The House Committee on Agrarian Reform on Wednesday approved a Marcos priority measure emancipating agrarian reform beneficiaries from the debt burden arising from the award of agricultural lands under the Comprehensive Agrarian Reform Program (CARP).
The committee, chaired by Ifugao Rep. Solomon R. Chungalao, approved the unnumbered substitute bill to 11 related house bills, which will condone some P58 billion in agrarian reform loans.
The consolidated bill will be known as the “New Agrarian Emancipation Act.”
Under the bill, the existing loan of Agrarian Reform Beneficiaries (ARBs) due to unpaid amortization or interest shall be condoned and written off.
All unpaid amortizations and interests, including penalties or surcharges, if any, due from loans secured under the CARP or from other agrarian reform programs or laws are hereby condoned by the government, relieving all ARBs from the payment thereof, thereby repealing Section 26 of Republic Act (RA) 6657, as amended, Section 6 of Executive Order (EO) 228, series of 1987, as well as the pertinent provisions of other agrarian reform laws, said the bill.
It added that the Department of Agrarian Reform (DAR) will issue, whenever necessary, a Certificate of Condonation which will be annotated on the Emancipation Patent (EP), Certificate of Land Ownership Award (CLOA), or on any other title based on the applicable agrarian reform law.
Also, it said that condonation will lift all mortgage liens in favor of the National Government, as represented by the Land Bank of the Philippines (LBP), attached to the land acquired.
The measure said that such condonation will be in accordance with the applicable banking laws and regulations of the Bangko Sentral ng Pilipinas.
The bill seeks to amend Section 27 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988.
The bill said lands acquired by beneficiaries under the proposal or other Agrarian Reform Laws will not be sold, transferred or conveyed except through hereditary succession, or to the government or to the LBP, or to other qualified beneficiaries through the DAR for a period of 10 years.
It added that the government will substitute the ARBS on their financial obligation to pay the value of the awarded land to the landowners acquired under the voluntary land transfer and direct payment schemes, thereby amending Section 20 of RA 6657, as amended.
Payment of the remaining balance of the compensation due the concerned landowners under the voluntary land transfer and direct payment schemes will be paid by the government from the Agrarian Reform Fund through the LBP.
The bill indicated that ARBs who are still to receive their awarded lands under the CARP or any other agrarian reform program or laws will do so without any obligation to pay any amortization. All private agricultural lands covered under the CARP or any other agrarian reform program or laws that have not been distributed at the time of the effectivity of this proposal, shall be distributed at no cost to the qualified beneficiaries.
Under the measure, ARBs who have completed payment of the amortization schedule and the payment of interest charges under Section 26 of RA 6657, as amended, Section 6 of EO 228 of 1987, and other agrarian reform laws will be given preference in the provision of support services and access to credit facilities.
It said ARBs who have paid any portion of the amortization schedule and interest charges under Section 26 of RA 6657, as amended, and other agrarian reform laws prior to the effectivity of this proposal will be entitled to an Estate Tax Amnesty until June 30, 2025.
Also, the agrarian reform lands of such beneficiaries may, as estates, enjoy the immunities and privileges of Estate Tax Amnesty and pay an estate amnesty tax at the rate of 6 percent based on the decedent’s total net estate at the time of death.
The authors of the bill include Chungalao, Ralph G. Recto, Maria Bernadette G. Escudero, Robert Raymund M. Estrella, Arnan C. Panaligan, Jaime R. Fresnedi, Wilbert T. Lee, Joey Sarte Salceda, Angelo Marcos Barba, Alfred C. Delos Santos, Arlene D. Brosas, France L. Castro, Raoul Danniel a. Manuel, and Kristine Singson-meehan.
The bill will be transmitted to the House Committee on Ways and Means for the deliberations of the tax provisions of the bill.
‘Biggest achievement’
Salceda called the measure “potentially PBBM’s biggest policy achievement in 2022 as it could change the game for our long-suffering and long-stagnating rural communities.”
He said the CARP needs a “major shakeup and this landmark measure might just be it.”
“CARP without adequate support services and with limited capital or entrepreneurship among farmer-beneficiaries is shown to have reduced agricultural productivity in CARP lands by as much as −34.1 percent compared to baseline. This has resulted in almost P418 billion in lost productivity for all CARP lands every year [for the 10.3 million hectares of CARP land].”
He added that condonation of ARB debts could result in an increase in productivity of between 23.8 percent as the market can now allocate the land more efficiently and 38.3 percent if productivity-enhancing interventions are increased.
Salceda, who objected to proposals to ban mortgaging of the emancipated lands, said that the proposal could unlock as much as P472 billion in credit and P629 billion in productivity gains in agriculture.
He said the gross value added in agriculture could also increase by as much as P174 billion “as lands would be available towards their best use.”
Salceda is proposing for a tax amnesty as an incentive for those who have paid part of their amortizations, until June 30, 2025. The House tax panel chair expects the measure to yield P6.1 billion in additional estate tax collections every year due to the proposal.
“I think this is a crucial provision because these lands tend to be idle or in disuse. They’re not earning much. So, the ARB decedents who will inherit these might not have the resources to pay the estate tax on these lands. That will prevent titling, credit access, and proper use.”