Policy purpose and intent
- Presidential Decree No. 27 declares that the old concept of land ownership by a few has generated legitimate grievances that gave rise to violent conflict and social tension.
- Presidential Decree No. 27 states that emancipation of the tiller of the soil from bondage is fundamental to reformation and the objectives of the New Society.
Scope: who is covered
- Presidential Decree No. 27 applies to all tenant farmers of private agricultural lands primarily devoted to rice and corn.
- Presidential Decree No. 27 covers tenant farmers under a system of share-crop or lease-tenancy.
- Presidential Decree No. 27 applies whether the land is classified as landed estate or not.
- Presidential Decree No. 27 deems each tenant farmer to be owner of a portion constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated.
Land retention by landowners
- The landowner may retain an area of not more than seven (7) hectares.
- The retention applies when the landowner is cultivating the area or will now cultivate it.
Transfer pricing: cost and valuation rule
- Presidential Decree No. 27 sets the land’s value to determine the cost of the land to be transferred to the tenant-farmer.
- The land’s value equals two and one-half (2 1/2) times the average harvest of the three normal crop years immediately preceding October 21, 1972.
- The total cost includes interest at the rate of six (6) per centum per annum.
Payment terms and amortization mechanics
- Presidential Decree No. 27 requires the tenant to pay the total cost over fifteen (15) years.
- Payment must be made through fifteeen (15) equal amortizations.
- In the event of default, the amortizations due must be paid by the farmer’s cooperative with a right of recourse against the defaulting farmer.
Government guarantee through stock
- Presidential Decree No. 27 provides that the government shall guaranty the amortizations.
- The guarantee is made through shares of stock in government-owned and government-controlled corporations.
Title issuance and cooperative membership condition
- Presidential Decree No. 27 prohibits actual issuance of title to a tenant-farmer until the tenant-farmer becomes a full-fledge member of a duly recognized farmers’ cooperative.
- Presidential Decree No. 27 requires the cooperative membership condition to be satisfied before actual title issuance.
Transfer restrictions on acquired land
- Presidential Decree No. 27 restricts transferability of title to land acquired under this Decree or under the Land Reform Program of the Government.
- Transfer is allowed only by hereditary succession.
- Transfer is also allowed to the Government in accordance with the provisions of this Decree, the Code of Agrarian Reforms, and other existing laws and regulations.
Implementation powers and repealing clause
- The Department of Agrarian Reform, through its Secretary, is empowered to promulgate rules and regulations for implementation of Presidential Decree No. 27.
- Presidential Decree No. 27 repeals or modifies laws, executive orders, decrees, and rules and regulations, or parts thereof, that are inconsistent with it.