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CONGRESS OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES

SIXTEENTH CONGRESS.
First Regular Session

309

House Bill No. *

Introduced by Representatives
GLORIA MACAPAGAL ARROYO and DIOSDADO MACAPAGAL ARROYO

AN ACT AMENDING SECTIONS 27 AND 71 OF REPUBLIC ACT NO.
6657, OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM
LAW OF 1988 THEREBY LIFTING THE RESTRICTION ON THE RIGHT OF
FARMER-BENEFICIARIES TO MORTAGE ANDIOR ENCUMBER THE LANDS
AWARDED TO THEM UNDER THE COMPREHENSIVE AGRARIAN | REFORM
PROGRAM AND ALLOWING THE SUBMISSION OF THE CERTIFICATE OF LAND
OWNERSHIP AWARD AS SUFFICIENT COLLATERAL FOR LOANS ENTERED
INTO WITH BANKS AND/OR OTHER FINANCIAL INTERMEDIARIES

EXPLANATORY NOTE

Awarding farm workers title to the lands they till is a step towards
achieving genuine land reform. Nevertheless, the country's experience With the
implementation of the Comprehensive Agrarian Reform Law has shown that this
approach does not fully secure our farm workers’ livelihood and productivity
Indeed, many of them have found it difficult, if not, nearly impossible to maximize their
shares due to deficient funding and the unavailability of credit.

Our government sought to address this problem by making credit ‘more
accessible through microfinance and other similar schemes. It has been noted,
however, that credit accommodations extended under these programs are short-
term and limited, and thus, unable to sustain our farm workers’ pressing credit
requirements. Therefore, if we truly intend to assist our farm workers obtain
useful credit, we should undertake steps to strengthen their capability to avail
of long-term and commercial loans from banking and other financial institutions.

This proposal, though laudable in its objective, is not as simple since the
Comprehensive Agrarian Reform Law, bars farm workers from using the
lands awarded to them as collateral for any loan transaction. This prohibition
effectively impairs their right to avail of credit from different sources and
consequently limits their options,

Lifting these restrictions in the Comprehensive Agrarian Reform
Law would be a welcome reprieve to our farm workers. Not only will this enhance
their chances of gaining credit but it will also equip them with the necessary
tools to improve their living conditions. Because of these overriding benefits,
we ask our distinguished colleagues to work with us for the immediate passage
of this Bill

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GLORIA MACAPAGAL ARROYO DIOSDADO. Py


CONGRESS OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES

SIXTEENTH CONGRESS.
First Regular Session

House Bill No. __— 309

Introduced by Representatives
GLORIA MACAPAGAL ARROYO and DIOSDADO MACAPAGAL ARROYO

AN ACT AMENDING SECTIONS 27 AND 71 OF REPUBLIC ACT NO.
6657, OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM
LAW OF 1988 THEREBY LIFTING THE RESTRICTION ON THE RIGHT OF
FARMER-BENEFICIARIES TO MORTAGE ANDIOR ENCUMBER THE LANDS
AWARDED TO THEM UNDER THE COMPREHENSIVE AGRARIAN REFORM
PROGRAM AND ALLOWING THE SUBMISSION OF THE CERTIFICATE OF LAND
OWNERSHIP AWARD AS SUFFICIENT COLLATERAL FOR LOANS
ENTERED INTO WITH BANKS AND/OR OTHER FINANCIAL
INTERMEDIARIES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled: .

SECTION1. Section 27 of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988 is hereby amended to read as
follows:

“Section 27. Transferability of Awarded Lands. Lands acquired by
beneficiaries under this Act may not be sold, transferred or conveyed
except through hereditary succession, or to the government, or to the LBP, or
to other qualified beneficiaries for a period of ten (10) years: Provided,
however, That the children or the spouse of the transferor, shall have a right
to repurchase the land from the government or LBP within a period of two
(2) years. Due notice of the availability of the land shall be given by the LBP
to the Barangay Agrarian Reform Committee (BARC) of the barangay
where the land is situated. The Provincial Agrarian Reform Coordinating
Committee (PARCCOM) as herein provided, shall in turn, be given due notice
thereof by the BARC.

If the land has not yet been fully paid by the beneficiary, the rights to
the land may be transferred or conveyed, with prior approval of the DAR,
to any heir of the beneficiary or to any other beneficiary who, as a condition
for such transfer or conveyance, shall cultivate the land himself. Failing
compliance herewith, the land shall be transferred to the LBP which shall
give due notice of the availability of the land in the manner specified
in the immediately preceding paragraph.

In the event of such transfer to the LBP, the latter shall
compensate the beneficiary in one lump sum for the amounts the latter has
already paid, together with the value of improvements he has made on the
land.


NOTWITHSTANDING THE FOREGOING, AND SUBJECT TO THE
MORTGAGE LIEN OF THE LBP AS PROVIDED BY SECTION 26 OF THIS
ACT, ANY FARMER BENEFICIARY, REGARDLESS OF WHETHER OR NOT
SIHE HAS FULLY PAID THE VALUE OF THE LAND AWARDED TO
HIM/HER MAY MORTGAGE THE SAME TO ANY PERSON, BANK OR
OTHER FINANCIAL INSTITUTION, PROVIDED, THAT THE PROCEEDS
OF ANY LOAN OBTAINED SHALL BE EXCLUSIVELY DEVOTED FOR THE
IMPROVEMENT ANDIOR DEVELOPMENT OF THE LAND AWARDED OR
THE PROCUREMENT OF THE NECESSARY AGRICULTURAL INPUTS
AND ESTABLISHMENT OF FACILITIES WHICH WILL ENHANCE THE
PRODUCTION, PROCESSING OR MARKETING OF AGRICULTURAL
PRODUCTS OR INCREASE FARM PRODUCTIVITY AND INCOME.

FOR THIS PURPOSE, ANY DOCUMENT OF TITLE EVIDENCING
THE RIGHT OF THE FARMER BENEFICIARY TO THE LAND AWARDED
WHICH MAY ISSUED BY THE DEPARTMENT OF AGRARIAN REFORM
SHALL BE CONSIDERED AS PRIMA FACIE PROOF OF THE FARMER-
BENEFICIARY'S TITLE OVER THE PROPERTY MORTGAGED.

Sec. 2. Section 71 of Republic Act No. 6657 is hereby amended to read as
follows:

"Section 71. Bank Mortgages. IN ADDITION TO banks and other
financial institutions allowed by law to hold mortgage rights or security
interests in agricultural lands to secure loans and other obligations of
borrowers, ANY PERSON, BANK OR FINANCIAL INSTITUTION WHO
ACQUIRES A MORTGAGE LIEN OVER THE LAND AWARDED UNDER
SECTION 27 HEREOF, may acquire title to these mortgaged properties,
regardless of area, subject to existing laws on compulsory transfer of
foreclosed assets and acquisition as prescribed under Section 16 of this Act.

Sec. 3. The Department of Agrarian Reform shall issue the necessary
implementing rules and regulations to implement the provisions of this Act within one
hundred twenty (120) days from its enactment.

Sec. 4. Any portion or provision of this Act that may be declared
unconstitutional or invalid shall not have the effect of nullifying other portions and
provisions hereof as long as such remaining portion or provision can still subsist
and be given effect in their entirety

Sec. 5. All laws, decrees, executive orders, proclamations and administrative
regulations, or parts thereof inconsistent herewith are hereby repealed or modified
accordingly.

Sec. 6. This Act shall take effect fifteen (15) days after its publication in at
least two (2) national papers of general circulation.

Approved,