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

HOUSE OF REPRESENTATIVES,

Introduced by Representative Rufus B. Rodriguez
1876

House Bill No.

EXPLANATORY NOTE

This 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 country’s natural
resources. The escalation of kaingin farming and illegal logging activities has prompted the
government to come up with innovative programs to arrest the deforestation problem. One
such program is the Integrated Social Forestry Program (ISFP) of the Department of
Environment and Natural Resources (DENR). 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. Since its inception, the farmer-grantees have already developed several
hectares of forestlands. Assisted by the national and local governments as well as lending
institutions, 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 Goverment Code of 1991 and prior legislative issuances, 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 real property
tax. Hence, lands covered by Certification of Stewardship Contracts (CSC) under the ISFP,
including the trees and improvements thereon, are subject to real property tax.

Itis 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,
itis proposed that trees and other improvements on lands covered by the ISFP be exempted
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, itis 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 real property tax under the Code.

In view of the foregoing, approval of the bill is earnestly requested

/


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

HOUSE OF REPRESENTATIVES

“introduced by Representative Rufus B. Rodriguez

1876

House Bill No.

AN ACT
EXEMPTING FROM REAL PROPERTY TAX THE TREES AND OTHER IMPROVEMENTS
ON LANDS COVERED BY CERTIFICATES OF STEWARDSHIP CONTRACTS UNDER
THE INTERGRATED SOCIAL FORESTRY PROGRAM

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

SECTION 1. - 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 (DENR) shall be exempt from the real property tax
under Section 232 of the Local Government Code of 1991

SEC. 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.

SEC. 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.

SEC. 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.