THIRTEENTH CONGRESS OF THE 
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First Regular Session 
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REPUBLIC OF THE PHILIPPINES 
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Introduced by Sen. Jinggoy Ejercito Estrada 
EXPLANATORY NOTE 
The accompanying Bill seeks to exempt from real property tax the trees and 
improvements on lands covered by Certificates of Stewardship Contracts under the 
Integrated Social Forestry Program of the Department of Environment and Natural 
Resources. 
The last two decades saw the alarming degradation and loss of the Philippines' 
natural forests. With no legal tenure over the land they occupy, with little incentive to 
invest in long-term protection, management and development of the forests. Upland 
farmers who rely on the forests for livelihood have resorted to kaingin farming, illegal 
cutting, among others. 
In addition, illegal logging by some unscrupulous entities 
contributed to further forest destruction. 
These activities have prompted the 
government to come up with innovative programs to arrest the country's deforestation 
problems. 
One such program is the Integrated Social Forestry Program of the Department 
of Environment and Natural Resources which was launched in 1982 by virtue of Letter of 
Instruction No.1260. The ISFP is a people-oriented program designed to improve the 
socio-economic conditions of upland farmers and communities who depend on 
forestlands for their livelihood, enhance ecological stability, and maximize upland 
productivity. Put simply, the ISFP seeks to reduce poverty, promote social justice, and 
protect the environment through proper stewardship of the uplands. Since its inception 
in 1982, the farmer-grantees have already developed more than 400,000 hectares of 
forestlands. 
Assisted by the national and local governments as well as lending 
institutions such as the Land Bank of the Philippines, the income levels of the grantees 
have increased, their dwellings improved, and literacy rates enhanced. 


It has been noted? , however, that based on the provisions of the Local 
Government Code of 1991 and prior legislative issuance, real property owned by the 
Republic of the Philippines or any of its political subdivisions, the beneficial use of which 
has been granted, for consideration or otherwise, to a taxable person , is subject to the 
real property tax,. 
Hence, lands covered by Certification of Stewardship Contracts 
(CSC) under the ISFP, including the trees and improvements thereon, are subject to the 
real property tax. 
It is emphasized however, that the ISFP was implemented to democratize the 
use of public lands, promote a more equitable distribution of forest bounty under the 
stewardship principle, reduce poverty, promote social justice and protect the 
environment. In this regard, it is proposed that trees and other improvements on lands 
covered by the ISFP be made exempt from the real property tax imposed under the 
Local Government Code of 1991. 
While the proposal could reduce the revenue of local government units from this 
source, it is believed that the same may not have an adverse impact on local 
government finance since the lands would still be subject to the basic and additional 
and real property tax under the Code. 
In view of the foregoing, approval of the bill is earnestly requested. 
EJERCITO ESTRADA 
Senator 


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1 
THIRTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
i T  c 6 
Introduced by Sen. Jinggoy Ejercito Estrada 
AN ACT 
EXEMPTING FROM REAL PROPERTY TAX THE TREES AND OTHER 
IMPROVEMENTS OF LANDS COVERED BY CERTIFICATES OF STEWARDSHIP 
CONTRACTS UNDER THE INTERGRATED SOCIAL FORESTY PROGRAM 
Be if enacted by the Senate and House of Represenfafives of the Philippines in 
Congress assembled: 
SECTION I. 
Trees and other improvements on lands covered by Certificates of 
Stewardship Contracts under the Integrated Social Forestry Program of the Department 
of Environment and Natural Resources shall be exempt from the real property tax under 
Section 232 of the Local Government Code of 1991, 
SECTION 2. Rules and Regulations. - The Department of Finance, in 
consultation with the Department of Environment and Natural Resources, shall 
promulgate the rules and regulations as may be necessary to implement the provisions 
of this Act. 
SECTION 3. Repealing Clause. - All laws, decrees, orders, rules and 
regulations and other issuances or parts thereof which are inconsistent with this Act are 
hereby repealed, modified or amended accordingly. 
SECTION 4. Effectivity. - This Act shall take effect fifteen (15) days after the 
completion of its publication in the Official Gazette or in at least two (2) newspapers of 
general circulation. 
Approved,