Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

474

House Bill No.

Introduced by HON. AGAPITO H. GUANLAO.

EXPLANATORY NOTE

The 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 sust5ain 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.

HON, AGAPIT@ H. GUANLAO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

ANIA

House Bill No.

Introduced by HON. AGAPITO H. GUANLAO

AN ACT

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

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

Section 1. 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 iump sum for the amounts the latter has already paid, together with the value of
improvements he has made on the land.

NOTWITHSTANDING THE FORGOING, AND SUBJECT TO THE MORTGAGE LIEN
OF THE LBP AS PROVIDED BY SECTION 26 OF THIS ACT, ANY FERMER BENEFICIARY,
REGARDLESS OF WHETHER OR NOT S/HE 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 AND/OR
DEVELOPMENT OF THE LAND AWARDED OR THE PROCUREMENT OF THE NECESSARY
SGRICULTURAL INPUTS AND ESTABLISHMENT OF FACILITIES WILL ENHANCE THE


PRODUCTION, PROCESSING OR MARKETING OF AGRICULTURAL PRODUCTS OR
INCREASE FARM PRODUCTIVITY AND INCOME.

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

Section 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 MORTAGAGE LIEN OVER THE LAND AWARDED UNDER SECTION 27
HEREOF, may acquire title to these mortgaged, regardless of area, subject to existing laws on
compulsory transfer of foreclosed assets and acquisition as prescribed under Section 16 of this
Act.

Section 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

Section 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 such
remaining portion or provision can still subsists and be given effect in their entirety.

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

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

Approved,