Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

6238

House Bill No.

Introduced by Hon. Orestes T. Salon and Hon. Delphine Gan Lee

EXPLANATORY NOTE

The country's labor force in 2015 totaled 41.34 million persons. Employment rate
was 94 percent. The agriculture sector employed 11.29 million persons and this
comprised 29 percent of the national employment.’ With more than a quarter of the
country’s population in the agricultural sector, and farmers being identified as one of the
highest poverty incidence among the country's basic sector, it is here in this bil, that we
tackle the restrictions in laws pertaining to the distribution of agricultural lands.

Commonwealth Act No. 141, as amended, or the Public Land Act serves as an
important measure for supporting our hard working farmers by providing the Agricultural
Free Patents as a mechanism for land ownership. However, there are restrictions under said
law on translating agricultural land title become tradable and bankable hindering the farmer
entrepreneur to improve their agricultural productivity.

Under the Public Land Act No. 141, grantees of agricultural free patent and the less
numerous homestead patents are restricted from mortgaging or selling the lands within five
(5) years from the issuance of the free patent, and from repurchasing by the patentee and/or
his widow and descendants within a five (5) years from the time of sale. Due to its restrictive
features, agricultural patents are not as attractive in the rural land market, either as collateral
or for acquisition.

At present, only agricultural free patents and homestead patents are the last
restricted patents in the land market, and it has been established that such restrictions on
the right to alienate or encumber the lands have worked against not just the people who are
‘supposed to benefit from the law by depriving them of the full enjoyment and utilization of the
property - These farmer-entrepreneurs are not asking the government for financial support,
but only for full use of their own lands since they are in the best position to evaluate the land
in accordance to their needs — but also against the government, as they hinder potential
capital turnover to the national economy. One study estimates that agricultural land/asset
covered by the five-year restriction amounts to at least Php 387 Billion, potentially rendered
idle due to limits in disposition, and may even reach trillions of pesos if patents prior to 1980
included.”

“nttps://psa.gov.ph/sites/default/files/Selected Statistics on Agriculture 2016.pdf
*Tiamson, Erwin L. “Freeing the Land Market: How Legal Restrictions Hamper Agricultural
Development and Poverty Reduction.” Foundation for Economic Freedom, February 2016.


This bill seeks to remove the current restrictions on agricultural free patents under
the Public Land Act to make these agricultural land titles immediately tradable and bankable.

In view of this, the urgent passing of this bill is thus earnestly sought.

Cee

ORESTES T. SALON DELS N-LEE
Sectoral Representative Seqféral Representative
AGRI Party-List AGRI Party-List


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

6238

House Bill No.

Introduced by Hon. Orestes T. Salon and Hon. Delphine Gan Lee

AN ACT
REMOVING THE RESTRICTIONS IN THE REGISTRATION OF LAND TITLES UNDER:
SECTIONS 118, 119, AND OTHER RESTRICTIONS AGAINST ENCUMBRANCE OR
ALIENATION ON FREE PATENTS ISSUED UNDER SECTION 44 OF COMMONWEALTH
ACT NO. 141 OR THE PUBLIC LAND ACT, AS AMENDED

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

Section 1. Title. - This act shall be known as the “Agricultural Free Patent Reform Act
of 2017."

Section 2. Declaration Policy. - It is the policy of the State to remove the restrictions
on free patent to allow the efficient and effective utilization of these lands to
contribute to wealth creation, entrepreneurship, and economic development.

Section 3. 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 Section 118 and 119 thereof.
‘Agricultural free patent shall now be considered as title in fee simple and shall not be
subject to any restriction against encumbrance or alienation.

Section 4. Retroactive Effect. - This Act shall have retroactive effect and any
restriction regarding encumbrances, conveyances, transfers, or dispositions,
imposed on agricultural free patents issued under Section 44 of Commonwealth Act
No. 141, as amended before the effectivity of this Act shall be removed and are hereby
immediately lifted

Section 5. Separability Cli Should any provision of this Act be subsequently
declared as unconstitutional, the same shall not affect the validity or the legality of
the other provisions.


Section 7. Effectivity. - This Act shall take effect fifteen (15) days after publication in the
Official Gazette or two (2) newspapers of general circulation.

Approved,