1

AGRARIAN REFORM LAW AND JURISPRUDENCE (A DAR-UNDP SARDIC

PUBLICATION)
AGRARIAN LAW AND JURISPRUDENCE
PREFACE
This book has inauspicious beginnings. The original intent of the UNDPSARDIC project, which eventually bore this book, was to map out special
areas for policy reform in agrarian reform law. But as the project team delved
deeper into the subject, the long unaddressed need for an organized and
systematic presentation of agrarian law and existing jurisprudence was again
put to fore. In response to that problem, the project team and the UNDPSARDIC project decided to widen the scope of the project and, thus, what
came of it was not only a map of the difficult problem areas in the law's
implementation but also this book. TcHCDI
Any foray into the complicated, and often contentious, arena that is
agrarian reform law necessitates a complete and well-grounded grasp of the
basics. If anything, our study revealed that, even after decades, agrarian
reform law remains vastly misunderstood and under-appreciated not only by
stakeholders but by agrarian reform law implementors themselves.
This is largely due to the dearth of materials on the matter. Over the
years, laws and their implementing rules have been refined and promulgated
to reflect the lessons learned and the changing times. Simultaneously, the
Supreme Court issued rulings that elucidate and interpret the law, as well as
repudiate portions thereof. The rights and obligations of the different
stakeholders have been constantly redefined and readjusted.
Despite these exciting developments, however, there has been little done
to mesh all these pieces of knowledge into an organized whole.
This book is an effort towards that end.
In a nutshell, this book is a humble attempt in summing up years of
agrarian reform law implementation. This book intends to reach out to all
sectors and stakeholders to heighten their understanding and appreciation of
the agrarian reform in the Philippines, and hopefully help refine the terms of
the ongoing debates among them. This book hopes to appeal to both familiar
and unfamiliar on the subject. It attempts to present, in an academic fashion,
all relevant agrarian reform laws, DAR implementing rules, and pertinent
judicial declarations on the matter. Hopefully, this will provide a holistic
framework for understanding agrarian law.
Extra effort was also exerted to demonstrate agrarian reform in action by
giving concrete illustrations and discussion from an operational perspective.
Interspersed with the theoretical discussions are the various operational
issues and difficulties that DAR implementors faced or are still facing.
The authors would like to thank

the UNDP-SARDIC project management team for providing the

financial and logistic support to see this project through.

the members of DAR's management committee who shared with

the project team their invaluable insights and experience in agrarian
reform implementation. Their contribution in making this book complete
and insightful is immeasurable.

the DAR-PPLAO support staff for providing administrative and

secretariat support; and

Antonio Ramos who served as auditor for this project.

This is but a first step. We derive inspiration from the words of T.S. Eliot:
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time
1

[From "Little Gidding"]

THE AUTHORS
CHAPTER 1
Coverage of the Comprehensive Agrarian Reform Program
The Comprehensive Agrarian Reform Program
The Comprehensive Agrarian Reform Program (CARP) is implemented by
Republic Act No. 6657 (1988) otherwise known as the "Comprehensive
Agrarian Reform Law". Prior to its enactment on 10 June 1988, President
Corazon C. Aquino issued Proclamation No. 131 (1987) instituting a
comprehensive agrarian reform program, and Executive Order No. 229
(1987) providing the mechanics for its implementation. RA 6657 took effect
on 15 June 1988.
While expressly repealing specific provisions of prior enactments on agrarian
reform, RA 6657 provides that the provisions of RA 3844 (1963), Presidential
Decree No. 27 (1972) and PD 266 (1973), EO 228 (1987) and EO 229 (1987)
and other laws not inconsistent with it shall have suppletory effect.
RA 6657 was enacted pursuant to the constitutional mandate enshrined in
Section 4, Art. XIII of the 1987 Constitution, which provides:
SEC. 4.
The State shall, by law, undertake an agrarian reform program
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 such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or
equity considerations, and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary landsharing.
The constitutionality of RA 6657 has been upheld in Association of Small
Landowners v. Secretary of Agrarian Reform , 175 SCRA 342 (1989) and
companion cases. The Supreme Court held that the requirement of public
use has already been settled by the Constitution itself. It noted that "[n]o
less than the 1987 Charter calls for agrarian reform which is the reason why
private agricultural lands are to be taken from their owners, subject to the
prescribed retention limits." (at 378)
While RA 6657 itself has been held constitutional, the Supreme Court in a
subsequent case, Luz Farms v. Secretary of Agrarian Reform , 192 SCRA 51
(1990), declared unconstitutional Sec. 3 (b), 10 and 11 thereof in so far as
they include lands devoted to the raising of livestock, swine and poultry
within its coverage. As a result of this ruling, Congress enacted RA 7881
(1995) amending these provisions and incorporating new provisions to
existing ones. The amendments adopted the Luz doctrine by removing
livestock, swine and poultry farms from CARP coverage.
Scope of CARP
The Constitution in Sec. 4, Art. XIII, mandates the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits
that the Congress may prescribe, taking into account ecological,
developmental or equity considerations and subject to the payment of just
compensation.
Prior to RA 6657, the operative law on land distribution was PD 27 (1972).
However, PD 27 is limited in scope, covering only tenanted private
agricultural lands primarily devoted to rice and corn operating under a
system of share-crop or lease tenancy, whether classified as landed estate or
not. The constitutional provision therefore expanded the scope of agrarian
reform to cover all agricultural lands.
RA 6657 operationalized this constitutional mandate and provides in Sec.
4 thereof that the CARP shall cover, regardless of tenurial arrangement and
2

commodity produced, all public and private agricultural lands, as provided in

Proclamation No. 131 and EO 229 including other lands of the public domain
suitable for agriculture. More specifically, the following lands are covered by
CARP:
a)
All alienable and disposable lands of the public domain devoted
to or suitable for agriculture;
b)
All lands of the public domain in excess of the specific limits as
determined by Congress in Sec. 4 (a) of RA 6657;
c)
All other lands owned by the government devoted to or suitable
for agriculture; and
d)
All private lands devoted or suitable for agriculture regardless of
the agricultural products raised or that can be raised thereon (Rep. Act
No. 6657 [1988], Sec. 4).
Definition of agricultural land
Sec. 3 (c) of RA 6657 defines agricultural lands as follows:
(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.
Sec. 3 (b) of RA 6657, as amended by RA 7881 (1995), defines
"agricultural activity" as follows:
(b)
Agriculture, Agriculture Enterprise or Agricultural Activity means
cultivation of 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.
In Natalia v. DAR, 225 SCRA 278 (1993), the Supreme Court held:
Section 4 of RA 6657 provides that the CARL "shall cover, regardless of
tenurial arrangement and commodity produced, all public and private
agricultural lands." As to what constitutes "agricultural land," it is referred to
as "land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land." The
deliberations of the Constitutional Commission confirm this limitation.
"Agricultural lands" are only those lands which are "arable and suitable
agricultural lands" and "do not include commercial and industrial lands" (at
282, 283).
Agricultural
lands
reclassified
by
local
governments into "forest conservation zones"
Agricultural lands reclassified by local government units (LGUs) into
"forest conservation zones" even prior to the effectivity of CARL do not
become forest land under Sec. 3 (c) of RA 6657 as to be exempted from
CARP coverage.
It should be noted that under the Constitution, lands of the public domain
are classified into agricultural, forest or timber, mineral lands and national
parks (CONST., Art. XII, Sec. 3). These classifications are called primary
classifications or "classification in the first instance." The same provision of
the Constitution also provides that agricultural lands of the public domain
may be further classified according to the uses to which they may be
devoted. This further classification of agricultural land is referred to as
secondary classification. The responsibility over primary classification of
lands of the public domain is vested in the President who exercises such
power upon the recommendation of the Department of Environment and
Natural Resources (DENR) (Com. Act No. 141 [1936], Sec. 6; EO 192 [1987]).
On the other hand, the authority to reclassify agricultural lands into
residential, commercial or industrial is lodged, among others, in cities and
municipalities (Rep. Act No. 7160 [1991], Sec. 20).
The group of lands referred to in Sec. 3 (c) of RA 6657 as non-agricultural
(i.e., mineral, forest, residential, commercial or industrial) is a mix of primary
and secondary classifications. Forest and mineral lands are, under the
3

Constitution and Commonwealth Act No. 141 (1936), primary classifications,

while the rest are secondary classifications.
Reclassification by LGUs of agricultural lands into "forest conservation
zones" does not have the effect of converting such lands into forest lands as
to be exempted from CARP. Firstly, an agricultural land is already a primary
classification and, hence, can only be subjected to secondary classification.
Secondly, LGUs have no authority or power to make primary classifications
considering that such power is the sole prerogative of the President
exercising such power upon the recommendation of the DENR.
The forest (or mineral) land referred to in Sec. 3 (c) of RA 6657 is
therefore to be understood as referring to forest (or mineral) land declared to
be such by the President/DENR and not by the LGUs. DAR Administrative
Order No. 1 (1990) makes this qualification in its definition of "agricultural
land," as follows:
. . . Agricultural land refers to those devoted to agricultural activity as
defined in R.A. 6657 and not classified as mineral or forest by the
Department of Environment and Natural Resources (DENR) and its
predecessor agencies, and not classified in town plans and zoning ordinances
as approved by the Housing and Land Use Regulatory Board (HLURB) and its
preceding competent authorities prior to 15 June 1988 for residential,
commercial or industrial use.
Agricultural
lands
reclassified
LGUs
into
residential, commercial or industrial
Taking into consideration the effectivity of the law, the secondary
classifications mentioned in Sec. 3 (c) of RA 6657 are treated according
whether they were classified as such before or after the effectivity of the law
on 15 June 1988.
If the agricultural land was classified as residential, commercial or
industrial by the LGU and approved by the Housing and Land Use Regulatory
Board (HLURB), or its predecessor agencies, prior to 15 June 1988, the land
will be recognized as so classified under Sec. 3 (c) of RA and is therefore not
covered by CARP. However, an exemption clearance from DAR is still
necessary to confirm or declare its exempt status. (DAR Adm. O. No. 6
[1994]).
This is based on Department of Justice Opinion No. 44 (1990) which
provides that with respect to the conversion of agricultural lands covered by
RA 6657 to non-agricultural uses, the authority of the DAR to approve such
conversion may be exercised from the date of its effectivity or on 15 June
1988. Thus, all lands already classified as commercial, industrial or
residential before that date no longer need any conversion clearance from
the DAR.
If an agricultural land is reclassified after 15 June 1988, the provisions on
land conversion under CARL and its implementing rules will apply (Rep. Act
No. 6657 [1988], sec. 65; DAR Adm. O. No. 1 [1999]).
Conversion prior to 15 June 1988 through presidential
proclamation binding before DAR
The reasoning in DOJ Opinion No. 44 (1990) was validated by the
Supreme Court in Natalia v. DAR, supra. This case involved the question of
whether or not lands already classified for residential, commercial or
industrial use, as approved by HLURB and its precursor agencies, prior to 15
June 1988 are covered by CARP. SDHCac
Natalia Realty, Inc. vs. Department of Agrarian Reform
225 SCRA 278 (1993)
Facts:
Petitioner Natalia Realty, Inc. is the owner of a 125.0078-ha land set
aside by Presidential Proclamation No. 1637 (1979) as townsite area for
the Lungsod Silangan Reservation. Estate Developers and Investors
4

Corporation (EDIC), the developer of the area, was granted preliminary

approval and locational clearances by the then Human Settlements
Regulatory Commission (HSRC) for the establishment of the Antipolo
Hills Subdivision therein. In November 1990, a Notice of Coverage was
issued by DAR on the undeveloped portion of the landholding. The
developer filed its objections and filed this case imputing grave abuse of
discretion to respondent DAR for including the undeveloped portions of
its landholding within the coverage of CARP.
Issue:
Are lands already classified for residential, commercial or industrial use,
and approved by HLURB and its precursor agencies prior to 15 June
1988, covered by RA 6657?
Held:
Sec. 4 of RA 6657 states that the CARL covers "regardless of tenurial
arrangement and commodity produced, all public and private and
agricultural lands" and as per the transcripts of the Constitutional
Commission, "agricultural lands" covered by agrarian reform refers only
to those which are "arable and suitable lands" and "do not include
commercial, industrial and residential lands." The land subject of the
controversy has been set aside for the Lungsod Silangan Reservation by
Proclamation No. 1637 prior to the effectivity of RA 6657 and in effect
converted these lands into residential use. Since the Natalia lands were
converted prior to 15 June 1988, DAR is bound by such conversion, and
thus it was an error to include these within the coverage of CARL.
Exemptions and Exclusions
Sec. 10 of RA 6657, as amended by RA 7881 (1995), specifically
enumerates the exemptions and exclusions from CARP, as follows:
a)
Lands actually, directly or exclusively used for parks and wild-life,
forest reserves, reforestation, fish sanctuaries and breeding grounds,
watersheds and mangroves (Rep. Act No. 6657 [1988], sec. 10 [a], as
amended by Rep. Act No. 7881 [1995]).
b)
Private lands actually, directly and exclusively used for prawn
farms and fishponds: Provided, That said prawn farms and fishponds
have not been distributed and Certificate of Land Ownership Award
(CLOA) issued to agrarian reform beneficiaries (ARBs) under CARP (Sec.
10 [b]).
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 seedling 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 (Sec. 10 [c]).
Lands devoted to raising of livestock, swine and poultry. The
Luz Farms Case.
Before its amendment by RA 7881, Sec. 3(b) of RA 6657 included in its
definition of agricultural activity the "raising of livestock, poultry or fish".
Likewise, the original Sec. 11 of RA 6657 on commercial farming provided
that "lands devoted to commercial livestock, poultry and swine raising shall
be subject to compulsory acquisition within ten (10) years from the
effectivity of the Act." However, the Supreme Court in Luz Farms vs.
Secretary of Agrarian Reform, supra, held that Sec. 3 (b) and Sec. 11 of RA
6657 (along with Sec. 13 and 32) are unconstitutional in far as they include
the raising of livestock and swine in the coverage of CARP.
5

Luz Farms vs. Secretary of the Department of Agrarian

Reform
192 SCRA 51 (1990)
Facts:
Petitioner Luz Farms is a corporation engaged in livestock and poultry
business. It seeks to nullify Sec. 3 (b) and Sec. 11 of RA 6657 in so far as
they apply to livestock and poultry business.
Held:
Sec. 3 (b) and Sec. 11 of RA 6657 are unconstitutional in so far as they
include lands devoted to raising livestock, swine and poultry within its
coverage. The use of land is incidental to but not the principal factor or
consideration of productivity in this industry. The Supreme Court held
that:
The transcripts of deliberations of the Constitutional Commission of
1986 on the meaning of the word "agricultural," clearly show that it was
never the intention of the framers of the Constitution to include
livestock and poultry industry in the coverage of the constitutionallymandated agrarian reform program of the government.
The Committee adopted the definition of "agricultural land" as defined
under Section 166 of RA 3844, as land devoted to any growth, including
but not limited to crop lands, saltbeds, fishponds, idle and abandoned
land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The Supreme Court noted that the intention of the Committee to limit
the application of the word "agriculture" is further shown by the
proposal of Commissioner Jamir to insert the word "arable" to
distinguish this kind of agricultural land from such lands as commercial
and industrial lands and residential properties. The proposal, however,
was not considered because the Committee contemplated that
agricultural lands are limited to arable and suitable agricultural lands
and therefore, do not include commercial, industrial and residential
lands (Record, CONCOM, 7 August 1986, Vol. III, p. 30).
Moreover, in his answer to Commissioner Regalado's interpellation,
Commissioner Tadeo clarified that the term "farmworker" was used
instead of "agricultural worker" in order to exclude therein piggery,
poultry and livestock workers (Record, CONCOM, August 2, 1986, Vol. II,
p. 621).
DAR AO 9 (1993) imposes two (2) conditions in order that these lands may
be exempted: (a) that the land or portion thereof is exclusively, directly, or
actually used for livestock, poultry and swine raising as of 15 June 1988; and
(b) the farm must satisfy the ratios of land, livestock, poultry and swine, as
follows:
cattle, carabao and horse raising
maximum of 1 head to 1
hectare; 21 heads for every 1.7815
hectares of infrastructure
sheep and goat raising
7 heads to 1 hectare; 147
heads for every 0.7205 hectare of
infrastructure
swine raising
21 heads of hogs for every
0.5126 hectare of infrastructure
poultry raising
500 layers for every 0.53
hectare of infrastructure or 1000
boilers for every 1.428 hectares of
infrastructure
Fishponds and prawn ponds
With the amendment of Sec. 3 (c), 10 and 11 of RA 6657 by RA 7881,
fishponds and prawnponds are also exempted from the coverage of CARP,
provided that said lands have not been distributed to ARBs and no CLOAs
have been issued.
6

To be exempted, the agricultural land must have been actually, directly

and exclusively used for prawn farms and fishponds as of 12 March 1995, the
date of effectivity of RA 7881. To avail of the exemption, a landowner or his
authorized representative still has to file a written application for land
exemption/exclusion with the DAR Provincial Office (DAR Adm. O. No. 3
[1995]).
In cases were the fishponds or prawn farms have been subjected to CARP,
by voluntary offer to sell, commercial farms deferment or notice of
compulsory acquisition, they can be exempt from CARP if a simple and
absolute majority of the actual regular workers or tenants consent to the
exemption within one (1) year from the effectivity of RA 7881 or on 12 March
1995. In cases where the fishponds or prawnponds have not been subjected
to CARP, the consent of the farm workers shall no longer be necessary (Rep.
Act No. 6657 [1988], sec. 10[b], as amended).
Sec. 4 of RA 7881 also amended RA 6657 by introducing a new provision
mandating the introduction of an incentive plan for employees of all
fishponds and prawn farms. Operators and entities owning or operating
fishponds and prawn farms are directed to execute within six (6) months
from its effectivity an incentive plan with their regular fishpond or prawn
farm worker's organization, if any, whereby seven point five percent (7.5%)
of net profits 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 over and above their
current compensation. This incentive plan requirement, however, does not
apply to agricultural lands subsequently converted to fishponds or prawn
farms provided that the size of the land converted does not exceed the
retention limit of the landowner.
Lands used for academic or educational use. The CMU case.
In Central Mindanao University vs. DARAB , 215 SCRA 85 (1992), the
Supreme Court passed upon the exemption of lands directly, actually and
exclusively used and found to be necessary for school sites and campuses,
including experimental farm stations operated by public or private schools
for educational purposes provided for under Sec. 10 of RA 6657, as
amended.
Central Mindanao University vs. Department of Agrarian
Reform Adjudication Board
215 SCRA 86 (1992)
Facts:
On 16 January 1958, President Carlos Garcia issued Proclamation No.
467 reserving for the Mindanao Agricultural College, now the CMU, a
piece of land to be used as its future campus. In 1984, CMU embarked
on a project titled "Kilusang Sariling Sikap" wherein parcels of land were
leased to its faculty members and employees. Under the terms of the
program, CMU will assist faculty members and employee groups
through the extension of technical know-how, training and other kinds
of assistance. In turn, they paid the CMU a service fee for use of the
land. The agreement explicitly provided that there will be no tenancy
relationship between the lessees and the CMU.
When the program was terminated, a case was filed by the participants
of the "Kilusang Sariling Sikap" for declaration of status as tenants
under the CARP. In its resolution, DARAB, ordered, among others, the
segregation of 400 hectares of the land for distribution under CARP. The
land was subjected to coverage on the basis of DAR's determination
that the lands do not meet the condition for exemption, that is, it is not
"actually, directly, and exclusively used" for educational purposes.
Issue:
7

Is the CMU land covered by CARP? Who determines whether lands

reserved for public use by presidential proclamation is no longer
actually, directly and exclusively used and necessary for the purpose for
which they are reserved?
Held:
The land is exempted from CARP. CMU is in the best position to resolve
and answer the question of when and what lands are found necessary
for its use. The Court also chided the DARAB for resolving this issue of
exemption on the basis of "CMU's present needs." The Court stated that
the DARAB decision stating that for the land to be exempt it must be
"presently, actively exploited and utilized by the university in carrying
out its present educational program with its present student population
and academic faculty" overlooked the very significant factor of growth
of the university in the years to come. SHECcT
The CMU case is unique as it involves land transferred by the state to
CMU through PD 467 which provided for its commitment to a specific use and
purpose. Thus, the said land was already set aside for a specific purpose and,
in effect, was taken outside the coverage of agrarian reform by law. It is
submitted that a more accurate basis for the exemption should have been
that the exclusive use of the land both present and future has been
determined by law, and not because of the determination of the CMU of what
it needs and how it intends to use it.
In ruling that the CMU is in the best position to determine the use of the
land and not DAR, the Supreme Court seems to have overlooked EO 407
(1990), as amended by EO 448 (1991), which provides that DAR is vested
with the power to determine whether lands reserved for public uses by
presidential proclamation is no longer actually, directly and exclusively used
and necessary for the purpose for which they are reserved. Said EO provides
that:
Sec. 1-A.
All lands or portions thereof reserved by virtue of
Presidential proclamations for specific public uses by the government,
its agencies and instrumentalities, including government-owned or
controlled corporations suitable for agriculture and no longer actually,
directly and exclusively used or necessary for the purposes for which
they have been reserved, as determined by the Department of Agrarian
Reform in coordination with the government agency or instrumentality
concerned in whose favor the reservation was established, shall be
segregated from the reservation and transferred to the Department of
Agrarian Reform for distribution to qualified beneficiaries under the
Comprehensive Agrarian Reform Program.
Thus, DAR in coordination with the agency or department involved, can
determine whether the purpose or use for which the lands reserved
continues to exist and therefore establish if they continue to be exempt from
CARP coverage.
The Supreme Court's statement that lands of universities and academic
institutions need not be actually, directly and exclusively used for
educational or research purposes at the time of the effectivity of the RA 6657
to be exempt from CARP also fails to consider Sec. 10 of RA 6657. Sec. 10 is
explicit that only those lands that are "actually, directly, and exclusively"
used and found necessary for the uses enumerated therein are exempt from
CARP coverage. A literal interpretation of the provision implies that the
exemption applies only to those lands already committed for the enumerated
purposes at the date of the effectivity of law on 15 June 1988. Thus,
agricultural land acquired by academic institutions for academic,
educational, or research purposes after 15 June 1988, or those owned by
them but not committed exclusively, actually, and directly to the
abovementioned uses before or on such date, are covered by CARP. For its
exclusion from acquisition and distribution, and for its commitment to said
8

purposes, the institution may file before DAR for clearance to convert these
lands into non-agricultural use.
Lands with 18% slope
Lands with 18% slope or over are exempt from CARP coverage unless
these are found to be agriculturally developed as of 15 June 1988.
This rule on exemption is based on PD 705 (1975), or the "Revised
Forestry Code of the Philippines," which provides that lands with a slope of
18% or over are generally reserved as forest lands. Sec. 15 thereof states
that "no land of the public domain eighteen per cent (18%) in slope or over
shall be classified as alienable and disposable" and that "lands eighteen per
cent (18%) in slope or over which have already been declared as alienable
and disposable shall be reverted to the classification of forest lands by the
Department Head, to form part of the forest reserves, unless they are
already covered by existing titles or approved public land application, or
actually occupied openly, continuously, adversely and publicly for a period of
not less than thirty (30) years as of the effectivity of this Code, where the
occupant is qualified for a free patent under the Public Land Act.
If the land has 18% slope or over and is agriculturally developed as of 15
June 1988, the same shall be allocated to the qualified applicants in the
following manner:
a)
If land is classified as forest land, and therefore is inalienable and
indisposable, this shall be allocated by the DENR under its Integrated
Social Forestry Program;
b)
If classified as alienable and disposable, this shall be allocated by
the Land Management Bureau-DENR and DAR pursuant to the
provisions of CA 141 and the Joint DAR-DENR AO 2 (1988); and
c)
If private agricultural land, this shall be acquired in accordance
with the provisions of RA 6657 (DAR Adm. O. No. 13 [1990], item E, part
II).
Effects of exemption
Sec. 10 of RA 6657 provides that exempted or excluded lands are
removed from the coverage of CARP. However, there are two (2) contending
views on whether these exempted or excluded lands are perpetually taken
out from coverage of the CARP.
The first view is that lands exempted or excluded from the law are
permanently taken out from coverage of the CARP. The basis of this
interpretation is the phraseology of Sec. 10 which states that exempted
lands are "exempt from the coverage of the law." The legal effect of this
interpretation is that the owner can use and dispose the land as he deems fit
without the need for any clearance from DAR.
The second view is that excluded and exempted lands can be covered by
CARP when the reason for their exemption ceases to exist. Thus, when the
reason for exemption ceases to exist for lands exempt under the Luz Farms
ruling or Sec. 10, as amended by RA 7881 (except lands with 18% slope),
they are removed from the exemption and are treated like any other
agricultural land.
It must be remembered that the lands subject of exemption under Sec. 10
of RA 6657 and the Luz Farms ruling are considered agricultural lands as
defined by Sec. 3 (c) of RA 6657, that is, they are in fact suitable to
agriculture and not classified as mineral, forest, residential, commercial or
industrial lands, but are exempt or excluded from CARP by reason of their
actual use and their necessity for other purposes. Thus, in the event that
these lands cease to be used or necessary for the purposes for which they
are exempted, they are removed from the application of Sec. 10 and are then
subject to CARP coverage.
The second view is anchored on the spirit and intent of the law to cover
all agricultural lands suitable to agriculture. Moreover, as RA 6657 is a social
welfare legislation the rules of exemptions and exclusions must be
9

10

interpreted restrictively and any doubts as to the applicability of the law

should be resolved in favor of inclusion.
In either case, the security of tenure of tenants enjoyed prior to 15 June
1988 shall be respected even when the lands are exempted. As to
farmworkers, the exemption of the land shall not cause the loss of the
benefits to which they are entitled under other laws. In addition, they are
granted preference in the award of other lands covered by CARP (DAR Adm.
O. No. 13 [1990], part II).
Homesteads
In Alita vs. CA, the Supreme Court stated that homesteads are exempt
from agrarian reform.
Alita vs. Court of Appeals
170 SCRA 706 (1989)
Facts:
Subject matter of the case consists of two (2) parcels of land acquired
by respondents' predecessors-in-interest through homestead patent
under the provisions of CA 141. Respondents wanted to personally
cultivate these lands, but the petitioners refused to vacate, relying on
the provisions of PD 27 and PD 316 and appurtenant regulations issued
by the then Ministry of Agrarian Reform.
Issue:
Are lands obtained through homestead patent covered under PD 27?
Held:
No. While PD 27 decreed the emancipation of tenants from the bondage of
the soil and transferring to them ownership of the land they till, the same
cannot be invoked to defeat the very purpose of the enactment of the Public
Land Act or CA 141. In Patricio v. Bayog, 112 SCRA 45, it was held that:
The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a piece of
land where he may build a modest house for himself and family
and plant what is necessary for subsistence and for the
satisfaction of life's other needs. The right of the citizens to
their homes and to the things necessary for their subsistence is
as vital as the right to life itself. They have a right to live with a
certain degree of comfort as become human beings, and the
State which looks after the welfare of the people's happiness is
under a duty to safeguard the satisfaction of this vital right.
In this regard, Sec. 6 of Article XIII of the 1987 Constitution provides:
Section 6.
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 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.
Moreover, Sec. 6 of RA 6657 contains a proviso supporting the inapplicability
of PD 27 to lands covered by homestead patents like those of the property in
question, reading:
Section 6.
Retention Limits. . . . 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.
xxx
xxx
xxx
While homestead lots are declared exempt under PD 27, they are not
expressly declared as such under RA 6657. However, Sec. 6 of RA 6657
provides that homesteaders are allowed to retain the total homestead lot
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subject to the conditions provided in the same section and as set DAR MC 4
(1991), to wit:
a)
That the original homestead grantee or his/her direct compulsory
heirs still own the land on 15 June 1988;
b)
The original homestead grantee or his or her compulsory heirs
cultivate the land as of 15 June 1988 and continue to cultivate the
same.
It also provides that the tenants of lands covered by homestead patents
exempted from PD 27 or retained under RA 6657 shall not be ejected
therefrom but shall remain as leaseholders therein.
Schedule of Implementation
Sec. 7 of RA 6657 lays out the schedule of acquisition and distribution of
all agricultural lands through a period of ten (10) years from the effectivity of
the Act:
Phase
Lands Covered
Schedule
I
Rice and corn lands under Presidential
19881992
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
II
All alienable and disposable public agricultural
1992-1995
lands;
all arable public agricultural lands under agroforest, pasture and agricultural leases already
cultivated and planted to crops in accordance;
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,
III-A
Landholdings above twenty-four (24) 1998-1992
hectares up to fifty hectares; and
III-B
Private agricultural lands with areas above the
1994-1998
retention limit up to 24 hectares
Though Sec. 7 of RA 6657 provides a fixed time table for the
implementation of the CARP law, this provision should be interpreted as
merely directory, rather than mandatory in character. This is the gist of
DOJ Opinion No. 9 (1997). It has been held that the difference between a
mandatory and a directory provision is often determined on grounds of
expediency. Where a provision embodies a rule of procedure rather than
one of substance, the provision as to time will be regarded as directory
only notwithstanding the mandatory nature of the language used. Sec. 5
of RA 6657 is more procedural in nature than substantive. The ten (10)year period is merely a time frame given to DAR for the acquisition and
distribution of public and private agricultural lands covered by RA 6657. It
is merely a guide to DAR in setting its priorities, and it is not, by any
means, a limitation of its authority. Hence, Sec. 5 of RA 6657 should not
be construed as a prescriptive period, the lapse of which bars the DAR
from covering the land under CARP.
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Thus, DAR need not wait for the full coverage of those lands in the first
phase before those in the succeeding phases could be covered. DAR may
also proceed with the coverage of lands in different phases simultaneously.
In view of the passing of the ten (10)-year period in 1998, Congress passed
RA 8532 (1998) providing for the funding for land acquisitions for another ten
(10) years.
Idle or abandoned lands
Sec. 22 of Art. XVIII of the 1987 Constitution and Sec. 18 (h) of EO 229
prioritizes the immediate expropriation or acquisition of idle or abandoned
lands.
Sec 3 (e) of RA 6657 defines idle or abandoned land as "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 RA 6657. However land that has become permanently or
regularly devoted to non-agricultural purposes is not to be considered as idle
or abandoned. Neither can it be considered as abandoned or idle any 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."
Lands owned by government
To expedite the disposition of lands owned by the government, President
Corazon C. Aquino issued EO 407 (1990) directing all government
instrumentalities, government agencies, government owned and controlled
corporations or financial institutions to transfer to the Republic of the
Philippines, through the DAR, all landholdings suitable for agriculture. Sec. 3
of EO 407 (1990) likewise provides for the redistribution and award of
fishponds, pasturelands and other lands of public domain suitable for
agriculture subject of cancelled or amended lease agreement to the agrarian
reform beneficiaries. EO 448 (1991) and EO 506 (1992) amended EO 407 by
including all lands or portions thereof reserved by virtue of presidential
proclamations for specific public uses by the government, its agencies and
instrumentalities, and no longer actually, directly and exclusively used or
necessary for the purposes for which they have been reserved. These also
excluded national parks and other protected areas, proposed national parks,
game refuge, bird sanctuaries, wild-life reserves, wilderness areas and other
protected areas, including old growth or virgin forests and all forests above
1,000 meters elevation or above 50 percent slope until such time that they
are segregated for agricultural purposes or retained under the National
Integrated Protected Areas System.
Commercial farms
Sec. 11 of RA 6657 allowed the deferment of the coverage of commercial
farms. Deferred commercial farms shall be subject to immediate compulsory
acquisition and distribution after ten (10) years from the effectivity of RA
6657 on 15 June 1988. For new farms, the ten (10)-year deferment will begin
from the first year of commercial production and operation.
For a commercial farm to be qualified for deferment, it must have been
planted to commercial crop or devoted to commercial farming operations
before 15 June 1988. DAR AO 16 (1988) provided a 60-day period for the
filing of applications of deferment which lapsed on 2 May 1989.
DAR AO 16 (1988) explicitly allows the DAR to automatically subject the
lands to redistribution when it determines that the purpose for which
deferment is granted no longer exists as when the particular farm areas
ceases to be commercially productive. During the deferment period, the DAR
shall initiate steps to acquire the lands. Final land transfer to the
beneficiaries shall be effected at the end of the deferment period. The
acquisition and distribution of these deferred commercial farms are governed
by DAR AO 9 (1998).
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Retention
Sec. 4, Art. XIII of the 1987 Constitution subjects the distribution of
agricultural lands for agrarian reform to "reasonable retention limits as
Congress may prescribe. Sec. 6 of RA 6657 operationalizes this mandate and
observes the right of persons to own, or retain, directly or indirectly public or
private agricultural land, the size of which shall vary according to factors
governing a viable family-size farm in such as commodity produced terrain,
infrastructure, and soil fertility, but in no case shall exceed five (5) hectares.
The retention limits under Sec. 6 of RA 6657 covers all persons whether
natural or juridical. Juridical persons like corporations and partnerships are
therefore subject to the five (5)-hectare limit.
With respect to married couples, their maximum retention limit is
determined by the nature of their property relations. For marriages covered
by the New Civil Code, in the absence of an agreement for the judicial
separation of property, spouses who own only conjugal properties may retain
a total of not more than five (5) hectares of such properties. However, if
either or both of them are landowners in their own respective rights (capital
and/or paraphernal), they may retain not more than five (5) hectares of their
respective landholdings. In no case, however, shall the total retention of such
couple exceed ten (10) hectares. (DAR Adm. O. No. 5 [2000], sec. 9 [g]).
For marriages covered by the Family Code, which took effect on 3 August
1988, a husband owning capital property and/or a wife owning paraphernal
property may retain not more than five (5) hectares each provided they
executed a judicial separation of properties prior to entering into the
marriage. In the absence of such an agreement, all properties (capital,
paraphernal and conjugal) shall be considered to be held in absolute
community, i.e., the ownership relation is one, and, therefore, only a total of
five (5) hectares may be retained. (DAR Adm. O. No. 5 [2000], sec. 9 [h]).
The five (5)-hectare retention limit applies to all lands regardless of how
acquired (i.e., by purchase, award, succession, donation) as the law does not
distinguish. Thus, a child who was awarded three (3) hectares as a preferred
beneficiary under Sec. 6 of RA 6657 and subsequently acquires a five (5)hectare landholding of his parent by succession can retain only five (5)
hectares of the total landholding.
Landowners have the obligation to cultivate directly or through labor
administration, and thereby make productive the area he retains. He is also
prohibited from making any constructions therein or commit it to purposes
incompatible with its agricultural nature. Before a landowner can commit the
retained land to non-agricultural purposes, he must first secure a conversion
order from DAR, otherwise he can be held liable for premature conversion
(see DAR Adm. O. No. 1 [1999]).
Award to children
If a landowner has children, three (3) hectares may be awarded to each
subject to the following qualifications:
a)
that he is at least fifteen (15) years old as of 15 June 1988; and
b)
that he is actually tilling the land or directly managing it (Rep.
Act No. 6657 [1988], sec. 6).
DAR MC 4 (1994) defined the term "directly managing" as the cultivation
of the land through personal supervision under the system of labor
administration. DHcESI
The award to the child is not to be taken from the retained land of the
landowner and is awarded to the child in his own right as a beneficiary. Thus,
the award is not automatic. The child is merely given a preference over other
beneficiaries.
As the right of the child is derived from his being a beneficiary, he must
not only meet the requirements of preference laid out in Sec. 6 of RA 6657,
but also all the other qualifications of a beneficiary enumerated under Sec.
22 of RA 6657. Thus, he must also be landless, a resident of the barangay or
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14

municipality where the land is located, and must have the willingness,
aptitude and ability to cultivate and make the land as productive as possible.
Moreover, he is subject to the same liabilities, responsibilities and limitations
imposed on all agrarian reform beneficiaries.
Exceptions to the 5-hectare retention limit
The five (5)-hectare retention limit under RA 6657 does not apply to
original homestead grantees or their direct compulsory heirs at the time of
the approval of RA 6657 who continue to cultivate the same, and to those
entitled to retain seven (7) hectares under PD 27.
In the Association cases, the Supreme Court held that landowners who
failed to exercise their rights to retain under PD 27 can avail of their rights of
retention under Sec. 6 of RA 6657 and retain only five (5) hectares. However,
in the resolution of the Supreme Court on the motion for consideration in the
said case, the Court qualified that those who, prior to the promulgation of RA
6657, complied with the requirements under Letter of Instruction (LOI) Nos.
41, 45 and 52 regarding the registration of the landholdings, shall be allowed
to enjoy the seven (7) hectare retention limit. All those who refused to
comply with the requirements cannot, in view of the passage of CARL,
demand that their retention limit be determined under PD 27.
Thus, the following OLT owners are still entitled to retain seven (7)
hectares even if they exercised their right of retention under PD 27 after 15
June 1988:
a)
Those landowners who complied with the requirement of either LOI 41,
45 or 52;
b)
Those who filed their applications before the deadline set (27 August
1985 as provided by AO. 1 [1985]) whether or not they have complied with
LOI Nos. 41, 45 or 52;
c)
Those who filed their applications after the deadline but complied with
the requirements of LOI 41, 45 or 52; and
d)
Heirs of a deceased landowner who manifested, while still alive, the
intention to exercise the right of retention prior to 23 August 1990 (the
finality of the Supreme Court decision in Association of Small Landowners vs.
Hon. Secretary of DAR; supra) (DAR Adm. O. No. 4 [1991]).
Exercise of right of retention
While Sec. 6 of RA 6657 acknowledges the right of the landowners to
choose the area to be retained, it requires that the area be compact and
contiguous, and shall be least prejudicial to the entire landholding and the
majority of the farmers therein (DAR Adm. O. No. 5 [2000], sec 2 [b]).
Sec. 4 of DAR AO 5 (2000) provides that under the Compulsory Acquisition
(CA) scheme, the landowner shall exercise his right of retention within sixty
(60) days from receipt of the Notice of Coverage from DAR. Failure to
exercise this right within the prescribed period means that the landowner
waives his right to choose which area to retain. Thereafter, the Municipal
Agrarian Reform Officer (MARO) shall designate the retained area for the
landowner.
Under the Voluntary Offer to Sell (VOS) scheme, the right of retention
shall be exercised at the time the land is offered for sale. The offer should
specify and segregate the portion covered by VOS and the portion applied for
retention; otherwise, the landowner shall be deemed to have waived his right
of retention over the subject property (DAR Adm. O. No. 5 [2000], sec. 4).
As a matter of policy, all rights acquired by the tenant-farmers under PD
27 and the security of tenure of the farmers or farmworkers on the land prior
to the approval of RA 6657 shall be respected (DAR Adm. O. No. 5 [2000],
sec. 2 [c]).
In case the area selected by the landowner or awarded for retention by the
DAR is tenanted, the tenant has two (2) options:
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a)
To remain as a lessee. If he chooses to remain in the area
retained, he shall be considered a lease holder and shall lose his right to
be a beneficiary; or
b)
Be a beneficiary in the same or another agricultural land with
similar or comparable features.
The tenant must exercise either option within one (1) year after the
landowner manifests his choice of the area for retention, or from the time the
MARO has chosen the area to be retained by the landowner, or from the time
an order is issued granting the retention (DAR Adm. O. No. 5 [2000], sec. 10).
Sec. 10 of DAR AO 5 (2000) further provides that in case the tenant
declines to enter into leasehold and there is no available land to transfer, or
if there is, the tenant refuses the same, he may choose to be paid
disturbance compensation by the landowner.
Where Certificates of Land Transfer (CLTs), Emancipation Patents (EPs) or
Certificates of Land Ownership Award (CLOAs) have already been issued on
the land chosen by the landowner as retention area, the DAR shall
immediately inform the agrarian reform beneficiaries (ARBs) concerned and
provide them the opportunity to contest the landowner's claim. Moreover,
the DAR shall ensure that the affected ARBs, should they so desire, be given
priority in the distribution of other lands of the landowner or other lands
identified by the DAR for redistribution, subject to the rights of those already
in the area (DAR Adm. O. No. 5 [2000], sec. 11)
Waiver of right of retention
Sec. 7 of DAR AO 5 (2000) provides that the following acts constitute
waiver on the landowner's right of retention:
a)
Executing an affidavit, letter or any other document duly
attested by the MARO, Provincial Agrarian Reform Officer (PARO) or
Regional Director (RD) indicating that he is expressly waiving his
retention right over subject landholding;
b)
Signing of the Landowner-Tenant Production Agreement and
Farmer's Undertaking (LTPA-FU) or Application to Purchase and Farmer's
Undertaking (APFU) covering subject property;
c)
Entering into a Voluntary Land Transfer/Direct Payment Scheme
(VLT-DPS) agreement as evidenced by a Deed of Transfer over the
subject property;
d)
Offering the subject landholding under VOS scheme and failure
to indicate his retained area;
e)
Signing/submission of other documents indicating consent to
have the entire property covered, such as the form letter of the LBP on
the disposition of the cash and bond portions of a land transfer claim for
payment, and the Deed of Assignment, warranties and undertaking
executed in favor of the LBP;
f)
Performing acts which constitute estoppel by laches; and
g)
Doing such act or acts as would amount to a valid waiver in
accordance with applicable laws and jurisprudence.
Public Lands
Public lands pertain to all lands that were not acquired by private persons
or corporations either by grant or purchase. These lands are either (a)
disposable (alienable) public lands or (b) non-disposable public lands.
CA 141 (1936), otherwise known as the "Public Land Act", governs the
administration and disposition of lands of the public domain. Sec. 9 thereof
classifies alienable or disposable lands of the public domain as (a)
agricultural; (b) residential, commercial, industrial or for similar productive
purposes; (c) educational, charitable, or other similar purposes; or (d)
reservations for town sites and for public and quasi-public uses.
Non-disposable public lands or those not susceptible of private
appropriation and include the following: (a) timber lands which are governed
by PD 705 (1975) or the Revised Forestry Code; and (b) mineral lands which
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16

are governed by RA 7942 (1995) or the Philippine Mining Act of 1995 and
other related laws.
All lands of the public domain are under the exclusive jurisdiction of the
DENR except those placed by law and/or by executive issuances under the
jurisdiction of other government agencies. Under Sec. 3 and 5 of CA 141, the
Secretary of Agriculture and Natural Resources (now the Secretary of DENR)
is the executive officer charged with carrying out the provisions of the Public
Land Act. It is empowered to prepare and issue such forms, instructions,
rules and regulations consistent with the Public Land Act. Sec. 6 of CA 141
(see also EO 192 [1987]) reserves the power to classify lands in the public
domain into either agricultural (disposable), timber or mineral lands to the
President, with the recommendation of the Secretary of DENR.
Under Sec. 4 of RA 6657, public and private agricultural lands and lands
of the public domain suitable for agriculture are covered by CARP. It provides,
among others, that all alienable and disposable lands of the public domain
devoted or suitable or devoted to agriculture (Sec 4 [a]) and all lands of the
public domain in excess of the specific limits of the public domain as
determined by Congress (Sec. 4 [b]) shall be covered by CARP. It has also
been determined that public agricultural lands that are untitled and privately
claimed are covered by CARP. In response to a query by DAR, the
Department of Justice issued Opinion No. 176 (1992) which stated:
. . . Thus, it has been held that there should be no distinction in the
application of the law where non is indicated therein (SSS vs. City of Bacolod,
115 SCRA 412) . . . By said rule, the term "private agricultural lands" in the
aforementioned section should be interpreted as including all private lands,
whether titled or untitled. . . .
RA 6657 has created an overlapping of jurisdictions between the DENR
and the DAR over the disposition of these lands. RA 6657 mandates DAR to
acquire and distribute these public lands to agrarian beneficiaries while CA
141 vests upon the DENR the power to control, survey, classification, lease,
sale or any other form of concession or disposition and management of the
lands of the public domain.
To resolve the overlapping mandates of the DENR and DAR in the
disposition and distribution of public lands for CARP purposes, the two
agencies issued Joint DAR-DENR MC 9 (1995) which recognizes that lands of
the public domain are under the jurisdiction of the DENR unless placed by
law and/or by executive issuances under the jurisdiction of other government
departments or entities. Under the said circular, the disposition of nonregistrable lands of the public domain is the exclusive responsibility of the
DENR under its various programs (i.e., the Integrated Social Forestry). In this
instance, the role of the DAR is to assist the DENR in identifying and
screening of farmer beneficiaries. The responsibility and authority of DAR to
distribute public lands shall be limited to the following:
a)
Lands proclaimed by the President as DAR Resettlement Projects
and placed under the administration of the DAR for distribution to
qualified farmer beneficiaries under CARP;
b)
Lands which are placed by law under the jurisdiction of DAR; and
c)
Lands previously proclaimed for the various government
departments, agencies and instrumentalities and subsequently turned
over to the DAR pursuant to EO 407 (1990), as amended by EO 448 and
506.
Untitled public alienable and disposable lands are still within the exclusive
jurisdiction of DENR pursuant to CA 141. However, in accordance with DOJ
Opinion No. 176 (1992), Joint DAR-DENR MC 14 (1997) provides that all
untitled public alienable and disposable lands are deemed "private" if the
criteria specified in RA 6940 for the determination of whether or not a person
has already acquired a recognizable private right over a landholding is met,
namely:
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a)
Continuous occupancy and cultivation by oneself or through
one's predecessors-in-interest for at least thirty (30) years prior to the
effectivity of RA 6940 on 16 April 1990;
b)
The land must have been classified as alienable and disposable
for at least thirty (30) years prior to the effectivity on 16 April 1990;
c)
One must have paid the real estate tax thereon; and
d)
There are no adverse claims on the land.
For these privately claimed public alienable and disposable lands, the
DENR first issues a Free Patent to qualified applicants for the retained area of
not more than five (5) hectares. The DAR shall then cover the excess area
and issue a CLOA or EP and distribute these to qualified beneficiaries.
TcCDIS
For untitled public alienable and disposable lands which are tenanted and
with claimants not qualified under the criteria specified in RA 6940, the
disposition shall be under the jurisdiction of the DENR. The role of the DAR in
this case is limited to the documentation and protection of the leasehold
arrangement between the public land claimant and the tenants.
If the alienable and disposable land is not tenanted but has actual farm
occupants, and the public land claimant lacks the requisite thirty (30)-year
possession, these shall be under the jurisdiction of the DENR and the
appropriate tenurial instrument shall be applied.
It is submitted, however, that these alienable and disposable lands that
are privately claimed by claimants who are not qualified under the criteria
set under RA 6940 (1990) should be turned over to DAR for distribution
under CARP. As these claimants/tenants are mere occupants and can not be
granted Free Patents by the DENR, these land should instead be committed
for agrarian purposes.
A recently issued DENR MC 22 (1999) entitled "DENR Jurisdiction over all
Alienable ad Disposable Lands of the Public Domain," seems to abrogate or
set aside Joint DAR-DENR MC 14 (1997). It directs all Regional Executive
Directors to strictly exercise DENR's jurisdiction over all alienable and
disposable lands of the public domain, including those lands not specifically
placed under the jurisdiction of other government agencies, and prepare the
same for disposition to qualified and legitimate recipients under the People's
Alliance for the Rehabilitation of Environment of the Office of the Secretary of
the DENR.
This recent issuance impliedly prohibits the turnover of alienable and
disposable lands to CARP, and thus, effectively removes remaining public
alienable and disposable lands out of the scope of CARP. While merely an
administrative order that can not overturn legislation on the matter, DENR
MC 22 (1999) poses another roadblock which if not corrected or legally
challenged in court can derail the already delayed coverage of public
agricultural lands. Sec. 7 of RA 6657 explicitly provides that alienable and
disposable public agricultural lands are among the priority lands for
distribution. Needless to say, the political implications of government's
reluctance to commit public agricultural lands for agrarian ends in the face of
its relentless expropriation of private landholdings is serious.
Ancestral Lands
Sec. 9 of RA 6657 defines ancestral lands as those lands that include, but
not limited to, lands in actual, continuous and open possession of an
indigenous cultural community and its members. Sec. 3 (b) of RA 8371
(1997) or the "Indigenous Peoples Rights Act of 1997," has a more
encompassing definition, to wit:
Sec. 3.
Definition of Terms. . . .
b).
Ancestral Lands Subject to Section 56 hereof, refers to lands
occupied, possessed and utilized by individuals, families, and clans who
are
members
of
the
ICCs/IPs
(indigenous
cultural
communities/indigenous
peoples)
since
time immemorial,
by
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themselves or through their predecessors-in-interests, under claims of

individual or traditional group ownership continuously, to the present,
except when interrupted by war, force majeure or displacement by
force, deceit, stealth or as a consequence of government projects and
other voluntary dealings entered into by government and private
individuals/corporations, including, but not limited to, residential lots,
rice terraces or paddies, private forests, swidden farms and treelots;
Policy for ancestral lands under CARP
CARP ensures the protection of the right of ICCs/IPs to their ancestral
lands to ensure their economic, social and cultural well being. Systems of
land ownership, land use, and modes of settling land disputes of the ICCs/IPs
shall be recognized and respected in line with principles of self-determination
and autonomy.
The Presidential Agrarian Reform Committee (PARC), notwithstanding any
law to the contrary, has the power to suspend the implementation of the
CARP with respect to ancestral lands for the purpose of identifying and
delineating such lands. It shall also respect laws on ancestral domain
enacted by the respective legislators of autonomous regions, subject to the
provisions of the Constitution and the principles enunciated in RA 6657 and
other national laws.
However, the full protection of the rights of the ICCs/IPs to their ancestral
lands under CARP is hampered by various legal constraints. For one, while
Sec. 9 respects or protects the rights of the ICCs/IPs to their ancestral lands
as means to protect their economic, social and cultural well-being, its
definition of ancestral lands is circumscribed by the limitation that the
Torrens System shall be respected. This is a fundamental legal setback to the
rights of ICCs/IPs. It should be noted that the vested rights of these
communities to ancestral lands have been recognized to have pre-existed
the Regalian Doctrine which underlie the government's perspective to full
ownership and control over natural resources as well as the current legal
system that regulates private property rights.
CARP involves alienable and disposable lands only while ancestral lands
of ICCs/IPs encompass forest and mineral lands and other lands of the public
domain which are by definition inalienable and indisposable. Thus, the
benefit of being awarded CLOAs over ancestral lands to these ICCs/IPs are
limited to private agricultural lands and public agricultural lands transferred
to DAR.
In any case, to promote and protect the rights of the ICCs/IPs over
ancestral lands situated in inalienable and indisposable public lands, DAR
issues member/s of the ICCs who are engaged in agricultural activities over
the said lands CARP Beneficiary Certificate (CBC). Though these do not vest
title, it likewise recognizes the claim of the ICC over these lands and allows
them to access support services from DAR.
RA 8371 (1997) has a more expansive definition of ancestral domains and
ancestral lands which includes lands that are legally determined as
indisposable and inalienable public lands. RA 8371 is a clear departure from
earlier law and regulation for not only does it expand the definition of
ancestral lands but recognizes the right of the ICCs/IPs to own these lands.
National Commission on Indigenous Peoples (NCIP), a body created by RA
8371, is vested, among others with the power and issue Certificates of
Ancestral Domain/Land Titles over ancestral lands.
CHAPTER 2
Agricultural Leasehold
Agricultural Tenancy
Definition and nature of agricultural tenancy
Agricultural tenancy is defined as "the physical possession by a person of
land devoted to agriculture, belonging to or legally possessed by another for
the purpose of production through the labor of the former and of the
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members of his immediate farm household in consideration of which the

former agrees to share the harvest with the latter or to pay a price certain or
ascertainable, whether in produce or in money, or both." (RA 1199 [1954],
sec. 3)
In Gelos vs. CA, 208 SCRA 608 (1992), the Supreme Court held that
agricultural tenancy is not a purely factual relationship. The written
agreement of the parties is far more important as long it is complied with
and not contrary to law.
Gelos vs. Court of Appeals
208 SCRA 608 (1992)
Facts:
Rafael Gelos was employed by Ernesto Alzona and his parents as their
laborer on a 25,000-sq. m farmland. They executed a written contract which
stipulated that as hired laborer Gelos would receive a daily wage of P5.00.
Three (3) years later, Gelos was informed of the termination of his services
and was asked to vacate the property. Gelos refused and continued working
on the land. Alzona filed a complaint for illegal detainer. The lower court
found Gelos as tenant of the property and entitled to remain thereon as
such. The decision was reversed by the Court of Appeals. DHACES
Issue:
What is the nature of the contract between Gelos and Alzona?
Held:
The parties entered into a contract of employment, not a tenancy
agreement. The agreement is a lease of services, not of the land in
dispute. . . . The petitioner would disavow the agreement, but his
protestations are less than convincing. His wife's testimony that he is
illiterate is belied by his own testimony to the contrary in another
proceeding. Her claim that they were tricked into signing the agreement
does not stand up against the testimony of Atty. Santos Pampolina, who
declared under his oath as a witness (and as an attorney and officer of
the court) that he explained the meaning of the document to Gelos, who
even read it himself before signing it. . . . Gelos points to the specific
tasks mentioned in the agreement and suggests that they are the work
of a tenant and not of a mere hired laborer. Not so. The work specified is
not peculiar to tenancy. What a tenant may do may also be done by a
hired laborer working under the direction of the landowner, as in the
case at bar. It is not the nature of the work involved but the intention of
the parties that determines the relationship between them. As this
Court has stressed in a number of cases, "tenancy is not a purely
factual relationship dependent on what the alleged tenant does upon
the land. It is also a legal relationship. The intent of the parties, the
understanding when the farmer is installed, and as in this case, their
written agreements, provided these are complied with and are not
contrary to law, are even more important."
Classes of agricultural tenancy
Agricultural tenancy is classified into share tenancy and leasehold
tenancy (M. A. GERMAN, SHARE AND LEASEHOLD TENANCY, 13 [1995]).
Share tenancy means "the relationship which exists whenever two
persons agree on a joint undertaking for agricultural production wherein one
party furnishes the land and the other his labor, with either or both
contributing any one or several of the items of production, the tenant
cultivating the land personally with aid of labor available from members of
his immediate farm household, and the produce thereof to be divided
between the landholder and the tenant." (Rep. Act No. 3844 [1963]. Sec. 166
[25]).
With the passage of RA 3844, share tenancy has been declared to be
contrary to public policy and abolished (Rep. Act No. 3844 [1963], sec. 4)
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except in the case of fishponds, saltbeds, and lands principally planted to

citrus, coconuts, cacao, coffee, durian and other similar permanent trees at
the time of the approval of said Act (Rep. Act No. 3844 [1963], sec. 35).
When RA 6389 (1971) was enacted, agricultural share tenancy has been
automatically converted to leasehold but the exemptions remained. It was
only under RA 6657 when the exemptions were expressly repealed.
Leasehold tenancy exists when a person who, either personally or with
the aid of labor available from members of his immediate farm household
undertakes to cultivate a piece of agricultural land susceptible of cultivation
by a single person together with members of his immediate farm household,
belonging to or legally possessed by, another in consideration of a fixed
amount in money or in produce or in both (Rep. Act No. 1199 [1954], sec. 4).
Under RA 6657, the only agricultural tenancy relation that is recognized is
leasehold tenancy. Said law expressly repealed Sec. 35 of RA 3844, making
all tenanted agricultural lands throughout the country subject to leasehold.
Leasehold tenancy may be established by operation of law, that is,
through the abolition of share tenancy under Sec. 4 of RA 3844; through the
exercise by the tenant of his right to elect leasehold; or by agreement of the
parties either orally or in writing, expressly or impliedly, which was the
condition before 1972 (M.A. German, supra, at 27).
Leasehold relation is instituted in retained areas with tenant(s) under RA
6657 or PD 27 who opts to choose to remain therein instead of becoming a
beneficiary in the same or another agricultural land with similar or
comparable features. The tenant must exercise his option within one (1) year
from the time the landowner manifests his choice of the area for retention
(Rep. Act No. 6657 [1988], sec. 6). Leasehold relation also exists in all
tenanted agricultural lands that are not yet covered under CARP (DAR Adm.
O. No. 5 [1993]).
The institution of leasehold in these areas ensure the protection and
improvement of the tenurial and economic status of tenant-tillers therein.
(Rep. Act No. 6657 [1988], sec. 6).
Leasehold tenancy distinguished from civil law lease
In Gabriel vs. Pangilinan, 58 SCRA 590 (1974), the Supreme Court
distinguished leasehold tenancy from civil law lease.
There are important differences between a leasehold tenancy and a civil
law lease. The subject matter of leasehold tenancy is limited to
agricultural land; that of civil law lease may be either rural or urban
property. As to attention and cultivation, the law requires the leasehold
tenant to personally attend to, and cultivate the agricultural land,
whereas the civil law lessee need not personally cultivate or work the
thing leased. As to purpose, the landholding in leasehold tenancy is
devoted to agriculture, whereas in civil law lease, the purpose may be
for any other lawful pursuits. As to the law that governs, the civil law
lease is governed by the Civil Code, whereas leasehold tenancy is
governed by special laws (at 596).
Elements of Agricultural Tenancy
The following are the essential requisites for the existence of a tenancy
relation:
a)
The parties are the landholder and the tenant;
b)
The subject is agricultural land;
c)
There is consent by the landholder for the tenant to work on the
land, given either orally or in writing, expressly or impliedly;
d)
The purpose is agricultural production;
e)
There is personal cultivation or with the help of the immediate
farm household; and
f)
There is compensation in terms of payment of a fixed amount in
money and/or produce. (Carag vs. CA, 151 SCRA 44 [1987]; Gabriel vs.
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Pangilinan, 58 SCRA 590 [1974]; Oarde vs. CA, 280 SCRA 235 [1997];
Qua vs. CA, 198 SCRA 236 [1991])
The Supreme Court emphasized in numerous cases that "(a)ll these
requisites must concur in order to create a tenancy relationship between the
parties. The absence of one does not make an occupant of a parcel of land,
or a cultivator thereof, or a planter thereon, a de jure tenant. This is so
because unless a person has established his status as a de jure tenant, he is
not entitled to security of tenure nor is he covered by the Land Reform
Program of the Government under existing tenancy laws." (Caballes v. DAR,
168 SCRA 254 [1988])
In the case of Teodoro vs. Macaraeg, 27 SCRA 7 (1969), the Court found all
the elements of an agricultural leasehold relation contained in the contract of
lease executed by the parties.
Teodoro vs. Macaraeg
27 SCRA 7 (1969)
Facts:
Macaraeg had been the lessee of the property of Teodoro for the past
seven (7) years when he was advised by the latter to vacate the
property because it would be given to another tenant. Thereafter, a new
tenant was installed who forbade Macaraeg from working on the
riceland. On the other hand, Teodoro denied that Macaraeg was his
tenant and claimed that he had always leased all of his 39-hectare
riceland under civil lease. He further claimed that after the expiration of
his "Contract of Lease" with Macaraeg in 1961, the latter did not
anymore renew his contract.
Held:
The Contract of Lease between the parties contains the essential
elements of a leasehold tenancy agreement. The landholding in dispute
is unmistakably an agricultural land devoted to agricultural production.
More specifically, the parties stipulated that "the property leased shall
be used or utilized for agricultural enterprise only." Furthermore, the
parties also agreed that the farmland must be used for rice production
as could be inferred from the stipulation that "the rental of nine (9)
cavans of palay per hectare for one agricultural year . . . must be of the
same variety (of palay) as that produced by the LESSEE."
The land is definitely susceptible of cultivation by a single person as it is
of an area of only four and a half (4-1/2) ha. This court has held that
even a bigger area may be cultivated personally by the tenant, singly or
with the help of the members of his immediate farm household.
From the stipulation that "the rental must be of the same variety as that
produced by the LESSEE," it can reasonably be inferred that the
intention of the parties was that Macaraeg personally work the land,
which he did as found by the Agrarian Court, thus: "In the instant case,
petitioner (Macaraeg) cultivated the landholding belonging to said
respondent (Teodoro) for the agricultural year 1960-61 in consideration
of a fixed annual rental." (italics supplied) Moreover, there is no
evidence that Macaraeg did not personally cultivate the land in dispute.
Neither did Teodoro allege, much less prove, that Macaraeg availed of
outside assistance in the cultivation of the said riceland.
Teodoro is the registered owner of the disputed landholding and he
delivered the possession thereof to Macaraeg in consideration of a
rental certain to be paid in produce. Evidently, there was a valid
leasehold tenancy agreement. Moreover, the provision that the rental
be accounted in terms of produce 9 cavans per hectare is an
unmistakable earmark, considering the other stipulations, that the
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parties did actually enter into a leasehold tenancy relation (at 16-17;
underscoring supplied).
Agricultural tenancy relation is different from farm employer-farm
employee relation. The Court clarified the difference in the case of Gelos vs.
CA, 208 SCRA 608 (1992), as follows:
On the other hand, the indications of an employer-employee
relationship are: 1) the selection and engagement of the employee; 2)
the payment of wages; 3) the power of dismissal; and 4) the power to
control the employee's conduct although the latter is the most
important element.
According to a well-known authority on the subject, tenancy relationship
is distinguished from farm employer-farm worker relationship in that: "In
farm employer-farm worker relationship, the lease is one of labor with
the agricultural laborer as the lessor of his services and the farm
employer as the lessee thereof. In tenancy relationship, it is the
landowner who is the lessor, and the tenant the lessee of agricultural
land. The agricultural worker works for the farm employer and for his
labor he receives a salary or wage regardless of whether the employer
makes a profit. On the other hand, the tenant derives his income from
the agricultural produce or harvest." (at 614)
Parties: landholder and tenant
Tenant defined.
A tenant is "a person who by himself, or with the aid available from within
his immediate household, cultivates the land belonging to or possessed by
another, with the latter's consent for purposes of production, sharing the
produce with the landholder or for a price certain or ascertainable in produce
or in money or both, under the leasehold tenancy system." (Rep. Act No.
1199 [1954], sec. 5 (a)).
An overseer of a coconut plantation is not considered a tenant.
Zamoras vs. Su, Jr.
184 SCRA 248 (1990)
Facts:
Zamoras was hired by Su as overseer of his coconut land in Dapitan
City. Zamoras was tasked to have the land titled in Su's name. He was
also "assigning portions of the land to be worked by tenants,
supervising the cleaning, planting, care and cultivation of the land, the
harvesting of coconuts and selling of the copra." As compensation, he
was paid salary of P2,400 per month plus 1/3 of the proceeds of the
sales of the copra. Su got another 1/3 of the proceeds while the other
third went to the tenants. In 1981, Su obtained a loan from Anita
Hortellano and the latter was authorized by Su to harvest the coconuts.
Meanwhile, he informed Zamoras that he was being temporarily laid-off
until the loan is settled. Zamoras filed a case for illegal termination and
breach of contract before the Regional Arbitration Branch of the Ministry
of Labor. The Labor Arbiter held that Zamoras' dismissal was without
just cause and ordered Zamoras reinstatement. On appeal, the National
Labor Relation Commission reversed the Labor Arbiter by holding that
there is no employee-employer relation existing between the parties but
a landlord-tenant relation hence jurisdiction rests with the agrarian
court. Zamoras assailed the decision of NLRC.
Held:
The NLRC's conclusion that a landlord-tenant relationship existed
between Su and Zamoras is not supported by the evidence which shows
that Zamoras was hired by Su not as a tenant but as overseer of his
coconut plantation. As overseer, Zamoras hired the tenants and
assigned their respective portions which they cultivated under Zamoras'
supervision. The tenants dealt directly with Zamoras and received their
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one-third share of the copra produce from him. The evidence also shows
that Zamoras, aside from doing administrative work for Su, regularly
managed the sale of copra processed by the tenants. There is no
evidence that Zamoras cultivated any portion of Su's land personally or
with the aid of his immediate farm household.
The
following
circumstances
indicate
an
employer-employee
relationship between them: 1. Zamoras was selected and hired by Su as
overseer of the coconut plantation. 2. His duties were specified by Su. 3.
Su controlled and supervised the performance of his duties. He
determined to whom Zamoras should sell the copra produced from the
plantation. 4. Su paid Zamoras a salary of P2,400 per month plus onethird of the copra sales every two months as compensation for
managing the plantation."
There is no tenancy relation because the element of personal cultivation
does not exist.
Castillo vs. CA
205 SCRA 529 (1992)
Facts:
Alberto Ignacio filed a complaint for injunction against Castillo alleging
that he is the agricultural tenant of the latter. He claims that Castillo
allowed him to construct a rest house in the property and that,
thereafter, Castillo started cutting fruit-bearing trees on the land and
filled with adobe stones the area intended for vegetables. On the other
hand, Castillo denied that Ignacio was his tenant but that the latter was
only a "magsisiga" of the landholding and that he did not ask
permission from Ignacio when he constructed his rest house. The trial
court found no tenancy relationship between the parties but this was
reversed by the Court of Appeals.
Held:
The element of personal cultivation is absent in this case. The alleged
tenant "is a businessman by occupation and this is his principal source
of income. He manufactures hollow blocks. He also has a piggery and
poultry farm as well as a hardware store on the land adjoining the
subject land. To add to that, the respondent farms the riceland of one
Dr. Luis Santos. It is thus evident that the working hours of the
respondent as a businessman and his other activities do not permit him
to undertake the work and obligations of a real tenant. This is further
supported by the undisputed fact that the respondent cannot even
personally perform the work of a smudger because on 22 October 1986,
the respondent hired some 20 people who are not members of his
family to cut and burn the grass in the premises of the subject land." (at
535-536).
An owner tilling his own agricultural land is not a tenant within the
contemplation of the law (Baranda vs. Baguio, 189 SCRA 194 (1990).
In Oarde vs. CA, et al., 280 SCRA 235 (1997), certifications of
tenancy/non-tenancy issued by DAR are not conclusive.
"The certifications issued by administrative agencies or officers that a
certain person is a tenant are merely provisional and not conclusive on
courts, as ruled by this Court in Cuao vs. Court of Appeals, citing
Puertollano vs. IAC. Secondly, it is well-settled that the "findings of or
certifications issued by the Secretary of Agrarian Reform, or his
authorized representative, in a given locality concerning the presence or
absence of a tenancy relationship between the contending parties is
merely preliminary or provisional and is not binding upon the courts."
(at 246)
Landholder-lessor
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A landholder-lessor is defined as "any person, natural or juridical, either

as owner, lessee, usufructuary or legal possessor of agricultural land, who
lets, leases or rents to another said property for purposes of agricultural
production and for a price certain or ascertainable either in an amount of
money or produce." (Rep. Act No. 1199 [1954], sec. 42). Thus, consent need
not be necessarily given personally by the registered owner as long as the
person giving the consent is the lawful landholder as defined by law.
Bernas vs. Court of Appeals
225 SCRA 119 (1993)
Facts:
Natividad Deita is the owner of a 5,831-sq m property which she
entrusted to her brother, Benigno, so that he could use the fruits thereof
to defray the cost of his children's education in Manila. The property
was leased by Bernas pursuant to a production sharing arrangement
executed between Bernas and Benigno. Natividad played no part in this
arrangement. In 1985, the lots were returned by Benigno to his sister
but when the owners sought to take possession, Bernas refused to
relinquish the property. Bernas was claiming that he was an agricultural
lessee entitled to security of tenure. Natividad filed an action for
recovery of possession. The trial court ruled in favor of Bernas but this
was subsequently reversed by the CA.
Issue:
Is consent by a legal possessor, even if without the consent of
landowner, sufficient to create tenancy relationship?
Held:
Yes. As legal possessor of the property, Benigno had the authority and
capacity to enter into an agricultural leasehold relation with Bernas.
"The law expressly grants him, as legal possessor, authority and
capacity to institute an agricultural leasehold lessee on the property he
legally possessed." (at 125-126)
Subject is agricultural land
For agricultural tenancy to exist, the subject of the agreement must be an
agricultural land.
RA 6657 defines the term "agricultural land" as "land devoted to
agricultural activity as defined in this Act and not classified as mineral,
forest, residential, commercial or industrial land." (see discussion on scope of
CARP, Chapter I). Under RA 3844, "agricultural land" refers to land devoted
to any growth, including but not limited to crop lands, salt beds, fish ponds,
idle land and abandoned land.
The area of agricultural land that a lessee may cultivate has no limit, but
he should cultivate the entire area leased. The three (3) hectare limit under
RA 6657 applies only to the award that may be given to the agrarian reform
beneficiary.
Consent by landholder
As discussed earlier, consent must be given by the true and lawful
landholder of the property. In Hilario vs. IAC, 148 SCRA 573 (1987), the
Supreme Court held that tenancy relation does not exist where a usurper
cultivates the land.
Hilario vs. Intermediate Appellate Court
148 SCRA 573 (1987)
Facts:
Salvador Baltazar was working on the land pursuant to a contract
executed between him and Socorro Balagtas involving a two (2)-ha
property. According to Baltazar, in 1965, he relinquished 1.5 ha to
certain individuals and what remained under his cultivation was -ha
owned by Corazon Pengzon. After Socorro's death, no new contract was
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executed. Sometime in 1980, the Hilarios started cultivating a 4,000-sq

m portion of the property and enjoined Baltazar from entering the same.
The Hilarios claimed that they acquired the landholding from the
Philippine National Bank after a foreclosure proceeding. On the other
hand, Corazon Pengzon explained that she did not get any share from
the produce of the land since 1964 and she would not have accepted it
knowing that she did not own the property anymore.
Held:
Baltazar is not a tenant because no consent was given by Pengzon. As
held in Tiongson v. Court of Appeals, 130 SCRA 482, tenancy
relationship can only be created with the consent of the true and lawful
landholder through lawful means and not by imposition or usurpation.
"So the mere cultivation of the land by usurper cannot confer upon him
any legal right to work the land as tenant and enjoy the protection of
security of tenure of the law (Spouses Tiongson vs. Court of Appeals,
130 SCRA 482)."
Successors-in-interest of the true and lawful landholder/owner who gave
the consent are bound to recognize the tenancy established before they
acquired the agricultural land.
Endaya vs. Court of Appeals
215 SCRA 109 (1992)
Facts:
Spouses San Diego owned a 2.0200-ha rice and corn land. The property
has been cultivated by Pedro Fideli as a tenant of the couple under a 5050 sharing agreement. In 1974, a lease contract was executed between
spouses San Diego and a certain Regino Cassanova for a period of four
(4) years at P400.00 per ha per annum rental and gave him the
authority to oversee the planting of crops. The contract was
subsequently renewed to last until 1980. In both cases, Fideli signed as
witness. While the contract was subsisting, Fideli continuously worked
on the property, sharing equally with Cassanova the net produce of the
harvests. In 1980, the land was sold to spouses Endaya. Fideli continued
tilling the land despite the Endaya's demand to vacate the property.
Fideli refused to leave and deposited with Luzon Development Bank the
landowner's share in the harvests. Fideli filed a complaint praying that
he be declared the agricultural tenant of the Endayas. The trial court
ruled in favor of the Endayas but the same was subsequently reversed
by the CA holding that Fideli is an agricultural lessee entitled to security
of tenure.
Held:
It is true that the Court has ruled that agricultural tenancy is not created
where the consent of the true and lawful owners is absent. But this
doctrine contemplates a situation where an untenanted farm land is
cultivated without the landowner's knowledge or against her will or
although permission to work on the farm was given, there was no
intention to constitute the worker as the agricultural lessee of the farm
land. The rule finds no application in the case at bar where the
petitioners are successors-in-interest to a tenanted land over which an
agricultural leasehold has long been established. The consent given by
the original owners to constitute private respondent as the agricultural
lessee of the subject landholding binds private respondents who, as
successors-in-interest of the Spouses San Diego, step into the latter's
shoes, acquiring not only their rights but also their obligations. (at 118;
underscoring supplied).
Purpose is agricultural production
Tenancy status arises only if an occupant of a parcel of land has been
given its possession for the primary purpose of agricultural production.
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Caballes vs. Department of Agrarian Reform

168 SCRA 248 (1988)
Facts:
Spouses Caballes acquired subject land from the Millenes family. Prior to
the sale, Abajon constructed his house on a portion of the property,
paying a monthly rental to the owner. Abajon was also allowed to plant
on a portion of the land and that the produce thereof would be shared
by them on a 50-50 basis. When the new owners took over, they told
Abajon to transfer his dwelling to the southern portion of the property
because they would be building a poultry near Abajon's house. Later,
the Caballes asked Abajon to leave because they needed the property.
Abajon refused. During the trial the former landowner testified that
Abajon dutifully gave her 50% share of the produce of the land under
his cultivation.
Held:
The fact of sharing alone is not sufficient to establish a tenancy
relationship. The circumstances of this case indicate that the private
respondent's status is more of a caretaker who was allowed by the
owner out of benevolence or compassion to live in the premises and to
have a garden of some sort at its southwestern side rather than a
tenant of the said portion. Agricultural production as the primary
purpose being absent in the arrangement, it is clear that the private
respondent was never a tenant of the former owner, Andrea Millenes.
Consequently, Sec. 10 of RA 3844, as amended, does not apply. Simply
stated, the private respondent is not a tenant of the herein petitioner.
Personal cultivation
Cultivation
Under DAR AO 5 (1993), cultivation is not limited to the plowing and
harrowing of the land, but also the husbanding of the ground to forward the
products of the earth by general industry, the taking care of the land and
fruits growing thereon, fencing of certain areas, and the clearing thereof by
gathering dried leaves and cutting of grasses. In coconut lands, cultivation
includes the clearing of the landholding, the gathering of the coconuts, their
piling, husking and handling as well as the processing thereof into copra,
although at times with the aid of hired laborers.
Meaning of "Personal Cultivation"
"Personal cultivation" exists when a person cultivates the land by himself
and with the aid available from his immediate farm household.
In Oarde vs. CA, et al., supra, the Court held that the element of personal
cultivation is essential for an agricultural leasehold. There should be personal
cultivation by the tenant or by his immediate farm household or members of
the family of the lessee or other persons who are dependent upon him for
support or who usually help him in his activities (Evangelista vs. CA, 158
SCRA 41). The law is explicit in requiring the tenant and his immediate family
to work the land (Bonifacio vs. Dizon, 177 SCRA 294), and the lessee cannot
hire many persons to help him cultivate the land (De Jesus vs. IAC, 175 SCRA
559). In Gabriel vs. Pangilinan, supra, the Court held that the tenancy
relation was severed when the tenant and/or his immediate farm household
ceased from personally working the fishpond when he became ill and
incapacitated.
Compensation in money and/or produce
In Matienzo v. Servidad, 107 SCRA 276 (1981), the Supreme Court held
that:
A tenant is defined under section 5(a) of Republic Act No. 1199 as a
person who, himself, and with the aid available from within his
immediate household, cultivates the land belonging to or possessed by
another, with the latter's consent for purposes of production, sharing
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the produce with the landholder under the share tenancy system, or
paying to the landholder a price certain or ascertainable in produce or in
money or both, under the leasehold tenancy system. From the above
definition of a tenant, it is clear that absent a sharing arrangement, no
tenancy relationship had ever existed between the parties. What
transpired was that plaintiff was made overseer over a 7-hectare land
area; he was to supervise applications for loans from those residing
therein; he was allowed to build his house thereon and to plant specified
plants without being compensated; he was free to clear and plant the
land as long as he wished; he had no sharing arrangement between him
and defendant; and he was not obligated to pay any price certain to nor
share the produce, with the latter. CaSHAc
Security of Tenure
Under Sec. 7 of RA 1199, "the agricultural leasehold relation once
established shall confer upon the agricultural lessee the right to continue
working on the landholding until such leasehold relation is extinguished. The
agricultural lessee shall be entitled to security of tenure on his landholding
and cannot be ejected therefrom unless authorized by the Court for causes
herein provided."
The Supreme Court has consistently ruled that once a leasehold relation
has been established, the agricultural lessee is entitled to security of tenure.
The tenant has a right to continue working on the land except when he is
ejected therefrom for cause as provided by law (De Jesus vs. IAC, 175 SCRA
559 [1989]).
Transfer of ownership or legal possession does not affect security of
tenure.
In Tanpingco vs. IAC, 207 SCRA 653 (1992), the Court upheld the validity
of donation but the donee must respect the rights of the tenant and ordered
the donee to pay the tenant disturbance compensation.
Tanpingco vs. Intermediate Appellate Court
207 SCRA 653 (1992)
Facts:
In 1985, Tanpingco filed a complaint for payment of disturbance
compensation against Benedicto Horca, Sr. Tanpingco alleged that he is
the tenant-lessee in Horca's riceland under a leasehold contract; that he
was asked to desist from working on the land because it was already
donated to the Ministry of Education, Culture and Sports; and that he is
willing to accept disturbance compensation or in the alternative to
remain as tenant-lessee of the subject land.
Issue:
Is the security of tenure of a tenant affected by the transfer of
ownership or legal possession of an agricultural land?
Held:
Under Art. 428 of the Civil Code, the owner has the right to dispose of a
thing without other limitations than those established by law. As an
incident of ownership, therefore, there is nothing to prevent a
landowner from donating his naked title to the land. However, the new
owner must respect the rights of the tenant. Sec. 7 of RA No. 3844, as
amended, gives the agricultural lessee the right to work on the
landholding once the leasehold relationship is established. It also
entitles him to security of tenure on his landholding. He can only be
ejected by the court for cause. Time and again, this Court has
guaranteed the continuity and security of tenure of a tenant even in
cases of a mere transfer of legal possession. As elucidated in the case
of Bernardo v. Court of Appeals (168 SCRA 439 [1988]), security of
tenure is a legal concession to agricultural lessees which they value as
life itself and deprivation of their landholdings is tantamount to
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deprivation of their only means of livelihood. Also, under Section 10 of

the same Act, the law explicitly provides that the leasehold relation is
not extinguished by the alienation or transfer of the legal possession of
the landholding. The only instances when the agricultural leasehold
relationship is extinguished are found in Section 8, 28 and 35 of the
Code of Agrarian Reforms of the Philippines. The donation of the land
did not terminate the tenancy relationship. However, the donation itself
is valid." (at 657-658; underscoring supplied).
Constitutionality of the provision on security of tenure
The constitutionality of the provision on security of tenure has long been
settled by the Supreme Court in the case of Primero vs. Court of Agrarian
Relations, 101 Phil. 675 (1957).
Primero vs. Court of Agrarian Relations
101 Phil. 675 (1957)
Facts:
Primero owns a tenanted riceland in Cavite. Because of his desire to let
the property to one Porfirio Potente, he notified his tenant advising the
latter to vacate the land. The tenant refused. Primero filed a case with
CAR which subsequently dismissed the same. On appeal, Primero
assailed the constitutionality of Sec. 9 and 50 of RA 1199 claiming that
said provisions are limitations on freedom of contract, a denial of equal
protection of law, and an impairment of, or limitation on, property
rights.
Held:
The provisions of law assailed as unconstitutional do not impair the right
of the landowner to dispose or alienate his property nor prohibit him to
make such transfer or alienation; they only provide that in case of
transfer or in case of lease, as in the instant case, the tenancy
relationship between the landowner and his tenant should be preserved
in order to insure the well-being of the tenant or protect him from being
unjustly dispossessed by the transferee or purchaser of the land; in
other words, the purpose of the law in question is to maintain the
tenants in the peaceful possession and cultivation of the land or afford
them protection against unjustified dismissal from their landholdings.
Republic Act 1199 is unquestionably a remedial legislation promulgated
pursuant to the social justice precepts of the Constitution and in the
exercise of the police power of the state to promote the commonwealth.
It is a statute relating to public subjects within the domain of the
general legislative powers of the State and involving the public rights
and public welfare of the entire community affected by it. Republic Act
1199, like the previous tenancy laws enacted by our lawmaking body,
was passed by congress in compliance with the constitutional mandates
that "the promotion of social justice to insure the well-being and
economic security of all the people should be the concern of the State"
(Art II, sec. 5) and that "the state shall regulate the relations between
landlord and tenant in agriculture" (Art. XIV, sec. 6). (at 680).
In Pineda vs. de Guzman, 21 SCRA 1450 (1967), the Supreme Court also
held:
Section 49 of the Agricultural Tenancy Act, Republic Act 1199, as
amended, enunciates the principle of security of tenure of the tenants,
such that it prescribes that the relationship of landholder and tenant
can only be terminated for causes provided by law. The principle is
epitomized by the axiom on land tenure that once a tenant, always a
tenant. Attacks on the constitutionality of this guarantee have centered
on the contention that it is a limitation on freedom of contract, a denial
of the equal protection of the law, and an impairment of or a limitation
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on property rights. The assault is without reason. The law simply

provides that the tenancy relationship between the landholder and his
tenant should be preserved in order to insure the well-being of the
tenant and protect him from being unjustly dispossessed of the land. Its
termination can take place only for causes and reasons provided in the
law. It was established pursuant to the social justice precept of the State
to promote the common weal. (Primero vs. Court of Industrial Relations,
G.R. No. L-10594, May 29, 1957) (at 1456).
Rights and Responsibilities of the Parties
Rights and responsibilities of lessee
The lessee shall have the following rights:
a)
To have possession and peaceful enjoyment of the land;
b)
To manage and work on the land in a manner and method of
cultivation and harvest which conform to the proven farm practices;
c)
To mechanize all or any phase of his farm work;
d)
To deal with millers and processors and attend to the issuance of
quedans and warehouse receipts of the produce due him/her;
e)
To continue in the exclusive possession and enjoyment of any
homelot the lessee may have occupied upon the effectivity of RA 3844;
f)
To be indemnified for the costs and expenses incurred in the
cultivation and for other expenses incidental to the improvement of the
crop in case the lessee surrenders, abandons or is ejected from the
landholding;
g)
To have the right of pre-emption and redemption; and
h)
To be paid disturbance compensation in case the conversion of
the farmholding has been approved (Rep. Act No. 3844 [1963], sec. 23,
24, 25, 11, 12, 36)
On the other hand, the lessee shall have the following responsibilities
under Sec. 26 of RA 3844:
a)
Cultivate and take care of the farm, growing crops, and other
improvements on the land and perform all the work therein in
accordance with proven farm practices;
b)
Inform the lessor within a reasonable time of any trespass
committed by third persons on the farm, without prejudice to his/her
direct action against the trespasser;
c)
Take reasonable care of the work animals and farm implements
delivered to him/her by the lessor and see to it that they are not used
for purposes other than those intended, or used by another without the
knowledge and consent of the lessor;
d)
Keep the farm and growing crops attended to during the work
season; and
e)
To pay the lease rental to the lessor when it falls due.
One of the rights of a lessee is to be entitled to a homelot. But only the
tenant-lessee has this right and that members of the immediate family of the
tenants are not entitled to a homelot.
Cecilleville Realty and Service Corporation vs. Court of
Appeals
278 SCRA 819 (1997)
Facts:
Petitioner Cecilleville Realty owns a parcel of land, a portion of which is
occupied by Herminigildo Pascual. Despite repeated demands,
Herminigildo refused to vacate the property and insisted that he is
entitled to occupy the land since he is helping his mother, the
corporation's tenant, to cultivate the property.
Held:
Only a tenant is granted the right to have a home lot and the right to
construct or maintain a house thereon. And here, private respondent
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does not dispute that he is not petitioner's tenant. In fact, he admits

that he is a mere member of Ana Pascual's immediate farm household.
Under the law, therefore, we find private respondent not entitled to a
homelot. Neither is he entitled to construct a house of his own or to
continue maintaining the same within the very small landholding of
petitioner. . . . Thus, if the Court were to follow private respondent's
argument and allow all the members of the tenant's immediate farm
household to construct and maintain their houses and to be entitled to
not more than one thousand (1,000) square meters each of home lot, as
what private respondent wanted this Court to dole-out, then farms will
be virtually converted into rows, if not colonies, of houses.
In sugarcane lands, the lessee shall have the following rights to be
exercised
by
him
personally
or
through
a
duly
registered
cooperative/farmers' association of which he is a bona fide member (DAR
Adm. O. No. 5 [1993]):
a)
To enter into a contract with the sugar central millers for the
milling of the sugarcane grown on the leased property;
b)
To be issued a warehouse receipt (quedan) or molasses storage
certificate by the sugar central for the manufactured sugar, molasses
and other by-products;
c)
To have free access to the sugar central's factory, facilities, and
laboratory for purposes of checking and/or verifying records and
procedures in the processing of sugarcane through professional
representation;
d)
To be furnished a weekly statement of cane and sugar account
showing, among other things, the tonnage of the delivered cane and
analysis of the crusher juice;
e)
To be given 30 days notice in writing before the sugar and other
by-products are sold through public auction; and
f)
To be provided with the standard tonnage allocation by the
miller/sugar central.
Rights and responsibilities of lessor
The lessor shall have the following rights:
a)
To inspect and observe the extent of compliance with the terms and
conditions of the leasehold contract;
b)
To propose a change in the use of the landholding to other agricultural
purposes, or in the kind of crops planted;
c)
To require the lessee, taking into consideration his/her financial
capacity and the credit facilities available to him/her, to adopt proven farm
practices necessary to the conservation of the land, improvement of the
fertility and increase in productivity; and
d)
To mortgage expected rentals (Rep. Act No. 3844 [1963], sec. 29):
The lessor may propose a change in use but the change shall be agreed
upon by the landowner and the lessee. In case of disagreement, the matter
may be settled by the Provincial Agrarian Reform Adjudicator (PARAD), or in
his absence the Regional Agrarian Reform Adjudicator (RARAD) (DAR Adm. O.
No. 5 [1993])
The lessor shall have the following obligations:
a)
To keep the lessee in peaceful possession and cultivation of the
land; and
b)
To keep intact such permanent useful improvements existing on
the landholding at the start of the leasehold relation (Rep. Act No. 3844
[1963], sec. 30).
Sec. 31 of RA 3844 provides that the lessor is prohibited to perform any of
the following acts:
a)
To dispossess the lessee of his/her landholding except upon
authorization by the Court;
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b)
To require the lessee to assume, directly or indirectly, the
payment of the taxes or part thereof levied by the government on the
land;
c)
To require the lessee to assume, directly or indirectly, any rent or
obligation of the lessor to a third party;
d)
To deal with millers or processors without written authorization of
the lessee in cases where the crop has to be sold in processed form
before payment of the lease rental;
e)
To discourage, directly or indirectly, the formation, maintenance
or growth of unions or organizations of lessees in his/her landholding;
and
f)
For coconut lands, indiscriminate cutting of coconut trees will be
deemed prima facie evidence to dispossess the tenant of his/her
landholding unless there is written consent of the lessee and there is
PCA certification, copy of the findings and recommendations of which
shall be furnished to affected tenants or lessees, or a resolution from
the Municipal Board allowing the cutting for valid reasons (DAR Adm. O.
No. 5 [1993] and DAR Adm. O. No. 19 [1989]).
Termination of Tenancy Relation
Causes for termination of leasehold relation
Section 8 of RA 3844 provides that agricultural leasehold relation shall be
extinguished by the following acts or omissions:
a)
Abandonment of the landholding without the knowledge of the
agricultural lessor;
b)
Voluntary surrender of the landholding by the agricultural lessee,
written notice of which shall be served three months in advance; or
c)
Absence of an heir to succeed the lessee in the event of his/her
death or permanent incapacity.
Conversion of the land to non-agricultural uses also extinguishes the
leasehold relation because the subject land is no longer an agricultural land
and the purpose is no longer agricultural production. However, under Sec. 16
of DAR AO 1 (1999), the tenant affected by the conversion is entitled to
disturbance compensation which must be paid within sixty (60) days from
the issuance of the order of conversion.
Abandonment
In the case of Teodoro vs. Macaraeg, supra, it was held that the word
"abandon," in its ordinary sense, means to forsake entirely, to forsake or
renounce utterly. "The emphasis is on the finality and the publicity with
which some thing or body is thus put in the control of another, and hence the
meaning of giving up absolutely, with intent never again to resume or claim
one's rights or interests." In other words, the act of abandonment constitutes
actual, absolute and irrevocable desertion of one's right or property. . . .
Likewise, failure to cultivate the land by reason of the forcible prohibition to
do so by a third party cannot also amount to abandonment, for
abandonment presupposes free will." (at 19-20; underscoring supplied).
Voluntary surrender of property
The tenant's intention to surrender landholding cannot be presumed,
much less determined by mere implication, but must be convincingly and
sufficiently proved.
Nisnisan, et al vs. Court of Appeals
294 SCRA 173 (1998)
Facts:
Spouses Gavino and Florencia Nisnisan are the owners of a 4.9774
hectare land in Davao del Sur. Policarpio, the son of Gavino, has been
cultivating one (1) ha of said land since 1961. In 1976, Gavino and
Policarpio executed a leasehold contract which stipulates a sharing
arrangement of 1/3:2/3 of the harvest. In 1978, Gavino sold two (2) ha
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of the land, including the land tenanted by Policarpio, to spouses

Mancera. As a result of the sale, Policarpio and family were ousted. They
then filed an action for reinstatement of tenancy against the Manceras.
The Manceras, on the other hand, countered that spouses Nisnisan have
no cause of action because they voluntarily surrendered their
landholding.
Issue:
Is the tenant deemed to have voluntarily surrendered subject
landholding?
Held:
Other than their bare allegations, private respondents failed to present
any evidence to show that petitioners-spouses surrendered their
landholding voluntarily after the private respondents purchased the
subject property. Moreover, the filing of the complaint for reinstatement
of leasehold tenancy by petitioners-spouses against private respondents
before the CAR militates against the private respondents' claim that
petitioners-spouses voluntarily surrendered their landholding to them.
Under Sec. 8 of RA 3844, voluntary surrender, as a mode of
extinguishing agricultural leasehold tenancy relations, must be
convincingly and sufficiently proved by competent evidence. The
tenant's intention to surrender the landholding cannot be presumed,
much less determined by mere implication.
Effect of death or permanent incapacity of tenant-lessee on
leasehold relation
Under Sec. 9 of RA 3844, in case of death or permanent incapacity, the
leasehold relation continues between the lessor and the person who can
cultivate the land personally, chosen by the lessor within one month from
such death or incapacity, from among the following:
a)
The surviving spouse;
b)
The eldest direct descendant by consanguinity;
c)
The next eldest descendant or descendants in the order of age.
The age requirement is applied under the presumption that all
heirs/successors are qualified.
The leasehold relation is not terminated by death or permanent incapacity
of the landholder-lessor. It binds his legal heirs (Rep. Act No. 3844 [1963],
sec. 9).
Also, Sec. 10 of RA 3844 provides that the mere expiration of the term or
period in a leasehold contract nor by sale, alienation or transfer of the legal
possession of the landholding does not extinguished leasehold. In these
cases, the transferee is subrogated to the rights and substituted to the
obligations of the lessor.
Dispossession of Tenants
Under Sec. 36 of RA 3844, dispossession of tenants may be authorized by
the Court in a judgment that is final and executory if after due hearing it is
shown that:
a)
The lessee failed to substantially comply with the terms and
conditions of the contract or with pertinent laws unless the failure is
caused by a fortuitous event or force majeure;
b)
The lessee planted crops or used the land for a purpose other
than what has been previously agreed upon;
(Note: Under DAR AO 5 [1993], the lessee is now allowed to intercrop
or plant secondary crops after the rental has been fixed, provided the
lessee shoulders the expenses.)
c)
The lessee failed to adopt proven farm practices necessary to
conserve the land, improve its fertility, and increase its productivity
taking into consideration the lessee's financial capacity and the credit
facilities available to him;
32

33

d)
There has been substantial damage, destruction or unreasonable
deterioration of the land or any permanent improvement thereon due to
the fault or negligence of the lessee;
e)
The lessee failed to pay lease rental on time except when such
non-payment is due to crop failure to the extent of 75% as a result of a
fortuitous event;
f)
The lessee employed a sub-lessee; or
g)
The landholding is declared by the DAR to be suited for
residential, commercial, industrial or some other urban purposes subject
to payment of disturbance compensation to the lessee.
(Note: Under Sec. 36 [1] of RA 3844, as amended by RA 6389,
disturbance compensation is equivalent to five [5] times the average of the
gross harvest on his landholding during the last five [5] preceding calendar
years.)
In the case of Garchitorena vs. Panganiban, 6 SCRA 338 (1962), it was
held that when non-payment of lease rentals occurs for several years, said
omission has the effect of depriving the landowner of the enjoyment of the
possession and use of the land.
Under Sec. 36 (1) of RA 3844, as amended, a lessor who ejects his tenant
without the court's authorization shall be liable for:
a)
fine or imprisonment;
b)
damages suffered by the agricultural lessee in addition to the
fine or imprisonment for unauthorized dispossession;
c)
payment of attorney's fees incurred by the lessee; and
d)
the reinstatement of the lessee.
Determination of Lease Rentals
The lease rental shall not be more than the equivalent of 25% of the
average normal harvest during the three (3) agricultural years preceding the
following dates:

10 September 1971, the date of effectivity of RA 6389 for

tenanted rice and corn lands;

15 June 1988 or date the tenant opted to enter into leasehold

agreement, whichever is sooner, for tenanted sugar lands; or

15 June 1988 or date of leasehold agreement by the parties

concerned, whichever is sooner, for all other agricultural lands after
deducting the amount used for seeds and the cost of harvesting,
threshing, loading, hauling and processing whichever is applicable (DAR
Adm. O. No. 5 [1993]).
DAR AO 5 (1993) defines "normal harvest" as the usual or regular produce
obtained from the land when it is not affected by any fortuitous event like
drought, earthquake, volcanic eruption, and the like. If there had been no
normal harvest, the estimated normal harvest during the three (3) preceding
agricultural years shall be considered as the normal harvest.
"Agricultural year" refers to the period of time required for raising a
particular product, including the preparation of the land, sowing, planting
and harvesting of crops and, whenever applicable, threshing of said crops:
Provided, however, That in case of crops yielding more than one harvest from
one planting, "agricultural year" shall be the period from the preparation of
the land to the first harvest and thereafter from harvest to harvest. In both
cases, the period may be shorter or longer than a calendar year.
The law states that only the amount used for seeds and the cost of
harvesting, threshing, loading, hauling, and processing, whichever is
applicable, are considered allowable deductions from the normal harvest in
order to determine the lease rental.
The lease rental shall cover the whole farmholding attended to by the
lessee. Computation of lease rental shall include both primary and secondary
crops existing as of 15 June 1988. Secondary crops which are planted to an
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34

aggregate area of half a hectare or less shall not be included in the

computation of the lease rental (DAR Adm. O. No. 5 [1993]).
If the land has been cultivated for a period of less than three agricultural
years prior to 15 June 1988, the initial rental shall be based on the average
normal harvest during the preceding agricultural years when the land was
actually cultivated.
After the lapse of the first three (3) normal harvests, the final rental shall
be based on the average normal harvest during these three (3) preceding
agricultural years.
CHAPTER 3
Land Acquisition
Registration of Landholdings and Landowners
Sec. 14 of RA 6657 requires all persons, natural or juridical, and
government entities that own or claim to own agricultural lands, whether, in
their names or in the name of others, are required, to file a sworn statement
with the assessor's office, containing the following data:
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;
d)
the crops planted in the property and the area covered by each
crop as of 1 June 1987;
e)
the terms of mortgages, lease, and management contracts
subsisting as of 1 June 1987; and
f)
the latest declared market value of the land as determined by
the city or provincial assessor.
The registration drive, denominated as Listasaka II, is governed by
Department of Finance MC 5 (1988).
Effect of failure to register
Under Sec. 4 of EO 229 (1987), which originally provided for the
compulsory registration of agricultural landholdings, if the landowner fails to
register within the prescribed period, the government shall base the
valuation of his property for landowner compensation purposes on the
City/Provincial Assessor's value.
The effects of non-registration provided in Sec. 40 of EO 229, however,
are now deemed superseded by Sec. 14 of RA 6657 which does not provide
for such effects. In the Association cases, the Supreme Court stated:
The complaint against the effects of non-registration of the land under
E.O. No. 229 does not seem to be viable any more as it appears that
Section 4 of the said Order has been superseded by Section 14 of the
CARP Law. This repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that in case of
failure or refusal to register the land, the valuation thereof shall be that
given by the provincial or city assessor for tax purposes. On the
contrary, the CARP Law says that the just compensation shall be
ascertained on the basis of the factors mentioned in its Section 17 and
in the manner provided for in Section 16.
Registration of Potential Beneficiaries
The law requires the DAR to register all potential beneficiaries and
compile a data bank containing pertinent information on them.
The registration of beneficiaries is governed by DAR AO 10 (1989). The
objectives of this activity include the validation of data reported by
landowners under the LISTASAKA program, and to provide basic data for the
planning and development of support programs.
Beneficiaries of PD 27 who have culpably sold, disposed of, or abandoned
their lands, and landowners of PD 27 beneficiaries who already own or have
already received at least three (3) hectares of land are excluded from
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35

registration, they being disqualified to become beneficiaries under Secs. 22

and 23 of RA 6657.
Effect of farmer's failure to register
The failure of a farmer to register does not have any effect prejudicial to
his rights as a potential farmer-beneficiary. DAR AO 10 (1989) does not
provide for any penalty against the failure of a farmer to register. He may
simply avail of the next registration period. Under this administrative order,
the registration of new qualified registrants is undertaken as a continuing
activity of the DAR.
Landholdings Covered by CARP
The schedule of acquisition and distribution of agricultural lands covered
by CARP is provided for under Sec. 7 of RA 6657. Land distribution and
acquisition covers three phases. However, this does not mean that in the
implementation of the program, a particular category should be finished first
before going to the next category. In other words, the three (3) phases as
outlined in Sec. 7 should not be interpreted as an exclusive order of priority.
Rather, what is contemplated is simultaneous over-all implementation
(Records of the Senate, Volume I, No. 101, pp. 3239-32340; Speech of Rep.
Roo, Congressional Deliberations, 6 October 1987). The guiding principle in
the implementation of the program is the readiness of the different farmer
groups to work fully without restraints on the land and make the land
productive (Sponsorship Speech of Rep. Andolana, Congressional
Deliberations, 23 September 1987).
It is within this framework that the following lands are to be acquired by
the Republic of the Philippines for ultimate distribution to the qualified
farmer-beneficiaries: rice and corn lands under PD 27/EO 228; idle or
abandoned lands; lands foreclosed by private and government financial
institutions; private agricultural lands; lands acquired by the Presidential
Commission on Good Government (PCGG), and public agricultural lands.
Rice and corn lands under PD 27 and EO 228
At the time of the deliberations on House Bill No. 400, otherwise known as
"An Act Instituting a Comprehensive Agrarian Reform Program and Providing
the Mechanism for Its Implementation," and Senate Bill No. 249, otherwise
known as "An Act Instituting a Comprehensive Agrarian Reform Program to
promote Social Justice and Industrialization, Providing the Mechanism for its
Implementation and for Other Purposes," the agrarian reform program was
already in place, albeit limited in scope. Specifically, on 21 October 1972
then President Marcos, through PD 27, instituted the agrarian reform
program and placed all tenanted rice and corn lands under its coverage. On
17 July 1987, President Aquino issued EO 228 which declared full ownership
by qualified farmer beneficiaries of lands they acquired by virtue of PD 27.
During the congressional deliberations, it was noted that as of 1987 or
fourteen (14) years of implementation of PD 27, approximately 547,000
hectares involving 397,896 beneficiaries had been left untouched. The
inclusion of rice and corn lands under PD 27 and EO 228 in the CARP is to be
seen as a mere continuation of an unfinished business. (Speech of Rep.
Gillego, Congressional Deliberations, 6 October 1987).
Idle or abandoned land
The DAR is mandated to initiate the expropriation or acquisition of idle or
abandoned agricultural lands at the earliest possible time for distribution to
farmer-beneficiaries of the agrarian reform program (Const. Art. XVIII, sec 22;
EO 229, sec 18[h]). Idle or abandoned land refers to any agricultural land not
cultivated, tilted 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 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
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36

any other fortuitous event, provided that prior such event, such land was
previously used for agricultural or other economic purpose (RA 6657, sec 3
[e]).
Private agricultural lands
Private agricultural lands within the context of RA 6657 refer to those
lands devoted to agricultural activity and not classified as residential,
commercial or industrial owned by persons, whether natural or juridical,
other than the government or its instrumentalities. Abandoned private
agricultural lands, commercial farms and agricultural lands subject of
mortgage or foreclosure by natural or juridical persons, private banking or
financial institutions are special classes of private agricultural lands subject
of acquisition or distribution to farmer-beneficiaries.
Agricultural lands under mortgage or foreclosure
Mortgage is an accessory contract whereby the debtor (or a third person)
guarantees the performance of the principal obligation by subjecting real
property or real rights as security in case of non-fulfillment of said obligation
within the period agreed upon. A mortgage follows the property whoever the
possessor may be and subjects it to the fulfillment of the obligation for
whose security it was constituted. (Bonnevie vs. Court of Appeals, 125 SCRA
122, [1983]). Therefore, even if the ownership of the mortgaged property
changes, the encumbrance, unless extinguished by any means allowed by
law, subsists. The parties to such contract, the mortgagee and the mortgagor
under the law, have their respective rights and obligations. It is the essence
of the mortgage contract that when the principal obligation becomes due,
the things in which the mortgage consists may be alienated for the payment
to the creditor. (New Civil Code, Art. 2087) This remedy is referred to as
foreclosure. In the foreclosure proceedings, the mortgaged property is sold
on default of the mortgagor in satisfaction of the mortgage debt.
The nature and the legal effects of and legal relationships formed by a
contract of mortgage gives rise to an important issue: at what point may the
creditor be considered as the landowner and when may he be treated as a
mere lienholder for the purpose of placing the landholdings under CARP
coverage?
When placing mortgaged private agricultural lands under CARP, it is
important to distinguish between the status of creditor as landowner and
creditor as lien-holder/mortgagee. The significance of this distinction lies in
the rights and obligations to which the landowner and mortgagee are
entitled and subjected to as enumerated in Sec. 8 and 9 of DAR AO 1 (2000).
Thus, the creditor-mortgagee shall be considered as the landowner for the
purpose of covering the properties under CARP under two (2) circumstances:
(a) when the mortgagee is the purchaser in the foreclosure sale and the
redemption period has already expired where the right of redemption exists;
or (b) when the mortgagee is the purchaser in the foreclosure sale and said
sale is confirmed by the court in cases where only equity of redemption is
provided (DAR Adm. O. No. 1 [2000], sec. 4).
On the other hand, the creditor is considered as a lien-holder or
mortgagee if as of the date the land transfer claim was received by the Land
Bank of the Philippines (LBP) from the DAR and either of the following
circumstances obtain: the mortgage debt is not yet due and demandable; or
the mortgage debt is already due and demandable but the mortgagee has
not foreclosed on the property; or the mortgage has already been foreclosed
but the period to exercise the right of redemption has not expired or the
foreclosure sale has not yet been confirmed by the court in cases where
there is only equity of redemption (DAR Adm. O. No. 1 [2000], sec. 5)
It is likewise important to state that mortgages and other claims
registered with the register of deeds shall be assumed by the government
(when landholdings subject or mortgage or claim is acquired for CARP
purposes) up to an amount equivalent to the landowner's compensation
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37

value as provided in Sec. 72 (b) of RA 6657. In other words, the government

shall assume the mortgage indebtedness not exceeding the just
compensation due the landowner. For instance, the debt secured by the
mortgage is P100,000.00. Assuming that when the mortgaged landholding is
placed under the CARP and acquired by the government, the landowner's
just compensation is determined to be P80,000.00. In this case, what the
government merely assumes is P80,000.00 out of the P100,000.00
indebtedness. This amount is what the government is obligated to pay the
landowner by virtue of its acquisition under CARP. It cannot be made to pay
the balance of P20,000.00. Said amount is collectible from the
debtor/mortgagor. The obligation of the debtor to pay the debt to the
mortgagee stands although the mortgaged property to secure the payment
of said debt may have been transferred to a third person. (Mccullough & Co.
vs. Veloso, 46 Phil. 1, [1924]).
Commercial farms
Commercial farms 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. These farms are subject to
immediate compulsory acquisition and distribution after ten (10) years from
the effectivity of RA 6657 or 15 June 1988. In the case of new farms, the ten
(10)-year period begins from the first year of commercial production and
operation as determined by DAR (Rep. Act No. 6657 [1988], sec. 11). Upon
the expiration of the ten (10)-year deferment period on 15 June 1998, the
DAR issued AO 9 (1998), otherwise known as "Rules and Regulations on the
Acquisition, Valuation, Compensation and Distribution of Deferred
Commercial Farms." All commercial farms whose deferment expired as of 15
June 1998 shall be subject to immediate acquisition and distribution under
the CARP. Those whose deferments have yet to expire will be acquired and
distributed only upon expiration of their respective deferment periods as
originally determined by the DAR or earlier if the DAR determines that the
purpose for which it was deferred no longer exists and revokes its deferment
(DAR Adm. O. No. 9 [1998], sec. 2 [a]). All infrastructure facilities and
improvements including buildings, roads, machineries, receptacles,
instruments or implements permanently attached to the land which are
necessary and beneficial to the operations of the farm as determined by the
DAR, and shall be subject to acquisition upon the recommendation of the
ARBs (DAR Adm. O. No. 9 [1998], sec. 2 [d]).
Commercial farms with expired deferment period shall be acquired
through VOS, CA or direct payment scheme. The acquisition of facilities and
improvements as a general rule, shall be encouraged through the direct
payment scheme (DAR Adm. O. No. 9 [1998], sec. 24).
Corporate farms
Corporate farms are those owned or operated by corporations or other
business associations (Rep. Act No. 6657 [1988], sec. 29). Corporate farms
may be acquired through voluntary land transfer, VOS, CA and voluntary
stock distribution plan (Rep. Act No. 6657 [1988], sec. 31). It must be noted
that corporate farm owners cannot avail of the ten-year deferment period
under DAR AO 9 (1998). Only commercial farms are subject of deferment.
(Rep. Act No. 6657 [1988], sec. 11; DAR Adm. O. No. 9 [1998]).
Lands owned by the State in proprietary capacity
Under Sec. 1 of EO 407 (1990), all government instrumentalities were
directed to transfer to the Republic of the Philippines through the DAR all
landholdings suitable for agriculture. The government instrumentalities
directed to do so included government agencies, government owned and
controlled corporations or financial institutions such as the Development
Bank of the Philippines, Philippine National Bank, Republic Planters Bank,
Asset Privatization Trust, Presidential Commission on Good Government,
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Department of Agriculture, State Colleges and Universities, Department of

National Defense and others.
Modes of Acquisition of Private Agricultural Lands
CARP is founded on the right of landless farmers and regular farmers to
own directly or collectively the lands they till through the just distribution of
all agricultural lands. To achieve this end, a mechanism is provided in the law
for the identification, acquisition, distribution of agricultural lands. As earlier
discussed, CARP covers both private and public agricultural lands. Since the
State owns the latter, they just need to be identified and distributed to the
beneficiaries. Private agricultural lands, upon the other hand, generally have
to go through the acquisition process before their ultimate distribution to the
farmers.
In order for the acquisition process to be completed, several requisites
must be satisfied. First, the land should be privately owned and found
suitable for agriculture. Second, there are beneficiaries willing to take over
the ownership of the land and make it more productive. Third, the landowner
is paid just compensation or deposit in cash or LBP bonds is made in his
name if the value is contested. Finally, title to the land is transferred in the
name of the Republic of the Philippines.
It must be clarified, however, that full payment of just compensation is
not necessarily required in Voluntary Land Transfer (VLT)/Direct Payment
Scheme (DPS) because the terms of payment of just compensation are
governed by the mutual agreement of the parties, i.e., the farmer-beneficiary
and the landowner. Likewise, under EO 407, the payment of just
compensation to the government instrumentality as landowner may come
even after land distribution, that is, thirty (30) days from the registration of
the ownership documents by the Register of Deeds in favor of the
Department of Agrarian Reform (Exec. Order No. 407 [1990], sec. 1, par. 4).
In the same manner that full payment of just compensation is not always
necessary to complete acquisition, transfer of title to the Republic of the
Philippines is not necessary in VLT/DPS since the landholding is directly
transferred from the landowner to the beneficiary.
The modes by which private agricultural lands may be acquired are as
follows: Operation Land Transfer (OLT), Voluntary Offer to Sell (VOS),
Voluntary Land Transfer/ Direct Payment Scheme (VLT/DPS), Compulsory
Acquisition (CA), and Voluntary Stock Distribution in the case of corporate
farms.
Operation Land Transfer
Operation Land Transfer (OLT) is a mechanism established for the
implementation of PD 27 (1972) and EO 228 (1987). It is a mode by which
ownership of tenanted rice and corn lands is transferred to tenantbeneficiaries. It must be stressed that for lands to come under OLT pursuant
to PD 27, there must be first showing that they are tenanted lands. (Castro
vs. CA, 99 SCRA 722 [1980])
LOI 227 (1974) was issued by then President Marcos directing the
immediate extension of the OLT to the landholdings of over seven (7)
hectares. Subsequently, LOI 474 (1976) was issued placing all tenanted rice
and corn lands with areas of seven (7) ha or less belonging to landowners
who own other agricultural lands exceeding seven (7) ha or lands used for
residential, commercial, industrial, or other urban purposes from which they
derive adequate income to support themselves and their families.
LOI 474 was subjected to constitutional scrutiny in the case of Zurbano
vs. Estrella, 137 SCRA 333 (1989). In this case, petitioners who are owners of
56.14 ha of coconut lands and 1.86 ha of ricelands, assailed the
constitutionality of LOI 474, arguing that it is a class legislation and therefore
a violation of the equal protection clause. Furthermore, petitioners averred
that said issuance is violative of the due process clause as it would be, as
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applied to them, a taking of private property without just compensation. The

Supreme Court in upholding its constitutionality held that:
. . . there is no legal basis for declaring LOI No. 474 void on its face on
equal protection, due process and taking of property without just
compensation grounds. The Constitution decrees no less than the
emancipation of tenants, and there are safeguards therein to assure
that there are no arbitrariness or injustice in its enforcement. There are,
moreover, built-in safeguards to preclude any unlawful taking of the
property. There is no merit to the contention that LOI 474 denies equal
protection. To condemn as class legislation an executive act intended to
promote the welfare of tenants is to ignore not only the letter of the
Constitution incidentally cited in the petition itself requiring the
formulation and implementation of an agrarian reform program aimed
at emancipating the tenant from the bondage of the soil, but also the
nation's history. . . . The attack on due process ground is unavailing as
on the face of the challenged measure fairness and justice may easily
be discerned. Nothing in its language lend support to the contention
that consequences so harsh and drastic would attend its
implementation. In language, scheme and framework, this Letter of
Instruction reveals the plan and purpose to attain the goal envisioned
by the Constitution but with due regard to the land owners affected. . . .
Neither is there any merit on the contention that there would be a
taking of private property for public use without just compensation. The
Constitution itself imposes the duty of the State to emancipate the
tenants from the bondage of the soil. What is more, even a month
before its adoption by the 1971-1972 Constitutional Convention, P.D. No.
27 was issued. Its validity, to repeat, was unanimously sustained by this
Tribunal. No other conclusion could have been reached, conforming as it
did to what the fundamental law ordained.
In the case of Locsin vs. Valenzuela, 194 SCRA 195 (1991), the Supreme
Court explained the legal effect of land being placed under OLT as vesting
ownership in the tenant. However, in a subsequent case, Vinzons-Magana vs.
Estrella, 201 SCRA 536 [1991], the High Tribunal, citing Pagtalunan vs.
Tamayo which predated the Locsin case, ruled that the mere issuance of a
certificate of land transfer does not vest ownership in the farmer/grantee.
There seems to be an inconsistency regarding the treatment of the legal
effect of the placing of the property under the Operation Land Transfer. This
is because the issuance of a Certificate of Land Transfer (CLT) over a
landholding presupposes that the property has already been covered under
the OLT. Therefore, if indeed, as the Locsin doctrine enunciated, ownership of
the land is transferred to the farmer at the time the property is placed under
OLT, then, it necessarily follows the CLT, being an instrument issued
subsequent to the coverage of the land under OLT, is evidence of ownership.
However, the latter case of Vinzons-Magana disputes this conclusion.
In the case of Locsin vs. Valenzuela, 194 SCRA 195 (1991), the petitioners
are owners of a landholding which was subject to the lifetime usufructuary of
private respondent. The subject landholding was placed under the Operation
Land Transfer. Petitioners filed a collection suit against the private
respondent claiming that the payments made by the tenants in the subject
properties should be considered as amortization payments for the price of
land and as such should belong to the landowners and not to the
usufructuary. The Court, upholding the petitioners contention, by construing
PD No. 27 in relation to PD No. 57, Department Circular No. 8, dated 1 April
1975 and EO No. 228 dated 17 July 1987, ruled that under PD No. 27, the
tenant-farmer became owner of the land as of 21 October 1972.
. . . Reading the foregoing provisions together, we observe that under
Presidential Decree No. 27, the basic statute, the tenant-farmer became
owner of a family-size farm of five (5) hectares or, if the land was
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irrigated, three (3) hectares, and that the tenant-owner had to pay for
the cost of the land within fifteen (15) years by paying fifteen (15) equal
annual amortization payments. Thus, it appears clear that ownership
over lands (like Lot No. 2-C-A-3) subjected to Operation Land Transfer
moved from the registered owner (the old landowner) to the tenants
(the new landowners). The fifteen (15) annual amortizations to be paid
by the tenants-owners were intended to replace the landholdings which
the old landowners gave up in favor of the new landowners, the
tenants-owners. It follows that in respect of land subjected to Operation
Land Transfer, the tenants-farmers became owners of the land they
tilled as of the effective date of Presidential Decree No. 27, i.e., 21
October 1972. Pending full payment of the cost of the land to the old
landowner by the Land Bank of the Philippines, the leasehold system
was "provisionally maintained" but the "lease rentals" paid by the
tenants-farmers prior to such full payment by the Land Bank to the old
landowner, would be credited no longer as rentals but rather as
"amortization payments" of the price of the land, the unamortized
portion being payable by the Land Bank. In respect of lands brought
within the coverage of Operation Land Transfer, the leasehold system
was legally and effectively terminated immediately on 21 October 1972
(notwithstanding the curious statement in Department Circular No. 8
that it was "provisionally maintained"). It was in respect of lands not yet
subjected to the terms and effects of Operation Land Transfer that the
leasehold system did continue to govern the relationship between the
"landowner and his tenant-tillers".
The exemption of the old landowner from the capital gains tax on the
amortization payments made to him by the tenants-purchasers, under
Presidential Decree No. 57 (supra), underscores the fact, referred to
above, that ownership or dominion over the land moved immediately
from landowner to tenant-farmer, rather than upon completion of
payment of the price of the land. In general, capital gains are realized
only when the owner disposes of his property. . . .
In the case of Pagtalunan vs. Tamayo, 183 SCRA 252 (1990), petitioner
sought to intervene in the expropriation proceedings filed by the Republic of
the Philippines over the subject parcel of land. Petitioner argues that he,
being a bona fide tenant of and holder of Certificate of Land Transfer
covering the subject properties, is entitled to the proceeds of the
expropriation. The Supreme Court, in rejecting petitioner's contention, ruled
that the petitioner, being merely a CLT holder is not the owner of the subject
property and thus, not entitled to just compensation. In explaining the nature
of the CLT, the Court stated that:
. . . However, a careful study of the provisions of Pres. Decree No. 27,
and the certificate of land transfer issued to qualified farmers, will
reveal that the transfer of ownership over these lands is subject to
particular terms and conditions the compliance with which is necessary
in order that the grantees can claim the right of absolute ownership
over them.
Under Pres. Decree No. 266 which specifies the procedure for the
registration of title to lands acquired under Pres. Decree No. 27, full
compliance by the grantee with the abovementioned undertakings is
required for a grant of title under the Tenant Emancipation Decree and
the subsequent issuance of an emancipation patent in favor of the
farmer/grantee [Section 2, Pres. Decree No. 226]. It is the emancipation
patent which constitutes conclusive authority for the issuance of an
Original Certificate of Transfer, or a Transfer Certificate of Title, in the
name of the grantee.
The mere issuance of the certificate of land transfer does not vest in the
farmer/grantee ownership of the land described therein. The certificate
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simply evidences the government's recognition of the grantee as the

party qualified to avail of the statutory mechanisms for the acquisition
of ownership of the land tilled by him as provided under Pres. Decree
No. 27. Neither is this recognition permanent nor irrevocable. Failure on
the part of the farmer/grantee to comply with his obligation to pay his
lease rentals or amortization payments when they fall due for a period
of two (2) years to the landowner or agricultural lessor is a ground for
forfeiture of his certificate of land transfer [Section 2, Pres. Decree No.
816].
Clearly, it is only after compliance with the above conditions which
entitle a farmer/grantee to an emancipation patent that he acquires the
vested right of absolute ownership in the landholding a right which
has become fixed and established, and is no longer open to doubt or
controversy . . . . At best, the farmer/grantee, prior to compliance with
these conditions, merely possesses a contingent or expectant right of
ownership over the landholding. . . .
The Pagtalunan doctrine was reiterated in the case of Vinzons-Magana vs.
Estrella, 201 SCRA 536 (1991). In this case, the petitioner assailed the
constitutionality of LOI No. 474 and its implementing guideline, DAR
Memorandum Circular No. 78-1978 . Moreover, petitioner prayed for the
cancellation of the CLT over the subject landholding arguing that the
issuance of the CLT in favor of the tenant without first expropriating the
property to pay the petitioner landowner the full market value thereof before
ceding and transferring the land to the tenant is unconstitutional as it is
confiscatory and violative of the due process clause. The Supreme Court,
brushing aside the petitioner's theory, held that the issue of the
constitutionality of the taking of private property under the CARP law has
already been settled by the Court. Moreover, citing the Pagtalunan case, the
Court explained the nature of the CLT, stating that it does not vest in the
farmer/grantee ownership of the land described therein. Therefore, there is
no taking of property without payment of just compensation.
It is noted that in all three cases, the facts from which the controversy
arose occurred prior to the issuance of EO 228 of then President Aquino
which declared that full ownership to qualified beneficiaries of the lands
covered by PD No. 27 as of 21 October 1972. Likewise, all cases were
promulgated after the issuance of EO No. 228 in 1987. Therefore, it cannot
be said that the reason behind the Locsin ruling declaring the effect of OLT as
vesting ownership in the tenant is the fact that EO 228, which categorically
clarified the legal effect of PD No. 27, was factored in the discussion of the
case. Why then was EO No. 228 not considered in the subsequent case of
Vinzons-Magana when it was already in effect then? The ponente instead
referred to the pre-Locsin case of Pagtalunan vs. Tamayo. In so doing, it
ignored altogether the legal implications of the Locsin doctrine.
Voluntary Offer to Sell
Voluntary Offer to Sell (VOS) is a scheme whereby the landowners
voluntarily offer their agricultural lands for coverage regardless of phasing. It
does not, however, mean that landholdings voluntarily offered for sale are
automatically accepted by DAR. A VOS may be rejected if the landholding is
not suitable for agriculture, or has a slope of more than eighteen percent
(18%) and is undeveloped. Likewise, said offer may be refused if there are no
takers or persons willing to be agrarian reform beneficiaries and, lastly, the
only identified ARBs are the qualified children of the landowner. [DAR A. O.
No. 06 (1997)]
As a general rule, withdrawal of VOS shall no longer be allowed after the
receipt by the DAR of the letter offer for VOS, i.e., CARP Form No. 1. (DAR
A.O. No. 06 [1997], II [A]). However, DAR may allow the withdrawal of
voluntary offers to sell if the withdrawal of VOS is for the purpose of
acquisition and compensation through the Voluntary Land Transfer/ Direct
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Payment Scheme (VLT/DPS), provided, that the claim folder has not yet been
forwarded to the LBP for the computation of the land value. (DAR A.O. No. 06
[1997] II [A] 2nd par.). DAR may also allow the withdrawal of VOS if the
subject landholding is determined by DAR to be more suitable for a townsite,
resettlement site or individual site needed to address a matter of national
interest or concern in calamity situation (DAR A.O. No. 06 [1997], II [C]).
In case lands voluntarily offered for sale are subsequently found to be
outside the coverage of CARP, such lands shall be reconveyed to the original
transferors. The manner of reconveyance is governed by A.O. No. 09, Series
of 1997.
In the case of commercial farms, the offer to sell must have been
submitted before the expiration of the deferment period in order that their
acquisition through VOS may be allowed, otherwise the property shall be
placed under compulsory acquisition (Section 8 [a] DAR A. O. No. 02-1998).
Landowners who voluntarily offer their lands for sale shall be entitled to
an additional five percent (5%) cash payment. It must be noted, however,
that banks and other financial institutions are not covered by said incentive.
(Rep. Act No. 6657, [1988 ], Sec. 19)
Voluntary Land Transfer/ Direct Payment Scheme
Voluntary Land Transfer or Direct Payment Scheme (VLT/DPS) is a mode of
acquisition whereby the landowner and the beneficiary enter into a voluntary
arrangement for the direct transfer of the lands to the latter. Not all private
agricultural lands may be subject of voluntary land transfer. For instance,
lands mortgaged with banking and/or financial institutions cannot be the
subject of VLT/DPS.
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 the Comprehensive Agrarian Reform Law. [Rep. Act No. 6657
(1988), sec. 20.] It must be stressed that this should not be construed to
mean that VLT/DPS is no longer allowed after one year from the effectivity of
R.A. 6657. It is submitted that VLT/DPS may be entered into even beyond 15
June 1989, or one year after the effectivity of R.A. No. 6657. It is argued that
that the exact moment when the one-year period under Section 20, par (a) of
R.A. No. 6657 within which notices of VLT/DPS may be filed commences from
the date when the land subject of the VLT/DPS is scheduled for acquisition
and distribution according to the various phases of implementation described
under Section 7 and 11 and the landowner is served a notice of acquisition of
his landholding.
If the law intended that the one year period be reckoned from the
approval or effectivity of RA 6657, it would have expressly said so, as it did in
the provisions on priorities (Sec. 7), commercial farms (Sec. 11), and stock
transfer option (Sec. 31). Instead, the law used the phrase "within the first
year of implementation of the CARP" which is at the time Section 16 is
implemented relative to specific and distinct classes of agricultural lands.
[Memorandum of Asst. Sec. Peaflor for the Secretary, August 23, 1999, p.
6.]
Section 20 (b) of R.A. No. 6657 provides that the terms and conditions of
the transfer under this mode 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.(Sec. 20 (b)) However this does not mean
that existence of "a standing government offer" is not essential to the
consummation of a VLT/DPS. The restriction imposed under Section 20 (b)
relative to the government's standing offer, is not absolute. The law itself
subjects its application only in instances where there is a prior offer by the
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government and that the same is known to both the landowner and the
qualified beneficiaries. [Memorandum of Asst. Sec. Peaflor for the Secretary,
August 23, 1999, p. 6.]
The terms and conditions of VLT/DPS should include the immediate
transfer of possession and ownership of the land in favor of the identified
beneficiaries. Certificates of Land Ownership Award (CLOAs) shall be issued
to the ARBs with proper annotations. [DAR A.O. No. 08, 1997 (Section II (E).].
The voluntary agreement shall include sanctions for non-compliance by
either party and shall be duly recorded and its implementation monitored by
the DAR. [Rep. Act No. 6657 (1988), sec. 20.]
Direct payments in cash or in kind may be made by the farmerbeneficiary 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 should be received by the farmerbeneficiary 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. [Rep. Act
No. 6657 (1988), sec. 21.]
A pressing issue respecting VLT/DPS is its application to commercial
farms. One school of thought espouses the theory that VLT/DPS cannot apply
to commercial farms as Section 11 of R.A. No. 6657 specifically requires their
". . . immediate compulsory acquisition and distribution . . ." beginning 15
June 1998. Hence, it is argued that commercial farms may be acquired only
through compulsory acquisition.
It is submitted that commercial farms may be acquired not only through
compulsory acquisition but through VLT/DPS as well.
There is no dispute that commercial farms whose deferments have
expired as of 15 June 1998 are subject to immediate compulsory acquisition
and distribution as provided in Section 11 of R.A. No. 6657. It should be
stressed, however, that all acquisitions under R.A. No. 6657 are compulsory
in nature, in the sense that the landowners whose agricultural lands are
covered by CARP have really no choice except to submit to the program.
The procedures for acquisition of private lands are provided for under
Chapter V, Section 16 (a) to (f). The procedure for land acquisition are further
elaborated by Chapter VI, Section 17 through Section 21. These provisions
prescribe specific rules for valuation and payment which include, among
others, Section 20 on voluntary land transfer and Section 21 on direct
payment of beneficiaries. Thus, even as the process of compulsory
acquisition under Section 16 is already in motion, the option available under
Sections 20 and 21 may still be exercised. The foregoing framework of
acquisition is the context within which the phrase "immediate compulsory
acquisition," as used in Section 11 should be understood.
The situation now is that before commercial farms could be compulsorily
acquired and distributed pursuant to Section 16, the preliminary steps for
their acquisition have to be continued or pursued, to wit: identification of
beneficiaries, inspection or technical survey and valuation. During this
period, the landowners and the qualified beneficiaries may, by reason of the
options available under Section 20 and 21, manifest their intent to
voluntarily arrange for direct transfer and payment of the property. In short,
the phrase "immediate compulsory acquisition" under Section 11 of R.A. No.
6657, when taken in the context of the procedures for acquiring lands under
CARP, still includes VLT/DPS as an option for valuation and payment of
commercial farms subject of acquisition. [Memorandum of Asst. Sec. Peaflor
for the Secretary, August 23, 1999, pp. 2-5]
DPS involving commercial farms may be availed of any time during the
acquisition process, after the preparation of the master list but prior to the
transmittal of the claim folder to the LBP. If the notice of acquisition is served
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by the parties upon to the DAR prior to the preparation of the master list, the
notice shall be validated by the MARO with identified ARBs included in the
master list, in a referendum to be held for this purpose. Acquisition under
DPS of lands with liens and encumbrances may be allowed provided that the
amount corresponding to the mortgage over the subject landholding shall be
deducted from the total value of the land to be paid by the ARBs. Provided
further that said agreement shall be upon mutual consent of both the ARBs
and the landowner, duly concurred with by the mortgagee or lienholder. In
case of delinquent real estate taxes, the ARBs may be allowed to assume
such liability to be deducted from the total value of the land. Upon mutual
consent of the ARBs and the landowner, duly concurred with by the
mortgagor or the lienholder, the ARBs may assume the mortgage, provided
that such obligation shall not exceed the annual amortization otherwise due
to the land pursuant to Section 26 of RA 6657, if the subject landholding was
acquired under VOS or CA [DAR A. O. No. 09 (1998), Section 9 (b)].
Compulsory Acquisition
Compulsory acquisition is a mode whereby the land is expropriated by the
State in accordance with the procedure outlined in Section 16 of R.A. No.
6657.
All private agricultural lands which have become due under the phase of
implementation as provided in Section 7 of R.A. No. 6657 are subject to
compulsory acquisition. However, where the landowner opts for other modes
of acquisition such as voluntary offer to sell or voluntary land transfer,
compulsory acquisition is suspended. In these cases, if negotiations fail, CA
is resumed. Likewise, all idle or abandoned agricultural lands regardless of
size are subject to compulsory acquisition. Lands subjected to Compulsory
Acquisition may be allowed to shift to Voluntary Land Transfer/Direct
Payment Scheme or Voluntary Offer to Sell provided that the claim folder had
not yet been forwarded to the LBP for the computation of land value. [DAR A.
O. 06, (1997) II (D).]
Voluntary stock distribution of corporate farms
Voluntary stock distribution is an alternative arrangement to the physical
distribution of lands wherein corporate owners voluntarily divest a portion of
their capital stock, equity or participation in favor of their workers or other
qualified beneficiaries. Stock ownership is based on the capital stocks of the
corporation and is equivalent to the agricultural land actually devoted to
agricultural activities valued in relation to the total assets of the corporation.
(Rep. Act No. 6657 [1988], sec. 31 as implemented by DAR Adm. O. No. 10
[1988] and DAR Adm. O. No. 1 [1991])
To safeguard the rights of farmer-beneficiaries, corporate farms with a
voluntary stock distribution plan must comply with the following conditions:
1)
The books of the corporation or association shall be subject to
periodic audit by certified public accountants chosen by the
beneficiaries;
2)
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
3)
Any shares acquired by such workers and beneficiaries shall have
the same rights and features as all other shares. Moreover, any transfer
of shares of stock by the original beneficiaries shall be void unless said
transaction is in favor of a qualified and registered beneficiary within
the same corporation. (Rep. Act No. 6657 [1988], sec. 31 as
implemented by DAR Adm. O. No. 10 [1988]).
However, corporate farm owners cannot avail of voluntary stock
distribution at present. Section 31 of RA 6657 states that "if within two (2)
years from the effectivity of CARP, the land or stock transfer has not been
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made or the plan for such stock distribution has not been approved by the
Presidential Agrarian Reform Council (PARC) within the same period, the
agricultural land of the corporate owners or corporation shall be subject to
compulsory acquisition under existing DAR rules and regulations.
The Case of Hacienda Luisita
Hacienda Luisita, Inc. is a corporate farm owning a total of 4,916 hectares
planted to sugarcane located in Tarlac. In May 1988, it applied to avail of the
stock distribution plan under CARP. The application was approved in
November 1988. The farm has a total of 355,531,462 shares of stocks with a
par value of P1.00 per share. One-third of these shares is subject for
distribution to the farmworker-beneficiaries (FBs) under the stock distribution
plan. The shares for the FBs are to be distributed in a span of 30 years. At
the time of application for stock distribution, there were about 6,000 FBs
within the farm. Under its stock distribution plan, FBs are supposed to
receive cash dividends accruing to their respective shares, homelots,
representation in the Board of Directors, production based incentives, and
other fringe benefits.
Procedure for Acquisition of Private Agricultural Lands
The procedure for the acquisition of private agricultural lands as provided
for in Sec. 16, RA 6657 are as follows:
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 and 18, and other pertinent provisions
hereof.
DAR identifies the land to be covered by CARP as well as the landowners
and beneficiaries thereof on the basis of a master list or inventory of
landholdings prepared by the field offices pursuant to the Land Acquisition
and Distribution Tracing System (LADTRACKS) and the CARP Scope Validation
Project. Said master list in turn is obtained from the LISTASAKA statements
as verified or complemented by the records of the Register of Deeds and
Assessor's Offices, review of town plan and zoning ordinances, field surveys,
interviews and community consultations and general knowledge of the land
ownership pattern in the barangays or municipalities. The identification of
lands is done by the DAR Municipal Office (DARMO) which gathers
documents such as OCT/TCT, tax declaration, copy of the approved survey
plan of the property and prepares the claim folder of the landowner.
Thereafter, the DARMO conducts preliminary ocular inspection to determine
initially whether or not the property may be covered under CARP.
If the property is coverable under CARP, the process of acquisition
continues. DARMO sends the landowner the Notice of Coverage and Field
Inspection with a copy of the Pre-OCI Report by personal delivery with proof
of service or by registered mail with return card. However, in the case of
deferred commercial farms, the Order of Deferment previously issued over
the landholding shall serve, upon expiration of the deferment period of the
subject commercial farm, as the Notice of Coverage, supported by the
Compliance Work Program and Summary of Exceptions originally submitted
with the approved deferment application. However, for record purposes, the
landowner shall be served a Notice of Expiration of Deferment which shall
contain a reminder of his right to retention should he wish to exercise the
same. [Section 9 (a) (1), DAR A.O. No. 02-1998]. The landowner is invited to
join the field investigation to select his retention area and to submit his
statement of production and income. If the landowner cannot be contacted
or refuses to accept said Notice, the notice shall be effected by publication in
a newspaper of national circulation. Likewise, a notice on the schedule of the
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field investigation shall be sent to the BARC, DENR, DA, LBP and prospective
beneficiaries. The DARMO then shall post a copy of the notice of coverage
and field inspection for seven working days in the bulletin board of the
barangay and municipal halls where the property is located and issues
Certification of Posting Compliance. Thereafter, the DARMO shall conduct
joint field investigation of the property with the LBP, DENR, DA BARC,
landowner and prospective ARBs. Jointly with the LBP and BARC, the DARMO
shall prepare the Field Investigation Report and the Land Use Map. The
DARMO shall screen/select qualified ARBs and cause the signing of the
Application Purchase and Farmer's Undertaking (APFU).The DARMO shall
forward the claim folder to DARPO for review and completion of documents.
The land is then surveyed. The claim folder is sent to the Land Bank for
valuation. At this stage, the DARPO sends the Notice of Land Valuation and
Acquisition to the Landowner (DAR A. O. No. 02 (1996) as amended by DAR
A.O. No. 1 (1998).]
In the preliminary stage of the acquisition process, notice to the
landowner is vital to the validity of coverage and acquisition of the
landholding. The Supreme Court had occasion to discuss and stress the
importance of these notices in the case of Roxas & Co. vs. CA, G.R. No.
127876, December 17, 1999. In this case, petitioner Roxas and Co., a
domestic corporation owns three haciendas. Notices of acquisition informing
the landowner that two of the haciendas were being compulsorily acquired
were sent by the DAR and served on the administrator in his address in the
hacienda. The administrator participated in the acquisition proceedings as
representative of the owner. Subject landholdings were acquired by the DAR
and subsequently distributed to the beneficiaries. The petitioner assailed the
validity of the acquisition proceedings on the ground, among others, that it
was denied due process as no notice of acquisition was ever served on it.
The Supreme Court held that:
. . . the procedure in sending notices is important to comply with the
requisites of due process especially when the owner is a juridical entity.
. . . The Notice of Acquisition in Section 16 of the CARL is required to be
sent to the landowner by personal delivery or registered mail. Whether
the landowner be a natural or juridical person to whose address the
Notice may be sent by personal delivery or registered mail, the law does
not distinguish. The DAR administrative orders also do not distinguish.
In the proceedings before the DAR the distinction between natural and
juridical persons in the sending of notices may be found in the Revised
Rules of Procedure of the DARAB. Service of pleadings before the DARAB
is governed by Section 6, Rule V of the DARAB Revised Rules of
Procedure. Notices and Pleadings are served on private domestic
corporations or partnerships in the following manner:
"Section 6.
Service Upon Private Domestic or Partnership. If
defendant is a corporation organized under the laws of the Philippines
or a partnership duly registered service may be made on the president,
manager, secretary, cashier, agent or any of its directors or partners"
Similarly, the Revised Rules of Court of the Philippines, in Section 13,
Rule 14 provides:
"Section 13. Service upon private domestic corporation or partnership.
If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on
the president, manager, secretary, cashier, agent or any of its
directors."
Summonses, pleadings and notices in cases against private domestic
corporation before the DARAB and the regular courts are served on the
president, manager, secretary, cashier, agent or any of its directors.
These persons are those through whom the private domestic
corporation or partnership is capable of action.
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Jaime Pimentel (the administrator) is not the president, manager,

secretary, cashier, agent or any of its director of the landowner
corporation. Is he, the administrator of the two Haciendas, considered
an agent of the corporation?
The purpose of all rules for the service of process on a corporation is to
make it reasonably certain that the corporation will receive prompt
notice in an action against it. Service must be made on a representative
so integrated with the corporation as to make it a priori supposable that
he will realize his responsibilities and know what he should do with any
legal papers served on him, and bring home to the corporation notice of
the filing of the action. The DAR's evidence does not indicate whether
the administrator's duties is so integrated with the corporation that he
would immediately realize his responsibilities and know what he should
do with any legal papers served on him. . . ."
It is submitted that the DARAB Rules and Procedure and the Rules of Court
were improperly applied to the aforecited case. The rules on service of
summons provided in the Rules Court should have not been applied since
what is involved in this case is acquisition proceedings which is
administrative in nature. Moreover, it must be emphasized that the DAR, in
adjudicating agrarian reform matters, is not bound by technical rules of
procedure. (Sec. 50, R.A. 6657). What is important in administrative
adjudication is the right to be heard. Said requirement was substantially
complied with in this case considering that the administrator, who takes
charge of the daily operations of the subject properties, participated in the
acquisition proceedings. Therefore, it cannot be argued that there was denial
of due process. Finally, the application of the DARAB Rules of Procedure is
erroneous. This is so since the matter of service of notice of acquisition does
not fall within the jurisdiction of the DARAB.
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.
The constitutionality of the aforementioned provision was upheld by the
Supreme Court in the case of Association of Small Land Owners in the
Philippines, Inc., vs. Secretary of Agrarian Reform, 175 SCRA 343 (1989):
Objection is raised, however, to the manner of fixing the just
compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is
made to Section 16(d), which provides that in case of the rejection or
disregard by the owner of the offer of the government to buy his land. . .
To be sure, the determination of just compensation is a function
addressed to the courts of justice and may not be usurped by any other
branch or official of the government. . . .
A reading of the aforecited Section 16(d) will readily show that it does
not suffer from the arbitrariness that rendered the challenged decrees
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constitutionally objectionable. Although the proceedings are described

as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real
value of the property. But more importantly, the determination of the
just compensation by the DAR is not by any means final and conclusive
upon the landowner or any other interested party, for Section 16(f)
clearly provides: Any party who disagrees with the decision may bring
the matter to the court of proper jurisdiction for final determination of
just compensation. The determination made by the DAR is only
preliminary unless accepted by all parties concerned. Otherwise, the
courts of justice will still have the right to review with finality the said
determination in the exercise of what is admittedly a judicial function."
Said ruling was reiterated in the case of Vinzons-Magana vs. Estrella, 201
SCRA 538 (1991).
The factors to be considered in the determination of just compensation as
enumerated in Section 17 of R.A. No. 6657 are not exclusive. The DAR and
LBP are not confined in their determination of just compensation to the
factors/criteria set forth in said provision. Notably, Section 17 does not
provide hard and fast rules which must be strictly adhered to by DAR and
LBP in the determination of just compensation. While said section provides
that the factors/criteria mentioned therein" shall be considered" it does not
expressly state that only these factors/criteria and no other shall be
considered. The factors/criteria set forth in Sections 17, 18 and other
pertinent provisions for that matter should be deemed as mere standards to
guide the proper officials in the determining just compensation, but in no
case shall control or limit such determination, the ultimate consideration
being that the compensation be the full and fair equivalent of the property
taken from its owner by the expropriator. [DOJ Opinion No. 109 (1991), July
25, 1991).]
In the case of Land Bank of the Philippines vs. CA and Pascual , G. R. No.
128557, December 29, 1999, the Supreme Court ruled that in the
determination of just compensation pursuant to Section 18 of R.A. No. 6657,
consent of the farmer-beneficiary is not needed. Furthermore, the Court ruled
that once the Land Bank agreed to the valuation, it is its duty to pay the
landowner said amount. In this case, private respondent's properties were
subjected to Operation Land Transfer. Consequently, the PARO issued a
valuation of the land which was rejected by the private respondent who filed
a case before the PARAD seeking to annul the PARO's valuation. The PARAD,
ruled in favor of private respondent, came up with its own valuation, and
directed the petitioner LBP to pay private respondent said amount. Petitioner
refused to pay the value of the land as determined by the PARAD arguing
among others that since it merely guarantees or finances the payment of the
value of the land, the farmer-beneficiary's consent, is indispensable and that
the only time the petitioner becomes legally bound to finance the transaction
is when the farmer-beneficiary approves the appraised value of the land. In
other words, petitioner asserts that the landowner, the DAR, the Land Bank
and the farmer-beneficiary must all agree to the value of the land as
determined by them. The Court, brushing aside petitioner's contention,
stated:
A perusal of the law however shows that the consent of the farmerbeneficiary is not required in establishing the vinculum juris for the
proper compensation of the landowner. Section 18 of R. A. No. 6657
states
Sec. 18.
Valuation and Mode of Compensation. The
LBP shall compensate the landowner in such amount 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
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and other pertinent provisions hereof, or as may be finally

determined by the court as just compensation for the land.
As may be gleaned from the aforementioned section, the landowner,
the DAR and the Land Bank are the only parties involved. The law does
not mention the participation of the farmer beneficiary.
. . . Once the Land Bank agrees with the appraisal of the DAR, which
bears the approval of the landowner, it becomes its legal duty to
finance the transaction. In the instant case, petitioner participated in
the valuation proceedings held in the Office of the PARAD through its
counsel . . .
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.
The CARP Law conditions the transfer of possession and ownership of the
land to the government on the receipt by the landowner of the corresponding
payment or the deposit by the DAR of the compensation in cash or LBP
bonds with an accessible bank. Until then, title remains with the landowner.
No outright change of ownership is contemplated either. (Association of
Small Land Owners in the Philippines vs. Secretary of Agrarian Reform), 175
SCRA 343 (1989.)
It must be noted, however, that the opening of a trust account and
issuance of a certification from Land Bank that a certain sum has been
earmarked for the landowner does not constitute substantial compliance with
Section 16(e) of R.A. No. 6657. In the case of LBP vs. CA [248 SCRA 149
(1995)] respondent landowners assailed the acquisition of their properties on
the ground that there was a taking without just compensation. They averred
that the "earmarking," "reservation" and "deposit in trust" made by the DAR
and the Land Bank pursuant to DAR A. O. No. 09-1990 is not equivalent to
just compensation under R.A. No. 6657. The Court nullified DAR A.O. No. 091990, ruling as follows:
. . . It is very explicit from Section 16 (e) that the deposit must be made
only in "cash" or in "LBP bonds." Nowhere does it appear nor can it be
inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of deposit,
that should have been made express, or at least, qualifying words ought
to have appeared from which it can be fairly deduced that a "trust
account" is allowed. In sum, there is no ambiguity in Section 16 (e) of R.
A. No. 6657 to warrant an expanded construction of the term
"deposit." . . .
. . . The ruling in the Association of Small Landowners case [that
payment of the just compensation is not always required to made fully
in money] merely recognized the extraordinary nature of the
expropriation to be undertaken under R. A. No. 6657 thereby allowing a
deviation from the traditional mode of payment other than in cash. It
did not, however, dispense with the settled rule that there must be full
payment of just compensation before title to the expropriated property
is transferred. . . .
What the Supreme Court nullified was merely the form in which the
deposit was made, i.e., the deposit in trust and not the deposit per se as
payment to the landowners for the expropriated lands. Thus, in effect, the
Court in making such pronouncement, upheld the validity of deposit per se
as payment of just compensation.
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f)
Any party who disagrees with the decision may bring the matter
to the court of proper jurisdiction for final determination.
In the case of Association of Small Landowners, the Supreme Court
explained that the determination of just compensation is a function
addressed to the courts of justice. [175 SCRA 343 (1989)].
The operating procedures for the acquisition of private agricultural lands are
outlined in the following administrative issuances:

DAR A. O. No. 2, Series of 1996 entitled "Revised Rules Governing

the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell
(VOS) and Compulsory Acquisition (CA) Pursuant to R. A. 6657" as
amended by DAR A. O. No. 2-98;

DAR A. O. No. 09, Series of 1998 entitled "Rules and Regulations

on the Acquisition, Valuation, Compensation and Distribution of Deferred
Commercial Farms";

DAR A. O. No. 08, Series of 1997 entitled "Revised Rules on the

Acquisition and Distribution of Compensable Agricultural Lands Under
VLT/DPS";

DAR A. O. No. 12, Series of 1990 entitled "Policy Guidelines and

Operating Procedures in the Identification and Acquisition of Idle and
Abandoned Lands".
Reconstitution of Lost or Damaged Title
A pressing operational problem besetting agrarian reform implementors is
the delay in the acquisition and distribution of agricultural lands with lost or
destroyed titles. To address this concern, DAR Memorandum Circular No. 05,
Series of 1994 was issued outlining the procedures on the reconstitution of
lost or destroyed titles.
Reconstitution of a certificate of title denotes restoration of the
instrument which is supposed to have been lost or destroyed in its original
form and condition. The purpose of the reconstitution of title or any
document is to have the same reproduced, after proper proceedings, in the
same form they were when the loss or destruction occurred. (Heirs of Pedro
Pinote vs. Dulay 198 SCRA 12 [1990])
There are two types of reconstitution of titles: judicial and administrative.
Judicial reconstitution partakes of a land registration proceeding and is
perforce a proceeding in rem. (Republic vs. Intermediate Appellate Court,
157 SCRA 62 [1988]). Judicial reconstitution is governed by Republic Act No.
26 in relation to Section 110 of P. D. No. 1529. Administrative reconstitution
of title is likewise governed by Republic Act No. 26, as amended by Republic
Act No. 6732. Under DAR Memorandum Circular No. 5 (1994), the
Department of Agrarian Reform (DAR), through the duly authorized DAR
lawyer, may file a petition for administrative or judicial reconstitution when
the notice of coverage over landholdings whose titles were lost or destroyed
has already been issued.
As a general rule, the remedy for the reconstitution of lost or destroyed
original copies of certificates of titles in the offices of the Register of Deeds is
the filing of a petition for judicial reconstitution of title. However,
administrative reconstitution of lost or destroyed original copies of
certificates of title may be availed of in case of substantial loss or destruction
of land titles due to fire, flood or other force majeure where the number of
certificates lost or damaged is at least ten (10) percent of the total number
of titles in the custody of the Register of Deeds but in no case shall the
number of titles lost or damaged be less than five hundred (500) as
determined by the Administrator of the Land Registration Authority. (Section
1, R.A. No. 6732 [1989]).
Detailed discussion of the procedures for the filing of petition for
reconstitution are provided for in R.A. No. 6732 as implemented by LRA
Circular dated 26 July 1989, R.A. No. 26 as amended, LRA Circular No. 35
dated 13 June 1983 and DAR Memorandum Circular No. 05, Series of 1994.
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CHAPTER 4
Just Compensation
Definition
Just compensation means the equivalent for the value of the property at
the time of its taking. It means a fair and full equivalent for the loss
sustained. All the facts as to the condition of the property and its
surroundings, its improvements and capabilities should be considered.
(Export Processing Zone Authority vs. Dulay, 149 SCRA 305 [1987]).
In the case of Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform, supra, the Supreme Court further explained
the meaning of "just compensation". It said:
Just compensation is defined as the full and fair equivalent of the
property taken from its owner by the expropriator. It has been
repeatedly stressed by this Court that the measure is not the taker's
gain but the owner's loss. The word "just" is used to intensify the
meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real,
substantial, full, ample.
As held in Republic of the Philippines v. Castellvi, there is compensable
taking when the following conditions concur: (1) the expropriator must
enter a private property; (2) the entry must be for more than a
momentary period; (3) the entry must be under warrant or color of
authority; (4) the property must be devoted to public use or otherwise
informally appropriated or injuriously affected; and (5) the utilization of
the property for public use must be in such a way as to oust the owner
and deprive him of beneficial enjoyment of the property. All these are
envisioned in the measures before us (at 378, 379).
(T)he content and manner of the just compensation provided for in the
afore-quoted Section 18 of the CARP Law is not violative of the
Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this
Court is not a cloistered institution removed from the realities and
demands of society or oblivious to the need for its enhancement. The
Court is as acutely anxious as the rest of our people to see the goal of
agrarian reform achieved at last after the frustrations and deprivations
of our peasant masses during all these disappointing decades. We are
aware that invalidation of the said section will result in the nullification
of the entire program, killing the farmer's hopes even as they approach
realization and resurrecting the spectre of discontent and dissent in the
restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today" (at 388).
Determination of Just Compensation
Under Sec. 17 of RA 6657, the factors considered in the determination of
just compensation are:
a)
cost of acquisition;
b)
current value of like properties;
c)
nature of land;
d)
actual use;
e)
income;
f)
sworn valuation by the landowner;
g)
tax declaration;
h)
assessment by government assessors;
i)
social and economic benefits contributed by farmers and
farmworkers and by the government; and
j)
non-payment of taxes or loans secured from government
financing institutions on land.
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The provisions of RA 6657 on just compensation do not provide hard-andfast rules which must be strictly adhered to by DAR and the LBP in
determining just compensation.
Notably, while Section 17 provides that the factors/criteria mentioned
therein "shall be considered" in determining just compensation, it does
not expressly state that only these factors/criteria, and no others, shall
be considered.
. . . The factors/criteria set forth in Section 17, and in Section 18 and
other pertinent provisions for that matter, should be deemed as mere
standards to guide the proper officials in determining just
compensation, but should in no case control or limit such determination,
the ultimate consideration being that the compensation be the "full and
fair equivalent of the property taken from its owner by the
expropriator".
. . . In every case, what should control is the "just-ness" of the proposal
taking into account the "revolutionary" nature of the expropriation
under the CARL. (DOJ Opinion No. 109 (1991))."
Valuation or Computation
General formula
The basic formula for the valuation of lands covered by Voluntary Offer to
Sell and Compulsory Acquisition is:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where : LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula is used if all the three (3) factors are present,
relevant, and applicable (DAR Admin. O. No. 5 [1998]). In any case, the
resulting figure in the equation is always multiplied to the number of area
or hectarage of land valued for just compensation.
To illustrate the formula wherein all of the factors above mentioned are
present:
Area : 3 hectares
Capitalized Net Income : P24,900
Market Value : P10,000
Comparable Sales : P 5,000
The land value is : LV = (24,900 x 0.6) + (5,000 x 0.3) +
(10,000 x 0.1)
= (14,940) + (1,500) + (1,000)
= (17,440) x (3 hectares)
= P 52,320
Computation of land value
Whenever one of the factors in the general formula is not available, the
computation of land value will be any of the three (3) computations or
formulae:
LV = (CNI x 0.9) + (MV x 0.1)
[if the comparable sales factor is missing]
LV = (CS x 0.9 ) + (MV x 0.1)
[if the capitalized net income is
unavailable]
LV = MV x 2
[if only the market value factor is
available]
In case the comparable sales factor (CS) is relevant or applicable, the land
value is computed in accordance with the general formula where MV is based
on the lowest productivity classification of the land.
In every case, the value of idle land using the formula MV x 2 should not
exceed the lowest value of land within the same estate under consideration
or within the same barangay or municipality (in that order) approved by LBP
within one (1) year from receipt of claimfolder (DAR Admin. O. No. 5 [1998]).
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Computation of land value under certain conditions

Valuation of lands planted to permanent but not yet fruit-bearing crops
There are times when the land being valued is planted to permanent
crops which are not yet productive or not yet fruit-bearing at the time of the
Field Investigation (FI) of the land. The land value is equivalent to the value
of the land plus the cumulative development cost (CDC) of the crop from
land preparation up to the time of FI. In equation form, the land value can be
computed as:
LV = (MV x 2) + CDC
Where:
a)
The market value (MV) to be used is the applicable unit market
value (UMV) classification of idle land.
b)
The cumulative development cost (CDC) is grossed-up from the
date of FI up to the date of LBP Claim Folder (CF) receipt for processing
but in no case should the grossed-up CDC exceed the current CDC data
based on industry.
In case the CDC data provided by the landowner could not be verified,
DAR and LBP should secure the said data from concerned agency/ies or, in
the absence thereof, should establish the same.
However, the resulting land value should not exceed the value of
productive land similar in terms of crop and plant density within the estate
under consideration or within the same barangay or municipality (in that
order) approved by LBP within one (1) year from receipt of CF (DAR Admin. O.
No. 5 [1998]).
Lands with permanent but not yet productive crops introduced by
farmer-beneficiaries
When the permanent but not yet fruit-bearing crops are introduced by the
farmer-beneficiaries, the land valuation formula used is the same as if only
the MV is available provided the MV used is the applicable UMV classification
of idle land. In equation form:
LV = MV x 2
In any case, the resulting land value should not exceed the value of
productive land similar in terms of crop and plant density within the estate
under consideration or within the same barangay or municipality (in that
order) approved by LBP within one (1) year from receipt of CF. And in case
the CS is relevant or applicable, the land value is computed in accordance
with the general formula where MV is based on the applicable classification
of the land (DAR Admin. O. No. 5 [1998]).
Use of Salvage Value on valuation of lands planted to permanent
but no longer productive or ready for cutting crops
When lands being valued are planted to permanent but no longer
productive or the crops are ready for cutting, the computation considers the
applicable UMV classification of idle land plus the salvage value of the
standing trees at the time of the FI. In equation form:
LV = (MV x 2) + Salvage Value
But the resulting land value should not exceed the value of productive
land similar in terms of crop and plant density within the estate under
consideration or within the same barangay or municipality (in that order)
approved by LBP within one (1) year from receipt of CF. In case where CS is
relevant or applicable, the land value is computed in accordance with the
general formula where MV is based on the lowest productivity classification
of the land (DAR Admin. O. No. 5 [1998]).
Land value under Voluntary Offer to Sell
In VOS, the computed value using the applicable formula should not
exceed the landowner's offer. The landowner's offer is grossed up from the
date of the offer up to the date of receipt of CF by LBP from DAR for
processing. The date of receipt of CF by LBP from DAR means the date when
the CF is determined by the LBP-LVLCO to be complete with all the required
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documents and valuation inputs duly verified and validated, and ready for
final computation/processing.
Factors of Land Value
Computation of Capitalized Net Income
Capitalized Net Income refers to the difference between the product of
the gross sales and selling prices (AGP x SP) and total cost of operations (CO)
capitalized at 12%.
Expressed in equation form:
(AGP x SP) - CO
CNI =
0.12
Where: CNI = Capitalized Net Income
AGP = Annual Gross Production corresponding to the latest available 12months' gross production immediately preceding the date of FI.
SP = (selling prices) The average of the latest available 12-months'
selling prices prior to the date of receipt of the CF by LBP for processing,
such prices to be secured from the Department of Agriculture (DA) and
other appropriate regulatory bodies or, in their absence, from the
Bureau of Agricultural Statistics. If possible, SP data is gathered from
the barangay or municipality where the property is located. In the
absence thereof, selling prices may be secured within the province or
region.
CO = Cost of Operations
Whenever the cost of operations could not be obtained or verified, an
assumed net income rate (NIR) of 20% is used. Landholdings planted to
coconut which are productive at the time of FI will continue to use the
assumed NIR of 70%. DAR and LBP will continue to conduct joint industry
studies to establish the applicable NIR for each crop covered under CARP.
0.12 = Capitalization Rate
(DAR Admin. O. No. 5 [1998])
To illustrate the computation of capitalized net income:
Number of coconut trees : 95 trees/hectare
Selling Prices : P6.74/kg.
Hence:
AGP = 95 trees/ha. x 30 nuts/tree 4.5 nuts/kg. = 633.33 kg.
CNI =
633.33 kg. x 6.74/kg. x 70% NIR for
coconut land

12 %
= P24,900.56/hectare
Comparable Sales
Comparable sales refers to any one or the average of all the applicable
sub-factors, namely sales transactions (ST), acquisition cost (AC) and market
value based on mortgage (MVM):
Where: ST = (Peso Value of Sales Transactions)
The criteria in the selection of the comparable sales transaction (ST) shall
be as follows:
a)
When the required number of STs is not available at the
barangay level, additional STs may be secured from the municipality
where the land being offered/covered is situated to complete the
required three comparable STs. In case there are more STs available
than what is required at the municipal level, the most recent
transactions shall be considered. The same rule applies at the provincial
level when no STs are available at the municipal level. In all cases, the
combination of STs sourced from the barangay, municipality and
province should not exceed three transactions.
b)
The land subject of acquisition as well as those subject of
comparable sales transactions should be similar in topography, land
54

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use, i.e., planted to the same crop. Furthermore, in case of permanent

crops, the subject properties should be more or less comparable in
terms of their stages of productivity and plant density.
c)
The comparable sales transactions should have been executed
within the period 1 January 1985 to 15 June 988, and registered within
the period 1 January 1985 to 13 September 1988.
d)
STs are grossed up from the date of registration up to the date of
receipt of CF by LBP from DAR for processing.
AC or Acquisition Cost is deemed relevant when the property subject of
acquisition was acquired through purchase or exchange with another
property within the period 1 January 1985 to 15 June 1988 and registered
within the period 1 January 1985 to 13 September 1988, and the condition of
said property is still substantially similar from the date of purchase or
exchange to the date of FI.
AC is grossed up from the date of registration of the deed of
sale/exchange up to the date of receipt of CF by LBP from DAR for
processing.
MVM or Market Value Based on Mortgage. For MVM to be relevant or
applicable, the property subject of acquisition should have been mortgaged
as of 15 June 1988 and the condition of the property is still substantially
similar up to the date of FI. MVM refers to the latest available appraised
value of the property (DAR Admin. O. No. 5 [1998]).
Market Value
MV or Market Value per Tax Declaration is the latest Tax Declaration (TD)
and Schedule of Unit Market Value (SUMV) issued prior to receipt of CF by
LBP. The Unit Market Value (UMV) is grossed-up from the date of its
effectivity up to the date of receipt of CF by LBP from DAR processing.
Formula in Grossing-Up of Valuation Inputs
The basic formula in the grossing-up of valuation inputs such as LO's
Offer, Sales Transaction (ST), Acquisition Cost (AC), Market Value Based on
Mortgage (MVM) and Market Value per Tax Declaration (MV) is:
Grossed-up
Valuation Input = Valuation Input x Regional Consumer
Price Index (RCPI) Adjustment Factor
The various valuation inputs are multiplied with the RCPI
Adjustment Factor. The RCPI Adjustment Factor refers to the ratio of the
most recent available RCPI for the month issued by the National Statistics
Office as of the date when the CF was received by LBP from DAR for
processing
and
the
RCPI
for
the
month
as
of
the
date/effectivity/registration of the valuation input. Expressed in equation
form:
Most Recent RCPI for the Month as of
the Date
of Receipt of CF by LBP from DAR
RCPI Adjustment Factor =
RCPI for the Month Issued as of the
Date/
Effectivity/Registration
of
the
Valuation Input
(DAR Admin. O. No. 5 [1998])
Valuation of deferred commercial farms
The formulae provided under DAR AO 5 (1998) are used in the
computation of valuation for deferred commercial farms (DAR Adm. O. No. 9
[1998]).
Valuation of lands of corporate farms
Agricultural lands owned by corporate farms are valued by considering
the following factors:
a)
factors for the determination of just compensation; and
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b)
factors needed to stimulate the growth of cooperatives and
participation of worker-beneficiaries (Rep. Act No. 6657 [1988], sec. 17
in relation to DAR Adm. O. No. 5 [1998])
Valuation of lands planted to sugarcane
There is a different computation for valuation of lands planted to
sugarcane because of the so-called "ratooning". In the valuation of lands
planted to sugar, the effects of ratooning are considered. Ratooning is the
cutting of the straw close to the ground at harvesting time after all the
standing water has been drained out to allow the young tillers to sprout out
of the rootstocks and develop into mature normal bearing plants in three or
four months with the aid of fertilizer, manure or compost (Rep. Act No. 1199
[1954], sec. 5, par. [g-2]).
The method of ratooning affects land valuation of the property. Majority of
sugar planters practice at least up to two (2) ratoons. This method reduces
the cost of production for sugar planters. Hence, the computation of the land
value is adjusted.
The applicable guideline in the valuation of lands planted to sugarcane is
the Joint DAR-LBP MC 15 (1999).
Valuation of rubber plantations
Valuation of rubber plantations are governed by Joint DAR-LBP MC 7 and 8
(1999).
Under the old rubber land valuation guideline or the Land Valuation
Guidelines No. 6 (1990), the recognized income of rubber plantations is
based on processed crumb rubber. Under one of the latest guidelines, the
standard income approach to valuation, measures the net income or
productivity of the land based on the farm produce (in their raw forms) and
not on the entire agri-business income enhanced by the added value of farm
products due to processing. It appropriately determines the Capitalized Net
Income of rubber plantations based on the actual yield and farm gate prices
of raw products (field latex and cuplump) and the corresponding cost of
production.
Furthermore, the growing market for old rubber trees which was not
considered in the old LVG is now considered.
There are also other several situations which are considered in the
computation of just compensation for rubber plantations. There are rubber
claims pending with the Department of Agrarian Reform Adjudication Board
(DARAB) for reasons such as landowner's rejection of the valuation but the
plantation remains under the management of the landowner. Due to the time
gap between the original date of FI and the date of DARAB's order to
recompute the property (during which period, the age and productivity of the
trees change), the valuation should be made on the basis of the age and
productivity of the trees at the time of recomputation (Joint DAR-LBP Memo.
Circ. No. 8, [1999]).
Compensation for Mt. Pinatubo areas
Under Joint DAR-LBP AO 3 (1994), agricultural lands affected by the Mt.
Pinatubo eruptions have been classified into three categories based on the
NEDA Region III Geographic Information System Database, to wit:
Under the Category I, are those areas actually affected by the lahar and
pyroclastic deposits, including those areas which have become silted, eroded
or continuously flooded for an indefinite period of time.
Under the Category II, are those areas not yet affected but have the
possibility of being actually affected.
Under the Category III, are those areas actually covered or affected by
ashfall but which remain productive.
The general rule is, lands under Category III shall be acquired and
landowners shall be compensated. While compensation of lands under
Categories I and II shall be effected under the following conditions:
a)
Claims have been approved by the LBP and:
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57

Landowner has executed a Deed of Assignment, Warranty and

Undertaking on or before the issuance of the Joint DAR-LBP
Administrative Order No. 3, Series of 1994; or
Transfer Certificate of Title was already registered in the name of
RP on or before the issuance of the same administrative order; or
Partial payment was already effected.
b)
Emancipation Patents/Certificates of Land Ownership Award have
been registered on or before 12 June 1991 regardless of whether or not
the claimfolder is with the LBP.
Summary Administrative Proceedings
Land Bank of the Philippines
The Land Bank of the Philippines is primarily responsible for the
determination of the land valuation and compensation for all private lands
suitable for agriculture under either the voluntary offer to sell or compulsory
acquisition arrangement as governed by RA 6657. The DAR makes use of the
determination of the land valuation and compensation by the LBP, in the
performance of its functions (Exec. Order. No. 405 [1990], sec. 1).
Public participation
There are several provisions of laws which encourage public participation
in the determination of land valuation, namely:
a)
Sec. 3 of EO 129-A states:
. . . partnership between government and organization of farmers and
farmworkers in agrarian reform policy formulation, program implementation
and evaluation shall be institutionalized . . .
b)
Sec. 18 of RA 6657 provides:
The LBP shall compensate the landowners in such amount as may be agreed
upon by the landowner and the DAR and the LBP . . .
c)
DAR AO 14 (1990) emphasizes Sec. 47 of RA
6657 on BARC's assistance in the initial
determination of the value of the land.
Preliminary determination of just compensation cases
The summary administrative proceeding is conducted before the
Provincial Agrarian Reform Adjudicator if the compensation offered does not
exceed two (2) million pesos; or before the Regional Agrarian Reform
Adjudicator if the government's offer is more than two (2) million pesos but
does not exceed five (5) million pesos; or before the Department of Agrarian
reform Adjudication Board if the offer is more than five (5) million pesos (DAR
Adm. Order No. 8 [1993]).
Under DAR MC 1 (1995), valuation cases involving PD 27 lands are
cognizable only by the Secretary of DAR (reiterating Sec. 12 of PD 946
[1976]). But in the recent case of Land Bank of the Phils. vs. CA, G.R. No.
128557, 29 December 1999, the Supreme Court declared that it was an error
for the Secretary of Agrarian Reform to issue DAR MC 1 (1995) directing the
DARAB to refrain from hearing valuation cases involving PD 27 lands. It is the
DARAB which has the authority to determine the initial valuation of lands
involving agrarian reform pursuant to Sec 1 (b), Rule II, 1994 Revised Rule of
the DARAB although such valuation may only be considered preliminary as
the final determination of just compensation is vested in the courts.
The PARAD's, RARAD's, or DARAB's summary administrative proceeding is
merely a preliminary determination of the just compensation due to the
landowner. The landowner has the right to question such preliminary
determination of the Adjudication Board before the Special Agrarian Courts.
"The determination made by the DAR is only preliminary unless accepted
by all parties concerned. Otherwise, the courts of justice will still have the
right to review with finality the said determination in the exercise of what is
admittedly a judicial function" (Association of Small Landowners in the
Philippines, Inc. vs. Secretary of Agrarian Reform, 175 SCRA 345 [1989], at p.
382).
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The Regional Trial Courts have not been completely divested of jurisdiction
over agrarian reform matters. Section 56 of RA 6657, on the other hand,
confers "special jurisdiction" on "Special Agrarian Courts", which are Regional
Trial Courts designated by the Supreme Court at least one (1) branch
within each province to act as such. These Regional Trial Courts qua
Special Agrarian Courts have, according to Section 57 of the same law,
original and exclusive jurisdiction over: 1) "all petitions for the determination
of just compensation to land-owners," and 2) "the prosecution of all criminal
offenses under . . . (the) Act (at 890). Vda. de Tangub vs. CA, 191 SCRA 885
(1990)
Although the proceedings are described as summary, the landowner and
other interested parties are nevertheless allowed an opportunity to submit
evidence on the real value of the property. But more importantly, such
determination of just compensation by the DAR, as earlier stated is by no
means final and conclusive upon the landowner or any other interested party
for Section 16 (f) clearly provides: "Any party who disagrees with the
decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation" Magana vs. Estrella, 201 SCRA 536
(1991).
In Phil. Veterans Bank vs. Court of Appeals, G.R. No. 132767, 18 January
2000, petitioner Bank argued that the DAR Adjudicators have no jurisdiction
to determine just compensation for the taking of lands under CARP because
such jurisdiction is vested in Regional Trial Courts designated as Special
Agrarian Courts. Hence, Petitioner could file its petition with the RTC beyond
the 15-day period of appeal from the decision of the DAR Adjudicator. The
RTC dismissed the petition of Petitioner for being filed beyond the 15-day
period for appeal. The Supreme Court reiterated its ruling in Republic vs.
Court of Appeals, supra, and said:
. . . this rule is an acknowledgment by the DARAB that the power to decide
just compensation cases for the taking of lands under R.A. No. 6657 is vested
in the courts. It is error to think that, because of Rule XIII, S 11, the original
and exclusive jurisdiction given to the courts to decide petitions for
determination of just compensation has already been transformed into an
appellate jurisdiction. It only means that, in accordance with settled
principles of administrative law, primary jurisdiction is vested in the DAR as
an administrative agency to determine in a preliminary manner the
reasonable compensation to be paid for the lands taken under the
Comprehensive Agrarian Reform Program, but such determination is subject
to challenge in the courts.
The jurisdiction of the Regional Trial Courts is not any less "original and
exclusive" because the question is first passed upon by the DAR, as the
judicial proceedings are not a continuation of the administrative
determination. For the matter, the law may provide that the decision of the
DAR is final and unappealable. Nevertheless, resort to courts cannot be
foreclosed on the theory that courts are the guarantors of the legality of
administrative action.
Valuation of PD 27 Lands
Under Sec. 2 of EO 228, land valuation shall be based on the Average
Gross Production (AGP) as determined by the Barangay Committee on Land
Production (BCLP). The formula is:
Rice Lands LV = AGP x 2.5 x P 35 *
Corn Lands LV = AGP x 2.5 x P 31**
*
government support price for one cavan of 50 kilos of palay on
October 21, 1972
**
government support price for one cavan of 50 kilos of corn on
October 21, 1972
Lease rentals paid to the landowner by the farmer-beneficiary after 21
October 1972 shall be considered as advance payment for the land.
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The factor of government support price provided under EO 228 does not
undervalue PD 27 lands. Under DAR AO 13 (1994), an increment of 6% yearly
interest compounded annually on lands covered by PD 27 and EO 228 is
granted. The formula is:
(Computed land value using the original formula) x (1.06)n
where : n = number of years from date of tenancy up to
effectivity date
The landowners qualified to receive the compensation based on the
increment formula are:
a)
Those whose lands are actually tenanted as of October 21, 1972
or thereafter and Operation Land Transfer (OLT) covered;
b)
Those who opted for government financing thru LBP as the mode
of compensation; and
c)
Those who have not yet been paid for the value of the land.
For those who were partially paid, the yearly increment of 6%
compounded annually shall only be applied to the unpaid balance. According
to the above mentioned administrative issuance, the said grant of increment
is reckoned from the effectivity date of PD 27 or date when the land was
actually tenanted up to the effectivity date of DAR AO 13 (1994) or up to 27
October 1994 only. It seems the grant of increment cannot be applied after
this effectivity date even if the actual payment can be had after 27 October
1994.
In the case of Benosa vs. CA, G.R. No. 122231, 27 November 1995, on the
issue of granting interest to the landowner, it was held:
It is settled that the landowners are entitled to legal interest on the
amount payable from the time the property was taken until full payment
is made (National Power Corporation vs. Angas, 208 SCRA 542;
Commissioner of Public Highways vs. Burgos, supra; Ortula vs. Republic,
22 SCRA 477; Republic vs. Delente, supra). DAR Administrative Order
No. 13, series of 1994 which grants increment of 6% yearly interest
compounded annually on lands covered by P.D. No. 27 and E.O. No. 228,
squarely recognizes the above rule and thus applies to the private
respondents.
In LBP vs. CA, supra, the Supreme Court decided not to apply the 6%
increment to the valuation because the Court of Appeals affirmed the
PARAD's use of the 1992 Gross Selling Price in the valuation of the private
respondent's land (following the ruling in the Court of Appeals case of Galeon
vs. Pastoral, CA-G.R. No. 23168; Rollo, p. 36)
Mode of Compensation
Landowners may be paid in cash or in kind. Payment in kind is justified in
the case of Association of Small Landowners of the Philippines, Inc. vs.
Secretary of Agrarian Reform, 175 SCRA 343 (1989) as follows:
It cannot be denied from these cases that the traditional medium for the
payment of just compensation is money and no other. And so,
conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional exercise of
the power of eminent domain. This is not an ordinary expropriation
where only a specific property of relatively limited area is sought to be
taken by the State from its owner for a specific and perhaps local
purpose. What we deal with here is a revolutionary kind of
expropriation.
The expropriation before us affects all private agricultural lands
wherever found and of whatever kind as long as they are in excess of
the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the entire
Filipino nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner. Its purpose does not cover only the
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whole territory of this country but goes beyond in time to the

foreseeable future, which it hopes to secure and edify with the vision
and the sacrifice of the present generation of Filipinos. Generations yet
to come are as involved in this program as we are today, . . . .
Accepting the theory that payment of the just compensation is not
always required to be made fully in money, we find further that the
proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the landowner. It is noted
that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and other things
of value. No less importantly, the government financial instruments
making up the balance of the payment are "negotiable at any time".
The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits, and other
things of value equivalent to the amount of just compensation.
The recognized rule indeed, is that title to the property expropriated
shall pass from the owner to the expropriator only upon full payment of
the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions" (at 386, 388
and 389).
Cash Payment
Under Sec. 18 of RA 6657, the proportion of payment in cash, dependent
on the area/hectarage of the land valued is subject to the following:
a)
above 50 hectares, insofar as the excess hectarage is concerned
= 25% cash
b)
above 24 hectares and up to 50 hectares = 30% cash
c)
24 hectares and below = 35% cash
For voluntary offer to sell, the cash portion is increased by 5%.
Payment in kind
Landowners may be paid with:
a)
Shares of stock in government owned or controlled corporation,
LBP preferred shares, physical assets or other qualified investments.
b)
Tax credits; or
c)
LBP bonds
Features of LBP bonds
The new ten (10)-year LBP bonds have attractive features which are more
acceptable and marketable than the other investment instruments. As
provided under Sec. 18 of RA 6657, these features are:
1)
Its market interest rates are aligned with 91-day treasury bill
rates, net of applicable final withholding tax, payable twice a year six
months from date of issue and every six months thereafter.
2)
One-tenth of the bond's face value matures every year from date
of issue up to the tenth year.
3)
The bond is fully guaranteed by the national government.
4)
The bond is non-denominated. Upon request, it can be split
according to amounts desired by the bondholder.
5)
The bonds are highly transferable and negotiable. 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:
a)
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;
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b)
Acquisition of shares of stock of government-owned or controlled
corporations or shares of stock owned by the government in private
corporations;
c)
Substitution for surety or bail bonds for the provisional release of
accused persons, or performance bonds;
d)
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;
e)
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;
f)
Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools, and
other institutions;
g)
Payment for fees of the immediate family of the original
bondholder in government hospitals; and
h)
Such other uses as the PARC may from time to time allow.
The 100% face value and negotiability of LBP bonds are well described in
the case of Gonzales vs. GSIS, 107 SCRA 492 (1981). Petitioner filed a
petition for mandamus to compel the respondent Government Service
Insurance System (GSIS) to accept 6% interest-bearing bonds issued by the
Land Bank of the Philippines at their par or face value as payment for
petitioners' outstanding housing loan. The act of the GSIS in discounting the
LBP bonds was found invalid. The Court ruled:
Land Bank bonds are certificates of indebtedness, approved by the
Monetary Board of the Central Bank, fully tax-exempt both as to
principal and income, and bear interest at the rate of 6% per annum
redeemable at the option of the Land Bank at or before maturity, which
in no case shall exceed 25 years. They are fully negotiable and
unconditionally guaranteed by the Government of the Republic of the
Philippines. These bonds are deemed contracts and the obligations
resulting therefrom fall within the purview of the non-impairment clause
of the Constitution, and any impairment thereof may take any
encroachment in any respect upon the obligation and cannot be
permitted. Thus, the value of these bonds cannot be diminished by any
direct or indirect act, particularly, since said bonds are fully guaranteed
by the Government of the Republic of the Philippines. They are issued
not in the open market nor for the captive market of landowners and to
facilitate the speedy transfer of lands to the tenant-farmers in support
of the land reform program of the Government. They are not ordinary
commercial paper in that sense subject to discounting (at 498, 499 and
502).
Mode of Payment for PD 27 Landowners
The landowners shall be paid in any of the following modes, at their
option (Exec. Order No. 228 [1987], sec. 3):
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. Onetenth 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.
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b)
Direct payment in cash or in 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 DAR; and
c)
Other modes of payment as may be prescribed or approved by
the PARC.
Under Sec. 9 of EO 229, landowners who voluntarily offer to sell their
lands are given the same incentive given to PD 27 landowners under EO 228,
which is the exemption from the payment of capital gains tax and other
taxes and fees.
CHAPTER 5
Land Redistribution
Qualified Agrarian Reform Beneficiaries Under CARP
Section 22 of RA 6657 enumerates the groups of farmers and tillers who
are qualified to become beneficiaries of the Comprehensive Agrarian Reform
Program. They are the following:
(a)
Children of landowners, who qualify under Section 6 of R.A. 6657;
(b)
Agricultural lessees and share tenants;
(c)
Regular farmworkers;
(d)
Seasonal farmworkers;
(e)
Other farmworkers;
(f)
Actual tillers or occupants of public lands;
(g)
Collectives or cooperatives of the above beneficiaries; and
(h)
Others directly working on the land.
Section 22 also provides that "[t]he 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",
following the order of priority quoted above.
Qualifications of Agrarian Reform Beneficiary
According to Section 22 of RA 6657, to qualify as an agrarian reform
beneficiary, one must:
(a)
be landless;
(b)
be at least 15 years old or head of a family at the time the
property was transferred in the name of the Republic of the Philippines;
and
(c)
have the willingness, ability, and aptitude to cultivate the land
and make it as productive as possible.
The requirements enumerated in Section 22 are the minimum or basic
qualifications for a farmer to become a beneficiary of land under the agrarian
reform program.
Qualifications of landowner's children as preferred beneficiaries
As provided in Section 6, three (3) hectares of agricultural land may be
awarded to each child of the landowner, on the condition that he is at least
15 years of age at the time of the award, and that he is actually tilling the
land or directly managing the farm. "Directly managing the farm" refers to
the cultivation of the land through personal supervision under the system of
labor administration.
Children of landowners are classified as preferred beneficiaries, and the
land awarded to them does not form part of the retention right of the parentlandowners. The transfer of the land to them is effected by the issuance of
CLOAs.
The rules on payment for the value of the land by the Land Bank and the
payment of amortizations by the beneficiary do not apply in the case of
preferred beneficiaries, unless there has been a tenancy relationship
between the parent-landowners and the children. In the latter case, the Land
Bank shall finance the acquisition of the property.
The rights and obligations of landowners' children as preferred
beneficiaries are governed by Memorandum Circular No. 4, Series of 1994.
"Landless Persons" Under CARL
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Section 25 of RA 6657 provides that a landless person is one who owns

less than three (3) hectares of agricultural land. Section 7 also provides that
an owner-tiller may still be awarded another parcel of agricultural land under
the program, provided that he is actually cultivating that land, and only to
the extent of the difference between the area of the land he owns and the
award ceiling of three (3) hectares. A tenant who owns one hectare of
agricultural land may still qualify as a beneficiary for two more hectares.
Persons Disqualified as Agrarian Reform Beneficiaries
The following persons are disqualified from becoming agrarian reform
beneficiaries:
a)
Those who are not included in the enumeration in Section 22;
b)
Those who fail to meet the qualifications prescribed under
Section 22;
c)
Those who have culpably sold, disposed of, or abandoned their
land received under CARP or P.D. 27;
d)
Those whose land has been foreclosed by the Land Bank, or
repossessed by the landowner in case of Voluntary Land Transfer/Direct
Payment Scheme, for non-payment of an aggregate of three annual
amortizations;
e)
Those who have converted their land to non-agricultural use
without prior approval by DAR; and
f)
Those guilty of negligence or misuse of the land or any support
extended to him (Sec. 22).
Grounds for disqualification of beneficiary
Under DAR Memorandum Circular No. 19 (1996), the following violations
will result in the disqualification of a farmer from being a beneficiary or from
continuing as such under the agrarian reform program:
(a)
Misuse or diversion of financial and support services extended to
the beneficiary;
(b)
Misuse of the land;
(c)
Material
misrepresentation
of
the
beneficiary's
basic
qualifications as provided under Section 22 of R.A. No. 6657, P.D. No. 27,
and other agrarian reform laws;
(d)
Sale, transfer, lease, or other forms of conveyance by the
beneficiary of rights over the land, in circumvention or R.A. No. 6657,
P.D. No. 27, and other agrarian reform laws;
(e)
Continuous neglect or abandonment of the awarded land over a
period of two calendar years as determined by the Secretary or his
authorized representative;
(f)
Failure to pay an aggregate of three (3) consecutive
amortizations to the Land Bank or to the landowner, except in cases of
fortuitous events;
(g)
Illegal conversion of the land by the beneficiary;
(h)
Waiver of rights to awarded lands;
(i)
Beneficiary's surrender of awarded land to landowner or other
non-beneficiary; and
(j)
Other acts or omissions that circumvent laws related to the
implementation of the agrarian reform program.
A separate chapter on prohibited acts, supra., discusses these violations
in detail.
Squatters disqualified to become CARP beneficiaries
In the case Central Mindanao University vs. DARAB, G.R. No. 100091,
October 22, 1992, the university entered into a contract with members of the
faculty and staff for an experimental rice project, under which the latter were
given tracts of land for cultivation. It was expressly stipulated in the contract
that no landlord-tenant relationship arose between the parties. After the term
of the project has expired, the university served notices to vacate on the
occupants of the land. The occupants refused to vacate the land, claiming
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that they are now entitled to be awarded the land they are tilling pursuant to
the land reform program.
The Supreme Court held that squatters are disqualified from becoming
CARP beneficiaries because they are "guilty of committing prohibited acts of
forcible entry or illegal detainer, [and therefore] do not qualify as
beneficiaries of and may not avail themselves of the rights and benefits of
agrarian reform".
The Supreme Court also ruled that "a person entering upon the lands of
another, not claiming in good faith the right to do so by virtue of any title of
his own, or by virtue of some agreement with the owner or with one whom
he believes holds title to the land, is a squatter. Squatters cannot enter the
land of another surreptitiously or by stealth, and under the umbrella of the
CARP, claim rights to said property as landless peasants." (Emphasis
supplied.)
Selection of Beneficiaries
The Municipal Agrarian Reform Officer or the Agrarian Reform Program
Technologist, with the participation of the BARC, screens the beneficiaries.
A farmer who claims priority over those who have been identified by the
MARO as beneficiaries should file a written protest with the MARO or the
PARO who is processing the claim folder. Once the protest is filed, the
MARO/PARO shall comment on the protest and submit the same to the
Regional Director who shall rule on the protest. If the parties disagree with
the RD's decision, they can file a written motion for reconsideration. If the
motion is denied, the farmers can appeal to the Secretary.
Landowner not entitled to select beneficiaries
It is not the landowner who distributes his land, so he does not have the
right to select who the transferees. Land acquisition and land distribution are
two different transactions. It is the government which buys the land from the
landowner and then sells it to the beneficiaries. It is not a direct transaction
between the landowner and the beneficiaries.
This rule also applies to voluntary land transfer/direct payment scheme.
Even under this scheme, it is not the landowner who determines who will be
the beneficiaries. The beneficiaries must qualify under the law, and it is still
the MARO and the BARC who do the screening.
Farmworker defined
A farmworker is defined by Section 3 (g), R.A. 6657 as a natural person
who renders service for value as an employee or laborer in an agricultural
enterprise or farm regardless of whether his/her companion is paid on a
daily, weekly, monthly, or "pakyaw" basis. The term includes an individual
whose work has ceased because of a pending agrarian dispute and who has
not obtained a substantially equivalent and regular farm employment.
Special qualifications for farmworkers in commercial farms
Aside from the minimum qualifications in Section 22 of R.A. 6657, Section
4 of Administrative Order No. 9, Series of 1998, provides for special
qualifications for farmworkers in commercial farms, which are as follows:
(a)
they must be at least 18 years old upon filing of application as
agrarian reform beneficiary;
(b)
they must have the willingness, aptitude, and ability to cultivate
and make the land productive; and
(c)
they must have been employed in the commercial farm between
June 15, 1988 and June 15, 1998 or upon expiration or termination of
the deferment.
Farmworkers who have worked longest on the land continuously shall be
given priority.
Specific disqualifications for commercial farmworkers
Section 5 of Administrative Order No. 9, Series of 1998, provides that the
following shall be grounds for the disqualification of potential beneficiaries:
a)
Mandatory retirement;
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b)
Optional retirement or resignation, provided that the farmworker
has not filed any case questioning such retirement or resignation;
c)
Dismissal for cause by final judgment;
d)
Waiver or refusal to be a beneficiary; and
e)
Violation of agrarian reform laws and regulations as determined
with finality by the proper tribunal or agency.
Questions have been raised on whether dismissal for cause distinguishes
between just and authorized causes as these two categories are defined in
Presidential Decree No. 442, otherwise known as the Labor Code of the
Philippines.
"Just cause" may consist in serious misconduct, willful disobedience of
reasonable and lawful orders of the employer, gross neglect and
abandonment of duties, dishonesty and loss of confidence of the employer in
the employee, commission of crime or offense by the employee against the
person or immediate family of the employer, and analogous cases (see
LABOR CODE, Article 282).
"Authorized cause", on the other hand, may be one of the following:
introduction of labor-saving devices, redundancy, retrenchment due to
legitimate business losses, closure of business, and ailment or disease of the
employee (see LABOR CODE, Article 283).
Just cause is distinguished from authorized cause in the Labor Code
because while just causes have something to do with the moral depravity
and fault of the employee, termination for authorized causes is due to
circumstances beyond the control of the employee.
It is evident from the history of the provision of the administrative
issuances on qualified farmworkers that the intention is to distinguish
between just and authorized causes. For one, the list of qualifications in
Section 4, Administrative Order No. 9, Series of 1998 provides that the
potential beneficiary "must have been employed in the commercial farm
between June 15, 1988 and June 15, 1998 or upon expiration or termination
of the deferment". This new provision makes the qualifications encompass
even those whose services have been terminated by the commercial farm as
of the time the deferment period expires.
Secondly, the original rules governing the acquisition of commercial
farms, Administrative Order No. 6, Series of 1998, in item (b), no. 2, letter M,
Part IV thereof, provides for dismissal from service for cause as a ground for
disqualification. Retrenchment as a ground for disqualification is listed as a
separate item, namely, item (d). This shows that item (b) refers only to
dismissal for just causes, and does not include dismissal for authorized
causes.
Administrative Order No. 6, Series of 1998 was eventually superseded by
Administrative Order No. 9, Series of 1998. The latter administrative order
removed retrenchment as a ground for disqualification. Only dismissal for
cause (meaning just cause) has been retained.
Thirdly, Administrative Order No. 9, Series of 1998, item (h), Section 6,
Article II, which provides for the prioritization of beneficiaries, still includes
retrenched workers among the potential beneficiaries. The provision states:
The Beneficiary Screening Committee shall prioritize the potential ARBs
pursuant to Section 22 of R.A. 6657. They shall be ranked according to the
length of their continuous service in the commercial farm reckoned from June
15, 1988 up to the expiration of the deferment period; residency, i.e.
whether residing in the same barangay or municipality; whether they have
been validly retrenched, i.e. with approval of the Dept. of Labor and
Employment; the nature of their work, i.e. whether directly related to farm
activities, and such other factors as the Committee may deem appropriate.
(Underscoring supplied.)
Different Categories of Farmworkers
Section 3, R.A. 6657 identifies these categories as follows:
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(a)
Regular farmworker is a natural person who is employed on a
permanent basis by an agricultural enterprise or farm.
(b)
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" and "sacada".
(c)
Other farmworker is a farmworker who is neither a regular nor a
seasonal farmworker, such as a farmworker who performs farm
activities but is not paid for his or her labor.
DAR A.O. No. 9, Series of 1998, on the other hand, identifies two more
categories:
(a)
Technical farmworker is a natural person employed by an agricultural
enterprise or farm, who is highly educated and trained and performs
functions in scientific, engineering, medical, teaching, and other fields, but
who is not vested with managerial or supervisory functions, such as
chemists, agronomists, veterinarians, and soil analysts.
(b)
Managerial or supervisory farmworker is a natural person who is
employed by an agricultural enterprise or farm vested with powers and
prerogatives (1) to lay down and execute management policies; (2) to hire,
transfer, suspend, layoff, recall, discharge, assign, or discipline employees;
and/or (3) to effectively recommend such managerial actions.
Categories of farmworkers qualified to become beneficiaries under
CARP
Farmworkers who are directly working on the land at the time DAR
conducts actual investigation and documentation of the agricultural
enterprise, whether as regular, seasonal, or other farmworkers are qualified
beneficiaries. Under A.O. No. 9, Series of 1998, however, other farmworkers
who are directly employed by the agri-business enterprise or corporation
may be considered as beneficiaries, provided they meet the basic
qualifications prescribed in Section 22.
Selection of Beneficiaries of Commercial Farms
Under A.O. No. 9, Series of 1998, there is a Beneficiary Screening
Committee responsible for the qualification, identification, and selection of
agrarian reform beneficiaries for acquired commercial farms. The Committee
is composed of the following:
(1)
The Provincial Agrarian Reform Officer, as Chairman;
(2)
The Municipal Agrarian Reform Officer;
(3)
The Provincial Agrarian Reform Coordinating Committee
(PARCCOM) Chairman or his duly authorized representative;
(4)
The Barangay Agrarian Reform Council (BARC) Chairman or his
duly authorized representative from each of the barangays where the
subject commercial farm is situated; and
(5)
The Barangay Chairman or his duly-authorized representative,
from each of the barangays where the subject commercial plantation is
situated; as members.
The Committee comes up with a master list of qualified beneficiaries, and
a waiting list of those who possess the minimum qualifications and none of
the disqualifications, but who could not otherwise be accommodated in the
updated master list.
Remedy of farmworker excluded from master list
A farmworker who is excluded from the masterlist may file a written
protest with the Beneficiary Screening Committee. The Committee Chairman
shall furnish a copy of the protest to the beneficiaries whose inclusion in the
list is being questioned. The protestees shall file their answer or comment on
the protest, and the Chairman shall transmit the records to the Regional
Director for the latter's decision. The Regional Director shall resolve the
protest based on substantial evidence showing the qualification or
disqualification of the beneficiary subject of the protest. No motion for
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reconsideration of the decision of the Regional Director shall be allowed, but

such decision may be appealed to the Office of the Undersecretary for Field
Operations and Support Services, whose decision shall be final and
executory. Notwithstanding the appeal, the decision of the Regional Director
shall not be stayed.
Managerial and supervisory farmworkers
Managerial and supervisory farmworkers may qualify as CARP
beneficiaries provided that they have been identified as qualified
beneficiaries prior to their promotion, and that they give up their managerial
or supervisory positions (see A.O. No. 9, Series of 1998). In the case,
however, of supervisory or managerial employees whose responsibilities do
not actually conform to the definition of supervisory or managerial
farmworkers, there are two views on the matter. One holds that supervisory
and managerial employees of commercial farms are disqualified from
becoming beneficiaries since the laws and regulations specify the rank and
not the job description. The other view is that they are qualified so long as
they are directly working on the land, and possess all the qualifications and
none of the disqualifications for becoming an agrarian reform beneficiary.
It is our opinion that these so called "supervisory or managerial"
employees can qualify as beneficiaries. The definition of supervisory or
managerial farmworkers in A.O. No. 9, Series of 1998, provides that to be
considered a supervisor or a manager, the farmworker must be vested with
the power to formulate and implement management policies; to hire, fire,
assign, and discipline employees; and/or to effectively recommend such
managerial actions.
Jurisprudence supports the view that this power is essential before an
employee may be considered as supervisory or managerial. In Franklin Baker
Company vs. Trajano, G.R. No. 75039, January 28, 1988, it was held:
To make one a supervisor, the power to recommend must not be merely
routinary or clerical in nature but requires the use of independent
judgment. In other words, the recommendation is (1) discretionary or
judgmental, not clerical; (2) independent, not a dictation of someone
else; and (3) effectively considered in the management decision. If
these qualities are lacking or, worse, if the power to recommend is
absent, then the person is not really a supervisor but a rank-and-file
employee.
There are instances when the position of a farmworker is denominated
"managerial" or "supervisory" even when he is not performing the
functions enumerated in the definition. Hence, it is our view that the
functions performed, rather than the rank, should be determinative of
the status of the farmworker. They should still qualify as beneficiaries,
provided they meet all the qualifications and possess none of the
disqualifications, subject to the rules on prioritization set down under
the law.
Seasonal farmworkers
Section 22 includes seasonal farmworkers among the beneficiaries
qualified to receive land under R.A. 6657, following the order of priority set
forth in the law.
There is a view that seasonal farmworkers are entitled "only to a just
share of the fruits of the land", but not to own land. This view finds support in
Fortich vs. Corona, G.R. No. 131457, August 19, 1999, wherein the Supreme
Court said:
Again, as expressed in the opinion of Mr. Martin, intervenors, who are
admittedly not regular but seasonal farmworkers, have no legal or
actual and substantive interest over the subject land inasmuch as they
have no right to own land. Rather, their right is limited only to a just
share of the fruits of the land.
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The Court based its observation on Article XIII, Section 4 of the

Constitution, which provides:
The State shall, by law, undertake an agrarian reform program founded
on the rights 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.
It is our view, however, that the fact that seasonal farmworkers may not
have been given a constitutional right does not mean that they do not have
a statutory right. Congress, in interpreting and implementing Article XIII,
Section 4 of the Constitution enacted Section 22 of RA 6657 which explicitly
includes seasonal farmworkers among the qualified beneficiaries. Moreover,
the observation made by the Supreme Court is only an obiter dictum and
cannot be made the basis for the loss or acquisition of legal rights. Moreover,
even a collective or cooperative of, among others, "seasonal farmworkers"
and "other farmworkers" may be awarded lands under the agrarian reform
program.
Collectives or Cooperatives as Qualified Beneficiaries
A collective or cooperative composed of the beneficiaries listed in Sec. 22
(a) to (e) of R.A. 6657, to wit: agricultural lessees and share tenants, regular
farmworkers, seasonal farmworkers, other farmworkers, and actual tillers or
occupants of public lands, can, by itself, be an awardee of land under CARP.
Sec. 25 of R.A. 6657, in fact, provides that "(t)he beneficiaries may opt for
collective ownership, such as co-ownership or farmers cooperative or some
other form of collective organization".
Cooperatives 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." (Section 3 [k] of R.A 6657).
The aggregate size of land that may be awarded to an association or a
cooperative shall not exceed the total number of members multiplied by the
award ceiling of three hectares, except where the Presidential Agrarian
Reform Council (PARC) approves the award of an area exceeding this limit.
Thus, a cooperative composed of 25 members, for instance, can receive a
maximum award of 75 hectares. (see Sec. 25, R.A 6657)
Inclusion of names of members of collective or cooperative not
mandatory
Memorandum Circular No. 24, Series of 1996, Memorandum Circular No.
14, Series of 1994, and Administrative Order No. 3, Series of 1993, governing
the issuance of collective CLOAs, expressly require the listing of the names of
all members in the CLOA issued to a collective or cooperative. The purpose
of this requirement is to "protect a farmer-member from possible summary
and unjust separation by the cooperative or association" (Part IV-A-1).
It is our view that inclusion in the CLOA of the names of all the members
of a collective or cooperative is not necessary in all cases. Where the CLOA is
under co-ownership, the names of all the co-owners (i.e. individual farmerbeneficiaries) should be listed in the collective CLOA. However, where the
CLOA is awarded in the name of the association or cooperative, there is no
need to include the names of the individual members thereof in the
collective CLOA. Sec. 25 of R.A. 6657, in fact, provides that "(t)itle to the
property shall be issued in the name of the co-owners or the cooperative or
collective organization as the case may be." (Underscoring supplied)
Women as Beneficiaries under CARP
Women are qualified to become agrarian reform beneficiaries in their own
right, not only as spouses of agrarian reform beneficiaries. For as long as a
female farmer's rights have vested and have been established separately
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from her husband's or her father's, she is entitled to receive land under the
program.
The term "vested right" has been defined in the case of Balboa vs.
Farrales, G.R. No. 27059, February 14, 1928, as some right or interest in
property which has become fixed and established and is no longer open to
doubt or controversy". The Supreme Court, citing American cases, explained
that "rights are vested when the right to enjoyment, present or prospective,
has become the property of some particular person or persons as a present
interest".
Involved in the Balboa case was an application for homestead patent.
During the pendency of his application, however, the law granting him the
right to such patent was repealed. The Supreme Court upheld his claim,
stating that at the time the law was repealed, the applicant has complied
with all the requirements for the issuance of a patent, hence, his right to the
patent has vested. "At least on that date," said the Court, "his right to the
land, as owner, ripened into a vested right. It was no longer expectant as
depending on some events or the performance of some conditions."
Other rights as beneficiaries have been granted to women through other
DAR administrative issuances. Under Memorandum Circular No. 10, Series of
1986, support services in terms of loan assistance in an amount not to
exceed three thousand pesos (P3,000.00) has been guaranteed for qualified
rural women's pre-cooperative groups. Under Memorandum Circular No. 4,
Series of 1992, a budget has been allocated for support services that will
empower women beneficiaries.
Under Part II.D of Administrative Order No. 2, Series of 1993, farmworkers
who are husband and wife may be separately entitled to three (3) hectares
each provided that their vested rights to the land have been duly
established. Each of the spouses shall be issued a separate CLOA.
Requirement for separate cultivation by spouses of beneficiaries
Under Memorandum Circular No. 18, Series of 1996, women who are
spouses of agrarian reform beneficiaries are required to also cultivate the
land, aside from the cultivation undertaken by her husband. We are of the
opinion that separate cultivation must be required of women only where they
are recipients of land in their own right, and should no longer be required of
women whose spouses receive land under the program.
To require separate cultivation by spouses of male agrarian reform
beneficiaries would work against, rather than protect, the interests of
women. This requirement fails to recognize the role of women in the rural
household, particularly in agrarian areas. Women are usually given
reproductive tasks, such as upbringing of children, household chores, and
other work having to do with the maintenance of the home. An additional
burden of cultivating the land would be harshly onerous upon women who
are spouses of beneficiaries.
The Civil Code and the Family Code recognize that the role of women in
traditional families is the maintenance of the household. In both Codes,
maintenance of the home is recognized as the wife's contribution to the
conjugal partnership of gains or to the absolute community of property as to
entitle her to one-half share of the marital partnership property. As long as
the wife works in the home, all properties received or acquired during the
subsistence of the marriage is considered part of the conjugal partnership of
gains or of the absolute community of property. There is no reason for R.A.
6657 to be given a different interpretation as regards the rights of women to
land awarded to their spouses under the Comprehensive Agrarian Reform
Program.
Modes of Distribution: Individual vs. Collective Ownership
It is the policy of the CARP to establish owner-cultivatorship of economicsized farms as basis of Philippine agriculture. In line with this is the award of
three hectares to the individual beneficiaries as the distribution limit. With a
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view of equitable land distribution and ownership, DAR is mandated to

distribute agricultural lands to as many tenants and farmworkers as possible.
Furthermore, the distribution of land shall be made directly to individual
beneficiaries.
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 collectively owned by the worker beneficiaries who
shall form into a worker cooperative or association which will deal with the
corporation or business association. [Rep. Act No. 6657 (1988) Sec. 29; DAR
A.O. No. 10 (1990), II (B)]
The beneficiaries may opt for collective ownership such as co-ownership
or farmer's cooperative or some other form of collective organization. The
total area that may be awarded under a collective CLOA shall not exceed the
total number of co-owners or members of the cooperative or collective
organization multiplied by the award limit of three hectares except in
meritorious cases as determined by the PARC, pursuant to Section 25 of R.A.
No. 6657. Collective co-ownership CLOAs may be issued to cover any
CARPable lands whether private lands or public lands within proclaimed DAR
settlement projects or public lands turned over to the DAR by other
government agencies and institutions pursuant to E.O. No. 407 as amended.
[Rep. Act No. 6657 (1988), sec. 25.]
Lands covered by collective CLOAs on a co-ownership basis shall be
subdivided in accordance with the actual occupancy of the ARBs, provided it
does not exceed three (3) hectares. Landholding covered by CLOAs in the
name of cooperative or farmer's organization, may, at the option of the
organization, also be subdivided based on the share of each member
provided that the subdivision as determined by the DAR shall be
economically feasible. [DAR A. O. No. 03 (1993), III (E).] Subdivision of lands
under collective CLOA is governed by A.O. No. 03, Series of 1993.
Factors Considered in Land Distribution
In the equitable distribution of lands subject of CARP, actual occupancy of
a tenant shall be the basis of the award, provided it does not exceed three
hectares. For untenanted lands, all the farmworkers therein shall be
considered as potential beneficiaries in the estate; provided that the
proportional share of each will not exceed three (3) hectares; otherwise,
additional ARBS, shall be considered. For unoccupied lands, each identified
ARB may be allowed the award ceiling of three hectares, provided that there
are enough lands for distribution under CARP in the barangay to
accommodate others who are equally qualified but who may not have been
considered as awardees in such land under acquisition. In all cases, the
aggregate award to an ARB shall not exceed the limit of three hectares and
his total land ownership as a result of the award shall not exceed three (3)
hectares. (DAR A.O. No. 10 [1990], II [D])
Distribution Procedure
The MARO, upon completion of land acquisition, validates the list of
qualified beneficiaries who were identified during the acquisition phase who
are still present and qualified to receive the land. Through a letter or CARP
Beneficiary Certificate (CBC), the identified ARBs are formally notified by the
MARO that they have qualified to receive the land. The ARBs are consulted
by the MARO as to their preferred mode of distribution . Thereafter the Land
Distribution Folders are prepared and based on the ARBs preference and
submitted to the PARO.
Upon transmittal, the PARO reviews all documents and generates the
Certificates of Land Ownership Award (CLOAs). If the ARBs prefer individual
parcels, the PARO requests the DENR to conduct subdivision survey. The
PARO then submits the CLOAs to the DAR Regional Office which causes them
to be signed by the Secretary. Lastly, the PARO registers the CLOAs with the
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Register of Deeds and forwards the same to the MARO for distribution. (DAR
A.O. No. 19 [1990]).
A compelling issue in respect to land distribution is the matter of physical
possession by DAR as a necessary prerequisite to its distribution to the ARBs.
It is submitted that physical possession is not necessary for land to be
distributed. Nothing in R.A. No. 6657 requires DAR to take physical
possession as a precondition for redistributing lands subject of acquisition.
What is required is "immediate possession" under Section 16 or "actual
possession" under Section 24. Actual possession of the land consists in the
manifestation of acts of dominion over it of such a nature as a party would
naturally exercise over his own property. (Ramos vs. Dir. of Lands [39 Phil
175 [1918]). In issuing the CLOA, the Republic of the Philippines, which
became the registered owner of subject property, acting through DAR,
exercised an act of dominion over the landholding as redistribution involves
disposition or alienation. Having manifested its dominion over the land, the
Republic of the Philippines through DAR, is deemed to be, for all legal intents
and purposes, in actual possession thereof. Redistribution is not limited to
the installation of farmers in the landholding. The generation and distribution
of CLOAs is embraced within the concept of redistribution.
Distribution of Homelots
A homelot refers to a parcel of agricultural land used by the ARB as the
site of his permanent dwelling including the area utilized for raising
vegetables, poultry, pigs and other animals and engaging in minor
industries. The area of the homelot may not exceed 1,000 square meters. It
is an integral part of the farm and an indispensable factor in farm operations.
The procedure for the acquisition and distribution of farmlots likewise apply
to homelots. If the homelot of a tenant-beneficiary falls within the retained
area of the landowner, the beneficiary may be made to transfer his dwelling
to his farmlot or other area to be designated for his homelot which shall be
mutually agreed upon by the parties. Provided that the landowner shoulders
the cost of the transfer of his dwelling and the agreed cost of other
improvements introduced by the tenant-beneficiary on said homelot. [DAR
A.O. No. 12 [1991], II [C])
Distribution of Commercial Farms and Facilities
Commercial farms may be distributed collectively or individually. Qualified
beneficiaries shall be awarded a maximum of three (3) hectares or a
minimum of one (1) hectare each in case the land is not sufficient to
accommodate them.
To expedite the acquisition, the commercial farms shall be initially
distributed collectively or under co-ownership. In the case the beneficiaries
desire to partition the land, DAR shall first determine whether it is
economically feasible to divide the land, in coordination with the Department
of Agriculture and other concerned agencies. Thereafter, the beneficiaries
may, by majority vote, decide whether to proceed with the partition or not. In
the event the beneficiaries decide to partition, the land shall be allocated to
the individual beneficiaries by drawing lots in the presence of DAR
Representatives. (Section 17 DAR A.O. No. 2-1998)
Facilities and improvements acquired shall be distributed collectively,
through a Deed of Transfer which shall specify the names of the ARBs and
duly annotated in the CLOAs generated over the subject landholding where
said facilities and improvements are found. Areas where the facilities and
landholdings are found are deemed common areas and shall not be
partitioned individually. (Section 28 DAR A.O. No. 02-98)
Collective CLOAS shall be generated within thirty (30) days upon receipt
by the PARO of the certified copy of the certificate of title in the name of the
Republic of the Philippines.
In individual CLOAs shall be generated within thirty (30) days upon receipt
of the approved Segregation Plan (ASP). However in the case of individual
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distribution and considering the time and financial constraints particularly in

the conduct of individual surveys, a collective CLOA may be generated in the
interim over the subject landholding (Section 18, DAR A.O. No. 02-1998)
CLOAs shall be registered immediately upon generation. (Section 20 DAR
A.O. No. 02-98)
Distribution of Corporate Farms
The general rule is that corporate farms are distributed directly to the
individual worker-beneficiaries. However, in case it is not economically
feasible and sound to divide the land, corporate farms shall be owned
collectively by the worker-beneficiaries who shall form a cooperative or
association which will deal with the corporation or business association. In
the latter case, the individual members of the cooperatives or corporations
shall have homelots and small farmlots for family use, to be taken from the
land owned by the cooperative or corporation. (Rep. Act No. 6657 [1988],
sec. 29).
Corporate farms owning or operating under lease or management contract
Pending final land transfer, corporate farms that own or operate under
lease or management contract and realize gross sales in excess of P5 million
are mandated to execute a production and profit sharing (PPS) plan provided
under DAR AO No. 8 (1988). The PPS plan is imposed in order to allow the
farmworkers in corporate farms to realize an improvement in their farm
income pending final transfer of the farm.
All farmworkers in a corporate farm, whether classified as regular,
seasonal, technical or other farmworkers are entitled to PPS. On the other
hand, managerial and supervisory employees are excluded from entitlement
to PPS. (DAR Adm. O. No. 8 [1988])
PPS are distributed to farmworkers, over and above the compensation
they are currently receiving, based on the following schedules:
1.
Three (3%) of Annual Gross Sales from 15 June 1988 until final
land or corporate stock transfer to the farmworker-beneficiaries is
effected, provided that the employer is not obligated to pay more than
100% of the regular annual compensation of the farmworkerbeneficiaries;
2.
In addition, 10% of net profit after tax, provided that in cases
where the retention right is allowed, the amount to be distributed shall
be reduced by an amount equivalent to the proportion of the retained
area to the total land area. (DAR Adm. O. No. [1988])
To ensure that corporate farm employers comply with the PPS provisions,
the Secretary of DAR or his authorized representatives shall have the power
to order and administer compliance with the PPS provisions and to require
submission of reports, compel the production of books and documents,
compel answers to interrogatories, issue subpoena and subpoena duces
tecum, and enforce its writs through Sheriffs or other duly deputized officers.
Moreover, Sections 73 and 74 of RA 6657 regarding prohibited acts and
omissions and the penalties therefor, are applicable to any person or entity
found to be violating any PPS provision. (DAR Adm. O. No. 8 [1988])
Proof of Ownership of Awarded Lands
The Certificate of Land Ownership Award evidences the ARB's ownership
in respect to private agricultural lands covered under R.A. No. 6657 (Rep. Act
No. 6657 [1988], sec. 24). Ownership of public lands, upon the other hand,
are evidenced by Free Patents. Emancipation Patents is the ARBs proof of
ownership of lands awarded under Operation Land Transfer. Discussing the
nature of an Emancipation Patent, the Supreme Court ruled in the case of
Vinzons-Magana vs. Estrella (201 SCRA 536 [1991]) that it is only compliance
with the prescribed conditions which entitles the farmer/grantee to an
emancipation patent by which he acquires the vested right of absolute
ownership in the landholding a right which has become fixed and
established and is no longer open to doubt and controversy.
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The pronouncement of the court respecting the impregnable character of

an Emancipation Patent should be qualified. The mere issuance of an
Emancipation Patent does not put the ownership of the ARB beyond attack
and scrutiny. It must be noted that P.D. No. 946 vests the Court of Agrarian
Relations (now the DAR Adjudication Board) jurisdiction over cases involving
the cancellation of emancipation patents issued under P.D. No. 266 (Pres.
Decree [1976], sec. 12 [g]). This only goes to show that ownership of
awarded lands covered by Emancipation Patents may be challenged. The
aforecited Supreme Court ruling presupposes that the issuance of
emancipation patents to the ARB is not tainted with any irregularity such that
it acquires the character of indefeasiblity. The Vinzons- Magana ruling must
be appreciated in this context.
Rights and Obligations of Beneficiaries
Once a Certificate of Land Ownership Award has been issued to a
beneficiary and registered in his name, it serves as an evidence of title to the
land, entitling the beneficiary to occupy the land, cultivate it, and maintain
possession of the same. cSIADH
An agrarian reform beneficiary is obliged to exercise the diligence of a
good father of a family in the use, cultivation, and preservation of the land
and the improvements thereon. His rights to the land, as well as to support
services to which he may be entitled as a beneficiary shall be forfeited in the
event that he neglects, abandons, misuses, or sells the land.
The beneficiary is also obliged to keep the land awarded to him intact,
and he may not subdivide the land in favor of his children or heirs. The three
hectares have been identified as an economic-sized family farm which must
be preserved as a single operating unit to promote the farm's economic
viability. Even if the beneficiary dies, his heirs are not allowed to divide the
land into smaller units.
However, such heirs are entitled to receive the land by way of hereditary
succession. This means that the land may be transferred either to the spouse
of the beneficiary, or in his or her absence or incapacity, to the eldest child
who meets the qualifications to be a CARP beneficiary, particularly the
requirement of willingness, aptitude, and ability to cultivate the land and
make it productive. The heir who succeeds to the land is under obligation to
pay the other heirs their legal shares in the property of the deceased
beneficiary. In the absence of qualified heirs or children, he land shall revert
to the DAR, which shall identify a new beneficiary the land.
A beneficiary is likewise obliged to comply with the provisions of R.A.
6657. Memorandum Circular No. 19, Series of 1996, supra., provides for the
grounds for perpetual disqualification of agrarian reform beneficiaries. The
grounds enumerated in this Memorandum Circular are violations of various
provisions of R.A. 6657 and administrative rules and regulations issued
pursuant to this law.
Protection of Rights of Member-Beneficiaries
The protection of rights of member-beneficiaries may be ensured in the
articles of incorporation and in the by-laws of the organization, which the
member-beneficiaries themselves enact and approve. Restrictions in the
transfer of shares or membership rights, by providing that such transfer shall
be valid only if made in favor of another qualified beneficiary, may be
adopted. The contract of membership may likewise contain provisions
ensuring that the rights of member-beneficiaries to ownership or other
privileges as members are protected.
The interests of farmer-members may also be adequately protected
according to the exit provisions in Republic Act No. 6938, otherwise known as
the Cooperative Code. Articles 31 and 32 of the Code provides:
Art. 31.
Termination of Membership. (1) A member of a
cooperative may, for any reason, withdraw his membership from the
cooperative by giving a sixty (60)-day notice to the board of directors.
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The withdrawing member shall be entitled to a refund of his share

capital contribution and all other interests in the cooperative: Provided,
That such refund shall not be made if upon such payment the value of
the assets of the cooperative would be less than the aggregate amount
of its debts and liabilities exclusive of his share capital contribution.
(2)
The death, insanity, insolvency or dissolution of a member shall
be considered an automatic termination of membership.
(3)
A member may be terminated by a vote of the majority of all the
members of the board of directors for any of the following causes:
(a)
When a member has not patronized the
services of the cooperative for an unreasonable
period of time as may be fixed by the board of
directors;
(b)
When a member has continuously failed to
comply with his obligations;
(c)
When a member has acted in violation of the
by-laws and the rules of the cooperative; and
(d)
For any act or omission injurious or prejudicial
to the interest or the welfare of the cooperative.
A member whose membership the board of directors may wish to
terminate shall be informed of such intended action in writing and shall
be given an opportunity to be heard before the said board makes its
decision. The decision of the board shall be in writing and shall be
communicated in person or by registered mail to the member and shall
be appealable, within thirty (30) days after the decision is promulgated,
to the general assembly whose decision therein, whether in a general or
special session, shall be final. Pending a decision by the general
assembly, the membership remains in force.
Art. 32.
Refund of Interests. All sums computed in accordance
with the bylaws to be due from a cooperative to a former member shall
be paid to him either by the cooperative or by the approved transferee,
as the case may be, in accordance with this Code.
Transferability of Awarded Lands
Section 27 prohibits the sale, transfer, or conveyance of lands acquired by
beneficiaries under R.A. 6657 within ten (10) years from the date of award.
This restriction on the transferability of the land is annotated on the
certificate of title in the Register of Deeds. Lands awarded pursuant to E.O.
228 and P.D. No. 27 may be alienated only upon full payment of
amortizations on the purchase price.
However, the lands acquired under CARP may be alienated through
hereditary succession, or in favor of the government, the Land Bank, or other
qualified beneficiaries even before the expiration of the ten-year period. This
provision presumes that the land to be alienated has been fully paid for by
the beneficiaries.
If the land has not yet been fully paid for, only the rights to the land may
be sold, transferred, or conveyed, and with prior approval of the DAR, and
only to the heirs of the beneficiary or to another beneficiary.
The buyer of agricultural land alienated under this section is still subject
to the aggregate ownership ceiling of five (5) hectares.
Mortgage of awarded land not equivalent to sale, disposition, or
conveyance
Mortgage is a land transaction allowed by the law, and hence is not a
sale, disposition, or conveyance contemplated by the prohibition. The
governing administrative issuance on land transactions is DAR Administrative
Order No. 1, Series of 1989. Section II.3.d provides:
The following are not prohibited transactions and may be registered by
the Register of Deeds without prior clearance from DAR:
d.
Deed of real estate mortgage executed by the . . . beneficiary.
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Since mortgage is not a prohibited transaction, it follows that it is not

tantamount to selling, disposing of, or conveying the awarded land, which
are prohibited transactions. Moreover, the framers of the law, in not
expressly prohibiting mortgage, may have anticipated circumstances in
which the farmer-beneficiary is left with no alternative but to mortgage his
land in order to respond to emergency situations such as sickness in the
family (see Torres vs. Ventura, 187 SCRA 96, at 103).
Farmer-beneficiary may alienate even without complete payment of
amortizations
The second paragraph of Section 27 of R.A. 6657 allows a farmerbeneficiary to transfer or convey his rights to the land, provided that prior
approval of the DAR has been obtained, to any qualified heir of the
beneficiary or to any other beneficiary. An essential condition of such
transfer or conveyance is that the transferee shall cultivate the land himself
and maintain its productivity as agricultural land. The failure to comply with
this condition shall result in the availability of the land for distribution to
another qualified agrarian reform beneficiary.
Disqualification of beneficiary who sold or transferred right to
awarded land
Section 73 (f) provides that the sale, transfer, or conveyance by a farmerbeneficiary of the right to use or any usufructuary right over the land must
be made "in order to circumvent the provisions" of R.A. 6657. This must be
harmonized with Section 27, which allows the farmer-beneficiary to transfer
or convey the land or his rights to the land, provided that it is with the prior
approval of DAR. Administrative Order No. 8, Series of 1995, governs the
procedure for obtaining this consent.
Administrative Order No. 10, Series of 1989 provides that beneficiaries
who have sold the land they received under R.A. 6657 or P.D. 27 are no
longer qualified to receive land under R.A. 6657, without any qualification on
the manner of disposition.
We believe, however, that the law intends to preserve the land in the
hands of the beneficiary and to make him benefit from the land for as long a
time as feasible. The administrative issuances regarding the obtention of
consent to convey the land merely exempt the vendor from criminal
prosecution for circumventing R.A. 6657, and cannot be construed to give
the farmer-beneficiary license to convey the land without forfeiting his right
to become a beneficiary again.
Manner of Payment by Beneficiaries
For lands acquired by DAR through the compulsory acquisition scheme or
through voluntary offer to sell, Section 26 provides that lands awarded to
beneficiaries shall be paid for by the farmers in thirty (30) annual
amortizations at six per cent (6%) interest per annum. These are regular
annual amortizations, payable to the Land Bank of the Philippines.
For lands acquired under the VLT/DPS scheme, Section 21 provides that
payment shall be made directly by the farmer-beneficiaries to the landowner
under the terms and conditions mutually agreed upon by the parties. Such
terms and conditions shall be subject to the approval by the DAR.
Pursuant to Section 20, the DAR is mandated to ensure that these terms
and conditions are not less favorable to the farmer-beneficiary than those
which would have prevailed had the DAR acquired the land under the
compulsory acquisition scheme.
If the landowner and the farmer cannot agree on the price of the land,
Section 21 provides that the land shall be subject to compulsory acquisition,
following the procedure under Section 16.
Payment by the beneficiaries, in any case, shall start one year from the
date of the registration of the CLOA with the Register of Deeds. Joint DAR-LBP
Memorandum Circular No. 30, Series of 1997 states that in case occupancy
of the land occurred before the date the CLOA is registered, then the basis
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for the amortization schedule would be the date of CLOA registration. If the
occupancy date occurred after the date of CLOA registration, then the
occupancy date would be the basis for the amortization schedule.
Computation of amount of amortizations
Under Administrative Order No. 2, Series of 1998, the basis of
computation shall be the cost of the land and the permanent improvements
thereon.
Pursuant to the mandate of the law that the payments shall be made
affordable to the beneficiaries, however, Administrative Order No. 2, Series
of 1998 provides that the amortizations may be reduced to:
(1)
2.5% of annual gross production (AGP) for the first three years
(2)
5% of the AGP for the fourth and fifth years
(3)
10% of the AGP for the sixth to thirtieth years, if this
amortization ceiling is lower than the regular amortization.
The annual gross production is defined as the peso value of the annual
yield/produce per hectare of the land awarded to farmer-beneficiaries, which
is reflected in the valuation portion of the Claim Valuation and Processing
Form.
In the case of VLT/DPS, for the purposes of computing the regular
amortization, the AGP shall be that agreed upon by the parties during the
proceedings for the determination of just compensation, and shall not be
changed throughout the period for payment of the value of the land.
The ceiling on the payments for lands voluntarily offered or compulsorily
acquired shall be the same. This is pursuant to the provision that, although
the terms and conditions of the VLT/DPS shall be mutually agreed upon by
the landowners and the farmer-beneficiaries, these should not be less
favorable to the ARB that those that would prevail had the land been
acquired by the government compulsorily (see Section 20 [b], R.A. 6657).
Effect of default in payment by beneficiary
In the case of land acquired under the VLT/DPS scheme, the land may be
repossessed in case the beneficiary fails to pay an aggregate of three (3)
consecutive annual amortizations from the date of receipt of the
amortization schedule, except if loss of crops occurs due to fortuitous event
or force majeure. Section 19 (c) provides that the voluntary agreement
entered into by the landowners and the beneficiaries under VLT/DPS shall
include sanctions for non-compliance by either party, subject to the approval
by the DAR.
In the case of land voluntarily offered for sale or compulsorily acquired,
the failure of the beneficiary to pay at least three (3) annual amortizations to
the Land Bank gives the bank the right to foreclose the land, with the
exception of loss of crops due to force majeure. In both cases, the beneficiary
shall be permanently disqualified from becoming a beneficiary again.
Failure to pay due to fortuitous event
If the default is occasioned by natural calamity and/or force majeure, or
any other instance when the failure to produce is not due to the fault of the
farmer, the scheduled amortization payment is limited to the maximum
amount of 10% of the annual gross production (see Section IV, A.O. No. 2,
Series of 1992). The default due to fortuitous event shall not result in the
permanent disqualification of the beneficiary.
Effect of higher valuation
The amount of regular annual amortization is not affected in case the
landowner is granted by the courts a higher valuation than that pegged by
the DAR/LBP/BARC during the valuation process. The only effect of this
change is to increase government assistance or subsidy.
Repossessed land does not revert to former landowner
In case awarded land is repossessed by the government, the DAR shall
cancel the CLOA issued to the beneficiary, and transfer the land to either of
the following:
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a)
A qualified heir of the beneficiary who shall assume the balance
of the value of the land; or
b)
In the absence of a qualified heir, a new qualified beneficiary
who, as a condition for such transfer, is willing to abide by the terms of
the existing VLT/DPS agreement, and who will pay for the entire value of
the land.
Beneficiary in default will not forfeit payments
If the land is sold to a new beneficiary other than an heir of the former
beneficiary, the landowner shall refund the payments to the latter, in one
lump sum or in installments, and shall pay for the improvements made by
the former beneficiary, less the lease rentals for the duration of his use of the
land and other charges allowed by law.
Assistance to farmer-beneficiaries in making payments
Administrative Order No. 2, Series of 1998 defines "assistance to farmers"
as follows:
(a)
The difference between the regular annual amortization (based
on the amount paid or approved for payment to the landowner) and the
affordable amount during the first five (5) years after the award of the
land to the ARBs where the affordable amount is lower that the regular
amortization;
(b)
The difference between the regular annual amortization and ten
percent (10%) of the AGP during the 6th to 30th year, whenever such
10% AGP is lower that the regular amortization; and
(c)
Rebate of 2% of interest in case the beneficiary makes an early
payment.
Production and Profit Sharing
Under Sections 13 and 32 of RA 6657, individuals or entities owning
agricultural lands and operating under lease or management contract are
required to execute production and profit-sharing plan with their farmworkers
or farmworkers' organization, pending final distribution of the land or
implementation of the stock distribution scheme. The provisions under AO 8
(1988) governs production and profit sharing plan under RA 6657.
A production and profit-sharing plan is required in order to improve the
income of farmworkers pending final land transfer or stock distribution or full
control in the case of deferred commercial farms and lease-back
arrangements.
The following employers are required to execute production and profitsharing plan provided that their annual gross sales exceed P5 million:
1)
Any enterprise owning or operating agricultural lands under
lease, management contract, production venture or other similar
arrangement;
2)
Multinational corporations engaged in agricultural activities; and
3)
Commercial farms devoted to aquaculture including salt beds,
fishponds and prawn ponds, fruit farms, orchards, vegetable and cutflower farms, and cacao, coffee and rubber plantation.
All farmworkers of covered employers, regardless of duration, who are
directly working on the land of the corporation or other entities, whether
classified as regular, seasonal, technical or other farmworkers are covered in
the mandated production and profit-sharing plan. To qualify, however, said
employees must not own more than three (3) hectares of agricultural land.
Covered employers are required to pay the following, over and above the
compensation currently received by the farmworkers:
1)
Three (3%) of Annual Gross Sales from 15 June 1988 until final
land or corporate stock transfer to the farmworker-beneficiaries is
effected, provided that the employer is not obligated to pay more than
100% of the regular annual compensation of the farmworkerbeneficiaries.
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2)
In addition, 10% of net profit after tax, provided that in cases
where the retention right is allowed, the amount to be distributed shall
be reduced by an amount equivalent to the proportion of the retained
area to the total land area. [AO 8 (1988)]
Existing production and profit-sharing granted prior to the effectivity of
CARP shall be credited as compliance with the mandated production and
profit-sharing plan. However, where the benefits received are less than what
is provided under RA 6657, covered employers shall pay the difference to the
farmworkers.
Non-compliance with the provisions on production and profit-sharing is a
violation covered by the provisions on prohibited acts and omissions and the
penalties therein under Sections 73 and 74 of RA 6657.
The enforce the above mandate, DAR through its Secretary or authorized
representatives has the following powers:
1)
To order and administer compliance with the Production and
Profit-Sharing provisions of RA 6657;
2)
To require covered employers to submit report on the distributed
production and profit shares;
3)
To compel the production of books and other relevant documents
of covered employers;
4)
To compel answers to questions needing clarifications to shed
light on problems encountered in the implementation of the plan;
5)
To issue subpoena; and
6)
To enforce its writs through sheriffs or other duly deputized
officers.
Tax Exemption
Transfers of ownership under R.A. No. 6657 are tax exempt as provided in
Section 66 thereof, as follows:
Transactions under this Act involving transfer of ownership, whether from
natural or juridical person, shall be exempted from taxes arising form 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.
It is submitted that tax-exempt transactions contemplated in the abovequoted provision only involve lands placed under the coverage of the CARP
and acquired through any of the modes of acquisition provided under the
law, i.e., compulsory acquisition, voluntary offer to sell, voluntary land
transfer or direct payment scheme for the purposes of transferring these to
the beneficiaries. Hence, transfer of homelots to farmers as disturbance
compensation in the case of lands already exempted from CARP coverage is
taxable. This is so since the farmer-transferees in this case did not acquire
the land as agrarian reform beneficiaries within the context of R.A. No. 6657.
It must be emphasized that tax exemptions are to be strictly construed
against the taxpayer. Therefore, any transaction not expressly enumerated in
Section 66 of R.A. No. 6657 should be construed as not included in the taxexempt provision of the law. (Memorandum of Asst. Sec. Peaflor for the
Secretary, 06 April 2000)
Standing Crops
Section 28 provides that the landowner is entitled to retain his or her
share in the standing crops unharvested at the time the DAR shall take
possession of the land under the compulsory acquisition scheme, and shall
be given reasonable time to harvest the same to the extent of the share
pertaining to him/her.
Standing crops refer only to those crops existing at the time DAR takes
possession of the land.
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In the case of sugarlands, the term shall include the original crop only,
excluding future harvests from ratoons, if what is existing at the time the
DAR takes possession of the land is the original crop. If what is existing at the
time of possession is already the first or second crop, the landowner shall be
entitled to harvest his/her share in that ratoon crop.
Support Services
Agrarian reform involves not only land redistribution, but also the totality
of factors and support services designed to uplift the economic status of the
beneficiaries and all other arrangements which will allow the beneficiaries to
receive a just share of the fruits of the lands they work. (Section 3 (a) R.A.
No. 6657). To address the latter, the Office of Support Services was created
to provide general support and coordinative services in the implementation
of the program. (Section 35, R.A. No. 6657). Notwithstanding the enactment
of R.A. No. 7905 otherwise known as "An Act to Strengthen the
Implementation of the Comprehensive Agrarian Program and for other
Purposes" support services by the government remained limited because of
fiscal constraints. Only 370,000 beneficiaries within the Agrarian Reform
Communities (ARCs) out of 3.34 million as of 1998 are reached by such
services. (CARP Annual Report, 1998, PARC Secretariat). Thus, the
Department saw the need to mobilize the private sector to ensure adequate
support services. It is within this framework that Joint Economic Enterprises
was conceived. Joint Economic Enterprises refer to partnerships or
arrangements between beneficiaries and investors to implement an
agribusiness enterprise in agrarian reform areas. The arrangement finds
legal basis in Section 35 and 44 of R.A. No. 6657, as amended by R.A. No
7905, as follows:
There is hereby created the Office of Support Services under the DAR to
be headed by an Undersecretary. . . . This 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: . . . (2)
Infrastructure development and public works projects in areas and
settlements that come under agrarian reform . . . . For the purpose of
providing the aforecited infrastructure and facilities, the DAR is
authorized to enter into contracts with interested private parties on long
term basis or through joint venture agreements or build-operatetransfer schemes, . . . (10) Assistance in the identification of ready
markets for agricultural produce and training in other various aspects of
marketing . . .
The PARCCOM shall coordinate and monitor the implementation of the
CARP in the province . . ., in addition, it shall recommend to the PARC
the following: . . . 3) continuous processing of applications for lease
back agreements, joint venture agreements and other schemes that will
optimize the operating size for agricultural production and also promote
both security of income to farmer beneficiaries; Provided that lease
back arrangements should be the last resort. (Underscoring supplied)
Joint Economic Enterprises
The parties to a joint economic enterprise are the agrarian reform
beneficiaries and investors who may either be private individuals,
partnerships or corporations; non-government organizations; cooperatives or
associations of beneficiaries; government-owned or controlled corporations
and other entities (Section 6 DAR A. O. No. 2-1999) It must be noted that the
beneficiaries referred to include holders of Emancipation Patents (EPs) of
Certificates of Land Ownership Awards (CLOAs). Qualified beneficiaries of
agricultural lands for distribution under the agrarian reform program may
also avail of the same provided that the land is distributed to the
beneficiaries before an agribusiness agreement is executed. Small
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landowners may engage in joint economic enterprises involving their

retained areas. (Section 4, DAR A.O. No. 2-1999)
In a joint economic enterprise, ownership of land remains with the
beneficiaries. Only the use thereof, where necessary, is conveyed. The
purposes for which a joint economic enterprise is to be established are
production, processing and marketing of products, or introduction,
maintenance, rehabilitation or upgrading of agricultural capital assets,
infrastructure or facilities, or provision of management expertise, technology,
equipment and other services to beneficiaries. The equity and interest of the
parties to a joint economic enterprise depend on the nature of enterprise and
extent of participation. Parties hall exercise shared responsibility and codetermination on matters affecting the viability of land and income of
beneficiaries. The parties shall agree on the period and cause the annotation
of the agreement on the titles of the properties. (Section 6, DAR A.O. No. 299)
Types of Joint Economic Enterprises
Joint Venture
In a joint venture, the beneficiaries contribute use of the land together
with the facilities and improvement while the investor provides capital and
technology for production, processing and marketing of goods, or for
construction, rehabilitation, upgrading of agricultural capital assets,
infrastructure and facilities. The joint venture has a personality separate and
distinct from the parties. The equity of beneficiaries in a joint venture
depends on the value of use of land and improvements at the minimum,
equal to lease rental. The equity of the beneficiaries is not subject to dilution.
The joint venture is to be managed jointly by the investors and the ARBs. The
beneficiaries are given a fixed number of seats in its board of directors
corresponding to their equity interest. The beneficiaries and/or their
dependents are to be given preference for employment in the joint venture.
Production, Processing and Marketing Agreement
In a production, processing and marketing agreement, the beneficiaries
engage in production and processing of agricultural products and directly sell
them to the investor who provides loans and technology. Incorporated in said
agreement is a price review mechanism taking into consideration industry
practice, prevailing market prices and other appropriate factors.
Build Operate Transfer Scheme
In a build-operate-transfer scheme, the investor builds or rehabilitates
facilities and improvements necessary to make the lands productive and
directly operates the same for a certain period. The facilities and
improvements are constructed at the investor's own expense, and he shall
not be allowed to access, for this purpose, government funds that would,
otherwise be available as financing or capital for beneficiaries. In said
scheme, the beneficiaries receive reasonable rent for the use of land. Upon
expiration of the agreed period, ownership of the facilities and other
improvements is consolidated in the name of the beneficiaries.
Management Contract
In a management contract beneficiaries hire the services of a contractor
with managerial skills and capability to manage and operate the farm in
exchange for a fixed wage and/or commission. The beneficiaries, in turn
provide labor. All income from the operation of the farm accrue exclusively to
the ARBs. In this arrangement, a human resource development program for
the members of the cooperative, association or federation is to be
implemented to facilitate transfer of technology and management
techniques to enable them to directly manage and operate the farm.
Service Contract
In a service contract, beneficiaries engage for a fee the services of a
contractor for mechanized land preparation, cultivation, harvesting, postharvest operations and other activities. The service contractors may include
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other ARBs with necessary equipment and facilities for mechanized farm
operations. Beneficiaries who wish to engage in service contracting but with
limited financial capability may avail of loan facilities or credits pursuant to
Section 35 of R.A. No. 6657 as amended.
Lease Contract
In a lease contract, beneficiaries bind themselves to give investor
enjoyment or use of their land for a price certain and for a definite period. In
this arrangement, the investor provides capital to operate the farm,
construct facilities and other improvements, process and market agricultural
products. The lessee may either be a former landowner or other investors.
However, under Section 44 of R.A. No. 6657, as amended by R.A. No. 7905,
leaseback arrangements should be the last resort. This means that the ARBs
and the investor (former landowner) must first consider other types of
agribusiness arrangements before deciding on a lease. The lessee/investor is
to give priority to qualified and willing ARBs and their dependents for
employment in the enterprise. In such cases, the ARBs are to be treated as
employees of the lessee/investor and are entitled to the mandated minimum
wage and other economic benefits granted under the Labor Code and other
existing laws.
Combinations or Phased Arrangements
Combinations or phased arrangements combine the features of any or all
of the preceding forms of agribusiness enterprises, or provide for a phased
implementation thereof. For instance, production and processing of
agricultural corps may be covered by contract growing, while marketing may
be under a joint venture. Small growers may engage production, while a
corporation may undertake processing and marketing. Initially, the
arrangement may provide for leaseback, followed by a contract growing, and
finally, joint venture.
Other Schemes
Other schemes refer to other agribusiness arrangements or schemes that
optimize the operating size of distributed lands for agricultural production
consistent with existing laws and regulations. (Section 7, DAR A.O. No. 2-99)
CHAPTER 6
Adjudication of Agrarian Reform Matters
Jurisdiction of DAR
Sec. 50 of RA 6657 provides that the DAR is vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall
have exclusive jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive jurisdiction of the
DA and the DENR. In the exercise of its jurisdiction, DAR 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 more 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.
Adjudication of agrarian reform matters involves the exercise by the DAR
Secretary of its exclusive jurisdiction over agrarian law implementation (ALI)
cases or the exercise by the DAR Adjudication Board (DARAB) of its
jurisdiction under the 1994 DARAB Revised Rules of Procedure. Petitions for
the determination of just compensation to landowners and the prosecution of
all criminal offenses under RA 6657 falls within the original and exclusive
jurisdiction of the Special Agrarian Courts (SACs).
Restraining orders or injunctions issued by regular courts
Any restraining order or injunction issued by courts against DAR pursuant
to the implementation of CARP is null and void as it violates the express
provisions of Sec. 55 and 68 of RA 6657. Sec. 55 provides that 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,
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necessary to, or in connection with the application, implementation,

enforcement, or interpretation of agrarian laws. On the other hand, Sec. 68
states that no injunction, restraining order, prohibition or mandamus shall be
issued by the lower courts against DAR, DA, DENR and DOJ in their
implementation of CARP.
ALI Cases
Under DAR AO 6 (2000), ALI cases refer to those agrarian cases falling
under the exclusive jurisdiction of the DAR Secretary. These cases strictly
involve the administrative implementation of RA 6657 and other agrarian
laws, rules and regulations. These cases include the following:
a)
Classification and identification of landholdings for coverage
under CARP, including protests or oppositions thereto and petitions for
lifting of coverage;
b)
Identification, qualification or disqualification of potential farmerbeneficiaries;
c)
Subdivision surveys of lands under CARP;
d)
Issuance, recall or cancellation of Certificates of Land Transfer
(CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the
purview of PD 816, including the issuance, recall or cancellation of EPs
or CLOAs not yet registered with the Register of Deeds;
e)
Exercise of the right of retention by the landowner;
f)
Application for exemption under Section 10 of RA 6657 as
implemented by DAR AO 13 (1990);
g)
Application for exemption pursuant to DOJ Opinion No. 44 (1990)
as implemented by DAR AO 6 (1994);
h)
Application for exemption under DAR AO No. 9 (1993);
i)
Application for exemption under Section 1 of RA 7881 as
implemented by DAR AO 3 (1995);
j)
Issuance of certificate of exemption for lands subject of VOS and
CA found unsuitable for agricultural purposes pursuant to DAR MC 34
(1997);
k)
Application for conversion of agricultural lands to residential,
commercial, industrial or other non-agricultural uses including protests
or opposition thereto;
l)
Right of the ARBs to homelots;
m)
Disposition of excess area of the FBs landholdings;
n)
Transfer, surrender or abandonment by the FBs of his
farmholding and its disposition;
o)
Increase of awarded area awarded by the farmer-beneficiary;
p)
Conflict of claims in landed estates and settlements; and
q)
Such other matters not mentioned above but strictly involving
the administrative implementation of RA 6657 and other agrarian laws,
rules and regulations as determined by the Secretary. (DAR Adm. O. No.
6 [2000], sec. 2).
In the adjudication of ALI cases, the Secretary or his authorized
representative may exercise quasi-judicial powers granted under Section 50
of RA 6657. He or his authorized representative 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 to
enforce its writs through sheriffs or other duly deputized officers. He or his
authorized representative 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.
Likewise, the Regional Director or the DAR official having jurisdiction over
the case, shall, motu propio or at the instance of a party, have the authority
to issue a Cease and Desist Order or Status Quo Order pending the resolution
of the case in the following instances:
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a)
where grave or irreparable damage will result to the parties;
b)
where the doing or continuance of certain acts will render the
case moot and academic; or
c)
where there is a need to maintain peace and order and prevent
injury or loss of life or property.
In this regard, the issuing authority may request the assistance of law
enforcement agencies to implement the order. (Sec. 17, DAR Adm. O. 6
[2000])
Moreover, the DAR shall not take cognizance of any agrarian controversy
unless a certification from the BARC has been submitted stating that the
dispute underwent mediation and conciliation without any success of
settlement. However, 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. (Rep. Act
No. 6657 [1988], sec. 53)
Jurisdiction over ALI Cases
The Secretary shall have exclusive original jurisdiction over all ALI cases.
However, this jurisdiction may be delegated to certain DAR officials in
accordance with existing rules and regulations (DAR Adm. O. No. 6 [2000],
sec. 6).
Protest/Petition for Lifting of Notice of Coverage/Application for
Exemption or Exclusion
Under Sec. 7 of DAR AO 6 (2000), the Regional Director shall exercise
primary jurisdiction over protests or petitions for lifting of notice of coverage.
The Secretary shall exercise exclusive jurisdiction for application for the
issuance of exemption clearance under DAR AO 6 (1994) involving lands with
an area of more than five (5) hectares. For lands with an area of five (5)
hectares and below, the issuance of such clearance is delegated to the
Regional Directors (DAR Adm. O. No. 6 [2000], sec. 8 [a]).
Applications for exemption or exclusion under DAR AO 13 (1990), DAR AO
9 (1993), DAR AO 3 (1995) and DAR MC 34 (1997) and other pertinent rules
and regulations, shall be under the jurisdiction of the concerned DAR officials
identified therein, except those involving lands five (5) hectares and below
situated within the provinces of Cavite, Laguna, Batangas, Rizal and Quezon
(CALABARZON) which are now delegated to the concerned Regional Director.
1
Conversion
Jurisdiction over applications for conversion shall pertain to the DAR
officials authorized to approve or disapprove applications for conversion of
agricultural lands to non-agricultural uses pursuant to Sec. 22 of DAR AO 1
(1999) (DAR Adm. O. No. 6 [2000], sec. 9).
Other ALI Cases
The jurisdiction over other ALI cases shall generally pertain to the Regional
Directors, except those cases specifically delegated to other DAR officials
under existing rules and regulations, or those that may subsequently be
promulgated by the Secretary (DAR Adm. O. No. 6 [2000], sec. 11).
Flashpoint Cases
Flashpoint cases are ALI cases which fall within the jurisdiction of the
Regional Director or the Director of the Bureau of Agrarian Legal Assistance
(BALA) and determined or certified by the Secretary or the Head Executive
Assistant which (a) threatens to disrupt the status quo in a particular area
and endanger life and limb as a result of the use of force from either the
landowners' side or farmer-beneficiaries' side or other parties; (b) are the
subject of massive pickets or which may immediately result in concerted
mass actions either in the DAR Central Office or in the field offices or at the
site of the conflict; or (c) are of such nature that the Secretary may assign for
immediate resolution. (DAR Memo. Circ. No. 13 [1997])
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The following are the procedure in the resolution of flashpoint cases:

a)
Once a case has been certified as a flashpoint case by the HEA or
the Secretary, the Director of the Special Concerns Staff (SCS) shall
issue an Order directing the Head of Office/Unit concerned where the
case is pending to transmit the entire case records, together with his
comments or recommendations, to the Office of the SCS Director within
48 hours from notice of the directive.
b)
Within 24 hours from receipt of the case records, the SCS
Director shall issue a directive to all concerned parties to submit their
respective position papers and such other documentary evidence within
ten
(10)
days
from
notice.
A
clarificatory
hearing,
dialogue/conciliation/mediation or ocular inspection may be conducted
when appropriate.
c)
Within five (5) working days from the conclusion of the
investigation/review/evaluation, the SCS Director shall rule on the case
or submit his recommendation for the resolution of the case.
d)
An aggrieved party may file a notice of appeal, together with the
appeal memorandum, to the Assistant Secretary for Policy, Planning and
Legal Affairs Office (PPLAO). The latter office shall forward the records,
together with the evaluation on appeal made and proposed resolution,
to the Office of the Secretary.
e)
The Secretary shall have five (5) working days to decide on the
appeal. The decision rendered by the Secretary shall be immediately
executory notwithstanding any duly perfected appeal. (DAR Memo. Circ.
No. 13 [1997])
However, a certification that a case is considered flashpoint shall merely
serve to accord utmost priority to the resolution thereof but shall not divest
the concerned DAR official of the authority to resolve such cases, unless
specifically directed in the national interest, or the Secretary himself has
assumed jurisdiction over the case. (Adm. O. No. 6 [2000], sec. 11)
Resolution of Disputes in Joint Economic Enterprises (JEE)
The following are the hierarchy of dispute resolution methods involving
joint economic enterprises:
1)
voluntary methods;
2)
mediation or conciliation by trained mediators or conciliators;
3)
arbitration; and
4)
To any of the following depending on the principal cause of
action:
a)
DAR
Adjudication
Board
(DARAB)
if
it
involves
interpretation of an agribusiness agreement or an agrarian dispute
as defined in Sec. 3 (d) of RA 6657;
b)
Securities and Exchange Commission (SEC) if it involves an
intra-corporate dispute;
c)Cooperative Development Authority (CDA) if it involves an intracooperative dispute; or
d)
National Labor Relations Commission (NLRC) if it involves
employer-employee relations. (DAR Adm. O. No. 2 [1999])
In this regard, the Secretary may issue such writs or orders, as may be
appropriate, to maintain the status quo and preserve peace and order in the
farm subject of a JEE, in the following cases:
a)
where there is clear and imminent threat to life or
property;
b)
where the dispute will cause serious and irreparable
damage to either party or to the agribusiness enterprise; or
c)where, in his judgment, there is an urgent need to protect the
national interest. (DAR Adm. O. No. 2 [1999])
Sec. 14 of DAR AO 6 (2000) provides that the filing of an application for
exemption, exclusion, conversion, retention or protest against coverage shall
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have the following effects in so far as land acquisition and distribution are
concerned:
a)
If the application or petition is filed before the issuance of the
notice of coverage, the notice of coverage shall not be issued until the
application or petition is finally resolved;
b)
If the application, protest or petition is filed after issuance of the
notice of coverage, the DAR may proceed with the processing of the
claimfolder notwithstanding the pendency of the application, protest or
petition in accordance with the activities outlined under DAR AO 2
(1996), as amended. The processing of the claimfolder may be
suspended by the PARO if upon proper review and evaluation of the
Field Investigation Report (FIR) submitted by the MARO, and upon
personal verification of the allegations in the application, protest or
petition, it is determined that the subject landholding is in fact
exempted or excluded from CARP coverage. Otherwise, the PARO may
forward the claimfolder to the LBP for further processing.
c)
In case the application, protest or petition is filed while the
claimfolder is pending with LBP, or where the claimfolder has been
forwarded by the PARO notwithstanding such application, protest or
petition, the LBP shall continue with the processing of the land
compensation claim, except that the Certification of Deposit (COD) shall
not be issued to the PARO until the application, protest or petition is
finally resolved.
Period in filing actions
Under Sec. 13 of DAR AO 6 (2000), petitions for lifting of notice of
coverage shall be filed within thirty (30) days from receipt of the Notice of
Coverage by the affected party. Failure by the affected party to file the
protest or petition within the prescribed period shall be deemed a waiver of
his right thereto. If the action is filed after the expiration of the thirty (30)day period, the protest or petition shall no longer be entertained or shall be
summarily dismissed by the MARO or the PARO, except in the following
instances:
a)
the protest or petition is based on allegations that subject
landholding is exempted from CARP coverage under DAR AO 6 (1994);
or
b)
upon evaluation of pertinent documents and based on the
physical conditions obtaining in the property, it is determined by DAR
that the subject landholding is exempted from CARP coverage pursuant
to DAR AO 13 (1990), DAR AO 9 (1993), DAR AO 3 (1995) and DAR MC
34 (1997) notwithstanding the issuance of the Notice of Coverage.
DARAB Cases
DAR Adjudication Board (DARAB)
The creation of DARAB was mandated under EO 129-A (1987) which aims
at reorganizing and strengthening the DAR. The DARAB was created under
the Office of the Secretary of the DAR and is given the powers and functions
to adjudicate specific agrarian reform cases.
Before the creation of the DARAB, the Courts of Agrarian Relations (CAR)
had the original and exclusive jurisdiction over agrarian reform matters. PD
946 (1976) entitled "Reorganizing the Courts of Agrarian Relations,
Streamlining their Procedures and for Other Purposes," gave the CARs
original and exclusive jurisdiction over agrarian reform matters, except those
that fall under the jurisdiction of the Secretary of the DAR. With the passage
of BP 129 (1980) or the Judiciary Reorganization Act, the CARs were
integrated into the RTCs and the jurisdiction of the former was vested in the
latter courts. However, with the promulgation of EO 229 (1987), entitled
"Providing the Mechanisms for the Implementation of the Comprehensive
Agrarian Reform Program (CARP)," the RTCs were divested of their special
jurisdiction to try agrarian reform matters.
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Under EO 229 (1987), the DAR is vested with primary jurisdiction to

determine and adjudicate agrarian reform matters and has the exclusive
jurisdiction over all matters involving the implementation of agrarian reform,
except those that fall under the exclusive jurisdiction of the DA and the
DENR. This is also clearly provided in Sec. 50 of RA 6657.
In Machete vs. Court of Appeals 250 SCRA 176 (1995), private respondent
Celestino Villalon filed a complaint for collection of back rentals and damages
before the Regional Trial Court against the petitioners. The complaint alleged
that the parties entered into a leasehold agreement with respect to the
private respondent's landholdings in Bohol. Petitioners moved to dismiss the
complaint on the ground of lack of jurisdiction of RTC over the subject matter.
Petitioners alleged that the subject matter of the complaint falls squarely
within the jurisdiction of the DAR in the exercise of its quasi-judicial powers.
The Supreme Court declared the dispute to be agrarian in nature and
therefore outside the jurisdiction of the RTC. The Supreme Court held that:
Section 17 of EO 229 vested the DAR with quasi-judicial powers to
determine and adjudicate agrarian reform matters as well as exclusive
original jurisdiction over all matters involving implementation of agrarian
reform except those falling under the exclusive original jurisdiction of the
Department of Agriculture and the Department of Environment and Natural
Resources in accordance with law. Executive Order 129-A, while in the
process of reorganizing and strengthening the DAR, created the Department
of Agrarian Reform Adjudication Board (DARAB) to assume the powers and
functions with respect to the adjudication of agrarian reform cases" (at 179,
180).
In an earlier case, Quismundo vs. CA, 201 SCRA 609 (1991), the Supreme
Court explained in detail the purpose for the creation of the quasi-judicial
body, to wit:
Executive Order No. 229, which provides for the mechanism for the
implementation of the Comprehensive Agrarian Reform Program
instituted by Proclamation No. 131, dated July 22, 1987, vests in the
Department of Agrarian Reform quasi-judicial powers to determine and
adjudicate agrarian reform matters.
However, with the enactment of Executive Order No. 229, which took
effect on August 29, 1987, fifteen (15) days after its release for
publication in the Official Gazette, the regional trial courts were divested
of their general jurisdiction to try agrarian reform matters. The said
jurisdiction is now vested in the Department of Agrarian Reform.
The foregoing holding is further sustained by the passage of Republic
Act No. 6657, the Comprehensive Agrarian Reform Law, which took
effect on June 15, 1988. The said law contains provisions which evince
and support the intention of the legislature to vest in the Department of
Agrarian Reform exclusive jurisdiction over all agrarian reform matters.
The resolution by the DAR is to the best advantage of the parties since
it is in a better position to resolve agrarian disputes, being the
administrative agency presumably possessing the necessary expertise
on the matter. Further, the proceedings therein are summary in nature
and the department is not bound by the technical rules of procedure
and evidence, to the end that agrarian reform disputes and other issues
will be adjudicated in a just, expeditious and inexpensive proceeding"
(at 613, 614, 615).
Powers and Functions of DARAB
DARAB is composed of seven (7) members with the DAR Secretary as its
Chairman. The members are: two (2) Undersecretaries designated by the
Secretary, the Assistant Secretary for Legal Affairs, and three (3) Assistant
Secretaries appointed by the President upon the recommendation of the
Secretary. A Secretariat is also constituted to support the Board (Exec. Order
No. 129-A [1987], sec. 13).
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Under Sec. 13 of EO 129-A (1987), the Board is empowered to delegate its

powers and functions to the regional offices of the Department in accordance
with the rules and regulations it has promulgated. With the implementing
authority of the Secretary under Sec. 34 of the same EO and Sec. 49 of RA
6657, the Board promulgated the present Rules and Procedures of DARAB
whereby adjudicators are specifically designated to adjudicate agrarian
reform cases in the regions and provinces.
As earlier noted, the DARAB was created under the Office of the Secretary
of the Department (Exec. Order No. 129-A [1987], sec. 13). It was established
to strengthen the Department (Exec. Order No. 229 [1987]). However,
DARAB has no jurisdiction on matters which strictly involve the
administrative implementation of RA 6657 and other agrarian laws. Those
are within the exclusive jurisdiction of the Secretary of DAR. Under DAR MC
13 (1997), the DAR Secretary has the authority to certify as flashpoint or
urgent case, only ALI cases but not cases within the jurisdiction of DARAB.
With respect to the regular courts, Supreme Court Administrative Circular
No. 3 (1992) provides:
The Court reiterates to all court judges the need for a careful
consideration of the proper application of the CARL (RA 6657) to avoid
conflict of jurisdiction with the DARAB. The trial court judges are
directed to take note of the rulings in Vda. de Tangub vs. CA, 191 SCRA
885 and Quismundo vs. CA, 201 SCRA 609.
In Ualat vs. Judge Ramos, 265 SCRA 345 (1996), the respondent judge of
MTC was fined P20,000.00 with stern warning from the Supreme Court for
gross ignorance of law for taking cognizance of an ejectment case despite
allegations of tenancy between the parties.
Ualat vs. Judge Ramos
265 SCRA 345 (1996)
Facts:
Complainants filed an administrative case against respondent Judge
Ramos for taking cognizance of the illegal detainer case filed by their
landowner against them. It was shown that the respondent judge had
knowledge of a previously filed DARAB case and the fact that the illegal
detainer case falls within the exclusive jurisdiction of the DAR. Despite
the separate affidavits of the complainants containing allegation of
landlord-tenant relationship, the respondent judge took cognizance of
the illegal detainer case.
Issue:
Was the action of Judge Ramos proper?
Held:
The Supreme Court in finding the respondent Judge liable for ignorance
of the law opined: "As can be readily seen from the answer filed by
complainants Sabio and Ualat in the civil case, they alleged the
existence of an agrarian tenancy relationship between themselves and
the landowner. Additionally, in the proceedings before respondent
Judge, complainants were even represented by a lawyer from the DAR.
These matters should have been sufficient to put respondent Judge on
notice that complainants were claiming protection under our agrarian
laws. At that point, he ought to have realized that there existed a
genuine issue involving agricultural tenancy among the parties with
respect to the subject property. Knowledge of existing agrarian
legislation and prevailing jurisprudence on the subject, together with an
ordinary degree of prudence would have prompted respondent Judge to
refer the case to the DAR for preliminary determination of the real
nature of the parties' relationship, as required by law" (at 357).
However, DARAB has no jurisdiction with respect to agrarian matters
involving the prosecution of all criminal offenses under RA 6657 and the
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determination of just compensation for landowners (Rep. Act No. 6657

[1988], sec. 57). Jurisdiction over said matters are lodged with the Special
Agrarian Courts (SACs). The Court of Appeals and Supreme Court maintain
their appellate jurisdiction over agrarian cases decided by DARAB.
In this regard, the Supreme Court in the case of Vda. de Tangub vs. CA,
191 SCRA 885 (1990) held that:
The Regional Trial Courts have not, however, been completely divested
of jurisdiction over agrarian reform matters. Section 56 of RA 6657, on
the other hand, confers "special jurisdiction" on "Special Agrarian
Courts", which are Regional Trial Courts designated by the Supreme
Court at least one (1) branch within each province to act as such.
These Regional Trial Courts qua Special Agrarian Courts have, according
to Section 57 of the same law, original and exclusive jurisdiction over: 1)
"all petitions for the determination of just compensation to landowners," and 2) "the prosecution of all criminal offenses under . . . (the)
Act" (at 890).
Barangay Agrarian Reform Committee (BARC)
This is originally the Barangay Agrarian Reform Council created under EO
229 (1987). RA 6657 changed the nomenclature of BARC from "council" to
"committee" and expanded its scope of functions. It is through the
organization of the BARCs that the implementation of CARP is envisioned to
be truly community based where the public can participate in decisionmaking and resolution of agrarian reform disputes.
This committee is composed of the following:
a)
Representative/s of farmer and farmworker beneficiaries;
b)
Representative/s of farmer and farmworker non-beneficiaries;
c)
Representative/s of agricultural cooperatives;
d)
Representative/s of other farmer organizations;
e)
Representative/s of the Barangay Council;
f)
Representative/s of non-government organizations (NGOs);
g)
Representative/s of Landowners;
h)
DA Official assigned to the area;
i)
DENR Official assigned to the area;
j)
DAR Agrarian Reform Technologist assigned to the area who shall
act as the Secretary; and
k)
Land Bank of the Philippines representative (Exec. Order No. 229
[1987], sec. 19).
Sec. 46 and 47 of RA 6657 defined the BARC functions in addition to those
provided under Sec. 19 of EO 229. DAR AO 14 (1990) provides for the
guidelines in the formation, organization and strengthening of the BARCs.
Primary and Exclusive Original and Appellate Jurisdiction of DARAB
Sec. 1, Rule II of the DARAB Revised Rules and Procedures provides that
the Board has primary and exclusive jurisdiction, both original and appellate,
to determine and adjudicate all agrarian cases including but not limited to
the following:
a)
All agrarian disputes involving the implementation of the CARP
under RA 6657, EOs 228, 229, and 129-A, RA 3844 as amended by RA
6389, PD 27 and other agrarian laws and their implementing rules and
regulations;
b)
Cases involving rights and obligations of persons, whether
natural or juridical, engaged in the management, cultivation and use of
all agricultural lands covered by the CARP and other agrarian laws;
c)
Cases involving the valuation of land, and the preliminary
determination and payment of just compensation, fixing and collection
of lease rentals, disturbance compensation, amortization payments and
similar disputes concerning the functions of the LBP;
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d)
Cases involving the annulment or cancellation of lease contracts
or deeds of sale or their amendments involving lands under the
administration and disposition of the DAR or LBP;
e)
Cases arising from or connected with membership or
representation in compact farms, farmers' cooperative and other
registered farmers' associations or organizations, related to lands
covered by the CARP and other agrarian laws;
f)
Cases involving the sale, alienation, mortgage, foreclosure,
preemption and redemption of agricultural lands under the coverage of
the CARP or other agrarian laws;
g)
Cases involving the issuance, correction and cancellation of
Certificates of Landownership Award (CLOAs) and Emancipation Patents
(EPs) which are registered with the Land Registration Authority;
h)
Cases previously falling under the original and exclusive
jurisdiction of the defunct Court of Agrarian Relations under Section 12
of PD 946, except sub-paragraph (Q) thereof and PD 815;
i)
And such other agrarian cases, disputes, matters or concerns
referred to it by the Secretary of the DAR.
DARAB's Jurisdiction over Agrarian Disputes
The Supreme Court, in several cases, had the occasion to explain what is
an agrarian dispute case for DARAB to try and adjudicate.
In the case of Machete vs. CA, 250 SCRA 176 (1995), the private
respondents asked for collection of back rentals and damages before the RTC
while the petitioners moved for the dismissal of the case because of lack of
jurisdiction. The Court ordered the transmittal of the case to DARAB and
ruled that:
Section 3, par. (d), of RA 6657 defines the term "agrarian dispute" as
referring to any controversy relating to tenurial arrangements, whether
leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farm workers' associations or
representation of persons in negotiating, fixing, maintaining, changing or
seeking to arrange terms or conditions of such tenurial arrangements (at
182).
In the case of Central Mindanao University vs. DARAB, 215 SCRA 86
(1992), on the issue of jurisdiction of the DARAB in ordering the petitioner to
segregate its 400 hectares land and including it under the CARP for
distribution to qualified beneficiaries, the Court opined:
Under Section 4 and Section 10 of RA 6657, it is crystal clear that the
jurisdiction of the DARAB is limited only to matters involving the
implementation of CARP. More specifically, it is restricted to agrarian
cases and controversies involving lands falling within the coverage of
the aforementioned program. It does not include those which are
actually, directly and exclusively used and found to be necessary for,
among such purposes, school sites and campuses for setting up
experimental farm stations, research and pilot production centers, etc.
(at 99). Sec. 17 of EO 129-A is merely a repetition of Sec. 50 of RA 6657.
There is no doubt that the DARAB has jurisdiction to try and decide any
agrarian dispute in the implementation of the CARP. An agrarian dispute
is defined by the same law as any controversy relating to tenurial rights
whether leasehold, tenancy, stewardship or otherwise over lands
devoted to agriculture (at 100).
In Isidro vs. CA, 228 SCRA 503, one of the issues raised is the jurisdiction
of the MTC in taking cognizance of a case involving an agricultural land. The
petitioner refused to vacate the land despite the demand of the private
respondent. The Supreme Court held that there exists no tenurial relations
between the parties, to wit:
An agrarian dispute refers to any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise,
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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 RA 6657 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 (at 510).
Cases under the Court of Agrarian Relations
DARAB has jurisdiction over cases previously falling under the original and
exclusive jurisdiction of the defunct Court of Agrarian Relations under PD 946
(1976), except sub-paragraph (Q) thereof and PD 815 (1975). The subparagraph (Q) exception under this cited provision refers only to cases
involving violations of the penal provisions of RA 1199, as amended. Hence,
the other provisions of RA 1199, as amended, still fall within the jurisdiction
of DARAB. Included in DARAB's jurisdiction is Section 21 of RA 1199, as
amended, which provides that:
Section 21. Ejectment; Violation; Jurisdiction. All cases involving the
dispossession of a tenant by the landholder or by a third party . . . .
The 'third party' mentioned in the said sec. 21 should be construed to
mean a person who is neither landholder or tenant, but who acts for, openly,
secretly, or factually for the landholder. For instance, a sheriff enforcing an
execution sale against the landholder; or a purchaser or transferee of the
land, or a mere dummy of the landowner (De Luna v. CA, 221 SCRA 703
[1993]).
Jurisdiction of the Regional Adjudicator (RARAD) and the Provincial
Adjudicator (PARAD)
Sec. 2, Rule II of the DARAB Revised Rules and Procedures provides that
the RARAD and the PARAD has concurrent original jurisdiction with the Board
to hear, determine and adjudicate all agrarian cases and disputes, and
incidents in connection therewith, arising with their assigned territorial
jurisdiction.
The RARAD is the Executive Adjudicator in his/her region directly
responsible to the Board. He/she shall:
1)
Direct supervision over the PARADs;
2)
Recommend to the Board the territorial assignments and the
disciplinary measures appropriate to the PARADs;
3)
Adjudicate agrarian disputes and land valuation cases;
4)
Hear and handle other cases which cannot be handled by the
PARADs:
a)
by reason of PARADs disqualification or inhibition;
b)
PARADs cannot handle the case properly;
c)because of the complexity and sensitivity of the case;
d)
delegated just compensation cases;
e)
and those assigned by the Board.
The RARAD has concurrent original jurisdiction with the PARAD.
Appellate Jurisdiction of the Board
Under Sec. 5, Rule II of the DARAB Revised Rules and Procedures, the
Board has the jurisdiction to review all the decisions of the Adjudicators.
However, under DAR MC 7 (1991), reiterating Sec. 1, par. (c) of the Revised
DARAB Rules and Procedures, it is emphasized that DARAB has no jurisdiction
over cases involving annulment or cancellation of orders and decisions of the
Secretary.
Not all decisions or orders of the PARAD and RARAD are reviewable by the
Board. Under DAR AO 8 (1993), the PARADs, RARADs and DARAB has original
and exclusive jurisdiction in the preliminary determination of just
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compensation cases which are appealable only to the Special Agrarian

Courts.
Mediation/Conciliation at Barangay Level
The BARC does not function as an adjudicator at the barangay level. The
BARC is mandated to mediate and conciliate agrarian disputes at the
barangay level. In a mediation/conciliation, BARC's objective is to persuade
the contending parties to settle their dispute amicably. The BARC does not
act as an adjudicator.
It is the responsibility of the BARC to promote a speedy and cost-free
administration of justice, prevent a dispute from going out of the barangay
level to DARAB level, and help the landowners and farmer-beneficiaries
commit themselves in complying with their agreements. This in turn is
envisioned to help in the efficient and successful implementation of the
CARP.
Where the land in dispute straddles two (2) or more barangays or the
parties involved reside in different barangays, the BARC of the barangay
where the biggest portion of the property lies, shall have the authority to
conduct the mediation or conciliation proceedings, unless for convenience
and accessibility and upon agreement of parties such proceedings should be
held in another barangay within the municipality or adjacent municipality
where the land in dispute is located (DARAB Revised Rules and Procedures
[1994] Rule III, sec. 3)
Under the DARAB Revised Rules and Procedures, DARAB can take
cognizance of an agrarian dispute even without the BARC Certification if:
1)
The dispute does not involve any of the following:
a)
Valuation lands to determine just compensation for
landowners;
b)
One of the parties is a public or private corporation,
partnership, association or juridical person, or a public
officer/employee wherein the dispute relates to the performance of
his official functions;
c)Issue involved is an administrative implementation of agrarian
laws and policies; and
d)
Cases determined by the Secretary as beyond the ambit
mediation/conciliation or compromise.
2)
The required certification cannot be complied with for valid
reasons like the non-existence or non-organization of the BARC or the
impossibility of convening it. The PARO shall conduct mediation and
conciliation proceedings and issue a certification to that effect.
3)
It involves resolving and disposing of preliminary incidents
related to the case, such as motion for the issuance of status quo
orders, temporary restraining orders, preliminary injunctions and such
similar motions necessitating immediate action (DARAB Revised Rules
and Procedures [1994], Rule III, secs. 1 and 2).
The lack of a BARC certification is not a ground for dismissal of an action.
A complainant is given every opportunity to secure said certification.
Powers and Duties of DARAB
Under the DARAB Revised Rules and Procedures, the powers and duties of
the Adjudicators include but are not limited to the following:
a)
Personally conduct a hearing, take control of the proceedings,
employ reasonable means to ascertain the facts of the case, determine
the real parties in interest, define and simplify the issues of the case,
and thresh out preliminary matters.
b)
To subpoena, summon witnesses, examine witnesses, may limit
the right of parties/counsels to ask questions to clarify the points of law
at issue or of facts involved, may limit the presentation of evidence to
matters relevant to the issues, and endeavor to settle the case
amicably/approve compromise agreements.
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c)
To hold a party in contempt, to issue writs and interlocutory
orders, and may award actual, compensatory, exemplary and moral
damages and attorney's fees.
Special Agrarian Courts (SACs)
Special agrarian courts are Regional Trial Courts within each province
designated by the Supreme Court to exercise special jurisdiction in addition
to its regular jurisdiction. The Supreme Court may designate more branches
to constitute such additional SACs as may be necessary to cope with the
number of agrarian cases in each province. (Rep. Act No. 6657 [1988], sec.
56)
Sec. 57 of RA 6657 provides that the SACs 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 RA 6657.
In Republic vs. Court of Appeals, 758 SCRA 263 (1996), the Supreme
Court held that "any effort to transfer the original and exclusive jurisdiction
to the DAR adjudicators and to convert the original jurisdiction of the RTCs
into appellate jurisdiction would be contrary to Section 57 of RA 6657 and
therefore would be void."
Judicial Review
Orders or Decisions of DAR Secretary
The decisions of the DAR Secretary in ALI cases may be appealed to the
Office of the President or the Court of Appeals, at the option of the appellant.
Sec. 54 of RA 6657 states that 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. On the other hand, Sec. 15 and 20, Book VII of EO 292 (1987) or
the Administrative Code of 1987, as implemented by DAR MC 3 (1994)
provides that an appeal from the decision/order issued by DAR shall be
perfected within fifteen (15) days after receipt of a copy of the decision/order
complained of by the party adversely affected. Said appeal shall be
perfected by filing with the DAR a notice of appeal, serving copies thereof
upon the prevailing party and the Office of the President and paying the
required fees. The DAR shall upon perfection of the appeal transmit the
records of the case to the Office of the President.
DARAB Decisions
Any decision, order, resolution, award or ruling of DARAB on any agrarian
dispute or on any matter pertaining to the application, implementation,
enforcement, interpretation of agrarian reform laws or rules and regulations
promulgated thereunder, may be brought within fifteen (15) days from
receipt of a copy thereof, to the Court of Appeals by certiorari. (Rep. Act No.
6657 [1988], sec. 54; Revised DARAB Rules [1994], Rule XIV, sec. 1)
Notwithstanding an appeal to the Court of Appeals, the decision of DAR
shall be immediately executory. (Rep. Act No. 6657 [1988], sec. 50; Revised
DARAB Rules [1994], Rule XIV, sec. 1)
Decisions of Special Agrarian Courts
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 from receipt of notice of the decision. (Rep. Act No. 6657 [1988], sec.
60)
Note:
1.
The transfer of jurisdiction over applications for
CALABARZON areas from the Center for Land Use Policy, Planning
and Implementation (CLUPPI) 2 to the Regional Director shall take
effect upon implementation of the DAR reorganization, or as
directed by the Secretary (DAR Admin. O. No. 6 [2000], sec. 36)
CHAPTER 7
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Land Use Conversion

Definition
DAR AO 1 (1999), entitled "Revised Rules and Regulations on the
Conversion of Agricultural Lands to Non-agricultural Uses," defines "land use
conversion" as "the act or process of changing the current use of a piece of
agricultural land into some other use as approved by DAR." (Sec. 2(k)).
Pursuant to the Memorandum of the President dated 16 April 1999, this
administrative order serves as the primary guidelines on the conversion of
agricultural lands to non-agricultural uses.
RA 8435 (1997), also known as the "Agriculture and Fisheries
Modernization Act of 1997," provides for a similar definition: "agricultural
land use conversion refers to the process of changing the use of agricultural
land to non-agricultural uses." (Sec. 4).
Conversion versus Reclassification
DAR's conversion authority is most often seen as synonymous with the
power of local government units (LGUs) to reclassify lands within their
territorial jurisdiction. This misconception has resulted in a lot of conflicts and
confusion not only between the two agencies but among other concerned
sectors.
"Reclassification" refers to the "act of specifying how agricultural lands
shall be utilized for non-agricultural uses such as residential, industrial,
commercial, as embodied in the land use plan, subject to the requirements
and procedures for conversion. It also includes the reversion of nonagricultural lands to agricultural use." (Joint HLURB, DAR, DA, DILG Memo.
Circular Prescribing the Guidelines to Implement MC 54, [1995], sec. 2[2.3]).
On the other hand, conversion is defined by the same Memorandum Circular
as the "act of changing the current use of a piece of agricultural land into
some other use." [Id., sec. 2[2.2])
Under section 20 of RA 7160 (1991) or the "Local Government Code of
1991," a city or municipality may authorize the reclassification of agricultural
lands and provide for the manner of their utilization or disposition under the
following circumstances:
a)
when the land ceases to be economically feasible and sound for
agricultural purposes as determined by the DA; or
b)
where the land shall have substantially greater economic value
for residential, commercial, or industrial purposes, as determined by the
sanggunian concerned.
Said Act mandates that the reclassification should be made after
conducting public hearing and that it shall be limited to the following
percentage of the total agricultural land area at the time of the passage of
the ordinance: (a) for highly urbanized and independent component cities,
fifteen percent (15%); (b) for component cities and third class municipalities,
ten percent (10%); and (c) for fourth to sixth class municipalities, five
percent (5%): Provided, further, that agricultural lands distributed to agrarian
reform beneficiaries pursuant to RA 6657 shall not be affected by the said
reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act. This percentage ceiling on the land area
which the LGUs can reclassify is not absolute. The President may, when
public interest so requires and upon recommendation of the National
Economic and Development Authority (NEDA), authorize a city or
municipality to reclassify lands in excess of the limits cited above (Rep. Act
No. 7160 [1991], sec. 20 [b]).
Also, LGUs are mandated to exercise such authority in accordance with
MC 54 (1993) of the Office of the President entitled "Prescribing the
Guidelines Governing Section 20 of RA 7160, otherwise known as the Local
Government Code of 1991, Authorizing Cities and Municipalities to Reclassify
Agricultural Lands Into Non-agricultural Uses." Under these Guidelines, the
following types of agricultural lands shall not be covered:
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a)
Agricultural lands distributed to agrarian reform beneficiaries
subject to Sec. 65 of RA 6657;
b)
Agricultural lands already issued a notice of coverage or
voluntarily offered for coverage under CARP;
c)
Agricultural lands identified under AO 20 (1992), as nonnegotiable for conversion.
On the other hand, the power of the DAR to approve or disapprove land
use conversion applications is exclusive (Exec. Order No. 129-A [1982], sec.
5[e]; see OP Memorandum Circular No. 54, Sec. 4, [1993] Book IV, Title XI,
Chapter 1, sec. 3 [13]; RA 6657 [1988[, sec. 65). It is distinct from the power
of LGUs to reclassify agricultural land under Section 20 of the Local
Government Code.
This is evident in Sec. 20 (e) of RA 7160 which provides: "Nothing in this
Section shall be construed as repealing, amending or modifying in any
manner the provisions of RA 6657." In his commentary, Sen. Aquilino Q.
Pimentel, principal author of the Local Government Code of 1991, stated as
follows:
Sanggunian Power to Reclassify Not to Convert. This is one section of
the Code which evoked a lot of discussion among the members of the
Conference Committee. The proposal to allow local governments to
reclassify land and provide for the manner of their utilization or
disposition was made by Congressman Pablo Garcia of Cebu, who
argued that the central government has no business dictating to the
local governments how to classify land within their jurisdiction. Some
legislators, however, felt that to allow local governments to reclassify
land may open the door to a nationwide frustration of the goals of the
agrarian reform law.
Congressman Garcia disputed the argument by pointing out that the
power he had sought to invest the local governments with was not to
convert land for any purpose contrary to the provisions of the
Comprehensive Agrarian Reform Law but merely to "reclassify" land.
(A.Q. Pimentel, Jr., The Local Government Code of 1991, The Key to
National Development 111).
DAR's role in the reclassification process is the issuance of a certification
that the lands sought to be reclassified are not distributed or not covered by
a notice of coverage or not voluntarily offered for coverage under CARP. This
certification must be secured by the sanggunian concerned prior to the
enactment of an ordinance reclassifying the agricultural land (OP
Memorandum Circular No. 54, [1993], sec. 2 (b) (2)).
After the reclassification by the LGU, a DAR conversion clearance shall still
be required prior to actual change of use of the land as explicitly provided in
OP Memorandum Circular No. 54 (1993), to wit:
"actions on applications for land use conversion shall remain
as the responsibility of DAR". (Sec. 4; Underscoring supplied.)
The case of Fortich, et al. v. Corona, et al., G.R. No. 131457 (19 August
1999) illustrates the confusion between reclassification and conversion. In
said case, a statement was made that LGUs have authority to convert or
reclassify agricultural lands without DAR approval. The Supreme Court
resolved two (2) separate motions for reconsideration filed by respondents
and intervenors of the Court's resolution dated 17 November 1998 as well as
their motion to refer the case to the Court en banc. The Supreme Court
stated that "(t)he crux of the controversy is the validity of the "Win-Win"
Resolution dated 7 November 1997 of the Office of the President which is
"void and of no legal effect considering that the March 29, 1996 decision of
the Office of the President had already become final and executory even
prior to the filing of the motion for reconsideration which became the basis of
the said "Win-Win" Resolution." (at 5).
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The DAR clarified its position on this issue through a Memorandum of the
DAR Secretary dated 13 October 1999, to wit:
It should be stressed that the motions in Fortich were denied on the
ground that the "win-win" resolution is void and has no legal effect
because the decision approving the conversion has already become
final and executory. This is the ratio decidendi or reason of the decision.
The statement that LGUs have authority to convert or reclassify
agricultural lands without DAR approval is merely a dictum or
expression of the individual views of the ponente or writer of the
Resolution of August 19, 1999. It does not embody the Court's
determination and is not binding.
Expropriated Lands Not Subject to DAR Conversion Clearance
Agricultural lands expropriated by LGUs pursuant to the power of eminent
domain need not be subject of DAR conversion clearance prior to change in
use. This was the Court's pronouncement in Province of Camarines Sur vs.
CA, 222 SCRA 173 (1993).
Province of Camarines Sur vs. Court of Appeals
222 SCRA 173 (1993)
Facts:
The Governor of Camarines Sur filed two (2) separate cases for
expropriation against Ernesto and Efren San Joaquin pursuant to
Sangguniang Panlalawigan Resolution No. 129 authorizing the Governor
to purchase or expropriate properties owned by the San Joaquins for the
establishment of a pilot farm for non-food and non-traditional
agricultural crops and a housing project for provincial government
employees. The San Joaquins moved to dismiss the complaints on the
ground of inadequacy of the price offered. The motion was denied and a
writ of possession was issued in favor of the province. On appeal with
the CA, the San Joaquins asked the appellate court to, among others,
nullify the resolution issued by the Sanggunian. The CA asked the Office
of the Solicitor General to comment to the petition. The Solicitor General
stated that the approval of the Office of the President is not needed but
the province must first secure the approval of the DAR of the plan to
expropriate the lands of petitioners. The CA set aside the order of the
trial court allowing the province to take possession and ordered the
suspension of the expropriation proceedings until after the submission
of the DAR approval to convert the property.
Issue:
Is DAR approval still necessary before an LGU can expropriate
agricultural lands for conversion to non-agricultural use?
Held:
It is true that local government units have no inherent power of eminent
domain and can exercise it only when expressly authorized by the
legislature (City of Cincinnati v. Vester, 281 US 439, 74 L.ed. 950, 50 S
Ct. 360). It is also true that in delegating the power to expropriate, the
legislature may retain certain control or impose certain restraints on the
exercise thereof by the local governments (Joslin Mfg. Co. v. Providence,
262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power
may be a limited authority, it is complete within its limits. Moreover, the
limitations on the exercise of the delegated power must be clearly
expressed, either in the law conferring the power or in other legislation.
Resolution No. 129 [1988] was promulgated pursuant to Section 9 of
B.P. Blg. 337, the Local Government Code, which provides: . . .
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Section 9 of B.P. Blg. 337 does not intimate in the least that local
government units must first secure the approval of the Department of
Land Reform for the conversion of lands from agricultural to nonagricultural use, before they can institute the necessary expropriation
proceedings. Likewise, there is no provision in the Comprehensive
Agrarian Reform Law which expressly subjects the expropriation of
agricultural lands by local government units to the control of the
Department of Agrarian Reform. The closest provision of law that the
Court of Appeal could cite to justify the intervention of the Department
of Agrarian Reform in expropriation matters is Section 65 of the
Comprehensive Agrarian Reform Law, which reads: . . .
The opening, adverbial phrase of the provision sends signals that it
applies to lands previously placed under the agrarian reform program as
it speaks of "the lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k) and
5(l) of Executive Order No. 129-A, Series of 1987, cannot be the source
of the authority of the Department of Agrarian Reform to determine the
suitability of a parcel of agricultural land for the purpose to which it
would be devoted by the expropriating authority. While those rules vest
on the Department of Agrarian Reform the exclusive authority to
approve or disapprove conversions of agricultural lands for residential,
commercial or industrial uses, such authority is limited to the
applications for reclassifications submitted by the land owners or tenant
beneficiaries..
Statutes conferring the power of eminent domain to political
subdivisions cannot be broadened or constricted by implication
(Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 41).
To sustain the Court of Appeals would mean that the local government
units can no longer expropriate agricultural lands needed for the
construction of roads, bridges, schools, hospitals, etc., without first
applying for conversion of the use of the lands with the Department of
Agrarian Reform, because all of these projects would naturally involve a
change in the land use. In effect, it would then be the Department of
Agrarian Reform to scrutinize whether the expropriation is for a public
purpose or public use. (at 179-181; underscoring supplied).
Authority to Approve/Disapprove Conversion
Under Sec. 4 and 5 of EO 129-A (1987), the DAR is mandated to "approve
or disapprove the conversion, restructuring or readjustment of agricultural
lands into non-agricultural uses." It authorizes DAR to "have exclusive
authority to approve or disapprove conversion of agricultural land for
residential, commercial, industrial, and other land uses as may be provided
for by law." Also, Sec. 4 of OP MC 54 (1993), provides that "action on
application for land use conversion on individual landholdings shall remain as
the responsibility of the DAR, . . . , pursuant to RA No. 6657 and EO 129-A."
Moreover, RA 6657 provides:
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, if the locality has become urbanized
and the land will have 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 authorized the reclassification or
conversion of the land and its disposition; Provided, That the beneficiary
shall have fully paid his obligations.
In the case of Roxas v. CA, G.R. No. 127876, 16 December 1999, the
authority of the DAR to approve or disapprove conversion was reiterated by
the Court:
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Respondent DAR's failure to observe due process in the acquisition of

petitioner's landholdings does not ipso facto give this Court the power
to adjudicate over petitioner's application for conversion of its
haciendas from agricultural to non-agricultural. The agency charged
with the mandate of approving or disapproving applications for
conversion is the DAR." (at 45-46; underscoring supplied). The Court
further stated that, "(t)he DAR's mandate over applications for
conversion was first laid down in Section 4 (j) and Section 5 (l) of
Executive Order No. 129-A, Series of 1987 and reiterated in the CARL
and Memorandum Circular No. 54, Series of 1993 of the Office of the
President. (at 46).
DAR's authority to allow conversion is not limited only to lands awarded
under CARP. As stated in DOJ Opinion No. 44 (1990):
Being vested with exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, it is believed to be the
agrarian reform law's intention that any conversion of a private
agricultural land to non-agricultural uses should be cleared before hand
by the DAR. True, the DAR's express power over land use conversion is
limited to cases in which agricultural lands already awarded have, after
five years, ceased 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. But to suggest that these are the only instances when the
DAR can require conversion clearances would open a loophole in R.A.
No. 6657, which every landowner may use to evade compliance with
the agrarian reform program. Hence, it should logically follow from the
said department's express duty and function to execute and enforce the
said statute that any commercial or industrial property should first be
cleared by the DAR.
xxx
xxx
xxx
Based on the foregoing premises, we reiterate the view that with
respect to conversions of agricultural lands covered by RA No. 6657 to
non-agricultural uses, the authority of DAR to approve such conversion
may be exercised from the date of the law's effectivity on June 15,
1988. This conclusion is based on a liberal interpretation of R.A. No.
6657 in the light of DAR's mandate and the extensive coverage of the
agrarian reform program. (Underscoring supplied.)
DAR Officials Authorized to Issue Conversion Orders
Under Sec. 22 (a) of DAR AO 1 (1999), the following DAR officials shall
approve or disapprove applications for land use conversion:
a)
The Regional Director for areas of not more than five (5)
hectares;
b)
The duly authorized Undersecretary for areas above five (5)
hectares but not more than fifty (50) hectares;
c)
The Secretary for areas of more than fifty (50) hectares, except
for those highly restricted from conversion which shall be subject to his
approval regardless of the area.
For purposes of determining the appropriate approving authority, the total
area for conversion shall refer to the aggregate area of all applications
regardless of the number of applications and the nature of the proposed
project where (a) the properties are owned by the same person or entity or
the owners of which are represented by the same person or entity; and (b)
the properties are located in the same barangay or adjacent barangays
within the same municipality/ies or city/ies. In case the subject land is
adjacent to an area previously issued with conversion order, the foregoing
test shall be applied to determine the appropriate approving authority (DAR
Adm. O. No. 1 [1999], sec. 22 [b] and [c]).
Scope of Land Use Conversion
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Under DAR AO 1 (1999), the following agricultural lands are subject to

DAR's conversion authority:
a)
Those to be converted to residential, commercial, industrial,
institutional and other non-agricultural purposes;
b)
Those to be devoted to another type of agricultural activity such
as livestock, poultry, and fishpond the effect of which is to exempt the
land from CARP coverage;
c)
Those to be converted to non-agricultural use other than that
previously authorized; and
d)
Those reclassified to residential, commercial, industrial, or other
non-agricultural uses on or after the effectivity of RA 6657 on June 15,
1988 pursuant to the Local Government Code.
Sec. 3 (b) of DAR AO 1 (1999) states that the change in use of land from
one agricultural activity to another use which would exempt the land from
CARP coverage under Sec. 10 of RA 6657 and DOJ Opinion No. 44 [1990]
requires conversion clearance. Hence, landowners of agricultural lands
devoted to coconuts must first secure a conversion clearance from DAR if
they want to convert the same to poultry farm or fishpond.
Also, DAR AO 1 (1990) requires landowners to secure another conversion
clearance if the change that will be undertaken is not what has been
authorized in a previous conversion order. In short, if DAR issues a
conversion order authorizing the landowner to change the use of the
property from agricultural use, e.g. coconut plantation to a memorial park,
the owner cannot develop the property into a residential subdivision without
getting another conversion clearance specifically allowing the residential use
of the land.
Agricultural lands outside DAR's conversion authority
The following lands do not require DAR conversion clearance or are not
subject to conversion:
a)
Agricultural lands reclassified to non-agricultural uses prior to 15
June 1988 (DAR Adm. O. No. 1 [1999], sec. 3 (d) and DOJ Opinion No.
44, [1990]). (These lands are subject to DAR exemption clearance);
b)
Agricultural lands considered non-negotiable for conversion (DAR
Adm. O. No. 1 [1999], sec. 4);
c)
Lands within the Strategic Agriculture and Fisheries Development
Zones (SAFDZs) which are subject to the five (5) year moratorium
period beginning 10 February 1998 up to 9 February 2003 (Rep. Act No.
8435 [1997], sec. 9; DA Adm. O. No. 6 [1998], rule 9). (Except as to 5%
thereof).
Areas highly restricted from conversion
Under Sec. 2 (b) and 5 of DAR AO 1 (1999), areas highly restricted from
conversion refer to the following:
a)
Irrigable lands not covered by irrigation projects with firm
funding commitment;
b)
Agro-industrial croplands, or lands presently planted to industrial
crops that support the economic viability of existing agricultural
infrastructure and agro-based enterprises;
c)
Highlands or areas located in elevations of 500 meters or above
and have the potential for growing semi-temperate and usually highvalue crops;
d)
Lands issued with notice of land valuation and acquisition, or
subject of a perfected agreement between the landowner and the
beneficiaries under the voluntary land transfer/direct payment scheme;
e)
Environmentally critical areas as determined by the DENR in
accordance with law.
The conversion of these areas, if at all, shall undergo a more stringent
process and the applicant must clearly show that conversion is far more
beneficial to the community and the public at large. Applications involving
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areas highly restricted from conversion are deliberated upon by the PARC
Land Use Technical Committee and subject to the Secretary's approval
regardless of the area. The applicant is also required to submit the following
additional requirements: (a) a project feasibility study; and (b) environmental
compliance certificate, if within environmentally critical area.
Lands non-negotiable for conversion
Under Sec. 4 of DAR AO 1 (1999), areas non-negotiable for conversion are
not eligible for conversion. Applications for conversion involving these areas
shall not be given due course, regardless of whether all or some portions
thereof are within areas highly restricted from conversion or within priority
development areas for conversion. These lands include the following:
a)
Agricultural lands within protected areas designated as such
under the National Integrated Protected Areas System including
watershed and recharged acquifers, as determined by the DENR;
b)
All irrigated lands, as delineated by the DA and/or NIA, where
water is available to support rice and other crop production;
c)
All irrigated lands where water is not available for rice and other
crop production but are within areas programmed for irrigation facility
rehabilitation by the DA and/or NIA; and
d)
All agricultural lands with irrigation facilities operated by private
organizations.
Conversion moratorium under RA 8435
Under RA 8435, the following lands within the SAFDZs are not eligible for
conversion for a period of five (5) years starting on 10 February 1998 until 9
February 2003:
a)
All irrigated lands;
b)
Irrigable lands already covered by irrigation projects with firm
funding commitments; and
c)
Lands with existing or having the potential for growing high-value
crops.
The 5-year conversion moratorium is not absolute. Five percent (5%) of
said lands within SAFDZs may be converted upon compliance with existing
laws, rules and regulations. DAR and DA, upon the recommendation of the
Regional and National SAFDZ Committees, shall jointly determine the
maximum 5% equivalent to the total area of land eligible for conversion.
(DAR Adm. O. No. 1 [1999], sec. 7 (b), (c ); DA Adm. O. No. 6, [1998], rule
9.5.2).
Upon expiration of the moratorium, conversion may be allowed, if at all,
on a case to case basis, subject to existing laws, rules and regulations on
land use conversion (DAR Adm. O. No. 1 [1999], sec. 7 [d]).
Lands within SAFDZs
SAFDZs refer to Strategic Agriculture and Fisheries Development Zones.
They are areas within the Network of Protected Areas for Agricultural and
Agro-industrial Development (NPAAAD) identified for production, agroprocessing and marketing activities to help develop and modernize, with the
support of the government, the agriculture and fisheries sectors in an
environmentally and socio-culturally sound manner (Rep. Act No. 8435
[1997], sec. 4). Lands within SAFDZs shall be identified by the DA on the
basis of the criteria prescribed in RA 8435.
Priority development areas for conversion
Under Sec. 6 of DAR AO 1 (1999), the following are priority development
areas for conversion:
a)
Specific sites in regional agri-industrial centers/regional industrial
centers identified by the Department of Trade and Industry and the DA;
b)
Tourism development areas identified by the Department of
Tourism as indicated in the current Medium Term Philippine
Development Plan;
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c)
Sites identified and proposed to be developed by LGUs into
socialized housing projects which are presently used for agricultural
purposes;
d)
Sites intended for socialized housing projects under EO 184,
series of 1994;
e)
Agricultural areas intended for ECOZONE projects pursuant to RA
7916.
Conversion of agricultural lands within priority development areas
requires DAR clearance. However, the period within which to process and
evaluate applications involving lands within these areas is shorter. Processing
of applications is conducted within 13 days from submission of complete set
of documentary requirements. Also, an environmental compliance certificate
is not a pre-condition to the approval of the conversion application; instead,
it forms part of the conditions of the order of conversion where applicable.
SHOPC
Under present guidelines, socialized housing projects are considered
priority development areas. (DAR Memo. Circular No. 9 [1999], sec. 1 [1.6].)
Under DAR AO 2 (2000), Mass Housing Desks shall be created at the
CLUPPI which shall be responsible for the receipt, processing and disposition
of all applications for conversion for socialized and low-cost housing projects.
Applicants for conversion involving socialized and low-cost housing
projects are exempt from the posting of cash bond, submission of
Certification of Eligibility for Conversion from DA and Environmental
Compliance Certificate from DENR. (DAR Adm. O. No. 2 [2000], sec. 3)
Likewise, applications for conversion involving socialized and low-cost
housing projects shall be processed for a period of thirteen (13) working days
upon receipt of the completed application pursuant to Sec. 1 of EO 258
(2000). (DAR Adm. O. No. 2 [2000], sec. 4)
Criteria for Conversion
Under Sec. 8 of DAR AO 1 (1999), the following criteria shall guide the
resolution of applications for conversion:
1)
Conversion may be allowed if the land subject of application is
not among those considered non-negotiable for conversion;
2)
Conversion may be allowed under the following cases, in
accordance with Section 65 of RA 6657:
a)
when the land has ceased to be economically feasible and
sound for agricultural purposes; or
b)
the locality has become urbanized and the land will have
greater economic value for residential, commercial, industrial or
other non-agricultural purposes.
3)
Conversion of lands within SAFDZs shall take into consideration
the following factors:
a)
The conversion is consistent with the natural expansion of
the municipality or locality, as contained in the approved physical
framework and land use plan;
b)
The area to be converted is not the only remaining food
production area of the community;
c)The conversion shall not hamper the availability of irrigation to
nearby farmlands;
d)
Areas with low productivity will be accorded priority for
conversion; and
e)
Sufficient disturbance compensation shall be given to the
farmers whose livelihoods are negatively affected by the
conversion.
4)
Conversion may be allowed when the environmental impact
assessment or initial environmental examination, as may be
appropriate, shall have determined that it shall not adversely affect air
and water quality and the ecological stability of the area.
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Under the previous guidelines, conversion may be allowed if the land has
been reclassified by the LGUs to non-agricultural uses, but said criterion has
been deleted under the present guidelines. That the land has been
reclassified to non-agricultural use as per zoning certification remains one of
the factors to consider in resolving whether to approve or disapprove an
application for conversion. It is not an indispensable condition, however, for
the approval of the application. Thus, conversion may be allowed even if the
property has not yet been reclassified to non-agricultural use if the
conditions under RA 6657 or RA 8435 warrant the same.
It is evident that the thrust of DAR conversion guidelines is to give the
department sole and exclusive prerogative to decide on conversion
applications. Certifications issued by other agencies are given persuasive
effect but the final determination belongs to the DAR.
Bonds and Disturbance Compensation
Under the present guidelines, applicants are required to post two (2) kinds
of bonds: cash bond and performance bond. They are also required to pay
disturbance compensation in appropriate cases.
Cash Bond
Cash bond is posted by the applicant upon filing of the application
equivalent to two point five percent (2.5%) of the total zonal value of the
land. It is refundable upon issuance of the order of conversion or convertible
into performance bond at the option of the applicant (DAR Adm. O. No. 1
[1999], sec. 15).
The cash bond is forfeited in favor of the government in the event actual
conversion activities are undertaken by the applicant prior to approval of the
application for conversion (DAR Adm. O. No. 1 [1999], sec. 15).
Performance Bond
Performance bond is posted in favor of DAR to guarantee the payment of
the amount of security as penalty in the event it is established that the
applicant/developer is in default of their obligations under the order of
conversion. It shall be effective for the duration of the project approved
under the conversion order. The performance bond shall be in the form of
either of the following:
a)
Cash, manager's check, cashier's check, irrevocable letter of
credit, bank draft equivalent to 2.5% of the total zonal value of the land;
or
b)
Bank guarantee equivalent to 5% of the total zonal value of the
land; or
c)
Surety equivalent to 15% of the total zonal value of the land
(DAR Adm. O. No. 1 [1999], sec. 15 [c).
The performance bond shall be forfeited in favor of the government in
case of violation of the conditions of the conversion order such as nonpayment of disturbance compensation, failure to develop or complete the
project within the period prescribed, etc. (DAR Adm. O. No. 1 [1999], sec. 15,
last par.)
Disturbance Compensation
Under RA 3844, disturbance compensation is given only to de jure
tenants. However, under the present conversion guidelines, tenants,
farmworkers, or bona fide occupants who will be affected by the conversion
of the property to non-agricultural uses are all entitled to disturbance
compensation (DAR Adm. O. No. 1 [1999], sec. 15 [a]).
Disturbance compensation, in cash or in kind or both, shall be paid by the
landowner or developer, as may be appropriate, in such amounts or under
such terms as may be mutually agreed upon between the affected tenants,
farmworkers or occupants and the landowner or developer but it should not
be less than five (5) times the average of the gross harvests on their
landholding during the last five (5) preceding calendar years. Any agreement
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for the payment between them shall be subject to DAR's approval and
compliance monitoring (DAR Adm. O. No. 1 [1999], sec. 15 (a)).
Payment of disturbance compensation or compliance with the terms and
conditions of the approved agreement must be made within sixty (60) days
from the date of approval of the application for conversion (DAR Adm. O. No.
1 [1999], sec. 15 [b]).
In case of disagreement between the parties, the issue on disturbance
compensation may be brought by either of them before the DAR Adjudication
Board for resolution (DAR Adm. O. No. 1 [1999], sec. 15 [c]).
Protests and Oppositions
Sec. 21 of DAR AO 1 (1999) states that the DAR admits protest or
opposition against any application for conversion which is resolved by the
approving authority simultaneously with the application. It may be filed by
any person who will be displaced or directly affected by the proposed land
use conversion such as occupants, tenants, farmworkers, identified
beneficiaries, bona fide residents of adjoining properties or communities
against the application with the DAR Regional Office or Central Office, as
appropriate (DAR Adm. O. No. 1 [1999], sec. 18 and 19).
The protest must be in writing and filed within fifteen (15) days from the
date of posting of the Notice of Application. However, if the oppositor is an
identified beneficiary under the agrarian reform program of the land applied
for and who failed to file a written protest within the said period due to fraud,
accident, mistake or excusable neglect, he shall have the right to intervene
at any time during the pendency of the application.
Protests or oppositions may be filed on the following grounds:
a)
The area applied for is non-negotiable for conversion;
b)
The adverse effects or the displacement to be caused by the
proposed conversion far outweigh the social and economic benefits to
the affected communities;
c)
Misrepresentation or concealment of material facts;
d)
Illegal/premature conversion;
e)
Existence of proof that conversion was resorted to as a means to
evade CARP coverage and to dispossess the tenant farmers of the land
tilled by them. (DAR Adm. O. No. 1 [1999], sec. 20)
Effects of Approval of Conversion Application
An order of conversion is generally subject to the following conditions:
a)
Payment of disturbance compensation within 60 days from
issuance of the order;
b)
Posting of a notice of conversion in a conspicuous place;
c)
Development of the land within a specific period;
d)
Withdrawal or cancellation of the order for misrepresentation of
facts integral to its issuance or for violation of the rules and regulations
on land use conversion.
Sec. 23 of DAR AO 1 (1999) also provides for the following effects:
First, the conversion of an agricultural land to non-agricultural uses is
limited to the specific use of the land authorized in the order. In case the
landowner decides to use the land for purposes other than that authorized, a
new application must be filed which must go through the process of
conversion again. Otherwise, he may be charged for unauthorized
conversion (DAR Adm. O. No. 1 [1999], sec. 40 (d) and 2 [y]).
Second, all conversion orders are subject to the schedule indicated in the
detailed site development plan and work and financial plan submitted by the
applicant. The rules, however, require that the period of development should
not extend beyond five (5) years from the issuance of the order except as
authorized by the Secretary or the approving official on meritorious grounds.
Third, the conditions of the order are binding not only upon the applicant
but also upon successors-in-interest of the property.
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Fourth, duly authorized representatives of DAR should be allowed free

and unhampered access to the property subject of the conversion order for
compliance monitoring purposes.
Fifth, the use authorized in the order of conversion shall be annotated on
the title of the subject property.
Sixth, the order is without prejudice to ancestral domain claims of
indigenous peoples pursuant to RA 8371.
Effect on tenants, farmworkers or occupants of property
Upon payment of disturbance compensation or compliance with the terms
and conditions of the agreement for disturbance compensation, the tenants,
farmworkers or occupants are expected to give up all their rights over the
land such as possession, tenancy, etc., in favor of the landowner or
developer.
In Gonzales v. CA, 174 SCRA 398, it was held that an agricultural
leasehold cannot be established on land which has been converted to
residential use.
Grounds for Revocation/Withdrawal/Cancellation of Conversion Order
Under
Sec.
35
of
DAR
AO
1
(1999),
a
petition
for
cancellation/revocation/withdrawal of the order of conversion may be filed at
the instance of DAR or any aggrieved party on the following grounds:
a)
Misrepresentation or concealment of facts or circumstances
material to the grant of conversion;
b)
Non-compliance with the conditions of the order of conversion;
c)
Lack of jurisdiction of the approving authority;
d)
Non-compliance
with
the
agreement
on
disturbance
compensation;
e)
Conversion to use other than that authorized in the conversion
order; and/or
f)
Any other violation of relevant rules and regulations of DAR.
The period within which to file the petition varies depending on the
ground raised by the petitioner:
a)
The petition must be filed before the approving authority within
90 days from discovery of facts which would warrant such cancellation
but not more than one year from issuance of the order if the basis is
misrepresentation or concealment, or non-compliance with the
agreement on disturbance compensation;
b)
The petition must be filed with 90 days from discovery of such
facts but not beyond the period for development stipulated in the order
if the basis is non-compliance with the conditions of the order,
conversion to use other than that authorized, or any other violation of
relevant rules and regulations of DAR;
c)
Where the ground is lack of jurisdiction, the petition shall be filed
with the Secretary at any time.
In the event the conversion order is cancelled or withdrawn, the land
subject thereof shall revert to the status of agricultural lands and shall be
subject to CARP coverage as circumstances may warrant. (Sec. 37, AO 1
(1999)).
CHAPTER 8
Prohibited Acts and Omissions
Preliminary Considerations
RA 6657, RA 8435 and RA 3844 are the primary sources of prohibited acts
and omissions under the agrarian reform program which are criminal in
nature and punishable with fine and imprisonment, or both. As a rule, the
prosecution of these acts does not preclude the DAR from pursuing
administrative cases against the offenders for the same acts or on the basis
of the same facts.
Other acts and omissions in violation of agrarian laws are also
administratively sanctioned. As the principal agency tasked with the
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implementation of CARP, the DAR is vested with the power to establish and
promulgate operational policies, rules and regulations for agrarian reform
implementation (see Exec. Order No. 129-A (1987), sec. 4 [c]). Moreover,
Sec. 50 of RA 6657 vests DAR with the primary jurisdiction to determine and
adjudicate agrarian reform matters and exclusive original jurisdiction over all
matters involving the implementation of agrarian reform.
Prohibited Acts and Omissions by Landowners under RA 6657
Sec. 73 of RA 6657 enumerates acts and omissions which are criminally
punishable. Other provisions of RA 6657 proscribing certain acts and
omissions not included in Sec. 73 are subject to administrative regulation or
sanctions.
1.
Ownership and Possession of Land Beyond Allowable Limits
Sec. 73 (a) of RA 6657 prohibits "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."
Elements:
a)
Offender is any person, natural or juridical;
b)
Person owns or possess agricultural lands in excess of
retention limit or award ceilings, except in the case of collective
ownership by farmer beneficiaries; and
c)The purpose of ownership or possession is to circumvent the
provisions of RA 6657;
2)
Prohibited Sale, Transfer, Conveyance or Change in the Nature of
the Land
Sec. 73(e) of RA 6657 also prohibits "The sale, transfer, conveyance or
change of the nature of lands outside 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." CIHTac
Elements:
a)
The offender is any person;
b)
The person either effects the
i. sale, transfer or conveyance of the land; or
ii. change the nature of the land.
c)
The land must be outside of urban centers and city limits;
d)
The transaction or the change of the nature of the land may be
of the whole or a portion of the land; and
e)
The transaction or the change of the nature of the land was
effected after 15 June 1988.
DAR AO 1 (1989) provides for administrative sanctions for the sale,
transfer, conveyance of lands outside urban centers. The elements of the
administrative offense is similar to that defined under Sec. 73 (e). Sec. 6 of
RA 6657 also provides that the sale, disposition, lease, management contract
or transfer of possession of private lands executed by the original owner in
violation of RA 6657 shall be null and void. The sale or disposition, however,
is not totally void. Part I (B) of DAR AO (1989) provides that the sale or
disposition of agricultural land is valid to the extent that the total landholding
of the transferee as a result of the said acquisition does not exceed the
landholding ceiling.
3. Illegal/Premature/Unauthorized Conversions
Illegal Conversion
Sec. 73 (c) of RA 6657 penalizes "The conversion by any
landowner of his agricultural land into any non-agricultural 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."
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Elements:
a)
The land is agricultural land;
b)
The offender is the landowner;
c)
There are acts committed converting the use of the land into
non-agricultural use; and
d)
The intent is to:
i. avoid the application of RA 6657; and
ii. to dispossess tenant farmers tilling the land.
DAR AO 1 (1999) provides a more expansive definition of illegal
conversion. Sec. 2 (g) of DAR AO 1 (1999) defines illegal conversion
as "the conversion by any landowner of his agricultural land into any
non-agricultural use with intent to avoid the application of RA 6657 to
his landholding and to dispossess his tenant farmers of the land tilled
by them; or the change of the nature of lands outside urban centers
and city limits either in whole or in part after the effectivity of RA
6657, as provided in Sec. 73 (c) and (e) respectively, of the said Act."
Thus, under the administrative rule, there are two (2) ways of
committing illegal conversion.
Elements of the First Type:
a)
Offender is the land owner;
b)
He/she converts his/her agricultural land into any nonagricultural use without authority or DAR clearance;
c)The intention of the conversion is to
i. avoid the application of RA 6657; and
ii. to dispossess the farmers of the land tilled by them;
Elements of the Second Type:
a)
Offender is the landowner or any other person;
b)
He/she changes the nature of the agricultural land, in
whole or in part;
c)Land is located outside urban centers and city limits; and
d)
Act was committed after 15 June 1988.
Premature Conversion
Sec. 11 of RA 8435 penalizes ". . . the undertaking of any development
activity, the results of which modify or alter the physical characteristics of
the agricultural lands to render them suitable for non-agricultural purposes
without an approved order of conversion from the DAR."
Elements:
a)
The land is agricultural land;
b)
The offender may be any person;
c)
Actual development activity is undertaken on the land;
d)
The development activity modifies or alters the physical
characteristics of the land;
e)
The land development renders the land suitable for nonagricultural purposes; and
f)
There is no approved order of conversion from the DAR.
Unauthorized conversion
Unlike illegal and premature conversions, unauthorized conversion is not
a criminal act but is merely administratively sanctioned.
Sec. 2 (w) of DAR AO 1 (1999) defines unauthorized conversion as "the
act of changing the current use of the land from agricultural (e.g. riceland) to
another agricultural use (e.g. livestock) without an order of conversion from
DAR, or changing the use of the land other than that allowed under the order
of conversion issued by DAR." There are, thus, two (2) ways to commit
unauthorized conversion.
Elements of the First Type:
a)
Offender is any person, i.e., landowner, developer or any
other person;
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b)
The person changes the current use of an agricultural land
into another agricultural purpose; and
c)The change of use was done without an order of conversion from
DAR.
Elements of the Second Type:
a)
Offender is any person, i.e., landowner, developer, or any
other person;
b)
The subject land is granted an order of conversion for its
commitment to non-agricultural purposes; and
c)The person commits the land to a purpose other than that
allowed under the order of conversion.
In addition to the foregoing, Sec. 35 of DAR AO 1 (1999) also provides for
administrative sanctions against certain acts in connection with the grant of
conversion application by landowners or their duly authorized
representatives. These include the following:
a)
Misrepresentation or concealment of material facts in
conversion application;
b)
Non-compliance with the conditions set forth in the
conversion order; and
c)Non-compliance
with
the
agreement
on
disturbance
compensation.
Prohibited Acts and Omissions by Beneficiaries under RA 6657
1. Sale, Transfer, Conveyance of Rights Acquired as a Beneficiary
Sec. 73 (f) of RA 6657 prohibits "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."
Elements:
a)
The offender is an agrarian reform beneficiary;
b)
Offender sells, transfers or conveys the right to use or any
other usufructuary right over his land;
c)The subject land was acquired by him/her by virtue of being a
beneficiary; and
d)
The act is motivated by the design to circumvent the
provisions of R.A. 6657.
Relatedly, Part I (4) of DAR MC 19 (1996) provides that the "[s]ale,
transfer, lease and other forms of conveyance by beneficiary of the rights to
use or any other usufructuary right over the land acquired by virtue of being
a beneficiary, in circumvention of the provisions of Sec. 73 of RA 6657, PD 27
and other agrarian law" is a prohibited act. However, if the lands has been
acquired under PD 27/EO 228, ownership may be transferred upon full
payment of amortization by the beneficiary.
Elements:
a)
The offender is an agrarian reform beneficiary;
b)
He/she sells, transfers or conveys the right to use or any
other usufructuary right over his land without legal basis;
c)The subject land was acquired by him/her by virtue of being a
beneficiary under RA 6657 or PD 27/EO 228; Provided that lands
acquired under PD 27/EO 228 can be transferred upon full payment
of amortizations. In the case of lands awarded under CARP, the
land can be transferred ten (10) years after the registration of the
CLOA; and
d)
The act is motivated by the design to circumvent the
provisions of RA 6657, PD 27 and other agrarian laws.
2. Misuse or Diversion of Financial Aid and Support Services
Sec. 37 of RA 6657 provides that the "misuse or diversion of the financial
and support services provided the beneficiary shall result in sanction against
the beneficiary guilty thereof, including the forfeiture of the land transferred
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to him or lesser sanctions as may be provided by the PARC without prejudice

to criminal prosecution." This is reflected in Item A, No. 1 of DAR MC 19
(1996).
Elements:
a)
The beneficiary was granted financial aid and other support
services;
b)
The beneficiary either:
i. misuses the financial aid and support services; or
ii. diverts such aid or services for other purposes.
3. Misuse of the Land
Par. 4, Sec. 22 of RA 6657 provides 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. Misuse of the land is
administratively sanctioned under DAR MC 19 (1996).
Part III, Item (A) of DAR AO 2 (1994) defines misuse of the land as "any
act causing substantial and unreasonable damage on the land, and causing
the deterioration and depletion of the soil fertility and improvements
thereon. It also includes the act of knowingly planting, growing, raising of
any plant which is the source of a dangerous drug, as defined under PD 1683
(1980)." Under the definition, there are two ways of committing this offense.
Elements of the First Type:
a)
Offender is a grantee of land awarded through CLOA or EP;
b)
Offender commits
acts
which cause substantial and
unreasonable damage to the land; and
c)
Such act causes the deterioration and depletion of the soil
fertility and improvements thereon.
Elements of the Second Type:
a)
Offender is a grantee of land awarded through a CLOA or EP; and
b)
He knowingly plants, grows or raises any plant which is the
source of dangerous drug as defined in PD 1683.
4. Continuous Neglect or Abandonment of Awarded Lands
Sec. 22 of RA 6657 provides that any beneficiary who is guilty of
negligence of the land extended to him shall forfeit his right to continue as
such beneficiary. Part I, A (5) of DAR MC 19 (1996) provides that "continuous
neglect or abandonment of the awarded lands over a period of two (2) years
as determined by the Secretary or his authorized representative" is subject
to administrative sanctions.
Part III, Item (B) of DAR AO 2 (1994) defines neglect or abandonment as
the "willful failure of the ARB, together with his farm household, to cultivate,
till, or develop his land to produce any crop, or to use the land for any
specific economic purpose continuously for a period of two calendar years."
Elements:
a)
The offender is an agrarian reform beneficiary;
b)
The beneficiary willfully fails or refuses to cultivate, till or
develop to produce any crop the land awarded him; and
c)
Such failure or refusal continue for a period of two (2) calendar
years.
5. Material Misrepresentation of Qualifications
The material misrepresentation of qualifications provided under Sec. 22 of
RA 6657 and other agrarian reform laws is administratively sanctioned under
Item A (3), Part I of DAR MC 19 (1996).
Elements:
a)
The offender is a beneficiary;
b)
Offender intentionally made false statements respecting a
matter of fact in his application for qualification as an ARB under RA
6657 or any other agrarian laws; and
c)
The misrepresented fact was material to the determination of his
qualification to become a beneficiary.
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6. Default and Failure in the Payment of Amortization to Landowner

Part I, item A(1) of DAR MC 19 (1996) provides that "default in the
obligation of the ARBs to pay the aggregate of three (3) consecutive
amortizations to the landowner in the case of awarded lands under voluntary
land transfer/direct payment scheme, except in cases of fortuitous events
and force majeure" is administratively sanctioned. The administrative rule is
based on Sec. 26, RA 6657 which states that a beneficiary whose land has
been foreclosed shall thereafter be permanently disqualified from becoming
a beneficiary.
Elements:
a)
Offender is an ARB;
b)
The beneficiary acquired the land by virtue of Voluntary Land
Transfer or Direct Payment Scheme;
c)
The beneficiary fails to pay the landowner amortization for three
(3) consecutive months; and
d)
Failure is due to reasons other than force majeure or fortuitous
events.
7. Failure to Pay Amortizations to LBP
Similarly, the failure to pay amortizations to LBP is penalized under DAR
MC 19 (1996) which states that "[f]ailure of the ARBs to pay at least three (3)
annual amortizations to the LBP in the case of awarded lands under the
Compulsory Acquisition (CA) or Voluntary Offer to Sell (VOS), except in the
case of fortuitous events and force majeure."
Elements:
a)
The beneficiary is an awardee of a land acquired through the
Compulsory Acquisition or Voluntary Offer to Sell;
b)
The beneficiary fails to pay the LBP at least three (3) annual
amortization; and
c)
Failure is due to reasons other than force majeure or fortuitous
events.
8. Waiver of Rights to Awarded Lands
Part I, item A, no. 9 of MC 19 (1996) treats the waiver of rights to awarded
lands by a beneficiary as an administrative offense.
Elements:
a)
Offender is a beneficiary; and
b)
The beneficiary has expressly or impliedly waived his rights over
the land.
9. FB's Surrender of Awarded Lands to Landowner or Other Non ARBs.
The surrender by a beneficiary of his awarded lands to landowner or other
non-ARBs is penalized under part I, item A (10) of MC 19 (1996).
Elements:
a)
Offender is a beneficiary;
b)
Offender surrenders land awarded him to the landowner or other
non-beneficiaries; and
c)
Such surrender is without legal authority or clearance from DAR.
Prohibited Acts and Omissions by Other Persons under RA 6657
1. Forcible Entry and Unlawful Detainer
Sec. 73 (b) of RA 6657 provides that "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" is a
prohibited act that is criminally punishable.
Elements:
a)
Offender is any person who is not qualified to become an
agrarian reform beneficiaries;
b)
He/she deprives the owner, or legal representatives or any
assigns of the said owner, the right of possession thereof either through
the following acts:
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i. by entering the land of another by force, intimidation, threat,

strategy, or stealth; or
ii. unlawfully refusing to vacate the land after the right to hold
possession thereof has expired;
c)
The intention of the acts is to avail themselves of the rights and
benefits of the Agrarian Reform Program.
2. Obstruction and Prevention of CARP Implementation
Sec. 73 (d) of RA 6657 penalized the "[w]illful prevention or obstruction by
any association or entity of the implementation of the CARP."
Elements:
a)
Offender may be a landowner, beneficiary or any other person,
natural or juridical; and
b)
The person commits acts to prevent or obstructs the
implementation of the CARP.
Prohibited Acts by Agricultural Lessees and Lessor under RA 3844
RA 3844 enumerates the criminal acts and omissions by agricultural
lessees and lessors.
By Agricultural Lessor
1.
Unlawful Recording of Sale in the Registry of Property Subject to
Right of Redemption
Sec. 13 of RA 3844 states that "[n]o deed of sale of agricultural land
under cultivation by an agricultural lessee or lessees shall be recorded in the
Registry of Property unless accompanied by an affidavit of the vendor that he
has given the written notice required in Section eleven of this Chapter or that
the land is not worked by an agricultural lessee." Failure to comply with this
provision is criminally punishable under Sec. 167(1) of RA 3844.
Elements:
a)
The offender is the landowner or agricultural lessor, or in case of
juridical persons, the manager or person who has charge of the
management or management of the property or in his default, the
person acting in his stead;
b)
He effects the recording of the sale of the land subject of an
agricultural lease; and
c)
Such recording was effected without the necessary Affidavit by
vendor that he has given prior written notice of the sale to the
agricultural lessor as required by Sec. 7 of RA 3844.
2. Unlawful Disposition of Lessee
Sec. 31(1) of RA 3844 provides that it shall be unlawful for the agricultural
lessor to "dispossess the agricultural lessee of his landholding except upon
authorization by the Court under Section thirty-six. Should the agricultural
lessee be dispossessed of his landholding without authorization from the
Court, the agricultural lessor shall be liable for damages suffered by the
agricultural lessee in addition to the fine or imprisonment prescribed in this
Code for unauthorized dispossession." Sec. 167(1) of RA 3844 penalizes the
commission by an agricultural lessor of the act defined under Sec. 31 of RA
3844.
Elements:
a)
Offender is an agricultural lessor;
b)
Offender dispossess the agricultural lessee of his landholding;
and
c)
Dispossession is without authorization from the Court.
3. Inducement to Execute or Enter into a Share Tenancy Contract
Sec. 167(2) of RA 3844 provides that "Any person, natural or juridical,
who induces another, as tenant, to execute or enter into a share tenancy
contract with himself or with another in violation of this Code shall be
punished by a fine not exceeding five thousand pesos with subsidiary
imprisonment in accordance with the Revised Penal Code: Provided, That the
execution of a share tenancy contract shall be considered prima facie
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evidence of such inducement as to the owner, civil law lessee, usufructuary

or legal possessor. In case of juridical persons, the manager or the person
who has charge of the management or administration of the property or, in
his default, the person acting in his stead, shall be liable under this Section."
Elements:
a)
Offender is any person, natural or juridical. In case of juridical
persons, the manager or the person who has charge of the
management or administration of the property, or in his default, the
person acting in his stead shall be liable; and
b)
Offender induces another person, as tenant, to execute or enter
into a share tenancy contract with himself or another in violation of RA
3844.
4. Making Untruthful Statements in Affidavit Required under Sec. 13, RA
3844
Sec. 167(2) of RA 3844 provides "Any person who executes an affidavit as
required by Section thirteen of Chapter I, knowing the contents thereof to be
false, shall be punished by a fine not exceeding one thousand pesos or
imprisonment of not more than one year, or both, in the discretion of the
court."
Sec. 13 of RA 3844 requires that prior to the registration of the sale or
transfer of land in the Registry of Property, the landowner must execute an
affidavit that written notice of the sale or transfer was made to the
agricultural lessor as required under Sec. 7 of RA 3844.
Elements:
a)
Offender is the landowner, agricultural lessor or any person; and
b)
He/she knowingly makes untruthful statements on a material
matter in an affidavit required for the registration of a sale of land
subject to right of pre-emption as required under Sec. 13 of RA 3844.
5. Acts Violating Farmworker's Rights to Self-Organization and to Engage
in Other Concerted Activities
Sec. 167 (4) of RA 3844 penalizes "Any person who willfully violates the
provisions of Sections forty and forty-one of this Code shall be punished by a
fine of not less than one hundred pesos nor more than one thousand pesos
or by imprisonment of not less than one month nor more than one year, or
both such fine and imprisonment, in the discretion of the court. If any
violation of Sections forty and forty-one of this Code is committed by a
corporation, partnership or association, the manager or, in his default, the
person acting as such when the violation took place shall be criminally
responsible."
Sec. 40 of RA 3844 recognizes the farmworkers' right to self-organization,
and provides that "the farm workers shall have the right to self-organization
and to form, join or assist farm workers' organizations of their own choosing
for the purpose of collective bargaining through representatives of their own
choosing: Provided, That this right shall be exercised in a manner as will not
unduly interfere with the normal farm operations. Individuals employed as
supervisors shall not be eligible for membership in farm workers'
organizations under their supervision but may form separate organizations of
their own."
Sec. 41 of RA 3844 likewise recognizes the right of farmworkers to engage
in concerted activities, to wit: "The farm workers shall also have the right to
engage in concerted activities for the purpose of collective bargaining and
other mutual aid or protection. For the purpose of this and the preceding
Section, it shall be the duty of the farm employer or manager to allow the
farm workers, labor leaders, organizers, advisers and helpers complete
freedom to enter and leave the farm, plantation or compound at the portion
of same where said farm workers live or stay permanently or temporarily."
Elements:
a)
Offender is the landowner, agricultural lessor or any person;
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b)

Offender commits acts which impair or prevent the exercise of

i. the right of farmworkers to self-organization under Sec. 40 of RA
3844; or
ii. the right to engage in concerted activities as defined under Sec.
41 of RA 3844.
6. Acts Violative of the Right of Farmworkers to a Minimum Wage
Sec. 167 (5) of RA 3844 provides "Any person who willfully violates the
provisions of Section forty-two of this Code shall, upon conviction thereof, be
subject to a fine of not more than two thousand pesos, or upon second
conviction, to imprisonment of not more than one year or both such fine and
imprisonment, in the discretion of the court. If any violation of the provisions
of Section forty-two of this Code is committed by a corporation, partnership
or association, the manager or, in his default, the person acting as such
when the violation took place shall be criminally responsible."
Sec. 42 of RA 3844 protects the farmworkers right to a minimum wage
and provides that "[n]otwithstanding any provision of law or contract to the
contrary, farm workers in farm enterprises shall be entitled to at least P3.50
a day for eight hours' work: Provided, That this wage may, however, be
increased by the Minimum Wage Board as provided for in Republic Act
Numbered Six hundred and two."
Elements:
a)
Offender is a landowner or any other person; and
b)
Offender fails or refuses to pay the farmworker the minimum
daily wage as set in Sec. 43, RA 3844 or determined by the Minimum
Wage Board.
By Agricultural Lessees
1. Cultivation of Another Farmland without Consent of Lessor
Sec. 167 (1) of RA 3844 penalizes the commission by agricultural lessees
of the prohibited acts under Sec. 27 of RA 3844.
Sec. 27 (1) of RA 3844 provides that it shall be unlawful for an agricultural
lessee "[t]o contract to work additional landholdings belonging to a different
agricultural lessor or to acquire and personally cultivate an economic familysize farm, without the knowledge and consent of the agricultural lessor with
whom he had first entered into household, if the first landholding is of
sufficient size to make him and the members of his immediate farm
household fully occupied in its cultivation."
Elements:
a)
Offender is an agricultural lessee;
b)
The land leased by him is of sufficient size to make him and the
members of his immediate farm household fully occupied in its
production;
c)
He contracts to work another landholdings belonging to a
different agricultural lessor or acquires and personally cultivate an
economic family-size farm; and
d)
The cultivation of the other landholding is without the consent of
his first lessor.
2. Unlawful Sublease of Leased Land by Lessor
Sec. 27 (b) of RA 3844 declares that it shall be unlawful for an agricultural
lessee "[t]o employ a sub-lessee on his landholding: Provided, however, That
in the case of illness or temporary incapacity, he may employ laborers whose
services on his landholdings shall be on his account." This prohibition is
reiterated in Item B(1), part VI of DAR AO 5 (1997).
Elements:
a)
Offender is an agricultural lessee;
b)
That he employs as sublessee on his landholdings; and
c)
The reason for the sub-contracting is other than illness or
temporary incapacity.
Penalties for Violation
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The penalties for the prohibited acts and omissions which are criminal in
nature are as follows:
Act or Omission
Penalty
Prohibited Acts or Omissions
Imprisonment of not less than one (1)
month to not
under RA 6657
more than three (3) years or a fine of not less
than one
thousand pesos (1,000.00) and not more than
fifteen
thousand pesos (P15,000.00), or both, at the
discretion
of the court. (Sec. 74, RA 6657)
Premature Conversion
Imprisonment of two (2) to six (6) years, or a
fine
under RA 8435
equivalent to one hundred percent (100%) of
the
government's investment cost, or both, at the
discretion of the court, and an accessory
penalty of
forfeiture of the land and any improvement
thereof.
(Sec. 11, RA 8435)
Violation of Sec. 13, Sec. 27,
Fine not exceeding one thousand pesos
or
and 31 (1) of RA 3844
imprisonment not exceeding one year or both
in the
discretion of the court (RA 3844, Sec. 167
(1).)
Inducement to Execute
Fine not exceeding five thousand pesos with
or Enter into a Share
subsidiary imprisonment in accordance with
the
Tenancy Contract
Revised Penal Code (Sec. 167 [2], RA 3844)
(Sec. 167 [2], RA 3844)
Making untruthful statements
Fine not exceeding one thousand pesos
or
in affidavit required under imprisonment of not more than one year, or
both, in
Sec. 13, RA 3844
the discretion of the Court (Sec. 167 (3), RA
3844)
(Sec. 167 (3), RA 3844)
Acts Violating Farmworker's
Fine of not less than one hundred pesos
nor more than
Rights to Self-organization one thousand pesos or by imprisonment of
not less
and to Engage in Other
than one month nor more than one year, or
both such
Concerted Activities
fine and imprisonment, in the discretion of
the court
(Sec. 167[4], RA 6657)
(Sec. 167 [4], RA 6657).
Acts Violative of the Right Fine of not more than two thousand pesos, or
upon
of Farmworkers to a
second conviction, to imprisonment of not
more than
Minimum Wage (Sec.
one year or both such fine and imprisonment,
in the
167[5], RA 3844)
discretion of the court (Sec. 167 [5], RA
3844).
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Upon the other hand, the penalties for prohibited acts and omissions
which are administrative in nature are as follows:
Acts or Omissions
Administrative Sanction
Under MC 19 (1996)
Cancellation of EPs/CLOAs and perpetual
disqualification of Agrarian Reform Beneficiaries (see MC 19 s. 1996, Part
I).
Under AO 1 (1999)
1. Cancellation or withdrawal of the
authorization for the land use conversion;
2. Blacklisting of the applicant, developer,
or representative;
3. Automatic
disapproval
of
pending
subsequent conversion applications that the offender may file with the
DAR;
4. Issuance of cease and desist order
(CDO); and/or
5. Forfeiture of cash bond in accordance
with Sec. 16 hereof. (A.O. 1 s. 1999, Sec. 49)
Jurisdiction Over Violation of Agrarian Laws
The power and duty to hear and try cases involving the criminal acts
enumerated under RA 6657, RA 8435 and RA 3844 and other relevant
agrarian laws belongs to the Special Agrarian Courts. HcaATE
With respect to administrative offenses, the DAR shall have jurisdiction
over the same by virtue of its express primary jurisdiction to determine and
adjudicate agrarian reform matters and exclusive original jurisdiction over all
matters involving the implementation of agrarian reform.
REPUBLIC ACT NO. 6657
June 10, 1988
REPUBLIC ACT NO. 6657
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. aisa dc
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
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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. cdasia
(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
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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 nonagricultural 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
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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; cda
(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
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(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. cdasia
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 twentyfour (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
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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 agroindustrial 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
worker-beneficiaries. In case it is not economically feasible and sound to
divide the land, then they shall form a workers' cooperative or association
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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 workerbeneficiaries, 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. cd i
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
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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 productionand income-sharing, 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 employee-beneficiaries 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
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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
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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; cdt
(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
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region where the lands for which the bonds

were paid are situated;
(ii) Acquisition of shares of stock of
government-owned
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 mediumscale 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 noncompliance 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
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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 farmerbeneficiary 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: cdtai
(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
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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 coownership 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
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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
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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 productionsharing 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 workers-beneficiaries 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 workers-beneficiaries.
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;
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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 post-harvest 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
farmer-beneficiaries 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.
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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 agri-business 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
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to interested and qualified parties. Parties who will engaged in the

development of capital-intensive, 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
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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.
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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. aisa dc
CHAPTER XIII
Judicial Review
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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 to 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
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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 illgotten 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.
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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 government-owned 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.
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(c)
The conversion by any landowner of his agricultural land
into any non-agricultural 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
August 7, 2009
REPUBLIC ACT NO. 9700
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
SECTION 1.
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:
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"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. ACcHIa
"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. DCIAST
"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
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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
farmworkers in its own agricultural estates, which shall be
distributed to them in the manner provided by law. cADEHI
"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. SDcITH
"The State may lease undeveloped lands of the public
domain to qualified entities for the development of capitalintensive 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:
"xxx
xxx
xxx
"(f) Farmer refers to a natural person whose primary
livelihood is cultivation of land or the production of
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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.
"xxx
xxx
xxx
"(l)
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. IHAcCS
"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:
EHTISC
"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
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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; IcHTCS
"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
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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 10, 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 twentyfour (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. aESICD
"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
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
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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 to 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 16 of 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 17 of Republic Act No. 6657, as amended, is
hereby further amended to read as follows: CSTEHI
"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 to 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:
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"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. CTSHDI
"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 No. 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'
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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. EHASaD
"The beneficiaries may opt for collective ownership,
such as coorkers 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 but 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 an individual title,
covering one (1) contiguous tract or several parcels of land
cumulated up to a maximum of three (3) hectares. HISAET
"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
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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. IDcAHT
"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
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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 sum for the amounts
the latter has already paid, together with the value of
improvements he/she has made on the land." CIAHaT
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, nongovernmental 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
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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 twothirds (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. HIEAcC
"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 farmholding of the agrarian reform beneficiary or the
establishment of facilities which shall enhance production or
marketing of agricultural products or 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 farmrelated 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
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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. DAHEaT
"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 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/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. cHESAD
"The PARC shall ensure that these support services, as
provided for in this Act, integrate the specific needs and wellbeing of women farmer-beneficiaries taking into account the
specific requirements of female family members of farmerbeneficiaries.
"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 to 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
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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; aSIDCT
"(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 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 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." SEHTAC
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
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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 (2)." cdrep
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 issue subpoena, 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 DAR 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." aIcSED
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
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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: ECaAHS
"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);
"(b) 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; ITCcAD
"(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;
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"(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 therefor, 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." IaAEHD
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:
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"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: SEIDAC
"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; acHETI
"(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
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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. TCaEIc
"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."
IHCSTE
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. CAaDTH
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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;
aEIADT
(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
consultancy, 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 Cases. 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.
TSacCH
SECTION 31.
Implementing Rules and Regulations. The PARC
and the DAR shall provide the necessary implementing rules and
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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: August 7, 2009
Published in the Philippine Star on August 24, 2009.

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