Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

FIFTEENTH CONGRESS
First Regular Session

COMMITTEE REPORT NO. 1173

TN ontt
Submitted by tbe Commisge an Agrarian Reform on O2UN 201i
Re: House Bill No. _ 2

Recommending its approval in substitution of House Bill Nos.1012 and 1013
Sponsors: Representatives Pryde Henry A. Teves and Florencio C. Garay

Mr. Speaker
The Committee on Agrarian Reform to which was referred the following measures:

House Bill No. 1012, introduced by Representative Florencio C. Garay, entitled: “AN
ACT INCREASING THE CASH PAYMENT GIVEN TO LANDOWNERS AS
COMPENSATION FOR LANDS COVERED BY THE COMPREHENSIVE
AGRARIAN REFORM PROGRAM, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 6657, AS AMENDED, OTHERWISE KNOWN AS “THE
COMPREHENSIVE AGRARIAN REFORM ACT OF 1988.”

and House Bill No. 1013, introduced by Representatives Florencio C. Garay and Philip
APichay, entitled: “AN ACT PROVIDING FOR A SHORTER MATURITY
PERIOD FOR LAND BANK OF THE PHILIPPINES BONDS GIVEN TO
LANDOWNERS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO.
6657, OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN
REFORM ACT OF 1988.”

has considered the same and recommends to the House that the attached House Bill No,

— 4802. entitled

AN ACT
INCREASING THE CASH PAYMENT AND PROVIDING FOR A
SHORTER MATURITY PERIOD FOR BONDS GIVEN TO LANDOWNERS AS
COMPENSATION FOR LANDS COVERED BY THE COMPREHENSIVE


AGRARIAN REFORM PROGRAM, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 6657, AS AMENDED, OTHERWISE KNOWN AS “THE
COMPREHENSIVE AGRARIAN REFORM ACT OF 1988.”

be approved in substitution of House Bill Nos. 1012 and 1013 with Representatives
Florencio C. Garay, Pryde Henry A. Teves, Philip A. Pichay, Salvador H. Escudero and

Agapito H. Guanlao as authors thereof.

Respectfully submitted

PRYDE HENRY A. TEVES
Chairman

Committee A Agrarian Reform

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
QUEZON CITY


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

~~ 486
HOUSE BILL NO.
(In Substitution to House Bill Nos. 1012 & 1013)

Introduced by REPRESENTATIVES. FLORENCIO C. GARAY
AND PHILIP A. PICHAY

AN ACT
INCREASING THE CASH PAYMENT GIVEN TO LANDOWNERS AS
COMPENSATION FOR LANDS COVERED BY THE COMPREHENSIVE
AGRARIAN REFORM PROGRAM, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 6657, AS AMENDED, OTHERWISE KNOWN AS
“THE COMPREHENSIVE AGRARIAN REFORM ACT OF 1988”

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

SECTION 1. Section 18 of Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Act, as amended, is
hereby further amended to read as follows:

“Section 18. Valuation and Mode of
Compensation. The LBP shall compensate the
landowner in such amount as may be agreed
upon by the landowner and the DAR and LBP or
as may be finally determined by the court as just
compensation for the land.

The compensation shall be paid in one of the
following modes at the option of the landowners:

ds Cash payment, under the following
terms and conditions:

(a) For lands above fifty (SO)
hectares, insofar as the excess


(b)

hectarage is concerned —
[Twenty-five percent (25%l]
FORTY PERCENT (40%) cash,
the balance to be paid in
government financial
instruments negotiable at any
time;

For lands above twenty-four
(24) hectares and up to fifty

- (50) hectares — [Thirty percent

(30%)}] FIFTY PERCENT (50%)
cash, the balance to be paid in
government financial

. instruments negotiable at any

{c)

time;

For lands twenty-four (24)
hectares and below — [Thirty-
five percent (35%)]' SIXTY
PERCENT (60%) cash, the
balance to be paid . in
government financial
instruments negotiable at any
time.

x x x
x Fog

LBP Bonds, which shall have the
following features:

(a) [Market interest rates aligned
with 91-day treasury bill rates]

A_ FIXED INTEREST RATE OF
TEN PERCENT (10%)
PER ANNUM WILL BE CHARGED
TO THE UNPAID BALANCE OF
THE PRINCIPAL AMOUNT. [Ten]
TWENTY percent [(10%)] (20%) of
the face value of the bonds shall
mature every year from the date of
issuance until the [tenth (10%)]
FIFTH (57) year: Provided, That
should the landowner choose to


forego the cash portion, whether in
full or in part, he shall be paid
correspondingly in LBP Bonds;

x x x

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

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL tote

Introduced by HON. FLORENCIO C. GARAY

EXPLANATORY NOTE

This bill seeks to increase the cash payment given to landowners
as compensation for lands covered by Republic Act No. 6657, as
amended, otherwise known as the Comprehensive Agrarian Reform Act of

1988.
Republic Act No, 6657 declares that:

“It is the policy of the State to pursue a
Comprehensive Agrarian Reform Program (CARP).
The welfare of the landless farmers and farm
workers will receive the highest consideration to
promote social justice and to move the nation
towards sound rural development and
industrialization, and the establishment of owner
cultivatorship of economic-sized farms as the
basis of Philippine agriculture.

To this end, a more equitable distribution
and ownership of land, with due regard to the
Tights of landouners to just compensation and to

the ecological needs of the nation, shall be
undertaken to provide farmers and farm workers
with the opportunity to enhance their dignity and
improve the quality of their lives through greater
productivity of agricultural lands." (Underscoring
supplied.)


Under Section 18 of the same law, it appears that only a small
portion of the compensation for lands surrendered to the farmers is paid
in casi, to wit: 25% for lands above 50 hectares, 30% for lands above 24
hectares up to 50 hectares, and 35% for lands 24 hectares and below.
As proposed, this bill increases the cash portion to 40%, 50% and 60%,
respectively, so 2s to give the landowners a moré equitable compensation
for what may have been the product of his decades of hard work and

savings.
In view of its national and local importance, the approval of this

pill is earnestly sought.
x

o>

4
““FLORENCIO o GARAY


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL No. _ 1012

Introduced by HON. FLORENCIO C. GARAY

AN ACT
INCREASING THE CASH PAYMENT GIVEN TO LANDOWNERS AS
COMPENSATION FOR LANDS COVERED BY THE COMPREHENSIVE
AGRARIAN REFORM PROGRAM, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 6657, AS AMENDED, OTHERWISE KNOWN AS
“THE COMPREHENSIVE AGRARIAN REFORM ACT OF 1988”

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

SECTION 1. Section 18 of Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Act, as amended, is
heredy further amended to read as follows:

“Section 18. Valuation and Mode of
Compensation. The LBP shall compensate the
landowner in such amount as may be agreed
upon by the landowner and the DAR and LBP or
as may be finally determined by the court as just
compensation for the land.

The compensation shall be paid in one of the
following modes at the option of the landowners:

1. Cash payment, under the
following terms and conditions:

(a) For lands above fifty (50)
hectares, insofar as the excess
hectarage is concerned —-


[Twenty-five percent (25%)]
FORTY PERCENT (40%) cash,
the balance to be paid in

government financial
instruments negotiable at any
time;

() For lands above twenty-four
(24) hectares and up ‘to fifty
(50) hectares ~ [Thirty percent
(30%)] FIFTY PERCENT (50%)
cash, the balance to be paid in

government financial
instruments negotiable at any
time;

() For lands twenty-four (24)
hectares and below - [Thirty-
five percent (35%)] | SIXTY

PERCENT (60%) cash, the
balance to be paid in

government financial
instruments negotiable at any
time.

SECTION 2. This Act shall take effect fifteen (15) days after
its publication in: at least two (2) natiorial newspapers of general

circulation.

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1018

Introduced by HON. FLORENCIO C. GARAY

EXPLANATORY NOTE

Section 2 (Declaration of Principles and Policies) of Republic act No.
6657, otherwise known as the Comprehensive Agrarian Reform Act of
1988, provides in part:

“The State shall provide incentives to
landowners to invest the proceeds of the
agrarian reform program to promote
industrialization, employment and privatization
of public sector _ enterprises. Financial
instruments used as payment for lands shall
contain features that shall enhance negotiability
and acceptability in the marketplace.”

This bill seeks to shorten the maturity period of the Land Bank of
the Philippines (LBP) Bonds issued to landowners as compensation for
their land falling under the coverage of the Comprehensive Agrarian

Reforrn Program.
Under RA 6657, ten percent (10%)of the face value of the LBP
Bonds mature every year until the tenth (10%) year. This condition set by
the law is detrimental on the part of the landowners because by the time
the LEP Bonds are fully paid, the purchasing power of its cash equivalent

has considerably depreciated.

This bill seeks to be fair on both the landowners and the farmer-
beneficiaries. The farmers-beneficiaries will be able to acquire ownership


of the land that they till while the landowners will enjoy the value of their
lands within a shorter period of time.

In view of its national and local importarice, the approval of this

pill is earnestly sought.
Oe, fr
sailed GARAY


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City
FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1013

Introduced by HON. FLORENCIO C. GARAY

AN ACT
PROVIDING FOR A SHORTER MATURITY PERIOD FOR LAND BANK
OF !HE PHILIPPINES BONDS GIVEN TO LAND OWNERS, AMENDING
FOR THE PURPOSE REPUBLIC ACT NO. 6657, OTHERWISE KNOWN
AS THE COMPREHENSIVE AGRARIAN REFORM ACT OF 1988

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

SECTION 1. Section 18 of Republic Act (RA) No. 6657,
otherwise known as the Comprehensive Agrarian Reform Act, is hereby
amended to read as follows:

“Section 18. Valuation and Mode of
Compensation. The LBP shall compensate the
landowner in such amount as shall be agreed
upon by the landowner and the DAR and LBP or
as may be finally determined by the court as just
compensation for the land.

The compensation shall be paid in one of the
following modes at the option of the landowners:

ex od
mz

xxx

LBP Bonds, which shall have the
following features:

Per


a) Market interest rates aligned
with 91-days treasury bill rates. [Ten]
TWENTY percent [(10%)] (20%) of the face
value of the bonds shall mature every year
from the date of issuance until the [tenth
(10*)] FIFTH (5%) year: Provided, That
should the landowner choose to forego the
cash portion, whether in full or in part, he
shall be paid correspondingly in LBP
Bonds;

x x x"

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

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FACT SHEET

House Bill No.__ 480:

AN ACT INCREASING THE CASH PAYMENT GIVEN TO
LANDOWNERS AS COMPENSATION FOR LANDS COVERED BY
THE COMPREHENSIVE AGRARIAN REFORM PROGRAM,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 6657, AS
AMENDED, OTHERWISE KNOWN AS “THE COMPREHENSIVE
AGRARIAN REFORM ACT OF 1988"

Introduced by: HONORABLE FLORENCIO C. GARAY AND PHILIP A. PICHAY
Referral. COMMITTEE ON AGRARIAN REFORM
Committee Chairperson: HONORABLE PRYDE HENRY A. TEVES

OBJECTIVE:

* To provide incentives to landowners and allow farmer-beneficiaries to
acquire ownership of the land.

KEY PROVISION:
* Increases the cash portion of the payment given to landowners as
follows:
Percent Increase Land Area
40% For lands above 50 hectares
50% For lands 24 to 50 hectares
60% For lands 24 hectares and below

+ Shortens the maturity period of LBP Bonds from 10 years to 5 years.

* Fixes the interest rate to ten (10) per cent per annum on the unpaid
balance of the principal amount of the LBP Bonds.


RELATED LAWS:

P.D. 27, Decreeing the emancipation of tenants from the bondage of
the soil;

E.0. 228, Declaring full land ownership to qualified farmer
beneficiaries covered by P.D. 27;

E.0. 229, Providing the mechanisms for the implementation of the
Comprehensive Agrarian Reform Program;

R.A, 6657, Comprehensive Agrarian Reform Program; and

R.A. 9700, CARPER Law


Republic of the Philippines
HOUSE OF RPRESENTATIVES.
Quezon City, Metro Manila
15" Congress
First Regular Session

MINUTES OF THE MEETING CONDUCTED BY THE COMMITTEE ON
AGRARIAN REFORM HELD ON MARCH 16, 2011, 1:30 PM. AT CONFERENCE
ROOMS 1 AND 2. RAMON -¥. MITRA BUILDING, HOUSE OF
REPRESENTATIVES, QUEZON CITY

MEMBERS PRESENT: —&

Rep. Pryde Henry A. Teves
Rep. Salvador H. Escudero
Rep. Agapito H. Guanlao
Rep. Philip Pichay

AUTHORS PRESENT:

GUESTS/RESOURCE PERSONS IN ATTENDANCE.

Rep. Rufus Rodriguez

Usec. Gerundio Madueno

Chairman

House Bill No. 721

Department of Agrarian Reform

(DAR)
Usec. Francis Aquino DAR
SVP Vickie Reyes Land Bank
Mr. Heli Tia Bureau of Internal Revenue
5. Mr. Arey Garcia PAKISAMA
6. Atty. Luis Llave PMO
7. Mr. Manuel Joson SOLIDARITY
8. Atty, Hector Feliciano SOLIDARITY
9. Atty. Marwil Llasos IDEALS
10.Mr. Amold Arrieta DARAB
U1 Atty. Patricia BellO DARAB
12. Ms. Belle Estrada PARC
13. Deputy Administrator Ronald Ortile . LRA

14. Director Nestor Floranda

DAR


L ROLL CALL.

Chairman Pryde Henry Teves called the meeting to order at 1:41 P.M. Upon motion of
Rep. Guanlao, the calling of the roll call was dispensed with.

I. APPROVAL OF MINUTES OF PREVIOUS MEETING

Upon motion of Rep. Guanlao, the Minutes of the previous meeting was approved as
submitted

‘
UI. APPROVAL OF THE SUBSTITUTE BILL TO HOUSE BILL NO. 721
WHICH CREATES THE NATIONAL | AGRARIAN ADJUDICATION
COMMISSION (NARAC) 3

The Chairman, Representative Teves informed thé Body that after considering all the
positions of the resource persons of the concerned agencies and stakeholders, the UP Law
Center has finally submitted its comment on the proposed Bill

Rep. Rufus Rodriguez, the principal author of the proposed measure mentioned that the
UP Law Center's position addressed specific concerns of certain agencies to wit

1) There are challenges as far as structural forms are concemed, however, it is still
maintained that the creation of the NARAC will have a big impact on the
disposition of agrarian cases. It is the opinion of the Law Center that the
Department Secretary and Undersecretaries must not form part of the Commission
to enjoy autonomy

2) Agrarian reform cases will still subsist notwithstanding the deadline provided for
in RA 9700, otherwise known as the CARPER Law:

3) PARC - Landowners’ Representative Atty. Hernandez commented that NARAC
should be part of the judiciary. On the contrary, the author opined that it must be
a part of the executive branch since it is an independent and specialized body
which is quasi-judicial in nature, hence. the jurisdiction on just compensation
must be retained by them.

4) Conformed to the recommendations of the Civil Service on the staffing pattern.

5) As to procedural recommendations, direct appeas on certiorari must be filed with
the Court of Appeals and providing options for Alternative Dispute Resolution is
a welcome view

Rep. Rodriguez earnestly sought for the approval of the said proposed measure since this
is the third deliberation on the subject matter. Rep. Guanlao moved to adopt the

proposed measure subject to style and for the inclusion of himself and Rep. Escudero as
co-authors thereof,



IV. CONTINUATION OF THE DELIBERATION ON HOUSE Bill NOS. 1012
AND 1013

Usec Madueno stated that the Department of Agrarian Reform (DAR) support House Bill
Nos, 1012 and 103. However, his main concern is its effect on the budgetary
requirements on DAR once the cash payment as compensation for landowners is
increased and the shortening of the maturity of the LBP Bonds from 10 years to 5 years is
effected. He mentioned that increasing the cash payment to 40%, 50%, and 60% would
require an annual budget of P73.97 billion, P92.46 billion, and P110.95 billion,
respectively. On shortening the maturity of LBP Bonds from 10 years to 5 years, he said
that increasing the cash payment to 40%,50% and 60% would require a budget of P73,97
billion, P9246 billion, and P110.95 billion, in that order

On the budget for land acquisition and distribution (LAD), Usec Madueno said that
RA7900 provided an annual budget of P30 billion Until the end of the program in 2014.
However, he stated that what DAR receives from the General Appropriation Act (GAA)
is less than this amount. He cited that in 2011, DAR was given a budget of only P16.5
billion. He added that out of this amount, P3.8 billion was allocated for landowners
compensation in 2011

On the part of Land Bank, SVP Reyes pointed out that funding on maturing LBP Bonds
will be provided by the Department of Budget and Management (DBM). On landowners’
compensation, she stated that Land Bank advance the landowner claim for payments to
be reimbursed later by the DBM

Atty. Tiu of the Bureau of Internal Revenue told the body that income from the interest
on LBP Bonds will be subjected to tax.

Atty. Feliciano suggested to the Body that the compensation for landowners be
earmarked in the DAR’s budget instead of being only a part of the land acquisition and
distribution component of the budget.

The resource persons from Land Bank, Pambansang Kilusan ng mga Samahang
Magsasaka (PAKISAMA), SOLIDAITY, and Initiatives for Dialoque and Empowerment
through Alternative Legal Services (IDEALS) supported the passage of the measure
However, they expressed concern as to where the government will source the funds once
the measure is enacted into law.

Rep, Escudero and Atty. Llasos of Initiatives for Dialogue and Empowerment through
Alternative Legal Services (IDEALS) commented that a balanced agrarian reform
program must consider the plight of both landowners and farmer beneficiaries

Rep. Guartlao stated that the Special Allotment Release Order (SARO) carmarked for
landowners compensation has a prescription period of two years only. After two years,
any unused amount will revert back to the National Treasury. Rep. Escudero asked the
Committee to write the DBM requesting that the unused P3.8 billion SARO that was


allocated for landowners compensation in 2011 be released as a manifestation of the
Committee genuine concern on the plight of landowners.

The Chair requested DAR to provide the Committee the details of the agri-based
Conditional Cash Transfer (CCT) arrangements being conducted in Mexico

Rep Guanlao moved for the approval of the substitute bill There being no objection, the
substitute bill was approved by the Body

V_ ADJOURNMENT

There being no other matters to be discussed, the meeting was adjourned at 2:18 P.M.
Prepared by
Keeces B. AMEDA UBALD pane

Sat 1 SLSON

Certified Correct

dha Rom J

MA. RITA F, MACABULOS
Committee Secretary

Noted By,

HON. PRYDE HENRY TEVES


Republic of the Philippines
HOUSE OF REPRESENTATIVES
zon City. Mero Manila

15" Congress
First Regular session

MINUTES OF THE MEETING CONDUCTED BY THE COMMITTEE ON AGRARIAN
REFORM HELD ON 02 FEBRUARY 2011, 1:30 P.M, AT CONFERENCE ROOMS | & 2
RAMON V. MITRA. JR. BUILDING. HOUSE OF REPRESENTATIVES, QUEZON CITY

MEMBERS PRESENT:

L. Rep. Crescente Paez . Presiding Officer
2. Rep, Ma. Rachel Arenas Vice Chairman
3. Rep. Philip Pichay

4. Rep. Agapito Gu

Rep. Florencio G:
Rep. Rafael V. Mariano
Rep. Fernando Gonzales

AUTHORS PRESENT:

1. Rep. Rufus Rodriguez 3 cess. House Bill No. 3834
2. Rep. Florencio Garay : = House Bill Nos. 1012 &
1013

GUESTS/RESOURCE PERSONS IN ATTENDANCE:

1. Usee Gerundio Madueno Department of Agrarian
Reform (DAR)
2. Usee Rosalinda Bistoyong DAR
3. Director Nestor Floranda DAR
4 Teresita Domingo Deparment of Justice
5, SVP Vicky Reves Land Bank of the Phils. (LBP)
6. Mr. Ramon Castro LBP
7. Atty. Lyndon Castanos Department of the Interior
and Local Government
8. Atty. John Raimer Camba Bureau of Internal

9. Mr, Ronald Ortile

10. Mr. Allan Barcena

11. Mr. Manuel Joson

12. Ay. Hector Feliciano
13, Mr. Silverio Berenguer
14. Mr. Willy Marbella

Revenue

Land Registration
Authority

Land Management Bureau
SOLIDARITY
SOLIDARITY

CAP

KMP


1. ROLL CALL/ROLL CALL

The Presiding Officer Crescente Paez called the meeting to order at 38 P.M. Upon
motion of Rep. Pichay which was duly seconded. the calling of the roll was dispensed with.

Il. APPROVAL OF MINUTES OF PRE

US MEETING

Upon motion of Rep. Pichay which was duly seconded, the Minutes of the previous
meeting was approved as submitted

IL), OPENING REMARKS OF THE CHAIRMAN

Presiding Officer Cresente Pacz stated thar the meeting is about compensation for
landowners. As provided in Article If, Section 9 of the 1987 Constitution, landowners have the
ight to be paid just compensation for their landholdings acquired by the government for
distribution to agrarian reform beneficiaries. They also have the right to equality’ in the
enjoyment of similar rights and privileges granted by law. He mentioned that the Commitice will
deliberate on House Bills Nos. 1012. 1013, and 3854. House Bill No. 1012. authored by Rep
Florencto Garay. aims to increase the percentage of cash payment given to landowners as
compensation for lands covered by CARP: House Bill No. 1013. authored by Rep. Florencio
Garay. seeks to provide for a shorter maturity period for LBP bonds given to landowners: and
House Bill No. 3854. authored by Rep. Rufus Rodriguez and Maximo Rodreguez. Jr.. proposes to
exempt from payment of estate taxes agricultural lands under agrarian reform laws provided that
the original landowner whose lands were covered die prior the full payment by the government of
just compensation,

IV, SPONSORSHIP REMARKS OF THE AUTHORS

Rep. Florencio Garay. author of House Bill Nos. 1012 and 1013. said that House Bill No
WL2 secks to give the landowners more equitable compensation for the product of decade of hard
work by increasing the percentage of cash payments from 25% 10 40% for lands above 50
hectares, from 30% to 30% for lands above 24 hectares up to 50 hectares. and from 35% to 60%
for lands 24 hectares and below. On the other hand, he stated that House Bill No. 1103 seeks to
shorten the maturity period of the Land Bank of the Philippines (LBP) Bonds issue to landowners
as compensation for their land under the coverage of the Comprehensive Agrarian Reform
Program.

Rep. Rufus B. Rodriguez. author of House Bill No. 3854. articulated that payments of
just compensation due to the landowners have been delayed because of administrative matters,
documentation requirements. land valuation. among others. There had been incidents when the
landowners have passed away without receiving just compensation leaving behind their families
who face the difficulty of paving estate taxes which at times exceed the amount of compensation
offered for their properties =

While the transfer of agricultural property taken by the government for land reform
purposes is already exempted from the payment of capital gain taxes, there is likewise a
compelling nccessity’ to exempt the same from estate taxes should the original landowner dies
without being paid just compensation


V. INITIAL DELIBERATION OF HOUSE BILLS NOS. 1102. 1103, AND 3854

Rep. Garay’ stated that he filed House Bill No. 1012 because of the many complaints he
received trom landowners on the delay of payments for just compensation. On the other hand.
shortening the maturity period of the Land Bank Bonds under House Bill No, 1013 from 10 years
{0 5 years will encourage landowners to invest in any enterprise that will spur industrialization,

Usee Madueno stated that DAR support House Bill Nos. 1012 and 1013. However, his
main concern is the effect on the budgetary requirements on DAR once the cash payment as
compensation for landowners is increased and the shortening, of the maturity of the LBP Bonds
from 10 years to 5 years is effeeted. He mentioned that the Jand acquisition and distribution
(LAD) component under R.A 7900. should be provided with a budget of P30 billion annually
until the end of the program in 2014. But what DAR receives from the General Appropriation Act
(GAA) is less than this amount. As a result the DAR target on LAD was not achieved in 2010.
‘The same might happen once the two measures are enacted into law

Rep. Pichay: opined that increasing the percentage of cash payment as compensation for
lands covered by CARP is logical in order to give the landowner a more equitable compensation
for decades of work of making the land productive,

Atty, Felciano supported the two measures. However, he has reservation on where the
government will get the money for Land Bank has admitted that the Agrarian Reform Fund
(ARF) has been depleted by several billion pesos. The ARF is the only source of payments by
Land Bank to landowners for lands taken by the government under agrarian reform,

In reply to the query of Rep Pichay. Usec Madueno stated that under RA 9700 there is no
more voluntary offer to sell but only compulsory LAD. Under RA 9700, DAR’s target on LAD
for the duration of the program is 890,000 hectares of land. For 2011, the LAD target is 200.000
heotares and the funds that will be used will come from 2011 GAA, DAR was given a budget of

3.9 billion for 2011 and the government agency that will release this money is the Department
of Budget and Management (DBM)

In response to the query of Rep. Guanlao, Usee Madueno stated that the 2011 DAR
budget of P3.9 billion does not cover the increase in budgetary requirements once the percentage
of cash payment to landowners is increased and the shortening of the maturity period of the LBP
Bonds from 10 years to 5 years is effected

SVP Reyes mentioned that the Agrarian Reform Fund deposited with Land Bank totaled
P1.2 billion as of December 31, 2010. She also stated that Land Bank made advance payments 10
landowners in case the Bank loses a dispute in court. The Bank, however. get reimbursement
fiom DBM on its advance payments.

in reply to the query of Rep. Padilla, SVP Reyes said that once Lank Bank approved the
claims for payments. a cash portion is deposited in the name of each landowner. Then. the Bank
earmark the bond portion to the landowner and the running of the 10 year period starts on the day
of the approval of the bond.

Rep. Pichay recommended that the interest on LBP Bonds on House Bill No. 1013 be
based on prevailing cost of money which range from 8% to 15% per annum,


Rep. Padilla recommended the consolidation of House Bills Nos. 1012 and 1013 with
consultation with the Reference and Research Bureau and the submission of cash flow pertaining
to the budgetary requirements of the two measures by the Department of Agrarian Reform and
the Land Bank of the Philippines

Usee Madueno of DAR. SVP Reyes of Land Bank and Asec ‘Teresita Domingo of DOJ
expressed ther support for the passage of House Bill No. 3854

Rep, Padilla moved for the approval of the measure since it is fair and just and does not
have any budy i fier, the body approved House Bill No, 3854 in 1010
subject to style.

‘The Presiding Officer. Rep, Crescemte Pacz. directed the Tech
Commutee Report for House Bill No. 3854.

al Stall te prepare the

VL ADJOURMENT

‘There being no other matters to be discussed, the meeting was adjourned at 3:03 P.M.

Prepared by

Mik yp wtiilire
UBALDO GRAVADOR
SLSON

Certified Correct
Bin Rona SI Praverbutre

MA, RITA F, MACABULOS,
Committee Secretary

Noted By:

HON. PRYDE HENRY TEVES,
Charmay