OF THE PHILIPPINES 
First Regular Session 
S E N A T E  
S. No. 
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Introduced by Senator Osmefia 111 
EXPLANATORY NOTE 
The tragedy of the commons is an allegory which demonstrates the free 
rider problem related to public goods. In the case of forest lands and forest 
resources, the failure to guard the common property from wholesale destruction 
by timber companies led to the denudation of our forests and the consequent 
natural calamities that followed. 
The total log ban that was advocated as a response to the problem of 
denuded forests is a pendulum swing to the opposite extreme. A total log ban is 
clearly not an optimum nor an effective response because it does not provide 
sufficient incentives that are consistent with the preservation of forest resources. 
This bill proposes a system of private land forestry, defining special 
agricultural lands and permanent agro-forestry zones, and vesting in private 
individuals the property rights to such lands. 
Private individuals exercising 
limited property rights over these lands under the supervisiori of Local 
Government Units (LGUs) will constitute the more effective enforcers of practices 
that will contribute towards the renewal and preservation of our forest lands and 
resources. 
In view of the foregoing, passage of this bill is earnestly requested. 
/pL 
S 
111 
Senator 


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THIRTEENTH CONGRESS OF THE REPUBLIC ) 
First Regular Session 
OF THE PHILIPPINES 
) 
LJ4 ,d.$ 38 p z  
S E N A T E  
Introduced by Senator OsmeAa Ill 
AN ACT 
INSTlTUTlONALlZlNG PRIVATE LAND FORESTRY TO ENHANCE 
REFORESTATION AND ENVIRONMENTAL PROTECTION AND 
PROVIDING 
INCENTIVES 
THEREOF, 
AND 
FOR 
OTHER 
PURPOSES 
Be it enacted by the Senate and the House of representatives of the Republic of 
the Philippines in Congress assembled: 
SECTION 1. Short Title. - This Act shall be known as the "Private Land 
Forestry and Incentive Act of 2004." 
SECTION 2. Declaration of Policy. - It is declared policy of the State to 
protect and advance the right of the people to a balanced and healthful ecology 
through forest conservation and reforestation. The State also recognizes the 
indispensable role of the private sector in reforestation 
SECTION 3. Coverage. - This Act shall cover social forestry areas, 
alienable/disposable land, and privately owned lands engaged in agro-forestry 
activities. 
SECTION 4. 
Special Agriculfural Lands and Permanent Agro- 
Forestry Zones. - All land areas covered by the integrated social forestry 
program of the Department of Environment and Natural Resources (DENR) 
pursuant to Letter of Instruction No. 1260 and such other areas as may be 
determined by the DENR are hereby classified as special agricultural lands, 


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declared as “Permanent Agro-Forestry Zones” and shall be available for land 
ownership or title by qualified beneficiaries. As special agricultural lands such 
areas shall continue to be farmed with at least twenty percent (20%) of the land 
planted to the trees or reforestation species and with environmental protection 
measures. 
SECTION 5. Who may apply? - ( 1 )  All individuals qualified to be 
beneficiaries of the integrated social forestry program of the DENR as provided in 
Administrative Order No. 4 dated February 27, 1991 are hereby declared 
qualified to apply for the titling of a forestland of not exceeding seven (7) 
hectares of Permanent Agro-Forestry Zone. 
(2) All individual forestland occupants awarded with certificates of 
stewardship contracts under the integrated social forestry program of DENR as 
of the effectivity of this Act are hereby qualified to apply for the corresponding 
land titles. 
It is hereby provided that the qualifications to be beneficiaries of the 
integrated social forestry program of government are as follows: Must be of legal 
age; Must be a citizen of the Philippines; Must be actual tillers or cultivators of 
the land to be allocated; and Must be living within the project area or adjacent 
barang aykitio . 
SECTION 6. Conditions for the Grant - The grant of certificates of land 
ownership or titles to qualified beneficiaries under this Act shall be subject to the 
following conditions: 
(a) 
At least twenty percent (20%) of the social for~estry area 
awarded to the occupant shall be devoted to tree farming of 
suitable species to contribute to the reforestation efforts of the 
government; 
(b) 
Trees and other vegetation along the banks of rivers and 
streams, bordering or passing through the allocated areas, shall 
be protected and preserved; Provided, that if the channel is at 
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least five (5) meters wide, the protected strip, perpendicular to 
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.the edge of the normal high waterline, shall be twenty (20) 
meters. In case of rivers or waterways less than five meters in 
width, the strip shall be ten meters on each side. 
(c) 
The allocated land shall be developed, consistent with scientific 
and environmental protection practices, into productive farms 
which are economically viable and enable the occupant and his 
family to be self-reliant; and 
Regardless of transfer of ownership, the area shall not be 
(d) 
converted to uses other than agro-forestry except as determined 
by scientific/technical studies and expressly allowed by law. 
SECTION 7. Jurisdiction over Agro-Forestry Zones. - Consistent with 
Section 17 of Republic Act No. 7160 or the Local Government Code, the local 
governments shall have primary jurisdiction over agro-forestry zones for 
purposes of the implementation and enforcement of the provisions of this Act. 
SECTION 8. 
Transferability of Ownership. - Social forestry areas 
acquired by beneficiaries under this Act may not be sold, transferred or conveyed 
except through hereditary succession or to other qualified beneficiaries for a 
period of five (5) years from date of issuance of the original certificate of land 
ownership or title. 
SECTION 9. Private Forestry Areas. - The following shall be considered 
as private forestry areas: (a) agricultural or alienable/disposable lands at least 
twenty percent (20%) of which area is devoted to tree farming of reforestation 
species; (b) private lands converted to farms at least twenty percent (20%) of 
which area is planted to reforestation species; and (c) social forestry or agro- 
forestry zone areas covered by this Act. 
SECTION IO. Incentives. - The following incentives are given to owners 
and cultivators/developers of private forestry areas: 


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Exemption from payment of all taxes and agriculturallforest 
charges including tariffs or import duties on agriculturallforestry 
equipment, machinery and farm processing and other inputs, 
except net income tax; 
Permission to sell, trade, dispose or export agro-forestry 
produce even in raw form; 
Permission to sell or dispose of the land area and assets thereof 
in secondary markets subject to the restriction in Section 8 of 
this Act; 
Government guarantee of up to ninety percent (9O0/o) of the 
amount loaned from local or foreign sources for private forestry 
operations; Provided, however, that the property and assets 
therein are mortgaged to the government as collateral; 
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Preferential technical and administrative assistance from 
government agencies. 
SECTION 1 'I. Disposal of Foreclosed Private Forestry Areas. - All 
private forestry areas or lands foreclosed or acquired by the government through 
default of loans or violation of law shall, within one (1) year after their titles are 
transferred in favor of the government, to be disposed to qualified persons or 
entities. 
SECTION 12, 
Economies of Scale. - Individual owners of private 
forestry areas may form federations for purposes of economies of scale of 
operations; Provided, however, that individual land ownership or title is 
preserved, and that 20% of the total land area, thus pooled, is devoted to tree 
farming of reforestation species and the remaining areas subjected to adequate 
environmental protection. 
SECTION 13. Penal Provisions. - Social forestry areas which have not 
adequately accomplished agro-forestry activities after five (5) years of ownership 
shall be forfeited in favor of the government. Other violations of forestry, land 
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such codes or laws. 
and environment and other laws shall be punished accordingly with respect to 
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SECTION 14. Implementing Guidelines. - The Department of Interior 
and Local Government (DILG), in consultation with the Department of 
Environment and Natural Resources, Agriculture and Agrarian Reform, the Land 
Bank and other agencies concerned shall formulate the necessary implementing 
rules and regulations within ninety (90) days after effectivity of this Act; Provided, 
that such regulations include the creation of inter-agency Oversight Committee at 
the appropriate field levels. 
SECTION 15. Separabilify Clause. - If any section or provision of this 
Act shall be declared unconstitutional or invalid, the other sections or provisions 
not affected thereby shall remain in full force and effect. 
SECTION 16. Repealing Clause. - All laws, decrees, orders, rules and 
regulations and other issuances inconsistent with the provisions of this Act are 
deemed modified, revoked or repealed accordingly. 
SECTION 17. Effectivity. - This Act shall take effect fifteen (15) days 
after its publication in two (2) leading newspapers of national circulation. 
Approved, 
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