Question & AnswerQ&A (DAR JOINT DAR-LBP MEMORANDUM CIRCULAR NO. 19, S. 2013)
The Circular aims to facilitate the issuance of Certificate of Full Payment (CFP) and Release of Real Estate Mortgage (ROREM) by the Land Bank of the Philippines (LBP) to Agrarian Reform Beneficiaries (ARBs) who have fully paid their land amortizations.
These guidelines apply to ARBs who are awardees under R.A. No. 6657, as amended, and those under Presidential Decree No. 27 who have fully paid their land amortizations and applicable interests to the LBP.
Section 26 of R.A. No. 6657, as amended, provides that lands awarded under this Act shall be paid by the ARBs to LBP in thirty (30) annual amortizations at six percent interest per annum.
Section 12 of E.O. No. 229 states payment of thirty (30) equal annual payments at six percent interest per annum with a two percent interest rebate for timely amortizations, and payment shall not exceed ten percent of the land's annual value of gross production.
LBP shall reduce the interest rate and/or reduce the principal obligation to make the repayments affordable for the ARBs.
The total land cost shall be paid over up to twenty (20) years in twenty (20) equal amortizations with six percent interest per annum and a two percent interest rebate for timely payments.
The government shall subsidize any adjustment or increase resulting from re-evaluation by DARAB or court in administrative or just compensation cases.
Under R.A. No. 6657, payment is based on the Notice of Land Valuation and Acquisition (NLVA); under PD 27/EO 228, it is based on the Land Valuation Summary and Farmer's Undertaking (LVSFU).
The amortization to be paid shall still be based on the original AGP and valuation as per the Land Amortization Schedule approved by the LBP; the amount shall not increase due to higher valuations.