EXECUTIVE ORDER NO. 228
EXECUTIVE ORDER NO. 228 - DECLARING
FULL LAND OWNERSHIP TO QUALIFIED FARMER BENEFICIARIES COVERED BY
PRESIDENTIAL DECREE NO. 27: DETERMINING THE VALUE OF REMAINING UNVALUED
RICE AND CORN LANDS SUBJECT TO P.D. NO. 27; AND PROVIDING FOR THE
MANNER OF PAYMENT BY THE FARMER BENEFICIARY AND MODE OF COMPENSATION TO
THE LANDOWNER
WHEREAS,
Presidential Decree No. 27; for purposes of determining the cost of the
land to be transferred to the tenant-farmer; provided that valuation
shall be determined by crop productivity;
WHEREAS, there is a need to complete Operation Land Transfer and
accelerate the payment to the landowners of lands transferred to
tenant-farmers; and
WHEREAS, there is also a need to maintain the financial validity of the
Land Bank of the Philippines, the financing arm of the agrarian reform
program of the government;
NOW THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by
virtue of the powers vested in me by the Constitution, here order that:
Section 1. All qualified farmer beneficiaries are now
deemed full owners as of October 21, 1972 of the land they acquired by
virtue of Presidential Decree No. 27 (hereinafter referred to as P.D.
No. 27).
Sec. 2. Henceforth, the valuation of rice and corn
lands covered by P.D. No. 27 shall be based on the average gross
production determined by the Barangay Committee on Land Production in
accordance with Department Memorandum Circular No. 26, Series of 1973,
and related issuances and regulations of the Department of Agrarian
Reform. The average gross production per hectare shall be multiplied by
two and a half (2.5), the product of which shall be multiplied by
Thirty Five Pesos (P35.00), the government support price for one cavan
of 50 kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00),
the government support price for one cavan of 50 kilos of corn on
October 21, 1972, and the amount arrived at shall be the value of the
rice and corn land, as the case may be, for the purpose of determining
its cost to the farmer and compensation to the landowner.
Lease rentals paid to the landowner by the farmer beneficiary after
October 21, 1972, shall be considered as advance payment for the land.
In the event of dispute with the land owner regarding the amount of
lease rental paid by the farmer beneficiary, the Department of Agrarian
Reform and the Barangay Committee on Land Production concerned shall
resolve the dispute within thirty (30) days from its submission
pursuant to Department of Agrarian Reform Memorandum Circular No. 26,
Series of 1973, and other pertinent issuances. In the event a party
questions in court the resolution of the dispute, the landowner’s
compensation claim shall still be processed for payment and the
proceeds shall be held in trust by the Trust Department of the Land
Bank in accordance with the provisions of Sec. 5 hereof, pending the
resolution of the dispute before the court.
Sec. 3. Compensation shall be paid to the
landowners in any of the following modes, at the option of the
landowners:
(a)
Bond payment over ten (10) years, with ten percent (10%) of the value
of the land payable immediately in cash, and the balance in the form of
LBP bonds bearing market rates of interest that are aligned with 90-day
treasury bills rates, net of applicable final withholding tax.
One-tenth of the face value of the bonds shall mature every year from
the date of issuance until the tenth year.
The LBP bonds issued hereunder
shall be eligible for the purchase of government assets to be
privatized.
(b) Direct
payment in cash or in kind by the farmer-beneficiaries with the terms
to be mutually agreed upon by the beneficiaries and landowners and
subject to the approval of the Department of Agrarian Reform; and
(c) Other
modes of payment as may be prescribed or approved by the Presidential
Agrarian Reform Council.
Sec. 4. All outstanding Land Bank bonds that are
retained by the original landowners-payee or by their heirs, are deemed
matured up to on-twenty fifth (1/25) of their yearly face value from
their date of issue to the date of this Executive Order and may be
claimed by the original landowner-payee by surrendering the bonds to
the Land Bank. The original landowner-payee may claim payment for the
remaining unmatured period of the surrendered bonds under any of the
modes of compensation provided in Sec. 3, subsections (a) (b) or (c)
hereof.
In order to meet the financial requirements mentioned in this Section ,
the Central Bank shall remit to the Land Bank such sums as may b
necessary from the Sinking Fund established by the Land Bank from the
retirement of its bonds and other long-term obligations and which
Sinking Fund is administered by the Central Bank: Provided, however,
That there is no change in maturity of other outstanding Land Bank
bonds acquired and held by transferees from original bondholders.
The landowner is exempt from capital gains tax on the compensation paid
to him under this Executive Order.
Sec. 5. In the event that the landowner does not
accept payment of the compensation due him, his compensation shall be
held in trust for him by the Trust Department of the Land Bank. The
cash portion of the compensation and such portions that mature yearly
shall be invested by the Trust Department only in government securities
fully guaranteed by the Republic of the Philippines. All the net
earnings of the investment shall be for the benefit of the landowner,
his heirs or successors in interest.
The rights of the landowners may be exercised by his heirs upon his
death.
Sec. 6. The total costs of the land including
interest at the rate of six percent (6%) per annum with a two percent
(2%) interest rebate for amortizations paid on time, shall be paid by
the farmer-beneficiary or his heirs to the Land Bank over a period up
to twenty (20) years in twenty (20) equal annual amortizations. Lands
already valued and financed by the Land Bank are likewise extended a
20-year period of payment of twenty (20) equal annual amortizations.
However, the farmer-beneficiary if he so elects, may pay in full before
the twentieth year or may request the Land Bank to structure a
repayment period of less than twenty (20) years if the amount to be
financed and the corresponding annual obligations are well within the
farmer’s capacity to meet. Ownership of lands acquired by the
farmer-beneficiary may be transferred after full payment of
amortizations.
Sec. 7. As of the date of this Executive Order, a
lien by way of mortgage shall exist in favor of the Land Bank on all
lands it has financed and acquired by the farmer-beneficiary by virtue
of P.D. No. 27 for all amortizations, both principal and interest, due
from the farmer-beneficiary or a valid transferee until the
amortizations are paid in full.
Sec. 8. Henceforth, failure on the part of the
farmer-beneficiary to pay three (3) annual amortizations shall be
sufficient cause for the Land Bank to foreclose on the
mortgage.
Sec. 9. Thirty (30) days after final notice for
payment to the defaulting tenant-farmer, a copy of which notice shall
be furnished to the Department of Agrarian Reform, the Land Bank may
foreclose on the mortgage by registering a certification under oath of
its intent to foreclose with the Registry of Deeds of the city or
province where the land is located attaching thereto: a copy of the
final notice for payment; proof of service to the tenant-farmer and the
Department of Agrarian Reform of the final notice for payment; and a
certification that at least three (3) annual amortizations on the land
or the sum thereof remain unpaid. The mortgage is deemed foreclosed
upon registration of said documents with the Registry of Deeds.
In the event the defaulting tenant-farmer could not be served the final
notice for payment, the Land Bank shall post the notice for payment in
the town hall, public market and barangay hall or any other suitable
place frequented by the public of the barangay where the defaulting
tenant-farmer resides. A certification by the Land Bank to this effect
will substitute for the proof of service of the final notice of payment
for purposes of foreclosure.
The Register of Deeds of all cities and provinces are directed to have
a separate registry book to enter all the requirements of foreclosure
as provided herein.
Sec. 10. The tenant-farmer, or any of his
compulsory heirs may lift the foreclosure within a period of two (2)
years from its registration by paying the Land Bank all unpaid
amortizations on the land with interest thereon of six percent (6%) per
annum. In case of failure to lift the foreclosure within the said
period, ownership of the land shall be deemed transferred to the Land
Bank.
Sec. 11. The Land Bank, not later than three (3)
months after its acquisition of the land, shall sell the foreclosed
land to any interested landless farmer duly certified to as a bona fide
landless farmer by the Department of Agrarian Reform of the barangay or
the two closest barangays where the land is situated. The cost of the
land is the unpaid amortizations due on the lands as of the date of the
sale with interest thereon of six percent (6%) per annum. In the event
that there is more than one interested buyer, the actual buyer shall be
determined by lottery in the presence of all the buyers or their
representatives and a representative of the Department of Agrarian
Reform. The Deed of Conveyance executed by the Land Bank in favor of
the farmer transferee shall be registered with the Register of Deeds of
the city or province where the land is located. Ownership shall
transfer to the farmer transferee only upon registration with the
Registry of Deeds. The lien of the Land Bank by way of mortgage on the
remaining unpaid amortizations shall subsists on the title of the
transferee.
Sec. 12. The Land Bank, at least one (1) month
prior to the sale, shall furnish the Department of Agrarian Reform with
a notice of sale and shall post a similar notice in the town hall,
public market and barangay hall or any other suitable place frequented
by the public of the barangay where the property is located. The notice
shall state the description of the property subject of the sale, the
price, the date and place of sale.
Sec. 13. The National Land Titles and Deeds
Registration Administration is hereby authorized to issue such rules
and regulations as may be necessary relative to the registration with
the Register of Deeds of all transactions/activities required herein
taking into consideration the need to protect the integrity of the
Torrens System, the interests of the parties and innocent third
parties.
All transactions/activities and their corresponding documents that are
registered with the Register of Deeds pursuant to the requirements of
P.D. No. 27 and this Executive Order shall be free from all documentary
stamps and registration fees.
Sec. 14. The Department of Agrarian Reform and the
Land Bank are authorized to issue the additional implementing
guidelines of this Executive Order which shall not be later than sixty
(60) days from the date hereof.
Sec. 15. To ensure the successful implementation
of the Agrarian Reform Program, an Agrarian Reform Operating Fund
(Agrarian Fund) shall be set up by the National Government in the Land
Bank. The amount of this Agrarian Fund, to be determined by the
Government Corporation Monitoring and Coordinating Committee
hereinafter referred to as GCMCC), will source the funding requirements
for Land Bank to carry out the full implementation of this program
which will include the net operating losses directly and indirectly
attributable to this program and the credit facilities to farmers and
farmers’ organizations. Within thirty (30) days from the effectivity of
this Executive Order, the Land Bank shall submit to the GCMCC its
funding requirements for 1987. Thereafter, within sixty (60) days after
the end of each calendar year, the Land Bank shall submit to the GCMCC
an accounting of all drawings the Land Bank had made against the Fund.
At the same time, it will also submit its prospective funding
requirements for the current year for review and validation of the
GCMCC. The amount approved by the GCMCC shall be deemed appropriate and
the amount programmed for release in coordination with the Department
of Finance, Budget and Management and the National Economic and
Development Authority. Within thirty (30) days from GCMCC’s approval,
such funds shall be remitted to the Land Bank for credit to the
Agrarian Fund.
Sec. 16. If any part of this Executive Order is
declared invalid or unconstitutional, it shall not affect any other
part thereof.
Sec. 17. All laws, presidential decrees, orders,
letters of instructions, rules and regulations, and other issuances or
parts thereof inconsistent with this Executive Order are hereby
repealed or modified accordingly.
Sec. 18. This Executive Order shall take effect
upon its signing and publication as provided by law.
DONE in the City of Manila,
this 17th day of July, in the year of Our Lord, nineteen hundred and
eighty-seven.
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Since 19.07.98.