HOUSE OF REPRESENTATIVES
-zon City
Gey one. 15 NOY 2046
Seventeenth Congress Tie:

Day:

First Regular Session

House Bill No. 4379

Introduced by Representative Arthur Yap

EXPLANATORY NOTE

While the Philippines posted a 6.3% average growth in 2012-2014, the government needs
to address the fact that: 1) agriculture sector grew by only 0.2% to Gross Domestic
Product (GDP); and, 2) poverty still exists, particularly the majority of the poor people
who live in rural arcas and work in the agricultural sector. Indeed, in the Philippines,
poverty is mainly a rural phenomenon.

In fact, the 2009 poverty incidence data indicated that the 57% agricultural households, is
three-fold percentage higher compared to the 17% from the non-agricultural.

One of the identified main causes of poverty in the country is the failure to develop the
agriculture sector (ADB, 2009). A study recently conducted by the Australian Aid — the
Asia Foundation, likewise highlights how legal limitations in the country hamper
agricultural growth/development and poverty reduction. It also pointed out that several
land laws written and approved in the early 1900s (when the Philippines was still a
predominantly agricultural society) have not been amended or repealed to keep pace with
the recent transformation of the country.

Commonwealth Act No. 141, otherwise known as the Public Land Act, ig one of those
outdated land laws, which negatively impact the 2,961,186 free patents issued by the
government in the last twenty-five (25) years (1980-2014). For the period 2009 to 2014,
the Department of Environment and Natural Resources (DENR) issued 542,000 free
patents. Under Sections 118, 119, 121, 122 and 123 of Commonwealth Act No. 141,
beneficiaries of these patents are covered by the five (5) year prohibition to sell or transfer
said property after the patent is awarded and gives the owner and/or heirs the right to
repurchase the land from the buyer, within a period of five (5) years from the date of
conveyance. This affects some 432,926 hectares in terms of land area.

‘These restrictions tend to increase transaction costs and hamper investment critical for job
creation and poverty reduction. It is a hindrance for our Filipino farmers to improve their
entrepreneurial skills, as well as their ability to fully develop the potentials of these lands.
Farmers are deprived of the opportunity to make use of the land as collateral for credit and
are barriers to the prospective buyers/developers.

‘This bill proposes to repeal the restrictions of the Public Land Act, specifically Sections
118, 119, 121, 122 and 123 on agricultural free patents to make these agricultural land
titles accessible for commercial and credit transactions so that free patent beneficiaries
can have access to credit which leads to increase productivity, job generation, poverty
reduction and improve economic conditions.

In view of the foregoing considerations, the passage of this bill is earnestly sought.

ATTY. ARTHUR C. YAP
Representative

2 RECEIVED


SEVENTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVE

House Bill No. 43'79

Introduced by REPRESENTATIVE ARTHUR YAP

AN ACT REMOVING THE RESTRICTIONS UNDER SECTIONS 118,
119, 121, 122 and 123 OF COMMONWEALTH ACT NO. 141, AS
AMENDED, ON FREE PATENTS ISSUED UNDER SECTION 44
THEREOF

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

SECTION. 1. Short Title. - This Act shall be known as the
“agricultural Free Patent Reform Act.”

Sec. 2. Removal of Restrictions. Agricultural public lands alienated
or disposed in favor of qualified public land applicants under Section 44
of Commonwealth Act No. 141, as amended, shall not be, subject to
restrictions regarding encumbrances, conveyances, transfers or
dispositions imposed under Sections 118, 119, 121, 122 and 123 of
Commonwealth Act No. 141, as amended.

Sec. 3. Retroactive Effect -This Act shall have retroactive effect and
restrictions regarding encumbrances, conveyances, transfers or
dispositions imposed under Sections 118, 119, 121, 122 and 123 of
Commonwealth Act No. 141, as amended, on free patents issued under
Section 44 thereof before the effectivity of this Act shall likewise be
removed and are hereby immediately lifted.

Section 4. Repealing Clause. - All laws, decrees, orders, rules and
regulations or other issuances or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

Section 5. Separability Clause. - If any portion or provision of this
Act is declared unconstitutional, the remainder of this Act or any
provisions not affected thereby shall remain in force and effect.

Section 6. Effectivity Clause. - This Act shall take effect after fifteen
(15) days following the completion of its publication either in the Official
Gazette or in a newspaper of general circulation in the Philippines.

Approved,