EXECUTIVE ORDER NO. 229
EXECUTIVE ORDER NO. 229 - PROVIDING
THE MECHANISMS FOR THE IMPLEMENTATION OF THE COMPREHENSIVE AGRARIAN
REFORM PROGRAM
WHEREAS,
by virtue of Proclamation No. 131 dated July 22, 1987 the Comprehensive
Agrarian Reform Program has been instituted;
WHEREAS, there is a need to provide for the mechanisms to start the
implementation of the program;
WHEREAS, public hearings and consultations were held to determine
appropriate mechanisms capable of being established.
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by
virtue of the powers vested in me by the Constitution, do hereby
order:
CHAPTER
I
Coverage
Section 1. Scope. — The Comprehensive Agrarian Reform
Program (CARP) shall cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 dated July 22, 1987, including
whenever applicable in accordance with law, other lands of the public
domain suitable to agriculture.
Sec. 2. Implementation. — Land acquisition and
distribution shall be implemented as provided in this Order as to all
kinds of lands under the coverage of the program, subject to such
priorities and reasonable retention limits as the Congress may under
the Constitution prescribe, taking into account ecological,
developmental, or equity considerations, and subject to the payment of
just compensation.
Sec. 3. Exemptions. — Lands actually used and
found to be necessary for national defense, school sites and campuses,
religious purposes, penal colonies and government research and
quarantine centers, are exempted from the coverage of the
program.
Sec. 4. Compulsory Registration. — Within one
hundred eighty (180) days from the effectivity of this Order all
natural and juridical persons, including government entities, owning,
leasing or managing agricultural lands shall file a sworn statement in
the proper Assessor’s Office in the form to be prescribed by the
Department of Agrarian Reform (DAR). This statement shall include among
others, (a) the description and area of the property; (b) the estimated
average gross income from the property; (c) the names of all tenants
and regular farmworkers therein; (d) the crop(s) planted in the
property and the area covered by each crop as of June 1, 1978; (e) the
terms of mortgages, leases, and management contracts subsisting as of
June 1, 1987; (f) the latest declared market value of the land as
determined by the City/Provincial Assessor, and (g) a sworn declaration
of the current fair market value, which the owner wishes to receive if
the property should be acquired by the government for agrarian reform
purposes.
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 Assessors’s value.
Beginning with the quarter immediately following this registration, the
real property tax payable shall be based on the abovementioned owner’s
declaration of current fair market value.
CHAPTER
II
Private and Acquisition
Sec. 5. Procedure of Acquisition. — After the
land, landowners, and beneficiaries shall have been identified, the DAR
shall publish its decision to acquire the land and notify the
landowners thereof, together with the offer of the DAR to pay for the
land as provided in Sec. 6 hereunder.
Within fifteen (15) days from publication and notice, the landowner
shall signify to the DAR his acceptance or rejection of the offer.
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 fifteen (15) days after he surrenders the Certificate of
Title and other relevant documents required by the DAR and the LBP.
In case of rejection or if no reply is received, the DAR shall conduct
administrative summary proceedings to determine the compensation for
the land, requiring the landowner, the LBP, and other interested
parties to submit within fifteen (15) days from the receipt of notice,
evidence as to the compensation for the land. After the expiration of
the above period, the matter is deemed submitted for decision.
Within fifteen (15) days from receipt of the decision, the LBP shall
establish a trust fund for the landowner concerned in the amount
decided and notify the landowner and the DAR of its
establishment.
Any party who disagrees with the decision may bring the matter to the
proper court for determination of just compensation.
After the establishment of the trust fund or receipt by the DAR of the
landowner’s acceptance of the offer, the DAR shall take immediate
possession of the land. Upon formal notification by the DAR, the
Register of Deeds shall issue a Transfer Certificate of Title (TCT) in
the name of the Republic of the Philippines as Trustee for and in
behalf of qualified beneficiaries. Thereupon, the DAR shall proceed
with the redistribution of the land to the qualified beneficiaries.
The rights and responsibilities of ownership by the beneficiaries
commence at the time of their designation as awardees-owners by the
DAR, as evidenced by a Certificate of Landownership Award in their
favor.
Sec. 6. Compensation to Landowners. — The LBP
shall compensate the landowner an amount to be established by the
government, which shall be based on the owner’s declaration of current
fair market value as provided in Sec. 4 hereof, but subject to
certain controls to be defined and promulgated by the Presidential
Agrarian Reform Council (PARC) as provided in Section 18 hereof. The
compensation shall be paid in any of the following modes, at the option
of the landowner:
(a)
Bond payment over ten (10) years, with ten (10) percent 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 91-day
treasury bills rates, net of applicable final withholding tax.
One-tenth of the face value of the bonds shall mature every year from
the date of issuance until the tenth year;
The LBP bonds issued hereunder
shall be eligible at face value for the purchase of government assets
to be privatized;
(b) Direct
payment in cash or kind by the farmer-beneficiaries with the terms to
be mutually agreed upon by the beneficiaries and landowners and subject
to the approval of the DAR; and
(c) Other
modes of payment as may be prescribed or approved by the PARC.
Sec. 7. Assistance to Landowners. — Landowners
affected by this Order shall be assisted and provided by the LBP with
the following services:
(a)
Investment information and counselling assistance;
(b) Conversion
and/or exchange of LBP bonds to/from government stocks and/or with
government assets; and
(c) Marketing
of LBP bonds.
CHAPTER
III
Land Transfer, Utilization, and
Sharing
Sec. 8. Voluntary Land Transfer. — Landowners
whose lands are subject to redistribution under this Order have the
option of entering into a voluntary agreement for direct transfer of
their lands to appropriate beneficiaries, under terms and conditions
acceptable to both parties and subject to the approval of the DAR. The
general guidelines for voluntary land transfer are:
(a)
The beneficiaries are determined by the DAR to be the same individuals
who would be eligible to purchase the land in case the government under
this Order acquired the land for resale;
(b) The area
of land to be transferred is no less than the area which the
government, under this Order, would otherwise acquire for resale;
(c) The terms
and conditions of the government’s standing offer to purchase from the
landowner and standing offer to resell to the beneficiaries are fully
known and understood by both parties;
(d) The
voluntary transfer agreement shall include sanctions for non-compliance
by either party and shall be binding and irrevocable for both parties,
and shall be duly recorded at and monitored by the DAR.
Sec. 9. Voluntary Offer to Sell. — The government
shall purchase all agricultural lands it deems productive and suitable
to farmer cultivation voluntarily offered for sale to it at a valuation
determined in accordance with Sec. 6. Such transactions shall be
exempt from the payment of capital gains tax and other taxes and fees.
Sec. 10. Corporate Landowners. — Corporate
landowners may give their workers and other qualified beneficiaries the
right to purchase such proportion of the capital stock of the
corporation that the land assets bear in relation to the corporation’s
total assets, and grant additional compensation which may be used for
this purposes. The approval by the PARC of a plan for such stock
distribution, and its initial implementation, shall be deemed
compliance with the land distribution requirements of the
CARP.
Sec. 11. Leases, Management Contracts, Mortgages,
and Claims. — Leases and management contracts on land covered by the
land distribution and registered with the Register of Deeds prior to
the approval of this Order may continue under their original terms and
conditions, but not beyond five (5) years from the effectivity of this
Order; provided that upon expiration, leases, and management contracts
may only be renewed subject to the agreement of the qualified
beneficiaries; and provided further that upon the distribution or award
of the land, where the existing lease rentals are not acceptable to the
qualified beneficiaries, such rentals shall be renegotiated with the
assistance of the Barangay Agrarian Reform Council (BARC). If the
parties fail to agree, the DAR shall determine the rental. Mortgages
and other claims registered with the Register of Deeds will be assumed
by the government up to the landowner’s compensation value as provided
for in Sec. 6 hereof.
Sec. 12. Payment of Beneficiaries. — Land acquired
and redistributed by the government shall be paid for by the
beneficiaries in thirty (30) equal annual payments at six (6) percent
per annum interest, with the first payment due one year after resale,
and a two (2) percent interest rebate for amortizations paid on time,
provided, that in no case shall the annual amortizations exceed ten
(10) percent of the land’s annual value of gross production. Should the
amortization exceed ten (10) percent, the LBP shall reduce the interest
rate and/or reduce the principal obligation to make the repayments
affordable. Incentives shall be given for prepayments.
The LBP shall have a lien by way of mortgage on the land acquired by
the beneficiary and this mortgage may be foreclosed by the LBP when the
outstanding principal balance unpaid and past due reaches the
equivalent of three (3) annual amortizations.
Sec. 13. Credit Support. — Upon land transfer,
each beneficiary who actually farms his land shall be eligible for a
production loan to finance one crop cycle under terms and conditions to
be determined by the LBP on a case to case basis, renewable upon
repayment.
Sec. 14. Collective or Individual Ownership. — For
lands with multiple beneficiaries, ownership of whole parcels or
estates may be transferred to the farmer-beneficiaries collective or
individually, at the option of the beneficiaries, provided, that in
collective ownership, each beneficiary shall have an undivided share of
the land held in common equivalent to not more than the applicable
retention limit. The beneficiaries may collectively decide on the
continued operation of the parcel/estate as a whole or to subdivide the
same into individual lots and determine the manner in which such
subdivision is to be implemented.
Sec. 15. Distribution and Utilization of Public
Lands. — All alienable and disposable lands of the public domain for
agriculture and outside proclaimed settlements shall be distributed by
the Department of Environment and Natural Resources (DENR) to qualified
beneficiaries as certified to jointly by the DAR and the
DENR.
Sec. 16. Production Sharing. — Individual’s or
entities owning and/or operating under lease agricultural lands with
gross sales in excess of Five Million Pesos (P5 million) per annum are
hereby mandated to execute a production sharing plan whereby at least
two and one-half (2.5) percent of the gross sales from the
production/cultivation of such lands are distributed as compensation to
the farmworkers over and above the compensation they currently receive,
provided that such individuals or entities are not obligated to pay
more than 100 percent of the regular and annual compensation of the
farmworkers.
CHAPTER
IV
Implementing and Coordinating
Mechanisms
Sec. 17. Quasi-Judicial Powers of the DAR. — The
DAR is hereby vested with quasi-judicial powers to determine and
adjudicate agrarian reform matters, and shall have exclusive original
jurisdiction over all matters involving implementation of agrarian
reform, except those falling under the exclusive original jurisdiction
of the DENR and the Department of Agriculture (DA).
The DAR shall have powers to punish for contempt and to issue subpoena,
subpoena duces tecum and writs to enforce its orders or decisions.
The decisions of the DAR may, in proper cases, be appealed to the
Regional Trial Courts but shall be immediately executory
notwithstanding such appeal.
Sec. 18. The Presidential Agrarian Reform Council
(PARC). — To coordinate the implementation of the CARP and to ensure
the timely and effective delivery of the necessary support services,
there is hereby created the Presidential Agrarian Reform Council
composed of the President as Chairman, and the Secretaries or Heads of
the following agencies, as follows:
Department
of Agrarian Reform — Vice Chairman
Department of Agriculture
— Vice Chairman
Department of Environment and
Natural Resources
— Vice Chairman
Executive Secretary
— Member
Department of Budget
and Management
— Member
Department of Finance
— Member
Department of Justice
— Member
Department of Labor
and Employment
— Member
Department of Local Government
— Member
Department of Public Works
and Highways
— Member
Department of Trade and Industry
— Member
Department of Transportation
and Communications
— Member
National Economic
and
Development Authority
— Member
Land Bank of the Philippines
— Member
Presidential Commission on Good
Government
— Member
The President shall appoint representatives of agrarian reform
beneficiaries and affected landowners as members of PARC.
The DAR shall provide the Secretariat for the PARC and the Secretary of
Agrarian Reform shall be the Director-General thereof.
The PARC shall formulate and/or implement the policies, rules and
regulations necessary to implement each component of the CARP, and may
authorize any of its members to formulate rules and regulations
concerning aspects of agrarian reform falling within their area of
responsibility. These policies, rules and regulations shall include the
following:
a.
Recommended small farm economy areas, which shall be specific by crop
and based on thorough technical study and evaluation;
b. The
schedule of acquisition and redistribution of specific agrarian reform
areas, provided that such acquisition shall not be implemented until
all the requirements are completed, including the first payment to the
landowners concerned.
c. Control
mechanisms for evaluating the owner’s declaration of current fair
market value as provided in Sec. 4 hereof in order to establish the
government’s compensation offer as provided in Sec. 6 hereof, taking
into account current land transactions in the locality, the landowner’s
annual income from his land, and other factors.
PARC shall have an Executive Committee composed of the Secretary of
Agrarian as Chairman, and Secretaries or Heads of the following
agencies as members:
Executive
Secretary
Department of Agriculture
Department of Environment and
Natural Resources
Department of Finance
Department of Public Works and
Highways
Land Bank of the
Philippines
Within ninety (90) days from the effectivity of this Order, the
Executive Committee of PARC shall complete a Program of implementation
incorporating the physical targets, implementation schedule and support
requirements of agrarian reform, and shall submit the same to the PARC,
for approval. Such program of implementation shall take into account,
and be consistent with, priorities and retention limits that Congress
may in the meantime prescribe, and the following basic policies and
guidelines set forth in the Constitution:
a.
The CARP 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;
b. The right
of small landowners shall be respected;
c. Voluntary
land-sharing shall be encouraged;
d. Farmers,
farmworkers, landowners, cooperatives and/or independent farmers’
organizations have the right to participate in the planning,
organization, and management of the CARP;
e. In lands of
the public domain, the CARP shall respect prior rights, homestead
rights of small settlers, and the rights of indigenous communities to
their ancestral lands;
f. Support to
agriculture through appropriate technology and research, and adequate
financial, production, marketing, and other support services must be
provided;
g. Landowners
shall be encouraged to invest the proceeds of the agrarian reform
program to promote industrialization, employment creation, and
privatization of public sector enterprises; and
h. At the
earliest possible time, idle or abandoned agricultural lands as may be
defined by law shall be expropriated for distribution to the
beneficiaries of the agrarian reform program.
Sec. 19. Barangay Agrarian Reform Council (BARC).
— On matters related to agrarian reform, the DAR shall convene at the
barangay level, a Barangay Agrarian Reform Council. The BARC shall be
operated on a self-help basis and will be composed of the
following:
a.
Representative/s of farmers and farmworkers beneficiaries;
b.
Representative/s of farmer and farmworkers 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 barangay;
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.
The functions of the BARC shall be:
a.
To participate and give support to the implementation of programs on
agrarian reform;
b. To mediate,
conciliate or arbitrate agrarian conflicts and issues that are brought
to it for resolution; and
c. To perform
such other functions that the PARC, its Executive Committee, or the DAR
Secretary may delegate from time to time.
CHAPTER
V
Financing
Sec. 20. Agrarian Reform Fund. — As provided
in Proclamation No. 131 dated July 22, 1987, a special fund is created,
known as The Agrarian Reform Fund, an initial amount of FIFTY BILLION
PESOS (P50 billion) to cover the estimated cost of the CARP from 1987
to 1992 which shall be sourced from the receipts of the sale of the
assets of the Asset Privatization Trust (APT) and receipts of sale of
ill-gotten wealth recovered through the Presidential Commission on Good
Government and such other sources as government may deem appropriate.
The amount collected and accruing to this special fund shall be
considered automatically appropriated for the purpose authorized in
this Order.
Sec. 21. Supplemental Appropriations. — The amount
of TWO BILLION SEVEN HUNDRED MILLION PESOS (P2.7 billion) is hereby
appropriated to cover the supplemental requirements of the CARP for
1987, to be sourced from the receipts of the sale of ill-gotten wealth
recovered through the Presidential Commission on Good Government and
the proceeds from the sale of assets by the APT. The amount collected
from these sources shall accrue to The Agrarian Reform Fund and shall
likewise be considered automatically appropriated for the purpose
authorized in this Order.
CHAPTER
VI
Sanctions
Sec. 22. Permanent Disqualification. — Persons,
associations, or entities who prematurely enter the land to avail
themselves of the rights and benefits hereunder, shall be permanently
disqualified from receiving benefits and shall forfeit their rights
hereunder.
Sec. 23. Contempt. — Persons, associations, or
entities who wilfully prevent or obstruct the implementation of the
CARP shall be liable for contempt.
CHAPTER
VII
General Provisions
Sec. 24. Ancestral Lands. — Within the framework
of national unity and development, the rights of indigenous cultural
communities to their ancestral lands are hereby protected to ensure
their economic, social, and cultural well-being.
Sec. 25. Immunity of Government Agencies from
Undue Interference. — No injunction, restraining order, prohibition or
mandamus shall be issued by the lower courts against the DAR, the DA,
the DENR and the Department of Justice in their implementation of the
CARP.
Sec. 26. 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.
Sec. 27. Applications of Existing Legislation. —
Presidential Decree No. 27, as amended, shall continue to operate with
respect to rice and corn lands, covered thereunder. The provisions of
Republic Act No. 3844 and other agrarian laws not inconsistent with
this Order shall have suppletory effect.
Sec. 28. Free Registration of Patents and Titles.
— All Registers of Deeds are hereby directed to register free from
payment of all fees, patents, titles, and documents required in the
implementation of the CARP.
Sec. 29. Separability Clause. — If, for any
reason, any section or provisions of this Order shall be held
unconstitutional or invalid, no other section or provision hereof shall
be affected thereby.
Sec. 30. Repealing Clause. — All laws, issuances,
decrees or any part or parts thereof inconsistent with the provisions
of this Order are hereby repealed or amended accordingly.
Sec. 31. Effectivity Clause. — This Executive
Order shall take effect fifteen (15) days after publication in the
Official Gazette or in a newspaper of general circulation in the
Philippines.
APPROVED, in the City of
Manila, Philippines, this 22nd day of July, 1987.
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