Executive Order No. 229 providing the Mechanism for the Implementation of the Comprehensive Agrarian Reform Programme

3422-0-36 OFFICIAL GAZETTE YOLo 83, xo, 30 "'---' MALACAFiAt-; PAL.\CE MANiLA EXECUTIVE ORDER No. 229 PROVIDING THE MECHANISl\IS FOR THE IMPLE.MENTATIO~ OF THE COMPREHENSIVE AGRARIAN ·RE FORM PROGRAM. 'VHEREAS. by virtue of Proclamation No. 131 dated July 22, 1987 the Comprehensive Agrarian Reform Program has been insti tuted; 'VHEREAS, there is a need to provide for the mechanisms to start the implementation of the program; WHEREAS, public hearings and consulta tions were held to determine appropriate mechanisms capable of being established; Now. THEREFORE, t, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order: CHAPIER I.-COVERAGE SECTION 1. Scope.-The Comprehensive Agrarian Reform Program (CARP) shall covers regardless of tenurial arrangement find cummodityproduced. all public arid pri vate agricultural.Iands. as provided in Proc lamation No. 131 dated July 22..·· 1987, including whenever applicable in accordance with law, other lands of the public domain ",{Iitable to agriculture. SEC. 2. Implementation.-Land acqui sition and distribution shall be implemented as provided in this Order as to all kinds of lands under the coverage of the program, subject to such priorities and reasonable retention limits as the Congress may under the Constitution prescribed, taking into ac count ecological, developmental, -or equity considerations, and subject to the payment of just compensation. SEC. 3. Exemptions.-Lands actually used and found to be necessary for national defense', school sites and campuses, religious purposes, penal colonies, and government research and quarantine centers, are exempt ed from the coverage of the program. SEC. 4. Compulsory Registratiott.-\Vith in one hundred eighty (180) days from the effectivity of this Order all natural and juridical persons, including government en tities, owning, leasing or managing agricul tural lands shall file a sworn statement in the proper Assessor's Office in the form to be prescrided by the Department of Agra rian Reform (DAR). This statement shall include among others, (a) the description and area of the property; (b) the esti mated average gross income from the pro perty; (c) the names of all tenants and regular farmworkers therein; (d) the crop (s) planted in the property and the area covered by each crop as of June 1, 1987; (e) the terms of mortgages, leases, and man :.gement contracts subsisting as of June 1, 1987; (f) the latest declared market value of the land as determined by the City/Pro vincial Assessor ; and (g) a sworn declara tion of the current fair market value, which the owner wishes to receive if the property should be acquired by the government for agrarian reform purposes. If the landowner fails to register within the prescribed period, the government shall base the valuation of his property for land owner compensation purposes on the City/ Provicial Assessor's value. Beginning with the quarter immediately following this re gistration, the real property tax payable shall be based on the abovementioned owner's declaration of current fair market value. CHAPTER I1.-PRIVATE LAND ACQUISI TION SEC. 5. Procedure of Acquisition.-Mter the land, landowners, and beneficiaries shall have been identified, the DAR shall publish its decision to acquire the land and notify the landowners thereof, together with the offer of the DAR to pay for the land as provided in Section 6 hereunder, JrLY 27, 1987 OFFICIAL GAZETTE 3422-0-37 Within fifteen (15) days from publica tion and notice, the landowner shall sig'nify to the DAR his acceptance or rejection of tho offer. If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LEP) shall pay the landowner the pur cha~e price of the land within fifteen (1!) d~~ after he surrenders the Certificate cf Title and other relevnnt documents required by the DAR and the LUP. Incase of rejection or if no reply is received, the DAR shall conduct adminis trative summary proceedings to determine the compensation for the land, requir-ing the landowner, the LBP, and other inte rested parties to submit within fifteen (15) days from the receipt of notice. evidence as to the compensation for the land. After the expiration of the above period. the matter is deemed submitted for decision. Within fifteen (15) davs from receipt of the decision, the LBP shall establish a trust fund for the landowner concerned in the amount decided and notify the landowner and the DAR of its establishment. Any party who disagrees with the deci sion may bring the matter to the proper court for determination of just compen sation. A Her the establishment of the trust fund or receipt by the DAR of tbe landowner's acceptance of the offer, the DAR shall take immediate possession of the land. Upon formal notification by the DAR, the Register of Deeds shall issue a Transfer Certificate of Title (TCT) in the name of the Re public of the Philippines as Trustee for and in behalf of qualified beneficiaries. There upon, the DAR shall proceed with the redis tributionof the land to the qualified beneficiaries. The rig-hts and responsibilities of owner ship by the beneficiaries commence at the time of their designation as awardees owners by the DAR. as evidenced by a Certificate of Landownership Award in thcir favor. SF-Co 6. Compcnsatio« to Lcndoumerss-« '~'!l~ L.DP shall compensate the landowner an arncuut to be established by the govern rmut, which shall be based ..on the owner's declaration cf current fair market value as provided in Section 4. hereof, but subject to certain controls to be defined and pro mu :~at~d by the Presidential Agrarian l~elorm Council (PARC) as provided in Section ]8 hereof. The compensation shall be paid in any of the following modes, at the option of the landowner: «. Bond payment over ten (10) years, with ten (10) percent of the value of the land payable immediately in cash and the balance in the fr.rm of LBP bonds bearing market rates of interest that are aligned v ith 9t-day treasury bills rates, net of applicable final withholding tax. One-tenth ni the face value of the bonds shall mature every year from the date of issuance until the tenth year; The LUP bonds issued hereunder shall be eligible at face value for the purchase of government assets to be privatized; b. Direct payment in cash or kind by the f.armer-beneficiaries with the terms to be mutuallv agreed upon by the beneficiaries and landowners and subject to the approval ot' the DAR; and c. Other modes of payment as may be prescribed or approved by the PARC. SESe 7. Assistance to Landoumers>« Landowners affected by this Order shall be assisted and provided by the LBP with the following services: a. Investment information and counselling assistanco ; b. Conversion and/or exchange of LBJ> bonds to/from government stocks and/or with government assets; and c. Marketing of LBP bonds. CHAPTER IlL-LAND TRANSFER, UTI LIZATION, AND SHARING SEC. 8. Voluntm·y Land Tramsier.:« Landowners whose lands are subject to re distribution under this Order have the o.p :1-122-0-38 OFFICIAL GAZETTE VOL. 83, No. 30 tion of entering into a voluntary agreement for direct transfer of their lands to appro j.riato beneficiaries, under terms and condi tions acceptable to both parties and subject to the approval of the DAn.. The general t-"uidelines for yoluntary land transfer are: fl. The beneficiaries are determined by the DAIr to be the same individuals who would be eligible to purchase the land in case the government under this Order HC c.uircd the land for resale; b, The area of land to be transferred is no less than the area which the government, under this Order, would otherwise acquire f 01' resale; f. The terms and conditions of the go vernmcnts standing- offer to purchase from the landowner iand standing offer to resell to the beneficiaries are fully known and understood by both parties; d. The voluntary transfer agreement shall include sanctions for non-compliance by either party and shall be binding and irre vocable for both parties, shall be duly re corded at and monitored by the DAR. SEC. 9. Foluntar!J Offer to Scll.-The government shall purchase all agricultural lands it deems productive and suitable to farmer cultivation voluntarily cfl'ered for d-ille to it at a valuation determined in ac cordance with Section 6. Such transactions shall be exempt from the payment of ca , .p.tal gains tax and other taxes and fees. ~EC. 10. Corporui : Lalldozcners.-Corpo rate landowners mar give their workers and other qualified beneficiaries the right to pur chase such proportion of the capital stock cf the ccrporation that the land assets bear in relation to the corporation's total assets, and grant additional compensation which rnay be used for this purposes. The approval by the PARC of a plan for such stock dis tribution. and its initial Implementation, shall be deemed compliance 'with the land distribution rcr!uiremcnts of the CAHP. ~FC. 11. Looses, J[all'lpr/;lnlf Contract». ."iol'lga[Jfs. and Claim.<;.-Leases and man agerncnt contracts on land covered by land distribution and registered with the Regis ter of Deeds prior to the approval of this "Drdcr .may icontinue -ifnder their original terms and conditions, but not beyond five (5) years from the effectivity of this Order; pre. ted that upon expiration, leases and management contracts may only re renewed subject to the agreement of the qualified bcncficiarics : and provided fur ther that upon the distribution or award of the land, where the existing lease ren tals are not acceptable to the qualified bcneficinries, such rentals shall be renego tiated with the assistance of the Barangay Agrarian Reform Council (BARe). If the parties fail to agree, the DAR shall deter mine the rental. Mortgages and other claims registered with the Register of Deeds will be assumed by the government up to the landowner's compensation value as provided for in Section G hereof. SEC. 12. POYi;ZClIt 'oj BCl1cjiciaries.-Land acquired and redistributed by the govern ment shall be paid for by the beneficiaries in thirty (30) equal annual payments at six (6) percent per annum interest, with the first payment due one year after resale, and a two (2) percent interest rebate for amortizations paid on time, provided. that in no case shall the annual amortizations exceed ten (10) percent of the land's annual value of gross production. Should the amortization exceed ten (10) percent, the LDP shall reduce the interest rate and/ or reduce the principal obligation to make the repayments affordable. Incentives shall be given for prepayments. The LEP shall have a lien by way of mortgage on the land acquired by the bene ficiary and this mortgage may be fore closed by the LBP when the outstanding principal balance unpaid and past due reaches the equivalent of three (3) annual arrr-rtizations. S;::c. 13. Credit Supporf.-Upon land transfer. each beneficiary who actuallv farms his land shall be eligible for a pro JULY 27, 1987 OFFICIAL GAZETTE -- . . -------- . duction loan to finance one crop cycle under terms and conditions to be determined by the LEP on a case to case basis, renewable upon repayment, SEC. 14. Collective or huliridual Otcner sT!.ip.-For lands with multiple benefi ciaries, ownership of whole parcels or estates may be transferred to the farmcr-benefi ciarios collectively or individually, at the option of the beneficiaries. prodded, that in collccti:..e ownership, each bcnc.lciarv shall have an undivided share of the land held in common equivalent to not more than the applicable retention limit.. The benefi ciaries rna, collectively decide on the con tinued operation of the parcel/estate as a whole or to subdivide the same into in dividual lets and determine the manner in which such subdivision is to be implemented. SEC .15. Distribution and Utilization 01 Public Land~.-All alienable and disposable lands of the public domain suitable fer agriculture and outside proclaimed settle ments shall be distributed by the Depart ment of Environment and Natural Resources (DENR) to qualified beneficiaries as certi fied to jointly by the DAR and the DEXn. SEC. 16. Production Shan·ng.-Individuals or entities owing and/or operating under lease agricultural lands with gross sales in excess of Five Million Pesos (P5 million) per annum are hereby mandated to execute a production sharing plan whereby at least two and one-half (2.5) percent of the gross sales from the production/cultivation of such lands are distributed as compensation b the fannworkers over and above the com pensation they currently rccei ve, provided that such individuals cr entities are not obligated to pay more than 100 percent of the regular and annual compensation of the Iarmworkers. CHAPTER IV.-IMPLEl\IEXTI~GAKD CO ORDINATING MECHANISMS St'C. 17. Quasi-Judicial Porcrs of ihr DAR.-The DAR is hereby vested with quasi-judicIal powers to determine and ad judicate asrrnrian reform matters, and chall have exclusive original jurisdiction over all matters involving implementation of agra rian reform, except those falling under the exclusive original jurlsdiction of the L~Nn. and the Department of Agriculture (DA). The DAn shall have powers to punish for contempt and to issue subpoena..subpoenn. duces tecum and writs to enforce its orders or decisions. The dcciaions of tl:e DAR may, in proper cases, be appealed to the Regional Trial Courts but shall be immediately executory notwithstanding such appeal, Sec. l8.-The Presidential Ar;1"m·ian Rc I01'nz Council (PARC).-To coordinate the implementation of the CARP and to ensure the timely and effective delivery of the necessary support services, there is hereby created the Presidential Agrarian Reform Council composed of the President as Chair man, and the Secretaries or Heads of the fol.owing agencies, as follows: Department of Agrarbr. P.:?r.orm-Viee Chairman Department of As::riculture -Viee Chairman Department of Environment and Xatu ral Resources -Vi~ Chairman Exccut i:..e Sc-retarv -Member Department of Budget and Man ~g'('m('nt -Member l)pp3rtment of Finance -Member Department of Justice -Member Department of Labor and Employ ment -Member Depa rtruent of Local Government -Member Department of Public Works and Ei/!hways -Member L.-epartment of Trade & Industry-Member D('l'artment of Tran91>ortation and Commllnications -Member ~ational Economic and Develop ment Authority -Member Land Bank of the Philippines -Member Presidential Commission on Good Go\":!rnment -Member 1'h0 President shall appoint representa t i vcs of agTfxinn reform beneficiaries and affected landowners as members Qf PAne. 3 ~:':-~-O-·lO OFFIC1AL G.\ZETTE YOLo sc, No. :;d . The DAn. shall provide the S('C:'~ Lari;tt for the PAn.C and the Secretary of Agrarian Reform Sh'111 be the Director-General there of. The PARC shall formulate and, or im plement the policies, rules and rcgulnt ions necessary to implement each component of the CARP, and may authorize any I)f its members to formulate rules anrl rC'r;u1;;t!"I1.~ concerning ~l:-:pects of agrar i.in reform fan ing within their area of responsibility, These policies, rules and regulations shall include til€' following: a. Recommended small farm economy areas, which shall be specific bv crop and based on through technical study and evaluation: b. Theschedule of acquisition and rcdis tzibution of specific agrarian reform areas, provided that such acquisition shall not be implemented until all the requirements are completed it-eluding the first payment to the landowners concerned. c, Control mechanisms fo' »valuating the owner's declaration of current fair market value as prodded in Section 4 hereof in order to o-tnblish the government's compensation ofT('r as provided in Section G hereof, taking into account current land transactir.ns in the locality, the landowner's annual income from his land. and other f'ac tors. PARe shall have an Executive Committee composed or the Secretary (If Aurarinn Re form as Chairman, and Secretaries or Hcads of the following agencies as members: Executive Secretary Department of Agriculture Department of Environment :111(1 Naturnl Resources Department of Finance Department nf Public V'-"rJ.:" and Hig-l~ ways Land Bank of the Philippines "-itl·i'1 ninety (SO) days from the eff'cc t ivity 01' this Order, the Executive Com mil+,:,:, o~ PAP..C shall complete a Program of implcmentnt ion incorporating the phy ~iCitl targ-ets, implementation schedule and <'~!r;,('~t requirements of ngrnrian reform. nnd sha11 sn bmit the same to the P ARC 1'01' approval. Such pro-rrarn of implemen bti(\~1 shall take into ;1.ccount, and be con :-:i:,t~!1t with, priorities and retention limits that Cong-ress may ill the meatirnc prescribe. and the following basic policies and guide lines set forth in the Constitution: o, The CATIP is founded on the right of farmers and regular f'armworkers. who are landless, to OW11 directly or collectively, the lands they till or, in the case of other f'armworkers, to receive a just share of the fruits thereof; " The ritrht of small landowners shall be respected; c. Voluntarv land-sharing shall be en couraged : d. Farmers, fnrmworkers, landowners, cooperatives and/or independent far mers' organizations have the right to participate in the planning organiza tion, and management of the CARP; c. In lands of the public domain, the CARP shall respect prior rights, home stead richts of small settlers, and the righte; of indigenous communities to their ancestral lands; f. Support to :-tg-riculture through appro priate technology and research, and adequate financial, production, market ing, and other support services must be provided : [t, Landowners shall be encouraged to invest the proceeds of the agrarian reform to promote industrialization, employment creation, and privatization of public sector enterprises; and F. At the (':'rliest possible time, idle or nbnndouc-l ~g'ricultnral lands as may 1-0 defined by law shall be expropriated for distribution to the beneficiaries of the agrarian reform program, JULY 27, J fJ87 OFFICIAL GAZETTE 3422-0~1 SEC. 19. Barangrr.y Agrarian Refo~'m :Zouncil (BARC) .-On matters related to agrarian reform, the DAR shall convene at the barangay level, a Barangay Agrarian Reform Council. The BARC shall be op erated on a self-help basis and will be composed of the following: a. Representative/a of farmer and farm worker beneficiaries; b. Representative/s of farmer and farm worker non-beneficiaries; c. Representative/s of agriculture coope ratives; d. Representative/s of other farmer or ganizations; e. Representative/s of the Barangay Council ; f. Representative/s of non-government or ganizations (NGOs); g. Representative/a of landowners; h. DA official assigned to the barangay : i, DENR official assigned to the area; i. DAR Agrarian Reform Technologist assigned to the area who shall act as the Secretary; and k, Land Bank of the Philippines repre sentative. The functions of the BARC shall be: a. To participate and give support to the implementation of programs on agra rian reform; b. To mediate, conciliate or arbitrate ag rarian conflicts and issues that are brought to it for resolution; and c. To perform such other functions that the PARC, its Executive Committee, or the DAR Secretary may delegate from time to time. CHAPTErt V.-FINANCING SEC. 20. Agrarian Reform Fund.-As provided in Proclamation No. 131 dated July 22, 1987, a special fund is created, krovvn as The Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS (P50 billion) to cover the estimated cost of the CARP from 1987 to 1992 which shall be sourced From the receipts of the sale of the assets of the Asset Privatization Trust (APT) and receipts of sale of ill-gotten wealth recovered through the Presidential Commission on Good Government and such other sources as government may deem ap propriate. The amount collected and ac cruing to this special fund shall be consider ed automatically appropriated for the pur pose authorized in this Order. SEC. 21. Supplemental Appropriations-:« The amount of TWO BILLION SEVEN HUNDRED :MILLION PESOS (P2.7 billion) is hereby appropriated to cover the supple mental requirements of the CARP for 1987, to be sourced from the receipts of the sale of ill-gotten wealth recovered through the Presidential Commission on Good Govern ment and the proceeds from the sale of assets by the APT. The amount collected from these sources shall accrue to The Ag rarian Reform Fund and shall likewise be considered automatically appropriated for the purpose authorized in this Order. CHAPTER VI.-SANCTIONS SEC. 22. Permanent DisquaUjication.-Per sons, associations, or entities who prema turely enter the land to avail themselves of the rights and benefits hereunder, shall be permanently disqualified from receiving benefits and shall forfeit their rights here under. SEC. 23. Contempt, Persons, associations, or entities who willfully prevent or obstruct the implementation of the CARP shall be liable for contempt. CHAPTER VII.-GENERAL PROVISIONS SEC. 24. Ancestral Lands.-'Within the framework of national unity and develop ment, the rights of indigenous cultural com munities to their ancestral lands are hereby protected to ensure their economic, social, and cultural well-being. SEC. 25. lmmw.nity of Government Agen cies from Undue lnte''ference.-No injunc 3·122-0-42 OFFICIAL GAZETTE VOL. 83, No. 3() tion, restraining order, proh ibition or man damus shall be issued by the 10\':01' courts against the DAR, the DA, the DE:'~R and the Department of Justice in their imple mentation of the CARP. SEC. 26. Aesietanee of other Grniernmcn: Entities.-The PARC in the ~ercise of its functions is hereby authorized to call upon the assistance and support of ether govern ment agencies, bureaus, and offices, including government-cwncd or controlled corpora tions. SEC. 27. AlJplira~io11!r r.f B.1'i.~U-j~(1 L ...gis lation.-Presidential Decree No. 27. as amended, shall continue to cpernte wit'i respect to rice and corn lands. covered there under. The provisions of Republic Act No. 3844 and other arrrarian laws net inconsis tent with this Order shall have suppletory effect. SEC. 28. Free Registration of Patents and T£tles.-AIl Registers of Deeds are hereby directed to register free from payment of all fees, patents, titles, and documents required ttl the implementation of the CARP. SEC. 29. S€para'!Jility Clause.-U, for any reason, any section or provision of this Order shall be held unconstitutional or in valid, no other section or provision hereof shall be affected thereby. SEC. 30. RC]iCali119 ClaU!~('.-All laws, is suances, decrees or any part cr parts thereof inconsistent with the provisions- of- this Or der are hereby repealed or amen.led accord ingly. SEC. 31. Effectivity Claw~e.-This Execu tive Order shall take effect fifteen (15) davs after publication in the Official Gazette or in a newspaper of general circulation in the Philippines. ApPROVEH. in the City of Manila, Philip pines, this 22~d day of July, 1987. (Sgd.) CORAZON C. AQUINO President of the Philippines Bv the President : (Sgd.) .JoKER P. ARROYO Executive' Secretary