounts are hereby authorized to be appropriated as and when needed to

augment the Agrarian Reform Fund in order to fully implement the provisions of this Act
during the five (5)-year extension period.

"Sources of funding or appropriations shall include the following:

 "(a) Proceeds of the sales of the Privatization and Management Office (PMO);

"e)All receipts from assets recovered and from sales of ill-gotten wealth recovered
through the PCGG excluding the amount appropriated for compensation to victims of
human rights violations under the applicable law;

"(c) Proceeds of the disposition and development of the properties of the

Government in foreign countries, for the specific purposes of financing production
credits, infrastructure and other support services required by this Act;

"(d) All income and, collections of whatever form and nature arising from the agrarian
reform operations, projects and programs of the DAR and other CARP implementing
agencies;

"(e) Portion of amounts accruing to the Philippines from all sources of official foreign.
aid grants and concessional financing from all countries, to be used for the specific
purposes of financing productions, credits, infrastructures, and other support services
required by this Act:

"(f) Yearly appropriations of no less than Five billion pesos (P5,000,000,000.00) from
the General Appropriations Act;

"(g) Gratuitous financial assistance from legitimate sources; and

"(h) Other government funds not otherwise appropriated.

"All funds appropriated to implement the provisions of this Act shall be considered continuing
appropriations during the period of its implementation: Provided, That if the need arises,
specific amounts for bond redemptions, interest payments and other existing obligations
arising from the implementation of the program shall be included in the annual General
Appropriations Act: Provided, further, That all just compensation payments to landowners,
including execution of judgments therefore, shall only be sourced from the Agrarian Reform
Fund: Provided, however, That just compensation payments that cannot be covered within
the approved annual budget of the program shall be chargeable against the debt service
program of the national government, or any unprogrammed item in the General
Appropriations Act:Provided, finally, That after the completion of the land acquisition and
distribution component of the CARP, the yearly appropriation shall be allocated fully to
support services, agrarian justice delivery and operational requirements of the DAR and the
other CARP implementing agencies."

Section 22. Section 65 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 65. Conversion of Lands. - After the lapse of five (5) years from its award, when the
land ceases to be economically feasible and sound for agricultural purposes, or the locality
has become urbanized and the land will have a greater economic value for residential,
commercial or industrial purposes, the DAR, upon application of the beneficiary or the
landowner with respect only to his/her retained area which is tenanted, with due notice to the
affected parties, and subject to existing laws, may authorize the reclassification or
conversion of the land and its disposition: Provided, That if the applicant is a beneficiary
under agrarian laws and the land sought to be converted is the land awarded to him/her or
any portion thereof, the applicant, after the conversion is granted, shall invest at least ten
 percent (10%)of the proceeds coming from the conversion in government
securities: Provided, further, That the applicant upon conversion shall fully pay the price of
the land: Provided, furthermore, That irrigated and irrigable lands, shall not be subject to
conversion: Provided, finally, That the National Irrigation Administration shall submit a
consolidated data on the location nationwide of all irrigable lands within one (1)year from the
effectivity of this Act.

"Failure to implement the conversion plan within five (5) years from the approval of such
conversion plan or any violation of the conditions of the conversion order due to the fault of
the applicant shall cause the land to automatically be covered by CARP."

Section 23. Section 68 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 68. Immunity of Government Agencies from Undue Interference. - In cases falling
within their jurisdiction, no injunction, restraining order, prohibition or mandamus shall be
issued by the regional trial courts, municipal trial courts, municipal circuit trial courts, and
metropolitan trial courts against the DAR, the DA, the DENR, and the Department of Justice
in their implementation of the program."

Section 24. Section 73 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 73. Prohibited Acts and Omissions. - The following are prohibited:

"(a) The ownership or possession, for the purpose of circumventing the provisions of
this Act, of agricultural lands in excess of the total retention limits or award ceilings
by any person, natural or juridical, except those under collective ownership by
farmer-beneficiaries;

"(b) The forcible entry or illegal detainer by persons who are not qualified
beneficiaries under this Act to avail themselves of the rights and benefits of the
Agrarian Reform Program:

"(c) Any conversion by , any landowner of his/her agricultural' land into any non-
agricultural use with intent to avoid the application of this Act to his/her landholdings
and to dispossess his/her bonafide tenant farmers:

"(d) The malicious and willful prevention or obstruction by any person, association or
entity of the implementation of the CARP;

"(e) The sale, transfer, conveyance or change of the nature of lands outside of urban
centers and city limits either in whole or in part after the effectivity of this Act, except
after final completion of the appropriate conversion under Section 65 of Republic Act
No. 6657, as amended. The date of the registration of the deed of conveyance in the
Register of Deeds with respect to titled lands and the date of the issuance of the tax
declaration to the transferee of the property with respect to unregistered lands, as the
case may be, shall be conclusive for the purpose of this Act;
 "(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other
usufructuary right over the land he/she acquired by virtue of being a beneficiary, in
order to circumvent the provisions of this Act;

"(g) The unjustified, willful, and malicious act by a responsible officer or officers of the
government through the following:

"(1) The denial of notice and/or reply to landowners;

"(2) The deprivation of retention rights;

"(3) The undue or inordinate delay in the preparation of claim folders; or

"(4) Any undue delay, refusal or failure in the payment of just compensation;

"(h) The undue delay or unjustified failure of the DAR, the LBP, the PARC, the
PARCCOM, and any concerned government agency or any government official or
employee to submit the required report, data and/or other official document involving
the implementation of the provisions of this Act, as required by the parties or the
government, including the House of Representatives and the Senate of the
Philippines as well as their respective committees, and the congressional oversight
committee created herein;

"(i) The undue delay in the compliance with the obligation to certify or attest and/or
falsification of the certification or attestation as required under Section 7 of Republic
Act No. 6657, as amended; and

"(j) Any other culpable neglect or willful violations of the provisions of this Act.

"In the case of government officials and employees, a conviction under this Act is without
prejudice to any civil case and/or appropriate administrative proceedings under civil service
law, rules and regulations. "Any person convicted under this Act shall not be entitled to any
benefit provided for in any agrarian reform law or program."

Section 25. Section 74 of Republic Act No. 6657, as amended, is hereby further amended to read
as follows:

"SEC. 74. Penalties. - Any person who knowingly or willfully violates the provisions of this
Act shall be punished by imprisonment of not less than one (1) month to not more than three
(3) years or a fine of not less than One thousand pesos (P1,000.00) and not more than
Fifteen thousand pesos (P15,000.00), or both, at the discretion of the court: Provided, That
the following corresponding penalties shall be imposed for the specific violations hereunder:

"(a) Imprisonment of three (3) years and one (1) day to six (6) years or a fine of not
less than Fifty thousand pesos (P50,000.00)and not more than One hundred fifty
thousand pesos (P150,000.00), or both, at the discretion of the court upon any
person who violates Section 73, subparagraphs (a), (b), (f), (g), and (h) of Republic
Act No. 6657, as amended; and

"(b) Imprisonment of six (6) years and one (1) day to twelve (12) years or a fine of not
less than Two hundred thousand pesos (P200,000.00) and not more than One
 million pesos (P1,000,000.00), or both, at the discretion of the court upon any person
who violates Section 73, subparagraphs (c), (d), (e), and (i) of Republic Act No.
6657, as amended.

"If the offender is a corporation or association, the officer responsible therefor shall be
criminally liable."

Section 26. Congressional Oversight Committee. - A Congressional Oversight Committee on

Agrarian Reform (COCAR) is hereby created to oversee and monitor the implementation of this Act.
It shall be composed of the Chairpersons of the Committee on Agrarian Reform of both Houses of
Congress, three (3) Members of the House of Representatives, and three (3) Members of the
Senate of the Philippines, to be designated respectively by the Speaker of the House of
Representatives and the President of the Senate of the Philippines.

The Chairpersons of the Committees on Agrarian Reform of the House of Representatives and of
the Senate of the Philippines shall be the Chairpersons of the COCAR. The Members shall receive
no compensation; however, traveling and other necessary expenses shall be allowed.

In order to carry out the objectives of this Act, the COCAR shall be provided with the necessary
appropriations for its operation. An initial amount of Twenty-five million pesos (P25,000,000.00) is
hereby appropriated for the COCAR for the first year of its operation and the same amount shall be
appropriated every year thereafter.

The term of the COCAR shall end six (6) months after the expiration of the extended period of five
(5) years.

Section 27. Powers and Functions of the COCAR. - The COCAR shall have the following powers
and functions:

(a) Prescribe and adopt guidelines which shall govern its work;

(b) Hold hearings and consultations, receive testimonies and reports pertinent to its specified
concerns;

(c) Secure from any department, bureau, office or instrumentality of the government such
assistance as may be needed, including technical information, preparation and production of
reports and submission of recommendations or plans as it may require, particularly a yearly
report of the record or performance of each agrarian reform beneficiary as provided under
Section 22 of Republic Act No. 6657, as amended;

(d) Secure from the DAR or the LBP information on the amount of just compensation
determined to be paid or which has been paid to any landowner;

(e) Secure from the DAR or the LBP quarterly reports on the disbursement of funds for the
agrarian reform program;

(f) Oversee and monitor, in such a manner as it may deem necessary, the actual
implementation of the program and projects by the DAR;
 (g) Summon by subpoena any public or private citizen to testify before it, or require
by subpoena duces tecum to produce before it such records, reports, or other documents as
may be necessary in the performance of its functions;

(h) Engage the services of resource persons from the public and private sectors as well as
civil society including the various agrarian reform groups or organizations in the different
regions of the country as may be needed;

(i) Approve the budget for the work of the Committee and all disbursements therefrom,
including compensation of all personnel;

(j) Organize its staff and hire and appoint such employees and personnel whether temporary,
contractual or on constancy subject to applicable rules; and

(k) Exercise all the powers necessary and incidental to attain the purposes for which it is
created.

Section 28. Periodic Reports. - The COCAR shall submit to the Speaker of the House of
Representatives and to the President of the Senate of the Philippines periodic reports on its findings
and recommendations on actions to be undertaken by both Houses of Congress, the DAR, and the
PARC.

Section 29. Access to Information. - Notwithstanding the provisions of Republic Act No. 1405 and
other pertinent laws, information on the amount of just compensation paid to any landowner under
Republic Act No. 6657, as amended, and other agrarian reform laws shall be deemed public
information.

Section 30. Resolution of Case. - Any case and/or proceeding involving the implementation of the
provisions of Republic Act No. 6657, as amended, which may remain pending on June 30, 2014
shall be allowed to proceed to its finality and be executed even beyond such date.

Section 31. Implementing Rules and Regulations. - The PARC and the DAR shall provide the
necessary implementing rules and regulations within thirty (30) days upon the approval of this Act.
Such rules and regulations shall take effect on July 1, 2009 and it shall be published in at least two
(2) newspapers of general circulation.

Section 32. Repealing Clause. - Section 53 of Republic Act No. 3844, otherwise known as the
Agricultural Land Reform Code, is hereby repealed and all other laws, decrees, executive orders,
issuances, rules and regulations, or parts thereof inconsistent with this Act are hereby likewise
repealed or amended accordingly.

Section 33. Separability Clause. - If, for any reason, any section or provision of this Act is declared
unconstitutional or invalid, the other sections or provisions not affected thereby shall remain in full
force and effect.

Section 34. Effectivity Clause. - This Act shall take effect on July 1,2009 and it shall be published
in at least two (2) newspapers of general circulation.

Approved,