February 8, 2023

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Bill, who condones agrarian reform loans, gets nods

The House of Representatives Committee on Agrarian Reform on Wednesday approved a priority Marcos measure that will relieve beneficiaries of agricultural reform from the burden of debt stemming from agricultural land allocations under the Comprehensive Agricultural Reform Program (CARP).

The committee, chaired by Ifugao MP Solomon R. Chungalao, approved the unnumbered replacement bill for 11 related house bills, which will authorize about P58 billion in agrarian reform loans.

The consolidated bill will be known as the New Agrarian Emancipation Act.

Under the bill, the existing Agricultural Reform Beneficiaries (ARBs) loan will be condoned and written off due to unpaid amortization or interest.

All unpaid amortization and interest, including any penalties or surcharges, arising from loans secured under the CARP or other agrarian reform program or act are hereby condoned by the Government, thereby exempting all ARBs from paying them, thereby exempting Section 26 of the Republic will repeal Law (RA) 6657, as amended, Section 6 of Executive Order (EO) 228, Series of 1987, as well as the relevant provisions of other land reform statutes, the bill said.

It added that the Department of Agrarian Reform (DAR) will issue a certificate of forgiveness, if required, to be endorsed on the Emancipation Patent (EP), Land Tenure Certificate (CLOA) or any other title based on applicable Agrarian Reform Act.

It also said the forgiveness would remove all mortgage liens in favor of the national government, represented by the Land Bank of the Philippines (LBP), which is associated with the acquired land.

The measure states that such acquiescence will comply with applicable banking laws and regulations of Bangko Sentral ng Pilipinas.

The bill aims to amend Section 27 of RA 6657 or the Comprehensive Agricultural Reform Act 1988.

The bill states that land acquired by beneficiaries under the Proposal or other land reform legislation will not be sold, transferred or transferred except by inheritance or to the Government or the LBP or to other qualified beneficiaries by the DAR for a period of ten years.

It added that the Government will replace the ARBS in its financial obligation to pay the value of awarded land to landowners acquired under the Voluntary Land Transfer and Direct Payment Schemes, thereby amending Section 20 of RA 6657, as amended becomes.

Payment of the remaining balance due to affected landowners under the voluntary land transfer and direct payment schemes will be paid by the government from the Agrarian Reform Fund through the LBP.

The bill indicated that ARBs who are yet to receive their awarded land under CARP or any other agrarian reform program or law will do so with no obligation to pay an amortization. Any private agricultural land covered by the CARP or other agrarian reform programs or laws that has not been allocated by the effective date of this proposal will be distributed to the eligible beneficiaries free of charge.

Under the measure, ARBs who have completed the payment of the amortization schedule and the payment of interest charges under Section 26 of RA 6657 as amended, Section 6 of EO 228 of 1987 and other agrarian reform legislation will be given preferential treatment in providing support services and access to credit facilities .

It said ARBs who paid a portion of the amortization plan and interest charges under Section 26 of RA 6657, as amended, and other farm reform legislation prior to the enactment of this proposal will be eligible for an estate tax amnesty until June 30, 2025.

Also, the agrarian reform countries of such beneficiaries can enjoy the immunities and privileges of estate tax amnesty as estates and pay an estate amnesty tax of 6 percent based on the testator’s total net worth at the time of death.

The bill’s authors include Chungalao, Ralph G. Recto, Maria Bernadette G. Escudero, Robert Raymund M. Estrella, Arnan C. Panaligan, Jaime R. Fresnedi, Wilbert T. Lee, Joey Sarte Salceda, Angelo Marcos Barba, Alfred C Delos Santos, Arlene D. Brosas, France L. Castro, Raoul Danniel & Manuel, and Kristine Singson-meehan.

The bill will be submitted to the House Committee on Ways and Means for consideration of the tax provisions of the bill.

“Biggest success”

Salceda called the measure “potentially PBBM’s greatest policy achievement of 2022 as it could change the game for our long-suffering and long-stagnant rural communities.”

He said CARP needed a “major reorganization and this landmark move could be just the ticket”.

“CARP without adequate support services and with limited capital or entrepreneurship among farmer beneficiaries has been shown to reduce agricultural productivity in CARP countries by as much as -34.1 percent compared to baseline. This has resulted in nearly P418 billion in lost productivity for all CARP countries each year [for the 10.3 million hectares of CARP land].”

He added that tolerating ARB debt could result in productivity gains ranging from 23.8 percent now that the market can allocate land more efficiently, to 38.3 percent if productivity-boosting interventions are scaled up.

Salceda, who has objected to proposals to ban pledging emancipated land, said the proposal could unlock up to 472 billion pesos in credit and 629 billion pesos in farm productivity gains.

He said gross value added in agriculture could also increase by as much as 174 billion pesetas “as land would be available for its best use”.

Salceda is proposing a tax amnesty until June 30, 2025 as an incentive for those who have paid part of their amortization proposal.

“I think this is a crucial determination as these lands tend to go unused or unused. You don’t earn much. Therefore, the ARB descendants who will inherit them may not have the funds to pay estate taxes on those lands. This will prevent title, credit access and proper use.”