Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 85)
The purpose of Presidential Decree No. 85 is to create the Agrarian Reform Fund to support the financing requirements of agrarian reform as provided in Presidential Decree No. 27 and for other related purposes.
The sources of the Agrarian Reform Fund include bonds in the Central Bank of the Philippines portfolio, funds from Guarantee Funds, assets from the Development Bank of the Philippines, Philippine National Bank, National Investment and Development Corporation, Government Service Insurance System, Land Bank shares, Agrarian Reform Special Account allocations, proceeds from foreign loans, and other disposable government assets and funds provided by law.
The Agrarian Reform Fund Commission administers the Agrarian Reform Fund. It controls the fund, invests and disposes of its assets, and promulgates rules and regulations for its effective operation. It is composed of the Secretary of Finance as Chairman, the Governor of the Central Bank of the Philippines, and the Secretary of Agrarian Reform as members.
The Commission is composed of the Secretary of Finance as Chairman, the Governor of the Central Bank of the Philippines, and the Secretary of Agrarian Reform as members. In their absence, the next-ranking official represents them.
Funds are used to finance land acquisition through various settlement modes such as cash payments, exchange arrangements, annuities with guarantees, full guarantees on amortization payments by tenant-farmers, and other modes adopted by the Commission. The Fund also finances agricultural production and commodity loans with guarantee coverage up to 85% of loan amounts.
The Commission has exclusive administration and control over the Fund. It can invest and dispose of assets, promulgate rules and regulations, and perform acts for the best interest of the Fund.
Upon recommendation of the Commission and the Central Bank Monetary Board and with the President's approval, the Secretary of Finance may issue bonds, debentures, and other evidences of indebtedness for the Fund, with terms determined by the Commission. These bonds are government obligations, fully tax-exempt, and redeemable within 25 years.
The Agrarian Reform Fund Commission, as holder of Land Bank shares owned or controlled by the Government, is authorized to reorganize the Land Bank, modify its operations and functions, and manage its properties with the President's approval, notwithstanding Republic Act No. 3844.
No, all assets and earnings of the Fund are exempt from all national, provincial, municipal, and city taxes and assessments, both current and future.
The Decree took effect immediately upon its signing on December 24, 1972.