UBLIC ACT No.

3844
AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO INSTITUTE LAND
REFORMS IN THE PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY AND THE
CHANNELING OF CAPITAL INTO INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING
AGENCIES, APPROPRIATE FUNDS THEREFOR AND FOR OTHER PURPOSES
PRELIMINARY CHAPTER
TITLE
DECLARATION OF POLICY AND COMPOSITION OF CODE
Sectio !. Title - This Act shall be known as the Agricultural Land Reform Code.
Sectio ". Declaration of Policy - It is the policy of the State
!"# To establish owner-culti$atorship and the economic family-si%e farm as the basis of &hilippine
agriculture and' as a conse(uence' di$ert landlord capital in agriculture to industrial de$elopment)
!*# To achie$e a dignified e+istence for the small farmers free from pernicious institutional
restraints and practices)
!,# To create a truly $iable social and economic structure in agriculture conduci$e to greater
producti$ity and higher farm incomes)
!-# To apply all labor laws e(ually and without discrimination to both industrial and agricultural
wage earners)
!.# To pro$ide a more $igorous and systematic land resettlement program and public land
distribution) and
!/# To make the small farmers more independent' self-reliant and responsible citi%ens' and a
source of genuine strength in our democratic society.
Sectio 3. Composition of Code - In pursuance of the policy enunciated in Section two' the following are established
under this Code
!"# An agricultural leasehold system to replace all e+isting share tenancy systems in agriculture)
!*# A declaration of rights for agricultural labor)
!,# An authority for the ac(uisition and e(uitable distribution of agricultural land)
!-# An institution to finance the ac(uisition and distribution of agricultural land)
!.# A machinery to e+tend credit and similar assistance to agriculture)
!/# A machinery to pro$ide marketing' management' and other technical ser$ices to agriculture)
!0# A unified administration for formulating and implementing pro1ects of land reform)
!2# An e+panded program of land capability sur$ey' classification' and registration) and
!3# A 1udicial system to decide issues arising under this Code and other related laws and
regulations.
CHAPTER I
AGRICULTURAL LEASEHOLD SYSTEM
Sectio 4. Abolition of Agricultural Share Tenancy - Agricultural share tenancy' as herein defined' is hereby
declared to be contrary to public policy and shall be abolished &ro$ided' That e+isting share tenancy contracts may
continue in force and effect in any region or locality' to be go$erned in the meantime by the pertinent pro$isions of
Republic Act 4umbered 5le$en hundred and ninety-nine' as amended' until the end of the agricultural year when the
4ational Land Reform Council proclaims that all the go$ernment machineries and agencies in that region or locality
relating to leasehold en$isioned in this Code are operating' unless such contracts pro$ide for a shorter period or the
tenant sooner e+ercise his option to elect the leasehold system &ro$ided' further' That in order not to 1eopardi%e
international commitments' lands de$oted to crops co$ered by marketing allotments shall be made the sub1ect of a
separate proclamation that ade(uate pro$isions' such as the organi%ation of cooperati$es' marketing agreements' or
other similar workable arrangements' ha$e been made to insure efficient management on all matters re(uiring
synchroni%ation of the agricultural with the processing phases of such crops &ro$ided' furthermore' That where the
agricultural share tenancy contract has ceased to be operati$e by $irtue of this Code' or where such a tenancy
contract has been entered into in $iolation of the pro$isions of this Code and is' therefore' null and $oid' and the
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tenant continues in possession of the land for culti$ation' there shall be presumed to e+ist a leasehold relationship
under the pro$isions of this Code' without pre1udice to the right of the landowner and the former tenant to enter into
any other lawful contract in relation to the land formerly under tenancy contract' as long as in the interim the
security of tenure of the former tenant under Republic Act 4umbered 5le$en hundred and ninety-nine' as amended'
and as pro$ided in this Code' is not impaired &ro$ided' finally' That if a lawful leasehold tenancy contract was
entered into prior to the effecti$ity of this Code' the rights and obligations arising therefrom shall continue to subsist
until modified by the parties in accordance with the pro$isions of this Code.
Sectio #. Establishment of Agricultural Leasehold Relation - The agricultural leasehold relation shall be
established by operation of law in accordance with Section four of this Code and' in other cases' either orally or in
writing' e+pressly or impliedly.
Sectio $. Parties to Agricultural Leasehold Relation - The agricultural leasehold relation shall be limited to the
person who furnishes the landholding' either as owner' ci$il law lessee' usufructuary' or legal possessor' and the
person who personally culti$ates the same.
Sectio %. Tenure of Agricultural Leasehold Relation - The agricultural leasehold relation once established shall
confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is
e+tinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be e1ected
therefrom unless authori%ed by the Court for causes herein pro$ided.
Sectio 8. Extinguishment of Agricultural Leasehold Relation - The agricultural leasehold relation established under
this Code shall be e+tinguished by
!"# Abandonment of the landholding without the knowledge of the agricultural lessor)
!*# 6oluntary surrender of the landholding by the agricultural lessee' written notice of which shall
be ser$ed three months in ad$ance) or
!,# Absence of the persons under Section nine to succeed to the lessee' in the e$ent of death or
permanent incapacity of the lessee.
Sectio &. Agricultural Leasehold Relation Not Extinguished by Death or ncapacity of the Parties - In case of death
or permanent incapacity of the agricultural lessee to work his landholding' the leasehold shall continue between the
agricultural lessor and the person who can culti$ate the landholding personally' chosen by the agricultural lessor
within one month from such death or permanent incapacity' from among the following !a# the sur$i$ing spouse) !b#
the eldest direct descendant by consanguinity) or !c# the ne+t eldest descendant or descendants in the order of their
age &ro$ided' That in case the death or permanent incapacity of the agricultural lessee occurs during the agricultural
year' such choice shall be e+ercised at the end of that agricultural year &ro$ided' further' That in the e$ent the
agricultural lessor fails to e+ercise his choice within the periods herein pro$ided' the priority shall be in accordance
with the order herein established.
In case of death or permanent incapacity of the agricultural lessor' the leasehold shall bind his legal heirs.
Sectio !'. Agricultural Leasehold Relation Not Extinguished by Expiration of Period! etc" - The agricultural
leasehold relation under this Code shall not be e+tinguished by mere e+piration of the term or period in a leasehold
contract nor by the sale' alienation or transfer of the legal possession of the landholding. In case the agricultural
lessor sells' alienates or transfers the legal possession of the landholding' the purchaser or transferee thereof shall be
subrogated to the rights and substituted to the obligations of the agricultural lessor.
Sectio !!. Lessee#s Right of Pre$emption - In case the agricultural lessor decides to sell the landholding' the
agricultural lessee shall ha$e the preferential right to buy the same under reasonable terms and conditions &ro$ided'
That the entire landholding offered for sale must be pre-empted by the Land Authority if the landowner so desires'
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unless the ma1ority of the lessees ob1ect to such ac(uisition &ro$ided' further' That where there are two or more
agricultural lessees' each shall be entitled to said preferential right only to the e+tent of the area actually culti$ated
by him. The right of pre-emption under this Section may be e+ercised within ninety days from notice in writing
which shall be ser$ed by the owner on all lessees affected.
Sectio !". Lessee#s Right of Redemption - In case the landholding is sold to a third person without the knowledge
of the agricultural lessee' the latter shall ha$e the right to redeem the same at a reasonable price and consideration
&ro$ided' That the entire landholding sold must be redeemed &ro$ided' further' That where these are two or more
agricultural lessees' each shall be entitled to said right of redemption only to the e+tent of the area actually culti$ated
by him. The right of redemption under this Section may be e+ercised within two years from the registration of the
sale' and shall ha$e priority o$er any other right of legal redemption.
Sectio !3. Affida%it Re&uired in Sale of Land Sub'ect to Right of Pre$emption - 4o deed of sale of agricultural land
under culti$ation by an agricultural lessee or lessees shall be recorded in the Registry of &roperty unless
accompanied by an affida$it of the $endor that he has gi$en the written notice re(uired in Section ele$en of this
Chapter or that the land is not worked by an agricultural lessee.
Sectio !4. Right of Pre$emption and Redemption Not Applicable to Land to be Con%erted into Residential!
ndustrial and Similar Purposes - The right of pre-emption and redemption granted under Sections ele$en and
twel$e of this Chapter cannot be e+ercised o$er landholdings suitably located which the owner bought or holds for
con$ersion into residential' commercial' industrial or other similar non-agricultural purposes &ro$ided' howe$er'
That the con$ersion be in good faith and is substantially carried out within one year from the date of sale. Should the
owner fail to comply with the abo$e condition' the agricultural lessee shall ha$e the right to repurchase under
reasonable terms and conditions said landholding from said owner within one year after the aforementioned period
for con$ersion has e+pired &ro$ided' howe$er' That the tenure of one year shall cease to run from the time the
agricultural lessee petitions the Land Authority to ac(uire the land under the pro$isions of paragraph "" of Section
fifty-one.
Sectio !#. Agricultural Leasehold Contract in (eneral - The agricultural lessor and the agricultural lessee shall be
free to enter into any kind of terms' conditions or stipulations in a leasehold contract' as long as they are not contrary
to law' morals or public policy. A term' condition or stipulation in an agricultural leasehold contract is considered
contrary to law' morals or public policy
!"# If the agricultural lessee is re(uired to pay a rental in e+cess of that which is hereinafter
pro$ided for in this Chapter)
!*# If the agricultural lessee is re(uired to pay a consideration in e+cess of the fair rental $alue as
defined herein' for the use of work animals and7or farm implements belonging to the agricultural
lessor or to any other person) or
!,# If it is imposed as a condition in the agricultural leasehold contract !a# that the agricultural
lessee is re(uired to rent work animals or to hire farm implements from the agricultural lessor or a
third person' or to make use of any store or ser$ices operated by the agricultural lessor or a third
person) or !b# that the agricultural lessee is re(uired to perform any work or render any ser$ice
other than his duties and obligations pro$ided in this Chapter with or without compensation) or !c#
that the agricultural lessee is re(uired to answer for any fine' deductions and7or assessments.
Any contract by which the agricultural lessee is re(uired to accept a loan or to make payment therefor in kind shall
also be contrary to law' morals or public policy.
Sectio !$. Nature and Continuity of Conditions of Leasehold Contract - In the absence of any agreement as to the
period' the terms and conditions of a leasehold contract shall continue until modified by the parties &ro$ided' That
in no case shall any modification of its terms and conditions pre1udice the right of the agricultural lessee to the
security of his tenure on the landholding &ro$ided' further' That in case of a contract with a period an agricultural
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lessor may not' upon the e+piration of the period increase the rental e+cept in accordance with the pro$isions of
Section thirty-four.
Sectio !%. )orm and Registration of Contract - Should the parties decide to reduce their agreement into writing'
the agricultural leasehold contract shall be drawn in (uadruplicate in a language or dialect known to the agricultural
lessee and signed or thumb-marked both by the agricultural lessee personally and by the agricultural lessor or his
authori%ed representati$e' before two witnesses' to be chosen by each party. If the agricultural lessee does not know
how to read' the contents of the document shall be read and e+plained to him by his witness. The contracting parties
shall acknowledge the e+ecution of the contract before the 1ustice of the peace of the municipality where the land is
situated. 4o fees or stamps of any kind shall be re(uired in the preparation and acknowledgment of the instrument.
5ach of the contracting parties shall retain a copy of the contract. The 1ustice of the peace shall cause the third copy
to be deli$ered to the municipal treasurer of the municipality where the land is located and the fourth copy to the
8ffice of the Agrarian Counsel.
5+cept in case of mistake' $iolence' intimidation' undue influence' or fraud' an agricultural contract reduced in
writing and registered as hereinafter pro$ided' shall be conclusi$e between the contracting parties' if not denounced
or impugned within thirty days after its registration.
Sectio !8. Registration of Leasehold Contract - The municipal treasurer shall' upon receipt of his copy of the
contract' re(uire the agricultural lessee and agricultural lessor to present their respecti$e copies of the contract' and
shall cause to be annotated thereon the date' time and place of registration as well as its entry or registration number.
Sectio !&. Registry of Agricultural Leasehold Contracts - The 9unicipal Treasurer of the municipality wherein the
land is situated shall keep a record of all such contracts drawn and e+ecuted within his 1urisdiction' to be known as
:Registry of Agricultural Leasehold Contracts:. ;e shall keep this registry together with a copy of each contract
entered therein' and make annotations on said registry of all subse(uent acts relati$e to each contract' such as its
renewal' no$ation' cancellation' etc. 4o registration fees or documentary stamps shall be re(uired in the registration
of said contracts or of any subse(uent acts relati$e thereto.
Sectio "'. *emorandum of Loans - 4o obligation to pay money on account of loans including interest thereon
obtained by the agricultural lessee from the agricultural lessor or his representati$e shall be enforceable unless the
same or a memorandum thereof be in writing in a language or dialect known to the agricultural lessee' and signed or
thumb-marked by him' or by his agent.
Sectio "!. Exemption from Lien and+or Execution - The following shall be e+empt from lien and7or e+ecution
against the agricultural lessee
!"# Twenty-fi$e per centum of the entire produce of the land under culti$ation) and
!*# <ork animals and farm implements belonging to the agricultural lessee &ro$ided' That their
$alue does not e+ceed one thousand pesos. =ut no article or species of property mentioned in this
Section shall be e+empt from e+ecution issued upon a 1udgment reco$ered for its price or upon a
1udgment of foreclosure of a mortgage thereon.
Sectio "". ,se of Accepted Standards of -eights and *easures - In all transactions entered into between the
agricultural lessee and the agricultural lessor concerning agricultural products the official or' upon agreement of the
parties' the accepted standards of weights and measures shall be used.
Sectio "3. Rights of Agricultural Lessee in (eneral - It shall be the right of the agricultural lessee
!"# To ha$e possession and peaceful en1oyment of the land)
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!*# To manage and work on the land in a manner and method of culti$ation and har$est which
conform to pro$en farm practices)
!,# To mechani%e all or any phase of his farm work) and
!-# To deal with millers and processors and attend to the issuance of (uedans and warehouse
receipts for the produce due him.
Sectio "4. Right to a .ome Lot - The agricultural lessee shall ha$e the right to continue in the e+clusi$e possession
and en1oyment of any home lot he may ha$e occupied upon the effecti$ity of this Code' which shall be considered as
included in the leasehold.
Sectio "#. Right to be ndemnified for Labor - The agricultural lessee shall ha$e the right to be indemnified for the
cost and e+penses incurred in the culti$ation' planting or har$esting and other e+penses incidental to the
impro$ement of his crop in case he surrenders or abandons his landholding for 1ust cause or is e1ected therefrom. In
addition' he has the right to be indemnified for one-half of the necessary and useful impro$ements made by him on
the landholding &ro$ided' That these impro$ements are tangible and ha$e not yet lost their utility at the time of
surrender and7or abandonment of the landholding' at which time their $alue shall be determined for the purpose of
the indemnity for impro$ements.
Sectio "$. /bligations of the Lessee - It shall be the obligation of the agricultural lessee
!"# To culti$ate and take care of the farm' growing crops' and other impro$ements on the
landholding as a good father of a family and perform all the work therein in accordance with
pro$en farm practices)
!*# To inform the agricultural lessor within a reasonable time of any trespass committed by third
persons upon the farm' without pre1udice to his direct action against the trespasser)
!,# To take reasonable care of the work animals and farm implements deli$ered to him by the
agricultural lessor and see that they are not used for purposes other than those intended or used by
another without the knowledge and consent of the agricultural lessor &ro$ided' howe$er' That if
said work animals get lost or die' or said farm implements get lost or are destroyed' through the
negligence of the agricultural lessee' he shall be held responsible and made answerable therefor to
the e+tent of the $alue of the work animals and7or farm implements at the time of the loss' death or
destruction)
!-# To keep his farm and growing crops attended to during the work season. In case of un1ustified
abandonment or neglect of his farm' any or all of his e+pected produce may' upon order of the
Court' be forfeited in fa$or of the agricultural lessor to the e+tent of the damage caused thereby)
!.# To notify the agricultural lessor at least three days before the date of har$esting or' whene$er
applicable' of threshing) and
!/# To pay the lease rental to the agricultural lessor when it falls due.
Sectio "%. Prohibitions to Agricultural Lessee - It shall be unlawful for the agricultural lessee
!"# To contract to work additional landholdings belonging to a different agricultural lessor or to
ac(uire and personally culti$ate an economic family-si%e farm' without the knowledge and
consent of the agricultural lessor with whom he had entered first into household' if the first
landholding is of sufficient si%e to make him and the members of his immediate farm household
fully occupied in its culti$ation) or
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!*# To employ a sub-lessee on his landholding &ro$ided' howe$er' That in case of illness or
temporary incapacity he may employ laborers whose ser$ices on his landholding shall be on his
account.
Sectio "8. Termination of Leasehold by Agricultural Lessee During Agricultural 0ear - The agricultural lessee may
terminate the leasehold during the agricultural year for any of the following causes
!"# Cruel' inhuman or offensi$e' treatment of the agricultural lessee or any member of his
immediate farm household by the agricultural lessor or his representati$e with the knowledge and
consent of the lessor)
!*# 4on-compliance on the part of the agricultural lessor with any of the obligations imposed upon
him by the pro$isions of this Code or by his contact with the agricultural lessee)
!,# Compulsion of the agricultural lessee or any member of his immediate farm household by the
agricultural lessor to do any work or render any ser$ice not in any way connected with farm work
or e$en without compulsion if no compensation is paid)
!-# Commission of a crime by the agricultural lessor or his representati$e against the agricultural
lessee or any member of his immediate farm household) or
!.# 6oluntary surrender due to circumstances more ad$antageous to him and his family.
Sectio "&. Rights of the Agricultural Lessor - It shall be the right of the agricultural lessor
!"# To inspect and obser$e the e+tent of compliance with the terms and conditions of their contract
and the pro$isions of this Chapter)
!*# To propose a change in the use of the landholding to other agricultural purposes' or in the kind
of crops to be planted &ro$ided' That in case of disagreement as to the proposed change' the same
shall be settled by the Court according to the best interest of the parties concerned &ro$ided'
further' That in no case shall an agricultural lessee be e1ected as a conse(uence of the con$ersion
of the land to some other agricultural purpose or because of a change in the crop to be planted)
!,# To re(uire the agricultural lessee' taking into consideration his financial capacity and the credit
facilities a$ailable to him' to adopt in his farm pro$en farm practices necessary to the conser$ation
of the land' impro$ement of its fertility and increase of its producti$ity &ro$ided' That in case of
disagreement as to what pro$en farm practice the lessee shall adopt' the same shall be settled by
the Court according to the best interest of the parties concerned) and
!-# To mortgage e+pected rentals.
Sectio 3'. /bligations of the Agricultural Lessor - It shall be the obligation of the agricultural lessor
!"# To keep the agricultural lessee in peaceful possession and culti$ation of his landholding) and
!*# To keep intact such permanent useful impro$ements e+isting on the landholding at the start of
the leasehold relation as irrigation and drainage system and marketing allotments' which in the
case of sugar (uotas shall refer both to domestic and e+port (uotas' pro$isions of e+isting laws to
the contrary notwithstanding.
Sectio 3!. Prohibitions to the Agricultural Lessor - It shall be unlawful for the agricultural lessor
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!"# To dispossess the agricultural lessee of his landholding e+cept upon authori%ation by the Court
under Section thirty-si+. Should the agricultural lessee be dispossessed of his landholding without
authori%ation from the Court' the agricultural lessor shall be liable for damages suffered by the
agricultural lessee in addition to the fine or imprisonment prescribed in this Code for unauthori%ed
dispossession)
!*# To re(uire the agricultural lessee to assume' directly or indirectly' the payment of the ta+es or
part thereof le$ied by the go$ernment on the landholding)
!,# To re(uire the agricultural lessee to assume' directly or indirectly' any part of the rent' :canon:
or other consideration which the agricultural lessor is under obligation to pay to third persons for
the use of the land)
!-# To deal with millers or processors without written authori%ation of the lessee in cases where
the crop has to be sold in processed form before payment of the rental) or
!.# To discourage' directly or indirectly' the formation' maintenance or growth of unions or
organi%ations of agricultural lessees in his landholding' or to initiate' dominate' assist or interfere
in the formation or administration of any such union or organi%ation.
Sectio 3". Cost of rrigation System - The cost of construction of a permanent irrigation system' including
distributory canals' may be borne e+clusi$ely by the agricultural lessor who shall be entitled to an increase in rental
proportionate to the resultant increase in production &ro$ided' That if the agricultural lessor refuses to bear the
e+penses of construction the agricultural lessee or lessees may shoulder the same' in which case the former shall not
be entitled to an increase in rental and shall' upon the termination of the relationship' pay the lessee or his heir the
reasonable $alue of the impro$ement at the time of the termination &ro$ided' further' That if the irrigation system
constructed does not work' it shall not be considered as an impro$ement within the meaning of this Section.
Sectio 33. *anner! Time and Place of Rental Payment - The consideration for the lease of the land shall be paid in
an amount certain in money or in produce' or both' payable at the place agreed upon by the parties immediately after
threshing or processing if the consideration is in kind' or within a reasonable time thereafter' if not in kind.
In no case shall the agricultural lessor re(uire the agricultural lessee to file a bond' make a deposit or pay the rental
in ad$ance' in money or in kind or in both' but a special and preferential lien is hereby created in fa$or of the
agricultural lessor o$er such portion of the gross har$est necessary for the payment of the rental due in his fa$or.
Sectio 34. Consideration for the Lease of Riceland and Lands De%oted to /ther Crops - The consideration for the
lease of riceland and lands de$oted to other crops shall not be more than the e(ui$alent of twenty-fi$e per centum of
the a$erage normal har$est during the three agricultural years immediately preceding the date the leasehold was
established after deducting the amount used for seeds and the cost of har$esting' threshing' loading' hauling and
processing' whiche$er are applicable &ro$ided' That if the land has been culti$ated for a period of less than three
years' the initial consideration shall be based on the a$erage normal har$est during the preceding years when the
land was actually culti$ated' or on the har$est of the first year in the case of newly-culti$ated lands' if that har$est is
normal &ro$ided' further' That after the lapse of the first three normal har$ests' the final consideration shall be
based on the a$erage normal har$est during these three preceding agricultural years &ro$ided' furthermore' That in
the absence of any agreement between the parties as to the rental' the ma+imum allowed herein shall apply
&ro$ided' finally' That if capital impro$ements are introduced on the farm not by the lessee to increase its
producti$ity' the rental shall be increased proportionately to the conse(uent increase in production due to said
impro$ements. In case of disagreement' the Court shall determine the reasonable increase in rental.
Sectio 3#. Exemption from Leasehold of /ther 1inds of Lands - 4otwithstanding the pro$isions of the preceding
Sections' 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 appro$al of this Code' the consideration' as well as the tenancy
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system pre$ailing' shall be go$erned by the pro$isions of Republic Act 4umbered 5le$en hundred and ninety-nine'
as amended.
Sectio 3$. Possession of Landholding2 Exceptions - 4otwithstanding any agreement as to the period or future
surrender' of the land' an agricultural lessee shall continue in the en1oyment and possession of his landholding
e+cept when his dispossession has been authori%ed by the Court in a 1udgment that is final and e+ecutory if after due
hearing it is shown that
!"# The agricultural lessor-owner or a member of his immediate family will personally culti$ate
the landholding or will con$ert the landholding' if suitably located' into residential' factory'
hospital or school site or other useful non-agricultural purposes &ro$ided) That the agricultural
lessee shall be entitled to disturbance compensation e(ui$alent to fi$e years rental on his
landholding in addition to his rights under Sections twenty-fi$e and thirty-four' e+cept when the
land owned and leased by the agricultural lessor' is not more than fi$e hectares' in which case
instead of disturbance compensation the lessee may be entitled to an ad$anced notice of at least
one agricultural year before e1ectment proceedings are filed against him &ro$ided' further' That
should the landholder not culti$ate the land himself for three years or fail to substantially carry out
such con$ersion within one year after the dispossession of the tenant' it shall be presumed that he
acted in bad faith and the tenant shall ha$e the right to demand possession of the land and reco$er
damages for any loss incurred by him because of said dispossessions.
!*# The agricultural lessee failed to substantially comply with any of the terms and conditions of
the contract or any of the pro$isions of this Code unless his failure is caused by fortuitous e$ent or
force ma1eure)
!,# The agricultural lessee planted crops or used the landholding for a purpose other than what had
been pre$iously agreed upon)
!-# The agricultural lessee failed to adopt pro$en farm practices as determined under paragraph ,
of Section twenty-nine)
!.# The land or other substantial permanent impro$ement thereon is substantially damaged or
destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural
lessee)
!/# The agricultural lessee does not pay the lease rental when it falls due &ro$ided' That if the
non-payment of the rental shall be due to crop failure to the e+tent of se$enty-fi$e per centum as a
result of a fortuitous e$ent' the non-payment shall not be a ground for dispossession' although the
obligation to pay the rental due that particular crop is not thereby e+tinguished) or
!0# The lessee employed a sub-lessee on his landholding in $iolation of the terms of paragraph * of
Section twenty-se$en.
Sectio 3%. 3urden of Proof - The burden of proof to show the e+istence of a lawful cause for the e1ectment of an
agricultural lessee shall rest upon the agricultural lessor.
Sectio 38. Statute of Limitations - An action to enforce any cause of action under this Code shall be barred if not
commenced within three years after such cause of action accrued.
CHAPTER II
BILL OF RIGHTS FOR AGRICULTURAL LABOR
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Sectio 3&. Rights for Agricultural Labor - To enable the farm workers to en1oy the same rights and opportunities in
life as industrial workers' they shall en1oy the following
!"# Right to self-organi%ation)
!*# Right to engage in concerted acti$ities)
!,# Right to minimum wage)
!-# Right to work for not more than eight hours)
!.# Right to claim for damages for death or in1uries sustained while at work)
!/# Right to compensation for personal in1uries' death or illness) and
!0# Right against suspension or lay-off.
Sectio 4'. Right to Self$/rgani4ation - The farm workers shall ha$e the right to self-organi%ation and to form' 1oin
or assist farm workers> organi%ations of their own choosing for the purpose of collecti$e bargaining through
representati$es of their own choosing &ro$ided' That this right shall be e+ercised in a manner as will not unduly
interfere with the normal farm operations. Indi$iduals employed as super$isors shall not be eligible for membership
in farm workers> organi%ations under their super$ision but may form separate organi%ations of their own.
Sectio 4!. Right to Engage in Concerted Acti%ities - The farm workers shall also ha$e the right to engage in
concerted acti$ities for the purpose of collecti$e bargaining and other mutual aid or protection.
?or 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' organi%ers' ad$isers and helpers complete freedom to enter and lea$e the farm'
plantation or compound at the portion of the same where said farm workers li$e or stay permanently or temporarily.
Sectio 4". Right to *inimum -age - 4otwithstanding any pro$ision of law or contract to the contrary' farm
workers in farm enterprises shall be entitled to at least &,..@ a day for eight hours> work &ro$ided' That this wage
may' howe$er' be increased by the 9inimum <age =oard as pro$ided for in Republic Act 4umbered Si+ hundred
and two.
Sectio 43. Right to Eight .ours# -or5 - 4otwithstanding the pro$ision of e+isting laws to the contrary' farm
workers shall not be re(uired to work for more than eight hours daily. <hen the work is not continuous' the time
during which the farm worker is not working and can lea$e his working place and can rest completely shall not be
counted.
<ork may be performed beyond eight hours a day in case of actual or impending emergencies caused by serious
accidents' fire' flood' typhoon' epidemic' or other disaster or calamity' or in case of urgent work to be performed on
farm machines' e(uipment or installations in order to a$oid a serious loss which the farm employer or manager
would otherwise suffer' or some other 1ust cause of a similar nature' but in all such cases the farm workers shall be
entitled to recei$e compensation for the o$ertime work performed at the same rate as their regular wages' plus at
least twenty-fi$e per centum additional' based on their daily wages.
4o farm employer or manager shall compel a farm worker to work during Sundays and legal holidays &ro$ided'
howe$er' That should the farm worker agree to work on said days' he shall be paid an additional sum of at least
twenty-fi$e per centum of his regular compensation) &ro$ided' further' That the farm employer or manager shall not
be held liable for any claim for o$ertime work which he had not pre$iously authori%ed' e+cept if the work rendered
was to a$oid damages to crops' produce' work animals or implements' buildings or the like.
9
Any agreement or contract between the farm employer or manager and the farm worker contrary to the pro$isions of
this Section shall be null and $oid.
Sectio 44. Right of Action for Damages - 4otwithstanding the pro$isions of e+isting laws to the contrary' Act
4umbered 5ighteen hundred and se$enty-four' as amended' entitled :An Act to e+tend and regulate the
responsibility of employers for personal in1uries and death suffered by their employees while at work:' shall apply to
farm workers insofar as it may be applicable.
Sectio 4#. Right to Compensation for Personal n'uries! Death! or llness - 4otwithstanding the pro$isions of
e+isting laws to the contrary' Act 4umbered Thirty-four hundred and twenty-eight' as amended' entitled :An Act
prescribing the compensation to be recei$ed by employees for personal in1uries' death or illness contracted in the
performance of their duties:' shall apply to farm workers insofar as it may be applicable.
Sectio 4$. Right Against Suspension of Lay$off - The landowner' farm employer or farm manager shall not suspend'
lay-off or dismiss any farm worker without 1ust cause from the time a farm workers> organi%ation or group of farm
workers has presented to the landowner a petition or complaint regarding any matter likely to cause a strike or
lockout and a copy thereof furnished with the Aepartment of Labor' or while an agricultural dispute is pending
before the Court of Agrarian Relations. If it is pro$ed during the said period that a worker has been suspended or
dismissed without 1ust cause' the Court may direct the reinstatement and the payment of his wage during the time of
his suspension or dismissal or of any sum he should ha$e recei$ed had he not been suspended or dismissed' without
pre1udice to any criminal liability of the landowner' farm employer or farm manager as prescribed by Section
twenty-four of Commonwealth Act 4umbered 8ne hundred and three' as amended.
Sectio 4%. /ther Applicable Pro%isions - All other e+isting laws applicable to non-agricultural workers in pri$ate
enterprises which are not inconsistent with this Code shall likewise apply to farm workers' farm labor organi%ations
and agrarian disputes as defined in this Code' as well as to relations between farm management and farm labor and
the functions of the Aepartment of Labor and other agencies.
Sectio 48. Exceptions to Preceding Section - The preceding Sections of this Chapter' e+cept Sections forty' forty-
one' forty-two and forty-three shall not apply to farm enterprises comprising not more than twel$e hectares.
CHAPTER III
LAND AUTHORITY
ARTICLE I
O()*i+*tio *, F-ctio. o/ t0e L*, A-t0o(it1
Sectio 4&. Creation of the Land Authority - ?or the purpose of carrying out the policy of establishing owner-
culti$atorship and the economic family-si%e farm as the basis of &hilippine agriculture and other policies enunciated
in this Code' there is hereby created a Land Authority' hereinafter called the Authority' which shall be directly under
the control and super$ision of the &resident of the &hilippines. The Authority shall be headed by a Bo$ernor who
shall be appointed by the &resident with the consent of the Commission on Appointments.
;e shall be assisted by two Aeputy Bo$ernors who shall be appointed by the &resident with the consent of the
Commission on Appointments' each of whom shall head such operating departments as may be set up by the
Bo$ernor. The Bo$ernor and the Aeputy Bo$ernors shall hold office for fi$e years.
Sectio #'. 6ualifications and Compensation of (o%ernors - 4o person shall be appointed Bo$ernor or Aeputy
Bo$ernor of the Authority unless he is a natural-born citi%en of the &hilippines' with ade(uate background and
e+perience in land reform here and7or elsewhere' and at least thirty-fi$e years of age.
10
The Bo$ernor shall recei$e an annual compensation of twenty-four thousand pesos) the Aeputy Bo$ernors shall
each recei$e an annual compensation of eighteen thousand pesos.
Sectio #!. Po7ers and )unctions - It shall be the responsibility of the Authority
!"# To initiate and prosecute e+propriation proceedings for the ac(uisition of pri$ate agricultural
lands as defined in Section one hundred si+ty-si+ of Chapter CI of this Code for the purpose of
subdi$ision into economic family-si%e farm units and resale of said farm units to bona fide tenants'
occupants and (ualified farmers &ro$ided' That the powers herein granted shall apply only to
pri$ate agricultural lands sub1ect to the terms and conditions and order of priority hereinbelow
specified
a. all idle or abandoned pri$ate agricultural lands' e+cept those held or purchased within
one year from the appro$al of this Code by pri$ate indi$iduals or corporations for the
purpose of resale and subdi$ision into economic family-si%e farm units in accordance
with the policies enunciated in this Code &ro$ided' That the subdi$ision and resale shall
be substantially carried out within one year from the appro$al of this Code)
b. all pri$ate agricultural lands suitable for subdi$ision into economic family-si%e farm
units' owned by pri$ate indi$iduals or corporations worked by lessees' no substantial
portion of whose landholding in relation to the area sought to be e+propriated' is planted
to permanent crops under labor administration' in e+cess of se$enty-fi$e hectares e+cept
all pri$ate agricultural lands under labor administration and lands ac(uired under Section
se$enty-one of this Code) and
c. in e+propriating pri$ate agricultural lands declared by the 4ational Land Reform
Council or by the Land Authority within a land reform district to be necessary for the
implementation of the pro$isions of this Code' the following order of priority shall be
obser$ed
". idle or abandoned lands)
*. those whose area e+ceeds "'@*- hectares)
,. those whose area e+ceeds .@@ hectares but is not more than "'@*- hectares)
-. those whose area e+ceeds "-- hectares but is not more than .@@ hectares) and
.. those whose area e+ceeds 0. hectares but is not more than "-- hectares.
!*# To help bona fide farmers without lands or agricultural owner-culti$ators of uneconomic-si%e
farms to ac(uire and own economic family-si%e farm units)
!,# To administer and dispose of agricultural lands of the public domain under the custody and
administration of the 4ational Resettlement and Rehabilitation Administration prior to the
appro$al of this Code and such other public agricultural lands as may hereafter be reser$ed by the
&resident of the &hilippines for resettlement and sale' in accordance with such terms and
conditions as are set forth under this Chapter &ro$ided' That the e+ercise of the authority granted
herein' as well as in the preceding sub-paragraph' shall not contra$ene public policy on the
permanency of forest reser$es or other laws intended for the preser$ation and conser$ation of
public forests)
11
!-# To de$elop plans and initiate actions for the systematic opening of alienable and disposable
lands of the public domain for speedy' distribution to and de$elopment by deser$ing and (ualified
persons or corporations)
!.# To recommend to the &resident' from time to time after pre$ious consultation with the
Secretary of Agriculture and 4atural Resources' what portion of the alienable or disposable public
lands shall be reser$ed for settlement or disposition under this chapter)
!/# To gi$e economic family-si%e farms to landless citi%ens of the &hilippines who need' deser$e'
and are capable of culti$ating the land personally' through organi%ed resettlement' under the terms
and conditions the Authority may prescribe' gi$ing priority to (ualified and deser$ing farmers in
the pro$ince where such lands are located)
!0# To reclaim swamps and marshes' obtain titles thereto whene$er feasible and subdi$ide them
into economic family-si%e farms for distribution to deser$ing and (ualified farmers)
!2# To undertake measures which will insure the early issuance of titles to persons or corporations
who ha$e actually settled and culti$ated disposable alienable lands of the public domain)
!3# To sur$ey' subdi$ide and set aside lands or areas of landholdings under its administration for
economic family-si%e farms' large-scale farm operations' town sites' roads' parks' go$ernment
centers and other ci$ic impro$ements as circumstances may warrant and to submit subdi$ision
sur$ey plans conducted either by the go$ernment or pri$ate sur$eyors on parcels of lands under its
administration for $erification and appro$al either by the Airector of Lands or by the Land
Registration Commission)
!"@# To inform the Agricultural &roducti$ity Commission and the 8ffice of the Agrarian Counsel
of the problems of settlers and farmers on lands under its administration)
!""# To ac(uire for agricultural lessees e+ercising their right of pre-emption under Chapter I of this
Code' any landholdings mentioned thereunder)
!"*# To conduct land capability sur$ey and classification of the entire country and print maps)
!",# To make such arrangements with the Land =ank with respect to titles of agricultural lands of
the public domain under its administration as will be necessary to carry out the ob1ecti$es of this
Code)
!"-# To e+propriate home lots occupied by agricultural lessees outside their landholdings for resale
at cost to said agricultural lessees) and
!".# To submit to the &resident of the &hilippines and to both ;ouses of Congress through their
presiding officers' to the Secretary of ?inance and to the Auditor Beneral within si+ty days of the
close of the fiscal year' an annual report showing its accomplishments during the year) the
e+propriation proceedings it has undertaken) the e+penditures it has incurred and other financial
transactions undertaken with respect thereto.
Sectio #". Appointment of Subordinate /fficials and Employees - The Bo$ernor shall organi%e the personnel in
such departments' di$isions and sections of the Authority as will insure their ma+imum efficiency. ;e shall appoint'
sub1ect to ci$il ser$ice rules and regulations' fi+ the compensation' sub1ect to <A&C8 rules and regulations' and
determine the duties of subordinate officials and employees as the e+igencies of the ser$ice may re(uire.
12
ARTICLE II
E23(o3(i*tio o/ P(i4*te A)(ic-5t-(*5 L*,.
Sectio #3. Compulsory Purchase of Agricultural Lands - The Authority shall' upon petition in writing of at least
one-third of the lessees and sub1ect to the pro$isions of Chapter 6II of this Code' institute and prosecute
e+propriation proceedings for the ac(uisition of pri$ate agricultural lands and home lots enumerated under Section
fifty-one. In the e$ent a landowner agrees to sell his property under the terms specified in this Chapter and the
4ational Land Reform Council finds it suitable and necessary to ac(uire such property' a 1oint motion embodying
the agreement' including the $aluation of the property' shall be submitted by the Land Authority and the land-owner
to the Court for appro$al &ro$ided' That in such case' any person (ualified to be a beneficiary of such e+propriation
or purchase may ob1ect to the $aluation as e+cessi$e' in which case the Court shall determine the 1ust compensation
in accordance with Section fifty-si+ of this Code.
Sectio #4. Possession of the Land2 Procedure - The Authority' after commencing the e+propriation suit' may take
immediate possession of the land upon deposit with the Court that has ac(uired 1urisdiction o$er the e+propriation
proceedings in accordance with the Rules of Court' of money' and bonds of the Land =ank' in accordance with the
proportions pro$ided for under Section eighty of this Code' e(ual to the $alue as determined by the Court in
accordance with the pro$isions of Section fifty-si+ hereof.
Sectio ##. Expeditious Sur%ey and Subdi%ision - Immediately after the Authority takes possession of lands to be
ac(uired by it under this Code' it shall undertake a subdi$ision sur$ey of the land into economic family-si%e farms
which shall be immediately assigned to beneficiaries selected in accordance with Section one hundred and twenty-
eight sub1ect to such rules and regulations as it may prescribe.
Sectio #$. 8ust Compensation - In determining the 1ust compensation of the land to be e+propriated pursuant to this
Chapter' the Court' in land under leasehold' shall consider as a basis' without pre1udice to considering other factors
also' the annual lease rental income authori%ed by law capitali%ed at the rate of si+ per centum per annum.
The owner of the land e+propriated shall be paid in accordance with Section eighty of this Act by the Land =ank and
pursuant to an arrangement herein authori%ed.
Sectio #%. Duty of Court in Expropriation Proceedings - In e+propriation proceedings' it shall be the duty of the
Court to include in its resolution or order of e+propriation a pro$ision that the Land Authority shall' after taking
possession of the land and after the subdi$ision thereof' allow the Land =ank to ha$e the title thereto for the purpose
of paying the owner the 1ust compensation therefor.
Sectio #8. ssuance of Certificates of Title for Parcel or Lot - After the payment of 1ust compensation on the land
e+propriated the Land =ank shall cause the issuance of separate certificates of titles for each parcel or lot in
accordance with the subdi$ision sur$ey made under Section fifty-fi$e.
Sectio #&. Prohibition Against Alienation and E'ectment - Dpon the filing of the petition referred to in Section
fifty-three the landowner may not alienate any portion of the land co$ered by such petition e+cept in pursuance of
the pro$isions of this Code' or enter into any form of contract to defeat the purposes of this Code' and no e1ectment
proceedings against any lessee or occupant of the land co$ered by the petition shall be instituted or prosecuted until
it becomes certain that the land shall not be ac(uired by the Authority.
Sectio $'. Disposition of Expropriated Land - After separate certificates of titles ha$e been issued in accordance
with Section fifty-eight' the Land Authority' on behalf of the Republic of the &hilippines and in representation of the
Land =ank as the financing agency' shall allot and sell each parcel or lot to a (ualified beneficiary selected under
Section fifty-fi$e of this Code' sub1ect to uniform terms and conditions imposed by the Land =ank &ro$ided' That
the resale shall be at cost which shall mean the purchase price not more than si+ per centum per annum' which shall
co$er administrati$e e+penses' and actual e+penses for subdi$ision' sur$eying' and registration &ro$ided' further'
That such cost shall be paid on the basis of an amorti%ation plan not e+ceeding twenty-fi$e years at the option of the
beneficiary.
13
In case some agricultural lessees working portions of agricultural lands ac(uired by the go$ernment under this Code
prefer to remain as lessees thereof' which preference shall be e+pressed in writing and attested by a representati$e of
the 8ffice of Agrarian Counsel' the resale and redistribution to them shall be deferred until such time that such
lessees are ready and willing to assume the obligations and responsibilities of independent owners' which shall be
manifested by a written notice to this effect by the lessees and which shall oblige the Land Authority forthwith to
allot and sell such portions to such lessees under the same uniform terms and conditions. &ending the sale' such
lessees shall continue to work on their landholdings and recei$e the produce thereof' sub1ect' howe$er' to the
re(uirement that they pay the Land =ank the allowable rental established in Section thirty-four. The Land =ank shall
apply the rental to the si+ percent added to the ac(uisition price and credit the balance to the ac(uisition cost in the
name of the lessee as partial payment for the land.
The Land Authority shall administer said parcels of land during the period they are under lease. Competent
management and ade(uate production credit shall be pro$ided in accordance with the program de$eloped by the
Land Reform &ro1ect Team for such area.
Sectio $!. /rgani4ation of Cooperati%e Associations - ?or the purpose of more efficient management' adoption of
modern farm methods and techni(ues' and spreading risk' either through di$ersification of farm pro1ects or mutual
assumption of risks the farmer beneficiaries may organi%e themsel$es into cooperati$e associations with the ad$ice
or assistance of the Agricultural &roducti$ity Commission and in accordance with the guidelines established by said
Commission for such associations.
Sectio $". Limitation on Land Rights - 5+cept in case of hereditary succession by one heir' landholdings ac(uired
under this Code may not be resold' mortgaged' encumbered or transferred until after the lapse of ten years from the
date of full payment and ac(uisition and after such ten-year period' any transfer' sale or disposition may be made
only in fa$or of persons (ualified to ac(uire economic family-si%e farm units in accordance with the pro$isions of
this Code &ro$ided' That a purchaser who ac(uired his landholding under a contract to sell may secure a loan on the
same from any pri$ate lending institution or indi$idual for an amount not e+ceeding his e(uity on said landholding
upon a guaranty by the Land =ank.
Sectio $3. nscription of Specific Prohibition Against Resale and Subdi%ision of Landholding - Certificates of titles
of landholdings ac(uired by the Land Authority and resold to purchasers shall contain therein a specific inscription
prohibiting further subdi$ision and the resale' transfer or encumbrance of said landholdings e+cept as pro$ided in
the preceding Section.
Sectio $4. Exemption from Attachment - Lands ac(uired under the pro$isions of this Chapter shall be e+empt from
e+ecution and attachment' e+cept when the land itself is the property mortgaged' in accordance with Section si+ty-
two of this Code.
Sectio $#. Precedence of Expropriation Cases - 5+propriation cases filed by the Authority under pro$isions of this
Chapter shall take precedence o$er all other ci$il cases pending before the Court and shall be terminated within a
period not e+ceeding si+ months from the date of filing.
ARTICLE III
Di.t(i6-tio o/ A)(ic-5t-(*5 L*,. o/ t0e P-65ic Do7*i
Sectio $$. Title to Public Agricultural Land - Dpon reser$ation by the &resident of the &hilippines of public
agricultural land a$ailable for disposition by the Land Authority' such land shall be sur$eyed' titled and transferred
to the Land =ank' which shall reduce said title into indi$idual titles for specific parcels or lots in accordance with the
subdi$ision sur$ey conducted by the Land Authority under paragraph 3 of Section fifty-one &ro$ided' howe$er'
That e+isting laws go$erning the ac(uisition of public lands shall ha$e been complied with.
The Land Authority shall thereupon distribute in accordance with the pro$isions of this Code' each parcel or lot'
sub1ect to the terms and conditions of the Land =ank' to a beneficiary selected pursuant to Section se$enty-one or in
14
accordance with paragraph , of Section fifty-one' to a beneficiary selected pursuant to paragraph , of Section one
hundred twenty-eight.
Sectio $%. Census of Settlements - The Authority shall take a census of all settlements already made or started by
farmers on their own initiati$e on public agricultural lands' forest lands' and on pri$ate titled lands which had been
cleared' occupied and culti$ated wholly or partially by them' with or without legal sanction. The census shall
include' among other things' the bona fide character of the settlements' the character of the settlers or farmers' the
e+act status of the lands settled' the feasibility of enlarging the settlements' particularly in connection with the
resources of the land occupied and the neighboring areas' actual and potential accessibility to markets' as well as
strategic location of the settlement with respect to national security.
Sectio $8. Assistance to Settlers in Transporting Themsel%es and Their 3elongings - The Authority may' in certain
pro1ects' assist settlers in transporting themsel$es' their belongings' work animals and farm e(uipment' if any' from
the communities from which they are migrating to the settlement areas reser$ed for the purpose and for subsistence
necessary until credit can be pro$ided by go$ernment financing agencies' or by any other credit institution by
loaning to them the full amount re(uired for such purposes. These loans from the Land Authority shall be non-
interest bearing' shall constitute a lien upon the land' and shall be amorti%ed o$er a period of ten years' payable
annually beginning with the end of the third year' after the date of arri$al in the settlement areas' sub1ect to the right
of the borrower to pay in the full at any time prior to the maturity of the loan.
Sectio $&. Assistance to Settlers in Securing E&uipment - The Authority may assist the settlers in securing
e(uipment' supplies and materials needed) or assist the cooperati$e associations of the new settlers in securing the
most ad$antageous prices or terms on farm implements and supplies needed.
Sectio %'. Pro%iding .ousing and Accommodations to Settlers - The Authority may help pro$ide housing and other
accommodations for the new settlers upon their arri$al in the settlement areas by the stationing them in properly
sur$eyed and subdi$ided lots reser$ed for the purpose help them organi%e community acti$ities) and cooperate with
the =ureau of ;ealth' the =ureau of &ublic Schools and other pertinent agencies of the Bo$ernment' in pro$iding
ser$ices necessary for the proper establishment of community facilities.
Sectio %!. Po7er of the Land Authority to Sell to .olders of 3onds ssued to )ormer Lando7ners -hose Lands
.a%e 3een Purchased for Redistribution - The Land Authority shall sell' for a price not less than the appraised
$alue' any portion not e+ceeding one hundred forty-four hectares in the case of indi$iduals or one thousand twenty-
four hectares in the case of corporations of the public agricultural lands transferred to the Land =ank which is
suitable for large-scale farm operations to any holder' who is (ualified to ac(uire agricultural lands through
purchase' of bonds issued to former landowners whose lands ha$e been purchased for redistribution under this Code'
sub1ect to the condition that the purchaser shall' within two years after ac(uisition' place under culti$ation at least
thirty per centum of the entire area under plantation administration and the remaining se$enty per centum within fi$e
years from the date of ac(uisition. The Bo$ernor of the Land Authority shall issue the title of said land upon
showing that the purchaser has begun the de$elopment and culti$ation of his land under plantation administration
&ro$ided' That public agricultural land sold as hereinabo$e specified shall not be the ob1ect of any e+propriation as
long as the same shall be de$eloped and culti$ated for large-scale production under farm labor management' e+cept
as allowed by the Constitution.
The selling price of the portion of the public agricultural land sold under this Section shall be credited to the
Bo$ernment>s subscription to the Land =ank. As payment for the land sold under this Section' the Land =ank shall
accept as sole instruments of payment the bonds issued pursuant to Section se$enty-si+. Issued bonds accepted as
payment for the land sold shall be cancelled to the e+tent of the amount paid.
All sales under this Code shall be sub1ect to the pro$ision of Chapter 6 of the &ublic Land Act co$ering sales of
public agricultural lands insofar as they are not inconsistent with the pro$isions of this Code.
15
Sectio %". Duplicate Records to be )urnished the 3ureau of Lands - The Land Authority shall furnish the =ureau
of Lands with the duplicate records of proceedings on applications for the sale or other disposition of public
agricultural lands under its administration.
Sectio %3. Transfer of Appropriations! Po7ers! )unctions! etc - The 4ational Resettlement and Rehabilitation
Administration and the Land Tenure administration are hereby abolished and their powers and functions not
inconsistent with this Code' balances of all appropriations' funds' e(uipment' records and supplies' as well as
agricultural lands' public and pri$ate' under their administration' are hereby transferred to the Authority &ro$ided'
That the function of the Land Tenure Administration with respect to the e+propriation of urban lands as pro$ided by
e+isting laws is hereby transferred to and all hereafter be undertaken by the &eople>s ;omesite and housing
Corporation.
In addition to the appropriations herein transferred there is hereby appropriated from the general funds in the
4ational Treasury not otherwise appropriated the sum of fi$e million pesos' or so much thereof as may be necessary'
to carry out the purposes of this Code.
To carry out the land capability sur$ey and classification mentioned in paragraph "* of Section fifty-one and Section
one hundred thirty-two of this Code' there is hereby appropriated out of the unappropriated funds of the 4ational
Treasury the amount of ten million pesos.
CHAPTER IV
LAND BAN8
Sectio %4. Creation - To finance the ac(uisition by the Bo$ernment of landed estates for di$ision and resale to
small landholders' as well as the purchase of the landholding by the agricultural lessee from the landowner' there is
hereby established a body corporate to be known as the :Land =ank of the &hilippines:' hereinafter called the
:=ank:' which shall ha$e its principal place of business in 9anila. The legal e+istence of the =ank shall be for a
period of fifty years counting from the date of the appro$al hereof. The =ank shall be sub1ect to such rules and
regulations as the Central =ank may from time to time promulgate.
Sectio %#. Po7ers in (eneral - To carry out this main purpose' the =ank shall ha$e the power
!"# To prescribe' repeal' and alter its own by laws' to determine its operating policies' and to issue
such rules and regulations as may be necessary to achie$e the main purpose for the creation of the
=ank)
!*# To adopt' alter and use a corporate seal)
!,# To ac(uire and own real and personal property and to sell' mortgage or otherwise dispose of
the same)
!-# To sue and be sued' make contracts' and borrow money from both local and foreign sources.
Such loans shall be sub1ect to appro$al by the &resident of the &hilippines and shall be fully
guaranteed by the Bo$ernment of the &hilippines)
!.# Dpon recommendation of the Committee on In$estments' to hold' own' purchase' ac(uire' sell
or otherwise in$est' or rein$est in stocks' bonds or other securities capable of gi$ing the =ank a
reasonably assured income sufficient to support its financing acti$ities and gi$e its pri$ate
stockholders a fair return on their holdings &ro$ided' howe$er' That pending the organi%ation of
the Committee on In$estments' the =ank may e+ercise the powers herein pro$ided without the
recommendation of said Committee on In$estments &ro$ided' further' That in case of the
dissolution of the Land =ank all unsold public lands transferred to it which may be allocated to the
16
Bo$ernment of the &hilippines in the course of li(uidation of the business of the =ank shall re$ert
to the Aepartment of Agriculture and 4atural Resources) and
!/# To pro$ide' free of charge' in$estment counselling and technical ser$ices to landowners whose
lands ha$e been ac(uired by the Land =ank. ?or this purpose' the Land =ank may contract the
ser$ices of pri$ate consultants.
Sectio %$. ssuance of 3onds - The Land =ank shall' upon recommendation by the =oard of Trustees and appro$al
of the 9onetary =oard of the Central =ank' issue bonds' debentures and other e$idences of indebtedness at such
terms' rates and conditions as the =ank may determine up to an aggregate amount not e+ceeding' at any one time'
fi$e times its unimpaired capital and surplus. Such bonds and other obligations shall be secured by the assets of the
=ank and shall be fully ta+ e+empt both as to principal and income. Said income shall be paid to the bondholder
e$ery si+ !/# months from the date of issue. These bonds and other obligations shall be fully negotiable and
unconditionally guaranteed by the Bo$ernment of the Republic of the &hilippines and shall be redeemable at the
option of the =ank at or prior to maturity' which in no case shall e+ceed twenty-fi$e years. These negotiable
instruments of indebtedness shall be mortgageable in accordance with established banking procedures and practices
to go$ernment institutions not to e+ceed si+ty per centum of their face $alue to enable the holders of such bonds to
make use of them in in$estments in producti$e enterprises. They shall also be accepted as payments for reparation
e(uipment and materials.
The =oard of Trustees shall ha$e the power to prescribe rules and regulations for the registration of the bonds issued
by the =ank at the re(uest of the holders thereof.
Sectio %%. ssuance of Preferred Shares of Stoc5 to )inance Ac&uisition of Landed Estates - The Land =ank shall
issue' from time to time' preferred shares of stock in such (uantities not e+ceeding si+ hundred million pesos worth
of preferred shares as may be necessary to pay the owners of landed estates in accordance with Sections eighty and
eighty-one of this Code. The amount of shares that the =ank may issue shall not e+ceed the aggregate amount need
to pay for ac(uired estates in the proportions prescribed in said Section eighty of this Code. The =oard of Trustees
shall include as a necessary part of the by-laws that it shall issue under Section se$enty-fi$e of this Code' such
formula as it deems ade(uate for determining the net asset $alue of its holdings as a guide and basis for the issuance
of preferred shares. The shares of stock issued under the authority of this pro$ision shall be guaranteed a rate of
return of si+ per centum per annum. In the e$ent that the earnings of the =ank for any single fiscal year are not
sufficient to enable the =ank' after making reasonable allowance for administration' contingencies and growth' to
declare di$idends at the guaranteed rate' the amount e(ui$alent to the difference between the =ank>s earnings
a$ailable for di$idends and that necessary to pay the guaranteed rate shall be paid by the =ank out of its own assets
but the Bo$ernment shall' on the same day that the =ank makes such payment' reimburse the latter in full' for which
purpose such amounts as may be necessary to enable the Bo$ernment to make such reimbursements are hereby
appropriated out of any moneys in the 4ational Treasury not otherwise appropriated. The =ank shall gi$e sufficient
notice to the =udget Commissioner and the &resident of the &hilippines in the e$ent that it is not able to pay the
guaranteed rate of return on any fiscal period. The guaranteed rate of return on these shares shall not preclude the
holders thereof from participating at a percentage higher than si+ per centum should the earnings of the =ank for the
corresponding fiscal period e+ceed the guaranteed rate of return. The =oard of Trustees shall declare and distribute
di$idends within three months after the close of each fiscal year at the guaranteed rate unless a higher rate of return
in 1ustified by the =ank>s earnings after making reasonable allowance for administration' contingencies and growth'
in which case di$idends shall be declared and distributed at a higher rate. The capital gains deri$ed from the sale or
transfer of such shares and all income deri$ed therefrom in the form of di$idends shall be fully e+empt from ta+es.
Sectio %8. Special (uaranty )und - In the e$ent that the =ank shall be unable to pay the bonds' debentures' and
other obligations issued by it' a fi+ed amount thereof shall be paid from a special guaranty fund to be set up by the
Bo$ernment' to guarantee the obligation of the Land =ank' and established in accordance with this Section' and
thereupon' to the e+tent of the amounts so paid' the Bo$ernment of the Republic of the &hilippines shall succeed to
all the rights of the holders of such bonds' debentures or other obligations &ro$ided' howe$er' That for the ne+t four
years after the establishment of the =ank' the payment to the special guaranty fund should not e+ceed one million
pesos per year' after which period' the Bo$ernment shall pay into the guaranty fund the sum of fi$e hundred
17
thousand pesos each year until the cumulati$e total of such guaranty fund is no less than twenty percent of the
outstanding net obligation of the Land =ank at the end of any single calendar year.
The guaranty fund shall be administered by the Central =ank of the &hilippines in the manner most consistent with
its charter. ?or the purpose of such fund' there shall be appropriated annually the sum of one million pesos out of
any moneys in the 4ational Treasury not otherwise appropriated' until the total amount of twenty million pesos shall
ha$e been attained.
Sectio %&. Recei%ing Payments and Time Deposits - The =ank' under the super$ision of the 9onetary =oard and
sub1ect to the pro$isions of the Beneral =anking Act' shall recei$e sa$ings and time deposits from the small
landholders in whose fa$or public lands or landed estates ac(uired by the Land Authority ha$e been sold and' for
this purpose' establish' and maintain branches and offices in such areas as may be necessary to ser$ice such deposits.
The 9onetary =oard shall super$ise and authori%e the =ank to recei$e sa$ings and time deposits from the public in
areas where facilities for such a ser$ice do not e+ist or cannot be ade(uately pro$ided by other deposit institutions.
Sectio 8'. *a5ing Payment to /7ners of Landed Estates - The Land bank shall make payments in the form herein
prescribed to the owners of land ac(uired by the Land Authority for di$ision and resale under this Code. Such
payment shall be made in the following manner ten per centum in cash and the remaining balance in si+ percent'
ta+-free' redeemable bonds issued by the =ank in accordance with Section se$enty-si+' unless the landowner desires
to be paid in shares of stock issued by the Land =ank in accordance with Section se$enty-se$en in an amount not
e+ceeding thirty per centum of the purchase price.
In the e$ent there is an e+isting lien on encumbrance on the land in fa$or of any Bo$ernment institution at the time
of ac(uisition by the Land =ank' the bonds and7or shares' in that order' shall be accepted as substitute collaterals to
secure the indebtedness.
The profits accruing from payment shall be e+empt from the ta+ on capital gains.
Sectio 8!. Capital - The authori%ed capital stock of the =ank shall be one billion fi$e hundred million pesos
di$ided into ninety million shares with a par $alue of ten pesos each' which shall be fully subscribed by the
Bo$ernment and si+ty million preferred shares with a par $alue of ten pesos each which shall be issued in
accordance with the pro$isions of Sections se$enty-se$en and eighty-three of this Code. 8f the total capital
subscribed by the Bo$ernment' two hundred million pesos shall be paid by the Bo$ernment within one year from
the appro$al of this Code' and one hundred million pesos e$ery year thereafter for two years for which purpose the
amount of two hundred million pesos is hereby appropriated upon the effecti$ity of this Code' and one hundred
million pesos e$ery year for the ne+t two years thereafter' out of the funds in the 4ational Treasury not otherwise
appropriated for the purpose &ro$ided' That if there are not enough funds in the 4ational Treasury for the
appropriation herein made' the Secretary of ?inance' with the appro$al of the &resident of the &hilippines' shall issue
bonds or other e$idence of indebtedness to be negotiated either locally or abroad in such amount as may be
necessary to co$er any deficiency in the amount abo$e-appropriated but not e+ceeding four hundred million pesos'
the proceeds of which are hereby appropriated &ro$ided' further' That the bonds to be issued locally shall not be
supported by the Central =ank &ro$ided' finally' That there is automatically appropriated out of the unappropriated
funds in the 4ational Treasury such amounts as is necessary to co$er the losses which shall include among other
things loss of earnings occasioned by the limitation of the resale cost herein pro$ided such that said amount together
with the administrati$e e+penses mentioned in Section ninety hereof shall not e+ceed in the aggregate the e(ui$alent
of two and one-half per centum of its assets limited therein.
Sectio 8". (o%ernment Shares - All shares of stock in the =ank subscribed or owned by the Bo$ernment shall not
be entitled to participate in the income earned by the =ank from its in$estments and other operations' whether in the
form of cash or stock di$idends or otherwise. Amounts e+pended for the administration of the =ank shall not be
deemed as a participation of the Bo$ernment in income.
Sectio 83. Preferred Shares - All preferred shares of stock issued under Section se$enty-se$en of this Code shall be
entitled to the income earned by the =ank on its in$estments and other operations and shall ha$e a limited right to
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elect annually one member of the =oard of Trustees and one member of the Committee on In$estments &ro$ided'
That the holders of such preferred shares of stock shall not bring deri$ati$e suits against the =ank. Such preferred
shares shall be fully transferable &ro$ided' further' That upon the li(uidation of the =ank' the redemption of such
preferred shares shall be gi$en priority and shall be guaranteed at par $alue.
Sectio 84. 9oting of Shares - The $oting power of all the shares of stock of the Land =ank owned or controlled by
the Bo$ernment shall be $ested in the &resident of the &hilippines or in such person or persons as he may from time
to time designate.
Sectio 8#. ,se of 3onds - The bonds issued by the Land =ank may be used by the holder thereof and shall be
accepted in the amount of their face $alue as any of the following
!"# &ayment for agricultural lands or other real properties purchased from the Bo$ernment)
!*# &ayment for the purchase of shares of stock of all or substantially all of the assets of the
following Bo$ernment owned or controlled corporations The 4ational Ae$elopment Company)
Cebu &ortland Cement Company) 4ational Shipyards and Steel Corporation) 9anila Bas
Corporation) and the 9anila ;otel Company.
Dpon offer by the bondholder' the corporation owned or controlled by the Bo$ernment shall'
through its =oard of Airectors' negotiate with such bondholder with respect to the price and other
terms and conditions of the sale. In case there are $arious bondholders making the offer' the one
willing to purchase under terms and conditions most fa$orable to the corporation shall be
preferred. If no price is acceptable to the corporation' the same shall be determined by a
Committee of Appraisers composed of three members' one to be appointed by the corporation'
another by the bondholder making the highest or only offer' and the third by the two members so
chosen. The e+penses of appraisal shall be borne e(ually by the corporation and the successful
purchaser.
Should the Bo$ernment offer for sale to the public any or all of the shares of stock or the assets of
any of the Bo$ernment owned or controlled corporations enumerated herein' the bidder who offers
to pay in bonds of the Land =ank shall be preferred pro$ided that the $arious bids be e(ual in
e$ery respect e+cept in the medium of payment.
!,# Surety or performance bonds in all cases where the Bo$ernment may re(uire or accept real
property as bonds) and
!-# &ayment for' reparations goods.
Sectio 8$. 3oard of Trustees - The affairs and business of the =ank shall be directed' its powers e+ercised and its
property managed and preser$ed by a =oard of Trustees. Such =oard shall be composed of one Chairman and four
members' one of whom shall be the head of the Land Authority who shall be an e+-officio member of such =oard
and another to be elected by the holders of preferred shares. The Chairman and two members of the =oard of
Trustees shall ser$e on full-time basis with the =ank. <ith the e+ception of the head of the Land Authority and the
member elected by the holders of preferred shares' the Chairman and all members of the =oard shall be appointed
by the &resident with the consent of the Commission on Appointments for a term of se$en years' e+cept that the first
Chairman and members to be appointed under this Code shall ser$e for a period of three' fi$e and se$en years' such
terms to be specified in their respecti$e appointments. Thereafter the Chairman and members' with the e+ception of
the e+-officio member' appointed after such initial appointment shall ser$e for a term of se$en years including any
Chairman or member who is appointed in place of one who resigns or is remo$ed or otherwise $acates his position
before the e+piration of his se$en-year term. The Chairman and the two full-time members of the =oard shall act as
the heads of such operating departments as may be set up by the =oard under the authority granted by Section
eighty-se$en of this Code. The Chairman shall ha$e authority' e+erciseable at his discretion' to determine from time
to time the organi%ational di$isions to be headed by each member ser$ing full time and to make the corresponding
19
shifts in designations pursuant thereto. The compensation of the Chairman and the members of the =oard of Trustees
ser$ing full time shall be twenty-four thousand and eighteen thousand pesos' respecti$ely. The other members of the
=oard shall recei$e a per diem of one hundred pesos for each session of the =oard that they attend.
Sectio 8%. The Chairman and 9ice$Chairman - The Chairman of the =oard shall be the chief e+ecuti$e officer of
the =ank. ;e shall ha$e direct control and super$ision of the business of the =ank in all matters which are not by
this Code or by the by-laws of the =ank specifically reser$ed to be done by the =oard of Trustees. ;e shall be
assisted by an 5+ecuti$e 6ice-Chairman and one or more $ice-chairman who shall be chosen and may be remo$ed
by the =oard of Trustees. The salaries of the 6ice-Chairmen shall be fi+ed by the =oard of Trustees with the
appro$al of the &resident of the &hilippines.
Sectio 88. 6ualifications of *embers - 4o person shall be appointed Chairman or member of the =oard unless he
is a man of accepted integrity' probity' training and e+perience in the field of banking and finance' at least thirty-fi$e
years of age and possessed of demonstrated administrati$e skill and ability.
Sectio 8&. Committee on n%estments - There shall be a Committee on In$estments composed of three members)
the member of the =oard of Trustees elected by the holders of preferred shares as Chairman' one member to be
appointed by the &resident of the &hilippines from among the go$ernment members of the =oard of Trustees' and
another member to be selected by the holders of preferred shares under Section eighty-three of this Code. The
Committee on In$estments shall recommend to the =oard of Trustees the corporations or entities from which the
Land =ank shall purchase shares of stock.
The Land =ank shall not in$est in any corporation' partnership or company wherein any member of the =oard of
Trustees or of the Committee on In$estments or his spouse' direct descendant or ascendant has substantial pecuniary
interest or has participation in the management or control of the enterprise e+cept with the unanimous $ote of the
members of the =oard of Trustees and of the Committee on In$estments' e+cluding the member interested' in a 1oint
meeting held for that purpose where full and fair information of the e+tent of such interest or participation has been
ade(uately disclosed in writing and recorded in the minutes of the meeting &ro$ided' That such interested member
shall not in any manner participate in the deliberations and shall refrain from e+erting any pressure or influence
whate$er on any official or member of the =ank whose functions bear on or relate to the in$estment of the funds of
the =ank in the enterprise &ro$ided' further' That the total in$estment in any single corporation' partnership'
company' or association shall not e+ceed fi$e per centum of the total in$estible funds.
Sectio &'. Personnel2 Cost of Administration - The Administrati$e e+penses of the =ank during any single fiscal
year shall not in any case e+ceed two and one-half per centum of its total assets. The =oard of Trustees shall pro$ide
for an organi%ation and staff of officers and employees necessary to carry out the functions of the =ank' fi+ their
compensation' and appoint and remo$e such officers and employees for cause. The =ank officers and employees
shall be sub1ect to the rules and regulations issued by the Ci$il Ser$ice Commission but shall not fall under the <age
and &osition Classification 8ffice. The =oard of Trustees shall recommend to the Ci$il Ser$ice Commission rules
and regulations for the recruitment' appointment' compensation' administration' conduct' promotion and remo$al of
all =ank officers and employees under a strict merit system and prepare and conduct e+aminations under the
super$ision of said Commission.
Sectio &!. Legal counsel - The Secretary of Eustice shall be e+-officio legal ad$iser of the =ank. Any pro$ision of
law to the contrary notwithstanding' the Land =ank shall ha$e its own Legal Aepartment' the chief and members of
which shall be appointed by the =oard of Trustees. The composition' budget and operating e+penses of the 8ffice of
the Legal Counsel and the salaries and tra$eling e+penses of its officers and employees shall be fi+ed by the =oard
of Trustees and paid by the =ank.
Sectio &". Auditor - The Auditor Beneral shall be the e+-officio auditor of the =ank and shall appoint a
representati$e' who shall be the auditor in charge of the auditing office of the =ank. The Auditor Beneral shall' upon
the recommendation of the auditor of the =ank' appoint or remo$e the personnel of the auditing office. The
compensation' budget and operating e+penses of the auditing office and the salaries and tra$eling e+penses of the
20
officers and employees thereof shall be fi+ed by the =oard of Trustees and paid by the =ank notwithstanding any
pro$ision of law to the contrary.
Sectio &3. Report on Condition of 3an5 - The representati$e of the Auditor Beneral shall make a (uarterly report
on the condition of the =ank to the &resident of the &hilippines' to the Senate through its &resident' to the ;ouse of
Representati$es through its Speaker' to the Secretary of ?inance' to the Auditor Beneral and to the =oard of Trustees
of the =ank. The report shall contain' among other things' a statement of the resources and liabilities including
earnings and e+penses' the amount of capital stock' surplus' reser$e and profits' as well as losses' bad debts' and
suspended and o$erdue paper carried in the books as assets of the =ank' and a plantilla of the =ank.
Sectio &4. Auditing Rules and Regulations - The Auditor Beneral shall' with respect to the =ank' formulate
impro$ed and progressi$e auditing rules and regulations designed to e+pedite the operations of the =ank and pre$ent
the occurrence of delays and bottlenecks in its work.
Sectio &#. Remo%al of *embers - The &resident of the &hilippines may' at any time' remo$e the Chairman or any
member of the =oard appointed by him if the interest of the =ank so re(uires' for any of the following causes
!"# 9ismanagement' gra$e abuse of discretion' infidelity in the conduct of fiduciary relations' or
gross neglect in the performance of duties)
!*# Aishonesty' corruption' or any act in$ol$ing moral turpitude) and
!,# Any act or performance tending to pre1udice or impair the substantial rights of the
stockholders.
Con$iction of the Chairman or a member for a crime carrying with it a penalty greater than arresto mayor shall
cause the remo$al of such Chairman or member without the necessity of &residential action.
The Chairman or member may' in any of the abo$e cases' be ci$illy liable for any damage that may ha$e been
suffered by the stockholders.
Sectio &$. Transfer of Claims and Liabilities - The assets of the former Land Tenure Administration and the
4ational Resettlement and Rehabilitation Administration in the form of claims and recei$ables arising from the sale
or transfer of pri$ate and public lands' agricultural e(uipment' machinery' tools and work animals' but e+cluding
ad$ances made for subsistence' to small landholders shall' after an e+hausti$e e$aluation to determine their true
asset $alue' be irre$ocably transferred to the =ank under such arrangements as the Land Authority and the =ank
shall agree upon. Thereafter' the =ank shall ha$e authority and 1urisdiction to administer the claims' to collect and
make ad1ustments on the same and' generally' to do all other acts properly pertaining to the administration of claims
held by a financial institution. The Land Authority' upon re(uest of the =ank' shall assist the latter in the collection
of such claims. The Land Authority shall be entitled to collect from the =ank no more than the actual cost of such
collection ser$ices as it may e+tend. The claims transferred under this Section shall not be considered as part of the
Bo$ernment>s subscription to the capital of the =ank.
Sectio &%. Regulation - The =ank shall not be sub1ect to the laws' rules and regulations go$erning banks and other
financial institutions of whate$er type e+cept with respect to the receipt of sa$ings and time deposits in accordance
with Section se$enty-nine of this Code' in which case the legal reser$e and other re(uirements prescribed by the
Central =ank for such deposits shall apply. The =ank shall be operated as an autonomous body and shall be under
the super$ision of the Central =ank.
Sectio &8. Tax Exemption - The operations' as well as holdings' e(uipment' property' income and earnings of the
=ank from whate$er sources shall be fully e+empt from ta+ation.
21
Sectio &&. /rgani4ation of 3an5 - The =ank shall be organi%ed within one year from the date that this Code takes
effect.
Sectio !''. Penalty for 9iolation of the Pro%isions of this Chapter - Any trustee' officer' employee or agent of the
=ank who $iolates or permits the $iolation of any of the pro$isions of this Chapter' or any person aiding or abetting
the $iolations of any of the pro$isions of this Chapter' shall be punished by a fine not to e+ceed ten thousand pesos
or by imprisonment of not more than fi$e years' or both such fine and imprisonment at the discretion of the Court.
CHAPTER V
AGRICULTURAL CREDIT ADMINISTRATION
Sectio !'!. Reorgani4ation of ACC)A to Align ts Acti%ities - The administrati$e machinery of the Agricultural
Credit and Cooperati$e ?inancing Administration created under Republic Act 4umbered 5ight hundred twenty-one'
as amended by Republic Act 4umbered Twel$e hundred and eighty-fi$e' shall be reorgani%ed to enable it to align its
acti$ities with the re(uirements and ob1ecti$es of this Code and shall be known as the Agricultural Credit
Administration.
Sectio !'". )inancing - To finance the additional credit functions of the Agricultural Credit Administration as a
result of the land reform program laid down in this Code' there is hereby appropriated the sum of one hundred fifty
million pesos out of funds in the 4ational Treasury not otherwise appropriated in addition to e+isting appropriations
for the Agricultural Credit and Cooperati$e ?inancing Administration.
Sectio !'3. Pri%ilege of Rediscounting - The Agricultural Credit Administration is hereby granted the pri$ilege of
rediscounting with the Central =ank of the &hilippines' the Ae$elopment =ank of the &hilippines and the &hilippine
4ational =ank eligible e$idence of indebtedness ac(uired by it in carrying on its authori%ed acti$ities' at an interest
rate e(ual to the lowest charged by the abo$e financing institution on any pri$ate person or entity.
Sectio !'4. Po7er to /btain Additional )unds - 4othing in this Section shall limit the power of the Agricultural
Credit Administration to obtain from the Central =ank of the &hilippines' the Ae$elopment =ank of the &hilippines'
the &hilippine 4ational =ank and other financing institutions' such additional funds as may be necessary for the
effecti$e implementation of this Act &ro$ided' That such additional funds are to be utili%ed as loans to farmers
and7or farmers> cooperati$es.
Sectio !'#. Loaning Acti%ities - Loaning acti$ities of the Agricultural Credit Administration shall be directed to
stimulate the de$elopment and operation of farmers> cooperati$es. The term :?armers> Cooperati$es: shall be taken
to include all cooperati$es relating to the production and marketing of agricultural products and those formed to
manage and7or own' on a cooperati$e basis' ser$ices and facilities' such as irrigation and transport system'
established to support production and7or marketing of agricultural products.
Dnder such rules and regulations in accordance with generally accepted banking practices and procedures as may be
promulgated by the Agricultural Credit Administration' Rural =anks and Ae$elopment =anks may' in their
respecti$e localities' be designated to act as agents of the Agricultural Credit Administration in regard to its loaning
acti$ities.
Sectio !'$. Credit to Small )armers - &roduction loans and loans for the purchase of work animals' tillage
e(uipment' seeds' fertili%ers' poultry' li$estock' feed and other similar items' may be e+tended to small farmers as
defined in Republic Act 4umbered 5ight hundred twenty-one' based upon their paying capacity and such securities
as they can pro$ide' and under such terms and conditions as the Agricultural Credit Administration may impose'
pro$ided the amount thereof does not e+ceed two thousand pesos' or such amount as may be fi+ed by the &resident'
but in no case shall the amount of loan e+ceed eighty per centum of the $alue of the collateral pledged. In instances
where credit is e+tended for items which are not consumed in their use' such items may be pledged as security
therefor. The Agricultural Credit Administration shall promulgate such rules and regulations as may be necessary in
the e+tension of the loans herein authori%ed so as to assure their repayment &ro$ided' That such rules and
regulations shall follow and be in accordance with generally accepted financing practices and procedures.
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Sectio !'%. Security for Loans - The production of the borrower' after deducting the lease rental and7or liens
thereon' shall be accepted as security for loans &ro$ided' That said production is pledged to the Agricultural Credit
Administration with appropriate safeguards to insure against its unauthori%ed disposition &ro$ided' further' That the
amount of loan shall not e+ceed si+ty per centum of the $alue of the estimated production.
Sectio !'8. Loans to Cooperati%es - The Agricultural Credit Administration is hereby authori%ed to e+tend such
types of loans as it may deem necessary for the effecti$e implementation of this Code' to eligible farmers>
cooperati$es as herein defined' under such terms and conditions as it may impose and with such securities as it may
re(uire. A farmers> cooperati$e that has been registered with the Securities and 5+change Commission and affiliated
with the Agricultural Credit Administration shall be eligible for loans if' in the 1udgment of the latter' its
organi%ation' management and business policies are of such character as will insure the safety and effecti$e use of
such loans.
Sectio !'&. Loans for Construction or Ac&uisition by Purchase of )acilities - Loans for the construction or
ac(uisition by purchase of facilities of farmers> cooperati$es may be granted by the Agricultural Credit
Administration.
Sectio !!'. nterest on Loans - The total charges including interest and insurance fees on all kinds of loans shall
not be more than eight per centum per annum &ro$ided' That if an impairment of the capitali%ation of the
Agricultural Credit Administration is imminent by reason of the limitation of the interest rate herein pro$ided' there
is automatically appropriated out of the unappropriated funds in the 4ational Treasury such amounts as is necessary
to co$er the losses of the Agricultural Credit Administration' but not e+ceeding si+ million pesos for any one year.
Sectio !!!. nstitution of Super%ised Credit - To pro$ide for the effecti$e use of credit by farmers' the Agricultural
Credit Administration may institute a program of super$ised credit in cooperation with the Agricultural &roducti$ity
Commission.
Sectio !!". (uidance to Cooperati%es - The Agricultural Credit Administration shall ha$e the power to register and
pro$ide credit guidance or assistance to all agricultural cooperati$es including irrigation cooperati$es and other
cooperati$e associations or fund corporations.
Sectio !!3. Auditing of /perations - ?or the effecti$e super$ision of farmers> cooperati$es' the head of the
Agricultural Credit Administration shall ha$e the power to audit their operations' records and books of account and
to issue subpoena and subpoena duces tecum to compel the attendance of witnesses and the production of books'
documents and records in the conduct of such audit or of any in(uiry into their affairs. Any person who' without
lawful cause' fails to obey such subpoena or subpoena duces tecum shall' upon application of the head of
Agricultural Credit Administration with the proper court' be liable to punishment for contempt in the manner
pro$ided by law and if he is an officer of the association' to suspension or remo$al from office.
Sectio !!4. Prosecution of /fficials - The Agricultural Credit Administration' through the appropriate pro$incial or
city fiscal' shall ha$e the power to file and prosecute any and all actions which it may ha$e against any and all
officials or employees of farmers> cooperati$es arising from misfeasance or malfeasance in office.
Sectio !!#. )ree Notarial Ser%ices - Any 1ustice of the peace' in his capacity as notary e+-officio' shall render
ser$ice free of charge to any person applying for a loan under this Code either in administering the oath or in the
acknowledgment of instruments relating to such loan.
Sectio !!$. )ree Registration of Deeds - Any register of deeds shall accept for registration' free of charge any
instrument relati$e to a loan made under this Code.
Sectio !!%. -riting$off ,nsecured and /utstanding Loans - Sub1ect to the appro$al of the &resident upon
recommendation of the Auditor Beneral' the Agricultural Credit Administration may write-off from its books'
unsecured and outstanding loans and accounts recei$able which may become uncollectible by reason of the death or
disappearance of the debtor' should there be no $isible means of collecting the same in the foreseeable future' or
23
where the debtor has been $erified to ha$e no income or property whatsoe$er with which to effect payment. In all
cases' the writing-off shall be after fi$e years from the date the debtor defaults.
Sectio !!8. Exemption from Duties! Taxes and Le%ies - The Agricultural Credit Administration is hereby e+empted
from the payment of all duties' ta+es' le$ies' and fees' including docket and sheriff>s fees' of whate$er nature or kind'
in the performance of its functions and in the e+ercise of its powers hereunder.
CHAPTER VI
AGRICULTURAL PRODUCTIVITY COMMISSION
Sectio !!&. Creation of the Agricultural Producti%ity Commission - ?or the purpose of accelerating progressi$e
impro$ement in the producti$ity of farms' the ad$ancement of farmers and the strengthening of e+isting agricultural
e+tension ser$ices through the consolidation of all7promotional' educational and informational acti$ities pertaining
to agriculture' the present =ureau of Agricultural 5+tension of the Aepartment of Agriculture and 4atural Resources
is hereby placed directly under the e+ecuti$e super$ision and control of the &resident and hereinafter renamed
Agricultural &roducti$ity Commission.
Dpon the effecti$ity of this Code' the Agricultural Tenancy Commission of the Aepartment of Eustice' together with
its powers' duties' responsibilities' files' records supplies' e(uipment' personnel and une+pended balance of
appropriations' is hereby placed under the Agricultural &roducti$ity Commission as a separate office thereof.
Sectio !"'. Commissioner of the Agricultural Producti%ity Commission - The Agricultural &roducti$ity
Commission shall be administered by an Agricultural &roducti$ity Commissioner who shall be appointed by the
&resident with the consent of the Commission on Appointments and who shall ha$e a compensation of si+teen
thousand pesos per annum. 4o person shall be appointed as a Agricultural &roducti$ity Commissioner unless he be a
holder of at least a =achelor of Science degree in Agricultural from a reputable school or college of agriculture and
shall ha$e practiced agriculture for at least fi$e years' and who is of recogni%ed competence in agricultural
economics or any of its e(ui$alents.
Sectio !"!. Po7ers and Duties - The Agricultural &roducti$ity Commissioner shall e+ercise the same powers and
duties $ested in the Airector of the =ureau of Agricultural 5+tension.
Sectio !"". Di%ision on Cooperati%es - In addition to the e+isting di$isions of the =ureau of Agriculture 5+tension'
herein renamed as Agricultural &roducti$ity Commission' there shall be a Ai$ision of Cooperati$es and such other
di$isions and sections as the Agricultural &roducti$ity Commissioner may deem necessary to organi%e in order to
carry out the promotional and educational acti$ities of the Commission.
Sectio !"3. Recruitment! Selection and Training of Extension -or5ers - The e+tension workers shall be recruited
and selected from graduates of agricultural college with ade(uate practical e+perience and training in actual crop'
tree' poultry and li$estock farming &ro$ided' howe$er' That in the e$ent there are no graduates of agricultural
colleges a$ailable' graduates of agricultural high schools may be temporarily employed. Training of e+tension
workers shall be done in con1unction with research institutions to insure their ma+imum efficiency.
Sectio !"4. )unctions of Extension -or5ers - In addition to their functions under Republic Act 4umbered Si+
hundred eighty' it shall be the duty of e+tension workers
!"# To reside in the locality where they are assigned' to disseminate technical information to
farmers' and to demonstrate impro$ed farm management practices and techni(ues)
!*# To work with indi$idual farmers in farm planning and budgeting' guide them in the proper
conduct of farm business and work out schedules of re-payment of loans obtained by farmers)
24
!,# To assist farmers in securing the ser$ices or assistance of other agencies' or their personnel'
ha$ing to do with rele$ant acti$ities and problems of farmers)
!-# To $isit newly-established independent farm operators either singly or collecti$ely at least once
a month)
!.# To conduct educational acti$ities that will ac(uaint leaseholders and other independent farm
operators with their rights and responsibilities under this Code)
!/# To encourage the formation and growth of pri$ate associations' study clubs' committees and
other organi%ed groups of farmers' familiari%e them with modern methods of farming and interest
them to acti$ely participate' collaborate or take the initiati$e in agricultural research'
e+perimentation and implementation of pro1ects in cooperation with the Agricultural &roducti$ity
Commissioner and other agencies) and
!0# To promote' stimulate and assist in the organi%ation of farmers> cooperati$es.
Sectio !"#. Appropriation - In addition to the funds herein transferred' there is hereby appropriated from the
general funds in the 4ational Treasury not otherwise appropriated the sum of fi$e million pesos' or so much thereof
as may be necessary to carry out the purposes of this Chapter.
CHAPTER VII
LAND REFORM PRO9ECT ADMINISTRATION
Sectio !"$. Creation of National Land Reform Council - There is hereby created a 4ational Land Reform Council'
hereinafter called the Council' which shall be composed of the Bo$ernor of the Land Authority' who shall act as
Chairman' the Administrator of the Agricultural Credit Administration' the Chairman of the =oard of Trustees of the
Land =ank' the Commissioner of the Agricultural &roducti$ity Commission and another member appointed by the
&resident upon recommendation of the minority party recei$ing the second largest number of $otes in the last
&residential election who shall hold office at the pleasure of such minority party' unless sooner remo$ed for cause by
the &resident as members and the Agrarian Counsel as legal counsel &ro$ided' That the Council shall not be
considered fully constituted and ready to function until after the member representing the minority party has been
appointed by the &resident of the &hilippines &ro$ided' further' That the minority party shall submit its
recommendation to the &resident within si+ty days from the appro$al of this Code' in the absence of which the
Council shall be deemed to be so constituted e$en without such member from the minority party &ro$ided' finally'
That the minority representati$e shall recei$e a per diem of fifty pesos for each day he attends a council meeting'
chargeable to the appropriations of the Land Authority.
Sectio !"%. *eetings2 Resolutions - The Chairman of the Council shall con$oke the Council as its responsibilities
enumerated in Section one hundred twenty-eight may warrant' and shall preside o$er its meetings.
It shall be the duty of the members to attend any meeting of the Council upon the call of the Chairman. In case of
inability' a member may re(uire the officer ne+t in rank in his agency to attend the meeting in his behalf.
A ma1ority $ote of the members present if there is a (uorum shall be necessary for the appro$al of a resolution.
Dpon such appro$al the resolution shall be final and binding upon all members of the Council and their respecti$e
agencies insofar as their functions' powers and duties re(uired under this Code are concerned.
The refusal of any member to implement any resolution or part thereof falling within the scope of the powers
granted to his agency shall be sufficient ground for the &resident of the &hilippines to remo$e said member from
office or to impose upon him disciplinary or administrati$e sanctions.
Sectio !"8. )unctions of National Land Reform Council - It shall be the responsibility of the Council
25
!"# To construct the general program of land reform contemplated by this Code)
!*# To establish guidelines' plans and policies for its member-agencies relati$e to any particular
land reform pro1ect)
!,# To formulate such rules and regulations as may be necessary to carry out the pro$isions of this
Code for !a# the selection of agricultural land to be ac(uired and distributed under this Code) !b#
the determination of si%es of family farms as defined in Section one hundred si+ty-si+) and !c# the
selection of beneficiaries to family farms a$ailable for distribution &ro$ided' That priority shall be
gi$en in the following order ?irst' to members of the immediate family of the former owner of the
land within the first degree of consanguinity who will culti$ate the land personally with the aid of
labor a$ailable within his farm household) Second' to the actual occupants personally culti$ating
the land either as agricultural lessees or otherwise with respect to the area under their culti$ation)
Third' to farmers falling under the preceding category who are culti$ating uneconomic-si%e farms
with respect to idle or abandoned lands) ?ourth' to owner-operators of uneconomic-si%e farms) and
?ifth' to such other categories as may be fi+ed by $irtue of this Code' taking into consideration the
needs and (ualifications of the applicants
!-# To re$ise' appro$e' or re1ect any land reform proposal or pro1ect) and
!.# To proclaim in accordance with the pro$isions of this Code' which proclamation shall be
considered as ha$ing been promulgated immediately after three successi$e weekly publications in
at least two newspapers of general circulation in the region or locality affected by the
proclamation' preference being gi$en to local newspapers' if any' that all the go$ernment
machineries and agencies in any region or locality relating to leasehold en$isioned in this Code are
operating &ro$ided' That the con$ersion to leasehold in the proclaimed area shall become
effecti$e at the beginning of the ne+t succeeding agricultural year after such promulgation
&ro$ided' further' That the proclamation shall be made after ha$ing considered factors affecting
feasibility and fund re(uirements and the other factors embodied in Sections one hundred twenty-
nine' one hundred thirty and one hundred thirty-one.
Sectio !"&. Creation of Land Reform Districts - The Council shall e+ercise the functions enumerated in the
preceding Section for particular areas which the Council shall select and designate as land reform districts. A district
shall constitute one or more reform pro1ects' each pro1ect to comprise either a large landed estate or se$eral areas
within small estates. In the selection of a district' the Council shall consider factors affecting the feasibility of
ac(uiring for redistribution the areas within the district' including
!"# The producti$ity of the area)
!*# Its suitability for economic family-si%e farms)
!,# The tenancy rate in the area)
!-# The minimum fi+ed capital outlay re(uired to de$elop the area)
!.# The pro+imity of the area to resettlement pro1ects) and
!/# The number of farmers that culti$ate uneconomic-si%e farms' the ability and readiness of such
farmers to be resettled' and the a$ailability of idle or abandoned lands that may be ac(uired or
e+propriated as well as of other resettlement facilities.
Sectio !3'. Regional Land Reform Committee - ?or the purpose of implementing the program and policies of the
Council on the local le$el' the Council shall establish in each region of the &hilippines a Regional Land Reform
26
Committee which shall be composed of the representati$es of the agencies composing the 4ational Land Reform
Council and shall be under the chairmanship of the representati$e of the Land Authority. The committee shall
recommend to the Council such plans for pro1ects of land reform in its 1urisdiction as it may deem appropriate. The
Committee shall conduct public hearings' gather and analy%e data' estimate the essentials of such plans for pro1ects
or programs and consolidate its findings in a report to be submitted to the Council for its consideration. The decision
of the Council upon such pro1ects or programs shall be returned to the Committee' within thirty days from the
submission thereof' for early implementation or e+ecution by said Committee and the agencies represented therein.
Sectio !3!. Land Reform Pro'ect Team - The Regional Land Reform Committee shall direct and assign a Land
Reform &ro1ect Team for any pro1ect or pro1ects within the region' to be composed of an appropriate number of
personnel from the member-agencies. The team shall be headed by a representati$e of the Land Authority designated
by the Committee' but each agency shall' in e$ery case' be duly represented by at least one member in the Team. 8n
the basis of national' regional' and local policies and programs formulated and appro$ed by the Council through the
Committee' the Team shall determine !a# the suitability of any area for redistribution into economic family-si%e
farms) !b# the economic si%e of farm units) !c# the feasibility of ac(uiring and distributing the area) !d# the
willingness of the lessees to assume the responsibilities of ownership) and !e# the financial and other re(uirements of
the pro1ect. ?or this purpose' it shall gather data' obtain opinions' conduct sur$eys' pursue in$estigations' and
incorporate any information thus established in a de$elopment program for the area concerned to be submitted in the
form of a consolidated report to the Committee.
CHAPTER VIII
LAND CAPABILITY SURVEY AND CLASSIFICATION
Sectio !3". Land Sur%ey to Conform to Legal Re&uirements - To pro$ide the necessary basis for the
implementation of the land reform program formulated under this Code' the Land Authority is hereby authori%ed to
undertake a land capability sur$ey and classification in cooperation with the rele$ant agencies that will be directly
benefited by such sur$ey and classification. The sur$ey shall be made to conform to the re(uirements of the
Aepartment of Agriculture and 4atural Resources for implementation of Agricultural programs and forestry
in$entory' of the =oard of Technical Sur$eys and 9aps' and of the 4ational 5conomic Council and other agencies
for agricultural planning and other purposes.
Sectio !33. Cadastral Sur%ey - To resol$e the rights of landholders holding unregistered property' the =ureau of
Lands is directed to undertake an e+panded cadastral sur$ey and land registration program commencing within three
months from the passage of this Code.
Sectio !34. Costs of )ees and Charges - 4otwithstanding any pro$isions of law to the contrary' the following rules
shall apply with respect to the costs' fees and charges in the sur$ey' monumenting' and registration of lands of
whate$er description and nature had in relation to cadastral proceedings undertaken by the 4ational Bo$ernment'
either alone through its offices' agencies and instrumentalities' or in con1unction with pro$incial and municipal
go$ernments.
Sectio !3#. Apportionment of Cost of Sur%ey - 8ne-half of the cost of sur$ey and monumenting and registration
proceedings shall be fully assessed and collected against each and all of the lots included in cadastral proceedings
and shall be apportioned in accordance with the area thereof' but in no case shall less than ten pesos be charged
against each lot' the other half being chargeable to the 4ational Bo$ernment. The amounts ta+ed against each of the
lots or parcels of land shall be considered as a special assessment of ta+es against the respecti$e parcels' shall
constitute a first lien upon the land and shall be collected by the Airector of Lands or his duly authori%ed
representati$es in e(ual installments within a period of three years' bearing interest at the rate of si+ per centum per
annum. The first installment shall become due and payable at the same time as the general land ta+es for the year
ne+t succeeding the year in which the assessment of the cost shall be recei$ed by the &ro$incial Treasurer' and shall
be collected in the same manner as such general ta+es. 5ach succeeding installment shall become due and payable at
the same time as the general land ta+es for the corresponding current year and shall be collected in the same manner.
The Airector of Lands shall for this purpose send to the officer in charge of such collection a copy of said
assessment of costs &ro$ided' howe$er' That the amounts representing the proportional shares of the costs ta+ed
against lots sur$eyed at the re(uest and e+pense of their owner and for which a plan other than the cadastral plan has
27
been made by a duly authori%ed sur$eyor prior to the decision in the cadastral proceeding' or which ha$e been
registered in accordance with the pro$isions of Act 4umbered ?our hundred ninety-si+' entitled :The Land
Registration Act:' or sur$eyed' patented' or leased under the &ublic Land and 9ining Laws' prior to the decision in
the cadastral proceeding' or ha$e been declared to the public lands by the Court' shall not constitute a lien against
said lot nor shall be collected from the owner thereof &ro$ided' further' That the owner of any lot may' if he so
desires' pay any installment of the costs ta+ed against his lot at any time before the same becomes due.
Sectio !3$. Payment of Costs of Land in ts Entirety in Case of Transfer of Land - In case of the sale' transfer' or
con$eyance' for a pecuniary consideration' of any property' or part thereof' registered by $irtue of a decree issued in
a cadastral proceeding' prior to the payment of the total amount of the costs ta+ed against such property in
accordance with the preceding Section endorsed as an encumbrance or lien upon each cadastral certificate of title'
the $endor or his legal representati$e shall pay such costs in their entirety in case the order apportioning the costs
has already been issued in the cadastral proceeding in which the property being sold' transferred' or con$eyed is
included' and the register of deeds concerned shall demand of the $endor' before registering the deed for such sale'
transfer' or con$eyance of said property' that he e+hibit a receipt signed by the Airector of Lands or his duly
authori%ed representati$e showing that such encumbrance or lien has been paid.
Sectio !3%. Costs of Registration Proceedings - The costs of the registration proceedings under the pro$isions of
this Code shall consist of a sum e(ui$alent to ten per centum of the costs of the sur$ey and monumenting of the
land. The amount of the costs of the proceeding so ta+ed shall be for all ser$ices rendered by the Land Registration
Commission and the clerk or his deputies in each cadastral proceeding' and the e+pense of publication' mailing' and
posting notice' as well as the notices of the decision and the order apportioning the cost shall be borne by the Land
Registration Commission.
Sectio !38. La7s Co%ering Sur%ey and Registration of Land in )orces - Dnless otherwise pro$ided in this Chapter'
all pro$isions of law co$ering the sur$ey and registration of land shall remain in full force and effect.
Sectio !3&. Re%ol%ing )und - All amounts collected by the =ureau of Lands or its duly authori%ed representati$es
from the owners of the $arious lots as costs of proceedings' sur$ey' and monumenting in relation to the cadastral
sur$ey program herein described shall be paid into a Special Cadastral &rogram Re$ol$ing ?und to finance the
cadastral land sur$ey and registration of other unregistered lands.
Sectio !4'. Appropriation - To finance and support the e+panded cadastral land sur$ey and registration program set
forth herein' the amount of one hundred million pesos is hereby appropriated out of funds in the 4ational Treasury
not otherwise appropriated' which amount shall be paid into a :Special Cadastral &rogram Re$ol$ing ?und:' to
finance the cadastral land sur$ey and registration of other unregistered areas.
CHAPTER I:
COURTS OF AGRARIAN RELATIONS
Sectio !4!. Creation - Courts of Agrarian Relations are hereby organi%ed and established throughout the
&hilippines in conformity with the pro$isions of this Chapter.
Sectio !4". Regional Districts - Regional districts for the Courts of Agrarian Relations in the &hilippines are
constituted as follows
The first Regional Aistrict shall consist of the pro$inces of Cagayan' =atanes' Isabela and 4ue$a
6i%caya' with seat in Tuguegarao' Cagayan for =ranch I and in Ilagan' Isabela for =ranch II)
The second Regional Aistrict' of the pro$inces of Ilocos 4orte' Ilocos Sur' Abra' 9ountain
&ro$ince' La Dnion and the City of =aguio' with seat in Laoag' Ilocos 4orte for =ranch I and in
San ?ernando' La Dnion for =ranch II)
28
The third Regional Aistrict of the pro$inces of &angasinan and Fambales' and the City of
Aagupan' with seat in Lingayen' &angasinan for =ranch I' in Tayug' &angasinan for =ranch II and
in Iba' Fambales for =ranch III)
The fourth Regional Aistrict' of the pro$inces of 4ue$a 5ci1a and Tarlac' and Cabanatuan City'
with seat in Cabanatuan City for =ranch I' in Buimba' 4ue$a 5ci1a for =ranch II' in Tarlac' Tarlac
for =ranch III and in 9oncada' Tarlac for =ranch I6)
The fifth Regional Aistrict' of the pro$inces of &ampanga' =ataan and =ulacan' with seat in
9alolos' =ulacan for =ranch I' in San ?ernando' &ampanga for =ranch II' in Angeles' &ampanga
for =ranch III and in =alanga' =ataan for =ranch I6)
The si+th Regional Aistrict' of the City of 9anila' Gue%on City' &asay City' the pro$ince of Ri%al'
the City of Ca$ite' the pro$ince of Ca$ite' the City of Tagaytay' Trece 9artires City' and the
pro$ince of &alawan' with seat in 9anila for =ranch I !5+ecuti$e Eudge#' in Ca$ite City for
=ranch II and in &asig' Ri%al for =ranch III) The se$enth Regional Aistrict' of the pro$ince of
Laguna' the City of San &ablo' the pro$ince of =atangas' the City of Lipa' and the pro$inces of
8riental 9indoro and 8ccidental 9indoro' with seat in Los =aHos' Laguna for =ranch I' in
=atangas' =atangas for =ranch II and in 9amburao' 9indoro 8ccidental for =ranch III)
The eight Regional Aistrict' of the pro$ince of Gue%on' the subpro$ince of Aurora' the City of
Lucena' and the pro$ince of Camarines 4orte' with seat in the City of Lucena for =ranch I and in
Aaet' Camarines 4orte for =ranch II)
The ninth Regional Aistrict' of the pro$ince of Camarines Sur' 4aga City' Legaspi City and the
pro$inces of Albay' Catanduanes' Sorsogon and 9asbate' with seat in 4aga City for =ranch I' in
Legaspi City for =ranch II and in Sorsogon' Sorsogon for =ranch III)
The tenth Regional Aistrict' of the pro$ince of Capi%' Ro+as City' the pro$inces of Aklan'
Romblon' 9arindu(ue and Iloilo' the City of Iloilo' and the pro$ince of Anti(ue' with seat in the
City of Iloilo for =ranch I and in Ro+as City for =ranch II)
The ele$enth Regional Aistrict' of the pro$ince of 8ccidental 4egros' the Cities of =acolod and
Silay' the pro$ince of 8riental 4egros' Aumaguete City' and the subpro$ince of Si(ui1or' with seat
in =acolod City for =ranch I' in Aumaguete City for =ranch II and in San Carlos City for =ranch
III)
The twelfth Regional Aistrict' of the pro$ince of Samar' the City of Calbayog' the pro$ince of
Leyte' and the Cities of 8rmoc and Tacloban' with seat in Catbalogan' Samar for =ranch I and in
8rmoc City for =ranch II)
The thirteenth Regional Aistrict' of the pro$ince of Cebu' the City of Cebu' and the pro$ince of
=ohol' with seat in the City of Cebu for =ranch I and in Tagbilaran' =ohol for =ranch II)
The fourteenth Regional Aistrict' of the pro$inces of Surigao and Agusan' =utuan City' the
pro$ince of 8riental 9isamis' Cagayan de 8ro City' the pro$inces of =ukidnon' Lanao del Sur
and Lanao del 4orte' and the Cities of Iligan and 9arawi' with seat in Cagayan de 8ro City for
=ranch I and in Iligan City for =ranch II)
The fifteenth Regional Aistrict' of the pro$ince of Aa$ao the City of Aa$ao' the pro$inces of
Cotabato and 8ccidental 9isamis' 8%ami% City' the pro$inces of Famboanga del 4orte and
Famboanga del Sur' Famboanga City' =asilan City and the pro$ince of Sulu' with seat in the City
of Aa$ao for =ranch I' Cotabato City for =ranch II and 8%ami% City for =ranch III.
29
Sectio !43. 8udges of Agrarian Relations $ The 1udicial function of the Courts of Agrarian Relations shall be $ested
in an 5+ecuti$e Eudge and the Regional Aistrict Eudges' who shall be appointed from time to time' depending on the
need for their ser$ices' by the &resident of the &hilippines with the consent of the Commission on Appointments
&ro$ided' howe$er' That the 5+ecuti$e Eudge and the eight Associate Eudges' at the time of the appro$al of this
Code' of the Court of Agrarian Relations established and organi%ed under Republic Act 4umbered Twel$e hundred
and si+ty-se$en' shall continue as Agrarian Eudges without need of new appointments by the &resident of the
&hilippines and new confirmation of the Commission on Appointments &ro$ided' further' That upon the appro$al of
this Code' the said 5+ecuti$e Eudge shall continue as such with authority to e+ercise the usual administrati$e
functions o$er the Court of Agrarian Relations not incompatible with the pro$isions of this Chapter and shall ha$e
his office in 9anila without pre1udice to his holding court in any district where the re(uirements of the ser$ice so
warrant' and the eight Associate Eudges shall be assigned as Regional Aistrict Eudges by the 5+ecuti$e Eudge to any
of the regional districts as constituted in the preceding Section.
Sectio !44. 6ualifications of 8udges2 Tenure of /ffice2 Compensation - 4o person shall be appointed as 5+ecuti$e
Eudge or Regional Aistrict Eudge unless he has been a citi%en of the &hilippines for ten years and has practiced law
in the &hilippines for a period of not less than ten years or has held during a like period' within the &hilippines' an
office re(uiring admission to the practice of law in the &hilippines as an indispensable re(uisite.
Regional Aistrict Eudges shall be appointed to ser$e during good beha$ior' until they reach the age of se$enty years
or become incapacitated to discharge the duties of their office' unless sooner remo$ed in accordance with law.
The 1udges may be suspended or remo$ed in the same manner and upon the same grounds as 1udges of the Court of
?irst Instance
The 5+ecuti$e Eudge shall recei$e an annual compensation which shall be e(ual to that allowed or may hereafter be
allowed for 1udges of the Court of ?irst Instance and the Regional Aistrict Eudges shall recei$e an annual
compensation of one thousand pesos less than that of the 5+ecuti$e Eudge.
Sectio !4#. Lea%e Pri%ileges2 Tra%eling Expenses - Eudges of the Courts of Agrarian Relations shall be entitled to
same retirement and lea$e pri$ileges now granted or may hereafter be granted to 1udges of the court of ?irst
Instance. They shall be entitled to tra$eling e+penses when performing their duties outside official stations.
Sectio !4$. 9acation of Courts of Agrarian Relations - The yearly $acation of Courts of Agrarian Relations shall
begin with the first of April and close with the first of Eune each year.
Sectio !4%. Assignment of 8udges to 9acation Duty - Auring the month of Eanuary of each year the 5+ecuti$e
Eudge shall issue an order naming the 1udges who are to remain on duty during the court $acation of that year) and'
consistently with the re(uirements of the 1udicial ser$ice' the assignment shall be so made that no 1udge shall be
assigned to $acation duty' unless upon his own re(uest' with greater fre(uency than once in two years.
Such order shall specify' in the case of each 1udge assigned to $acation duty' the territory o$er which in addition to
his own district his authority as $acation 1udge shall e+tend.
The 5+ecuti$e Eudge may from time to time modify his order assigning the 1udges to $acation duty as newly arising
conditions or emergencies may re(uire.
A 1udge assigned to $acation duty shall not ordinarily be re(uired to hold court during such $acation) but the
5+ecuti$e Eudge may' when in his 1udgment the emergency shall re(uire' direct any 1udge assigned to $acation duty
to hold during the $acation a special term of court in any district.
Sectio !48. 8udges of Regional Districts - ?our 1udges shall be commissioned for each of the fourth and fifth
Regional Aistricts) three 1udges shall be commissioned for each of the third' si+th' se$enth' ninth' ele$enth and
fifteenth Regional Aistricts) and two 1udges for each of the other Regional Aistricts.
30
Sectio !4&. /ath of /ffice - =efore entering upon the discharge of the duties of their office' the 1udges shall take
and subscribe to an oath of office in accordance with the pro$isions of Section twenty-three of the Re$ised
Administrati$e Code.
Sectio !#'. Di%ision of 3usiness 3et7een 3ranches - All business appertaining to the Courts of Agrarian Relations
of each Regional Aistrict shall be e(uitably distributed among the 1udges of the branches in such manner as shall be
agreed upon by the 1udges themsel$es. Should the 1udges fail to agree on the distribution of business' then the
5+ecuti$e Eudge shall make the distribution.
Sectio !#!. 8udges# Certification as to -or5 Completed - The 1udges of the Courts of Agrarian Relations shall
certify at the end of each month that all petitions and motions in all cases pending decision or resolution for a period
of thirty days from submission by the parties ha$e been determined and decided before the date of the making of the
certificate. 4o lea$e shall be granted and no salary shall be paid without such certificate.
Sectio !#". /fficial Station of Regional District 8udges - <ithin thirty days after the appro$al of this Code' the
5+ecuti$e Eudge shall issue an order designating the official station of the 1udges of the branches of each of the
Regional Aistricts.
Sectio !#3. Time and Place of .olding Court - Sessions of the Court shall be con$ened on all working days when
there are cases ready for trial or other court business to be dispatched. The hours for the daily session of the Court
shall be from nine to twel$e in the morning' and from three to fi$e in the afternoon' e+cept on Saturdays' when a
morning session only shall be re(uired but the 1udge may e+tend the hours of session whene$er in his 1udgment it is
proper to do so. The 1udge' in his discretion' may order that but one session per day shall be held instead of two' at
such hours as he may deem e+pedient for the con$enience both of the Court and of the public) but the number of
hours that the Court shall be in session per day shall be not less than fi$e.
Sessions of the Court shall be held at the places of the official station of the respecti$e 1udges &ro$ided' howe$er'
That whene$er necessary in the interest of speedy and ine+pensi$e 1ustice and litigation' a 1udge shall hold court in
the municipality where the sub1ect matter of the dispute is located' utili%ing the sala of the local 1ustice of the peace
court for this purpose.
A brief monthly report which shall be submitted within the first fi$e days of the succeeding month showing the
number and nature of the cases tried in his sala' the place of hearing in each case' the progress of the litigation with
corresponding dates and the disposition made thereon shall be rendered by e$ery 1udge under his signature and
copies thereof shall be furnished the 5+ecuti$e Eudge' who shall compile and report in an appropriate form the
decisions promulgated in important cases. A 1udge who fails or neglects to make his report shall' upon first offense'
be liable to warning by the 5+ecuti$e Eudge' and upon repeated failure or neglect may be suspended or remo$ed
from office.
Sectio !#4. 8urisdiction of the Court - The Court shall ha$e original and e+clusi$e 1urisdiction o$er
!"# All cases or actions in$ol$ing matters' contro$ersies' disputes' or money claims arising from
agrarian relations &ro$ided' howe$er' That all cases still pending in the Court of Agrarian
Relations' established under Republic Act 4umbered Twel$e hundred and si+ty-se$en' at the time
of the effecti$ity of this Code' shall be transferred to and continued in the respecti$e Courts of
Agrarian Relations within whose district the sites of the cases are located)
!*# All cases or actions in$ol$ing $iolations of Chapters I and II of this Code and Republic Act
4umber 5ight hundred and nine) and
!,# 5+propriations to be instituted by the Land Authority &ro$ided' howe$er' That e+propriation
proceedings instituted by the Land Tenure Administration pending in the Court of ?irst Instance at
the time of the effecti$ity of this Code shall be transferred to and continued in the respecti$e
Courts of Agrarian Relations within whose district the sub1ect matter or property is located.
31
Sectio !##. Po7ers of the Court2 Rules and Procedures - The Courts of Agrarian Relations shall ha$e all the
powers and prerogati$es inherent in or belonging to the Court of ?irst Instance.
The Courts of Agrarian Relations shall be go$erned by the Rules of Court &ro$ided' That in the hearing'
in$estigation and determination of any (uestion or contro$ersy pending before them' the Courts without impairing
substantial rights' shall not be bound strictly by the technical rules of e$idence and procedure' e+cept in
e+propriation cases.
Sectio !#$. Appeals - Appeals from an order or decision of the Courts of Agrarian Relations may be taken to the
Court of Appeals on (uestions of fact and of fact and law or to the Supreme Court on pure (uestions of law' as the
case may be' in accordance with rules go$erning appeals from the Court of ?irst Instance as pro$ided in the Rules of
Court.
Sectio !#%. Detail of 8udges to Another District - <hene$er any 1udge in any of the Court shall certify to the
5+ecuti$e Eudge that the condition of the docket in his Court is such as to re(uire the assistance of an additional
1udge' or when there is any $acancy in any Court' the 5+ecuti$e Eudge may' in the interest of 1ustice' with the
appro$al of the Supreme Court' assign any 1udge of the Court of Agrarian Relations whose docket permits his
temporary absence from said Court' to hold session in the Court needing such assistance or where such $acancy
e+ists.
<hene$er a 1udge appointed or assigned in any branch of the Court shall lea$e his district by transfer or assignment
to another Court of e(ual 1urisdiction without ha$ing decided a case totally heard by him and which was duly argued
or opportunity gi$en for argument to the parties of their counsel' it shall be lawful for him to prepare and sign his
decision in said case anywhere within the &hilippines and send the same by registered mail to the clerk of court to be
filed in the Court as of the date when the same was recei$ed by the clerk' in the same manner as if the 1udge had
been present in the Court to direct the filing of the 1udgment &ro$ided' howe$er' That if a case has been heard only
in part' the Supreme Court' upon petition of any of the interested parties to the case and the recommendation of the
respecti$e district 1udge' may also authori%e the 1udge who has partly heard the case to continue hearing and to
decide said case notwithstanding his transfer or appointment to another court of e(ual 1urisdiction.
Sectio !#8. Personnel of the Courts of Agrarian Relations -
!"# Court Commissioners) Gualifications and Compensation - There shall be twenty-four Court
Commissioners who shall recei$e an annual compensation of nine thousand pesos each and shall
be appointed by the &resident with the consent of the Commission on Appointments. A Court
Commissioner shall be a member of the &hilippine =ar and must ha$e been engaged in the
practice of law for fi$e years or must ha$e held a position in the go$ernment re(uiring the
(ualifications of a lawyer for the same period. A Court Commissioner may be assigned by the
5+ecuti$e Eudge to assist in the hearing and in$estigation of cases. Sub1ect to the latter>s direction
and super$ision' he may hear e$idence for the Court on any disputed point or issue in any gi$en
case or cases and shall after said hearing submit a report of all the cases heard by him together
with the records thereof within the period prescribed by the Court. Auring the hearing he may rule
upon (uestions of pleading and procedure but not on the merits of the case.
!*# Clerks of Court) Gualifications' Auties' Compensation and =ond - There shall be as many
Clerks of Court as there are 1udges' who shall be appointed by the &resident of the &hilippines
with the consent of the Commission on Appointments. Aeputy Clerks of Court and such other
employees as may be re(uired shall be appointed by the 5+ecuti$e Eudge' sub1ect to Ci$il Ser$ice
law' rules and regulations.
4o person shall be eligible for appointment as Clerk of Court unless he is duly authori%ed to practice law in the
&hilippines.
32
=efore entering upon the discharge of the duties of his office' he shall file a bond in the amount of ten thousand
pesos in the same manner and form as re(uired of the Clerk of the Supreme Court' such bond to be appro$ed by' and
filed with' the Treasurer of the &hilippines and shall be sub1ect to inspection by interested parties. The Clerk of
Court shall re(uire his deputy to gi$e an ade(uate bond as security against loss by reason of his wrong-doing or
gross negligence.
The Clerks of Court shall each recei$e an annual compensation of se$en thousand two hundred pesos. They shall
e+ercise the same powers and perform the same duties on all matters within the 1urisdiction of the Courts as those
e+ercised by the Clerks of Court of the Courts of ?irst Instance.
Clerks of Courts and other subordinate employees of the Courts of Agrarian Relations shall' for administrati$e
purposes' belong to the Aepartment of Eustice) but in the performance of their duties' they shall be sub1ect to the
super$ision of the 1udges of the Court to which they respecti$ely pertain.
The Commissioners' otherwise known as ;earing 8fficers of the Court of Agrarian Relations' as well as the Clerks
of Court at the time of the appro$al of this Code' shall continue as such without the need of new appointment by the
&resident of the &hilippines and new confirmation by the Commission on Appointments.
Sectio !#&. Appropriation - There is hereby appropriated the sum of three million fi$e hundred thousand pesos' or
so much thereof as may be necessary' out of the unappropriated funds in the &hilippine Treasury for e+penses for
courtrooms and court offices' including e(uipment for the Courts and their personnel' for salaries' and for other
necessary e+penses that may be incurred in carrying out the pro$isions of this Chapter. The amount appropriated
shall be carried in succeeding appropriations for the Courts of Agrarian Relations.
CHAPTER :
OFFICE OF AGRARIAN COUNSEL
Sectio !$'. Creation of /ffice of Agrarian Counsel - To strengthen the legal assistance to agricultural lessees and
agricultural owner-culti$ators referred to in this Code' the Tenancy 9ediation Commission is hereby e+panded and
shall hereafter be known as the 8ffice of the Agrarian Counsel. The head of the 8ffice shall hereafter be known as
Agrarian Counsel and shall ha$e the rank' (ualifications and salary of ?irst Assistant Solicitor Beneral. ;e shall be
assisted by a Aeputy Agrarian Counsel' who shall ha$e the rank' (ualifications and salary of Assistant Solicitor
Beneral. The Agrarian Counsel and Aeputy Agrarian Counsel shall be appointed by the &resident with the consent of
the Commission on Appointments of Congress and shall be under the direct super$ision of the Secretary of Eustice.
Sectio !$!. Special Attorneys - There is hereby created in the 8ffice of the Agrarian Counsel eighty additional
positions of Special Attorneys' who shall be appointed by the &resident upon recommendation of the Secretary of
Eustice and with the consent of the Commission on Appointments. They shall ha$e the rank' (ualifications and salary
pro$ided by law for a solicitor in the 8ffice of the Solicitor Beneral with the lowest rank.
Sectio !$". Appointment of Subordinate /fficials - The Agrarian Counsel shall appoint the subordinate officials
and employees of the 8ffice of Agrarian Counsel' sub1ect to ci$il ser$ice rules and regulations' fi+ their
compensation and prescribe their duties. The compensation of special attorneys transferred to the 8ffice of Agrarian
Counsel shall be fi+ed on salary scales corresponding to solicitors of the 8ffice of the Solicitor Beneral &ro$ided'
That in the fi+ing of their salary seniority in rank shall be taken into account.
The Agrarian Counsel shall ha$e the power to organi%e such di$isions and sections as will insure ma+imum
efficiency of the 8ffice.
Sectio !$3. )unctions of the /ffice of Agrarian Counsel - It shall be the responsibility of the 8ffice of the Agrarian
counsel' upon proper notification by the party concerned or by the association or organi%ation to which belongs' to
represent agricultural lessees' agricultural farm workers and agricultural owner-culti$ators referred to in this Code
who cannot engage the ser$ices of competent pri$ate counsel in cases before the Court of Agrarian Relations.
33
Sectio !$4. Authority to Administer /ath - The Agrarian Counsel' the Aeputy Agrarian Counsel and the Special
Attorneys of the 8ffice of Agrarian Counsel are hereby authori%ed to administer oaths free of charge.
Sectio !$#. Appropriations - There is hereby appropriated' in addition to the appropriation of the Tenancy
9ediation Commission for ?iscal Iear "3/-' the sum of three million pesos' or so much thereof as may be
necessary' out of the unappropriated funds in the 4ational Treasury' for salaries' wages' purchase of motor $ehicles'
supplies' e(uipment' and other sundry e+penses. The amount appropriated herein shall be carried in the
appropriations for the 8ffice of the Agrarian Counsel in the Beneral Appropriations Acts for succeeding fiscal years.
CHAPTER :I
GENERAL PROVISIONS
Sectio !$$. Definition of Terms - As used in Chapter I of this Code
!"# :Agricultural Land: means land de$oted to any growth' including but not limited to crop lands'
salt beds' fish ponds' idle land and abandoned land as defined in paragraphs "2 and "3 of this
Section' respecti$ely.
!*# :Agricultural lessee: means a person who' by himself and with the aid a$ailable from within
his immediate farm household' culti$ates the land belonging to' or possessed by' another with the
latter>s consent for purposes of production' for a price certain in money or in produce or both. It is
distinguished from ci$il lessee as understood in the Ci$il Code of the &hilippines.
!,# :Agricultural lessor: means a person' natural or 1uridical' who' either as owner' ci$il law
lessee' usufructuary' or legal possessor' lets or grants to another the culti$ation and use of his land
for a price certain.
!-# :Agricultural year: means the period of time re(uired for raising a particular agricultural
product' including the preparation of the land' sowing' planting and har$esting of crops and'
whene$er applicable' threshing of said crops &ro$ided' howe$er' That in case of crops yielding
more than one har$est from planting' :agricultural year: shall be the period from the preparation
of the land to the first har$est and thereafter from har$est to har$est. In both cases' the period may
be shorter or longer than a calendar year.
!.# :Court: means the Court of Agrarian Relations.
!/# ?air rental $alue: means the $alue not in e+cess of allowable depreciation plus si+ per cent
interest per annum on the in$estment computed at its market $alue &ro$ided' That the fair rental
$alue for work animal or animals and farm implements used to produce the crop shall not e+ceed
fi$e per cent of the gross har$est for the work animal or animals and fi$e per cent for implements.
!0# :?arm implements: means hand tools or machines ordinarily employed in a farm enterprise.
!2# :Immediate farm household: means the members of the family of the lessee or lessor and other
persons who are dependent upon him for support and who usually help him in his acti$ities.
!3# :Incapacity: means any cause or circumstance which pre$ents the lessee from fulfilling his
contractual and other obligations under this Code.
!"@# :Inspect: means to enter' e+amine and obser$e. Dnder no circumstance' howe$er' shall such
entrance' e+amination and obser$ation be utili%ed to commit any act of intimidation or coercion
nor shall it be utili%ed to impair the ci$il rights of the indi$iduals affected.
34
!""# :&ro$en farm practices: means sound farming practices generally accepted through usage or
officially recommended by the Agricultural &roducti$ity Commission for a particular type of farm.
!"*# :<ork animals: means animals ordinarily employed in a farm enterprise' such as carabaos'
horses' bullocks' etc.
!",# :&ersonal culti$ation: means culti$ation by the lessee or lessor in person and7or with the aid
of labor from within his immediate household.
As used in Chapter II
!"-# :?arm employer: includes any person acting directly or indirectly in the interest of a farm
employer whether for profit or not' as well as a labor contractor' but shall not include any labor
organi%ation !otherwise than when acting as a farm employer# or anyone acting in the capacity of
an officer or agent of such labor organi%ation.
!".# :?arm worker: includes any agricultural wage' salary or piece but is not limited to a farm
worker of a particular farm employer unless this Code e+plicitly states otherwise and any
indi$idual whose work has ceased as a conse(uence of' or in connection with' a current agrarian
dispute or an unfair labor practice and who has not obtained a substantially e(ui$alent and regular
employment.
<hene$er the term :farm worker: is used in this Code' it shall be understood to include farm
laborer and7or farm employee.
!"/# :?arm workers> organi%ation: includes any union or association of farm workers which e+ists'
in whole or in part' for the purpose of collecti$e bargaining or dealing with farm employers
concerning terms and conditions of employment.
!"0# :Agrarian dispute: means any contro$ersy relating to terms' tenure or conditions of
employment' or concerning an association or representation of persons in negotiating' fi+ing'
maintaining' changing' or seeking to arrange terms or conditions of employment' regardless of
whether the disputants stand in the pro+imate relation of farm employers and employees.
As used in Chapter III of this Code
!"2# :Idle lands: means land not de$oted directly to any crop or to any definite economic purpose
for at least one year prior to the notice of e+propriation e+cept for reasons other than force ma1eure
or any other fortuitous e$ent but used to be de$oted or is suitable to such crop or is contiguous to
land de$oted directly to any crop and does not include land de$oted permanently or regularly to
other essential and more producti$e purpose.
!"3# :Abandoned lands: means lands de$oted to any crop at least one year prior to the notice of
e+propriation' but which was not utili%ed by the owner for his benefit for the past fi$e years prior
to such notice of e+propriation.
!*@# :5conomic family-si%ed farm units: means an area of farm land that permits efficient use of
labor and capital resources of the farm family and will produce an income sufficient to pro$ide a
modest standard of li$ing to meet a farm family>s needs for food' clothing' shelter' and education
with possible allowance for payment of yearly installments on the land' and reasonable reser$es to
absorb yearly fluctuations in income.
35
!*"# :Suitably for economic family-si%e farm: refers to situations where a parcel of land whose
characteristics' such as climate' soil' topography' a$ailability of water and location' will support a
farm family if operated in economic family-si%e farm units and does not include those where
large-scale operations will result in greater production and more efficient use of land.
!**# :Agricultural owner-culti$ator: means any person who' pro$iding capital and management'
personally culti$ates his own land with the aid of his immediate family and household.
!*,# :8wner-manager: means the owner of a parcel of land de$oted to agricultural production
who pro$ides the capital and management in the farm enterprise.
!*-# :Labor administration: means cases where farm workers are employed wholly in the
agricultural production.
!*.# :Share tenancy: as used in this Code means the relationship which e+ists whene$er two
persons agree on a 1oint undertaking for agricultural production wherein one party furnishes the
land and the other his labor' with either or both contributing any one or se$eral of the items of
production' the tenant culti$ating the land personally with the aid of labor a$ailable from members
of his immediate farm household' and the produce thereof to be di$ided between the landholder
and the tenant.
!*/# :Ta+ free: in reference to bonds and shares of stock issued by the Land =ank as payment for
ac(uired pri$ate agricultural land shall mean all go$ernment ta+es' e+cept gift ta+ and inheritance
ta+.
Sectio !$%. Penal Pro%isions -
!"# 6iolation of the pro$isions of Section thirteen and twenty-se$en and paragraph " of Section
thirty-one of this Code shall be punished by a fine not e+ceeding one thousand pesos or
imprisonment not e+ceeding one year or both in the discretion of the court. In case of 1uridical
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.
!*# Any person' natural or 1uridical' who induces another' as tenant' to e+ecute or enter into a share
tenancy contract with himself or with another in $iolation of this Code shall be punished by a fine
not e+ceeding fi$e thousand pesos with subsidiary imprisonment in accordance with the Re$ised
&enal Code &ro$ided' That the e+ecution of a share tenancy contract shall be considered prima
facie e$idence of such inducement as to the owner' ci$il law lessee' usufructuary or legal
possessor. In case of 1uridical 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.
!,# Any person who e+ecutes an affida$it as re(uired by Section thirteen of Chapter I' knowing the
contents thereof to be false' shall be punished by a fine not e+ceeding one thousand pesos or
imprisonment of not more than one year' or both' in the discretion of the court.
!-# Any person who wilfully $iolates the pro$isions 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 $iolation 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 $iolation took place shall be criminally responsible.
36
!.# Any person who wilfully $iolates the pro$isions of Section forty-two of this Code shall' upon
con$iction thereof' be sub1ect to a fine of not more than two thousand pesos' or upon second
con$iction' to imprisonment of not more than one year or both such fine and imprisonment' in the
discretion of the court. If any $iolation of the pro$isions 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 $iolation took place shall be criminally responsible.
Sectio !$8. Pending Application for *echani4ation - Any pro$ision of this Code to the contrary notwithstanding'
any application for mechani%ation where corresponding certifications for suitability for mechani%ation and for
a$ailability for resettlement by the Agricultural Tenancy Commission and the 4ational Resettlement and
Rehabilitation Administration' respecti$ely' ha$e been issued and proper notices ser$ed on the tenants at least two
months prior to the appro$al of this Code shall be gi$en due course and decided in accordance with the pertinent
pro$isions and re(uirements of Republic Act 4umbered 5le$en hundred and ninety-nine' as amended.
Sectio !$&. Personnel of Reorgani4ed or Abolished Agencies - &ermanent officials and employees of all e+isting
go$ernment agencies which are abolished or reorgani%ed under this Code' sub1ect to Ci$il Ser$ice Rules and
regulations' shall be absorbed and shall not be di$ested of their positions e+cept presidential appointees &ro$ided'
That those presidential appointees who cannot be absorbed and such officials and employees who prefer to be laid-
off shall be gi$en gratuity e(ui$alent to one month salary for e$ery year of ser$ice but in no case more than twenty-
four month>s salary' in addition to all benefits to which they are entitled under e+isting laws and regulations.
To carry out the pro$isions of this Section' there is hereby appropriated the sum of fi$e hundred thousand pesos out
of the unappropriated funds in the 4ational Treasury.
Sectio !%'. 3udgeting and Disbursing of Appropriated )unds - Any pro$ision of this Code or of any e+isting law
to the contrary notwithstanding' not more than si+ty per centum of the specific appropriations pro$ided in this Code
for operating e+penditures shall be used for personnel ser$ices &ro$ided' That in the case of the appropriations for
the Agricultural &roducti$ity Commission not more than twenty per centum shall be spent for office personnel and
other administrati$e e+penses thereof &ro$ided' further' That the total operating e+penditures of the Agricultural
Credit Administration shall not e+ceed three per centum of its total capitali%ation in addition to the allowance for
losses under Section one hundred ten &ro$ided' furthermore' That all une+pended balances of all appropriations
pro$ided in this Code for operating e+penditures shall re$ert to the 4ational Treasury at the end of the fiscal year in
conformity with the pro$isions of Section twenty-three of Republic Act 4umbered 4ine hundred ninety-two And
pro$ided' finally' That all the financial re(uirements of the $arious agencies established in this Code for their
operation e+cept the Land =ank and the Agricultural Credit Administration shall be proposed in the &resident>s
budget in order that such appropriation as may be necessary therefor may be pro$ided in the Beneral Appropriation
Acts for the succeeding fiscal years.
Sectio !%!. Separability of Pro%isions - If' for any reason' any section or pro$ision of this Code shall be (uestioned
in any court' and shall be held to the unconstitutional or in$alid' no other section or pro$ision of this Code shall be
affected thereby.
Sectio !%". Prior nconsistent La7s - All laws or parts of any law inconsistent with the pro$isions of this Code are
hereby repealed.
Sectio !%3. Effecti%e Date - This Code shall take effect upon its appro$al.
Appro$ed August 2' "3/,
UBLIC ACT No. $38&
37
AN ACT AMENDING REPUBLIC ACT NUMBERED THIRTY;EIGHT HUNDRED AND FORTY;FOUR,
AS AMENDED, OTHER<ISE 8NO<N AS THE AGRICULTURAL LAND REFORM CODE, AND FOR
OTHER PURPOSES
Sectio !. Section "' *' , and - of Republic Act 4o. thirty eight hundred and forty-four' otherwise known as the
Agricultural Land Reform Code' are hereby amended to read as follows
:Sec. ". Title. - This Act shall be known as the Code of Agrarian Reforms of the &hilippines.:
:Sec. *. Aeclaration of &olicy. - It is the policy of the State
:!"# To establish cooperati$e-culti$atorship among those who li$e and work on the land as tillers'
owner-culti$atorship and the economic family-si%e farm as the basis of &hilippine agriculture and'
as a conse(uence' di$ert landlord capital in agriculture to industrial de$elopment)
:!*# To achie$e a dignified e+istence for the small farmers free from pernicious institutional
restraints and practices)
:!,# To create a truly $iable social and economic structure in agriculture conduci$e to greater
producti$ity and higher farm income through a cooperati$e system of production' processing'
marketing' distribution' credit and ser$ices)
:!-# To apply all labor laws e(ually and without discrimination to both industrial and agricultural
wage e earners)
:!.# To pro$ide a more $igorous and systematic land resettlement program and public land
distribution)
:!/# To make the small farmers more independent' self-reliant and responsible citi%ens' and a
source of genuine strength in our democratic society)
:!0# To gi$e first priority to measures for the ade(uate and timely financing of the Agrarian
Reform &rogram pursuant to ;ouse Eoint Resolution 4umbered Two' otherwise known as the
9agna Carta of Social Eustice and 5conomic ?reedom) e+isting laws) e+ecuti$e and
administrati$e orders) and rules and regulations to the contrary notwithstanding)
:!2# To in$ol$e local go$ernments in the implementation of the Agrarian Reform &rogram) and
:!3# To e$ol$e a system of land use and classification.:
:Sec. ,. Composition of Code. - In pursuance of the policy enunciated in Section two' the following are established
under this Code
:!"# An agricultural leasehold system to replace all e+isting share tenancy systems in agriculture)
:!*# A system of crediting rental as amorti%ation payment on purchase price)
:!,# A declaration of rights for agricultural labor)
:!-# A machinery for the ac(uisition and e(uitable distribution of agricultural land)
:!.# An institution to finance the ac(uisition and distribution of agricultural land)
38
:!/# A machinery to e+tend credit and similar assistance to agricultural lessees' amorti%ing owners-
culti$ator' and cooperati$es)
:!0# A machinery to pro$ide marketing' management' and other technical assistance and7or
ser$ices to agricultural lessees' amorti%ing owners-culti$ator' owners-culti$ator' and cooperati$es)
:!2# A machinery for cooperati$e de$elopment)
:!3# A department for formulating and implementing pro1ects of agrarian reform)
:!"@# An e+panded program of land capability sur$ey' classification' and registration)
:!""# A 1udicial system to decide issues arising under this Code and other related laws regulations)
and
:!"*# A machinery to pro$ide legal assistance to agricultural lessees' amorti%ing owners-culti$ator'
and owners-culti$ator.:
:Sec. -. Automatic Con$ersion to Agricultural Leasehold. - Agricultural share tenancy throughout the country' as
herein defined' is hereby declared contrary to public policy and shall be automatically con$erted to agricultural
leasehold upon the effecti$ity of this section.
:The credit assistance traditionally e+tended by a land-owner and a local lender to a tenant under the share tenancy
systems in agriculture for production loans and loans for the purchase of work animals' tillage e(uipment' seeds'
fertili%ers' poultry' li$estock feed and other similar items' and ad$ances for the subsistence of a lease and his family'
may be continued by said landowner and local lender &ro$ided' That the total charges on these loans' including
interest and ser$ice' inspection and issuance fees' shall not e+ceed fourteen per cent per calendar year and the
principal thereof shall not be sub1ect to upward ad1ustment e$en in case of e+traordinary inflation and7or
de$aluation &ro$ided' further' That on all loans or ad$ances other than money' the interest shall be computed on the
basis of current price of the goods at the time when the loans or ad$ances were made.
:Any work animal and tillage e(uipment in the possession of a share tenant but owned by a landowner shall
automatically be sold to said tenant on installment for a period not e+ceeding fi$e years and at a price agreed upon
by the parties &ro$ided' howe$er' That the tenant shall pay in ad$ance ten per cent of the price agreed upon.
:5+isting share tenancy contracts may continue in force and effect in any region or locality' to be go$erned in the
meantime by the pertinent pro$isions of Republic Act 4umbered 5le$en hundred and ninety-nine' as amended' until
the end of the agricultural year when the &resident of the &hilippines shall ha$e organi%ed by e+ecuti$e order the
Aepartment of Agrarian Reform in accordance with the pro$isions of this amendatory Act' unless such contracts
pro$ide for a shorter period or the tenant sooner e+ercises his option to elect the leasehold system &ro$ided' That in
order not to 1eopardi%e international commitments' lands de$oted to crops co$ered by marketing allotments shall be
made the sub1ect of a separate proclamation by the &resident upon the recommendation of the department head that
ade(uate pro$isions' such as the organi%ation of cooperati$es' marketing agreement' or other similar workable
arrangements' ha$e been made to insure efficient management on all matters re(uiring synchroni%ation of the
agricultural with the processing phases of such crops.
:In case some agricultural share tenants do not want to become agricultural lessees of their respecti$e landholding'
they shall' with the assistance of the =ureau of Agrarian Legal Assistance' notify in writing the landowners
concerned. In such a case' they shall ha$e one agricultural year from the date of the notice to accept leasehold
relationship' otherwise the landowner may proceed to their e1ectment.:
Sectio "" Sections "" and "* of the same Code are hereby amended to read as follows
39
:Sec. "". Lessee>s Right of &re-emption. - In case the agricultural lessor decides to sell the landholding' the
agricultural lessee shall ha$e the preferential right to buy the same under reasonable terms and conditions &ro$ided'
That the entire landholding offered for sale must be pre-empted by the Aepartment of Agrarian Reform upon petition
of the lessee or any of them &ro$ided' further' That where there are two or more agricultural lessees' each shall be
entitled to said preferential right only to the e+tent of the area actually culti$ated by him. The right of pre-emption
under this Section may be e+ercised within one hundred eighty days from notice in writing' which shall be ser$ed by
the owner on all lessees affected and the Aepartment of Agrarian Reform.
:If the agricultural lessee agrees with the terms and conditions of the sale' he must gi$e notice in writing to the
agricultural lessor of his intention to e+ercise his right of pre-emption within the balance of one hundred eighty day>s
period still a$ailable to him' but in any case not less than thirty days. ;e must either tender payment of' or present a
certificate from the land bank that it shall make payment pursuant to section eighty of this Code on' the price of the
landholding to the agricultural lessor. If the latter refuses to accept such tender or presentment' he may consign it
with the court.
:Any dispute as to the reasonableness of the terms and conditions may be brought by the lessee or by the
Aepartment of Agrarian Reform to the proper Court of Agrarian Relations which shall decide the same within si+ty
days from the date of the filing thereof &ro$ided' That upon finality of the decision of the Court of Agrarian
Relations' the Land =ank shall pay to the agricultural lessor the price fi+ed by the court within one hundred twenty
days &ro$ided' further' That in case the Land =ank fails to pay within that period' the principal shall earn an interest
e(ui$alent to the prime bank rate e+isting at the time.
:Dpon the filing of the corresponding petition or re(uest with the department or corresponding case in court by the
agricultural lessee or lessees' the said period of one hundred and eighty days shall cease to run.
:Any petition or re(uest for pre-emption shall be sol$ed within si+ty days from the filing thereof) otherwise' the said
period shall start to run again.:
:Sec. "*. Lessee>s right of Redemption. - In case the landholding is sold to a third person without the knowledge of
the agricultural lessee' the latter shall ha$e the right to redeem the same at a reasonable price and consideration
&ro$ided' That where there are two or more agricultural lessees' each shall be entitled to said right of redemption
only to the e+tent of the area actually culti$ated by him. The right of the redemption under this Section may be
e+ercised within one hundred eighty days from notice in writing which shall be ser$ed by the $endee on all lessees
affected and the Aepartment of Agrarian Reform upon the registration of the sale' and shall ha$e priority o$er any
other right of legal redemption. The redemption price shall be the reasonable price of the land at the time of the sale.
:Dpon the filing of the corresponding petition or re(uest with the department or corresponding case in court by the
agricultural lessee or lessees' the said period of one hundred and eighty days shall cease to run.
:Any petition or re(uest for redemption shall be resol$ed within si+ty days from the filing thereof) otherwise' the
said period shall start to run again.
:The Aepartment of Agrarian Reform shall initiate' while the Land =ank shall finance' said redemption as in the
case of pre-emption.:
Sectio 3. Section fourteen of the same Code is hereby repealed.
Sectio 4. Section ,* of the same Code is hereby amended to read as follows
:Sec. ,*. Cost of Irrigation System. - The cost of construction of a permanent irrigation system' including
distributary canals' may be borne e+clusi$ely by the agricultural lessor who shall be entitled to an increase in rental
proportionate to the resultant increase in production &ro$ided' That if the agricultural lessor refuses to bear the
e+penses of construction the agricultural lessee7or lessees may shoulder the same' in which case the former shall not
40
be entitled to an increase in rental and shall' upon the termination of the relationship' pay the lessee or his heir the
reasonable $alue of the impro$ement at the time of the termination &ro$ided' further' That if the irrigation system
constructed does not work' it shall not be considered as an impro$ement within the meaning of this Section
&ro$ided' furthermore' That the lessees' either as indi$iduals or as groups' shall undertake the management and
control of irrigation systems with their respecti$e 1urisdiction. ;owe$er' those constructed and operated by the
go$ernment may be gi$en to the lessees either as indi$iduals or as groups at their option with the right to maintain'
manage and operate such irrigation systems and to collect and recei$e rentals therefrom &ro$ided' still further' That
the lessees' either as indi$iduals or as groups' shall allocate not more than twenty-fi$e per cent of their collection for
rentals to the go$ernment if the irrigation systems has obligations to meet until paid' otherwise such irrigation
system will be maintained' managed and operated solely by the lessees either as indi$iduals or as groups' sub1ect to
such rules on water rights and water use promulgated by the 4ational Irrigation Administration or such other
go$ernment agencies authori%ed by law &ro$ided' finally' That if the irrigation system is installed and7or
constructed at the e+pense of the landowner or agricultural lessor' the Aepartment of Agrarian Reform shall initiate'
while the Land =ank shall finance' the ac(uisition of such irrigation system at its current fair market $alue so that
the ownership thereof may be $ested in the lessees as indi$iduals or groups.:
Sectio #. Section ,- of the same Code is hereby amended to read as follows
:Sec. ,-. Consideration for the Lease of Riceland and Lands Ae$oted to 8ther Crops. - The consideration for the
lease of riceland and lands de$oted to other crops shall not be more than the e(ui$alent of twenty-fi$e per centum of
the a$erage normal har$est or if there ha$e been no normal har$ests' then the estimated normal har$est during the
three agricultural years immediately preceding the date the leasehold was established after deducting the amount
used for seeds and the cost of har$esting' threshing' loading' hauling and processing' whiche$er are applicable
&ro$ided' That if the land has been culti$ated for a period of less than three years' the initial consideration shall be
based on the a$erage normal har$est or if there ha$e been no normal har$ests' then the estimated normal har$est
during the preceding years when the land was actually culti$ated' or on the har$est of the first year in the case of
newly culti$ated lands' if that har$est is normal har$ests' the final consideration shall be based on the a$erage
normal har$est during these three preceding agricultural years.
:In the absence of any agreement between the parties as to the rental' the Court of Agrarian Relations shall
summarily determine a pro$isional rental in pursuance of e+isting laws' rules and regulations and production records
a$ailable in the different field units of the department' taking into account the e+tent of the de$elopment of the land
at the time of the con$ersion into leasehold and the participation of the lessee in the de$elopment thereof. This
pro$isional rental shall continue in force and effect until a fi+ed rental is finally determined. The court shall
determined the fi+ed rental within thirty days after the petition is submitted for decision.
:If capital impro$ements are introduced on the farm not by the lessee to increase its producti$ity' the rental shall be
increased proportionately to the conse(uent increase in production due to said impro$ements. In case of
disagreement' the Court shall determine the reasonable increase in rental.:
Sectio $. A new section is hereby inserted after Section ,-' to be designated as Section :,--A:' which shall read as
follows
:Sec. ,--A. Rental credited as amorti%ation payment on purchase price. - The rental paid under the preceding section
after the appro$al of this amendatory Act shall be credited as amorti%ation payment on the purchase price of the
landholding tilled by the lessee in any of the following instances
:!"# <hen the landholding is e+propriated by the go$ernment for the lessee) and
:!*# <hen it is redeemed.
:The purchase price of the landholding shall be determined by the parties or the go$ernment agencies concerned on
the same basis prescribed under section fifty-si+ of this Code &ro$ided' That whate$er balance remains after
41
crediting as amorti%ation the rental paid' the same may be financed by the Land =ank in the same ratio and mode of
payment as pro$ided under section eighty of this Code.
:The pro$isions of Act 4umbered ?our hundred ninety-si+' as amended' and other laws to the contrary
notwithstanding' the Land Registration Commission is hereby authori%ed concurrently with the =ureau of Lands to
appro$e sur$ey plans of lands intended for original registration and to issue transfer certificate of title in fa$or of the
new amorti%ing-owner-beneficiaries under this section and the Registries of Aeeds to register the same. ?or this
purpose' the Land Registration Commissioner shall issue the necessary rules and regulations for the implementation
of this pro$ision.
:The Aepartment and7or the =ank' in appropriate cases' shall facilitate the immediate issuance of the corresponding
transfer certificate of title of the landholding to the new amorti%ing owner with the encumbrance thereof duly
annotated.
:&ro$isions of e+isting laws' rules and regulations to the contrary notwithstanding' any amorti%ing owner may use
this transfer certificate of title to obtain a loan from any public or pri$ate lending institution and he shall be entitled
to borrow therefor an amount not less than si+ty per centum of the fair market $alue of the property &ro$ided' That
the proceeds of such loan shall be applied as follows fifty per centum as partial payment of any unpaid balance on
the landholding and the remaining fifty per centum for the capital impro$ement of the land and operating capital for
farm operations of the amorti%ing owner.
:The payment of all loans obtained pursuant to the pro$isions of this section shall be guaranteed by the Land =ank
and for this purpose' it shall set aside a sinking fund in such amount as may be necessary to be determined by its
=oard of Trustees.
:In case of default in the payment of three consecuti$e installments on the loan' the lender shall immediately notify'
among others' the Land =ank and the department of such default' and thereafter' these agencies shall take the
appropriate steps either
:!"# To answer for the default in case the reason therefor is due to fortuitous e$ent' or
:!*# In any other case' to take o$er the ownership and administration of said property.
:In the latter case mentioned under the preceding paragraph' the go$ernment shall endea$or to substitute the
defaulting amorti%ing owner with a new one who does not own any land and who shall be subrogated to the rights'
and shall assume the obligations' of the former amorti%ing owner.
:The rules prescribed in the two immediately preceding paragraphs shall apply in case the lessee defaults in the
payment of at least three consecuti$e rental amorti%ations' with the former landowner gi$ing the re(uired notice in
proper cases.
:In all instances where default is due to fortuitous e$ents the Land =ank shall be answerable for such default and the
farmers shall be released from the obligations to pay such installment or installments due together with interest
thereon.:
Sectio %. Section ,/!"# of the same Code is hereby amended to read as follows
:!"# The landholding is declared by the department head upon recommendation of the 4ational
&lanning Commission to be suited for residential' commercial' industrial or some other urban
purposes &ro$ided' That the agricultural lessee shall be entitled to disturbance compensation
e(ui$alent to fi$e times the a$erage of the gross har$ests on his landholding during the last fi$e
preceding calendar years):
42
Sectio 8. Section ,3!*# of the same Code is hereby amended to read as follows
:!*# Right to engage in concerted acti$ities as defined under Republic Act 4umbered 5ight
hundred and se$enty-fi$e.:
Sectio &. The Titles of Chapter III and Article I and Section -3 and .@ of the same Code are hereby amended to
read as follows
:Chapter III
Aepartment of Agrarian Reform.
:Article I
8rgani%ation and ?unctions of the Aepartment of Agrarian Reform.
:Sec. -3. Creation of the Aepartment of Agrarian Reform. - ?or the purpose of carrying out the policy of
establishing owner-culti$atorship and the economic family si%e farm as the basis of &hilippine agriculture and other
policies enunciated in this Code' there is hereby created a Aepartment of Agrarian Reform' hereinafter referred to as
Aepartment' which shall be directly under the control and super$ision of the &resident of the &hilippines. It shall
ha$e authority and responsibility for implementing the policies of the state on agrarian reforms as pro$ided in this
Code and such other e+isting laws as are pertinent thereto.
:The Aepartment shall be headed by a Secretary who shall be appointed by the &resident with the consent of the
Commission on Appointments.
:;e shall be assisted by one Dndersecretary who shall be appointed by the &resident with the consent of the
Commission on Appointments.
:Sec. .@. Gualifications and Compensations of Secretary and Dndersecretary. - 4o person shall be appointed
Secretary or Dndersecretary of the Aepartment unless he is a natural born citi%en of the &hilippines' with pro$en
e+ecuti$e ability and ade(uate background and e+perience in land reform here and7or elsewhere for at least fi$e !.#
years' and at least thirty-fi$e years of age &ro$ided' howe$er' That the Dndersecretary shall be a career
administrator and' at the time of his appointment' shall not be more than fifty-se$en !.0# years of age' unless the
&resident has determined that he possesses special (ualifications and his ser$ices are needed.
:The Secretary and the Dndersecretary shall ha$e' among other (ualifications' demonstrated interest in' and concern
for' the needs and problems of the rural and farm populations and the solutions thereto &ro$ided' That no person
who owns any farmholding shall be appointed as Secretary or Dndersecretary unless such farmholding is under the
leasehold system or the system of agricultural land ownership transfer direct to the tiller.
:The Secretary shall recei$e an annual compensation e(ui$alent to any other e+ecuti$e department secretary) the
Dndersecretary shall recei$e an annual compensation e(ui$alent to any other e+ecuti$e department undersecretary.:
Sectio !'. The following new sections are hereby inserted after Section .@' to be designated as Sections :.@-A to
.@-I': which shall read as follows
:Sec. .@-A. &owers and functions of the Secretary. - In addition to the powers and functions specified in this Code'
the Secretary shall e+ercise such powers and perform such functions and duties as are re(uired of any e+ecuti$e
department secretary under e+isting laws.:
:Sec. .@-=. &owers and functions of the Dndersecretary. - In addition to the powers and functions specified in this
Code' the Dndersecretary shall e+ercise such powers and perform such functions and duties as are re(uired of any
e+ecuti$e Aepartment Dndersecretary under e+isting laws.:
43
:Sec. .@-C. 6acancy in office or incapacity. - In case of $acancy in the office of Secretary or inability of the
Secretary to e+ercise his powers and perform his functions and duties due to his illness' absence or any other cause'
the Dndersecretary shall temporarily perform the functions of the said office.:
:Sec. .@-A. 8ffice of the Secretary) Appointment of &ersonnel. - The office of Secretary shall be composed of the
Secretary' the Dndersecretary' the chiefs of the staff ser$ices or units directly under the department proper' together
with the personnel thereof.
:All personnel of the department proper shall be appointed by the Secretary in accordance with applicable ci$il
ser$ice law and rules.:
:Sec. .@-5. Creation of Staff Ser$ices) ?unctions. - There shall be created in the department a planning ser$ice' a
financial and management ser$ice' an administrati$e ser$ice' and such other staff ser$ices as the Secretary may
deem necessary to establish in accordance with this section' each to be headed by a chief' which shall be organi%ed
and shall perform the functions as follows
:!"# &lanning Ser$ice
:The &lanning Ser$ice shall be responsible for pro$iding the department with economical'
efficient' and effecti$e ser$ices relating to planning' programming and pro1ect de$elopment.
:!*# ?inancial and 9anagement Ser$ice
:The ?inancial and 9anagement Ser$ice shall be responsible for pro$iding the department with
staff ad$ice and assistance on budgetary' financial' and management impro$ement matters.
:!,# Administrati$e Ser$ice
:The Administrati$e Ser$ices shall be responsible for pro$iding the department with economical' efficient' and
effecti$e ser$ices relating to personnel' legal assistance' information' records' supplies' e(uipment' collection'
disbursements' security' and custodial work.
:Sec. .@-?. Creation of =ureaus) ?unctions. - There shall be under the department the following bureaus each to be
headed by a Airector who shall be assisted by an Assistant Airector' charged with the direct implementation of the
programs and policies of the Aepartment
:!"# The =ureau of ?arm 9anagement which shall be responsible for the de$elopment and
implementation of programs on increased producti$ity' home impro$ement' and rural youth
de$elopment)
:!*# The =ureau of Land Ac(uisition' distribution and de$elopment which shall be responsible for
the distribution of lands to bona fide farmers' for conducting land capability sur$ey and
classification' and for the impro$ement of lands ac(uired by the Aepartment)
:!,# The =ureau of Resettlement which shall be responsible for the resettlement of displaced
farmers' landless families' and urban workers in the settlement pro1ects of the Aepartment' the
construction of houses' roads and other facilities' and the taking of a census of all proclaimed and
unproclaimed resettlements) and
:!-# The =ureau of Agrarian Legal Assistance which shall be responsible for e+tending legal
assistance to farmers including those pro$ided under Republic Act 4umbered ?orty-eight hundred
and eighty-si+' the e+ecution of leasehold contracts and apprising the farmers with their rights and
duties under the law.
44
:5ach of these bureaus may establish such di$isions as are necessary for the economical' efficient and effecti$e
performance of its functions.:
:Sec. .@-B. Appointment' Gualifications and Compensations of Airectors and the Assistant Airectors) Appointment
of &ersonnel. - The Airector of a =ureau and his assistant shall each recei$e the e(ui$alent compensation and shall
be appointed in the same manner as any other director or assistant director of a bureau.
:4o person shall be appointed director or assistant director of a bureau unless he is a natural-born citi%en of the
&hilippines' with pro$en e+ecuti$e ability and ade(uate background and e+perience in land reform here and7or
elsewhere for at least three !,# years' and at least twenty-fi$e years of age) &ro$ided' That the Airector or Assistant
Airector shall be a career administrator and) at the time of his appointment' shall not be more than fifty-se$en !.0#
years of age' unless the &resident has determined that he possesses special (ualifications and his ser$ices are needed
&ro$ided' further' That the Airector or Assistant Airector shall ha$e' among other (ualifications' demonstrated
interest in' and concern for' the needs and problems of the rural and farm population and the solutions thereto
&ro$ided' finally' That no persons who owns any farmholding shall be appointed as Airector or Assistant Airector
unless such farmholding is under the leasehold system or the system of agricultural land ownership-transfer direct to
the tiller.
:All personnel of the =ureaus shall be appointed by the Secretary' upon recommendation of their respecti$e
Airector' in accordance with applicable ci$il ser$ice law and rules.:
:Sec. .@-;. ?unctions of Airectors and Assistant Airectors. - The Airector or in his absence' the Assistant Airector'
shall e+ercise such powers and perform such functions and duties as are pro$ided for under e+isting laws' in addition
to the powers and functions pro$ided for in this Code.:
:Sec. .@-I. Regional and ?ield 8ffices. - The Aepartment may ha$e regional and other field offices' the number'
location and organi%ation of which shall be determined by the Aepartment in conformity with the area pattern
prescribed hereunder
:!"# The Aepartment' in the establishment of regional and other field offices' shall follow the field
ser$ice area pattern authori%ed below. There are established ten regions' each with definite
regional centers within the region as follows
:a. Region 4o. " is called the Ilocos Region' and comprises the pro$inces of =atanes'
Ilocos 4orte' Ilocos Sur' Abra' La Dnion' =enguet' and 9ountain &ro$ince and the cities
of =aguio' and Laoag' with the regional center at San ?ernando' La Dnion)
:b. Region 4o. * is called the Cagayan 6alley Region' and comprises the pro$inces of
Cagayan' Isabela' 4ue$a 6i%caya' Guirino !Sub-pro$ince#' Ifugao' and Jalinga-Apayao'
with the regional center at Tuguegarao' Cagayan)
:c. Region 4o. , is called the Central Lu%on Region' and comprises the pro$inces of
&angasinan' Tarlac' 4ue$a 5ci1a' &ampanga' Fambales' =ulacan' =ataan' and the cities of
Angeles' Cabanatuan' Aagupan' 8longapo' &alayan' San Carlos !&angasinan# and San
Eose !4ue$a 5ci1a#' with the regional center at San ?ernando' &ampanga)
:d. Region 4o. - is called the Southern Tagalog Region' and comprises the pro$inces of
Ri%al' Ca$ite' Laguna' =atangas' Gue%on' 9arindu(ue' 8riental 9indoro' 8ccidental
9indoro' Romblon' Aurora !Sub-pro$ince#' and &alawan' and the cities of =atangas'
Caloocan' Ca$ite' Lipa' Lucena' 9anila' &asay' &uerto &rincesa' Gue%on' San &ablo'
Tagaytay' and Trece 9artires with the regional center at greater 9anila)
45
:e. Region 4o. . is called the =icol Region' and comprises the pro$inces of Camarines
4orte' Camarines Sur' Albay' Catanduanes' 9asbate' and Sorsogon' and the cities of
Iriga' Lega%pi and 4aga' with the Regional center at Lega%pi City)
:f. Region 4o. / is called the <estern 6isayas Region' and comprises the pro$inces of
4egros 8ccidental' Iloilo' Buimaras !Sub-pro$ince#' Anti(ue' Aklan and Capi%' and the
cities of =acolod' =ago' Cadi%' Iloilo' La Carlota' Ro+as' San Carlos !4egros 8ccidental#
and Silay' with regional center at Iloilo City)
:g. Region 4o. 0 is called the Central and 5astern 6isayas Region' and comprises the
pro$inces of 4egros 8riental' Si(ui1or !Sub-pro$ince#' Cebu' =ohol' 4orthern Samar'
5astern Samar' <estern Samar' Leyte' Southern Leyte' and =iliran !Sub-pro$ince# and
the cities of =ais' Calbayog' Canlaon' Catbalogan' Cebu' Aanao' Aumaguete' Lapu-lapu'
8rmoc' 9andawe' Tacloban' Tagbilaran' and Toledo' with the regional center at Cebu
City)
:h. Region 4o. 2 is called the <estern 9indanao Region' and comprises the pro$inces of
9isamis 8ccidental' Lanao del 4orte' Lanao del Sur' Famboanga del 4orte' Famboanga
del Sur' and Sulu' and the cities of =asilan' Aapitan' Aipolog' Iligan' 9arawi' 8ro(uieta'
8%amis' &agadian' Tangub' and Famboanga with the regional center at Famboanga City)
:i. Region 4o. 3 is called the Central 9indanao Region' and comprises the pro$inces of
Camiguin' 9isamis 8riental' =ukidnon' Cotabato' and South Cotabato' and the cities of
Cagayan de 8ro' Cotabato' Beneral Santos' and Bingoog' with the Regional center at
Cagayan de 8ro City)
:1. Region 4o. "@ is called the 5astern 9indanao Region' and comprises the pro$inces of
Surigao del 4orte' Surigao del Sur' Agusan del 4orte' Agusan del Sur' Aa$ao del 4orte'
Aa$ao 8riental' and Aa$ao del Sur' and the cities of =utuan' Aa$ao' and Surigao' with
the regional center at Aa$ao City)
:!*# The Aepartment shall organi%e an integrated and department-wide field ser$ices as the
e+igencies of the Agrarian Reform &rogram may re(uire &ro$ided' That the Aepartment shall
establish in e$ery regional or other field office organi%ed' a consultati$e and coordinating body
which shall include in its membership a tiller-lessee representing the agricultural lessees and a
representati$e from the local go$ernments of the area where said office is operating.
:!,# The regional office shall be headed by a Regional Airector who may be assisted' whene$er
necessary' by an Assistant Regional Airector. The Regional Airector and Assistant Airector' if any'
shall be appointed by the Secretary in accordance with applicable ci$il ser$ice law and rules)
&ro$ided' howe$er' That the Regional Airector and Assistant Regional Airector shall ha$e the
same (ualifications as =ureau Airector and Assistant Airector' respecti$ely.
:All personnel of the Regional and other offices shall be appointed by the Secretary upon
recommendation of their respecti$e regional director' in accordance with applicable ci$il ser$ice
law and rules &ro$ided' That applicants from the region' who possess the re(uired (ualifications'
shall be appointed to $acant positions in the said region' unless nobody among the said applicants
is (ualified) in which case' applicants from other regions may be considered.
:!-# The Regional Airector shall be responsible in carrying out the policies and implementing the
plans and programs of the Aepartment in the regional area under his 1urisdiction &ro$ided'
howe$er' That when the department>s function or acti$ity transcends regional boundaries and
re(uires central and7or inter-regional action' said functions may be performed under the direct
super$ision and control of the department.
46
:!.# The Regional offices shall ha$e units on agricultural e+tension' credit and legal assistance' as
well as cooperati$e de$elopment) or personnel in which the functional areas of the department
may be represented. There shall be in these regional units as much combination of related
functions as possible.
:!/# The functions of a regional office shall be as follows
:a. Implement laws' policies' plans' programs' rules and regulations of the Aepartment in
the regional areas)
:b. &ro$ide economical' efficient' and effecti$e ser$ice to the people in the area)
:c. Coordinate with regional offices of other departments' bureaus' agencies in the area)
:d. Coordinate with local go$ernment units in the area) and
:e. &erform such related functions as may be pro$ided by other e+isting laws.:
Sectio !!. The Land Reform &ro1ect Administration and its go$erning body' the 4ational Land Reform Council'
under the 8ffice of the &resident' are hereby abolished) and their functions are transferred to the Aepartment'
together with applicable appropriations' records' e(uipment' property and all the organic' contributed and7or
assigned personnel to the Land Reform &ro1ect Administration pursuant to this Code' other e+isting laws and
5+ecuti$e 8rder 4umbered Se$enty-fi$e' Series of 4ineteen hundred and si+ty-four' as well as such personnel as
may be necessary from its go$erning body' the 4ational Land Reform Council.
Sectio !". The Land Authority under the 8ffice of the &resident and a member-agency of the Land Reform &ro1ect
Administration is hereby abolished) and its functions are transferred to the Aepartment' together with applicable
appropriations' records' e(uipment' property' and such personnel as may be necessary.
Sectio !3. The Secretary shall' in consultation with the Dndersecretary and =ureau Airectors' allocate by
Aepartment 8rder to the different bureaus' agencies and regional offices of the Aepartment the functions of the
agencies' offices and7or units abolished and not otherwise assigned by this Amendatory Act or by the organi%ation
plan of the Aepartment to a particular agency or office.
Sectio !4. The Land =ank of the &hilippines is hereby attached to the Aepartment as its land financing arm and
shall de$ote all of its resources to agrarian reforms.
The Land =ank of the &hilippines and the Agricultural Credit Administration' in addition to the functions and duties
assigned to them under e+isting laws' e+ecuti$e and administrati$e orders' and rules and regulations' shall be
responsible for rendering staff ad$ice and assistance to the Secretary of the Aepartment. The regional offices or field
units of these entities and7or instrumentalities shall likewise coordinate and cooperate with the regional office or
field units of the Aepartment' respecti$ely.
Sectio !#. <ithin si+ty !/@# days from the appro$al of this Amendatory Act' the &resident by 5+ecuti$e 8rder
shall' upon recommendation of the Special Technical Committee created under Special 8rder 4umbered 5le$en'
Series of 4ineteen hundred and se$enty-one' of the Land Reform &ro1ect Administration' and the Commission on
Reorgani%ation created pursuant to Republic Act 4o. .-,.' as amended' organi%e the said Aepartment in accordance
with the pro$isions of this Amendatory Act with the end in $iew of achie$ing economy and ma+imum efficiency and
effecti$eness and of strictly obser$ing the merit system in the retention and promotion of the best (ualified
personnel &ro$ided' That the administrati$e machineries of the entities attached and7or re(uired under this Code to
coordinate and cooperate with the Aepartment' as well as the agencies ser$icing the same' shall also be reorgani%ed
to enable them to align their acti$ities with the re(uirements and ob1ecti$es of this Code &ro$ided' further' That not
more than ten per cent of the personnel of the Aepartment and the bureaus' offices' agencies and7or entities under'
47
coordinating or ser$icing it shall be stationed in the Central 8ffice) &ro$ided' finally' That not more that fi$e per
cent of the total personnel in the regional' team' resettlement agency or e(ui$alent field offices shall be stationed in
such offices.
Sectio !$. Section ." of the same Code is hereby amended to read as follows
:Sec. .". &owers and ?unctions. - It shall be the responsibility of the Aepartment
:!"# to initiate and prosecute e+propriation proceedings for the ac(uisition of pri$ate agricultural
lands as defined in Section one hundred si+ty-si+ of Chapter CI of this Code for the purpose of
subdi$ision into economic family-si%e farm units and resale of said farm units to bona fide tenants'
occupants and (ualified farmers &ro$ided' That the powers herein granted shall apply only to
pri$ate agricultural lands sub1ect to the terms and conditions and order of priority herein below
specified.
:a. all idle or abandoned pri$ate agricultural lands' e+cept those held or purchased within
one year from the appro$al of this Code by pri$ate indi$iduals or corporations for the
purpose of resale and subdi$ision into economic family-si%e farm units of not more than
si+ !/# hectares each in accordance with the policies enunciated in this Code &ro$ided'
That the subdi$ision and resale shall be substantially carried out within one year from the
appro$al of this Code)
:b. all pri$ate agricultural lands suitable for subdi$ision into economic family-si%e farm
units of not more that si+ !/# hectares owned by pri$ate indi$iduals or corporation
worked by lessees' no substantial portion of whose landholding in relation to the area
sought to be e+propriated' is planted to permanent crops under labor administration' in
e+cess of twenty-four hectares e+cept all pri$ate agricultural lands under labor
administration &ro$ided' That pri$ate agricultural lands occupied and culti$ated
continuously for not less that ten years by tillers or their ascendants who are not farm
laborers or lessees may be sub1ect to e+propriation under this Code &ro$ided' further'
That any court action filed for the e1ectment of the tiller shall not interrupt the running of
the ten-year period unless such action is filed within three years from the date of
occupancy &ro$ided' finally' That if the final decision rendered in the court action is
fa$orable to the tiller' the ten-year period shall be considered as continuous and
uninterrupted) and
:c. in e+propriating pri$ate agricultural lands declared by the Aepartment of Agrarian
Reform to be necessary for the implementation of the pro$isions of this Code' the
following order of priority shall be considered)
". idle or abandoned lands)
*. those whose area e+ceeds of "'@*- hectares)
,. those whose area e+ceeds .@@ hectares but is not more than "'@*- hectares)
-. those whose area e+ceeds "-- hectares but is not more than .@@ hectares)
.. those whose area e+ceeds 0. hectares but is not more than "-- hectares) and
/. those whose area e+ceeds *- hectares but is not more than 0. hectares.
48
:!*# To ac(uire pri$ate agricultural lands regardless of area through negotiated purchase sub1ect to
appro$al of the court as to price for distribution and sale at cost to their actual occupants who are
tillers of the land in lots of not more than si+ hectares &ro$ided' That where there are se$eral
groups or indi$iduals of such tillers petitioning for the ac(uisition of their respecti$e occupancy'
priority shall be gi$en to the group with a greater number of tillers who first filed the petition o$er
a group with a lesser number of tillers' and the latter o$er indi$idual tillers &ro$ided' further' That
the group or indi$idual who has continuously tilled the land longest shall ha$e the first priority)
:!,# To help bona fide farmers without lands or agricultural owner-culti$ators of uneconomic si%e
farms to ac(uire and own economic family-si%e farm units of not more than si+ hectares each)
:!-# To administer and dispose of agricultural lands of the public domain under the custody and
administration of the 4ational Resettlement and Rehabilitation Administration and the 5conomic
Ae$elopment Corps of the Armed ?orces of the &hilippines prior to the appro$al of this
Amendatory Act and such other public agricultural lands as may hereafter be reser$ed by the
&resident of the &hilippines or by law for resettlement and sale' in accordance with such terms and
conditions as are set forth under this chapter &ro$ided' That the e+ercise of the authority granted
herein' as well as the preceding subparagraph' shall not contra$ene public policy on the
permanency of forest reser$es or other laws intended for the preser$ation and conser$ation of
public national and municipal forests' parks and watersheds &ro$ided' further' That said authority
shall not be construed to e+clude the other modes of disposition of public agricultural lands under
the public land Act or to contra$ene the authority granted by law to the Aepartment of Agriculture
and 4atural Resources o$er all public agricultural lands not co$ered by the Agrarian Reform
&rogram &ro$ided' finally' That the Secretary of the Aepartment of Agriculture and 4atural
Resources shall within a period of ten years from the appro$al of this Amendatory Act' release to
the Aepartment of Agrarian Reform for resettlement and sale all lands of the public domain
reser$ed for agricultural resettlement and sale e+cept public agricultural lands which are reser$ed
as settlements for the national cultural minorities under the administration of the Commission on
4ational Integration)
:!-# To de$elop plans and initiate actions for the systematic opening of alienable and disposable
lands of the public domain for speedy distribution to and de$elopment by deser$ing and (ualified
persons who do not own any land in si%es of not more than si+ hectares)
:!.# To recommend to the &resident' from time to time after pre$ious consultation with the
Secretary of Agriculture and 4atural Resources' what portion of the alienable' or disposable public
lands shall be reser$ed for resettlement or disposition under this Chapter)
:!/# To gi$e economic family-si%e farms of not more than si+ hectares to landless citi%ens of the
&hilippines who need' deser$e' and are capable of culti$ating the land personally' through
organi%ed resettlement' under the terms and conditions the Aepartment may prescribe' gi$ing
priority to (ualified and deser$ing farmers in the pro$ince where such lands are located)
:!0# To reclaim swamps and marshes for agricultural purposes only' obtain titles thereto whene$er
feasible and subdi$ide them into economic family-si%e farms of not more than si+ hectares for
distribution to deser$ing and (ualified farmers)
:!2# To undertake measures which will insure the early issuance of titles to persons or corporations
who ha$e actually settled and culti$ated alienable lands of the public domain)
:!3# To sur$ey' subdi$ide and set aside lands or areas of land-holdings under its custody and
administration for economic family-si%e farms' large-scale farm operations' town sites' roads'
parks' go$ernment centers and other ci$ic impro$ements as circumstances may warrant &ro$ided'
That the =ureau of Lands and the Land Registration Commission' as the case may be' shall $erify
49
the said sur$eys or subdi$isions' and after such $erifications' appro$e or disappro$e the same) and
issue' in case of appro$al of said sur$eys or subdi$isions' the corresponding patents and titles
thereto)
:!"@# To inform the Agricultural &roducti$ity Commission and the Aepartment of Agriculture and
4atural Resources of the problems of settlers and farmers on lands under its administration and in
land reform areas &ro$ided' That it is mandatory for the said Commission and Aepartment to
pro$ide field agricultural e+tension ser$ice to these areas upon being informed of the problems
obtaining &ro$ided' further' That settlement pro1ects and lands reform areas' especially pri$ate
agricultural lands ac(uired by the go$ernment' shall be gi$en first priority in the diffusion of
useful and practical information' knowledge and skills on agriculture' soil conser$ation' li$estock'
fisheries' forest conser$ation' public lands and natural resources laws' home economics and rural
life' in order to encourage their application through field demonstrations' lectures and conferences'
publications and other means of imparting information' stimulation' promotion and organi%ation of
agricultural cooperati$es and encouragement in the formation and growth of pri$ate associations'
study clubs' committees and other groups of farmers and members of their family that will
enhance their social and economic conditions)
:!""# To ac(uire for agricultural lessees e+ercising their right to pre-emption and redemption under
Chapter I of this Code' any land-holdings mentioned thereunder)
:!"*# To conduct land capability sur$ey and classification of the entire country and print maps)
:!",# To make such arrangements with the Land =ank with respect to titles of agricultural lands of
the public domain under its administration as will be necessary to carry out the ob1ecti$es of this
Code)
:!"-# To e+propriate home lots occupied by agricultural lessees outside their landholdings for
resale at cost to said agricultural lessees)
:!".# To see to it that all agricultural lands' either public or pri$ate' distributed by the go$ernment
to the beneficiaries of the Agrarian Reform &rogram shall be sold only by the said beneficiaries to
the go$ernment) and
:!"/# To submit to the &resident of the &hilippines and to both ;ouses of Congress through their
presiding officers' to the Secretary of ?inance and to the Auditor Beneral within si+ty days of the
close of the fiscal year' an annual report showing its Accomplishments during the year) the
e+propriation proceedings it has undertaken) the e+penditures it has incurred and other financial
transactions undertaken with respect thereto):
Sectio !%. Section ./ of the same Code is hereby amended to read as follows
:Sec. ./. Eust Compensation. - In determining the 1ust compensation of the land to be e+propriated pursuant to this
Chapter' the Court shall consider as basis' the fair market $alue' without pre1udice to considering the assessed $alue
and other pertinent factors.
:The owner of the land e+propriated shall be paid in accordance with Section eighty of this Code by the Land =ank
and pursuant to an arrangement herein authori%ed.:
Sectio !8. Section 0" of the same Code is hereby amended to read as follows
:Sec. 0". &ower of the Aepartment of Agrarian Reform to sell to ;olders of =onds Issued to ?ormer Landowners
whose Land ha$e been &urchased for Redistribution. - The Aepartment of Agrarian Reform shall sell' for a price not
50
less than the appraised $alue' any portion not e+ceeding one hundred forty-four hectares in the case of indi$iduals of
the public agricultural lands transferred to the Land =ank which is suitable for large-scale farm operations to any
holder' who is (ualified to ac(uire agricultural lands through purchase' of bonds issued to former landowners whose
lands ha$e been purchased for redistribution under this Code' sub1ect to condition that the purchaser shall' within
two years after ac(uisition' place under culti$ation at least thirty per centum of entire area under plantation
administration and the remaining se$enty per centum within fi$e years from the date of ac(uisition. The Secretary
shall issue the title of said land upon showing that the purchaser has de$eloped and culti$ated at least one-fourth of
his land under plantation administration.
Any public agricultural land sold as hereinabo$e specified shall not be the ob1ect of any e+propriation as long as the
same is de$eloped and culti$ated for large-scale production under farm labor management &ro$ided' howe$er' That
after the capital in$ested therein for de$elopment' plus a reasonable margin of profit shall ha$e been fully reco$ered'
or after the lapse of twenty-fi$e years from the date of ac(uisition' whiche$er comes earlier' said land shall become
e+propriable.
The selling price of the portion of the public agricultural land sold under this Section shall be credited to the Land
=ank. As payment for the land sold under this Section' the Land =ank shall accept as sole instruments of payment
the bonds issued pursuant to Section se$enty-si+. Issued bonds accepted as payment for the land sold shall be
cancelled to the e+tent of the amount paid.
All sales under this Code shall be sub1ect to the rules and regulations which the Aepartment of Agrarian Reform in
consultation with the Land =ank' shall prescribe insofar as they are not inconsistent with the pro$isions of this Code.
Sectio !&. Sec 0/ of the same Code is hereby amended to read as follows
:Sec. 0/. Issuance of =onds. - The Land =ank shall' upon recommendation by the =oard of Trustees and appro$al of
the 9onetary =oard of the Central =ank' issue bonds' debentures and other e$idences of indebtedness at such terms'
rates and conditions as the =ank may determine up to an aggregate amount not e+ceeding' at any one time' fi$e
times its unimpaired capital and surplus. Such bonds and other obligations shall be secured by the assets of the =ank
and shall be fully ta+ e+empt both as to principal and income. Said income shall be paid to the bondholders e$ery si+
!/# months from the date of issue. These bonds and other obligations shall be fully negotiable and unconditionally
guaranteed by the Bo$ernment of the Republic of the &hilippines and shall be redeemable at the option of the =ank
at or prior to maturity' which in no case shall e+ceed twenty-fi$e years. These negotiable instruments of
indebtedness shall be mortgageable in accordance with established banking procedures and practice to go$ernment
institutions' e+isting charters and7or laws to the contrary notwithstanding' not to e+ceed si+ty per centum of their
face $alue to enable the holders of such bonds to make use of them in in$estments in producti$e enterprises. They
are eligible as legal reser$es against deposit liabilities of banks' sub1ect to the terms and conditions which the
Central =ank of the &hilippines may impose. They shall also be accepted as payments for reparation e(uipment and
materials' the pro$isions of Republic Act 4umbered Se$enteen hundred and eighty-nine' as amended' to the contrary
notwithstanding.
The =oard of Trustees shall ha$e the power to prescribe rule and regulations for the registration of the bonds issued
by the =ank at the re(uest of the holders thereof.:
Sectio "'. Section 2@ of the same Code is hereby amended to read as follows
:Sec. 2@. 9aking &ayment to 8wners of Landed 5states. - The Land =ank shall make payments in the form herein
prescribed to the owners of the land ac(uired by the Aepartment of Agrarian Reform for di$ision and resale under
this Code. Such payment shall be made in the following manner twenty per centum in cash and the remaining
balance in si+ per cent' ta+-free' redeemable bonds issued by the =ank in accordance with Section twenty-si+' unless
the landowner desires to be paid in shares of stock issued by the Land =ank in accordance with Section se$enty-
se$en in an amount not e+ceeding thirty per centum of the purchase price.
51
:In the e$ent there is an e+isting lien or encumbrance on the land in fa$or of any Bo$ernment institution at the time
of ac(uisition by the Land =ank' the bonds and7or shares' in that order' shall be accepted as substitute collaterals to
secure the indebtedness' e+isting charters of these institutions to the contrary notwithstanding.
:The profits accruing from payment shall be e+empt from the ta+ on capital gains.:
Sectio "!. Section 2. of the same Code is hereby amended to read as follows
:Sec. 2.. Dse of =onds. - The bonds issued by the Land =ank may be used by the holder thereof and shall be
accepted in the amount of their face $alue as any of the following
:!"# &ayment for agricultural lands or other real properties purchased from the Bo$ernment)
:!*# &ayment for the purchase of shares of stock of all or substantially all of the assets of the
following Bo$ernment owned or controlled corporations The 4ational Ae$elopment Company)
&hilippine 4ational =ank) &hilippine 4ational Railways) Cebu &ortland Cement Company)
4ational Shipyards and Steel Corporations) 9anila Bas Corporation) and the 9anila ;otel
Company.
:Dpon offer by the bondholder' the corporation owned or controlled by the Bo$ernment shall'
through its =oard of Airectors' negotiate with such bondholders with respect to the price and other
terms and conditions of the sale. In case there are $arious bondholders making the offer' the one
willing to purchase under terms and conditions most fa$orable to the corporations shall be
preferred. If no price is acceptable to the corporation' the same shall be determined by the
Committee of Appraisers composed of three members' one to be appointed by the corporation'
another by the bondholder making the highest or only offer' and the third by the two members' so
chosen. The e+pense of appraisal shall be borne e(ually by the corporation and the successful
purchaser.
:Should the Bo$ernment offer for sale to the public any or all of the shares of stock or the assets
of any of the Bo$ernment owned or controlled corporation enumerated herein' the bidder who
offers to pay bonds of the Land =ank shall be preferred pro$ided that the $arious bids be e(ual in
e$ery respect e+cept in the medium of payment.
:!,# Surety' bail bonds for the pro$isional release of accused persons or performance bonds in all
cases where the go$ernment may re(uire or accept real property as bonds)
:!-# &ayment for reparations goods' the pro$isions of Republic Act 4umbered Se$enteen hundred
and eighty-nine' as amended' to the contrary notwithstanding)
:!.# Security for loans applied with the &hilippine 4ational =ank' Ae$elopment =ank of the
&hilippines' Bo$ernment Ser$ice Insurance System' Social Security System' and other
go$ernment financial institution' e+isting charters of these institutions to the contrary
notwithstanding) and
:!/# Legal reser$es against deposit liabilities of banks' sub1ect to the terms and conditions which
the Central =ank of &hilippines may impose pursuant to the Beneral =anking Act.:
Sectio "". Section "@" of the same Code is hereby amended to read as follows
:Sec. "@". Reorgani%ation of ACA to align its acti$ities. - The administrati$e machinery of the Agricultural Credit
Administration' shall be reorgani%ed to enable it to align its acti$ities with the re(uirements and ob1ecti$es of this
Code &ro$ided' That the =oard of Bo$ernors established by Republic Act 4umbered 5ight hundred and twenty-
52
one' as amended' shall be composed of a chairman and four !-# members' three !,# of whom shall be the
Dndersecretary of Agrarian Reform who shall be the Chairman e+-officio' the Administrator of the Agricultural
Credit Administration who shall be the 6ice-Chairman e+-officio and the 6ice-&resident in charge of agricultural
loans of the &hilippine 4ational =ank' who shall be e+-officio member thereof. The two other members shall be
appointed by the &resident of the &hilippines with the consent of the Commission of Appointments for a term of
three years' one of whom shall represent the farmers-beneficiary of the Agrarian Reform &rogram and shall be
appointed upon recommendation of either or both the farmers and7or cooperati$es mo$ement' federation or league
e+isting at the same time such recommendation is submitted' and the other to represent the political party recei$ing
the second highest number of $otes in the immediately preceding presidential elections &ro$ided' howe$er' That the
term of the farmers> representati$e shall ipso facto terminate when such member cease to be in the farmers and7or
cooperati$es mo$ement' federation or league' and that of the minority party at the pleasure of the nominating
political party.
:The Administrator shall be the Chief 5+ecuti$e of the Administration and shall ser$e for a term of si+ years unless
he resigns or is remo$ed for cause. The compensation of the Administrator shall be fi+ed by the &resident but shall
not be less that twenty-four thousand pesos per annum. The members of the =oard shall recei$e per diems of not
more than fifty pesos for each session of the =oard that they attend &ro$ided' howe$er' That the total per diems'
including all other remunerations' shall not e+ceed si+ hundred pesos a month.
:4o person shall be appointed as Administrator unless he is a natural-born citi%en of the &hilippines' with pro$en
e+ecuti$e ability and e+perience in the field of agricultural cooperati$es and7or banking and finance' ade(uate
background and e+perience in land reform here and7or elsewhere for at least fi$e !.# years' and at least thirty-fi$e
years of age &ro$ided' howe$er' That he shall ha$e' among other (ualifications' demonstrated interest in' and
concern for' the needs and problems of the rural population and7or peasantry and the solutions thereto &ro$ided'
further' That no person who owns any farmholding shall be appointed as Administrator unless such farmholding is
under the leasehold system or the system of agricultural land ownership-transfer direct to the tiller.:
Sectio "3. Section "@. and "@/ of the same Code are hereby amended to read as follows
:Sec. "@.. Loaning Acti$ities. - Loaning acti$ities of the Agricultural Credit Administration shall be directed to
stimulate the de$elopment and operation of farmers> cooperati$es. The term :?armers Cooperati$es: shall be taken
to include all cooperati$es relating to the production and marketing of agricultural products and these formed to
manage and7or own' on a cooperati$e basis' agricultural farmlands' ser$ices and facilities' such as irrigation and
transport systems' established to support production and7or marketing of agricultural products.
:Dnder such rules and regulations in accordance with generally accepted banking practices and procedures as may
be promulgated by the Agricultural Credit Administration' Rural =anks' Cooperati$e =anks' and Ae$elopment
=anks may' in their respecti$e localities' be designated to act as agents of the Agricultural Credit Administration in
regard to its loaning acti$ities.:
:Sec. "@/. Credit to Small ?armers and7or Tillers of the land. - &roduction loans and loans for the purchase of work
animals' tillage e(uipment' seeds' fertili%ers' poultry' li$estock' feed and other similar items' may be e+tended to
small farmers as defined in Republic Act 4umbered 5ight hundred twenty-one and7or tillers of the land' based upon
their paying capacity and such securities as they can pro$ide' and under such terms and conditions as the
Agricultural Credit Administration may impose' pro$ided the amount thereof does not e+ceed two thousand pesos'
or such amount as may be fi+ed by the &resident at any gi$en agricultural year &ro$ided' That his total outstanding
obligations shall not e+ceed fi$e thousand pesos' but in no case shall the amount of loan e+ceed eighty per centum of
the $alue of the collateral pledged. In instance where credit is e+tended for items which are not consumed in their
use' such items may be pledged as security thereof. The Agricultural Credit Administration shall promulgate such
rules and regulations as may be necessary in the e+tension of the loans herein authori%ed so as to assure their
repayment &ro$ided' That such rules and regulations shall follow and be in accordance with generally accepted
financing practices and procedures.:
Sectio "4. Section "@2 of the same Code is hereby amended to read as follows
53
:Sec. "@2. Loans to Cooperati$es. - The Agricultural Credit Administration is hereby authori%ed to e+tend such
types of loans as it may deem necessary for the effecti$e implementation of this Code to eligible farmers>
cooperati$es as herein defined' under such terms and conditions as it may impose and with such securities as it may
re(uire &ro$ided That the said Administration is hereby authori%ed to e+tend production loans to cooperati$es at
not more than eight per cent interest per calendar year and directly to the farmers at not more than twel$e per cent
per calendar year &ro$ided' further' That cooperati$es are hereby authori%ed to e+tend loans directly to their
members at not more than twel$e per cent per calendar year. A farmers> cooperati$e that has been registered with the
Agricultural Credit Administration shall be eligible for loans if' in the 1udgment of the latter' its organi%ation'
management and business policies are of such character as will insure the safety and effecti$e use of such loans.:
Sectio "#. Section ""@ of the same Code is hereby amended to read as follows
:Sec. ""@. Total charges on Loans. - The total charges including interest' insurance fees and inspection' notari%ation
and other ser$ice charges on all kinds of loans shall not be more than twel$e per centum per calendar year &ro$ided'
That if an impairment of the capitali%ation of the Agricultural Credit Administration is imminent by reason of the
limitation appropriated out of the unappropriated funds in the 4ational Treasury such amounts as is necessary to
co$er the losses of the Agricultural Credit Administration' but not e+ceeding si+ million pesos for any one year.:
Sectio "$. Section ""* of the same Code is hereby amended to read as follows
:Sec. ""*. Registration of and guidance to Cooperati$es' Associations and 8rgani%ations. - The Agricultural Credit
Administration shall ha$e the power to register' finance and super$ise all agricultural cooperati$es' including multi-
purpose cooperati$es' and farm associations or organi%ations) and pro$ide credit guidance or assistance to all
agricultural' irrigation' and other cooperati$e associations' multi-purpose cooperati$es' farm organi%ations or fund
corporations &ro$ided' That all cooperati$es' associations or organi%ations registered under this Section shall ha$e
1uridical personality.:
Sectio "%. Section "*- of the same Code is hereby amended to read as follows
:Sec. "*-. ?unction of 5+tension <orkers. - In addition to their functions under Republic Act 4umbered si+
hundred eighty' it shall be the duty of e+tension workers
:!"# To reside in the locality where they are assigned' to disseminate technical information to farm
families' and to demonstrate impro$ed farm and home management practices and techni(ues)
:!*# To work with indi$idual farmers in farm planning and budgeting' guide them in the proper
conduct of farm business and work out schedules of re-payment of loans obtained by farmers)
:!,# To assist farmers in securing the ser$ices or assistant of other agencies' or their personnel'
ha$ing to do rele$ant acti$ities and problems of farmers)
:!-# To $isit newly-established independent farm operators either singly or collecti$ely at least
once a month)
:!.# To promote and stimulate the growth and de$elopment of the youth towards impro$ed farm
and home management practices and techni(ues' as well as the de$elopment of their skills for
small-scale industries and the like)
:!/# To encourage the formation and growth of pri$ate associations' study clubs' committees and
other organi%ed groups of farmers' familiari%e them with modern methods of farming and interest
them to acti$ely participate' collaborate or take the initiati$e in agricultural research'
e+perimentation and implementation of pro1ects in cooperation with the Agricultural &roducti$ity
Commission and other agencies) and
54
:!0# To promote' stimulate and assist in the organi%ation of farmers> cooperati$es' including multi-
purpose cooperati$es.:
Sectio "8. Sections 8ne hundred twenty-si+ and 8ne hundred twenty-se$en of the same Code is hereby repealed.
Sectio "&. A new section is hereby inserted after Sec. "*2' to be designated therein as :Section "*2-A': which shall
read as follows
:Sec. "*2-A. &articipation of Local Bo$ernments. - The Aepartment of Agrarian Reform shall' in e$ery way
possible to insure the successful implementation of the Agrarian Reform &rogram' in$ol$e local go$ernments and
secure their participation in the $arious aspects of the program' such as the leasehold system' the ac(uisition and
distribution of pri$ate and public agricultural lands' the de$elopment of cooperati$es and small-scale industries and
the like' and the other corollary operational acti$ities that should be carried out through barrio' municipal' pro$incial
and city go$ernments.
:In pursuing this approach' howe$er' the Aepartment shall formulate the policies and programs necessary in the
implementation of this Code.
:The Aepartment shall also render technical assistance to local go$ernments necessary to carry out the ob1ecti$e of
agrarian reforms.:
Sectio 3'. Section ".. of the same Code is hereby amended to read as follows
:Sec. "... &owers of the Court) Rules of &rocedure. - The Courts of Agrarian Relations shall ha$e all the powers
and prerogati$es inherent in or belonging to the Court of ?irst Instance.
:The Courts of Agrarian Relations shall be go$erned by the Rules of Court &ro$ided' That in the hearing'
in$estigation and determination of any (uestion or contro$ersy pending before them' the Courts without impairing
substantial rights' shall not be bound strictly by the technical rules of e$idence and procedure' e+cept in
e+propriation cases &ro$ided' further' That in case the persons referred to under Section one hundred si+ty-three
hereof' are not represented by a lawyer of their own choice' the duly authori%ed leaders of duly registered farmers
organi%ations may enter their appearances as counsel for their respecti$e member and7or organi%ation before the
Court of Agrarian Relations' if the Court is fully con$inced that the said leader could competently protect the interest
of his client sub1ect to the basic duties and obligations as officers of the Court.
:The Court of Agrarian Relations is hereby authori%ed to conduct compulsory arbitration between agricultural labor
and agricultural management' agricultural share tenants and agricultural landlords' and agricultural lessees and
agricultural lessors in conflicts arising out of' and in connection with' their agrarian relations upon certification by
the Secretary of Eustice.
:The rights and duties of the parties to the proceedings' the functions and responsibilities of the Court' and the
bidding effect of awards' orders and processes of the Court shall be co$ered by Section si+ to twenty-four of
Commonwealth Act 4umbered 8ne hundred three.
:<here the litigant is an agricultural tenant' tiller or lessee' he shall be entitled to the rights of a pauper litigant
under the rules of Court and the pri$ileges of an indigent litigant under Republic Act 4umbered Si+ty hundred and
thirty-fi$e' without further proof thereof.:
Sectio 3!. Section "/, of the same Code' as amended by Republic Act 4o. -22/' is further amended to read as
follows
:Sec. "/,. ?unctions of the 8ffice of the Agrarian Counsel. - It shall be the responsibility of the 8ffice of the
Agrarian Counsel upon proper notification by the party concerned or by the association or organi%ation to which he
55
belong' to represent tenants' agricultural lessees' agricultural farm workers and agricultural owner-culti$ators or the
members of their immediate farm household referred to in this Code who cannot engage the ser$ices of competent
pri$ate counsel in cases before the Court of Agrarian Relations. This responsibility shall include representation
before courts' including appellate' in cases ci$il or criminal' instituted by or against said tenant' agricultural lessees'
farm workers or owners-culti$ator or the members of their immediate farm household' where the cases arise from or
are connected with' or results or effects of an agrarian dispute. The decision of the 8ffice of the Agrarian Counsel to
pro$ide legal assistance shall be final.:
Sectio 3". Section "/- of the same Code is hereby amended to read as follows
:Sec. "/-. Authority to Administer 8ath and Acknowledgment. - The Agrarian Counsel' the Aeputy Agrarian
Counsel and the Special Attorneys of the 8ffice of the Agrarian Counsel are hereby authori%ed to administer oaths
and acknowledgment free of charge.:
Sectio 33. Section "/0 of the same Code is hereby amended by adding after paragraph !.# thereof' the following
two paragraphs which shall read as follows
:!/# Any collusion between an agricultural lessee and an agricultural lessor and between a $endor
and a $endee on installment sales to simulate agricultural contracts' agricultural loans' or any
application for benefits under the Agrarian Reform program shall be punishable by imprisonment
of not more than fi$e years and a fine not e+ceeding fi$e thousand pesos.
:The period for filing the corresponding criminal action for any criminal $iolation falling under the foregoing
pro$isions of this section shall cease to run' whene$er a case is filed before the Court of Agrarian Relations for the
determination of a pre1udicial (uestion in relation to the criminal action' until said determination has become final.:
Sectio 34. To carry out the ob1ecti$es of this Amendatory Act' and notwithstanding any pro$isions of e+isting laws'
rules and regulations to the contrary' all lending institutions' whether public or pri$ate' shall set aside at least twenty-
fi$e per cent of their loanable funds and make it a$ailable for agricultural credit to agricultural lessees' owner-
culti$ator' amorti%ing owners' and cooperati$es' including multi-purpose cooperati$es and farm associations and
organi%ations owned and operated by those who li$e and work on the land as tillers and registered with the
Agricultural Credit Administration.
Sectio 3#. 4otwithstanding any pro$ision of e+isting laws' rules and regulations to the contrary' the Aepartment of
Agrarian Reform is hereby authori%ed to segregate any area of three thousand hectares out of any of its reser$ations
as demonstration farm or pilot pro1ect for the resettlement program of the Aepartment on the mosha$e-type of
communal agriculture.
Sectio 3$. The personnel of the agencies' offices and7or units abolished' merged' renamed and7or reorgani%ed under
this Amendatory Act shall ha$e the same rights and pri$ileges afforded to the personnel of abolished or reorgani%ed
agencies under the Agricultural Land Reform Code and in pursuance of Section 8ne hundred si+ty-nine thereof.
To carry out the pro$isions of this Section' there is hereby appropriated the sum of 8ne million pesos out of the
unappropriated funds in the 4ational Treasury &ro$ided' That ten per cent of this appropriation or so much thereof
as may be necessary is hereby set aside for the e+penses of the organi%ing staff created under Section ". hereof.
Sectio 3%. Any reference to the Land Reform &ro1ect Administration' the 4ational Land Reform Council and the
Land Authority in the Agricultural Reform Code or under any other e+isting laws shall be understood to refer to the
Aepartment of Agrarian Reform.
Sectio 38. If' for any reason' any section or pro$isions of this Amendatory Act shall be held unconstitutional or
in$alid' no other section or pro$ision of the same shall be affected thereby.
56
All laws or parts of any law inconsistent with the pro$isions of this Amendatory Act are hereby repealed and7or
modified accordingly.
Sectio 3&. This Act shall take effect upon its appro$al.
Appro$ed September "@' "30"
PRESIDENTIAL DECREE No. "% Octo6e( "!, !&%"
DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL,
TRANSFERRING TO THEM THE O<NERSHIP OF THE LAND THEY TILL AND PROVIDING THE
INSTRUMENTS AND MECHANISM THEREFOR
In as much as the old concept of land ownership by a few has spawned $alid and legitimate grie$ances that ga$e rise
to $iolent conflict and social tension'
The redress of such legitimate grie$ances being one of the fundamental ob1ecti$es of the 4ew Society'
Since Reformation must start with the emancipation of the tiller of the soil from his bondage'
48<' T;5R5?8R5' I' ?5RAI4A4A 5. 9ARC8S' &resident of the &hilippines' by $irtue of the powers $ested in
me by the Constitution as Commander-in-Chief of all the Armed ?orces of the &hilippines' and pursuant to
&roclamation 4o. "@2"' dated September *"' "30*' and Beneral 8rder 4o. " dated September **' "30*' as amended
do hereby decree and order the emancipation of all tenant farmers as of this day' 8ctober *"' "30*
This shall apply to tenant farmers of pri$ate agricultural lands primarily de$oted to rice and corn under a system of
sharecrop or lease-tenancy' whether classified as landed estate or not)
The tenant farmer' whether in land classified as landed estate or not' shall be deemed owner of a portion constituting
a family-si%e farm of fi$e !.# hectares if not irrigated and three !,# hectares if irrigated)
In all cases' the landowner may retain an area of not more than se$en !0# hectares if such landowner is culti$ating
such area or will now culti$ate it)
?or the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Aecree' the
$alue of the land shall be e(ui$alent to two and one-half !* "7*# times the a$erage har$est of three normal crop years
immediately preceding the promulgation of this Aecree)
The total cost of the land' including interest at the rate of si+ !/# per centum per annum' shall be paid by the tenant in
fifteen !".# years of fifteen !".# e(ual annual amorti%ations)
In case of default' the amorti%ation due shall be paid by the farmers> cooperati$e in which the defaulting tenant-
farmer is a member' with the cooperati$e ha$ing a right of recourse against him)
The go$ernment shall guaranty such amorti%ations with shares of stock in go$ernment-owned and go$ernment-
controlled corporations)
4o title to the land owned by the tenant-farmers under this Aecree shall be actually issued to a tenant-farmer unless
and until the tenant-farmer has become a full-fledged member of a duly recogni%ed farmer>s cooperati$e)
57
Title to land ac(uired pursuant to this Aecree or the Land Reform &rogram of the Bo$ernment shall not be
transferable e+cept by hereditary succession or to the Bo$ernment in accordance with the pro$isions of this Aecree'
the Code of Agrarian Reforms and other e+isting laws and regulations)
The Aepartment of Agrarian Reform through its Secretary is hereby empowered to promulgate rules and regulations
for the implementation of this Aecree.
All laws' e+ecuti$e orders' decrees and rules and regulations' or parts thereof' inconsistent with this Aecree are
hereby repealed and or modified accordingly.
Aone in the City of 9anila' this *"st day of 8ctober' in the year of 8ur Lord' nineteen hundred and se$enty-two
ECUTIVE ORDER NO. ""8 9-51 !%, !&8%
DECLARING FULL LAND O<NERSHIP TO =UALIFIED FARMER BENEFICIARIES COVERED BY
PRESIDENTIAL DECREE NO. "%> DETERMINING THE VALUE OF REMAINING UNVALUED RICE
AND CORN LANDS SUB9ECT TO P.D. NO. "%? AND PROVIDING FOR THE MANNER OF PAYMENT
BY THE FARMER BENEFICIARY AND MODE OF COMPENSATION TO THE LANDO<NER
<;5R5AS' &residential Aecree 4o. *0) for purposes of determining the cost of the land to be transferred to the
tenant-farmer) pro$ided that $aluation shall be determined by crop producti$ity)
<;5R5AS' there is a need to complete 8peration Land Transfer and accelerate the payment to the landowners of
lands transferred to tenant-farmers) and
<;5R5AS' there is also a need to maintain the financial $alidity of the Land =ank of the &hilippines' the financing
arm of the agrarian reform program of the go$ernment)
48< T;5R5?8R5' I' C8RAF84 C. AGDI48' &resident of the &hilippines' by $irtue of the powers $ested in me
by the Constitution' here order that
Sec. ". All (ualified farmer beneficiaries are now deemed full owners as of 8ctober *"' "30* of the land they
ac(uired by $irtue of &residential Aecree 4o. *0 !hereinafter referred to as &.A. 4o. *0#.
Sec. *. ;enceforth' the $aluation of rice and corn lands co$ered by &.A. 4o. *0 shall be based on the a$erage gross
production determined by the =arangay Committee on Land &roduction in accordance with Aepartment
9emorandum Circular 4o. */' Series of "30,' and related issuances and regulations of the Aepartment of Agrarian
Reform. The a$erage gross production per hectare shall be multiplied by two and a half !*..#' the product of which
shall be multiplied by Thirty ?i$e &esos !&,..@@#' the go$ernment support price for one ca$an of .@ kilos of palay
on 8ctober *"' "30*' or Thirty 8ne &esos !&,".@@#' the go$ernment support price for one ca$an of .@ kilos of corn
on 8ctober *"' "30*' and the amount arri$ed at shall be the $alue of the rice and corn land' as the case may be' for
the purpose of determining its cost to the farmer and compensation to the landowner.
Lease rentals paid to the landowner by the farmer beneficiary after 8ctober *"' "30*' shall be considered as ad$ance
payment for the land. In the e$ent of dispute with the land owner regarding the amount of lease rental paid by the
farmer beneficiary' the Aepartment of Agrarian Reform and the =arangay Committee on Land &roduction concerned
shall resol$e the dispute within thirty !,@# days from its submission pursuant to Aepartment of Agrarian Reform
9emorandum Circular 4o. */' Series of "30,' and other pertinent issuances. In the e$ent a party (uestions in court
the resolution of the dispute' the landowner>s compensation claim shall still be processed for payment and the
proceeds shall be held in trust by the Trust Aepartment of the Land =ank in accordance with the pro$isions of
Section . hereof' pending the resolution of the dispute before the court.
58
Sec. ,. Compensation shall be paid to the landowners in any of the following modes' at the option of the
landowners
!a# =ond payment o$er ten !"@# years' with ten percent !"@K# of the $alue of the land payable
immediately in cash' and the balance in the form of L=& bonds bearing market rates of interest
that are aligned with 3@-day treasury bills rates' net of applicable final withholding ta+. 8ne-tenth
of the face $alue of the bonds shall mature e$ery year from the date of issuance until the tenth
year.
The LA& bonds issued hereunder shall be eligible for the purchase of go$ernment assets to be
pri$ati%ed.
!b# Airect payment in cash or in kind by the farmer-beneficiaries with the terms to be mutually
agreed upon by the beneficiaries and landowners and sub1ect to the appro$al of the Aepartment of
Agrarian Reform) and
!c# 8ther modes of payment as may be prescribed or appro$ed by the &residential Agrarian
Reform Council.
Sec. -. All outstanding Land =ank bonds that are retained by the original landowners-payee or by their heirs' are
deemed matured up to on-twenty fifth !"7*.# of their yearly face $alue from their date of issue to the date of this
5+ecuti$e 8rder and may be claimed by the original landowner-payee by surrendering the bonds to the Land =ank.
The original landowner-payee may claim payment for the remaining unmatured period of the surrendered bonds
under any of the modes of compensation pro$ided in Section ,' subsections !a# !b# or !c# hereof.
In order to meet the financial re(uirements mentioned in this Section' the Central =ank shall remit to the Land =ank
such sums as may b necessary from the Sinking ?und established by the Land =ank from the retirement of its bonds
and other long-term obligations and which Sinking ?und is administered by the Central =ank &ro$ided' howe$er'
That there is no change in maturity of other outstanding Land =ank bonds ac(uired and held by transferees from
original bondholders.
The landowner is e+empt from capital gains ta+ on the compensation paid to him under this 5+ecuti$e 8rder.
Sec. .. In the e$ent that the landowner does not accept payment of the compensation due him' his compensation
shall be held in trust for him by the Trust Aepartment of the Land =ank. The cash portion of the compensation and
such portions that mature yearly shall be in$ested by the Trust Aepartment only in go$ernment securities fully
guaranteed by the Republic of the &hilippines. All the net earnings of the in$estment shall be for the benefit of the
landowner' his heirs or successors in interest.
The rights of the landowners may be e+ercised by his heirs upon his death.
Sec. /. The total costs of the land including interest at the rate of si+ percent !/K# per annum with a two percent
!*K# interest rebate for amorti%ations paid on time' shall be paid by the farmer-beneficiary or his heirs to the Land
=ank o$er a period up to twenty !*@# years in twenty !*@# e(ual annual amorti%ations. Lands already $alued and
financed by the Land =ank are likewise e+tended a *@-year period of payment of twenty !*@# e(ual annual
amorti%ations. ;owe$er' the farmer-beneficiary if he so elects' may pay in full before the twentieth year or may
re(uest the Land =ank to structure a repayment period of less than twenty !*@# years if the amount to be financed
and the corresponding annual obligations are well within the farmer>s capacity to meet. 8wnership of lands ac(uired
by the farmer-beneficiary may be transferred after full payment of amorti%ations.
Sec. 0. As of the date of this 5+ecuti$e 8rder' a lien by way of mortgage shall e+ist in fa$or of the Land =ank on all
lands it has financed and ac(uired by the farmer-beneficiary by $irtue of &.A. 4o. *0 for all amorti%ations' both
principal and interest' due from the farmer-beneficiary or a $alid transferee until the amorti%ations are paid in full.
59
Sec. 2. ;enceforth' failure on the part of the farmer-beneficiary to pay three !,# annual amorti%ations shall be
sufficient cause for the Land =ank to foreclose on the mortgage.
Sec. 3. Thirty !,@# days after final notice for payment to the defaulting tenant-farmer' a copy of which notice shall be
furnished to the Aepartment of Agrarian Reform' the Land =ank may foreclose on the mortgage by registering a
certification under oath of its intent to foreclose with the Registry of Aeeds of the city or pro$ince where the land is
located attaching thereto a copy of the final notice for payment) proof of ser$ice to the tenant-farmer and the
Aepartment of Agrarian Reform of the final notice for payment) and a certification that at least three !,# annual
amorti%ations on the land or the sum thereof remain unpaid. The mortgage is deemed foreclosed upon registration of
said documents with the Registry of Aeeds.
In the e$ent the defaulting tenant-farmer could not be ser$ed the final notice for payment' the Land =ank shall post
the notice for payment in the town hall' public market and barangay hall or any other suitable place fre(uented by
the public of the barangay where the defaulting tenant-farmer resides. A certification by the Land =ank to this effect
will substitute for the proof of ser$ice of the final notice of payment for purposes of foreclosure.
The Register of Aeeds of all cities and pro$inces are directed to ha$e a separate registry book to enter all the
re(uirements of foreclosure as pro$ided herein.
Sec. "@. The tenant-farmer' or any of his compulsory heirs may lift the foreclosure within a period of two !*# years
from its registration by paying the Land =ank all unpaid amorti%ations on the land with interest thereon of si+
percent !/K# per annum. In case of failure to lift the foreclosure within the said period' ownership of the land shall
be deemed transferred to the Land =ank.
Sec. "". The Land =ank' not later than three !,# months after its ac(uisition of the land' shall sell the foreclosed land
to any interested landless farmer duly certified to as a bona fide landless farmer by the Aepartment of Agrarian
Reform of the barangay or the two closest barangays where the land is situated. The cost of the land is the unpaid
amorti%ations due on the lands as of the date of the sale with interest thereon of si+ percent !/K# per annum. In the
e$ent that there is more than one interested buyer' the actual buyer shall be determined by lottery in the presence of
all the buyers or their representati$es and a representati$e of the Aepartment of Agrarian Reform. The Aeed of
Con$eyance e+ecuted by the Land =ank in fa$or of the farmer transferee shall be registered with the Register of
Aeeds of the city or pro$ince where the land is located. 8wnership shall transfer to the farmer transferee only upon
registration with the Registry of Aeeds. The lien of the Land =ank by way of mortgage on the remaining unpaid
amorti%ations shall subsists on the title of the transferee.
Sec. "*. The Land =ank' at least one !"# month prior to the sale' shall furnish the Aepartment of Agrarian Reform
with a notice of sale and shall post a similar notice in the town hall' public market and barangay hall or any other
suitable place fre(uented by the public of the barangay where the property is located. The notice shall state the
description of the property sub1ect of the sale' the price' the date and place of sale.
Sec. ",. The 4ational Land Titles and Aeeds Registration Administration is hereby authori%ed to issue such rules
and regulations as may be necessary relati$e to the registration with the Register of Aeeds of all
transactions7acti$ities re(uired herein taking into consideration the need to protect the integrity of the Torrens
System' the interests of the parties and innocent third parties.
All transactions7acti$ities and their corresponding documents that are registered with the Register of Aeeds pursuant
to the re(uirements of &.A. 4o. *0 and this 5+ecuti$e 8rder shall be free from all documentary stamps and
registration fees.
Sec. "-. The Aepartment of Agrarian Reform and the Land =ank are authori%ed to issue the additional implementing
guidelines of this 5+ecuti$e 8rder which shall not be later than si+ty !/@# days from the date hereof.
Sec. ".. To ensure the successful implementation of the Agrarian Reform &rogram' an Agrarian Reform 8perating
?und !Agrarian ?und# shall be set up by the 4ational Bo$ernment in the Land =ank. The amount of this Agrarian
60
?und' to be determined by the Bo$ernment Corporation 9onitoring and Coordinating Committee hereinafter
referred to as BC9CC#' will source the funding re(uirements for Land =ank to carry out the full implementation of
this program which will include the net operating losses directly and indirectly attributable to this program and the
credit facilities to farmers and farmers> organi%ations. <ithin thirty !,@# days from the effecti$ity of this 5+ecuti$e
8rder' the Land =ank shall submit to the BC9CC its funding re(uirements for "320. Thereafter' within si+ty !/@#
days after the end of each calendar year' the Land =ank shall submit to the BC9CC an accounting of all drawings
the Land =ank had made against the ?und. At the same time' it will also submit its prospecti$e funding re(uirements
for the current year for re$iew and $alidation of the BC9CC. The amount appro$ed by the BC9CC shall be
deemed appropriate and the amount programmed for release in coordination with the Aepartment of ?inance'
=udget and 9anagement and the 4ational 5conomic and Ae$elopment Authority. <ithin thirty !,@# days from
BC9CC>s appro$al' such funds shall be remitted to the Land =ank for credit to the Agrarian ?und.
Sec. "/. If any part of this 5+ecuti$e 8rder is declared in$alid or unconstitutional' it shall not affect any other part
thereof.
Sec. "0. All laws' presidential decrees' orders' letters of instructions' rules and regulations' and other issuances or
parts thereof inconsistent with this 5+ecuti$e 8rder are hereby repealed or modified accordingly.
Sec. "2. This 5+ecuti$e 8rder shall take effect upon its signing and publication as pro$ided by law.
A845 in the City of 9anila' this "0th day of Euly' in the year of 8ur Lord' nineteen hundred and eighty-se$en.
E:ECUTIVE ORDER NO. !"&;A 9-51 "$, !&8%
MODIFYING ORDER NO. !"& REORGANI@ING AND STRENGTHENING THE DEPARTMENT OF
AGRARIAN REFORM AND FOR OTHER PURPOSES
<;5R5AS' 5+ecuti$e 8rder 4o. "*3 dated Eanuary ,@' "320 was suspended)
<;5R5AS' &residential &roclamation 4o. "," and 5+ecuti$e 8rder 4o. **3' both dated Euly **' "320 instituted a
Comprehensi$e Agrarian Reform &rogram !CAR&# and pro$ided the mechanisms for its implementation)
<;5R5AS' 5+ecuti$e 8rder 4o. **3 $ests on the Aepartment of Agrarian Reform (uasi-1udicial powers to
determine and ad1udicate agrarian reform matters)
<;5R5AS' there is a need to strengthen and e+pand the functions of the Aepartment of Agrarian Reform to be
more effecti$e in implementing the Comprehensi$e Agrarian Reform &rogram)
<;5R5AS' under Article C6III' Section /' of the "320 Constitution' the &resident shall continue to e+ercise
legislati$e powers until the ?irst Congress con$enes)
48<' T;5R5?8R5' I' C8RAF84 C. AGDI48' &R5SIA54T 8? T;5 &;ILI&&I45S' by $irtue of the powers
$ested in me by the Constitution' do hereby order
Sec. ". Title. This 5+ecuti$e 8rder shall otherwise be known as the Reorgani%ation Act of the Aepartment of
Agrarian Reform.
Sec. *. Reorgani%ation. The Aepartment of Agrarian Reform is hereby reorgani%ed structurally and functionally'
hereinafter referred to as the Aepartment' in accordance with the pro$isions of this 5+ecuti$e 8rder.
61
Sec. ,. Aeclaration of &olicy. It is the declared policy of the State of completely abolish all remnants of feudalism
and all other types of un1ust tenurial arrangements' implement the comprehensi$e agrarian reform program' increase
the producti$ity of the direct producers' and strengthen the agricultural base for increased industriali%ation.
&ursuant to this policy' the State shall
a# 5stablish owner-culti$ated economic' family-si%e farms and collecti$ely-owned7cooperati$ely-culti$ated
farms as the foundation of &hilippine agriculture)
b# &rohibit absentee land ownership)
c# Rechannel and di$ert landlord capital in agriculture to industrial de$elopment)
d# Assist in the preser$ation and conser$ation of prime lands for agricultural purposes)
e# 5ncourage the establishment and protect the autonomy and independence of institutions of farmers and
farmworkers that will safeguard their interests and ensure their dignified e+istence' free from pernicious
restraints and practices)
f# Create 1ust and $iable socio-economic structures in agriculture conduci$e to greater producti$ity and
higher incomes through the cooperati$e system of production' processing' marketing' distribution' and
credit ser$ices)
g# Accelerate the disposition of public alienable' disposable' and culti$able land to actual culti$ators and
other (ualified beneficiaries and de$elop agrarian communities for full utili%ation of land for human growth
and de$elopment)
h# Institutionali%e partnerships between go$ernment and organi%ations of farmers and farmworkers in
agrarian reform policy formulation' program implementation' and e$aluation)
i# &ro$ide specific in$estment opportunities' alternati$e employment' and other incenti$es for landowners
affected by agrarian reform)
1# 5nsure ade(uate funding support for the agrarian reform program as well as timely' affordable' and
appropriate financing schemes to its beneficiaries)
k# Implement an agricultural land ta+ scheme that will pre$ent land hoarding and7or speculation.
Sec. -. 9andate. The Aepartment shall be responsible for implementing the Comprehensi$e Agrarian Reform
&rogram and' for such purpose' it is authori%ed to
a# Ac(uire' determine the $alue of' subdi$ide into family-si%e farms or organi%e into collecti$e of
cooperati$e farms and de$elop pri$ate agricultural lands for distribution to (ualified tillers' actual
occupants' and displaced urban poor)
b# Administer and dispose all culti$able portions of the public domain declared as alienable and disposable
for agricultural purposes transferred to it by the Aepartment of 5n$ironment and 4atural Resources)
c# Ac(uire' by purchase or grant' real estate properties suited for agriculture that ha$e been foreclosed by
the national go$ernment)
62
d# Dndertake land consolidation' land reclamation' land forming' and conser$ation in areas sub1ect to
agrarian reform)
e# ?acilitate the compensation of landowners co$ered by agrarian reform)
f# Issue emancipation patents to farmers and farmworkers who ha$e been gi$en lands under the agrarian
reform program as may be pro$ided for by law)
g# &ro$ide free legal ser$ices to agrarian reform beneficiaries and resol$e agrarian conflicts and land tenure
problems)
h# Ae$elop and implement alternati$e land tenure systems such as cooperati$e farming and agro-industrial
estates' among others)
i# Dndertake land use management and land de$elopment studies and pro1ects in agrarian reform areas)
k# Appro$e or disappro$e the con$ersion' restructuring or read1ustment of agricultural lands into non-
agricultural uses)
l# 9onitor and e$aluate the progress of agrarian reform implementation)
m# Assist the 8ffice of the Solicitor Beneral in pro$iding e$idence for the re$ersion proceedings to be filed
with respect to lands of the public domain' occupied by pri$ate indi$iduals and their tenants or farmworkers
which are sub1ect to land reform' and real rights connected therewith which ha$e been ac(uired in $iolation
of the Constitution or the public land laws or through corrupt practices)
n# Submit progress reports to the 8ffice of the &resident' to Congress' and to the people at the end of each
year and at all times make a$ailable to the general public information on the current status of its programs.
Sec. .. &owers and ?unctions. &ursuant to the mandate the Aepartment' and in order to ensure the successful
implementation of the Comprehensi$e Agrarian Reform &rogram' the department is hereby authori%ed to
a# Ad$ise the &resident and the &residential Agrarian Reform Council on the promulgation of
e+ecuti$e7administrati$e orders' other regulati$e issuances and legislati$e proposals designed to strengthen
agrarian reform and protect the interests of the benefeciaries thereof)
b# Implement all agrarian laws' and for this purpose' punish for contempt and issue subpoena' subpoena
duces tecum' writs of e+ecution of its decisions' and other legal processes to ensure successful and
e+peditious program implementation) the decisions of the Aepartment may in proper cases' be appealed to
the Regional Trial Courts but shall be immediately e+ecutory notwithstanding such appeal)
c# 5stablish and promulgate operational policies' rules and regulations and priorities for agrarian reform
implementation)
d# Coordinate program implementation with the Land =ank of the &hilippines and other rele$ant ci$ilian
and military go$ernment agencies mandated to support the agrarian reform program)
e# Ac(uire' administer' distribute' and de$elop agricultural lands for agrarian reform purposes)
f# Dndertake sur$eys of lands co$ered by agrarian reform)
63
g# Issue emancipation patents to farmers and farmworkers co$ered by agrarian reform for both pri$ate and
public lands and when necessary make administrati$e corrections of the same)
h# &ro$ide free legal ser$ices to agrarian reform beneficiaries and resol$e agrarian conflicts and land-tenure
related problems as may be pro$ided for by law)
i# &romote the organi%ation and de$elopment of cooperati$es and other associations of agrarian reform
beneficiaries)
1# Conduct continuing education and promotion programs on agrarian reform for beneficiaries' land-
owners' go$ernment personnel' and the general public)
k# Institutionali%e the participation of farmers' farmworkers' other beneficiaries' and agrarian reform
ad$ocates in agrarian reform policy formulation' program implementation' and e$aluation)
l# ;a$e e+clusi$e authority to appro$e or disappro$e con$ersion of agricultural lands for residential'
commercial' industrial' and other land uses as may be pro$ided for by law)
m# Call upon any go$ernment agency' including the Armed ?orces of the &hilippines' and non-
go$ernmental organi%ations !4B8s# to e+tend full support and cooperation to program implementation)
n# 5+ercise such other powers and functions as may be pro$ided for by law or directed by the &resident' to
promote efficiency and effecti$eness in the deli$ery of public ser$ices.
Sec. /. Structural 8rgani%ation. The Aepartment shall consist of the Aepartment &roper' the staff offices' the staff
bureaus and the regional7pro$incial7municipal agrarian reform offices.
The Aepartment &roper shall consist of the following
a# 8ffice of the Secretary)
b# 8ffices of the Dndersecretaries)
c# 8ffices of the Assistant Secretaries)
d# &ublic Affairs Staff)
e# Special Concerns Staff)
f# Agrarian Reform Ad1udication =oard.
The staff sectoral bureaus' on the other hand' shall be composed of
a# =ureau of Land Ac(uisition and Aistribution)
b# =ureau of Land Ae$elopment)
c# =ureau of Agrarian Legal Assistance)
d# =ureau of Agrarian Reform Information and 5ducation)
64
e# =ureau of Agrarian Reform =eneficiaries Ae$elopment.
The field offices shall consist of the Aepartment regional offices' the pro$incial offices and the municipal agrarian
reform office.
Sec. 0. Secretary of Agrarian Reform. The authority and responsibility for the e+ercise of the mandate of the
Aepartment and the discharge of its powers and functions shall be $ested in the Secretary of Agrarian Reform'
hereinafter referred to as Secretary' who shall ha$e super$ision and control o$er the Aepartment and shall be
appointed by the &resident.
Sec. 2. 8ffice of the Secretary. The 8ffice of the Secretary shall consist of the Secretary' his immediate staff' the
&ublic Affairs Staff and the Special Concerns Staff.
Sec. 3. Dndersecretary. The Secretary shall be assisted by four !-# Dndersecretaries who shall be appointed by the
&resident upon the recommendation of the Secretary. The Secretary is hereby authori%ed to delineate' assign and7or
reassign the respecti$e functional areas of responsibility of the Dndersecretaries' pro$ided' That such responsibility
shall be with respect to the mandate and ob1ecti$es of the Aepartment) and pro$ided' ?urther' that no Dndersecretary
shall be assigned primarily administrati$e responsibilities.
Sec. "@. Assistant Secretary. The Secretary and the Dndersecretaries shall also be assisted by se$en !0# Assistant
Secretaries' who shall be appointed by the &resident upon the recommendation of the Secretary. The Secretary is
hereby authori%ed to delineate' assign and7or reassign the respecti$e functional areas of responsibility of the
Assistant Secretaries' pro$ided' That such responsibility shall be with respect to the mandate and ob1ecti$es of the
Aepartment.
Sec. "". &ublic Affairs Staff. There is hereby created a &ublic Affairs Staff' under the office of the Secretary' to be
headed by a Airector and assisted by an Assistant Airector' which shall ser$e as the public information arm of the
Aepartment. It shall be responsible for disseminating information and agrarian reform policies' plans' programs and
pro1ects) and respond to public (ueries related to the implementation of the agrarian reform program.
Sec. "*. Special Concerns Staff. There is hereby created a Special Concerns Staff under the 8ffice of the Secretary'
to be headed by a Airector and assisted by an Assistant Airector' which shall be responsible for handling priority
areas7sub1ects identified by the Secretary that necessitate special and immediate attention.
Sec. ",. Agrarian Reform Ad1udication =oard. There is hereby created an Agrarian Reform Ad1udication =oard
under the 8ffice of the Secretary. The =oard shall be composed of the Secretary as Chairman' two !*#
Dndersecretaries as may be designated by the Secretary' the Assistant Secretary for Legal Affairs' and three !,#
others to be appointed by the &resident upon the recommendation of the Secretary as members. A Secretariat shall be
constituted to support the =oard. The =oard shall assume the powers and functions with respect to the ad1udication
of agrarian reform cases under 5+ecuti$e 8rder 4o. **3 and this 5+ecuti$e 8rder. These powers and functions may
be delegated to the regional offices of the Aepartment in accordance with rules and regulations to be promulgated by
the =oard.
Sec. "-. &lanning and &ro1ect 9anagement 8ffice. There is hereby created a &lanning and &ro1ect 9anagement
8ffice within the Aepartment &roper which shall be responsible for coordinating and initiating the de$elopment'
integration and prioriti%ation of plans' programs and pro1ects of the Aepartment) monitoring and e$aluating agrarian
reform program implementation) establishing linkages with foreign funding institutions) and coordinating the
acti$ities of the different 8ffices' =ureaus and Attached Agencies of the Aepartment.
Sec. ".. &olicy and Strategic Research 8ffice. There is hereby created a &olicy and Strategic Research 8ffice within
the Aepartment &roper which shall be responsible for establishing and implementing a computeri%ed management
information system as well as for coordinating and7or initiating research and studies for planning and policy
formulation purposes.
65
Sec. "/. ?inance' 9anagement and Administrati$e 8ffice. There is hereby created a ?inance' 9anagement and
Administrati$e 8ffice within the Aepartment &roper which shall be responsible for the proper and timely allocation
of funds to support appro$ed programs' pro1ects and acti$ities) the appropriate management control and accounting
of funds) the management of the Aepartment>s physical assets) and the pro$ision of ser$ices to ensure effecti$e and
efficient personnel management and manpower career de$elopment' and for the establishment of management
systems and procedures.
Sec. "0. ?ield 8perations 8ffice. There are hereby created ?ield 8perations 8ffices for Lu%on' 6isayas and
9indanao within the Aepartment &roper which shall monitor and assess the implementation of the Aepartment>s
policies' plans and programs at the regional' pro$incial and municipal le$els.
Sec. "2. Legal Affairs 8ffice. There is hereby created a Legal Affairs 8ffice within the Aepartment &roper which
shall be responsible for the re$iew of contracts and other legal matters' the rendition of legal assistance to
Aepartment personnel and those who will be affected by the agrarian reform program.
Sec. "3. =ureau of Land Ac(uisition and Aistribution. There is hereby created the =ureau of Land Ac(uisition and
Aistribution which shall absorb the rele$ant functions of the =ureaus of Land Ac(uisition' Aistribution and
Ae$elopment' and of Land Tenure Impro$ement. The =ureau of Land Ac(uisition and Aistribution' to be headed by
a Airector and assisted by an Assistant Airector' shall be responsible for the de$elopment of policies' plans'
programs' standard operating procedures' and for pro$iding technical assistance' relati$e to the ac(uisition and
distribution of pri$ate agricultural lands co$ered by the agrarian reform program' including land tiller-landowner
identification' land $aluation' and landowners compensation' transfer of ownership to actual tillers' leasehold
arrangements' stewardship' and land transfer actions.
Sec. *@. =ureau of Land Ae$elopment. There is hereby created the =ureau of Land Ae$elopment which shall absorb
the rele$ant functions of the =ureau of Land Ac(uisition' Aistribution and Ae$elopment. The =ureau of Land
Ae$elopment' to be headed by a Airector and assisted by an Assistant Airector' shall responsible for the
de$elopment of policies' plans and programs' and for pro$iding technical assistance' relati$e to land sur$eys' land
use' capability and classification' engineering ser$ices' and land consolidation.
Sec. *". =ureau of Agrarian Legal Assistance. The =ureau of Agrarian Legal Assistance shall be strengthened and
shall be responsible for de$eloping guidelines' plans and programs for legal assistance including de$eloping'
maintaining and coordinating para-legal ser$ices for those who will be affected by the Comprehensi$e Agrarian
Reform &rogram. It shall be headed by a Airector and assisted by an Assistant Airector.
Sec. **. =ureau of Agrarian Reform Information and 5ducation. There is hereby created the =ureau of Agrarian
Reform Information and 5ducation which shall absorb the functions of the Agrarian Reform 5ducation Ser$ice
which is abolished by this 5+ecuti$e 8rder. The =ureau of Agrarian Reform Information and 5ducation' to be
headed by a Airector and assisted by an Assistant Airector' shall be responsible for de$eloping and conducting
continuing training and education programs for the ac(uisition of knowledge' $alue formation' and de$elopment of
skills and fa$orable attitudes among benefeciaries and personnel of the Aepartment and other agencies' and the
increase of awareness' participation and acceptance of agrarian reform by the public through the dissemination of
information and communication materials.
Sec. *,. =ureau of Agrarian Reform =enefeciaries Ae$elopment. There is hereby created the =ureau of Agrarian
Reform =eneficiaries Ae$elopment which shall absorb the rele$ant functions of the =ureau of Resettlement. The
=ureau of Agrarian Reform =eneficiaries Ae$elopment' to be headed by a Airector and assisted by an Assistant
Airector' shall be responsible for the de$elopment of policies' plans and programs' and for pro$iding technical
assistance' relati$e to the de$elopment of settlement areas into $iable agrarian communities. It shall also be
responsible for promoting the organi%ation of agrarian reform beneficiaries' liaison with farmer and farm workers
organi%ations to ensure the raising or farm incomes' the promotion of all forms of farm cooperation' the achie$ement
of a dignified e+istence and the creation of a $iable economic structure conduci$e to greater producti$ity and higher
farm income.
66
Sec. *-. Regional 8ffices The Aepartment shall ha$e twel$e !"*# Regional 8ffices. 5ach Regional 8ffice shall be
headed by a Regional Airector who shall be assisted by an Assistant Regional Airector for operations and an
Assistant Regional Airector for Administration.
The Regional 8ffices shall be responsible for the implementation of laws' policies' plans' programs' pro1ects' rules
and regulations of the Aepartment in its administrati$e region. ?or such purpose' it shall ha$e the following
functions
a# &repare and submit plans and programs for the region on
"# Land ac(uisition and distribution)
*# Information and education)
,# Land use management and land de$elopment)
-# Agrarian reform beneficiaries de$elopment)
b# &ro$ide technical assistance to &ro$incial 8ffices and 9unicipal Agrarian Reform 8ffices in the
implementation of appro$ed plans and programs)
c# Conduct operations research and e$aluation of agrarian reform implementation within the region)
d# Coordinate with other go$ernment and pri$ate agencies and farmer and farm workers organi%ations at
the regional le$el' to carry out the programs7pro1ects for the general welfare of agrarian reform
beneficiaries)
e# 9aintain an information system in coordination with the established monitoring systems)
f# Re$iew and e$aluate reports and other documents submitted by the &ro$incial 8ffices and 9unicipal
Agrarian Reform 8ffices and agrarian reform clientele)
g# Submit periodic feedback as may be necessary in the ser$ice of the Aepartment>s clientele.
Sec. *.. &ro$incial 8ffices. The Agrarian Reform Aistrict 8ffices are hereby abolished and in their stead the
Aepartment shall create &ro$incial Agrarian Reform 8ffices as may be necessary in promoting efficiency and
effecti$eness in the deli$ery of its ser$ices. 5ach &ro$incial Agrarian Reform 8ffice shall be headed by a &ro$incial
Agrarian Reform 8fficer.
The &ro$incial Agrarian Reform 8ffices shall be responsible for directing and coordinating the operations and
acti$ities of the 9unicipal Agrarian Reform 8ffices operating within the pro$ince and has the following functions
a# Set priorities' specific targets' schedules' and deadlines for the e+ecution of appro$ed plans' programs'
and pro1ects on
"# Land ac(uisition' distribution' transfer of land ownership to actual tillers' including land-tiller-
landowner identification' tenurial security' leasehold arrangements' land sur$eys' land $aluation
and landowner>s compensation as may be pro$ided for by law)
*# Continuing information and education programs on agrarian reform)
67
,# 5ncouraging the organi%ational de$elopment of agrarian reform beneficiaries cooperati$es and
other associations and institutionali%ing farmer-go$ernment partnership in agrarian reform policy
formulation' program implementation' and e$aluation)
-# Landowners> compensation and rechanneling landowner capital to industrial de$elopment)
.# Ae$elopment and implementation of alternati$e land tenure systems such as cooperati$e
farming' cooperati$e culti$atorship schemes' and agro-industrial estates' among others)
/# Land use management)
0# Compact farming' integrated farming system' sloping agricultural land technology' and other
land conser$ation measures in agrarian reform areas' in coordination with farmer and farm
workers organi%ations)
2# &ro$ision of legal ser$ices to those affected by agrarian reform and resolution of agrarian
conflicts and land tenure problems)
b# &ro$ide administrati$e ser$ices to the 9unicipal Agrarian Reform 8ffices within the pro$ince)
c# &ro$ide legal ser$ices to agrarian reform beneficiaries in cases arising from or connected with agrarian
reform disputes' handling of e+propriation proceedings' registering cooperati$es and re$iewing and acting
on all matters initially in$estigated and ele$ated by 9unicipal Agrarian Reform 8ffice)
d# &ro$ide technical assistance to 9unicipal Agrarian Reform 8ffices in the implementation of appro$ed
plans and programs)
e# Coordinate with go$ernmental' pri$ate agencies' and farmer and farm worker organi%ations at the
pro$incial le$el' to carry out programs)
f# Conduct periodic performance audit sur$ey in collaboration with the regional office and monitor agrarian
reform program accomplishments' including operational problems and constraints' and recommend
appropriate remedial measures for effecti$e program implementation)
g# &erform such other functions as may be necessary in the ser$ice of the Aepartment>s clientele)
Sec. */. 9unicipal Agrarian Reform 8ffices. The Aepartment shall ha$e as many 9unicipal Agrarian Reform
8ffices as may be necessary in promoting efficiency and effecti$eness in the deli$ery of its ser$ices' which shall be
headed by a 9unicipal Agrarian Reform 8fficer.
The 9unicipal Agrarian Reform 8ffice shall be responsible for directly implementing agrarian reform programs and
deli$ering e+pected results at the municipal le$el. ?or such purpose' it shall ha$e the following functions
a# Implement policies and programs on land ac(uisition and distribution and transfer of landowners to
actual tillers' including identification of farms' landowners' and beneficiaries' leasehold arrangements' land
$aluation' landowner>s compensation and transfer actions as determined in accordance with law)
b# Dndertake continuing information and education programs on agrarian reform among the beneficiaries
thereof)
c# 5ncourage and promote the organi%ation and de$elopment of agrarian reform beneficiaries and assist in
the registration of organi%ed cooperati$es)
68
d# Institutionali%e beneficiaries> participation in agrarian reform policy formulation and program
implementation)
e# 8rgani%e7establish compact farms' land consolidation' integrated farm system' sloping agricultural land
technology and other cooperati$e-culti$atorship schemes)
f# &ro$ide assistance in agrarian reform research)
g# &ro$ide assistance to $arious legal ser$ices' including legal information and legal counselling'
documentation and preliminary processing of applications for patents and applications to purchase lots'
preliminary in$estigation of conflicting claims of lot boundaries and appraisal of properties' and mediation
of different problems arising from implementation of the agrarian reform program) e+ecution and
registration of lease contracts' initial in$estigation of administrati$e cases' and other legal ser$ices)
h# &ro$ide assistance on pro1ect identification' formulation' and de$elopment that would uplift the socio-
economic status of the beneficiaries including pro1ects that would channel landlord capital to industrial
de$elopment)
i# Cooperati$e with other go$ernment and pri$ate agencies and farmer and farm worker organi%ations
within the area of co$erage for effecti$e program7pro1ect implementation)
1# Submit periodic reports on program7pro1ects accomplishments including identified problems and
recommended solutions thereto)
k# Implement pro1ects supporti$e of national priority programs which the Aepartment is committed to
assist)
l# &erform such other functions as may be assigned from time to time' to promote efficiency and
effecti$eness in the deli$ery of public ser$ices.
Sec. *0. Attached Agency
a# The Aepartment shall' sub1ect to the appro$al of the &residential Agrarian Reform Council' create the
?oundation for the Agrarian Reform 9o$ement of the &hilippines !?AR9-&hilippines# to administer'
operate' and manage programs and pro1ects de$eloped by the Aepartment and initiate alternati$e li$elihood
pro1ects for displaced small landowners. It shall be attached to the office of the Secretary and shall be
go$erned by a =oard of Trustees. The ?oundation will be authori%ed to raise funds and to contract foreign
and domestic loans for its pro1ects.
Sec. *2. Transitory &ro$isions. In accomplishing the acts of reorgani%ation herein prescribed' the following
transitory pro$isions shall be complied with' unless otherwise pro$ided elsewhere in this 5+ecuti$e 8rder)
a# The transfer of a go$ernment unit shall include the functions' appropriations' funds' records' e(uipment'
facilities' chosen in action' rights' other assets' and liabilities' if any' of the transferred unit as well as the
personnel thereof' as may be necessary' who shall' in a hold-o$er capacity' continue to perform their
respecti$e duties and responsibilities and recei$e the corresponding salaries and benefits. Those personnel
from the transferred unit whose positions are not included in the Aepartment>s new position structure and
staffing pattern appro$ed and prescribed by the Secretary or who are not reappointed shall be deemed
separated from the ser$ice and shall be entitled to the benefits pro$ided in the second paragraph of Section
*3 hereof.
b# The transfer of functions which results in the abolition of the go$ernment unit that e+ercised them shall
include the appropriations' funds' records' e(uipment' facilities' chosen in action' rights' other assets and
69
personnel as may be necessary to the proper discharge of the transferred functions. The abolished unit>s
remaining appropriations and funds' if any' shall re$ert to the Beneral ?und and its remaining assets' if any'
shall be allocated to such appropriate units as the Secretary shall determine or shall otherwise be disposed
in accordance with the Bo$ernment Auditing Code and other pertinent laws' rules and regulations. Its
liabilities' if any' shall likewise be treated in accordance with the Bo$ernment Auditing Code and other
pertinent laws' rules and regulations. Its personnel shall' in a hold-o$er capacity' continue to perform their
duties and responsibilities and recei$e their corresponding salaries and benefits. Its personnel whose
positions are not included in the Aepartment>s structure and staffing pattern appro$ed and prescribed by the
Secretary under Section *3 hereof or who are not reappointed' shall be deemed separated from the ser$ice
and shall be entitled to the benefits pro$ided in the second paragraph of the same Section *3.
c# Any transfer of functions which does not result in the abolition of the go$ernment unit that has e+ercised
them shall include the appropriations' funds' records' e(uipment' facilities' chosen in action' rights' and
assets and personnel as may be necessary to the proper discharge of the transferred functions. The
liabilities' if any' that may ha$e been incurred in connection with the discharge of the transferred functions'
shall be treated in accordance with the Bo$ernment Auditing Code and other pertinent laws' rules and
regulations. Such personnel shall' in a hold-o$er capacity' continue to perform their duties and
responsibilities and recei$e their corresponding salaries and benefits unless in the meantime they are
separated from the ser$ice. Any personnel' whose positions are not included in the Aepartment>s new
position structure and staffing patter appro$ed and prescribed by the Secretary under Section *3 hereof or
who are not reappointed' shall be deemed separated from the ser$ice and shall be entitled to the benefits
pro$ided in the second paragraph of the same Section *3.
d# In case of the abolition of a go$ernment unit which does not result in the transfer of its functions to
another unit' the appropriations and funds of the abolished entity shall re$ert to the Beneral ?und' while the
records' e(uipment' facilities' chosen in action' rights' and other assets thereof shall be allocated to such
appropriate entities as the Secretary shall determine or shall otherwise be disposed in accordance with the
Bo$ernment Auditing Code and other pertinent laws' rules and regulations' The liabilities of the abolished
units shall be treated in accordance with the Bo$ernment Auditing Code and other pertinent laws' rules and
regulations' while the personnel thereof' whose position' is not included in the Aepartment>s new position
structure and staffing pattern appro$ed and prescribed by the Secretary under Section *3 hereof or who has
not reappointed' shall be deemed separated from the ser$ice and shall be entitled to the benefits pro$ided in
the second paragraph of the same Section *3.
e# In case of merger or consolidation of go$ernment units' the new or sur$i$ing unit shall e+ercise the
functions !sub1ect to the reorgani%ation herein prescribed and the laws' rules and regulations pertinent to the
e+ercise of such functions# and shall ac(uire the appropriations' funds' records' e(uipment' facilities'
chosen in action' rights' other assets' liabilities' if any' and personnel' as may be necessary' of the units that
compose the merged unit shall in a hold-o$er capacity' continue to perform their respecti$e duties and
responsibilities and recei$e their corresponding salaries and benefits unless in the meantime they are
separated from the ser$ice. Any such personnel' whose positions are not included in the Aepartment>s new
position structure and staffing pattern appro$ed and prescribed by the Secretary under Section *3 hereof or
who are not reappointed' shall be deemed separated from the ser$ice and shall be entitled to the benefits
pro$ided in the second paragraph of the same Section *3.
f# In case of termination of a function which does not result in the abolition of the go$ernment unit which
performed such function' the appropriations and funds intended to finance the discharge of such function
shall re$ert to the Beneral ?und while the records' e(uipment' facilities' chosen in action' rights and other
assets used in connection with the discharge of such function shall be allocated to the appropriate units as
the Aepartment shall determine or shall otherwise be disposed in accordance with the Bo$ernment Auditing
Code and other pertinent laws' rules and regulations' The liabilities' if any' that may ha$e been incurred in
connection with the discharge of such function shall likewise be treated in accordance with the Bo$ernment
Auditing Code and other pertinent laws' rules and regulations. The personnel who ha$e performed such
function' whose positions are not included in the Aepartment>s new position structure and staffing pattern
appro$ed and prescribed by the Secretary under Section *3 hereof or who ha$e not been reappointed' shall
70
be deemed separated from the ser$ice and shall be entitled to the benefits pro$ided in the second paragraph
of the same Section *3 hereof.
Sec. *3. 4ew' Structure and &attern. Dpon appro$al of this 5+ecuti$e 8rder' the officers and employees of the
Aepartment shall' in a hold-o$er capacity' continue to perform their respecti$e duties and responsibilities and recei$e
the corresponding salaries and benefits unless in the meantime they are separated from go$ernment ser$ice.
The new position structure and staffing pattern of the Aepartment shall be appro$ed and prescribed by the Secretary
within si+ty !/@# days from the effecti$ity of this 5+ecuti$e 8rder and the authori%ed positions created thereunder
shall be filled with regular appointments by him or by the &resident as the case may be. Those incumbents whose
positions are not included therein or who are not reappointed shall be deemed separated from the ser$ice. Those
separated from the ser$ice shall recei$e the retirement benefits to which they be entitled under e+isting laws' rules
and regulations. 8therwise' they shall be paid the e(ui$alent of one !"# month basic salary for e$ery year of ser$ice
in the go$ernment' or a fraction thereof' computed on the basis of the highest salary recei$ed' but in no case shall
such payment e+ceed the e(ui$alent of twel$e !"*# months salary. la7phi:"net
Sec. ,@. &eriodic &erformance 5$aluation. The Aepartment of Agrarian Reform is hereby re(uired to formulate and
enforce a system of measuring and e$aluating periodically and ob1ecti$ely the performance of the Aepartment and
submit the same annually to the &resident.
Sec. ,". 4otice or Consent Re(uirement. If any reorgani%ational change herein authori%ed is of such substance or
materiality as to pre1udice third persons with rights recogni%ed by law or contract such that notice to or consent of
creditors is re(uired to be made or obtained pursuant to any agreement entered into with any of such creditors' such
notice or consent re(uirement shall be complied with prior to the implementation of such reorgani%ational change.
Sec. ,*. &rohibition Against Structural Changes. 4o change in the reorgani%ation herein prescribed shall be $alid
e+cept upon prior appro$al of the &resident for the purpose of promoting efficiency and effecti$eness in the deli$ery
of public ser$ices.
Sec. ,,. ?unding. ?unds needed to carry out the pro$isions of this 5+ecuti$e 8rder shall be taken from funds
a$ailable in the Aepartment.
Sec. ,-. Implementing Authority of the Secretary. The Secretary shall issue orders' rules and regulations and other
issuances as may be necessary to ensure the effecti$e implementation of the pro$isions of this 5+ecuti$e 8rder.
Sec. ,.. Separability. Any portion or pro$ision of this 5+ecuti$e 8rder that may be declared unconstitutional shall
not ha$e the effect of nullifying other portions or pro$isions hereof as long as such remaining portions or pro$isions
can still subsist and be gi$en effect in their entirety. la7phi:"net
Sec. ,/. Repealing Clause. All laws' ordinances' rules and regulations and other issuances or parts thereof' which are
inconsistent with this 5+ecuti$e 8rder' are hereby repealed or modified accordingly. la7phi:"net
Sec. ,0. 5ffecti$ity. This 5+ecuti$e 8rder shall take effect immediately.
A&&R865A in the City of 9anila' &hilippines' this */th day of Euly' in the Iear of 8ur Lord' 4ineteen ;undred
and 5ighty-Se$en.
&R8CLA9ATI84 48. ","
!Euly **' "320#
INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM
<;5R5AS' we ha$e proclaimed the re$i$al and de$elopment of the full
potential of &hilippine agriculture to be an economic priority of our new democracy
so as to pro$ide a firm foundation for the industriali%ation of our economy' and
71
thereby assure the genuine independence of our country)
<;5R5AS' it is necessary to make our new democracy meaningful by
increasing the producti$ity of the farming sector and increasing the incomes of
farmers' regular farmworkers' and other farmworkers)
<;5R5AS' the essential element in any policy of agricultural re$i$al and
de$elopment is a comprehensi$e and realistic agrarian reform program)
<;5R5AS' such an agrarian reform program will encourage the shift of
capital from land to industry)
<;5R5AS' reali%ing these imperati$es' the &resident declared in the "32/
&residential campaign that she would undertake an agrarian reform program)
<;5R5AS' there is need for all to address agrarian reform in the spirit of
cooperation' harmony' and understanding' a spirit which must per$ade the process as
a whole' in its $oluntary as well as non-$oluntary aspects' for the country faces
problems and challenges that re(uire national unity)
<;5R5AS' agrarian reform indispensably entails the participation of all
concerned in the planning' organi%ation' and management of the program)
<;5R5AS' the entire ?ilipino people' together with all go$ernment agencies
and pri$ate organi%ations' must e+tend priority support and full cooperation to
implement this program effecti$ely)
<;5R5AS' there is a need for the program to be realistic and fle+ible in order
to succeed' to take account of differences from place to place' from community to
community' so that no single and rigid prescription would be unfairly and unwisely
applied to all regardless of special features and circumstances' and to be within the
present and foreseeable capabilities of the nation)
<;5R5AS' the program further re(uires a$ailable funding that is definite as
to source and timing)
<;5R5AS' the education' re-orientation' and moti$ation of farmers' regular
farmworkers' and other farmworkers in their new role and responsibilities' along with
steps to ensure that the program will result in increased producti$ity and better
income for the beneficiaries' are also called for)
<;5R5AS' all these and other infrastructure re(uirements must further be
pro$ided for by other legislation and measures)
<;5R5AS' the &resident recogni%es as a partner to this continuing
undertaking the co-e(ual =ranch of the Congress of the &hilippines' whose Senate is
elected at large and therefore speaks for the nation' and whose ;ouse of
Representati$es articulates the needs and problems of the constituencies and sectors
in the land)
<;5R5AS' in the last analysis' the times undeniably a call for change' and
the need to undertake the agrarian reform program can no longer wait so that no
alternati$e lies but to adopt a program that is workable' sufficiently funded and abo$e
all' aimed to succeed' for the nation can no more afford its failure than its lack)
<;5R5AS' the forces of history and the Constitution' the pressing needs of
the times' the capabilities of the present' and the age-old aspirations of the ?ilipino
people demand such agrarian reform program.
<;5R5?8R5' the Constitution of the &hilippines pro$ides the following
:ARTICL5 II
:A5CLARATI84 8? &RI4CI&L5S A4A STAT5 &8LICI5S
+++ +++ +++
:Sec. *". The State shall promote comprehensi$e rural
de$elopment and agrarian reform.:
:ARTICL5 CCII
:4ATI84AL 5C8489I A4A &ATRI984I
+++ +++ +++
:Sec. "' par. * The State shall promote
industriali%ation and full employment based on sound
agricultural de$elopment and agrarian reform. . . .:
72
:ARTICL5 CIII
:S8CIAL EDSTIC5 A4A ;D9A4 RIB;TS
+++ +++ +++
:ABRARIA4 A4A 4ATDRAL R5S8DRC5S R5?8R9
+++ +++ +++
:Sec. -. The State shall' by law' undertake an agrarian
reform founded on the right of farmers and regular
farmworkers' who are landless' to own directly or
collecti$ely the lands they till or' in the case of other
farmworkers' to recei$e a 1ust share of the fruits thereof. To
this end' the State shall encourage and undertake the 1ust
distribution of all agricultural lands' sub1ect to such
priorities and reasonable retention limits as the Congress
may prescribe' taking into account ecological'
de$elopmental' or e(uity considerations' and sub1ect to the
payment of 1ust compensation. In determining the retention
limits' the State shall respect the right of small landowners.
The State shall further pro$ide incenti$es for $oluntary
land-sharing.:
:Sec. .. The State shall recogni%e the right of the
farmers' farmworkers' and landowners' as well as
cooperati$es' and other independent farmers> organi%ations
to participate in the planning' organi%ation' and
management of the program' and shall pro$ide support to
agriculture through appropriate technology and research'
and ade(uate financial production' marketing' and other
support ser$ices.:
:Sec. /. The State shall apply the principles of agrarian
reform or stewardship' whene$er applicable in accordance
with law' in the disposition or utili%ation of other natural
resources' including lands of the public domain under lease
or concession suitable to agriculture' sub1ect to prior rights'
homestead rights of small settlers' and the rights of
indigenous communities to their ancestral lands.
:The State may resettle landless farmers and farmworkers in
its own agricultural estates which shall be distributed to
them in the manner pro$ided by law.:
+++ +++ +++
:Sec. 2. The State shall pro$ide incenti$es to
landowners to in$est the proceeds of the agrarian reform
program to promote industriali%ation' employment creation'
and pri$ati%ation of public sector enterprises. ?inancial
instruments used as payments for their lands shall be
honored as e(uity in enterprises of their choice.:
:ARTICL5 C6III
:TRA4SIT8RI &R86ISI84S
+++ +++ +++
:Sec. **. At the earliest possible time' the Bo$ernment
shall e+propriate idle or abandoned agricultural lands as
may be defined by law' for distribution to the beneficiaries
of the agrarian reform program.:
48<' T;5R5?8R5' I' C8RAF84 C8EDA4BC8 AGDI48' &resident of
the Republic of the &hilippines' by $irtue of the powers $ested in me by the
Constitution' do hereby order
S5CTI84 ". Scope. L Comprehensi$e Agrarian Reform &rogram
!CAR&# is hereby instituted which shall co$er' regardless of tenurial arrangement and
73
commodity produced all public and pri$ate agricultural lands as pro$ided in the
Constitution' including whene$er applicable in accordance with law' other lands of
the public domain suitable to agriculture.
S5CTI84 *. Agrarian Reform )und. L There is hereby created a
special fund' to be known as The Agrarian Reform ?und' an initial amount of ?I?TI
=ILLI84 &5S8S !.@'@@@'@@@' @@@.@@# to co$er the estimated cost of the
Comprehensi$e Agrarian Reform &rogram from "320 to "33* which shall be sourced
from the receipts of the sale of the assets of the Asset &ri$ati%ation Trust and receipts
of sale of ill-gotten wealth recei$ed through the &residential Commission on Bood
Bo$ernment and such other sources as go$ernment may deem appropriate. The
amounts collected and accruing to this special fund shall be considered automatically
appropriated for the purpose authori%ed in this &roclamation.
S5CTI84 ,. mplementation. L The pro$isions for the mechanisms
needed initially to implement the Comprehensi$e Agrarian Reform &rogram are set
forth in 5+ecuti$e 8rder 4o. **3' dated ** Euly' "320' which is a companion measure
to this &roclamation.
S5CTI84 -. Effecti%ity and Repealing Clause. L This &roclamation
shall take effect immediately upon its appro$al and repeals or amends accordingly all
laws' issuances' decrees or any part thereof inconsistent with its pro$isions.
A&&R865A' in the City of 9anila' &hilippines' this **nd day of Euly' "320.
CAR&' or the Comprehensi$e Agrarian Reform &rogram' is the redistribution of public and pri$ate agricultural lands
to farmers and farmworkers who are landless' irrespecti$e of tenurial arrangement. CAR&Ms $ision is to ha$e an
e(uitable land ownership with empowered agrarian reform beneficiaries who can effecti$ely manage their economic
and social de$elopment to ha$e a better (uality of life.
8ne of the ma1or programs of CAR& is Land Tenure Impro$ement' which seeks to hasten distribution of lands to
landless farmers. Similarly' the Aepartment offers Support Ser$ices to the beneficiaries such as infrastructure
facilities' marketing assistance program' credit assistance program' and technical support programs. ?urthermore'
the department seeks to facilitate' resol$e cases and deli$er Agrarian Eustice.
The legal basis for CAR& is the Republic Act 4o. //.0 otherwise known as Comprehensi$e Agrarian Reform Law
!CARL# signed by &resident Cora%on C. A(uino on Eune "@' "322. It is an act which aims to promote social 1ustice
and industriali%ation' pro$iding the mechanism for its implementation' and for other purposes.
REPUBLIC ACT NO. $$#%
A9-e !', !&88B
AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE
SOCIAL 9USTICE AND INDUSTRIALI@ATION, PROVIDING THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES

CHAPTER I
P(e5i7i*(1 C0*3te(
S5CTI84 ". Title. L This Act shall be known as the Comprehensi$e Agrarian Reform Law of "322.
S5CTI84 *. Aeclaration of &rinciples and &olicies. L It is the policy of the State to pursue a Comprehensi$e
Agrarian Reform &rogram !CAR&#. The welfare of the landless farmers and farmworkers will recei$e the
74
highest consideration to promote social 1ustice and to mo$e the nation toward sound rural de$elopment and
industriali%ation' and the establishment of owner culti$atorship of economic-si%e farms as the basis of &hilippine
agriculture.
To this end' a more e(uitable distribution and ownership of land' with due regard to the rights of landowners to 1ust
compensation and to the ecological needs of the nation' shall be undertaken to pro$ide farmers and farmworkers
with the opportunity to enhance their dignity and impro$e the (uality of their li$es through greater producti$ity of
agricultural lands.
The agrarian reform program is founded on the right of farmers and regular farmworkers' who are landless' to own
directly or collecti$ely the lands they till or' in the case of other farm workers' to recei$e a 1ust share of the fruits
thereof. To this end' the State shall encourage and undertake the 1ust distribution of all agricultural lands' sub1ect to
the priorities and retention limits set forth in this Act' ha$ing taken into account ecological' de$elopmental' and
e(uity considerations' and sub1ect to the payment of 1ust compensation. The State shall respect the right of small
landowners' and shall pro$ide incenti$es for $oluntary land-sharing.
The State shall recogni%e the right of farmers' farmworkers and landowners' as well as cooperati$es and other
independent farmers> organi%ations' to participate in the planning' organi%ation' and management of the program'
and shall pro$ide support to agriculture through appropriate technology and research' and ade(uate financial
production' marketing and other support ser$ices.
The State shall apply the principles of agrarian reform' or stewardship' whene$er applicable' in accordance with law'
in the disposition or utili%ation of other natural resources' including lands of the public domain' under lease or
concession' suitable to agriculture' sub1ect to prior rights' homestead rights of small settlers and the rights of
indigenous communities to their ancestral lands.
The State may resettle landless farmers and farmworkers in its own agricultural estates' which shall be distributed to
them in the manner pro$ided by law. =y means of appropriate incenti$es' the State shall encourage the
formation and maintenance of economic-si%e family farms to be constituted by indi$idual 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 pro$ide support to such
fishermen through appropriate technology and research' ade(uate financial' production and marketing assistance
and other ser$ices. The State shall also protect' de$elop and conser$e such resources. The protection shall e+tend to
offshore fishing grounds of subsistence fishermen against foreign intrusion. ?ishworkers shall recei$e a 1ust share
from their labor in the utili%ation of marine and fishing resources.
The State shall be guided by the principles that land has a social function and land ownership has a social
responsibility. 8wners of agricultural lands ha$e the obligation to culti$ate directly or through labor administration
the lands they own and thereby make the land producti$e.
The State shall pro$ide incenti$es to landowners to in$est the proceeds of the agrarian reform program to promote
industriali%ation' employment and pri$ati%ation of public sector enterprises. ?inancial instruments used as payment
for lands shall contain features that shall enhance negotiability and acceptability in the marketplace. The State may
lease unde$eloped lands of the public domain to (ualified entities for the de$elopment of capital-intensi$e farms'
and traditional and pioneering crops especially those for e+ports sub1ect to the prior rights of the beneficiaries
under this Act.
S5CTI84 ,. Aefinitions. L?or the purpose of this Act' unless the conte+t indicates otherwise
!a# Agrarian Reform means redistribution of lands' regardless of crops or fruits produced' to farmers and regular
farmworkers who are landless' irrespecti$e of tenurial arrangement' to include the totality of factors and support
ser$ices designed to lift the economic status of the beneficiaries and all other arrangements alternati$e 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 recei$e a 1ust share of the fruits of the lands they work.
75
!b# Agriculture' Agricultural 5nterprise or Agricultural Acti$ity means the culti$ation of the soil' planting of crops'
growing of fruit trees' raising of li$estock' poultry or fish' including the har$esting of such farm products' and other
farm acti$ities and practices performed by a farmer in con1unction with such farming operations done by person
whether natural or 1uridical.
!c# Agricultural Land refers to land de$oted to agricultural acti$ity as defined in this Act and not classified as
mineral' forest' residential' commercial or industrial land.
!d# Agrarian Aispute refers to any contro$ersy relating to tenurial arrangements' whether leasehold' tenancy'
stewardship or otherwise' o$er lands de$oted to agriculture' including disputes concerning farmworkers>
associations or representation of persons in negotiating' fi+ing' maintaining' changing' or seeking to arrange terms or
conditions of such tenurial arrangements.
It includes any contro$ersy relating to compensation of lands ac(uired 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 pro+imate relation of farm operator and beneficiary' landowner and tenant' or lessor and
lessee.
!e# Idle or Abandoned Land refers to any agricultural land not culti$ated' tilled or de$eloped to produce any crop nor
de$oted to any specific economic purpose continuously for a period of three !,# years immediately prior to
the receipt of notice of ac(uisition by the go$ernment as pro$ided under this Act' but does not include land that has
become permanently or regularly de$oted to non-agricultural purposes. It does not include land which has
become unproducti$e by reason of force ma1eure or any other fortuitous e$ent' pro$ided that prior to such e$ent'
such land was pre$iously used for agricultural or other economic purpose.
!f# ?armer refers to a natural person whose primary li$elihood is culti$ation of land or the production of agricultural
crops' either by himself' or primarily with the assistance of his immediate farm household' whether the land is
owned by him' or by another person under a leasehold or share tenancy agreement or arrangement with the owner
thereof.
!g# ?armworker is a natural person who renders ser$ice for $alue as an employee or laborer in an agricultural
enterprise or farm regardless of whether his compensation is paid on a daily' weekly' monthly or :pakyaw: basis.
The term includes an indi$idual whose work has ceased as a conse(uence of' or in connection with' a pending
agrarian dispute and who has not obtained a substantially e(ui$alent and regular farm employment.
!h# Regular ?armworker is a natural person who is employed on a permanent basis by an agricultural enterprise or
farm.
!i# Seasonal ?armworker is a natural person who is employed on a recurrent' periodic or intermittent basis by an
agricultural enterprise or farm' whether as a permanent or a non-permanent laborer' such as :dumaan:' :sacada:' and
the like.
!1# 8ther ?armworker is a farmworker who does not fall under paragraphs
!g#' !h# and !i#.
!k# Cooperati$es shall refer to organi%ations composed primarily of small agricultural producers' farmers'
farmworkers' or other agrarian reform beneficiaries who $oluntarily organi%e themsel$es for the purpose of
pooling land' human' technological' financial or other economic resources' and operated on the principle of one
member' one $ote. A 1uridical person may be a member of a cooperati$e' with the same rights and duties as a natural
person.
76
CHAPTER II
Co4e(*)e
S5CTI84 -. Scope. L The Comprehensi$e Agrarian Reform Law of "323 shall co$er' regardless of tenurial
arrangement and commodity produced' all public and pri$ate agricultural lands' as pro$ided in &roclamation 4o.
"," and 5+ecuti$e 8rder 4o. **3' including other lands of the public domain suitable for agriculture.
9ore specifically the following lands are co$ered by the Comprehensi$e Agrarian Reform &rogram
!a# All alienable and disposable lands of the public domain de$oted to or suitable for agriculture. 4o reclassification
of forest or mineral lands to agricultural lands shall be undertaken after the appro$al of this Act until Congress'
taking into account ecological' de$elopmental and e(uity considerations' shall ha$e determined by law' the specific
limits of the public domain.
!b# All lands of the public domain in e+cess of the specific limits as determined by Congress in the preceding
paragraph)
!c# All other lands owned by the Bo$ernment de$oted to or suitable for agriculture) and
!d# All pri$ate lands de$oted to or suitable for agriculture regardless of the agricultural products raised or that can be
raised thereon.
S5CTI84 .. Schedule of Implementation. L The distribution of all lands co$ered by this Act shall be implemented
immediately and completed within ten !"@# years from the effecti$ity thereof.
S5CTI84 /. Retention Limits. L 5+cept as otherwise pro$ided in this Act' no person may own or retain' directly
or indirectly' any public or pri$ate agricultural land' the si%e of which shall $ary according to factors go$erning a
$iable family-si%e farm' such as commodity produced' terrain' infrastructure' and soil fertility as determined by the
&residential Agrarian Reform Council !&ARC# created hereunder' but in no case shall retention by the landowner
e+ceed fi$e !.# hectares.
Three !,# hectares may be awarded to each child of the landowner' sub1ect to the following (ualifications !"# that he
is at least fifteen !".# years of age) and !*# that he is actually tilling the land or directly managing the farm
&ro$ided' That landowners whose lands ha$e been co$ered by &residential Aecree 4o. *0 shall be allowed to keep
the areas originally retained by them thereunder &ro$ided' further' That original homestead grantees or their direct
compulsory heirs who still own the original homestead at the time of the appro$al of this Act shall retain the same
areas as long as they continue to culti$ate said homestead.
The right to choose the area to be retained' which shall be compact or contiguous' shall pertain to the landowner
&ro$ided' howe$er' That in case the area selected for retention by the landowner is tenanted' the tenant shall ha$e
the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with
similar or comparable features. In case the tenant chooses to remain in the retained area' he shall be considered a
leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land' he loses his right as a leaseholder to the land retained by the landowner. The
tenant must e+ercise this option within a period of one !"# year from the time the landowner manifests his choice of
the area for retention. In all cases' the security of tenure of the farmers or farmworkers on the land prior to the
appro$al of this Act shall be respected.
Dpon the effecti$ity of this Act' any sale' disposition' lease' management' contract or transfer of possession of
pri$ate lands e+ecuted by the original landowner in $iolation of the Act shall be null and $oid &ro$ided' howe$er'
That those e+ecuted prior to this Act shall be $alid only when registered with the Register of Aeeds within a period
of three !,# months after the effecti$ity of this Act. Thereafter' all Registers of Aeeds shall inform the Aepartment of
77
Agrarian Reform !AAR# within thirty !,@# days of any transaction in$ol$ing agricultural lands in e+cess of fi$e !.#
hectares.
S5CTI84 0. &riorities. L The Aepartment of Agrarian Reform !AAR# in coordination with the &residential
Agrarian Reform Council !&ARC# shall plan and program the ac(uisition and distribution of all agricultural lands
through a period of ten !"@# years from the effecti$ity of this Act. Lands shall be ac(uired and distributed as follows
&hase 8ne Rice and corn lands under &residential Aecree 4o. *0) all idle or abandoned lands) all pri$ate lands
$oluntarily offered by the owners for agrarian reform) all lands foreclosed by the go$ernment financial institutions)
all lands ac(uired by the &residential Commission on Bood Bo$ernment !&CBB#) and all other lands owned by the
go$ernment de$oted to or suitable for agriculture' which shall be ac(uired and distributed immediately upon
the effecti$ity of this Act' with the implementation to be completed within a period of not more than four !-# years)
&hase Two All alienable and disposable public agricultural lands) all arable public agricultural lands under agro-
forest' pasture and agricultural leases already culti$ated and planted to crops in accordance with Section /' Article
CIII of the Constitution) all public agricultural lands which are to be opened for new de$elopment and resettlement)
and all pri$ate agricultural lands in e+cess of fifty !.@# hectares' insofar as the e+cess hectarage is concerned'
to implement principally the rights of farmers and regular farmworkers' who are the landless' to own directly or
collecti$ely the lands they till' which shall be distributed immediately upon the effecti$ity of this Act' with the
implementation to be completed within a period of not more than four !-# years.
&hase Three All other pri$ate agricultural lands commencing with large landholdings and proceeding to medium
and small landholdings under the following schedule
!a# Landholdings abo$e twenty-four !*-# hectares up to fifty !.@# hectares' to begin on the fourth !-th# year from the
effecti$ity of this Act and to be completed within three !,# years) and
!b# Landholdings from the retention limit up to twenty-four !*-# hectares' to begin on the si+th !/th# year from the
effecti$ity of this Act and to be completed within four !-# years) to implement principally the right of farmers and
regular farmworkers who are landless' to own directly or collecti$ely the lands they till.
The schedule of ac(uisition and redistribution of all agricultural lands co$ered by this program shall be made in
accordance with the abo$e order of priority' which shall be pro$ided in the implementing rules to be prepared by the
&residential Agrarian Reform Council !&ARC#' taking into consideration the following) the need to distribute land to
the tillers at the earliest practicable time) the need to enhance agricultural producti$ity) and the a$ailability of funds
and resources to implement and support the program.
In any case' the &ARC' upon recommendation by the &ro$incial Agrarian Reform Coordinating Committee
!&ARCC89#' may declare certain pro$inces or region as priority land reform areas' in which the ac(uisition and
distribution of pri$ate agricultural lands therein may be implemented ahead of the abo$e schedules. In effecting the
transfer within these guidelines' priority must be gi$en to lands that are tenanted.
The &ARC shall establish guidelines to implement the abo$e priorities and distribution scheme' including the
determination of who are (ualified beneficiaries &ro$ided' That an owner-tiller may be a beneficiary of the land he
does not own but is actually culti$ating to the e+tent of the difference between the area of the land he owns and the
award ceiling of three !,# hectares.
S5CTI84 2. 9ultinational Corporations. L All lands of the public domain leased' held or possessed by
multinational corporations or associations' and other lands owned by the go$ernment or by go$ernment-owned or
controlled corporations' associations' institutions' or entities' de$oted to e+isting and operational agri-business or
agro-industrial enterprises' operated by multinational corporations and associations' shall be programmed for
ac(uisition and distribution immediately upon the effecti$ity of this Act' with the implementation to be completed
within three !,# years.
78
Lands co$ered by the paragraph immediately preceding' under lease' management' grower or ser$ice contracts' and
the like' shall be disposed of as follows
!a# Lease' management' grower or ser$ice contracts co$ering such lands co$ering an aggregate area in e+cess of
"'@@@ hectares' leased or held by foreign indi$iduals in e+cess of .@@ hectares are deemed amended to conform with
the limits set forth in Section , of Article CII of the Constitution.
!b# Contracts co$ering areas not in e+cess of "'@@@ hectares in the case of such corporations and associations' and
.@@ hectares' in the case of such indi$iduals' shall be allowed to continue under their original terms and
conditions but not beyond August *3' "33*' or their $alid termination' whiche$er comes sooner' after which' such
agreements shall continue only when confirmed by the appropriate go$ernment agency. Such contracts
shall likewise continue e$en 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 !,# years mentioned
in the first paragraph hereof.
!c# In no case will such leases and other agreements now being implemented e+tend beyond August *3' "33*' when
all lands sub1ect hereof shall ha$e been distributed completely to (ualified beneficiaries or awardees. Such
agreements can continue thereafter only under a new contract between the go$ernment or (ualified beneficiaries or
awardees' on the one hand' and said enterprises' on the other. Lands leased' held or possessed by multinational
corporations' owned by pri$ate indi$iduals and pri$ate non-go$ernmental corporations' associations' institutions and
entities' citi%ens of the &hilippines' shall be sub1ect to immediate compulsory ac(uisition and distribution upon the
e+piration of the applicable lease' management' grower or ser$ice contract in effect as of August *3' "320' or
otherwise' upon its $alid termination' whiche$er comes sooner' but not later than after ten !"@# years following the
effecti$ity of the Act. ;owe$er during the said period of effecti$ity' the go$ernment shall take steps to ac(uire these
lands for immediate distribution thereafter.
In general' lands shall be distributed directly to the indi$idual workerbeneficiaries. In case it is not economically
feasible and sound to di$ide the land' then they shall form a workers> cooperati$e or association which will deal with
the corporation or business association or any other proper party for the purpose of entering into a lease or growers
agreement and for all other legitimate purposes. Dntil a new agreement is entered into by and between the workers>
cooperati$e or association and the corporation or business association or any other proper party' any agreement
e+isting at the time this Act takes effect between the former and the pre$ious landowner shall be respected by both
the workers> cooperati$e or association and the corporation' business' association or such other proper party. In no
case shall the implementation or application of this Act 1ustify or result in the reduction of status or diminution of
any benefits recei$ed or en1oyed by the worker-beneficiaries' or in which they may ha$e a $ested right' at the time
this Act becomes effecti$e'.
The pro$isions of Section ,* of this Act' with regard to production and income-sharing shall apply to farms operated
by multinational corporations. Auring the transition period' the new owners shall be assisted in their efforts to learn
modern technology in production. 5nterprises which show a willingness and commitment and good-faith efforts to
impart $oluntarily such ad$anced technology will be gi$en preferential treatment where feasible.
In no case shall a foreign corporation' association' entity or indi$idual en1oy any rights or pri$ileges better than
those en1oyed by a domestic corporation' association' entity or indi$idual.
S5CTI84 3. Ancestral Lands. L?or 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 &ro$ided' That the Torrens Systems shall be respected. The right of these communities
to their ancestral lands shall be protected to ensure their economic' social and cultural well-being. In line with the
principles of self-determination and autonomy' the systems of land ownership' land use' and the modes of settling
land disputes of all these communities must be recogni%ed and
respected.
79
Any pro$ision of law to the contrary notwithstanding' the &ARC may suspend the implementation of this Act with
respect to ancestral lands for the purpose of identifying and delineating such lands &ro$ided' That in the
autonomous regions' the respecti$e legislatures may enact their own laws on ancestral domain sub1ect to
the pro$isions of the Constitution and the principles enunciated in this Act and other national laws.
S5CTI84 "@. 5+emptions and 5+clusions. LLands actually' directly and e+clusi$ely used and found to be
necessary for parks' wildlife' forest reser$es' reforestation' fish sanctuaries and breeding grounds' watersheds' and
mangro$es' national defense' school sites and campuses including e+perimental farm stations operated by public or
pri$ate schools for educational purposes' seeds and seedlings research and pilot production centers' church sites and
con$ents appurtenant thereto' mos(ue sites and Islamic centers appurtenant thereto' communal burial grounds
and cemeteries' penal colonies and penal farms actually worked by the inmates' go$ernment and pri$ate research
and (uarantine centers and all lands with eighteen percent !"2K# slope and o$er' e+cept those already de$eloped
shall be e+empt from the co$erage of the Act.
S5CTI84 "". Commercial ?arming. L Commercial farms' which are pri$ate agricultural lands de$oted to
commercial li$estock' poultry and swine raising' and a(uaculture including saltbeds' fishponds and prawn ponds'
fruit farms' orchards' $egetable and cut-flower farms' and cacao' coffee and rubber plantations' shall be sub1ect to
immediate compulsory ac(uisition and distribution after !"@# years from the effecti$ity 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 AAR. Auring the ten-year period' the
go$ernment shall initiate the steps necessary to
ac(uire these lands' upon payment of 1ust compensation for the land and the impro$ements thereon' preferably in
fa$or of organi%ed cooperati$es or associations'
which shall hereafter manage the said lands for the worker-beneficiaries. If the AAR determines that the purposes
for which this deferment is granted no
longer e+ist' such areas shall automatically be sub1ect to redistribution. The pro$isions of Section ,* of the Act' with
regard to production-and incomesharing'
shall apply to commercial farms.
CHAPTER III
I73(o4e7et o/ Te-(i*5 *, L*6o( Re5*tio.
S5CTI84 "*. Aetermination of Lease Rentals. LIn order to protect and impro$e the tenurial and economic status
of the farmers in tenanted lands under the retention limit and lands not yet ac(uired under this Act' the AAR is
mandated to determine and fi+ immediately the lease rentals thereof in accordance with Section ,- of Republic Act
4o. ,2--' as amended &ro$ided' That the AAR shall immediately and periodically re$iew and ad1ust the rental
structure for different crops' including rice and corn' or different regions in order to impro$e progressi$ely the
conditions of the farmer' tenant or lessee.
S5CTI84 ",. &roduction-Sharing &lan. L Any enterprise adopting the scheme pro$ided for in Section ,* or
operating under a production $enture' lease' management contract or other similar arrangement and any farm
co$ered by Sections 2 and "" hereof is hereby mandated to e+ecute within ninety !3@# days from the effecti$ity of
this Act' a production-sharing plan' under guidelines prescribed by the appropriate go$ernment agency.
4othing herein shall be construed to sanction the diminution of any benefits such as salaries' bonuses' lea$es and
working conditions granted to the employeebeneficiaries
under e+isting laws' agreements' and $oluntary practice by the enterprise' nor shall the enterprise and its employee-
beneficiaries be pre$ented from entering into any agreement with terms more fa$orable to the latter.
CHAPTER IV
Re)i.t(*tio
S5CTI84 "-. Registration of Landowners. L<ithin one hundred eighty !"2@# days from the effecti$ity of this Act'
all persons' natural or 1uridical' including go$ernment entities' that own or claim to own agricultural lands' whether
80
in their names or in the name of others' e+cept those who ha$e already registered pursuant to 5+ecuti$e 8rder 4o.
**3' who shall be entitled to such incenti$es as may be pro$ided for the &ARC' shall file a sworn statement in the
proper assessor>s office in the form to be prescribed by the AAR' stating the following information
!a# the description and area of the property)
!b# the a$erage gross income from the property for at least three !,# years)
!c# the names of all tenants and farmworkers therein) cda
!d# the crops planted in the property and the area co$ered by each crop as of Eune "' "320)
!e# the terms of mortgages' lease' and management contracts subsisting as of Eune "' "320' and
!f# the latest declared market $alue of the land as determined by the city or pro$incial assessor.
S5CTI84 ".. Registration of =eneficiaries. L The AAR in coordination with the =arangay Agrarian Reform
Committee !=ARC# as organi%ed in this Act' shall register all agricultural lessees' tenants and farmworkers who are
(ualified to be beneficiaries of the CAR&. These potential beneficiaries with the assistance of the =ARC and the
AAR shall pro$ide the following data
!a# names and members of their immediate farm household)
!b# owners or administrators of the lands they work on and the length of
tenurial relationship)
!c# location and area of the land they work)
!d# crops planted) and
!e# their share in the har$est or amount of rental paid or wages recei$ed.
A copy of the registry or list of all potential CAR& beneficiaries in the barangay shall be posted in the barangay hall'
school or other public buildings in the barangay where it shall be open to inspection by the public at all reasonable
hours.
CHAPTER V
L*, AcC-i.itio
S5CTI84 "/. &rocedure for Ac(uisition of &ri$ate Lands. L ?or purposes of ac(uisition of pri$ate lands' the
following procedures shall be followed
!a# After ha$ing identified the land' the landowners and the beneficiaries' the AAR shall send its notice to ac(uire
the land to the owners thereof' by personal deli$ery 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 AAR to pay a corresponding $alue in accordance with the $aluation set forth in Sections "0' "2' and
other pertinent
pro$isions hereof.
!b# <ithin thirty !,@# days from the date of receipt of written notice by personal deli$ery or registered mail' the
landowner' his administrator or representati$e shall inform the AAR of his acceptance or re1ection of the offer.
!c# If the landowner accepts the offer of the AAR' the Land =ank of the &hilippines !L=&# shall pay the landowner
the purchase price of the land within thirty !,@# days after he e+ecutes and deli$ers a deed of transfer in fa$or of
the go$ernment and surrenders the Certificate of Title and other muniments of title.
!d# In case of re1ection or failure to reply' the AAR shall conduct summary administrati$e proceedings to determine
the compensation for the land re(uiring the landowner' the L=& and other interested parties to submit e$idence as to
the 1ust compensation for the land' within fifteen !".# days from the receipt of the notice. After the e+piration of the
abo$e period' the matter is deemed submitted for decision. The AAR shall decide the case within thirty !,@# days
after it is submitted for decision.
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!e# Dpon receipt by the landowner of the corresponding payment or' in case of re1ection or no response from the
landowner' upon the deposit with an accessible bank designated by the AAR of the compensation in cash or in
L=& bonds in accordance with this Act' the AAR shall take immediate possession of the land and shall re(uest the
proper Register of Aeeds to issue a Transfer Certificate of Title !TCT# in the name of the Republic of the
&hilippines. The AAR shall thereafter proceed with the redistribution of the land to the (ualified beneficiaries.
!f# Any party who disagrees with the decision may bring the matter to the court of proper 1urisdiction for final
determination of 1ust compensation.
CHAPTER VI
Co73e.*tio
S5CTI84 "0. Aetermination of Eust Compensation. LIn determining 1ust compensation' the cost of ac(uisition of
the land' the current $alue of the like properties' its nature' actual use and income' the sworn $aluation by the owner'
the ta+ declarations' and the assessment made by go$ernment assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the Bo$ernment to the property as well as
the non-payment of ta+es or loans secured from any go$ernment financing institution on the said land shall be
considered as additional factors to determine its $aluation.
S5CTI84 "2. 6aluation and 9ode of Compensation. LThe L=& shall compensate the landowner in such amounts
as may be agreed upon by the landowner and the AAR and the L=&' in accordance with the criteria pro$ided for in
Sections "/ and "0' and other pertinent pro$isions hereof' or as may be finally determined by the court' as the 1ust
compensation for the land.
The compensation shall be paid on one of the following modes' at the option of the landowner
!"# Cash payment' under the following terms and conditions)
!a# ?or lands abo$e L Twenty-fi$e percent fifty !.@# hectares' insofar !*.K# cash' the balance to as the e+cess
hectarage is be paid in go$ernment concerned. financial instruments negotiable at any time.
!b# ?or lands abo$e L Thirty percent !,@K# cash' twenty-four !*-# hectares the balance to be paid in and up to fifty
!.@# hectares. go$ernment financial instruments negotiable at any time.
!c# ?or lands twenty-four L Thirty-fi$e percent !,.K# !*-# hectares and below. cash' the balance to be paid in
go$ernment financial instruments negotiable at any time.
!*# Shares of stock in go$ernment-owned or controlled corporations' L=& preferred shares' physical assets or other
(ualified in$estments in accordance with guidelines set by the &ARC)
!,# Ta+ credits which can be used against any ta+ liability)
!-# L=& bonds' which shall ha$e the following features
!a# 9arket interest rates aligned with 3"-day treasury bill rates. Ten percent !"@K# of the face $alue of the bonds
shall mature e$ery year from the date of issuance until the tenth !"@th# year &ro$ided' That should the landowner
choose to forego the cash portion' whether in full or in part' he shall be paid correspondingly in L=& bonds)
!b# Transferability and negotiability. Such L=& bonds may be used by the landowner' his successors in interest or his
assigns' up to the amount of their face $alue' for any of the following
!i# Ac(uisition of land or other real properties of the go$ernment' including assets under the Asset &ri$ati%ation
&rogram and other assets foreclosed by go$ernment financial institutions in the same pro$ince or region where the
lands for which the bonds were paid are situated)
!ii# Ac(uisition of shares of stock of go$ernmentowned or -controlled corporations or shares of stocks owned by the
go$ernment in pri$ate corporations)
!iii# Substitution for surety or bail bonds for the pro$isional release of accused persons' or performance bonds)
!i$# Security for loans with any go$ernment financial institution' pro$ided the proceeds of the loans shall be in$ested
in an economic enterprise' preferably in a small-and medium-scale industry' in the same pro$ince or region as the
land for which the bonds are paid)
!$# &ayment for $arious ta+es and fees to go$ernment) &ro$ided' That the use of these bonds for these purposes will
82
be limited to a certain percentage of the outstanding balance of the financial instruments &ro$ided' further' That the
&ARC shall determine the percentage mentioned abo$e)
!$i# &ayment for tuition fees of the immediate family of the original bondholder in go$ernment uni$ersities'
colleges' trade schools' and other institutions)
!$ii# &ayment for fees of the immediate family of the original bondholder in go$ernment hospitals) and
!$iii# Such other uses as the &ARC may from time to time allow.
In case of e+traordinary inflation' the &ARC shall take appropriate measures to protect the economy.
S5CTI84 "3. Incenti$es for 6oluntary 8ffers for Sales. LLandowners' other than banks and other financial
institutions' who $oluntarily offer their lands for sale shall be entitled to an additional fi$e percent !.K# cash
payment.
S5CTI84 *@. 6oluntary Land Transfer. LLandowners of agricultural lands sub1ect to ac(uisition under this Act
may enter into a $oluntary arrangement for direct transfer of their lands to (ualified beneficiaries sub1ect to the
following guidelines
!a# All notices for $oluntary land transfer must be submitted to the AAR within the first year of the implementation
of the CAR&. 4egotiations between the landowners and (ualified beneficiaries co$ering any $oluntary land transfer
which remain unresol$ed after one !"# year shall not be recogni%ed and such land shall instead be ac(uired by the
go$ernment and transferred pursuant to this Act.
!b# The terms and conditions of such transfer shall not be less fa$orable to the transferee than those of the
go$ernment>s standing offer to purchase from the landowner and to resell to the beneficiaries' if such offers ha$e
been made and are fully known to both parties.
!c# The $oluntary agreement shall include sanctions for non-compliance by either party and shall be duly recorded
and its implementation monitored by the AAR.
S5CTI84 *". &ayment of Compensation by =eneficiaries Dnder 6oluntary Land Transfer. LAirect payments in
cash or in kind may be by the farmer-beneficiary to the landowner under terms to be mutually agreed upon by both
parties' which shall be binding upon them' upon registration with the appro$al by the AAR. Said appro$al shall be
considered gi$en' unless notice of disappro$al is recei$ed by the farmer-beneficiary within thirty !,@# days from the
date of registration. In the e$ent they cannot agree on the price of land' the procedure for compulsory ac(uisition as
pro$ided in Section "/ shall apply. The L=& shall e+tend financing to the beneficiaries for purposes of ac(uiring the
land.
CHAPTER VII
L*, Re,i.t(i6-tio
S5CTI84 **. Gualified =eneficiaries. L The lands co$ered by the CAR& shall be distributed as much as possible
to landless residents of the same barangay' or in the absence thereof' landless residents of the same municipality in
the following order of priority !a# agricultural lessees and share tenants) !b# regular farmworkers) !c# seasonal
farmworkers) !d# other farmworkers) !e# actual tillers or occupants of public lands) !f# collecti$es or cooperati$es
of the abo$e beneficiaries) and !g# others directly working on the land. &ro$ided' howe$er' That the children of
landowners who are (ualified under Section / of this Act shall be gi$en preference in the distribution of the land of
their parents and &ro$ided' further' That actual tenant-tillers in the landholdings shall not be e1ected or remo$ed
therefrom. =eneficiaries under &residential Aecree 4o. *0 who ha$e culpably sold' disposed of' or abandoned their
land are dis(ualified to become beneficiaries under this &rogram. A basic (ualification of a beneficiary shall be his
willingness' aptitude' and ability to culti$ate and make the land as producti$e as possible. The AAR shall adopt a
83
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 e+tended to him shall forfeit his right to continue as such beneficiary. The AAR
shall submit periodic reports on the performance of the beneficiaries to the &ARC. 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 a$ailable for distribution under
this Act' at the option of the beneficiaries. ?armers already in place and those not accommodated in the distribution
of pri$ately-owned lands will be gi$en preferential rights in the distribution of lands from the public domain.
S5CTI84 *,. Aistribution Limit. L 4o (ualified beneficiary may own more than three !,# hectares of agricultural
land.
S5CTI84 *-. Award to =eneficiaries. L The rights and responsibilities of the beneficiary shall commence from
the time the AAR makes an award of the land to him' which award shall be completed within one hundred eighty
!"2@# days from the time the AAR takes actual possession of the land. 8wnership of the beneficiary shall be
e$idenced by a Certificate of Land 8wnership Award' which shall contain the restrictions and conditions pro$ided
for in this Act' and shall be recorded in the Register of Aeeds concerned and annotated on the Certificate of Title.
S5CTI84 *.. Award Ceilings for =eneficiaries. L=eneficiaries shall be awarded an area not e+ceeding three !,#
hectares which may co$er a contiguous tract of land or se$eral parcels of land cumulated up to the prescribed award
limits. ?or purposes of this Act' a landless beneficiary is one who owns less than three !,# hectares of agricultural
land. The beneficiaries may opt for collecti$e ownership' such as co-ownership or farmers cooperati$e or some
other form of collecti$e organi%ation &ro$ided' That the total area that may be awarded shall not e+ceed the total
number of co-owners or member of the cooperati$e or collecti$e organi%ation multiplied by the award limit abo$e
prescribed' e+cept in meritorious cases as determined by the &ARC. Title to the property shall be issued in the name
of the co-owners or the cooperati$e or collecti$e organi%ation as the case may be.
S5CTI84 */. &ayment by =eneficiaries. LLands awarded pursuant to this Act shall be paid for by the
beneficiaries to the L=& in thirty !,@# annual amorti%ations at si+ percent !/K# interest per annum. The payments
for the first three !,# years after the award may be at reduced amounts as established by the &ARC &ro$ided' That
the first fi$e !.# annual payments may not be more than fi$e percent !.K# of the $alue of the annual gross
production as established by the AAR. Should the scheduled annual payments after the fifth year e+ceed ten percent
!"@K# of the annual gross production and the failure to produce accordingly is not due to the beneficiary>s fault' the
L=& may reduce the interest rate or reduce the principal obligations to make the repayment affordable. The L=&
shall ha$e a lien by way of mortgage on the land awarded to the beneficiary) and this mortgage may be foreclosed
by the L=& for non-payment of an aggregate of three !,# annual amorti%ations. The L=& shall ad$ise the AAR of
such proceedings and the latter shall subse(uently award the forfeited landholdings to other (ualified beneficiaries.
A beneficiary whose land' as pro$ided herein' has been foreclosed shall thereafter be permanently dis(ualified from
becoming a beneficiary under this Act. cd
S5CTI84 *0. Transferability of Awarded Lands. LLands ac(uired by beneficiaries under this Act may not be sold'
transferred or con$eyed e+cept through hereditary succession' or to the go$ernment' or the L=&' or to other
(ualified beneficiaries for a period of ten !"@# years &ro$ided' howe$er' That the children or the spouse of the
transferor shall ha$e a right to repurchase the land from the go$ernment or L=& within a period of two !*# years.
Aue notice of the a$ailability of the land shall be gi$en by the L=& to the =arangay Agrarian Reform Committee
!=ARC# of the barangay where the land is situated. The &ro$incial Agrarian Reform Coordinating Committee
!&ARCC89# as herein pro$ided' shall' in turn' be gi$en due notice thereof by the =ARC. If the land has not yet
been fully paid by the beneficiary' the rights to the land may be transferred or con$eyed' with prior appro$al of the
AAR' to any heir of the beneficiary or to any other beneficiary who' as a condition for such transfer or con$eyance'
shall culti$ate the land himself. ?ailing compliance herewith' the land shall be transferred to the L=& which shall
gi$e due notice of the a$ailability of the land in the manner specified in the immediately preceding paragraph. In
the e$ent of such transfer to the L=&' the latter shall compensate the beneficiary in one lump sum for the amounts
the latter has already paid' together with the $alue of impro$ements he has made on the land.
84
S5CTI84 *2. Standing Crops at the Time of Ac(uisition. LThe landowner shall retain his share of any standing
crops unhar$ested at the time the AAR shall take possession of the land under Section "/ of the Act' and shall be
gi$en a reasonable time to har$est the same.
CHAPTER VIII
Co(3o(*te F*(7.
S5CTI84 *3. ?arms 8wned or 8perated by Corporations or 8ther =usiness Associations. LIn the case of farms
owned or operated by corporations or other business associations' the following rules shall be obser$ed by the
&ARC In general' lands shall be distributed directly to the indi$idual worker-beneficiaries. In case it is not
economically feasible and sound to di$ide the land' then it shall be owned collecti$ely by the workers> cooperati$e
or association which will deal with the corporation or business association. Dntil a new agreement is entered into by
and between the workers> cooperati$e or association and the corporation or business association' any agreement
e+isting at the time this Act takes effect between the former and the pre$ious landowner shall be respected by both
the workers> cooperati$e or association and the corporation or business association.
S5CTI84 ,@. ;omelots and ?armlots for 9embers of Cooperati$es. L The indi$idual members of the cooperati$es
or corporations mentioned in the preceding section shall be pro$ided with homelots and small farmlots for their
family use' to be taken from the land owned by the cooperati$e or corporation.
S5CTI84 ,". Corporate Landowners. LCorporate landowners may $oluntarily transfer ownership o$er their
agricultural landholdings to the Republic of the &hilippines pursuant to Section *@ hereof or to (ualified
beneficiaries' under such terms and conditions' consistent with this Act' as they may agree upon' sub1ect to
confirmation by the AAR. Dpon certification by the AAR' corporations owning agricultural lands may gi$e their
(ualified beneficiaries the right to purchase such proportion of the capital stock of the corporation that the
agricultural land' actually de$oted to agricultural acti$ities' bears in relation to the company>s total assets' under
such terms and conditions as may be agreed upon by them. In no case shall the compensation recei$ed 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 e(uity or participation. Corporations or associations which $oluntarily di$est a
proportion of their capital stock' e(uity or participation in fa$or of their workers or other (ualified beneficiaries
under this section shall be deemed to ha$e complied with the pro$isions of the Act &ro$ided' That the following
conditions are complied with a# In order to safeguard the right of beneficiaries who own shares of stocks to
di$idends and other financial benefits' the books of the corporation or association shall be sub1ect to periodic audit
by certified public accountants chosen by the beneficiaries) b# Irrespecti$e of the $alue of their e(uity in the
corporation or association' the beneficiaries shall be assured of at least one !"# representati$e in the board of
directors' or in a management or e+ecuti$e committee' if one e+ists' of the corporation or association) and c# Any
shares ac(uired by such workers and beneficiaries shall ha$e the same rights and features as all other shares. d# Any
transfer of shares of stocks by the original beneficiaries shall be $oid ab initio unless said transaction is in fa$or of a
(ualified and registered beneficiary within the same corporation. If within two !*# years from the appro$al of this
Act' the land or stock transfer en$isioned abo$e is not made or reali%ed or the plan for such stock distribution
appro$ed by the &ARC within the same period' the agricultural land of the corporate owners or corporation shall be
sub1ect to the compulsory co$erage of this Act. acd
S5CTI84 ,*. &roduction-Sharing. L&ending final land transfer' indi$iduals or entities owning' or operating under
lease or management contract' agricultural lands are hereby mandated to e+ecute a production-sharing plan with
their farm workers or farmworkers> reorgani%ation' if any' whereby three percent !,K# of the gross sales from the
production of such lands are distributed within si+ty !/@# days of the end of the fiscal year as compensation to
regular and other farmworkers in such lands o$er and abo$e the compensation they currently recei$e &ro$ided' That
these indi$iduals or entities reali%e gross sales in e+cess of fi$e million pesos per annum unless the AAR' upon
proper application' determines a lower ceiling. In the e$ent that the indi$idual or entity reali%es a profit' an
additional ten percent !"@K# of the net profit after ta+ shall be distributed to said regular and other farmworkers
within ninety !3@# days of the end of the fiscal year. To forestall any disruption in the normal operation of lands to be
turned o$er to the farmworker-beneficiaries mentioned abo$e' a transitory period' the length of which shall be
determined by the AAR' shall be established. Auring this transitory period' at least one percent !"K# of the gross
sales of the entity shall be distributed to the managerial' super$isory and technical group in place at the time of the
85
effecti$ity 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' super$isory and technical group
may conclude' sub1ect to the appro$al of the AAR.
S5CTI84 ,,. &ayment of Shares of Cooperati$e or Association. L Shares of a cooperati$e or association ac(uired
by farmers-beneficiaries or workersbeneficiaries shall be fully paid for in an amount corresponding to the $aluation
as determined in the immediately succeeding section. The landowner and the L=& shall assist the farmers-
beneficiaries and workers-beneficiaries in the payment for said shares by pro$iding credit financing.
S5CTI84 ,-. 6aluation of Lands. LA $aluation scheme for the land shall be formulated by the &ARC' taking into
account the factors enumerated in Section "0' in addition to the need to stimulate the growth of cooperati$es and the
ob1ecti$e of fostering responsible participation of the workers-beneficiaries in the creation of wealth. In the
determination of price that is 1ust not only to the indi$iduals but to society as well' the &ARC shall consult closely
with the landowner and the workersbeneficiaries. In case of disagreement' the price as determined by the &ARC' if
accepted by the workers-beneficiaries' shall be followed' without pre1udice to the landowner>s right to petition the
Special Agrarian Court to resol$e the issue of $aluation.
CHAPTER I:
S-33o(t Se(4ice.
S5CTI84 ,.. Creation of Support Ser$ices 8ffice. L There is hereby created the 8ffice of Support Ser$ices under
the AAR to be headed by an Dndersecretary. The 8ffice shall pro$ide general support and coordinati$e ser$ices in
the implementation of the program particularly in carrying out the pro$isions of the following ser$ices to farmer-
beneficiaries and affected landowners "# Irrigation facilities' especially second crop or dry season irrigation
facilities) *# Infrastructure de$elopment and public works pro1ects in areas and settlements that come under agrarian
reform' and for this purpose' the preparation of the physical de$elopment plan of such settlements pro$iding suitable
barangay sites' potable water and power resources' irrigation systems and other facilities for a sound agricultural
de$elopment plan) ,# Bo$ernment subsidies for the use of irrigation facilities) -# &rice support and guarantee for all
agricultural produce) .# 5+tending to small landowners' farmers> organi%ations the necessary credit' like
concessional and collateral-free loans' for agro-industriali%ation based on social collaterals like the guarantees of
farmers> organi%ation /# &romoting' de$eloping and e+tending financial assistance to small-and medium-scale
industries in agrarian reform areas) 0# Assigning sufficient numbers of agricultural e+tension workers to farmers>
organi%ations) 2# Dndertake research' de$elopment and dissemination of information on agrarian reform and low-
cost and ecologically sound farm inputs and technologies to minimi%e reliance on e+pensi$e and imported
agricultural inputs) 3# Ae$elopment of cooperati$e management skills through intensi$e training) "@# Assistance in
the identification of ready markets for agricultural produce and training in other $arious prospects of marketing) and
cdtai ""# Administration operation management and funding of support ser$ices' programs and pro1ects including
pilot pro1ects and models related to agrarian reform as de$eloped by the AAR.
S5CTI84 ,/. ?unding for Support Ser$ices. LIn order to co$er the e+penses and cost of support ser$ices' at least
twenty-fi$e percent !*.K# of all appropriations for agrarian reform shall be immediately set aside and made
a$ailable for this purpose. In addition' the AAR shall be authori%ed to package proposals and recei$e grants' aid and
other forms of financial assistance from any source.
S5CTI84 ,0. Support Ser$ices to the =eneficiaries. L The &ARC shall ensure that support ser$ices to farmers-
beneficiaries are pro$ided' such as !a# Land sur$eys and titling) !b# Liberali%ed terms on credit facilities and
production loans) !c# 5+tension ser$ices by way of planting' cropping' production and posthar$est technology
transfer' as well as marketing and management assistance and support to cooperati$es and farmers> organi%ations) !d#
Infrastructure such as access trails' mini-dams' public utilities' marketing and storage facilities) and !e# Research'
production and use of organic fertili%ers and other local substances necessary in farming and culti$ation. The &ARC
shall formulate policies to ensure that support ser$ices to farmerbeneficiaries shall be pro$ided at all stages of land
reform. The =agong Jilusang Jabuhayan sa Jaunlaran !=JJJ# Secretariat shall be transferred and attached to the
L=&' for its super$ision including all its applicable and e+isting funds' personnel' properties' e(uipment and records.
9isuse or di$ersion of the financial and support ser$ices herein pro$ided shall result in sanctions against the
86
beneficiary guilty thereof' including the forfeiture of the land transferred to him or lesser sanctions as may be
pro$ided by the &ARC' without pre1udice to criminal prosecution.
S5CTI84 ,2. Support Ser$ices to Landowners. LThe &ARC with the assistance of such other go$ernment agencies
and instrumentalities as it may direct' shall pro$ide landowners affected by the CAR& and prior agrarian reform
programs with the following ser$ices !a# In$estment information financial and counseling assistance) !b# ?acilities'
programs and schemes for the con$ersion or e+change of bonds issued for payment of the lands ac(uired with stocks
and bonds issued by the 4ational Bo$ernment' the Central =ank and other go$ernment institutions and
instrumentalities) !c# 9arketing of L=& bonds' as well as promoting the marketability of said bonds in traditional
and non-traditional financial markets and stock e+changes) and !d# 8ther ser$ices designed to utili%e producti$ely
the proceeds of the sale of such lands for rural industriali%ation. A landowner who in$ests in rural-based industries
shall be entitled to the incenti$es granted to a registered enterprise engaged in a pioneer or preferred area of
in$estment as pro$ided for in the 8mnibus In$estment Code of "320' or to such other incenti$es as the &ARC' the
L=&' or other go$ernment financial institutions may pro$ide. The L=& shall redeem a landowner>s L=& bonds at
face $alue' pro$ided that the proceeds thereof shall be in$ested in a =8I-registered company or in any agribusiness
or agro-industrial enterprise in the region where the landowner has pre$iously made in$estments' to the e+tent of
thirty percent !,@K# of the face $alue of said L=& bonds' sub1ect to guidelines that shall be issued by the L=&.
S5CTI84 ,3. Land Consolidation. L The AAR shall carry out land consolidation pro1ects to promote e(ual
distribution of landholdings' to pro$ide the needed infrastructures in agriculture' and to conser$e soil fertility and
pre$ent erosion.
CHAPTER :
S3eci*5 A(e*. o/ Coce(
S5CTI84 -@. Special Areas of Concern. L As an integral part of the Comprehensi$e Agrarian Reform &rogram'
the following principles in these special areas of concern shall be obser$ed
!"# Subsistence ?ishing. LSmall fisherfolk' including seaweed farmers' shall be assured of greater access to the
utili%ation of water resources.
!*# Logging and 9ining Concessions. LSub1ect to the re(uirement of a balanced ecology and conser$ation of water
resources' suitable areas' as determined by the Aepartment of 5n$ironment and 4atural Resources !A54R#' in
logging' mining and pasture areas' shall be opened up for agrarian settlements whose beneficiaries shall be re(uired
to undertake reforestation and conser$ation production methods. Sub1ect to e+isting laws' rules and regulations'
settlers and members of tribal communities shall be allowed to en1oy and e+ploit the products of the forest other than
timer within the logging concessions.
!,# Sparsely 8ccupied &ublic Agricultural Lands. LSparsely occupied agricultural lands of the public domain shall
be sur$eyed' proclaimed and de$eloped as farm settlements for (ualified landless people based on an organi%ed
program to ensure their orderly and early de$elopment. cda Agricultural land allocations shall be made for ideal
family-si%e farms as determined by the &ARC. &ioneers and other settlers shall be treated e(ually in e$ery respect.
Sub1ect to the prior rights of (ualified beneficiaries' unculti$ated lands of the public domain shall be made a$ailable
on a lease basis to interested and (ualified parties. &arties who will engaged in the de$elopment of capitalintensi$e'
traditional or pioneering crops shall be gi$en priority. The lease period' which shall not be more than a total of fifty
!.@# years' shall be proportionate to the amount of in$estment and production goals of the lessee. A system of
e$aluation and audit shall be instituted.
!-# Idle' Abandoned' ?oreclosed and Se(uestered Lands. LIdle' abandoned' foreclosed and se(uestered lands shall
be planned for distribution as home lots and family-si%e farmlots to actual occupants. If land area permits' other
landless families shall be accommodated in these lands.
87
!.# Rural <omen. L All (ualified women members of the agricultural labor force must be guaranteed and assured
e(ual right to ownership of the land' e(ual shares of the farm>s produce' and representation in ad$isory or
appropriate decision-making bodies.
!/# 6eterans and Retirees. LIn accordance with Section 0 of Article C6I of the Constitution' landless war $eterans
and $eterans of military campaigns' their sur$i$ing spouse and orphans' retirees of the Armed ?orces of the
&hilippines !A?&# and the Integrated 4ational &olice !I4&#' returnees' surrenderees' and similar beneficiaries shall
be gi$en due consideration in the disposition of agricultural lands of the public domain.
!0# Agriculture Braduates. LBraduates of agricultural schools who are landless shall be assisted by the go$ernment'
through the AAR' in their desire to own and till agricultural lands.
CHAPTER :I
P(o)(*7 I735e7et*tio
S5CTI84 -". The &residential Agrarian Reform Council. L The &residential Agrarian Reform Council !&ARC#
shall be composed of the &resident of the &hilippines as Chairman' the Secretary of Agrarian Reform as 6ice-
Chairman and the following as members) Secretaries of the Aepartments of Agriculture) 5n$ironment and 4atural
Resources) =udget and 9anagement) Local Bo$ernment &ublic <orks and ;ighways) Trade and Industry) ?inance)
Labor and 5mployment) Airector-Beneral of the 4ational 5conomic and Ae$elopment Authority) &resident' Land
=ank of the &hilippines) Administrator' 4ational Irrigation Administration) and three !,# representati$es of affected
landowners to represent Lu%on' 6isayas and 9indanao) si+ !/# representati$es of agrarian reform beneficiaries' two
!*# each from Lu%on' 6isayas and 9indanao' pro$ided that one of them shall be from the cultural communities.
S5CTI84 -*. 5+ecuti$e Committee. L There shall be an 5+ecuti$e Committee !5CC89# of the &ARC composed
of the Secretary of the AAR as Chairman' and such other members as the &resident may designate' taking into
account Article CIII' Section . of the Constitution. Dnless otherwise directed by &ARC' the 5CC89 may meet and
decide on any and all matters in between meetings of the &ARC &ro$ided' howe$er' That its decisions must be
reported to the &ARC immediately and not later than the ne+t meeting.
S5CTI84 -,. Secretariat. L A &ARC Secretariat is hereby established to pro$ide general support and coordinati$e
ser$ices such as inter-agency linkages) program and pro1ect appraisal and e$aluation and general operations
monitoring for the &ARC. The Secretariat shall be headed by the Secretary of Agrarian Reform who shall be assisted
by an Dndersecretary and supported by a staff whose composition shall be determined by the &ARC 5+ecuti$e
Committee and whose compensation shall be chargeable against the Agrarian Reform ?und. All officers and
employees of the Secretariat shall be appointed by the Secretary of Agrarian Reform.
S5CTI84 --. &ro$incial Agrarian Reform Coordinating Committee !&ARCC89#. L A &ro$incial Agrarian
Reform Coordinating Committee !&ARCC89# is hereby created in each pro$ince' composed of a Chairman' who
shall be appointed by the &resident upon the recommendation of the 5CC89' the &ro$incial Agrarian Reform
8fficer as 5+ecuti$e 8fficer' and one representati$e each from the Aepartments of Agriculture' and of 5n$ironment
and 4atural Resources and from the L=&' one representati$e each from e+isting farmers> organi%ations' agricultural
cooperati$es and non-go$ernmental organi%ations in the pro$ince) two representati$es from landowners' at least one
of whom shall be a producer representing the principal crop of the pro$ince' and two representati$es from farmer
and farmworker-beneficiaries' at least one of whom shall be a farmer or farmworker representing the principal crop
of the pro$ince' as members &ro$ided' That in areas where there are cultural communities' the latter shall likewise
ha$e one representati$e. The &ARCC89 shall coordinate and monitor the implementation of the CAR& in the
pro$ince. It shall pro$ide information on the pro$isions of the CAR&' guidelines issued by the &ARC and on the
progress of the CAR& in the pro$ince.
S5CTI84 -.. &ro$ince-by-&ro$ince Implementation. L The &ARC shall pro$ide the guidelines for a pro$ince-by-
pro$ince implementation of the CAR&. The ten-year program of distribution of public and pri$ate lands in each
pro$ince shall be ad1usted from year by the pro$ince>s &ARCC89 in accordance with the le$el of operations
88
pre$iously established by the &ARC' in e$ery case ensuring that support ser$ices are a$ailable or ha$e been
programmed before actual distribution is effected.
S5CTI84 -/. =arangay Agrarian Reform Committee !=ARC#. L Dnless otherwise pro$ided in this Act' the
pro$isions of 5+ecuti$e 8rder 4o. **3 regarding the organi%ation of the =arangay Agrarian Reform Committee
!=ARC# shall be in effect.
S5CTI84 -0. ?unctions of the =ARC. L In addition to those pro$ided in 5+ecuti$e 8rder 4o. **3' the =ARC
shall ha$e the following functions !a# 9ediate and conciliate between parties in$ol$ed in an agrarian dispute
including matters related to tenurial and financial arrangements) acd !b# Assist in the identification of (ualified
beneficiaries and landowners within the barangay) !c# Attest to the accuracy of the initial parcellary mapping of the
beneficiary>s tillage) !d# Assist (ualified beneficiaries in obtaining credit from lending institutions) !e# Assist in the
initial determination of the $alue of the land) !f# Assist the AAR representati$es in the preparation of periodic
reports on the CAR& implementation for submission to the AAR) !g# Coordinate the deli$ery of support ser$ices to
beneficiaries) and !h# &erform such other functions as may be assigned by the AAR. !*# The =ARC shall endea$or
to mediate' conciliate and settle agrarian disputes lodged before it within thirty !,@# days from its taking cogni%ance
thereof. If after the lapse of the thirty day period' it is unable to settle the dispute' it shall issue a certificate of its
proceedings and shall furnish a copy thereof upon the parties within se$en !0# days after the e+piration of the thirty-
day period.
S5CTI84 -2. Legal Assistance. L The =ARC or any member thereof may' whene$er necessary in the e+ercise of
any of its functions hereunder' seek the legal assistance of the AAR and the pro$incial' city' or municipal
go$ernment.
S5CTI84 -3. Rules and Regulations. L The &ARC and the AAR shall ha$e the power to issue rules and
regulations' whether substanti$e or procedural' to carry out the ob1ects and purposes of this Act. Said rules shall take
effect ten !"@# days after publication in two !*# national newspapers of general circulation.
CHAPTER :II
A,7ii.t(*ti4e A,D-,ic*tio
S5CTI84 .@. Guasi-Eudicial &owers of the AAR. L The AAR is hereby $ested with the primary 1urisdiction to
determine and ad1udicate agrarian reform matters and shall ha$e e+clusi$e original 1urisdiction o$er all matters
in$ol$ing the implementation of agrarian reform e+cept those falling under the e+clusi$e 1urisdiction of the
Aepartment of Agriculture !AA# and the Aepartment of 5n$ironment and 4atural Resources !A54R#. It shall not be
bound by technical rules of procedure and e$idence but shall proceed to hear and decide all cases' disputes or
contro$ersies in a most e+peditious manner' employing all reasonable means to ascertain the facts of e$ery case in
accordance with 1ustice and e(uity and the merits of the case. Toward this end' it shall adopt a uniform rule of
procedure to achie$e a 1ust' e+peditious and ine+pensi$e determination for e$ery action or proceeding before it. It
shall ha$e the power to summon witnesses' administer oaths' take testimony' re(uire submission of reports' compel
the production of books and documents and answers to interrogatories and issue subpoena' and subpoena duces
tecum' and enforce its writs through sheriffs or other duly deputi%ed officers. It shall likewise ha$e the power to
punish direct and indirect contempts in the same manner and sub1ect to the same penalties as pro$ided in the Rules
of Court. Responsible farmer leaders shall be allowed to represent themsel$es' their fellow farmers' or their
organi%ations in any proceedings before the AAR &ro$ided' howe$er' That when there are two or more
representati$es for any indi$idual or group' the representati$es should choose only one among themsel$es to
represent such party or group before any AAR proceedings. 4otwithstanding an appeal to the Court of Appeals' the
decision of the AAR shall be immediately e+ecutory.
S5CTI84 .". ?inality of Aetermination. L Any case or contro$ersy before it shall be decided within thirty !,@#
days after it is submitted for resolution. 8nly one !"# motion for reconsideration shall be allowed. Any order' ruling
or decision shall be final after the lapse of fifteen !".# days from receipt of a copy thereof.
89
S5CTI84 .*. ?ri$olous Appeals. L To discourage fri$olous or dilatory appeals from the decisions or orders on the
local or pro$incial le$els' the AAR may impose reasonable penalties' including but not limited to fines or censures
upon erring parties.
S5CTI84 .,. Certification of the =ARC. L The AAR shall not take cogni%ance of any agrarian dispute or
contro$ersy unless a certification from the =ARC that the dispute has been submitted to it for mediation and
conciliation without any success of settlement is presented &ro$ided' howe$er' That if no certification is issued by
the =ARC within thirty !,@# days after a matter or issue is submitted to it for mediation or conciliation the case or
dispute may be brought before the &ARC.
CHAPTER :III
9-,ici*5 Re4ieE
S5CTI84 .-. Certiorari. L Any decision' order' award or ruling of the AAR 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 e+cept as otherwise pro$ided in this
Act within fifteen !".# days from the receipt of a copy thereof. The findings of fact of the AAR shall be final and
conclusi$e if based on substantial e$idence.
S5CTI84 ... 4o Restraining 8rder or &reliminary In1unction. L4o court in the &hilippines shall ha$e 1urisdiction
to issue any restraining order or writ of preliminary in1unction against the &ARC or any of its duly authori%ed or
designated agencies in any case' dispute or contro$ersy arising from' necessary to' or in connection with the
application' implementation' enforcement' or interpretation of this Act and other pertinent laws on agrarian reform.
S5CTI84 ./. Special Agrarian Court. L The Supreme Court shall designate at least one !"# branch of the Regional
Trial Court !RTC# within each pro$ince 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 pro$ince. In the designation' the Supreme Court shall gi$e preference to the Regional Trial
Courts which ha$e been assigned to handle agrarian cases or whose presiding 1udges were former 1udges of the
defunct Court of Agrarian Relations. The Regional Trial Court !RTC# 1udges assigned to said courts shall e+ercise
said special 1urisdiction in addition t
o the regular 1urisdiction of their respecti$e courts. The Special Agrarian Courts shall ha$e the powers and
prerogati$es inherent in or belonging to the Regional Trial Courts. S5CTI84 .0. Special Eurisdiction. L The
Special Agrarian Courts shall ha$e original and e+clusi$e 1urisdiction o$er all petitions for the determination of 1ust
compensation to landowners' and the prosecution of all criminal offenses under this Act. The Rules of Court shall
apply to all proceedings before the Special Agrarian Courts' unless modified by this Act. The Special Agrarian
Courts shall decide all appropriate cases under their special 1urisdiction within thirty !,@# days from submission of
the case for decision.
S5CTI84 .2. Appointment of Commissioners. L The Special Agrarian Courts' upon their own initiati$e or at the
instance of any of the parties' may appoint one or more commissioners to e+amine' in$estigate and ascertain facts
rele$ant to the dispute including the $aluation of properties' and to file a written report thereof with the court.
S5CTI84 .3. 8rders of the Special Agrarian Courts. L4o order of the Special Agrarian Courts on any issue'
(uestion' matter or incident raised before them shall be ele$ated to the appellate courts until the hearing shall ha$e
been terminated and the case decided on the merits.
S5CTI84 /@. Appeals. L An appeal may be taken from the decision of the Special Agrarian Courts by filing a
petition for re$iew with the Court of Appeals within fifteen !".# 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 AAR' as the case may be' shall be by a petition for re$iew with the Supreme Court within a non-
e+tendible period of fifteen !".# days from receipt of a copy of said decision.
90
S5CTI84 /". &rocedure on Re$iew. L Re$iew by the Court of Appeals or the Supreme Court' as the case may be'
shall be go$erned by the Rules of Court. The Court of Appeals' howe$er' may re(uire the parties to file simultaneous
memoranda within a period of fifteen !".# days from notice' after which the case is deemed submitted for decision.
S5CTI84 /*. &referential Attention in Courts. L All courts in the &hilippines' both trial and appellate' shall gi$e
preferential attention to all cases arising from or in connection with the implementation of the pro$isions of this Act.
All cases pending in court arising from or in connection with the implementation of this Act shall continue to be
heard' tried and decided into their finality' notwithstanding the e+piration of the ten-year period mentioned in
Section . hereof.
CHAPTER :IV
Fi*ci)
S5CTI84 /,. ?unding Source. L The initial amount needed to implement this Act for the period of ten !"@# years
upon appro$al hereof shall be funded from the Agrarian Reform ?und created under Sections *@ and *" of 5+ecuti$e
8rder 4o. **3. Additional amounts are hereby authori%ed to be appropriated as and when needed to augment the
Agrarian Reform ?und in order to fully implement the pro$isions of this Act. Sources of funding or appropriations
shall include the following a# &roceeds of the sales of the Assets &ri$ati%ation Trust) b# All receipts from assets
reco$ered and from sales of ill-gotten wealth reco$ered through the &residential Commission on Bood Bo$ernment)
c# &roceeds of the disposition of the properties of the Bo$ernment in foreign countries) d# &ortion of amounts
accruing to the &hilippines from all sources of official foreign grants and concessional financing from all countries'
to be used for the specific purposes of financing production credits' infrastructures' and other support ser$ices
re(uired by this Act) cdt !e# 8ther go$ernment funds not otherwise appropriated. All funds appropriated to
implement the pro$isions of this Act shall be considered continuing appropriations during the period of its
implementation.
S5CTI84 /-. ?inancial Intermediary for the CAR&. L The Land =ank of the &hilippines shall be the financial
intermediary for the CAR&' and shall insure that the social 1ustice ob1ecti$es of the CAR& shall en1oy a preference
among its priorities.
CHAPTER :V
Gee(*5 P(o4i.io.
S5CTI84 /.. Con$ersion of Lands. L After the lapse of fi$e !.# years from its award' when the land ceases to be
economically feasible and sound for agricultural purposes' or the locality has become urbani%ed and the land will
ha$e a greater economic $alue for residential' commercial or industrial purposes' the AAR' upon application of the
beneficiary or the landowner' with due notice to the affected parties' and sub1ect to e+isting laws' may authori%e the
reclassification or con$ersion of the land and its disposition &ro$ided' That the beneficiary shall ha$e fully paid his
obligation.
S5CTI84 //. 5+emptions from Ta+es and ?ees of Land Transfers. L Transactions under this Act in$ol$ing a
transfer of ownership' whether from natural or 1uridical persons' shall be e+empted from ta+es arising from capital
gains. These transactions shall also be e+empted from the payment of registration fees' and all other ta+es and fees
for the con$eyance or transfer thereof) &ro$ided' That all arrearages in real property ta+es' without penalty or
interest' shall be deductible from the compensation to which the owner may be entitled.
S5CTI84 /0. ?ree Registration of &atents and Titles. L All Registers of Aeeds are hereby directed to register' free
from payment of all fees and other charges' patents' titles and documents re(uired for the implementation of the
CAR&.
S5CTI84 /2. Immunity of Bo$ernment Agencies from Dndue Interference. L 4o in1unction' restraining order'
prohibition or mandamus shall be issued by the lower courts against the Aepartment of Agrarian Reform !AAR#' the
Aepartment of Agriculture !AA#' the Aepartment of 5n$ironment and 4atural Resources !A54R#' and the
Aepartment of Eustice !A8E# in their implementation of the program.
91
S5CTI84 /3. Assistance of 8ther Bo$ernment 5ntities. L The &ARC' in the e+ercise of its functions' is hereby
authori%ed to call upon the assistance and support of other go$ernment agencies' bureaus and offices' including
go$ernmentowned or -controlled corporations.
S5CTI84 0@. Aisposition of &ri$ate Agricultural Lands. L The sale or disposition of agricultural lands retained by
a landowner as a conse(uence of Section / hereof shall be $alid as long as the total landholdings that shall be owned
by the transferee thereof inclusi$e of the land to be ac(uired shall not e+ceed the landholding ceilings pro$ided for
in this Act. Any sale or disposition of agricultural lands after the effecti$ity of this Act found to be contrary to the
pro$isions hereof shall be null and $oid. Transferees of agricultural lands shall furnish the appropriate Register of
Aeeds and the =ARC an affida$it attesting that his total landholdings as a result of the said ac(uisition do not
e+ceed the landholding ceiling. The Register of Aeeds shall not register the transfer of any agricultural land without
the submission of this sworn statement together with proof of ser$ice of a copy thereof to the =ARC.
S5CTI84 0". =ank 9ortgages. L=anks and other financial institutions allowed by law to hold mortgage rights or
security interests in agricultural lands to secure loans and other obligations of borrowers' may ac(uire title to these
mortgaged properties' regardless of area' sub1ect to e+isting laws on compulsory transfer of foreclosed assets and
ac(uisition as prescribed under Section ", of this Act. acd
S5CTI84 0*. Lease' 9anagement' Brower or Ser$ice Contracts' 9ortgages and 8ther Claims. L Lands co$ered
by this Act under lease' management' grower or ser$ice contracts' and the like shall be disposed of as follows !a#
Lease' management' grower or ser$ice contracts co$ering pri$ate lands may continue under their original terms and
conditions until the e+piration of the same e$en if such land has' in the meantime' been transferred to (ualified
beneficiaries. !b# 9ortgages and other claims registered with the Register of Aeeds shall be assumed by the
go$ernment up to an amount e(ui$alent to the landowner>s compensation $alue as pro$ided in this Act.
S5CTI84 0,. &rohibited Acts and 8missions. L The following are prohibited !a# The ownership or possession' for
the purpose of circum$enting the pro$isions of this Act' of agricultural lands in e+cess of the total retention limits or
award ceilings by any person' natural or 1uridical' e+cept those under collecti$e ownership by farmer-beneficiaries.
!b# The forcible entry or illegal detainer by persons who are not (ualified beneficiaries under this Act to a$ail
themsel$es of the rights and benefits of the Agrarian Reform &rogram. !c# The con$ersion by any landowner of his
agricultural land into any nonagricultural use with intent to a$oid the application of this Act to his landholdings and
to dispossess his tenant farmers of the land tilled by them. !d# The willful pre$ention or obstruction by any person'
association or entity of the implementation of the CAR&. !e# The sale' transfer' con$eyance or change of the nature
of lands outside of urban centers and city limits either in whole or in part after the effecti$ity of this Act. The date of
the registration of the deed of con$eyance in the Register of Aeeds with respect to titled lands and the date of the
issuance of the ta+ declaration to the transferee of the property with respect to unregistered lands' as the case may
be' shall be conclusi$e for the purpose of this Act. !f# The sale' transfer or con$eyance by a beneficiary of the right
to use or any other usufructuary right o$er the land he ac(uired by $irtue of being a beneficiary' in order to
circum$ent the pro$isions of this Act.
S5CTI84 0-. &enalties. L Any person who knowingly or willfully $iolates the pro$isions of this Act shall be
punished by imprisonment of not less than one !"# month to not more than three !,# years or a fine of not less than
one thousand pesos !&"'@@@.@@# and not more than fifteen thousand pesos !&".'@@@.@@#' or both' at the discretion of
the court. If the offender is a corporation or association' the officer responsible therefor shall be criminally liable.
S5CTI84 0.. Suppletory Application of 5+isting Legislation. L The pro$isions of Republic Act 4o. ,2-- as
amended' &residential Aecree 4os. *0 and *// as amended' 5+ecuti$e 8rder 4os. **2 and **3' both Series of "320)
and other laws not inconsistent with this Act shall ha$e suppletory effect.
S5CTI84 0/. Repealing Clause. LSection ,. of Republic Act 4o. ,2,-' &residential Aecree 4o. ,"/' the last two
paragraphs of Section "* of &residential Aecree 4o. 3-/' &residential Aecree 4o. "@,2' and all other laws' decrees
e+ecuti$e orders' rules and regulations' issuances or parts thereof inconsistent with this Act are hereby repealed or
amended accordingly. cdt
92
S5CTI84 00. Separability Clause. LIf' for any reason' any section or pro$ision of this Act is declared null and
$oid' no other section' pro$ision' or part thereof shall be affected and the same shall remain in full force and effect.
S5CTI84 02. 5ffecti$ity Clause. L This Act shall take effect immediately after publication in at least two !*#
national newspapers of general circulation.
Appro$ed Eune "@' "322
R5&D=LIC ACT 48. 022"
A4 ACT A954AI4B C5RTAI4 &R86ISI84S 8? R5&D=LIC ACT 48. //.0' 54TITL5A :A4 ACT
I4STITDTI4B A C89&R5;54SI65 ABRARIA4 R5?8R9 &R8BRA9 T8 &R898T5 S8CIAL EDSTIC5
A4A I4ADSTRIALIFATI84' &R86IAI4B T;5 95C;A4IS9 ?8R ITS I9&L5954TATI84' A4A ?8R
8T;5R &DR&8S5S:
S5CTI84 ". Section ,' &aragraph !b# of Republic Act 4o. //.0 is hereby amended to read as follows
:Sec. ,. Aefinitions. L ?or the purpose of this Act' unless the conte+t indicates otherwise
:!b# Agriculture' Agricultural 5nterprise or Agricultural Acti$ity means the culti$ation of the soil' planting of crops'
growing of fruit trees' including the har$esting of such farm products' and other farm acti$ities and practices
performed by a farmer in con1unction with such farming operations done by persons whether natural or 1uridical.:
Sec. *. Section "@ of Republic Act 4o. //.0 is hereby amended to read as follows
:Sec. "@. 5+emptions and 5+clusions.
:!a# Lands actually' directly and e+clusi$ely used for parks' wildlife' forest reser$es' reforestation' fish sanctuaries
and breeding grounds' watersheds and mangro$es shall be e+empt from the co$erage of this Act.
:!b# &ri$ate lands actually' directly and e+clusi$ely used for prawn farms and fishponds shall be e+empt from the
co$erage of this Act &ro$ided' That said prawn farms and fishponds ha$e not been distributed and Certificate of
Land 8wnership Award !CL8A# issued to agrarian reform beneficiaries under the Comprehensi$e Agrarian Reform
&rogram.
:In cases where the fishponds or prawn farms ha$e been sub1ected to the Comprehensi$e Agrarian Reform Law' by
$oluntary offer to sell' or commercial farms deferment or notices of compulsory ac(uisition' a simple and absolute
ma1ority of the actual regular workers or tenants must consent to the e+emption within one !"# year from the
effecti$ity of this Act. <hen the workers or tenants do not agree to this e+emption' the fishponds or prawn farms
shall be distributed collecti$ely to the worker-beneficiaries or tenants who shall form a cooperati$e or association to
manage the same.
:In cases where the fishponds or prawn farms ha$e not been sub1ected to the Comprehensi$e Agrarian Reform Law'
the consent of the farm workers shall no longer be necessary' howe$er' the pro$ision of Section ,*-A hereof on
incenti$es shall apply.:
:!c# Lands actually' directly and e+clusi$ely used and found to be necessary for national defense' school sites and
campuses' including e+perimental farm stations operated by public or pri$ate schools for educational purposes'
seeds and seedling research and pilot production center' church sites and con$ents appurtenant thereto' mos(ue sites
and Islamic centers appurtenant thereto' communal burial grounds and cemeteries' penal colonies and penal farms
actually worked by the inmates' go$ernment and pri$ate research and (uarantine centers and all lands with eighteen
percent !"2K# slope and o$er' e+cept those already de$eloped' shall be e+empt from the co$erage of this Act.:
Sec. ,. Section "" &aragraph " is hereby amended to read as follows
93
:Sec. "". Commercial ?arming. L Commercial farms' which are pri$ate agricultural lands de$oted to saltbeds' fruit
farms' orchards' $egetable and cut-flower farms' and cacao' coffee and rubber plantations' shall be sub1ect to
immediate compulsory ac(uisition and distribution after ten !"@# years from the effecti$ity of this Act.In the case of
new farms' the ten-year period shall begin from the first year of commercial production and operation' as determined
by the AAR.Auring the ten-year period' the Bo$ernment shall initiate steps necessary to ac(uire these lands' upon
payment of 1ust compensation for the land and the impro$ements thereon' preferably in fa$or of organi%ed
cooperati$es or associations which shall thereafter manage the said lands for the workers-beneficiaries.:
Sec. -. There shall be incorporated after Section ,* of Republic Act 4o. //.0 a new section to read as follows
:Sec. ,*-A. Incenti$es. L Indi$iduals or entities owning or operating fishponds and prawn farms are hereby
mandated to e+ecute within si+ !/# months from the effecti$ity of this Act an incenti$e plan with their regular
fishpond or prawn farmworkers or fishpond or prawn farm workers> organi%ation' if any' whereby se$en point fi$e
percent !0..K# of their net profit before ta+ from the operation of the fishpond or prawn farms are distributed within
si+ty !/@# days at the end of the fiscal year as compensation to regular and other pond workers in such ponds o$er
and abo$e the compensation they currently recei$e.
:In order to safeguard the right of the regular fishpond or prawn farm workers under the incenti$e plan' the books of
the fishpond or prawn farm owners shall be sub1ect to periodic audit or inspection by certified public accountants
chosen by the workers.
:The foregoing pro$ision shall not apply to agricultural lands subse(uently con$erted to fishpond or prawn farms
pro$ided the si%e of the land con$erted does not e+ceed the retention limit of the landowner.:
Sec. .. There shall be incorporated after Section /. of Republic Act 4o. //.0 new sections to read as follows
:Sec. /.-A. Con$ersion into ?ishpond and &rawn ?arms. L 4o con$ersion of public agricultural lands into
fishponds and prawn farms shall be made e+cept in situations where the pro$incial go$ernment with the concurrence
of the =ureau of ?isheries and A(uatic Resources !=?AR# declares a coastal %one as suitable for fishpond
de$elopment.In such case' the Aepartment of 5n$ironment and 4atural Resources !A54R# shall allow the lease and
de$elopment of such areas &ro$ided' That the declaration shall not apply to en$ironmentally critical pro1ects and
areas as contained in title !A# sub-paragraph two' !=-.# and !C-"# and title !=#' number ele$en !""# of &roclamation
4o. *"-/' entitled :&roclaiming Certain Areas and Types of &ro1ects as 5n$ironmentally Critical and <ithin the
Scope of the 5n$ironmental Impact Statement !5IS# System established under &residential Aecree 4o. ".2/': to
ensure the protection of ri$er systems' a(uifers and mangro$e $egetations from pollution and en$ironmental
degradation &ro$ided' further' That the appro$al shall be in accordance with a set of guidelines to be drawn up and
promulgated by the AAR and the =?AR &ro$ided' furthermore' That small-farmer cooperati$es and organi%ations
shall be gi$en preference in the award of the ?ishpond Lease Agreement !?LAs#.
chan robles $irtual law library
:4o con$ersion of more than fi$e !.# hectares of pri$ate lands to fishpond and prawn farms shall be allowed after
the passage of this Act' e+cept when the use of the land is more economically feasible and sound for fishpond and7or
prawn farm' as certified by the =ureau of ?isheries and A(uatic Resources !=?AR#' and a simple and absolute
ma1ority of the regular farm workers or tenants agree to the con$ersion' the Aepartment of Agrarian Reform' may
appro$e applications for change in the use of the land &ro$ided' finally' That no piecemeal con$ersion to
circum$ent the pro$isions of this Act shall be allowed.In these cases where the change of use is appro$ed' the
pro$isions of Section ,*-A hereof on incenti$es shall apply.:
:Sec. /.-=. In$entory. L <ithin one !"# year from the effecti$ity of this Act' the =?AR shall undertake and finish
an in$entory of all go$ernment and pri$ate fishponds and prawn farms' and undertake a program to promote the
sustainable management and utili%ation of prawn farms and fishponds.4o lease under Section /.-A hereof may be
granted until after the completion of the said in$entory.chan robles $irtual law library
:The sustainable management and utili%ation of prawn farms and fishponds shall be in accordance with the effluent
standards' pollution charges and other pollution control measures such as' but not limited to' the (uantity of
fertili%ers' pesticides and other chemicals used' that may be established by the ?ertili%er and &esticide Authority
!?&A#' the 5n$ironmental 9anagement =ureau !59=#' and other appropriate go$ernment regulatory bodies' and
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e+isting regulations go$erning water utili%ation' primarily &residential Aecree 4o. "@/0' entitled :A Aecree
Instituting A <ater Code' Thereby Re$ising and Consolidating the Laws Bo$erning the 8wnership' Appropriation'
Dtili%ation' 5+ploitation' Ae$elopment' Conser$ation and &rotection of <ater Resources.:
:Sec. /.-C. &rotection of 9angro$e Areas. L In e+isting ?ishpond Lease Agreements !?LAs# and those that will be
issued after the effecti$ity of this Act' a portion of the fishpond area fronting the sea' sufficient to protect the
en$ironment' shall be established as a buffer %one and be planted to specified mangro$e species to be determined in
consultation with the regional office of the A54R.The Secretary of 5n$ironment and 4atural Resources shall
pro$ide the penalties for any $iolation of this undertaking as well as the rules for its implementation.:
:Sec. /.-A. Change of Crops. L The change of crops to commercial crops or high $alue crops shall not be
considered as a con$ersion in the use or nature of the land. The change in crop should' howe$er' not pre1udice the
rights of tenants or leaseholders should there be any and the consent of a simple and absolute ma1ority of the
affected farm workers' if any' shall first be obtained.:
Sec. /. There shall be incorporated after Section 0, of Republic Act 4o. //.0 a new section to read as follows
:Sec. 0,-A. 5+ception. L The pro$isions of Section 0,' paragraph !5#' to the contrary notwithstanding' the sale
and7or transfer of agricultural land in cases where such sale' transfer or con$eyance is made necessary as a result of
a bank>s foreclosure of the mortgaged land is hereby permitted.:
Sec. 0. Separability Clause. L If for any reason' any section or pro$ision of this Act is declared null and $oid' no
other section pro$ision or part thereof shall be affected and the same shall remain in full force and effect.
chan robles $irtual law library
Sec. 2. 5ffecti$ity Clause. L This Act shall take effect fifteen !".# days after its publication in at least two !*#
newspapers of general circulation.
Appro$ed ?ebruary *@' "33.
CARPER ACo73(e0e.i4e A)(*(i* Re/o(7 P(o)(*7 E2te.io Eit0 Re/o(7.B RA &%''
REPUBLIC ACT NO. &%''
AA-)-.t %, "''&B

AN ACT STRENGTHENING THE COMPREHENSIVE AGRARIAN REFORM PROGRAM ACARPB,
E:TENDING THE AC=UISITION AND DISTRIBUTION OF ALL AGRICULTURAL LANDS,
INSTITUTING NECESSARY REFORMS, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF
REPUBLIC ACT NO. $$#%, OTHER<ISE, 8NO<N AS THE COMPREHENSIVE AGRARIAN REFORM
LA< OF !&88, AS AMENDED, AND APPROPRIATING FUNDS THEREFOR
S5CTI84 ". Section * of Republic Act 4o. //.0' as amended' otherwise known as the Comprehensi$e Agrarian
Reform Law of "322' is hereby further amended to read as follows :S5C. *. Aeclaration of &rinciples and &olicies.
L It is the policy of the State to pursue a Comprehensi$e Agrarian Reform &rogram !CAR&#. The welfare of the
landless farmers and farmworkers will recei$e the highest consideration to promote social 1ustice and to mo$e the
nation toward sound rural de$elopment and industriali%ation' and the establishment of owner culti$atorship of
economic-si%e farms as the basis of &hilippine agriculture. :The State shall promote industriali%ation and full
employment based on sound agricultural de$elopment and agrarian reform' through industries that make full and
efficient use of human and natural resources' and which are competiti$e in both domestic and foreign markets
&ro$ided' That the con$ersion of agricultural lands into industrial' commercial or residential lands shall take into
account' tillers> rights and national food security. ?urther' the State shall protect ?ilipino enterprises against unfair
foreign competition and trade practices.
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:The State recogni%es that there is not enough agricultural land to be di$ided and distributed to each farmer and
regular farmworker so that each one can own his7her economic-si%e family farm. This being the case' a meaningful
agrarian reform program to uplift the li$es and economic status of the farmer and his7her children can only be
achie$ed through simultaneous industriali%ation aimed at de$eloping a self-reliant and independent national
economy effecti$ely controlled by ?ilipinos. :To this end' the State may' in the interest of national welfare or
defense' establish and operate $ital industries. :A more e(uitable distribution and ownership of land' with due regard
to the rights of landowners to 1ust compensation' retention rights under Section / of Republic Act 4o. //.0' as
amended' and to the ecological needs of the nation' shall be undertaken to pro$ide farmers and farmworkers with the
opportunity to enhance their dignity and impro$e the (uality of their li$es through greater producti$ity of
agricultural lands. :The agrarian reform program is founded on the right of farmers and regular farmworkers' who
are landless' to own directly or collecti$ely the lands they till or' in the case of other farmworkers' to recei$e a 1ust
share of the fruits thereof. To this end' the State shall encourage and undertake the 1ust distribution of all agricultural
lands' sub1ect to the priorities and retention limits set forth in this Act' taking into account ecological'
de$elopmental' and e(uity considerations' and sub1ect to the payment of 1ust compensation. The State shall respect
the right of small landowners' and shall pro$ide incenti$e for $oluntary land-sharing. :As much as practicable' the
implementation of the program shall be community-based to assure' among others' that the farmers shall ha$e
greater control of farmgate prices' and easier access to credit.
:The State shall recogni%e the right of farmers' farmworkers and landowners' as well as cooperati$es and other
independent farmers> organi%ations' to participate in the planning' organi%ation' and management of the program'
and shall pro$ide support to agriculture through appropriate technology and research' and ade(uate financial'
production' marketing and other support ser$ices. :The State shall recogni%e and enforce' consistent with e+isting
laws' the rights of rural women to own and control land' taking into consideration the substanti$e e(uality between
men and women as (ualified beneficiaries' to recei$e a 1ust share of the fruits thereof' and to be represented in
ad$isory or appropriate decision-making bodies. These rights shall be independent of their male relati$es and of
their ci$il status. :The State shall apply the principles of agrarian reform' or stewardship' whene$er applicable' in
accordance with law' in the disposition or utili%ation of other natural resources' including lands of the public
domain' under lease or concession' suitable to agriculture' sub1ect to prior rights' homestead rights of small settlers
and the rights of indigenous communities to their ancestral lands. :The State may resettle landless farmers and
farmworkers in its own agricultural estates' which shall be distributed to them in the manner pro$ided by law.
:=y means of appropriate incenti$es' the State shall encourage the formation and maintenance of economic-si%e
family farms to be constituted by indi$idual 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 pro$ide support to such fishermen through appropriate technology and
research' ade(uate financial' production and marketing assistance and other ser$ices. The State shall also protect'
de$elop and conser$e such resources. The protection shall e+tend to offshore fishing grounds of subsistence
fishermen against foreign intrusion. ?ishworkers shall recei$e a 1ust share from their labor in the utili%ation of
marine and fishing resources. :The State shall be guided by the principles that land has a social function and land
ownership has a social responsibility. 8wners of agricultural land ha$e the obligation to culti$ate directly or through
labor administration the lands they own and thereby make the land producti$e. :The State shall pro$ide incenti$es to
landowners to in$est the proceeds of the agrarian reform program to promote industriali%ation' employment and
pri$ati%ation of public sector enterprises. ?inancial instruments used as payment for lands shall contain features that
shall enhance negotiability and acceptability in the marketplace.
:The State may lease unde$eloped lands of the public domain to (ualified entities for the de$elopment of capital-
intensi$e farms' and traditional and pioneering crops especially those for e+ports sub1ect to the prior rights of the
beneficiaries under this Act.:
S5CTI84 *. Section , of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows :S5C.
,. Aefinitions. L ?or the purpose of this Act' unless the conte+t indicates otherwise :+++ +++ +++ :!f# ?armer
refers to a natural person whose primary li$elihood is culti$ation of land or the production of agricultural crops'
li$estock and7or fisheries either by himself7herself' or primarily with the assistance of his7her immediate farm
household' whether the land is owned by him7her' or by another person under a leasehold or share tenancy
agreement or arrangement with the owner thereof. :+++ +++ +++ :!l# Rural women refer to women who are engaged
96
directly or indirectly in farming and7or fishing as their source of li$elihood' whether paid or unpaid' regular or
seasonal' or in food preparation' managing the household' caring for the children' and other similar acti$ities.:
S5CTI84 ,. Section - of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows :S5C.
-. Scope. L The Comprehensi$e Agrarian Reform Law of "322 shall co$er' regardless of tenurial arrangement and
commodity produced' all public and pri$ate agricultural lands as pro$ided in &roclamation 4o. "," and 5+ecuti$e
8rder 4o. **3' including other lands of the public domain suitable for agriculture &ro$ided' That landholdings of
landowners with a total area of fi$e !.# hectares and below shall not be co$ered for ac(uisition and distribution to
(ualified beneficiaries. I;AcCS :9ore specifically' the following lands are co$ered by the CAR& :!a# All alienable
and disposable lands of the public domain de$oted to or suitable for agriculture. 4o reclassification of forest or
mineral lands to agricultural lands shall be undertaken after the appro$al of this Act until Congress' taking into
account ecological' de$elopmental and e(uity considerations' shall ha$e determined by law' the specific limits of the
public domain) :!b# All lands of the public domain in e+cess of the specific limits as determined by Congress in the
preceding paragraph) :!c# All other lands owned by the Bo$ernment de$oted to or suitable for agriculture) and :!d#
All pri$ate lands de$oted to or suitable for agriculture regardless of the agricultural products raised or that can be
raised thereon. :A comprehensi$e in$entory system in consonance with the national land use plan shall be instituted
by the Aepartment of Agrarian Reform !AAR#' in accordance with the Local Bo$ernment Code' for the purpose of
properly identifying and classifying farmlands within one !"# year from effecti$ity of this Act' without pre1udice to
the implementation of the land ac(uisition and distribution.:
S5CTI84 -. There shall be incorporated after Section / of Republic Act 4o. //.0' as amended' new sections to
read as follows 5;TISC :S5C. /-A. 5+ception to Retention Limits. L &ro$incial' city and municipal go$ernment
units ac(uiring pri$ate agricultural lands by e+propriation or other modes of ac(uisition to be used for actual' direct
and e+clusi$e public purposes' such as roads and bridges' public markets' school sites' resettlement sites' local
go$ernment facilities' public parks and barangay pla%as or s(uares' consistent with the appro$ed local
comprehensi$e land use plan' shall not be sub1ect to the fi$e !.#-hectare retention limit under this Section and
Sections 0@ and 0,!a# of Republic Act 4o. //.0' as amended &ro$ided' That lands sub1ect to CAR& shall first
undergo the land ac(uisition and distribution process of the program &ro$ided' further' That when these lands ha$e
been sub1ected to e+propriation' the agrarian reform beneficiaries therein shall be paid 1ust compensation.: :S5C. /-
=. Re$iew of Limits of Land Si%e. L <ithin si+ !/# months from the effecti$ity of this Act' the AAR shall submit a
comprehensi$e study on the land si%e appropriate for each type of crop to Congress for a possible re$iew of limits of
land si%es pro$ided in this Act.:
S5CTI84 .. Section 0 of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows :S5C.
0. &riorities. L The AAR' in coordination with the &residential Agrarian Reform Council !&ARC# shall plan and
program the final ac(uisition and distribution of all remaining unac(uired and undistributed agricultural lands from
the effecti$ity of this Act until Eune ,@' *@"-. Lands shall be ac(uired and distributed as follows
:&hase 8ne Auring the fi$e !.#-year e+tension period hereafter all remaining lands abo$e fifty !.@# hectares shall be
co$ered for purposes of agrarian reform upon the effecti$ity of this Act. All pri$ate agricultural lands of landowners
with aggregate landholdings in e+cess of fifty !.@# hectares which ha$e already been sub1ected to a notice of
co$erage issued on or before Aecember "@' *@@2) rice and corn lands under &residential Aecree 4o. *0) all idle or
abandoned lands) all pri$ate lands $oluntarily offered by the owners for agrarian reform &ro$ided' That with respect
to $oluntary land transfer' only those submitted by Eune ,@' *@@3 shall be allowed &ro$ided' further' That after Eune
,@' *@@3' the modes of ac(uisition shall be limited to $oluntary offer to sell and compulsory ac(uisition &ro$ided'
furthermore' That all pre$iously ac(uired lands wherein $aluation is sub1ect to challenge by landowners shall be
completed and finally resol$ed pursuant to Section "0 of Republic Act 4o. //.0' as amended &ro$ided' finally' as
mandated by the Constitution' Republic Act 4o. //.0' as amended' and Republic Act 4o. ,2--' as amended' only
farmers !tenants or lessees# and regular farmworkers actually tilling the lands' as certified under oath by the
=arangay Agrarian Reform Council !=ARC# and attested under oath by the landowners' are the (ualified
beneficiaries. The intended beneficiary shall state under oath before the 1udge of the city or municipal court that
he7she is willing to work on the land to make it producti$e and to assume the obligation of paying the amorti%ation
for the compensation of the land and the land ta+es thereon) all lands foreclosed by go$ernment financial
institutions) all lands ac(uired by the &residential Commission on Bood Bo$ernment !&CBB#) and all other lands
97
owned by the go$ernment de$oted to or suitable for agriculture' which shall be ac(uired and distributed immediately
upon the effecti$ity of this Act' with the implementation to be completed by Eune ,@' *@"*)
:&hase Two !a# Lands twenty-four !*-# hectares up to fifty !.@# hectares shall likewise be co$ered for purposes of
agrarian reform upon the effecti$ity of this Act. All alienable and disposable public agricultural lands) all arable
public agricultural lands under agro-forest' pasture and agricultural leases already culti$ated and planted to crops in
accordance with Section /' Article CIII of the Constitution) all public agricultural lands which are to be opened for
new de$elopment and resettlement) and all pri$ate agricultural lands of landowners with aggregate landholdings
abo$e twenty-four !*-# hectares up to fifty !.@# hectares which ha$e already been sub1ected to a notice of co$erage
issued on or before Aecember "@' *@@2' to implement principally the rights of farmers and regular farmworkers'
who are landless' to own directly or collecti$ely the lands they till' which shall be distributed immediately upon the
effecti$ity of this Act' with the implementation to be completed by Eune ,@' *@"*) and :!b# All remaining pri$ate
agricultural lands of landowners with aggregate landholdings in e+cess of twenty-four !*-# hectares' regardless as to
whether these ha$e been sub1ected to notices of co$erage or not' with the implementation to begin on Euly "' *@"*
and to be completed by Eune ,@' *@",)
:&hase Three All other pri$ate agricultural lands commencing with large landholdings and proceeding to medium
and small landholdings under the following schedule :!a# Lands of landowners with aggregate landholdings abo$e
ten !"@# hectares up to twenty-four !*-# hectares' insofar as the e+cess hectarage abo$e ten !"@# hectares is
concerned' to begin on Euly "' *@"* and to be completed by Eune ,@' *@",) and :!b# Lands of landowners with
aggregate landholdings from the retention limit up to ten !"@# hectares' to begin on Euly "' *@", and to be completed
by Eune ,@' *@"-) to implement principally the right of farmers and regular farmworkers who are landless' to own
directly or collecti$ely the lands they till.
:The schedule of ac(uisition and redistribution of all agricultural lands co$ered by this program shall be made in
accordance with the abo$e order of priority' which shall be pro$ided in the implementing rules to be prepared by the
&ARC' taking into consideration the following the landholdings wherein the farmers are organi%ed and understand
the meaning and obligations of farmland ownership) the distribution of lands to the tillers at the earliest practicable
time) the enhancement of agricultural producti$ity) and the a$ailability of funds and resources to implement and
support the program &ro$ided' That the &ARC shall design and conduct seminars' symposia' information
campaigns' and other similar programs for farmers who are not organi%ed or not co$ered by any landholdings.
Completion by these farmers of the aforementioned seminars' symposia' and other similar programs shall be
encouraged in the implementation of this Act particularly the pro$isions of this Section. :Land ac(uisition and
distribution shall be completed by Eune ,@' *@"- on a pro$ince-by-pro$ince basis.
In any case' the &ARC or the &ARC 5+ecuti$e Committee !&ARC 5CC89#' upon recommendation by the
&ro$incial Agrarian Reform Coordinating Committee !&ARCC89#' may declare certain pro$inces as priority land
reform areas' in which case the ac(uisition and distribution of pri$ate agricultural lands therein under ad$anced
phases may be implemented ahead of the abo$e schedules on the condition that prior phases in these pro$inces ha$e
been completed &ro$ided' That notwithstanding the abo$e schedules' phase three !b# shall not be implemented in a
particular pro$ince until at least ninety percent !3@K# of the pro$incial balance of that particular pro$ince as of
Eanuary "' *@@3 under &hase 8ne' &hase Two !a#' &hase Two !b#' and &hase Three !a#' e+cluding lands under the
1urisdiction of the Aepartment of 5n$ironment and 4atural Resources !A54R#' ha$e been successfully completed.
:The &ARC shall establish guidelines to implement the abo$e priorities and distribution scheme' including the
determination of who are (ualified beneficiaries &ro$ided' That an owner-tiller may be a beneficiary of the land
he7she does not own but is actually culti$ating to the e+tent of the difference between the area of the land he7she
owns and the award ceiling of three !,# hectares &ro$ided' further' That collecti$e ownership by the farmer
beneficiaries shall be sub1ect to Section *. of Republic Act 4o. //.0' as amended &ro$ided' furthermore' That rural
women shall be gi$en the opportunity to participate in the de$elopment planning and implementation of this Act
&ro$ided' finally' That in no case should the agrarian reform beneficiaries> se+' economic' religious' social' cultural
and political attributes ad$ersely affect the distribution of lands.:
S5CTI84 /. The title of Section "/ of Republic Act 4o. //.0' as amended' is hereby further amended to read as
follows :S5C. "/. &rocedure for Ac(uisition and Aistribution of &ri$ate Lands.:
98
S5CTI84 0. Section "0 of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
CST5;I :S5C. "0. Aetermination of Eust Compensation. L In determining 1ust compensation' the cost of
ac(uisition of the land' the $alue of the standing crop' the current $alue of like properties' its nature' actual use and
income' the sworn $aluation by the owner' the ta+ declarations' the assessment made by go$ernment assessors' and
se$enty percent !0@K# of the %onal $aluation of the =ureau of Internal Re$enue !=IR#' translated into a basic
formula by the AAR shall be considered' sub1ect to the final decision of the proper court. The social and economic
benefits contributed by the farmers and the farmworkers and by the Bo$ernment to the property as well as the
nonpayment of ta+es or loans secured from any go$ernment financing institution on the said land shall be considered
as additional factors to determine its $aluation.:
S5CTI84 2. There shall be incorporated after Section ** of Republic Act 4o. //.0' as amended' a new section to
read as follows :S5C. **-A. 8rder of &riority. L A landholding of a landowner shall be distributed first to (ualified
beneficiaries under Section **' subparagraphs !a# and !b# of that same landholding up to a ma+imum of three !,#
hectares each. 8nly when these beneficiaries ha$e all recei$ed three !,# hectares each' shall the remaining portion of
the landholding' if any' be distributed to other beneficiaries under Section **' subparagraphs !c#' !d#' !e#' !f#' and
!g#.:
S5CTI84 3. Section *- of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows :S5C.
*-. Award to =eneficiaries.L The rights and responsibilities of the beneficiaries shall commence from their receipt
of a duly registered emancipation patent or certificate of land ownership award and their actual physical possession
of the awarded land. Such award shall be completed in not more than one hundred eighty !"2@# days from the date
of registration of the title in the name of the Republic of the &hilippines &ro$ided' 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 !"# year from its registration with the 8ffice of the Registry of Aeeds'
sub1ect to the conditions' limitations and (ualifications 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 pro$ided for by &residential Aecree 4o. ".*3' as amended by Republic Act 4o. /0,*. :It is the
ministerial duty of the Registry of Aeeds to register the title of the land in the name of the Republic of the
&hilippines' after the Land =ank of the &hilippines !L=&# has certified that the necessary deposit in the name of the
landowner constituting full payment in cash or in bond with due notice to the landowner and the registration of the
certificate of land ownership award issued to the beneficiaries' and to cancel pre$ious titles pertaining thereto.
:Identified and (ualified agrarian reform beneficiaries' based on Section ** of Republic Act 4o. //.0' as amended'
shall ha$e usufructuary rights o$er the awarded land as soon as the AAR takes possession of such land' and such
right shall not be diminished e$en pending the awarding of the emancipation patent or the certificate of land
ownership award. CTS;AI :All cases in$ol$ing the cancellation of registered emancipation patents' certificates of
land ownership award' and other titles issued under any agrarian reform program are within the e+clusi$e and
original 1urisdiction of the Secretary of the AAR.:
S5CTI84 "@. Section *. of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. *.. Award Ceilings for =eneficiaries. L =eneficiaries shall be awarded an area not e+ceeding three !,#
hectares' which may co$er a contiguous tract of land or se$eral parcels of land cumulated up to the prescribed award
limits. The determination of the si%e of the land for distribution shall consider crop type' soil type' weather patterns
and other pertinent $ariables or factors which are deemed critical for the success of the beneficiaries. :?or purposes
of this Act' a landless beneficiary is one who owns less than three !,# hectares of agricultural land. :<hene$er
appropriate' the AAR shall encourage the agrarian reform beneficiaries to form or 1oin farmers> cooperati$es for
purposes of affiliating with e+isting cooperati$e banks in their respecti$e pro$inces or localities' as well as forming
blocs of agrarian reform beneficiaries' corporations' and partnerships and 1oining other farmers> collecti$e
organi%ations' including irrigators> associations &ro$ided' That the agrarian reform beneficiaries shall be assured of
corresponding shares in the corporation' seats in the board of directors' and an e(uitable share in the profit. :In
general' the land awarded to a farmer-beneficiary should be in the form of an indi$idual title' co$ering one !"#
contiguous tract or se$eral parcels of land cumulated up to a ma+imum of three !,# hectares.
:The beneficiaries may opt for collecti$e ownership' such as coorkers or farmers cooperati$e or some other form of
collecti$e organi%ation and for the issuance of collecti$e ownership titles &ro$ided' That the total area that may be
99
awarded shall not e+ceed the total number of co-owners or members of the cooperati$e or collecti$e organi%ation
multiplied by the award limit abo$e prescribed' e+cept in meritorious cases as determined by the &ARC. :The
conditions for the issuance of collecti$e titles are as follows :!a# The current farm management system of the land
co$ered by CAR& will not be appropriate for indi$idual farming of farm parcels) :!b# The farm labor system is
speciali%ed' where the farmworkers are organi%ed by functions and not by specific parcels such as spraying'
weeding' packing and other similar functions) :!c# The potential beneficiaries are currently not farming indi$idual
parcels but collecti$ely 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 $iability of farm operations'
such as packing plants' storage areas' dikes' and other similar facilities that cannot be subdi$ided or assigned to
indi$idual farmers. :?or idle and abandoned lands or underde$eloped agricultural lands to be co$ered by CAR&'
collecti$e ownership shall be allowed only if the beneficiaries opt for it and there is a clear de$elopment plan that
would re(uire collecti$e farming or integrated farm operations e+hibiting the conditions described abo$e. 8therwise'
the land awarded to a farmerbeneficiary should be in the form of an indi$idual title' co$ering one !"# contiguous
tract or se$eral parcels of land cumulated up to a ma+imum of three !,# hectares.
:In case of collecti$e ownership' title to the property shall be issued in the name of the co-owners or the cooperati$e
or collecti$e organi%ation as the case may be. If the certificates of land ownership award are gi$en to cooperati$es
then the names of the beneficiaries must also be listed in the same certificate of land ownership award. :<ith regard
to e+isting collecti$e certificates of land ownership award' the AAR should immediately undertake the parceli%ation
of said certificates of land ownership award' particularly those that do not e+hibit the conditions for collecti$e
ownership outlined abo$e. The AAR shall conduct a re$iew and redocumentation of all the collecti$e certificates of
land ownership award. The AAR shall prepare a prioriti%ed list of certificates of land ownership award to be
parceli%ed. The parceli%ation shall commence immediately upon appro$al of this Act and shall not e+ceed a period
of three !,# years. 8nly those e+isting certificates of land ownership award that are collecti$ely farmed or are
operated in an integrated manner shall remain as collecti$e.:
S5CTI84 "". Section */ of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. */. &ayment by =eneficiaries. L Lands awarded pursuant to this Act shall be paid for by the beneficiaries to
the L=& in thirty !,@# annual amorti%ations at si+ percent !/K# interest per annum. The annual amorti%ation shall
start one !"# year from the date of the certificate of land ownership award registration. ;owe$er' if the occupancy
took place after the certificate of land ownership award registration' the amorti%ation shall start one !"# year from
actual occupancy. The payments for the first three !,# years after the award shall be at reduced amounts as
established by the &ARC &ro$ided' That the first fi$e !.# annual payments may not be more than fi$e percent !.K#
of the $alue of the annual gross production as established by the AAR. Should the scheduled annual payments after
the fifth !.th# year e+ceed ten percent !"@K# of the annual gross production and the failure to produce accordingly is
not due to the beneficiary>s fault' the L=& shall reduce the interest rate and7or reduce the principal obligation to
make the repayment affordable. IAcA;T :The L=& shall ha$e a lien by way of mortgage on the land awarded to the
beneficiary) and this mortgage may be foreclosed by the L=& for nonpayment of an aggregate of three !,# annual
amorti%ations. The L=& shall ad$ise the AAR of such proceedings and the latter shall subse(uently award the
forfeited landholding to other (ualified beneficiaries. A beneficiary whose land' as pro$ided herein' has been
foreclosed shall thereafter be permanently dis(ualified from becoming a beneficiary under this Act.:
S5CTI84 "*. Section *0 of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. *0. Transferability of Awarded Lands. L Lands ac(uired by beneficiaries under this Act or other agrarian
reform laws shall not be sold' transferred or con$eyed e+cept through hereditary succession' or to the go$ernment'
or to the L=&' or to other (ualified beneficiaries through the AAR for a period of ten !"@# years &ro$ided' howe$er'
That the children or the spouse of the transferor shall ha$e a right to repurchase the land from the go$ernment or
L=& within a period of two !*# years. Aue notice of the a$ailability of the land shall be gi$en by the L=& to the
=ARC of the barangay where the land is situated. The &ARCC89' as herein pro$ided' shall' in turn' be gi$en due
notice thereof by the =ARC. :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 subse(uent 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 con$eyed' with prior appro$al of the AAR' to any heir of the
beneficiary or to any other beneficiary who' as a condition for such transfer or con$eyance' shall culti$ate the land
himself7herself. ?ailing compliance herewith' the land shall be transferred to the L=& which shall gi$e due notice of
100
the a$ailability of the land in the manner specified in the immediately preceding paragraph. :In the e$ent of such
transfer to the L=&' the latter shall compensate the beneficiary in one lump sum for the amounts the latter has
already paid' together with the $alue of impro$ements he7she has made on the land.:
S5CTI84 ",. Section ,/ of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. ,/. ?unding for Support Ser$ices. L In order to co$er the e+penses and cost of support ser$ices' at least forty
percent !-@K# of all appropriations for agrarian reform during the fi$e !.#-year e+tension period shall be
immediately set aside and made a$ailable for this purpose &ro$ided' That the AAR shall pursue integrated land
ac(uisition and distribution and support ser$ices strategy re(uiring a plan to be de$eloped parallel to the land
ac(uisition and distribution process. The planning and implementation for land ac(uisition and distribution shall be
hand-in-hand with support ser$ices deli$ery &ro$ided' further' That for the ne+t fi$e !.# years' as far as practicable'
a minimum of two !*# Agrarian Reform Communities !ARCs# shall be established by the AAR' in coordination with
the local go$ernment units' non-go$ernmental organi%ations' community-based cooperati$es and people>s
organi%ations in each legislati$e district with a predominant agricultural population &ro$ided' furthermore' That the
areas in which the ARCs are to be established shall ha$e been substantially co$ered under the pro$isions of this Act
and other agrarian or land reform laws &ro$ided' finally' That a complementary support ser$ices deli$ery strategy
for e+isting agrarian reform beneficiaries that are not in barangays within the ARCs shall be adopted by the AAR.
:?or this purpose' an Agrarian Reform Community is composed and managed by agrarian reform beneficiaries who
shall be willing to be organi%ed and to undertake the integrated de$elopment of an area and7or their
organi%ations7cooperati$es. In each community' the AAR' together with the agencies and organi%ations
abo$ementioned' shall identify the farmers> association' cooperati$e or their respecti$e federations appro$ed by the
farmers-beneficiaries that shall take the lead in the agricultural de$elopment of the area. In addition' the AAR' in
close coordination with the congressional o$ersight committee created herein' with due notice to the concerned
representati$e of the legislati$e district prior to implementation shall be authori%ed to package proposals and recei$e
grants' aids and other forms of financial assistance from any source.:
S5CTI84 "-. Section ,0 of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. ,0. Support Ser$ices for the Agrarian Reform =eneficiaries. L The State shall adopt the integrated policy of
support ser$ices deli$ery to agrarian reform beneficiaries. To this end' the AAR' the Aepartment of ?inance' and the
=angko Sentral ng &ilipinas !=S&# shall institute reforms to liberali%e access to credit by agrarian reform
beneficiaries. The &ARC shall ensure that support ser$ices for agrarian reform beneficiaries are pro$ided' such as
:!a# Land sur$eys and titling) :!b# Sociali%ed terms on agricultural credit facilities) :Thirty percent !,@K# of all
appropriations for support ser$ices referred to in Section ,/ of Republic Act 4o. //.0' as amended' shall be
immediately set aside and made a$ailable for agricultural credit facilities &ro$ided' That one-third !"7,# of this
segregated appropriation shall be specifically allocated for subsidies to support the initial capitali%ation for
agricultural production to new agrarian reform beneficiaries upon the awarding of the emancipation patent or the
certificate of land ownership award and the remaining two-thirds !*7,# shall be allocated to pro$ide access to
sociali%ed credit to e+isting agrarian reform beneficiaries' including the leaseholders &ro$ided' further' the L=& and
other concerned go$ernment financial institutions' accredited sa$ings and credit cooperati$es' financial ser$ice
cooperati$es and accredited cooperati$e banks shall pro$ide the deli$ery system for disbursement of the abo$e
financial assistance to indi$idual agrarian reform beneficiaries' holders of collecti$e titles and cooperati$es. ;I5AcC
:?or this purpose' all financing institutions may accept as collateral for loans the purchase orders' marketing
agreements or e+pected har$ests &ro$ided' That loans obtained shall be used in the impro$ement or de$elopment of
the farmholding of the agrarian reform beneficiary or the establishment of facilities which shall enhance production
or marketing of agricultural products or increase farm income therefrom &ro$ided' further' That of the remaining
se$enty percent !0@K# for the support ser$ices' fifteen percent !".K# shall be earmarked for farm inputs as
re(uested by the duly accredited agrarian reform beneficiaries> organi%ations' such as' but not limited to !"# seeds'
seedlings and7or planting materials) !*# organic fertili%ers) !,# pesticides) !-# herbicides) and !.# farm animals'
implements7machineries) and fi$e percent !.K# for seminars' trainings and the like to help empower agrarian reform
beneficiaries. :!c# 5+tension ser$ices by way of planting' cropping' production and post-har$est technology transfer'
as well as marketing and management assistance and support to cooperati$es and farmers> organi%ations) :!d#
Infrastructure such as' but not limited to' access trails' minidams' public utilities' marketing and storage facilities)
:!e# Research' production and use of organic fertili%ers and other local substances necessary in farming and
culti$ation) and :!f# Airect and acti$e AAR assistance in the education and organi%ation of actual and potential
agrarian reform beneficiaries' at the barangay' municipal' city' pro$incial' and national le$els' towards helping them
101
understand their rights and responsibilities as owner-culti$ators de$eloping farm-related trust relationships among
themsel$es and their neighbors' and increasing farm production and profitability with the ultimate end of
empowering them to chart their own destiny. The representati$es of the agrarian reform beneficiaries to the &ARC
shall be chosen from the nominees of the duly accredited agrarian reform beneficiaries> organi%ations' or in its
absence' from organi%ations of actual and potential agrarian reform beneficiaries as forwarded to and processed by
the &ARC 5CC89. AA;5aT :The &ARC shall formulate policies to ensure that support ser$ices for agrarian
reform beneficiaries shall be pro$ided at all stages of the program implementation with the concurrence of the
concerned agrarian reform beneficiaries. :The &ARC shall likewise adopt' implement' and monitor policies and
programs to ensure the fundamental e(uality 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 =agong Jilusang Jabuhayan sa Jaunlaran !=JJJ# Secretariat shall be transferred and
attached to the L=&' for its super$ision including all its applicable and e+isting funds' personnel' properties'
e(uipment and records. :9isuse or di$ersion of the financial and support ser$ices herein pro$ided shall result in
sanctions against the beneficiary guilty thereof' including the forfeiture of the land transferred to him7her or lesser
sanctions as may be pro$ided by the &ARC' without pre1udice to criminal prosecution.:
S5CTI84 ".. There shall be incorporated after Section ,0 of Republic Act 4o. //.0' as amended' a new section to
read as follows :S5C. ,0-A. 5(ual Support Ser$ices for Rural <omen. L Support ser$ices shall be e+tended
e(ually to women and men agrarian reform beneficiaries.
:The &ARC shall ensure that these support ser$ices' as pro$ided for in this Act' integrate the specific needs and well-
being of women farmerbeneficiaries taking into account the specific re(uirements of female family members of
farmer-beneficiaries. :The &ARC shall also ensure that rural women will be able to participate in all community
acti$ities. To this effect' rural women are entitled to self-organi%ation in order to obtain e(ual access to economic
opportunities and to ha$e access to agricultural credit and loans' marketing facilities and technology' and other
support ser$ices' and e(ual treatment in land reform and resettlement schemes. :The AAR shall establish and
maintain a women>s desk' which will be primarily responsible for formulating and implementing programs and
acti$ities related to the protection and promotion of women>s rights' as well as pro$iding an a$enue where women
can register their complaints and grie$ances principally related to their rural acti$ities.:
S5CTI84 "/. Section ,2 of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. ,2. Support Ser$ices for Landowners. L The &ARC' with the assistance of such other go$ernment agencies
and instrumentalities as it may direct' shall pro$ide landowners affected by the CAR& and prior agrarian reform
programs with the following ser$ices :!a# In$estment information' financial and counseling assistance' particularly
in$estment information on go$ernment-owned and7or -controlled corporations and disposable assets of the
go$ernment in pursuit of national industriali%ation and economic independence :!b# ?acilities' programs and
schemes for the con$ersion or e+change of bonds issued for payment of the lands ac(uired with stocks and bonds
issued by the 4ational Bo$ernment' the =S& and other go$ernment institutions and instrumentalities) aSIACT :!c#
9arketing of agrarian reform bonds' as well as promoting the marketability of said bonds in traditional and non-
traditional financial markets and stock e+changes) and7or :!d# 8ther ser$ices designed to utili%e producti$ely the
proceeds of the sale of such lands for rural industriali%ation. :A landowner who in$ests in rural-based industries
shall be entitled to the incenti$es granted to a registered enterprise engaged in a pioneer or preferred area of
in$estment as pro$ided for in the 8mnibus In$estment Code of "320' or to such other incenti$es as the &ARC' the
L=&' or other go$ernment financial institutions shall pro$ide. :The L=& shall redeem a landowner>s agrarian reform
bonds at face $alue as an incenti$e &ro$ided' That at least fifty percent !.@K# of the proceeds thereof shall be
in$ested in a =oard of In$estments !=8I#-registered company or in any agri-business or agro-industrial enterprise in
the region where the CAR&-co$ered landholding is located. An additional incenti$e of two percent !*K# in cash
shall be paid to a landowner who maintains his7her enterprise as a going concern for fi$e !.# years or keeps his7her
in$estments in a =8I-registered firm for the same period &ro$ided' further' That the rights of the agrarian reform
beneficiaries are not' in any way' pre1udiced or impaired thereby. :The AAR' the L=& and the Aepartment of Trade
and Industry shall 1ointly formulate the program to carry out these pro$isions under the super$ision of the &ARC
&ro$ided' That in no case shall the landowners> se+' economic' religious' social' cultural and political attributes
e+clude them from accessing these support ser$ices.:
102
S5CTI84 "0. Section -" of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. -". The &residential Agrarian Reform Council. L The &residential Agrarian Reform Council !&ARC# shall be
composed of the &resident of the &hilippines as Chairperson' the Secretary of Agrarian Reform as 6ice-Chairperson
and the following as members Secretaries of the Aepartments of Agriculture) 5n$ironment and 4atural Resources)
=udget and 9anagement) Interior and Local Bo$ernment) &ublic <orks and ;ighways) Trade and Industry)
?inance) and Labor and 5mployment) Airector-Beneral of the 4ational 5conomic and Ae$elopment Authority)
&resident' Land =ank of the &hilippines) Administrator' 4ational Irrigation Administration) Administrator' Land
Registration Authority) and si+ !/# representati$es of affected landowners to represent Lu%on' 6isayas and
9indanao) si+ !/# representati$es of agrarian reform beneficiaries' two !*# each from Lu%on' 6isayas and 9indanao
&ro$ided' That at least one !"# of them shall be from the indigenous peoples &ro$ided' further' That at least one !"#
of them shall come from a duly recogni%ed national organi%ation of rural women or a national organi%ation of
agrarian reform beneficiaries with a substantial number of women members &ro$ided' finally' That at least twenty
percent !*@K# of the members of the &ARC shall be women but in no case shall they be less than two !*#.:
S5CTI84 "2. Section .@ of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. .@. Guasi-Eudicial &owers of the AAR. L The AAR is hereby $ested with primary 1urisdiction to determine
and ad1udicate agrarian reform matters and shall ha$e e+clusi$e original 1urisdiction o$er all matters in$ol$ing the
implementation of agrarian reform' e+cept those falling under the e+clusi$e 1urisdiction of the Aepartment of
Agriculture !AA# and the A54R. :It shall not be bound by technical rules of procedure and e$idence but shall
proceed to hear and decide all cases' disputes or contro$ersies in a most e+peditious manner' employing all
reasonable means to ascertain the facts of e$ery case in accordance with 1ustice and e(uity and the merits of the
case. Toward this end' it shall adopt a uniform rule of procedure to achie$e a 1ust' e+peditious and ine+pensi$e
determination of e$ery action or proceeding before it. :It shall ha$e the power to summon witnesses' administer
oaths' take testimony' re(uire 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
deputi%ed officers. It shall likewise ha$e the power to punish direct and indirect contempts in the same manner and
sub1ect to the same penalties as pro$ided in the Rules of Court. :Responsible farmer leaders shall be allowed to
represent themsel$es' their fellow farmers' or their organi%ations in any proceedings before the AAR &ro$ided'
howe$er' That when there are two or more representati$es for any indi$idual or group' the representati$es should
choose only one among themsel$es to represent such party or group before any AAR proceedings. :4otwithstanding
an appeal to the Court of Appeals' the decision of the AAR shall be immediately e+ecutory e+cept a decision or a
portion thereof in$ol$ing solely the issue of 1ust compensation.:
S5CTI84 "3. Section .@ of Republic Act 4o. //.0' as amended' is hereby further amended by adding Section .@-A
to read as follows :S5C. .@-A. 5+clusi$e Eurisdiction on Agrarian Aispute. L 4o court or prosecutor>s office shall
take cogni%ance of cases pertaining to the implementation of the CAR& e+cept those pro$ided under Section .0 of
Republic Act 4o. //.0' as amended. If there is an allegation from any of the parties that the case is agrarian in
nature and one of the parties is a farmer' farmworker' or tenant' the case shall be automatically referred by the 1udge
or the prosecutor to the AAR which shall determine and certify within fifteen !".# days from referral whether an
agrarian dispute e+ists &ro$ided' That from the determination of the AAR' an aggrie$ed party shall ha$e 1udicial
recourse. In cases referred by the municipal trial court and the prosecutor>s office' the appeal shall be with the proper
regional trial court' and in cases referred by the regional trial court' the appeal shall be to the Court of Appeals. :In
cases where regular courts or (uasi-1udicial bodies ha$e competent 1urisdiction' agrarian reform beneficiaries or
identified beneficiaries and7or their associations shall ha$e legal standing and interest to inter$ene concerning their
indi$idual or collecti$e rights and7or interests under the CAR&. :The fact of non-registration of such associations
with the Securities and 5+change Commission' or Cooperati$e Ae$elopment Authority' or any concerned
go$ernment agency shall not be used against them to deny the e+istence of their legal standing and interest in a case
filed before such courts and (uasi-1udicial bodies.:
S5CTI84 *@. Section .. of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
5CaA;S :S5C. ... 4o Restraining 8rder or &reliminary In1unction. L 5+cept for the Supreme Court' no court in
the &hilippines shall ha$e 1urisdiction to issue any restraining order or writ of preliminary in1unction against the
&ARC' the AAR' or any of its duly authori%ed or designated agencies in any case' dispute or contro$ersy arising
from' necessary to' or in connection with the application' implementation' enforcement' or interpretation of this Act
and other pertinent laws on agrarian reform.:
103
S5CTI84 *". Section /, of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. /,. ?unding Source. L The amount needed to further implement the CAR& as pro$ided in this Act' until Eune
,@' *@"-' upon e+piration of funding under Republic Act 4o. 2.,* and other pertinent laws' shall be funded from
the Agrarian Reform ?und and other funding sources in the amount of at least 8ne hundred fifty billion pesos
!&".@'@@@'@@@'@@@.@@#. :Additional amounts are hereby authori%ed to be appropriated as and when needed to
augment the Agrarian Reform ?und in order to fully implement the pro$isions of this Act during the fi$e !.#-year
e+tension period. :Sources of funding or appropriations shall include the following :!a# &roceeds of the sales of the
&ri$ati%ation and 9anagement 8ffice !&98#) :!b# All receipts from assets reco$ered and from sales of ill-gotten
wealth reco$ered through the &CBB e+cluding the amount appropriated for compensation to $ictims of human
rights $iolations under the applicable law) ITCcAA :!c# &roceeds of the disposition and de$elopment of the
properties of the Bo$ernment in foreign countries' for the specific purposes of financing production credits'
infrastructure and other support ser$ices re(uired by this Act) :!d# All income and collections of whate$er form and
nature arising from the agrarian reform operations' pro1ects and programs of the AAR and other CAR&
implementing agencies) :!e# &ortion of amounts accruing to the &hilippines from all sources of official foreign aid
grants and concessional financing from all countries' to be used for the specific purposes of financing productions'
credits' infrastructures' and other support ser$ices re(uired by this Act) :!f# Iearly appropriations of no less than
?i$e billion pesos !&.'@@@'@@@'@@@.@@# from the Beneral Appropriations Act) :!g# Bratuitous financial assistance
from legitimate sources) and !h# 8ther go$ernment funds not otherwise appropriated. :All funds appropriated to
implement the pro$isions of this Act shall be considered continuing appropriations during the period of its
implementation &ro$ided' That if the need arises' specific amounts for bond redemptions' interest payments and
other e+isting obligations arising from the implementation of the program shall be included in the annual Beneral
Appropriations Act &ro$ided' further' That all 1ust compensation payments to landowners' including e+ecution of
1udgments therefor' shall only be sourced from the Agrarian Reform ?und &ro$ided' howe$er' That 1ust
compensation payments that cannot be co$ered within the appro$ed annual budget of the program shall be
chargeable against the debt ser$ice program of the national go$ernment' or any unprogrammed item in the Beneral
Appropriations Act &ro$ided' finally' That after the completion of the land ac(uisition and distribution component
of the CAR&' the yearly appropriation shall be allocated fully to support ser$ices' agrarian 1ustice deli$ery and
operational re(uirements of the AAR and the other CAR& implementing agencies.:
S5CTI84 **. Section /. of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. /.. Con$ersion of Lands. L After the lapse of fi$e !.# years from its award' when the land ceases to be
economically feasible and sound for agricultural purposes' or the locality has become urbani%ed and the land will
ha$e a greater economic $alue for residential' commercial or industrial purposes' the AAR' upon application of the
beneficiary or the landowner with respect only to his7her retained area which is tenanted' with due notice to the
affected parties' and sub1ect to e+isting laws' may authori%e the reclassification or con$ersion of the land and its
disposition &ro$ided' That if the applicant is a beneficiary under agrarian laws and the land sought to be con$erted
is the land awarded to him7her or any portion thereof' the applicant' after the con$ersion is granted' shall in$est at
least ten percent !"@K# of the proceeds coming from the con$ersion in go$ernment securities &ro$ided' further'
That the applicant upon con$ersion shall fully pay the price of the land &ro$ided' furthermore' That irrigated and
irrigable lands' shall not be sub1ect to con$ersion &ro$ided' finally' That the 4ational Irrigation Administration shall
submit a consolidated data on the location nationwide of all irrigable lands within one !"# year from the effecti$ity
of this Act. :?ailure to implement the con$ersion plan within fi$e !.# years from the appro$al of such con$ersion
plan or any $iolation of the conditions of the con$ersion order due to the fault of the applicant shall cause the land to
automatically be co$ered by CAR&.:
S5CTI84 *,. Section /2 of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. /2. Immunity of Bo$ernment Agencies from Dndue Interference. L In cases falling within their 1urisdiction'
no in1unction' 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 AAR' the AA' the A54R' and the
Aepartment of Eustice in their implementation of the &rogram.:
S5CTI84 *-. Section 0, of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
S5IAAC :S5C. 0,. &rohibited Acts and 8missions. L The following are prohibited :!a# The ownership or
possession' for the purpose of circum$enting the pro$isions of this Act' of agricultural lands in e+cess of the total
retention limits or award ceilings by any person' natural or 1uridical' e+cept those under collecti$e ownership by
104
farmer-beneficiaries) :!b# The forcible entry or illegal detainer by persons who are not (ualified beneficiaries under
this Act to a$ail themsel$es of the rights and benefits of the Agrarian Reform &rogram) :!c# Any con$ersion by any
landowner of his7her agricultural land into any non-agricultural use with intent to a$oid the application of this Act to
his7her landholdings and to dispossess his7her bonafide tenant farmers) :!d# The malicious and willful pre$ention or
obstruction by any person' association or entity of the implementation of the CAR&) :!e# The sale' transfer'
con$eyance or change of the nature of lands outside of urban centers and city limits either in whole or in part after
the effecti$ity of this Act' e+cept after final completion of the appropriate con$ersion under Section /. of Republic
Act 4o. //.0' as amended. The date of the registration of the deed of con$eyance in the Register of Aeeds with
respect to titled lands and the date of the issuance of the ta+ declaration to the transferee of the property with respect
to unregistered lands' as the case may be' shall be conclusi$e for the purpose of this Act) :!f# The sale' transfer or
con$eyance by a beneficiary of the right to use or any other usufructuary right o$er the land he7she ac(uired by
$irtue of being a beneficiary' in order to circum$ent the pro$isions of this Act) ac;5TI :!g# The un1ustified' willful'
and malicious act by a responsible officer or officers of the go$ernment through the following :!"# The denial of
notice and7or reply to landowners) :!*# The depri$ation of retention rights) :!,# The undue or inordinate delay in the
preparation of claim folders) or :!-# Any undue delay' refusal or failure in the payment of 1ust compensation) :!h#
The undue delay or un1ustified failure of the AAR' the L=&' the &ARC' the &ARCC89' and any concerned
go$ernment agency or any go$ernment official or employee to submit the re(uired report' data and7or other official
document in$ol$ing the implementation of the pro$isions of this Act' as re(uired by the parties or the go$ernment'
including the ;ouse of Representati$es and the Senate of the &hilippines as well as their respecti$e committees' and
the congressional o$ersight committee created herein) :!i# The undue delay in the compliance with the obligation to
certify or attest and7or falsification of the certification or attestation as re(uired under Section 0 of Republic Act 4o.
//.0' as amended) and :!1# Any other culpable neglect or willful $iolations of the pro$isions of this Act. TCa5Ic :In
the case of go$ernment officials and employees' a con$iction under this Act is without pre1udice to any ci$il case
and7or appropriate administrati$e proceedings under ci$il ser$ice law' rules and regulations. :Any person con$icted
under this Act shall not be entitled to any benefit pro$ided for in any agrarian reform law or program.:
S5CTI84 *.. Section 0- of Republic Act 4o. //.0' as amended' is hereby further amended to read as follows
:S5C. 0-. &enalties. L Any person who knowingly or willfully $iolates the pro$isions of this Act shall be punished
by imprisonment of not less than one !"# month to not more than three !,# years or a fine of not less than 8ne
thousand pesos !&"'@@@.@@# and not more than ?ifteen thousand pesos !&".'@@@.@@#' or both' at the discretion of the
court &ro$ided' That the following corresponding penalties shall be imposed for the specific $iolations hereunder
:!a# Imprisonment of three !,# years and one !"# day to si+ !/# years or a fine of not less than ?ifty thousand pesos
!&.@'@@@.@@# and not more than 8ne hundred fifty thousand pesos !&".@'@@@.@@#' or both' at the discretion of the
court upon any person who $iolates Section 0,' subparagraphs !a#' !b#' !f#' !g#' and !h# of Republic Act 4o. //.0' as
amended) and :!b# Imprisonment of si+ !/# years and one !"# day to twel$e !"*# years or a fine of not less than Two
hundred thousand pesos !&*@@'@@@.@@# and not more than 8ne million pesos !&"'@@@'@@@.@@#' or both' at the
discretion of the court upon any person who $iolates Section 0,' subparagraphs !c#' !d#' !e#' and !i# of Republic Act
4o. //.0' as amended. :If the offender is a corporation or association' the officer responsible therefor shall be
criminally liable.:
S5CTI84 */. Congressional 8$ersight Committee. L A Congressional 8$ersight Committee on Agrarian Reform
!C8CAR# is hereby created to o$ersee and monitor the implementation of this Act. It shall be composed of the
Chairpersons of the Committee on Agrarian Reform of both ;ouses of Congress' three !,# 9embers of the ;ouse of
Representati$es' and three !,# 9embers of the Senate of the &hilippines' to be designated respecti$ely by the
Speaker of the ;ouse of Representati$es and the &resident of the Senate of the &hilippines. The Chairpersons of the
Committees on Agrarian Reform of the ;ouse of Representati$es and of the Senate of the &hilippines shall be the
Chairpersons of the C8CAR. The 9embers shall recei$e no compensation) howe$er' tra$eling and other necessary
e+penses shall be allowed. In order to carry out the ob1ecti$es of this Act' the C8CAR shall be pro$ided with the
necessary appropriations for its operation. An initial amount of Twenty-fi$e million pesos !&*.'@@@'@@@.@@# is
hereby appropriated for the C8CAR for the first year of its operation and the same amount shall be appropriated
e$ery year thereafter. CAaAT; The term of the C8CAR shall end si+ !/# months after the e+piration of the
e+tended period of fi$e !.# years.
S5CTI84 *0. &owers and ?unctions of the C8CAR. L The C8CAR shall ha$e the following powers and
functions !a# &rescribe and adopt guidelines which shall go$ern its work) !b# ;old hearings and consultations'
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recei$e testimonies and reports pertinent to its specified concerns) !c# Secure from any department' bureau' office or
instrumentality of the go$ernment such assistance as may be needed' including technical information' preparation
and production of reports and submission of recommendations or plans as it may re(uire' particularly a yearly report
of the record or performance of each agrarian reform beneficiary as pro$ided under Section ** of Republic Act 4o.
//.0' as amended) !d# Secure from the AAR or the L=& information on the amount of 1ust compensation determined
to be paid or which has been paid to any landowner) !e# Secure from the AAR or the L=& (uarterly reports on the
disbursement of funds for the agrarian reform program) !f# 8$ersee and monitor' in such a manner as it may deem
necessary' the actual implementation of the program and pro1ects by the AAR) !g# Summon by subpoena any public
or pri$ate citi%en to testify before it' or re(uire by subpoena duces tecum to produce before it such records' reports'
or other documents as may be necessary in the performance of its functions) a5IAAT !h# 5ngage the ser$ices of
resource persons from the public and pri$ate sectors as well as ci$il society including the $arious agrarian reform
groups or organi%ations in the different regions of the country as may be needed) !i# Appro$e the budget for the work
of the Committee and all disbursements therefrom' including compensation of all personnel) !1# 8rgani%e its staff
and hire and appoint such employees and personnel whether temporary' contractual or on consultancy' sub1ect to
applicable rules) and !k# 5+ercise all the powers necessary and incidental to attain the purposes for which it is
created.
S5CTI84 *2. &eriodic Reports. L The C8CAR shall submit to the Speaker of the ;ouse of Representati$es and to
the &resident of the Senate of the &hilippines periodic reports on its findings and recommendations on actions to be
undertaken by both ;ouses of Congress' the AAR' and the &ARC.
S5CTI84 *3. Access to Information. L 4otwithstanding the pro$isions of Republic Act 4o. "-@. and other
pertinent laws' information on the amount of 1ust compensation paid to any landowner under Republic Act 4o.
//.0' as amended' and other agrarian reform laws shall be deemed public information.
S5CTI84 ,@. Resolution of Cases. L Any case and7or proceeding in$ol$ing the implementation of the pro$isions
of Republic Act 4o. //.0' as amended' which may remain pending on Eune ,@' *@"- shall be allowed to proceed to
its finality and be e+ecuted e$en beyond such date.
S5CTI84 ,". Implementing Rules and Regulations. L The &ARC and the AAR shall pro$ide the necessary
implementing rules and regulations within thirty !,@# days upon the appro$al of this Act. Such rules and regulations
shall take effect on Euly "' *@@3 and it shall be published in at least two !*# newspapers of general circulation.
S5CTI84 ,*. Repealing Clause. L Section ., of Republic Act 4o. ,2--' otherwise known as the Agricultural
Land Reform Code' is hereby repealed and all other laws' decrees' e+ecuti$e orders' issuances' rules and regulations'
or parts thereof inconsistent with this Act are hereby likewise repealed or amended accordingly.
S5CTI84 ,,. Separability Clause. L If' for any reason' any section or pro$ision of this Act is declared
unconstitutional or in$alid' the other sections or pro$isions not affected thereby shall remain in full force and effect.
S5CTI84 ,-. 5ffecti$ity Clause. L This Act shall take effect on Euly "' *@@3 and it shall be published in at least
two !*# newspapers of general circulation.
Appro$ed August 0' *@@3 &ublished in the &hilippine Star on August *-' *@@3.
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