Implementation mechanisms of CARP

Policy, scope, and coverage rules

Section 1 provides that CARP covers, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands under Proclamation No. 131 (July 22, 1987).
Section 1 further covers, whenever applicable, other lands of the public domain suitable to agriculture.
Section 2 requires that land acquisition and distribution under CARP be implemented as provided in the order, subject to priorities and reasonable retention limits that Congress may prescribe under the Constitution.
Section 2 mandates that implementation also take into account ecological, developmental, or equity considerations, and remain subject to the payment of just compensation.
Section 3 exempts from CARP coverage lands actually used and found to be necessary for:
- national defense;
- school sites and campuses;
- religious purposes;
- penal colonies; and
- government research and quarantine centers.

Compulsory registration and valuation consequences

Section 4 requires that within 180 days from effectivity, all natural and juridical persons, including government entities, owning, leasing, or managing agricultural lands must file a sworn statement in the proper Assessor’s Office using the form prescribed by the Department of Agrarian Reform (DAR).
The sworn statement must include, among others:
- (a) description and area of the property;
- (b) estimated average gross income from the property;
- (c) names of all tenants and regular farmworkers therein;
- (d) the crop(s) planted as of June 1, 1987 and the area covered by each crop;
- (e) terms of mortgages, leases, and management contracts subsisting as of June 1, 1987;
- (f) the latest declared market value as determined by the City/Provincial Assessor; and
- (g) a sworn declaration of the current fair market value the owner wishes to receive if acquired for agrarian reform purposes.
Section 4 provides that if the landowner fails to register within the period, the government bases valuation for landowner compensation on the City/Provincial Assessor’s value.
Section 4 mandates that starting with the quarter immediately following registration, real property tax must be based on the owner’s declared current fair market value.

Private land acquisition: notice, compensation, and transfer

Section 5 directs that after land, landowners, and beneficiaries are identified, the DAR must publish its decision to acquire and notify landowners, including the DAR’s offer to pay under Section 6.
Section 5 requires that within 15 days from publication and notice, the landowner must signify acceptance or rejection of the offer.
Section 5 provides that if the landowner accepts, the Land Bank of the Philippines (LBP) pays the landowner within 15 days after surrender of the Certificate of Title and other documents required by the DAR and LBP.
Section 5 provides that if the landowner rejects or does not reply, the DAR conducts administrative summary proceedings to determine compensation, requiring submission of evidence within 15 days from receipt of notice.
Section 5 provides that after expiration of the submission period, the matter is deemed submitted for decision; after decision, the LBP must establish a trust fund within 15 days in the amount decided and notify the landowner and the DAR.
Section 5 allows any party who disagrees with the decision to bring the matter to the proper court for determination of just compensation.
Section 5 requires that after establishment of the trust fund or receipt by the DAR of the landowner’s acceptance, the DAR must take immediate possession of the land.
Section 5 mandates that upon formal notification by the DAR, the Register of Deeds issues a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines as Trustee for and in behalf of qualified beneficiaries, after which the DAR proceeds with redistribution.
Section 5 provides that beneficiaries’ ownership rights and responsibilities commence at DAR designation as awardees-owners, evidenced by a Certificate of Landownership Award.

Landowner compensation and assistance

Section 6 establishes that LBP compensates the landowner an amount determined by government, based on the owner’s declaration of current fair market value under Section 4, subject to controls defined and promulgated by the Presidential Agrarian Reform Council (PARC) under Section 18.
Section 6 provides that compensation may be paid at the landowner’s option in any of the following modes:
- (a) Bond payment over 10 years: 10% of the value in cash immediately and the balance in LBP bonds bearing market rates of interest aligned with 91-day treasury bills rates, net of applicable final withholding tax; one-tenth of the face value matures every year from issuance until the tenth year.
- (b) Direct payment in cash or kind by farmer-beneficiaries, under mutually agreed terms subject to DAR approval.
- (c) Other modes of payment prescribed or approved by PARC.
Section 6 states that LBP bonds issued hereunder are eligible at face value for purchase of government assets to be privatized.
Section 7 requires LBP to assist landowners affected by the order by providing:
- investment information and counseling assistance;
- conversion and/or exchange of LBP bonds to/from government stocks and/or with government assets; and
- marketing of LBP bonds.

Voluntary transfers and special land arrangements

Section 8 grants landowners whose lands are subject to redistribution the option to enter a voluntary agreement for direct transfer to appropriate beneficiaries, under terms acceptable to both parties and subject to DAR approval.
Section 8 requires that voluntary transfer guidelines include:
- beneficiaries determined by DAR to be the same individuals who would be eligible to purchase if government acquired the land for resale;
- the transferred area is no less than the area the government would otherwise acquire for resale;
- both parties fully understand the terms of the government’s standing offer to purchase from the landowner and standing offer to resell to beneficiaries; and
- the voluntary transfer agreement includes sanctions for non-compliance by either party, is binding and irrevocable for both parties, and is duly recorded at and monitored by DAR.
Section 9 mandates that the government purchases all agricultural lands it deems productive and suitable for farmer cultivation that are voluntarily offered for sale to it at a valuation determined in accordance with Section 6.
Section 9 provides that such voluntary sale transactions are exempt from capital gains tax and other taxes and fees.
Section 10 authorizes corporate landowners to let workers and other qualified beneficiaries purchase a proportion of the corporation’s capital stock equal to the land assets’ relation to the corporation’s total assets, and to grant additional compensation usable for this purpose.
Section 10 provides that PARC approval of a plan for such stock distribution and its initial implementation is deemed compliance with CARP land distribution requirements.
Section 11 allows leases and management contracts on covered land registered with the Register of Deeds prior to approval of this order to continue under original terms and conditions, but not beyond five (5) years from effectivity.
Section 11 provides that renewals of leases and management contracts after the initial period require qualified beneficiaries’ agreement.
Section 11 requires that upon distribution/award, if existing lease rentals are not acceptable to qualified beneficiaries, rentals must be renegotiated with assistance of the Barangay Agrarian Reform Council (BARC); if parties fail to agree, DAR determines rental.
Section 11 states that mortgages and other claims registered with the Register of Deeds are assumed by the government up to the landowner’s compensation value under Section 6.

Beneficiary payments, credit support, ownership, and use

Section 12 provides that land acquired and redistributed by government is paid for by beneficiaries in thirty (30) equal annual payments at six (6) percent per annum interest.
Section 12 requires the first payment due one (1) year after resale and provides a two (2) percent interest rebate for amortizations paid on time.
Section 12 limits annual amortizations so they shall not exceed ten (10) percent of the land’s annual value of gross production.
Section 12 provides that if amortizations exceed ten (10) percent, LBP must reduce the interest rate and/or reduce the principal to make repayments affordable.
Section 12 mandates incentives for prepayments.
Section 12 grants LBP a lien by way of mortgage on land acquired by the beneficiary, and states the mortgage may be foreclosed by LBP when outstanding principal balance unpaid and past due reaches the equivalent of three (3) annual amortizations.
Section 13 provides that upon land transfer, each beneficiary who actually farms the land is eligible for a production loan to finance one crop cycle under terms and conditions determined by LBP case by case, and renewable upon repayment.
Section 14 permits collective or individual transfer of whole parcels or estates for lands with multiple beneficiaries, at the option of beneficiaries.
Section 14 limits collective ownership so each beneficiary’s undivided share in land held in common is equivalent to not more than the applicable retention limit.
Section 14 authorizes beneficiaries to collectively decide on continued operation of the parcel/estate as a whole or subdividing into individual lots and the manner of implementation.
Section 15 mandates that all alienable and disposable public lands suitable for agriculture and outside proclaimed settlements are distributed by DENR to qualified beneficiaries certified jointly by DAR and DENR.
Section 16 mandates production sharing for individuals or entities owing and/or operating lease agricultural lands with gross sales exceeding Five Million Pesos (PHP 5 million) per annum.
Section 16 requires execution of a production sharing salary plan giving at least two and one-half (2.5) percent of gross sales from production/cultivation as compensation to farmworkers over and above their current compensation.
Section 16 limits employer obligation so it is not more than 100 percent of the regular and annual compensation of farmworkers.

DAR quasi-judicial authority, PARC coordination, BARC mediation

Section 17 vests DAR with quasi-judicial powers to determine and adjudicate agrarian reform matters.
Section 17 grants DAR exclusive original jurisdiction over all matters involving agrarian reform implementation, except those under DENR and DA exclusive original jurisdiction.
Section 17 authorizes DAR to punish for contempt and to issue subpoena, subpoena duces tecum, and writs to enforce orders or decisions.
Section 17 provides that DAR decisions may be appealed to the Regional Trial Courts in proper cases, but are immediately executory notwithstanding such appeal.
Section 18 creates the Presidential Agrarian Reform Council (PARC) to coordinate CARP implementation and ensure timely delivery of support services.
Section 18 provides PARC composition with the President as Chairman; vice chairmen include the Secretaries/Heads of DAR, DA, and DENR; Executive Secretary and members include: Department of Budget and Management, Department of Finance, Department of Justice, Department of Labor and Employment, Department of Local Government, Department of Public Works and Highways, Department of Trade & Industry, Department of Transportation and Communications, National Economic and Development Authority, Land Bank of the Philippines, and Presidential Commission on Good Government.
Section 18 directs the President to appoint representatives of agrarian reform beneficiaries and affected landowners as PARC members.
Section 18 states that DAR provides the PARC Secretariat and the Secretary of Agrarian Reform is the Director-General of the Secretariat.
Section 18 requires PARC to formulate and/or implement policies, rules, and regulations including:
- recommending small farm economy areas specific by crop based on technical study and evaluation;
- scheduling acquisition and redistribution of specific agrarian reform areas, while ensuring acquisition is not implemented until all requirements are completed, including the first payment to landowners concerned;
- controlling mechanisms for evaluating the owner’s declaration of current fair market value under Section 4 to establish the government’s compensation offer under Section 6, considering current local transactions, owner’s annual income, and other factors.
Section 18 establishes an Executive Committee of PARC composed of the Secretary of Agrarian Reform as Chairman and members from specified agencies including Executive Secretary, Department of Agriculture, Department of Environment and Natural Resources, Department of Finance, Department of Public Works and Highways, and Land Bank of the Philippines.
Section 18 requires that within ninety (90) days from effectivity, the Executive Committee complete a Program of implementation incorporating physical targets, implementation schedule, and support requirements, and submit it to PARC for approval.
Section 18 sets foundational constitutional-aligned CARP policies and guidelines incorporated into the implementation program, including recognition of farmers and regular farmworkers’ rights to own land they till (or receive just share of fruits), respect for small landowners’ rights, encouragement of voluntary land-sharing, participation rights of farmers/farmworkers/landowners/cooperatives/independent organizations in planning and management, respect for prior rights in public domain and ancestral/community rights, provision of support services, encouragement of landowners to invest proceeds for industrialization/employment/privatization, and expropriation at earliest possible time of idle or abandoned agricultural lands as defined by law for distribution.
Section 19 directs DAR to convene at the barangay level a Barangay Agrarian Reform Council (BARC) operating on a self-help basis.
Section 19 provides BARC membership includes representatives from farmer/farmworker beneficiaries and non-beneficiaries, agriculture cooperatives, other farmer organizations, Barangay Council, NGOs, landowners, DA and DENR officials assigned to the barangay/area, a DAR Agrarian Reform Technologist as Secretary, and an LBP representative.
Section 19 sets BARC functions to support implementation programs and to mediate, conciliate, or arbitrate agrarian conflicts/issues brought for resolution, and to perform delegated functions from PARC, its Executive Committee, or the DAR Secretary.

Financing of CARP and special appropriations

Section 20 creates the special fund called the Agrarian Reform Fund, with an initial amount of FIFTY BILLION PESOS (PHP 50 billion) to cover estimated CARP cost from 1987 to 1992.
Section 20 provides that Agrarian Reform Fund sources include receipts from the sale of assets of the Asset Privatization Trust (APT) and receipts from sale of ill-gotten wealth recovered through the Presidential Commission on Good Government, and other government sources deemed appropriate.
Section 20 states that amounts collected and accruing to the special fund are automatically appropriated for authorized purposes in the order.
Section 21 appropriates TWO BILLION SEVEN HUNDRED MILLION PESOS (PHP 2.7 billion) for supplemental CARP requirements for 1987.
Section 21 directs that the supplemental appropriation is sourced from receipts of sale of ill-gotten wealth recovered through PCGG and proceeds from sale of assets by APT, accruing to the Agrarian Reform Fund and treated as automatically appropriated for the order’s purposes.

Sanctions and institutional protections

Section 22 imposes permanent disqualification and forfeiture of rights and benefits for persons, associations, or entities that prematurely enter land to avail themselves of rights and benefits under this order.
Section 23 provides that persons, associations, or entities that willfully prevent or obstruct CARP implementation are liable for contempt.
Section 25 prohibits lower courts from issuing injunctions, restraining orders, prohibitions, or mandamus against the DAR, DA, DENR, and the Department of Justice in implementing CARP.

Related laws, free registration, and general clauses

Section 27 provides that Presidential Decree No. 27, as amended, continues to operate with respect to rice and corn lands covered thereunder.
Section 27 establishes that Republic Act No. 3844 and other agrarian laws not inconsistent with the order have suppletory effect.
Section 28 directs Registers of Deeds to register free of payment all fees, patents, titles, and documents required for CARP implementation.
Section 24 protects the rights of indigenous cultural communities to their ancestral lands within the framework of national unity and development to ensure their economic, social, and cultural well-being.
Section 26 authorizes PARC to call upon other government agencies, bureaus, offices, and government-owned or controlled corporations for support and assistance.
Section 29 contains a separability clause: if any section or provision is held unconstitutional or invalid, the remaining sections or provisions are not affected.
Section 30 provides a repealing clause: all laws, issuances, decrees, or parts inconsistent with the order are repealed or amended accordingly.