Guidelines on Protection of Non-Convertible Agricultural Lands

Constitutional policy and legal basis

Section 21, Article II of the 1987 Constitution is invoked to support the State’s promotion of comprehensive rural development and agrarian reform.
Section 1, Article XII of the 1987 Constitution is invoked to support industrialization and full employment based on sound agricultural development and agrarian reform.
Section 9, Article XIII of the 1987 Constitution is invoked to support continuing urban land reform and housing for underprivileged and homeless citizens in urban centers and resettlement areas.
The Order is issued based on the President’s power to issue guidelines to Executive agencies to define roles consistent with agency mandates and government priorities (WHEREAS clauses).

Core principles and governing policies

The State must prioritize a rational and sustainable allocation, utilization, management, and development of the country’s land resources (Section 1(A)(1)).
The State must protect prime agricultural lands for food production and give highest priority to completion of the Comprehensive Agrarian Reform Program (CARP) (Section 1(A)(2)).
The State must ensure food self-sufficiency and food security through efficient and sustainable land use consistent with sound agricultural development, natural resources development, and agrarian reform (Section 1(A)(3)).
The State must promote dispersal of industries nationwide to catalyze countryside development through Regional Growth Centers (RGCs), economic zones, and growth networks/corridors (Section 1(A)(4)).
The State must promote and encourage economic and socialized housing projects to make adequate housing units available for average and low-income earners in urban and rural areas (Section 1(A)(5)).
The State must institutionalize participation of people’s organizations, non-government organizations, and local communities in formulation of a national land use plan (Section 1(A)(6)).

Non-negotiable and restricted conversion areas

Non-negotiable for conversion areas are protected from conversion through these categories (Section 1(B)(1)):
- Protected areas designated under the National Integrated Protected Areas System (NIPAS), including watershed and recharge areas of aquifers, as determined by DENR, pursuant to Republic Act No. 7586.
- All irrigated lands delineated by DA and/or NIA, where water is available to support rice and other crop production, and all irrigated lands where water is not available for rice and other crop production but are within areas programmed for irrigation facility rehabilitation by DA and NIA, pursuant to Presidential Administrative Order 20 (1992).
- All irrigable lands covered by irrigation projects with firm funding commitments, delineated by DA and/or NIA and approved by the President (Section 1(B)(1)(a)-(c)).
The Network of Protected Areas for Agriculture (as of 1991) determines guide classification for non-negotiable areas, and it may be revised only upon approval of the President upon favorable recommendation of the Cabinet Cluster on Agro-Industrial Development (Section 1(B)(1)).
For lands “protected from and non-negotiable for conversion,” applications for conversion shall not be given due course by the Department of Agrarian Reform (DAR) (Section 1(B)(1)).
Highly restricted from conversion areas are limited to these categories (Section 1(B)(2)):
- Lands classified “Highly Restricted from Conversion” in the Network of Protected Areas for Agriculture as delineated by DA, including:
  - irrigable lands not covered by irrigation projects with firm funding commitments;
  - agro-industrial croplands or lands presently planted to industrial crops supporting the economic viability of existing agricultural infrastructure and agro-based enterprises; and
  - highlands (areas located in elevations of 500 meters or above) with potential to grow semi-temperate and usually high value crops (Section 1(B)(2)(a)).
- Lands issued a Notice of Acquisition/Valuation under agrarian reform, or subject of a perfected agreement between landowner and beneficiaries under Voluntary Land Transfer (VLT) or Direct Payment Scheme (DPS) under CARP, as determined by DAR (Section 1(B)(2)(b)).
- Areas identified as environmentally critical by DENR, pursuant to Presidential Decree No. 1586 (1978) and its implementing rules and regulations (Section 1(B)(2)(c)).
Conversion of highly restricted lands is allowed only through compliance with existing laws, rules, and regulations, and it requires an additional social benefit cost analysis approved by the DA (Section 1(B)(2)).
Applications involving highly restricted areas under Section 1(B)(2)(c) must undergo Environmental Impact Assessment (EIA) and/or issuance of an Environmental Compliance Certificate (ECC) by DENR (Section 1(B)(2)).
Conversion may be allowed for priority areas under Executive Order 124 (1993) that fall within highly restricted areas, with social benefit cost analysis waived, but EIC or ECC is always required, and conversion is forbidden if the sites fall under non-negotiable areas (Section 1(B)(3)).
Conversion of highly restricted priority-area sites is allowed only if they are within these specified types and annexed areas:
- specific sites in regional agri-industrial centers/regional industrial centers (RAICs/RICs) identified by DTI and DA (attached as Annex A);
- tourism development areas (TDAs) identified by DOT (attached as Annex B); and
- sites identified by LGUs for socialized housing (Section 1(B)(3)(a)-(c)).

Approval standards and required certifications

Farmers or prospective agrarian reform beneficiaries affected by conversion must be paid sufficient disturbance compensation, and owners/developers are encouraged to support affected farmers and stakeholders through capital for livelihood shift, skills training, relocation sites, and priority in employment for them and their children (Section 1(B)(4)).
Owners/developers are encouraged to adopt investment arrangements giving affected farmers and stakeholders a stake in development, including joint ventures and partnerships (Section 1(B)(4)).
No LGU reclassification application is given due course by HLURB without:
- an approved Comprehensive Land Use Plan approved by HLURB for provinces, highly urbanized cities, independent component cities, and the cities and municipalities of Metropolitan Manila; or by the Sangguniang Panlalawigan for component cities and municipalities, after 1 January 1989; and
- the following agency certifications (Section 1(B)(5)):
  - HLURB certification specifying total area of zoned agricultural lands based on the approved Comprehensive Land Use Plan or Zoning Ordinance prior to application for conversion;
  - NIA certification that the area to be reclassified is not covered under Presidential A.O. 20, s. 1992;
  - DAR certification that lands are not distributed or covered by a Notice of Valuation under CARP; and
  - DENR certification that the area is classified alienable and disposable, and not needed for forestry purposes if within public lands.
No conversion application is given due course by DAR without the following certifications (Section 1(B)(6)):
- DA certification of viability or non-viability of agricultural land and confirmation it is not part of non-negotiable areas, or certification on whether land is classified as highly restricted from conversion;
- DENR certification that land does not fall under NIPAS or is not environmentally critical; for environmentally critical areas, DAR may issue an Order of Conversion subject to issuance of an ECC by DENR;
- NIA certification that the area is not covered under Presidential A.O. 20, S. 1992; and
- HLURB certification that land has been reclassified and reclassification is within or outside maximum allowable limits set by law (Section 1(B)(6)(a)-(d)).
DENR, in coordination with DAR, must institute an Environmental Guarantee Fund to ensure environmental protection and provide government financial capability to handle negative impacts of conversion (Section 1(B)(6)(b)).
The DAR Secretary’s decision is appealable to the Office of the President (Section 1(B)(7)).
Conversion of areas considered non-negotiable may be allowed only by the President upon favorable recommendation of the Cabinet Cluster on Agro-Industrial Development (Section 1(B)(7)).
When irrigated lands are involved and non-negotiable conversion is allowed, the owner/developer must replace affected areas with an equal area of irrigated lands, whether within or outside the locality being applied for conversion, and conversion must not adversely affect the irrigation system (Section 1(B)(7)).

Terms and express definitions

Agricultural Lands are lands devoted to agricultural activity and not classified as mineral, forest, residential, commercial, or industrial land (Section 2(a); reference to Section 3(c), RA 6657).
Aquifer Recharge Areas are sources of water replenishment where rainwater or seepage actually enters aquifers; aquifers are sources of water from the ground (Section 2(b)).
Environmentally Critical Areas include enumerated categories:
- natural parks, watershed reserves, wildlife preserves, sanctuaries;
- areas set aside as aesthetic potential tourist spots;
- habitats for endangered or threatened species of indigenous Philippine wildlife (flora and fauna);
- unique historic, archeological, or scientific interests;
- traditionally occupied cultural communities and tribes;
- critical slopes;
- areas frequently visited and/or hard hit by natural calamities (geologic hazards, floods, typhoons and volcanic activities);
- prime agricultural lands;
- recharge areas of aquifers;
- water bodies;
- mangrove areas;
- coral reefs;
- mossy and virgin forests;
- river banks; and
- swamp forests and marshlands (Section 2(c)).
Highly Restricted Areas Within Network of Protected Areas for Agricultural Development are the most efficient agricultural lands that can be grown to a wide range of crops with minimum to moderate farm management requirement (Section 2(d)).
Land Use covers manner of utilization, including allocation, development, and management (Section 2(e)).
Land Use Conversion is the act or process of changing current use of agricultural land into other use (Section 2(f)).
Land Use Plan is a policy document with maps illustrating community-desired population distribution and future allocation of land-using activities, identifying allocation, character, and extent of land resources and the process and criteria used for land-use determination (Section 2(g)).
Network of Protected Areas for Agriculture (NPAA) refers to land reserved for agricultural activities and includes:
- all irrigated and potentially irrigable land;
- alluvial plain lands highly suitable for agricultural production and/or for food production;
- sustainable land traditional sources of food;
- crop land supporting the existing economic scale of production sustaining economic viability of existing agricultural infrastructure and agro-based enterprises in the province or region;
- productive land in low-calamity-risk areas suitable for economic trees and other cash crops; and
- agricultural land ecologically fragile where conversion will result in serious environmental problems (Section 2(h)).
National Integrated Protected Areas System is the classification and administration of designated protected areas to maintain essential ecological processes and life-support systems, preserve genetic diversity, ensure sustainable resource use, and maintain natural conditions to the extent possible (Section 2(i)).
Premature Conversion of Agricultural Land is development activity altering physical characteristics of agricultural lands to render them suitable for non-agricultural purposes without an approved order of conversion from the DAR (Section 2(j)).
Prime Agricultural Lands provide optimum and sustainable yield with minimum inputs and development cost as determined by DA (Section 2(k)).
Protected Areas are identified land and water portions set aside due to unique physical and biological significance, managed to enhance biological diversity and protected against destructive human exploitation (Section 2(l)).
Reclassification of Agricultural Lands covers specifying non-agricultural utilization (residential, industrial, commercial) as embodied in the land use plan subject to conversion requirements and procedure, and also includes reversion of non-agricultural lands to agricultural use (including joint HLURB, DAR, DA, DILG Memorandum Circular, s. 1995) (Section 2(m)).
Regional Agri-Industrial Growth Centers are specific locations outside the National Capital Region identified for development with infrastructure/utilities needed by industries to operate in the countryside, strengthening linkages between agriculture and industry and integrating into national and international production, distribution, and exchange systems (Section 2(n)).
Regional Growth Networks/Corridors are neighboring provinces/regions linked through cooperation of LGUs, enabling sharing of comparative advantages/strengths and development of networks/corridors and radiation areas (Section 2(o)).
Socialized Housing includes housing programs/projects for underprivileged and homeless citizens for houses and lots or homelots only, undertaken by government or private sector, including sites and services development, long-term financing, liberalized terms on interest payments, and other benefits under RA 7279 (Section 2(p)).
Special Economic Zones are selected areas with highly developed or potential for development into agro-industrial, industrial, tourist/recreational, commercial, banking, investment and financial centers, which may contain industrial estates, export processing zones, free trade zones, and tourist/recreational centers (Section 2(q)).
Tourism Development Areas are specific tourism sites in areas prioritized in national and regional tourism master plans and those designated by legislative and executive issuances as tourist spots/zones developable into tourism estates or integrated resort, leisure, recreation complexes, and other tourism facilities (Section 2(r)).
Watershed is a catchment area or drainage basin from which stream waters are drawn (Section 2(s)).
Zoning is delineation/division of a city/municipality into functional zones where only specific land uses are allowed, directing and regulating land use in line with an approved or adopted land use plan and prescribing setback provisions, minimum lot sizes, building heights, and bulk (Section 2(t)).
Zoning Ordinance is local legislation approving development control/zoning plan and providing regulations and other conditions on land uses and infrastructure limitations within a city/municipality (Section 2(u)).

Implementation monitoring and compliance

Implementation of Section 20 of RA 7160 authorizing cities and municipalities to reclassify agricultural lands into non-agricultural uses must observe guidelines set by the Joint HLURB, DAR, DA and DILG Memorandum Circular, s. 1995, pursuant to M.C. 54, s. 1993 from the Office of the President (Section 3).

Penalties through cross-application of offenses

Section 4 applies prohibited acts and penalties defined in related laws and administrative issuances to govern violations connected to conversion and protected/agricultural land rules, including RA 6657, RA 7586, Executive Order 184, Executive Order 648, and specified DAR, DA, and DENR administrative issuances (Section 4).
Conversion-avoidance is penalized when a landowner converts agricultural land to non-agricultural use with intent to avoid RA 6657 and dispossess tenant farmers (Section 4(a)(1)).
Illicit change of land nature is penalized when lands outside urban centers and city limits are sold, transferred, conveyed, or have their nature changed after RA 6657 effectivity (Section 4(a)(2)).
Illegal occupancy inside protected areas is penalized, including squatting, mineral exploration, or other illegal occupation (Section 4(a)(3)).
Unpermitted structures, fences/enclosures, or business activity within protected areas is penalized (Section 4(a)(4)).
Failure of a developer/proponent to comply with undertaking or socialized housing project is penalized (Section 4(a)(5)).
Misrepresentation or concealment of material facts in conversion applications and other material rule violations for conversion grant are penalized (Section 4(a)(6)).
Failure to implement and complete land development of the approved conversion area within the specified time is penalized (Section 4(a)(7)).
Knowingly or willfully converting agricultural land without DAR approval is penalized (Section 4(a)(8)).
Misrepresentation or concealment of material facts for issuance of the Certificate of Eligibility for Conversion (CEC) by DA, or attempts to misrepresent for such issuance, are penalized (Section 4(a)(9)).
Environmentally critical projects or activities operating without a valid ECC from DENR are penalized (Section 4(a)(10)).
Violating ECC conditions, environmental management plans (EMP), or rules on the environmental impact statement (EIS) system is penalized (Section 4(a)(11)).
Misrepresentations in EIS/IEE or any other documents submitted under DENR A.O. 96-37 are penalized (Section 4(a)(12)).

Transitory provisions and agency directives

Agencies must harmonize and amend land use and land use conversion procedures and guidelines based on the Order’s principles within sixty (60) days from effectivity (Section 5(a)).
Within six (6) months from effectivity, these agency functions must be performed (Section 5):
- Department of Agriculture (DA) must:
  - update and revise the Network of Protected Areas for Agriculture, including maps, taking into account the Order;
  - identify criteria for certifying land has ceased to be economically sound and suitable for agriculture;
  - design, in consultation with DAR, DENR, NEDA, HLURB, DTI, and DOT, the social benefit cost analysis used in evaluating lands prior to issuance of the CEC; and
  - require National Irrigation Administration (NIA) to prepare and update maps of irrigated and irrigable lands protected from and non-negotiable for conversion (Section 5(1)).
- DENR must:
  - prepare and/or validate maps of initial NIPAS components, including watershed and aquifer areas, with consultation and active support from LGUs; and
  - identify and map environmentally critical areas subject of an EIA or ECC with consultation and active support from LGUs (Section 5(2)).
- Department of Agrarian Reform (DAR) must identify lands already issued (1) Notice of Valuation under Compulsory Acquisition (CA), or (2) Voluntary Offer to Sell (VOS) process, or (3) lands subject of a perfected agreement between landowner and beneficiaries under VLT or DPS under CARP (Section 5(3)).
- Housing and Land Use Regulatory Board (HLURB) must design and install a monitoring and evaluation system for reclassification of agricultural lands into non-agricultural uses, in coordination with DA, DAR, DILG, NEDA, League of Provinces, League of Cities, and League of Municipalities, with consultation with people’s organizations and NGOs, pursuant to M.C. 54 (1993) from the Office of the President (Section 5(4)).
- Department of Interior and Local Government (DILG) must cause LGUs to comply immediately with comprehensive land use plan formulation and updating, reviewed and approved by HLURB or the Sangguniang Panlalawigan pursuant to EO 72 (1993), in coordination with HLURB (Section 5(5)).
Where there is no Presidential approval of delineation of irrigated and irrigable lands non-negotiable for conversion, the DA’s Network of Protected Areas for Agriculture governs (Section 5).

Repeal and modification; separability

All issuances inconsistent with Administrative Order No. 363 are repealed or modified accordingly (Section 6).