Comprehensive Agrarian Reform Law of 1988

Policy, purpose, and governing principles

Section 2 declares the State policy to pursue a Comprehensive Agrarian Reform Program (CARP) that gives the highest consideration to the welfare of landless farmers and farmworkers to promote social justice and move the nation toward sound rural development and industrialization.
Section 2 establishes owner cultivatorship of economic-size farms as the basis of Philippine agriculture.
Section 2 directs an equitable distribution and ownership of land with due regard to landowners’ just compensation and the nation’s ecological needs.
Section 2 grounds the agrarian reform program on the right of landless farmers and regular farmworkers to own directly or collectively the lands they till, and the right of other farmworkers to receive a just share of the fruits of the lands they work.
Section 2 requires the State to encourage and undertake just distribution of all agricultural lands, subject to the Act’s priorities and retention limits, with payment of just compensation, and to respect the right of small landowners while providing incentives for voluntary land-sharing.
Section 2 recognizes participation rights of farmers, farmworkers, landowners, and their organizations (including cooperatives and independent farmers’ organizations) in planning, organization, and management, and mandates support to agriculture through technology, research, and financial, production, and marketing services.
Section 2 mandates that agrarian reform principles of stewardship apply whenever applicable to the disposition or utilization of other natural resources, including suitable lands of the public domain under lease or concession, subject to prior rights, homestead rights of small settlers, and rights of indigenous communities to ancestral lands.
Section 2 allows resettlement of landless farmers and farmworkers in the State’s own agricultural estates, to be distributed as provided by law.
Section 2 directs the State to protect the rights of subsistence fishermen for the preferential use of communal marine and fishing resources (including offshore fishing grounds against foreign intrusion) and to ensure fishworkers receive a just share from their labor in utilization of marine and fishing resources.
Section 2 declares the principles that land has a social function and land ownership carries special responsibility, including the obligation of agricultural landowners to cultivate directly or through labor administration so the land becomes productive.
Section 2 provides that incentives must encourage landowners to invest agrarian reform proceeds to promote industrialization, employment, and privatization of public sector enterprises, and requires financial instruments used as payment for lands to enhance negotiability and acceptability in the marketplace.
Section 2 authorizes the State to lease undeveloped lands of the public domain to qualified entities for capital-intensive farm development and for traditional and pioneering export crops, subject to beneficiaries’ prior rights under the Act.

Key definitions established by the Act

Section 3 defines “Agrarian Reform” as redistribution of lands (regardless of crops or fruits produced) to landless farmers and regular farmworkers, including arrangements alternative to physical redistribution such as production or profit-sharing, labor administration, and distribution of shares of stock, so beneficiaries receive a just share of the fruits of lands they work.
Section 3 defines “Agriculture, Agricultural Enterprise or Agricultural Activity” to cover cultivation and related farming activities, including harvesting, performed by persons whether natural or juridical.
Section 3 defines “Agricultural Land” as land devoted to agricultural activity as defined in the Act and not classified as mineral, forest, residential, commercial or industrial land.
Section 3 defines “Agrarian Dispute” as any controversy relating to tenurial arrangements over lands devoted to agriculture, including disputes on farmworkers’ associations or representation in negotiating and arranging terms and conditions, and including disputes on compensation and other transfer terms/conditions.
Section 3 defines “Idle or Abandoned Land” as agricultural land not cultivated or developed to produce any crop or devoted to any economic purpose continuously for three (3) years immediately before receipt of notice of acquisition, excluding land permanently or regularly devoted to non-agricultural purposes and excluding unproductiveness due to force majeure or fortuitous events where the land was previously used for agricultural or other economic purpose.
Section 3 defines “Farmer” as a natural person whose primary livelihood is cultivation or production of agricultural crops, by himself or primarily with assistance of his immediate farm household, whether the land is his or under leasehold/share tenancy.
Section 3 defines “Farmworker” as a natural person rendering service for value as an employee or laborer in an agricultural enterprise or farm, including “pakyaw” arrangements, and including an individual whose work has ceased due to or in connection with a pending agrarian dispute and who has not obtained substantially equivalent and regular employment.
Section 3 defines “Regular Farmworker” as a farmworker permanently employed by an agricultural enterprise or farm; “Seasonal Farmworker” as a farmworker employed on a recurrent/periodic/intermittent basis; and “Other Farmworker” as any farmworker not falling under the regular/seasonal categories.
Section 3 defines “Cooperatives” as organizations composed primarily of small agricultural producers, farmers, farmworkers, or other agrarian reform beneficiaries, voluntarily organized to pool land and other resources, operated under one member, one vote, with a juridical person able to be a member with rights and duties of a natural person.

Coverage and schedule of implementation

Section 4 provides that the CARL of 1988 covers, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands under Proclamation No. 131 and Executive Order No. 229, and includes other lands of the public domain suitable for agriculture.
Section 4 covers all alienable and disposable lands of the public domain devoted to or suitable for agriculture.
Section 4 prohibits reclassification of forest or mineral lands to agricultural lands after approval of the Act until Congress determines the specific limits of the public domain by law, taking into account ecological, developmental, and equity considerations.
Section 4 covers all lands of the public domain in excess of specific limits determined by Congress.
Section 4 covers other lands owned by the Government devoted to or suitable for agriculture.
Section 4 covers all private lands devoted to or suitable for agriculture regardless of agricultural products raised or capable of being raised.
Section 5 requires the distribution of all covered lands to be implemented immediately and completed within ten (10) years from effectivity.

Retention limits and tenant protection

Section 6 provides that, except as otherwise provided in the Act, no person may own or retain agricultural land beyond the retention limits set by viability factors determined by the Presidential Agrarian Reform Council (PARC), but in no case may retention exceed five (5) hectares.
Section 6 allows retention of three (3) hectares for each child of the landowner, provided the child is at least fifteen (15) years of age and is actually tilling the land or directly managing the farm.
Section 6 permits landowners covered by Presidential Decree No. 27 to keep the area originally retained under that decree.
Section 6 allows original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of approval of the Act to retain the same areas as long as they continue to cultivate the homestead.
Section 6 gives the landowner the right to choose a retention area that must be compact or contiguous, and provides tenant options if the chosen retention area is tenanted.
Section 6 requires respect for farmers’ or farmworkers’ security of tenure on land prior to approval of the Act.
Section 6 declares that any sale, disposition, lease, management contract, or transfer of possession of private lands executed in violation of the Act’s retention rules is null and void, with a limited validity for transactions executed prior to the Act if registered within three (3) months after effectivity.
Section 6 requires Registers of Deeds to inform the Department of Agrarian Reform (DAR) within thirty (30) days of transactions involving agricultural lands in excess of five (5) hectares.
Section 6 fixes the tenant’s option period at one (1) year from the time the landowner manifests the choice of retention area, and provides consequences depending on whether the tenant remains or chooses beneficiary status in another agricultural land.

Acquisition priorities and multinational corporation rules

Section 7 mandates that DAR, in coordination with PARC, plan and program acquisition and distribution of all agricultural lands through ten (10) years from effectivity, with implementation by phases and specific land categories.
Section 7 requires Phase One acquisition/distribution of:
- rice and corn lands under Presidential Decree No. 27;
- all idle or abandoned lands;
- all private lands voluntarily offered;
- lands foreclosed by government financial institutions;
- lands acquired by PCGG (Presidential Commission on Good Government);
- and all other government-owned lands devoted to or suitable for agriculture,
  to be acquired and distributed immediately upon effectivity with completion within not more than four (4) years.
Section 7 requires Phase Two acquisition/distribution of:
- all alienable and disposable public agricultural lands;
- arable public agricultural lands under agro-forest, pasture and agricultural leases already cultivated and planted to crops;
- public agricultural lands for new development and resettlement; and
- private agricultural lands in excess of fifty (50) hectares (excess hectarage only),
  to be distributed immediately upon effectivity with completion within not more than four (4) years.
Section 7 requires Phase Three acquisition/distribution for remaining private agricultural lands, starting with large landholdings and proceeding to medium and small landholdings under:
- above twenty-four (24) hectares up to fifty (50) hectares, beginning on the fourth (4th) year and completed within three (3) years; and
- from the retention limit up to twenty-four (24) hectares, beginning on the sixth (6th) year and completed within four (4) years.
Section 7 provides that PARC, upon recommendation by PARCCOM, may declare priority land reform areas where acquisition/distribution of private agricultural lands may proceed ahead of the scheduled phases.
Section 7 requires that transfer within the guidelines gives priority to tenanted lands.
Section 7 requires PARC guidelines to determine qualified beneficiaries and allows an owner-tiller to be a beneficiary for the land he cultivates to the extent of the difference between the area he owns and the award ceiling of three (3) hectares.
Section 8 requires lands of the public domain leased/held/possessed by multinational corporations or associations, and government or government-controlled entities devoted to operational agri-business/agro-industrial enterprises, operated by multinationals, to be programmed for acquisition and distribution immediately upon effectivity, completed within three (3) years.
Section 8 deems amended to conform with Section 3 of Article XII of the Constitution lease/management/grower/service contracts covering an aggregate area exceeding 1,000 hectares for foreign corporations/associations/entities and exceeding 500 hectares for foreign individuals.
Section 8 allows contracts not exceeding those thresholds to continue under original terms and conditions but not beyond August 29, 1992, or valid termination whichever comes sooner; after that, contracts continue only when confirmed by the appropriate government agency.
Section 8 limits extension of such leases and agreements to August 29, 1992, after which lands must be completely distributed to qualified beneficiaries/awardees.
Section 8 provides that leases/agreements can continue thereafter only under a new contract between government or qualified beneficiaries/awardees and the enterprise.
Section 8 requires immediate compulsory acquisition and distribution for lands leased/held/possessed by multinational corporations or foreign individuals, owned by private citizens or private non-governmental corporations/associations, upon expiration of the applicable contract as of August 29, 1987, or valid termination whichever comes sooner, but not later than ten (10) years after effectivity; the government must take steps to acquire these lands for immediate distribution thereafter.
Section 8 provides distribution generally directly to individual worker-beneficiaries; if division is not economically feasible, worker-beneficiaries must form a workers’ cooperative or association to deal with the corporation and enter needed agreements, and existing agreements are respected until new agreements are entered.
Section 8 mandates that implementation must not reduce status or diminish vested benefits of worker-beneficiaries existing when the Act becomes effective.
Section 8 requires that the provisions of Section 32 on production and income-sharing apply to farms operated by multinational corporations.
Section 8 requires assistance to new owners for modern technology during the transition and gives preferential treatment to enterprises making good-faith efforts to voluntarily impart advanced technology where feasible.
Section 8 prohibits foreign enterprises/entities/individuals from enjoying rights or privileges better than those enjoyed by domestic ones.

Ancestral lands and exemptions from coverage

Section 9 defines ancestral lands of each indigenous cultural community to include lands in the community’s actual, continuous, and open possession and occupation of the community and its members, and requires respect for the Torrens System.
Section 9 protects the right of these communities to ancestral lands to ensure economic, social, and cultural well-being, and requires recognition and respect for their land ownership/use systems and dispute settlement modes under principles of self-determination and autonomy.
Section 9 authorizes PARC to suspend implementation of the Act with respect to ancestral lands for identifying and delineating such lands.
Section 9 provides that in autonomous regions, respective legislatures may enact their own ancestral domain laws subject to the Constitution and the principles in the Act and other national laws.
Section 10 exempts from coverage lands actually, directly and exclusively used and found necessary for:
- parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds;
- watersheds and mangroves;
- national defense;
- school sites and campuses (including experimental farm stations operated by public or private schools for educational purposes);
- seeds and seedlings research and pilot production centers;
- church sites and appurtenant convents;
- mosque sites and Islamic centers appurtenant thereto;
- communal burial grounds and cemeteries;
- penal colonies and penal farms actually worked by inmates;
- government and private research and quarantine centers; and
- lands with eighteen percent (18%) slope and over except those already developed.

Tenant and lease rental protections; production-sharing duty

Section 12 mandates DAR to determine and fix lease rentals immediately to protect tenurial and economic status of farmers in tenanted lands under retention limits and lands not yet acquired, in accordance with Section 34 of Republic Act No. 3844, as amended.
Section 12 requires DAR to immediately and periodically review and adjust rental structure for different crops, including rice and corn, in different regions to improve progressively the conditions of farmers, tenants, or lessees.
Section 13 mandates that any enterprise adopting Section 32 or operating under production venture, lease, management contract, or similar arrangement, and any farm covered by Sections 8 and 11, must execute a production-sharing plan within ninety (90) days from effectivity, under guidelines prescribed by the appropriate government agency.
Section 13 prohibits interpreting the production-sharing mandate as sanctioning diminution of existing benefits such as salaries, bonuses, leaves, and working conditions, and allows enterprises and employee-beneficiaries to enter agreements with more favorable terms.

Land registration duties and public inspection

Section 14 requires all persons and entities, including government entities, that own or claim to own agricultural lands (whether in their names or in the names of others), except those already registered under Executive Order No. 229, to file within one hundred eighty (180) days from effectivity a sworn statement in the proper assessor’s office in the DAR-prescribed form.
Section 14 requires the sworn statement to state: property description and area; average gross income for at least three (3) years; names of tenants and farmworkers; crops and area of each crop as of June 1, 1987; subsisting mortgages, leases, and management contracts as of June 1, 1987; and the latest declared market value as determined by the city or provincial assessor.
Section 15 requires DAR, in coordination with the Barangay Agrarian Reform Committee (BARC), to register qualified agricultural lessees, tenants, and farmworkers as CARP beneficiaries.
Section 15 requires potential beneficiaries, with assistance of BARC and DAR, to provide household members’ names; landowners or administrators and length of tenurial relationship; location and area of land worked; crops planted; and share in harvest or rental paid or wages received.
Section 15 requires posting a copy of the registry/list of potential CARP beneficiaries in barangay halls, schools, or other public buildings for inspection by the public at all reasonable hours.

Compulsory acquisition procedure and just compensation

Section 16 requires DAR to follow specified procedures for acquisition of private lands:
- DAR must identify land, landowners, and beneficiaries, then send a notice to acquire to owners by personal delivery or registered mail and post it in conspicuous places in municipal building and barangay hall.
Section 16 requires the notice to contain DAR’s offer to pay a corresponding value based on valuation set in Sections 17 and 18 and other pertinent provisions.
Section 16 requires landowners to inform DAR of acceptance or rejection within thirty (30) days from receipt of written notice.
Section 16 requires that if the landowner accepts, Land Bank of the Philippines (LBP) shall pay purchase price within thirty (30) days after execution and delivery of a deed of transfer and surrender of the Certificate of Title and other muniments.
Section 16 requires summary administrative proceedings if there is rejection or failure to reply, requiring landowner, LBP, and other interested parties to submit evidence within fifteen (15) days; the matter is deemed submitted for decision after that period.
Section 16 requires DAR to decide within thirty (30) days after submission for decision.
Section 16 requires that upon receipt of payment (or deposit in an accessible bank designated by DAR of compensation in cash or in LBP bonds), DAR take immediate possession and request Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic, and then proceed with redistribution.
Section 16 grants any party who disagrees with DAR’s decision the right to bring the matter to the court of proper jurisdiction for final determination of just compensation.
Section 17 directs that, in determining just compensation, factors include the cost of acquisition, current value of like properties, nature, actual use and income, sworn valuation by owner, tax declarations, and government assessor assessments.
Section 17 directs that additional factors include social and economic benefits contributed by farmers and farmworkers and by the government, and non-payment of taxes or loans secured from any government financing institution on the land.
Section 18 requires LBP to compensate the landowner in the agreed amount among landowner, DAR, and LBP, or as finally determined by court.
Section 18 authorizes compensation in one mode at landowner’s option, including cash payment with specified percentages based on land size:
- for lands above fifty (50) hectares (excess): twenty-five percent (25%) cash; balance in government financial instruments negotiable at any time;
- for lands above twenty-four (24) hectares up to fifty (50) hectares: thirty percent (30%) cash; balance in government financial instruments negotiable at any time;
- for lands twenty-four (24) hectares and below: thirty-five percent (35%) cash; balance in government financial instruments negotiable at any time.
Section 18 allows compensation through shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets, or other qualified investments per PARC guidelines; tax credits usable against any tax liability; and LBP bonds with specified features including market interest aligned with 91-day treasury bill rates and maturity where ten percent (10%) of face value matures every year from issuance until the tenth (10th) year.
Section 18 provides bond transferability and negotiability and permits bond use by the landowner (and successors/assigns) up to face value for enumerated purposes including government land/asset acquisitions in the same province/region, acquisition of certain government or owned shares, surety/bail substitution, security for government loans for investment in economic enterprise preferably small-and medium-scale industry in the same province/region, payment for taxes and fees (subject to PARC-set percentage limits), tuition fees in government institutions, hospital fees in government hospitals, and other uses allowed by PARC.
Section 18 authorizes PARC to take appropriate measures to protect the economy in case of extraordinary inflation.
Section 19 provides that landowners (other than banks and other financial institutions) who voluntarily offer their lands for sale are entitled to an additional five percent (5%) cash payment.
Section 20 allows landowners subject to acquisition to enter into voluntary arrangements for direct transfer to qualified beneficiaries, but requires submission of notices for voluntary land transfer within the first year of CARP implementation and provides that unresolved negotiations after one (1) year are not recognized and instead the land is acquired by government under the Act.
Section 20 requires voluntary terms not less favorable than government’s standing offer if such offers have been made and fully known to both parties, requires the voluntary agreement to include sanctions for non-compliance by either party, and requires recording and DAR monitoring.
Section 21 allows direct payment by farmer-beneficiary in cash or in kind under mutually agreed terms upon DAR registration and approval, with DAR approval deemed given unless disapproval notice is received within thirty (30) days from registration.
Section 21 provides that if parties cannot agree on price, the compulsory acquisition procedure under Section 16 applies, and LBP must extend financing to beneficiaries for land acquisition.

Land redistribution to qualified beneficiaries

Section 22 requires distribution of covered lands as much as possible to landless residents of the same barangay, and otherwise of the same municipality, following priority order:
- agricultural lessees and share tenants;
- regular farmworkers;
- seasonal farmworkers;
- other farmworkers;
- actual tillers or occupants of public lands;
- collectives or cooperatives of the above beneficiaries; and
- others directly working on the land.
Section 22 gives preference in distribution to the children of landowners qualified under Section 6.
Section 22 prohibits eviction or removal of actual tenant-tillers from the landholding.
Section 22 disqualifies beneficiaries under Presidential Decree No. 27 who culpably sold, disposed of, or abandoned their land from becoming beneficiaries under the program.
Section 22 makes willingness, aptitude, and ability to cultivate and make the land productive a basic beneficiary qualification.
Section 22 requires DAR to monitor each beneficiary’s record/performance, and provides forfeiture of right to continue as beneficiary for negligence or misuse of land or support extended; DAR must submit periodic reports on performance to PARC.
Section 22 allows additional ownership of other lands available for distribution under the Act when retention rights or number of tenants/workers prevent accommodating all persons on the land, at beneficiaries’ option.
Section 22 grants preferential rights in distribution of public domain lands to farmers already in place and those not accommodated in distribution of privately-owned lands.
Section 23 limits ownership by qualified beneficiaries to three (3) hectares of agricultural land.
Section 24 provides that beneficiary rights and responsibilities commence upon DAR award, completed within one hundred eighty (180) days from DAR taking actual possession; ownership is evidenced by a Certificate of Land Ownership Award containing restrictions/conditions, recorded in the Register of Deeds and annotated on the Certificate of Title.
Section 25 provides that awards shall not exceed three (3) hectares, may be contiguous or several parcels cumulated up to award limits, defines a landless beneficiary as owning less than three (3) hectares, and allows collective ownership (co-ownership, farmers cooperative, or other collective organization) subject to area limits based on number of co-owners/members multiplied by the award limit, except in meritorious cases determined by PARC.
Section 26 requires beneficiaries to pay LBP in thirty (30) annual amortizations with six percent (6%) interest per annum, allows PARC to set reduced amounts for first three (3) years, limits first five (5) annual payments to no more than five percent (5%) of annual gross production, and authorizes LBP to reduce interest or principal if payments after the fifth year exceed ten percent (10%) of annual gross production and failure is not due to beneficiary fault.
Section 26 establishes a lien by way of mortgage by LBP on awarded land, allows foreclosure for non-payment of an aggregate of three (3) annual amortizations, requires DAR to be advised so it can award forfeited landholding to other qualified beneficiaries, and permanently disqualifies a beneficiary whose land has been foreclosed.
Section 27 prohibits sale, transfer, or conveyance of awarded lands except through hereditary succession, to government, to LBP, or to other qualified beneficiaries for ten (10) years, and grants children or spouse of transferor a right to repurchase from government or LBP within two (2) years, with LBP notice to BARC and notice to PARCCOM through BARC where applicable.
Section 27 authorizes transfer/conveyance before full payment only with prior DAR approval to heirs or other beneficiaries who cultivate the land, failing which the land is transferred