Agrarian Reform Loan Condonation Act

Coverage and who benefits

The Act covers the condonation of principal agrarian reform debt amounting to P57.557 billion of 610,054 Agrarian Reform Beneficiaries (ARBs), covering 1,173,101.57 hectares (Section 2).
The Act also covers outright condonation of the principal loan of P14.5 billion, including interests, penalties and surcharges, of 263,622 ARBs covering 409,206.91 hectares, where the ARBs’ names and loan details were already submitted by the Land Bank of the Philippines (LBP) to Congress (Section 2).
The remaining P43.057 billion condonation in Section 2 takes effect only after LBP and the Department of Agrarian Reform (DAR) submit detailed indebtedness details to Government, covering 346,432 ARBs covering 763,894.66 hectares, contained in a list required under Section 2 (Section 2).
For purposes of the Act, ARBs refer to farmers or farmworkers granted lands under Presidential Decree No. 27, Republic Act No. 6657 (as amended), and Republic Act No. 9700, who have outstanding loan balances payable to the LBP and to private landowners as of the Act’s effectivity (Section 4).

Full loan condonation and mortgage release

Upon effectivity, the individual loans of ARBs—including interests, penalties and surcharges—secured under the Comprehensive Agrarian Reform Program (CARP) or from other agrarian reform programs or laws are condoned and written off by the Government (Section 2).
The ARBs must have been indebted to Government as of the effectivity of the Act (Section 2).
LBP and DAR must submit a detailed list of actual loans subject to condonation under the collective Certificate of Land Ownership Awards (CLOAs), including the ARB name; amount of loan plus penalties, interests, and surcharges; location; hectarage; and other relevant information, to the concerned Senate and House committees within three (3) years from effectivity (Section 2).
The congressional submission becomes part of the Congressional Records of the Act after the required committee submission under Section 2 (Section 2).
DAR must issue, whenever necessary, a Certificate of Condonation annotated on the Emancipation Patent (EP) and CLOA based on applicable agrarian reform law (Section 2).
Condonation lifts all mortgage liens attached to the land acquired in favor of the National Government, as represented by the LBP (Section 2).

VLT/DPS compensation payment termination

The Act terminates all direct payments of compensation by 10,201 ARBs covering 11,531.24 hectares to landowners under Voluntary Land Transfer (VLT) and Direct Payment Schemes (DPS) amounting to P206,247,776.41 (Section 3).
Remaining balances of compensation due concerned landowners must be paid by the Government through the LBP and charged against the Agrarian Reform Fund (Section 3).
Termination and payment treatment applies where the ARBs were indebted to the landowner as of the effectivity of the Act (Section 3).

Title processing and condonation annotation

The appropriate Registry of Deeds must register the EP, CLOA, or any other title issued under applicable agrarian reform law within sixty (60) days from issuance in the name of the ARB (Section 8).
The Registry of Deeds must annotate the Notice of Condonation on all affected EPs, CLOAs, or other titles within sixty (60) days from issuance by DAR (Section 8).

Estates tax treatment and local tax amnesty

Land awarded to ARBs must be excluded from the ARB’s gross estate for purposes of estate tax (Section 7).
The Department of the Interior and Local Government must encourage local government units to enact local tax amnesty on real property taxes and other transfer taxes of qualified ARBs under Section 7 (Section 7).

Restitution and dismissal of forfeiture cases

Any pending administrative case involving forfeiture by DAR solely due to failure of an ARB to pay the thirty (30)-year amortization plus six percent (6%) annual interest must be dismissed motu proprio by DAR immediately (Section 9).
DAR must move for dismissal of all actions pending with the courts relating to collection of unpaid principal and interests over agricultural lands covered by agrarian reform laws (Section 9).
Execution of a final and executory administrative decision that disqualified an ARB—through cancellation of agrarian reform title, extinguishment of possession and ownership rights, removal of the person from the awarded land, or dismantling of improvements—due to failure to pay the thirty (30)-year amortization plus six percent (6%) annual interest must be immediately terminated (Section 9).
Upon termination, the agrarian reform award must be immediately restored and the forfeiture decision reversed (Section 9).
Any agrarian reform title cancelled due to such final and executory decision must be reconstituted immediately in favor of the ARB (Section 9).
If the agricultural land was already awarded to another beneficiary, DAR must, as far as equitable, award another land to the disqualified ARB (Section 9).

Disqualification and liberalized investigation

A person convicted by final judgment of prohibited acts and omissions under Section 73 and meted penalties under Section 74 of Republic Act No. 6657 (as amended) is disqualified to avail of benefits under the Act (Section 10).
Disqualification also results upon a final judgment determination that an ARB, in violation of Section 22 of Republic Act No. 6657 (as amended), willfully refused to make the awarded land productive as possible or deliberately neglected or abandoned the awarded land continuously for two (2) calendar years (Section 10).
Non-cultivation due to non-installation of the ARBs, threats by other stakeholders or entities, lack of facilities and support services, or situations beyond the ARBs’ control not due to their fault or actuations must not be considered neglect, abandonment, or grounds for disqualification (Section 10).
DAR must thoroughly investigate and revalidate allegations that constitute disqualification, in a manner construed liberally in favor of the ARBs (Section 10).

Landowner rights preserved and transfers unaffected

Nothing in the Act diminishes the right of landowners to just compensation for agricultural lands acquired under the agrarian reform program (Section 11).
Nothing in the Act is to be interpreted to remove existing limitations on the transfer, ownership, and agricultural use of land (Section 11).

RSBSA inclusion and support services mandate

The Department of Agriculture must include ARBs beneficiaries of the Act in the Registry System for Basic Sectors in Agriculture (RSBSA) (Section 5).
The Department of Agriculture must provide ARBs all support services due to farmers under the RSBSA system (Section 5).

Preference for ARBs with paid amortizations

ARBs who have completed payment of the amortization schedule and interest charges under Section 26 of Republic Act No. 6657 (as amended), Section 6 of Executive Order No. 228 of 1987, and other agrarian reform laws must be given preference in provision of credit facilities and support services (Section 6).
The preference is tied to Section 37 of Republic Act No. 6657 (as amended) and relevant DA and government financial institution programs and projects (Section 6).

Implementing rules and agency assistance

The DAR, in coordination with the Executive Committee of the Presidential Agrarian Reform Council (PARC) and with technical assistance of the LBP, must issue rules and regulations for effective implementation within sixty (60) days from effectivity (Section 12).
All other government offices and agencies must render prompt and necessary assistance, subject to applicable laws and rules, to fully implement the Act (Section 13).

Funding and budget charging

The amount necessary for implementation must be charged against the Agrarian Reform Fund, certified by the Bureau of the Treasury (Section 14).
Inclusion in the annual General Appropriations Act must follow existing budgeting process, rules and regulations, and such other funds as may be authorized by Congress (Section 14).

Separability and repeal/ amendment rules

If any provision is declared unconstitutional, the remainder of the Act remains in full force and effect (Section 15).
Section 21 of Republic Act No. 6657 (as amended) is modified, and all laws, executive orders, issuances, or parts inconsistent with the Act are amended, repealed, or modified accordingly (Section 16).