'" 
SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 1538 
) 
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S>eltllh 
(OH,;c or tilt' ,~l't"ltt~r, 
'13 
SEP -5 P 1 :54 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
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 Government 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. 
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 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, 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 real 
property tax under the Code. 
In view of the foregoing, approval of the bill is earnestly requested. 
Senator 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 15 3 8 
) 
) 
) 
~el1llh> 
(4)th;r tlf Up? $i'ITtbrll ' 
"13 
SEP -5 P 1 :54 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
EXEMPTING FROM REAL PROPERTY TAX THE TREES AND OTHER 
IMPROVEMENTS 
ON 
LANDS 
COVERED 
BY 
CERTIFICATES 
OF 
STEWARDSHIP 
CONTRACTS· UNDER 
THE 
INTEGRATED 
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,