THE AGRARIAN REFORM

PROGRAM OF THE
PHILIPPINES
LAND REFORM VERSUS AGRARIAN REFORM

➢ Land reform in the Philippines is a process of

redistributing land from the landlords to tenant-
farmers in order that they will be given a chance to
own a piece of land improve their plight.
➢ Agrarian reform is concerned with the total
development of the farmer’s economic, social and
political transformation.
➢ It is defined as the rectification of the whole system
of agriculture
HISTORY OF AGRARIAN REFORM
PRE-SPANISH PERIOD
➢ There is no system of land ownership.
➢ Rudimentary form of private ownership was
practiced.
➢ When the Indo-Malayan race came,they introduced the Muslim
system of land distribution in Southern Philippines.
The different social classes:
1. The Nobles- This social class could own their own land free from
tribute payment.
2. The Serfs- They were entitled to cultivate certain land,but were
required to pay an annual fee of one-half of the yield of their crops to
the Datu.
3. The Slaves- they simply served the Datu or the Nobles and they could
be sold or traded..
SPANISH PERIOD
➢ Spain declared all lands in the Philippines as part of public domain
regardless of local customs.
➢ The “Encomienda System” was introduced by the Spaniards.
Encomienderos must defend their encomienda from external attack,
maintain peace and order within, and support the missionaries. In
turn,the encomiendero acquired the right to collect tribute from the
indios (native).
➢ During the middle of 17th century “Encomienda System” was abolished
due to abuses committed by the Encomienderos. It was replaced by the
“Cacique class”
➢ The Share tenancy or the“Kasama System” came also into existence.
Large landholders leased portions of their landed estates to
intermediaries,who,in turn,rented out parcels to peasants.
➢ The cacique class continues to grow due to inter-marriage
with the [Link] gained stature with Spanish officials
which gave them powers that they became more oppressive.
This results to rebellions during 18th century in Central
Luzon.

➢ Among the causes were:

1. Enforced labor;
2. Relatively heavy head tax;and
3. Required church and government contributions

➢ At the close of Spanish Period,[Link]

confiscated the friar lands and gave it to landless peasants
AMERICAN PERIOD

➢ At the beginning of the period, Spanish land records that had

existed were either destroyed or lost,leaving the legal situation
with regard to holdings very complicated.
➢ From 1903 to 1938 there was an increase in tenancy rate and
land ownership decreased.
➢ The Public LandAct of 1902 which became effective on July 26,
1904 offered homestead plot not in excess of 16 hectares to
families who had occupied and cultivated the tract they were
residing on sinceAugust 1, 1898.
➢ Further opposition to the government and local government
policies was evident during the 1940 elections when a socialist
and peasant leader,PedroAbad Santos almost won again the
candidate of the Pampango Landlords.
➢ Indeed,the agrarian problem festered for so long time that the
1935 Constitution incorporated a cardinal principle on social
justice to insure the well-being and economic security of all the
people.
THE PRESENT REPUBLIC

➢ After the independence of July 4, 1946 the need for land

reform became pressing.
➢ In 1946, pres. Manuel Roxas enacted RA No. 34 of 1946,
providing for a 70-30 crops sharing arrangements and
regulating share-tenancy contracts.
➢ September 1954, pres. Ramon Magsaysay signed into law
RA no. 1199, as amended by RA No. 2263 which allowed
for the division of the crops
➢ In 1963,[Link] Macapagal signed into law RA No.3844
otherwise known as the Agricultural Land Reform Code,
abolition of share tenancy and the imposition of agricultural
leasehold system.
➢ On September 21,1972,[Link] Marcos issued
Presidential Decree No.2,declaring the entire the Philippines as
land reform area.
➢ On October 21,1972,[Link] signed Presidential
Decree No.27,“emancipating the tenant-farmers from the
bondage of the soil”.
➢ Under the New Constitution,the primary governing law on
agrarian reform is RA No.6657,otherwise known as the
ComprehensiveAgrarian Reform Law of 1988.
 RESISTANCE IN THE IMPLEMENTATION OF
AGRARIAN REFORM
o Fragmentation of farm-holdings- with the institution of
land reform big landholding is divided among tenant farmers
into a family size land which is 3 hectares
o Small farms became less productive- In the micro level,
the farmers become more [Link] farmers can rely on
their products from daily [Link], in the macro
level,the people will suffer because there will be few
production for national consumptions.
o Ineffective government programs- most of the
programs initiated by the government on agrarian reforms
and cooperatives are ineffective due to the inefficiency of
the people implementing the program.
o Agrarian reforms failed in the past- failure of the
program may be attributed to the following:
a. Big landholdings are owned by elite politicians and
relatives
b. Failure of the government to provide measures
that will assist the farmers;
c. Graft and corruption;and
d. Lack of unity and cooperation among farmers.
PERTINENT LAWS ON AGRARIAN REFORM

1. Spanish Decree of 1880- Enjoining land holders,whether the

caciques or peasants to secure legal titles to their lands;
2. Spanish Decree of 1894- a decree granting landholders one
year to secure legal titles to their land. Failure of the
landowners to secure land title will mean forfeiture of their
land.
3. Public LandAct of July 1,1902- this became effective on
July 26,1904 offering homestead plots not in excess of 16
hectares to families who have occupied and cultivated the tract
they were residing on sinceAugust 1,1898;
4. Act No 4054,The Rice ShareTenancyAct of 1933-
Regulating the tenancy share contracts by establishing minimum
standards of 50-50 crops sharing.
5. Act No 4113 (The Sugar CaneTenancy Contracts)-An
act regulating the relationships of landowners and tenants of
sugar land;
6. CommonwealthAct No.103- An act creating the Court of
Industrial Relations which will settle disputes between
landowners and agricultural workers.
7. Commonwealth Act No.213- Defined and regulated
legitimate labor organizations;
8. Commonwealth Act Nos. 178,461 and 608- a law giving more
protection to agricultural tenants under Rice ShareTenancyAct;
9. RepublicAct No.34 of 1946- Provides for a 70-
30 crop sharing arrangements and regulating share tenancy
contracts;
10. Republic Act No. 1160 of 1954- Establishing the National
Resettlement and RehabilitationAdministration to resettle landless
residents and other landless farmers;
11. Republic act no.1199 (The Agricultural Tenancy Act of 1954)
amended by RA No. 2263 allowing the division of crops on
the following basis:
Items Equivalent of the Crop
1. Land 30%
2. Labor 30%
3. Animals 5%
4. Implements 5%
5. Final Harrowing 5%
6. Transplanting 25%
12. RepublicAct No.1400 (Land ReformAct of 1955)-
Creating the LandTenureAdministration and providing for the
reduction of large landholdings,resettlement of tenants in
areas abundant land;securing of land titles and the
provision of adequate credit facilities for the
small landholders;
13. RepublicAct No.3844 (TheAgricultural Land Reform
Code of 1963)- abolition of share tenancy and the
imposition of agricultural leasehold [Link] also provides for
the eventual expropriation and subdivision of big landed
estates and their resale at cost and on installment to landless
tillers.
14. RepublicAct 6389 (Amendments to the Agricultural
Land Reform Code of 1971)- Creation of the Department
ofAgrarian Reform (DAR) to implement the agricultural land
reform programs;
15. RepublicAct 6390 (Agrarian Reform Special Fund Act
of 1971)- Created to finance theAgrarian Reform Program of
the government;
16. Presidential Decree No.2- Declaring the entire Philippines
as a land reform area;
17. Presidential Decree No.27- Emancipating the
tenant-farmers from the bondage of the soil;
18. Proclamation No.131- Instituting a
ComprehensiveAgrarian Reform Program;
19. Executive order no.228- signed by [Link] C.
Aquino on July 16,1987 declaring full ownership to qualified
farmer beneficiaries covered by PD No.27;
20. Executive Order No.229- Providing for the mechanism on
the implementation of the program;
21. Executive Order No.129- A signed in July 26,1987
streamlining and expanding the power and operation of the
DAR;
22. RepublicAct No.6657 (The ComprehensiveAgrarian
Reform Law of 1988)- An act instituting the CARP to
promote social justice and industrialization, providing the
mechanism for its implementation and for other purposes.
IMPORTANCE OF LAND REFORMS
1. It will diffuse tension existing between tenant-farmers and
landlords;
2. It will give the farmers a dignified existence in our society;
3. It will bring social justice;
4. It will increase the efficiency and productivity of the
farmers;
5. It will help solve unemployment;
6. It will increase food production;
7. It will enhance the living conditions of the poor farmers;and
8. It will correct the imbalance in our society where
concentrations of land, wealth and political power are in the
hands of a few.
ASPECTS OF AGRARIAN REFORM

1. EconomicAspect- Agrarian reform will help improve

agricultural productivity to accelerate general economic
development.
2. Socio-culturalAspect- Agrarian reform gives
significant social change in the community.
3. ReligiousAspect- When God created earth, He gives it all to
His [Link] sees to it that everything He made are used
and enjoyed by the people.
4. MoralAspect- The ignorant and poor farmers are abuse.
Therefore,it is the moral obligation of the government to bring
about peace and prosperity to our country.
5. LegalAspect- As part of the government’s moral
obligation,it has formulate laws that will effect agrarian
reforms.
6. PoliticalAspects- Agrarian reform is ultimately the
product of deliberate political [Link],
agrarian reform must be the highest priority of government
programs.
COMPONENTS OF AGRARIAN REFORM
➢ Land Distribution- considered as the very foundation of
Agrarian [Link] virtue of this component,the farmers
are given the chance to become owners of the land they
are tilling.
➢ Support Services-These are services undertaken by the
government to assist the farmers after redistribution.
• Irrigation facilities;
• Infrastructure development and public works projects in
areas and settlements that come under agrarian reform
including the preparation of the physical development plan of
such settlements providing suitable barangay sites,portable
water and power resources,irrigation system and other
facilities for a sound agricultural development plan;
➢ Price support and guarantee for all agricultural produce;
➢ Extending to small landowners, farmers, and farmer’s
organizations the necessary credit like concessional and
collateral-free loans for agro- industrialization based on social
collaterals like the guarantees of farmer’s organization;
➢ Promoting,developing and extending financial assistance to
small and medium scale industries in agrarian reform areas;
➢ Undertake research,development and dissemination of
information on agrarian reform and low-cost ecological sound
farm inputs and technologies to minimize reliance on
expensive and imported agricultural inputs;
➢ Development of cooperative management skills through
intensive training;
➢ Assistance in identification of ready markets for agricultural
produce and training in other various aspects of marketing.
 THE COMPREHENSIVE AGRARIAN REFORM
LAW OF 1988
CARP stands for the Comprehensive Agrarian Reform
Program, a government initiative that aims to grant landless
farmers and farm workers ownership of agricultural lands.
It was signed into law by President Corazon [Link] on
June 10,1988,and was scheduled to have been completed in
1998.
 An agrarian system is the dynamic set of economic and
technological factors that affect agricultural [Link] is
premised on the idea that different systems have developed
depending on the natural and social conditions specific to a
particular region.
Political factors also have a bearing on an agrarian system
due to issues such as land ownership, labor organization, and
forms of cultivation.
As food security has become more important,mostly due
to the explosive population growth during the 20th century,
the efficiency of agrarian systems has come under greater
review.
 THE DIFFERENT PRINCIPLES AND
POLICIES

1. The welfare of the landless farmers and farm workers will

receive the highest consideration to promote social justice
and to move the nation towards it’s development and
industrialization.

2. By means of appropriate incentives, the state shall

encourage the formation and maintenance of
economically sized family farms.
3. The state shall be guided by the principles that land has a social
function and landownership has a social responsibility.

4. The state may lease underdeveloped lands of the public domain

to qualified entities for the development of capital intensive
farms and traditional and pioneeringh crops especially under
the act.
 SALIENT FEATURE OF CARP
(RA NO. 6657)

1. The comprehensiveAgrarian reform programs covers

all public and private agricultural lands.
2. Ownership of agricultural lands is based on a family size farm
which is not more than three hectares.
3. Qualified beneficiaries in the following order of priority are
the agricultural lessees and share tenants,regular farm
workers,seasonal farm workers,occupants of public lands,
etc.
4. The distribution of all lands covered by CARP shall be
implemented within 10yrs effective immediately upon signing
of the law by [Link] [Link] on June 10,1998.
5. Exemption and exclusions include lands foe wildlife,forest
reserves,reforestation,fish sanctuaries and breeding grounds,
watersheds and mangroves, national defense,school sites and
campuses,etc.
6. Payments to landowners:25% cash and 75%
government bonds for above 50 hectares.
7. Beneficiaries pay Land Bank of the Philippines in 30 annual
amortization at 6% interest per annum.
8. Valuation of lands is determined by PresidentialAgrarian
Reform Council (PARC),headed by the President of the
Philippines.
 Taxation
Basic Rules and Principles in Philippine Taxation
 What is Taxation?
It is the inherent power by which the
sovereign state imposes financial burden
upon persons and property as a means
of raising revenues in order to defray the
necessary expenses of the government
(Tax Digest by Crescencio Co Untian,
2002).

Taxation is the imposition of financial

charges or other levies, upon a taxpayer
(an individual or legal entity) by a state
such that failure to pay is punishable by
law.
What is Taxation?
It is a mode by which government make exactions
for revenue in order to support their existence and
carry out their legitimate objectives (Tax Law and
Jurisprudence by Justice Vitug, 2000).

It is the most pervasive and the strongest of all the

powers of the government. Taxes are the lifeblood
of the government, without which, it cannot
subsist.
Purpose of taxation

Primary purpose
• To provide funds or property with which to promote
the general welfare of its citizens and to enable it to
finance its multifarious activities.
Secondary purposes
• To strengthen anemic enterprises by giving tax
exemptions.
• To protect local industries against foreign competition
through imposition of high customs duties on imported
goods.
• To reduce inequalities in wealth and income by imposing
progressively higher taxes.
• To prevent inflation by increasing taxes or ward off depression
by decreasing taxes.
Theory and basis of taxation

• Theory
– The existence of the government is a
necessity.
– The government cannot continue without a
means to pay its expenses
– The government has the rights to compel its
citizens and property within its limits to
contribute.
• Basis
– Taxation is based on the reciprocal duties of
protection and support between the
government and its people.
– Government receives taxes from the people
which is used to perform functions of
government and other benefits.
– Benefit-received theory.
Basic principles of sound tax system

• Fiscal adequacy
• Equality or theoretical justice
• Administrative feasibility
Fiscal adequacy

• The source of government revenue should be

efficient to demand the needs of public expenditure.
• Creating new taxes or new tax machinery or by
merely changing the rates applicable to existing taxes.
Equality or theoretical justice

• The tax burden should be proportionate to the

taxpayer’s ability to pay.
• Ability-to-pay principle.
Administrative feasibility
• The tax laws should be capable of convenient, just
and effective administration.
• Each tax should be:
– Clear and plain to the taxpayer.
– Capable of uniform enforcement
– Convenient as to time, place and manner of
payment.
– Not unduly burdensome upon or discouraging to
business activity
Nature of taxation

• It is inherent in sovereignty.
• Legislative in character.
• Subject to constitutional and inherent limitations.
History of Taxation
• The first known system of taxation was in
Ancient Egypt around 3000 BC - 2800 BC in
the first dynasty of the Old Kingdom.

• In Biblical times, tax is already prevalent.

According to Genesis [Link]
"But when the crop comes in, give a fifth of it to
Pharaoh. The other four-fifths you may keep as
seed for the fields and as food for yourselves and
your households and your children".
History of Taxation
• Earliest taxes in Rome are called as portoria
were customs duties on imports and exports
• Augustus Caesar introduced the inheritance tax
to provide retirement funds for the military.
The tax was five percent on all inheritances
except gifts to children and spouses .

• In England, taxes were first used as emergency

measures.
The pre-colonial society, being communitarian,
did not have taxes.
History of Taxation in the Philippines
History of Taxation in the Philippines
During the Spanish Period, new income-
generating means were introduced by the
government such as the :

• Manila-Acapulco Galleon Trade

• Polo Y Servicio (Forced Labor)
• Bandala
• Encomienda System
• Tribute
History of Taxation in the Philippines

Manila-Acapulco Galleon Trade

was the main source of income
for the colony during its early
years.

The Galleon trade brought silver

from Nueva Castilla and silk from
China by way of Manila.
History of Taxation in the Philippines

Polo Y Servicio is the forced labor for 40 days, of

men ranging from 16 to 60 years of age who were
obligated to give personal services to community
projects. One could be exempted from the polo by
paying a fee called falla (which was worth one and a
half real).

Bandala is one of the taxes collected from the

Filipinos. It comes from the Tagalog word mandala,
which is a round stock of rice stalks to be threshed.
History of Taxation in the Philippines
Encomienda are large tracts of land given to a person
as reward for a meritorious act. The encomenderos
were given full authority to manage the encomienda by
collecting tribute from the inhabitants and govern
people living on it.

Tribute was the residence tax during the Spanish times.

It may be paid in cash or kind, partly, or wholly.

But in 1884, the tribute was replaced by the cedula

personal or personal identity paper, equivalent to the
present community tax certificate.
D id you k now?
That in the 19th century, the
“cedula” served as an
identification card that had to be
carried at all times.
A person who could not present his
or her cedula to a guardia civil
could then be detained for being
“indocumentado”.
Andres Bonifacio and other
Katipuneros tore their cedulas in
August 1896, signaling the start of
the Philippine Revolution.
The Development of the Community Tax
The cédula was imposed by the
Americans on January 1, 1940, when
Commonwealth Act No. 465 went into
effect, mandating the imposition of a
base residence tax of fifty centavos and
an additional tax of one peso based on
factors such as income and real estate
holdings.

The payment of this tax would merit the

issue of a residence certificate.
Corporations were also subject to the
residence tax.
A sample cedula in the 1920s.
What is a “cedula”?
Also known as a “residence certificate”, is a legal
identity document in the Philippines.
Issued by cities and municipalities to all persons that
have reached the age of majority and upon payment
of a community tax, it is considered as a primary form
of identification in the Philippines and is one of the
closest single document the Philippines has to a
national system of identification, akin to a driver's
license and a passport.
 Why is “cedula” important?
A person is required to present a cedula when
he or she acknowledges a document before a
notary public; takes an oath of office upon
election or appointment to a government
position; receives a license, certificate or permit
from a public authority; pays a tax or fee;
receives money from a public fund; transacts
official business; or receives salary from a
person or corporation.
 The Four R’s of Taxation
Taxation has four main purposes or
effects:

• Revenue
• Redistribution
• Repricing
• Representation
The Four R’s of Taxation

Revenue
The taxes raise money
to spend on armies,
roads, schools and
hospitals, and on more
indirect government
functions like market
regulation or legal
systems.
The Four R’s of Taxation
Redistribution
This refers to the transferring
wealth from the richer sections
of society to poorer sections.

Repricing
Taxes are levied to address
externalities; for example,
tobacco is taxed to discourage
smoking, and a carbon tax
discourages use of carbon-based
fuels.
The Four R’s of Taxation
Representation
As what goes with the
slogan "no taxation
without representation,"
it implies that: rulers tax
citizens, and citizens
demand accountability
from their rulers as the
other part of this bargain.
Why Tax?
• The main purpose of taxation is to accumulate
funds for the functioning of the government
machineries.
• No government in the world can run its
administrative office without funds and it has no
such system incorporated in itself to generate
profit from its functioning.
• The government’s ability to serve the people
depends upon the taxes that are collected.
• Taxes are indispensable in the government
operation and without it, the government will be
paralyzed.
The Philippine Tax System
• Tax law in the Philippines covers national and local
taxes.
• National taxes refer to national internal revenue
taxes imposed and collected by the national
government through the Bureau of Internal
Revenue (BIR) and local taxes refer to those
imposed and collected by the local government.
• The 1987 Philippine Constitution sets limitations
on the exercise of the power to tax.
• The rule of taxation shall be uniform and
equitable. The Congress shall evolve a progressive
system of taxation (Article VI, Section 28,
Paragraph 1).
 What is Tax E v a s i o n
Tax evasion happens when there
is fraud through pretension and
the use of other illegal devices to
lessen one’s taxes, there is tax
evasion, under-declaration of
income, and non-declaration of
income and other items subject to
tax, under-appraisal of goods
subject to tariff, and over-
declaration of deductions.
The Branches of Government vis-à-vis the Tax Law

The Congress may, by law, authorize the President to

fix within specified limits, and subject to such
limitations and restrictions as it may impose, tariff
rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts within
the framework of the national development program
of the Government (Article VI, Section 28, Paragraph
2).
The Branches vis-à-vis the Tax Law
The President shall have the power to veto any particular item or
items in an appropriation, revenue, or tariff bill, but the veto shall
not affect the item or items to which he does not object (Article
VI, Section 27, Paragraph 2).

The Supreme Court has the power to: review, revise, reverse, modify,
or affirm on appeal or certiorari, as the law or the Rules of Court
may provide, final judgments and orders of lower courts in “all cases
involving the legality of any tax, impost, assessment, or toll, or any
penalty imposed in relation thereto” (Article VIII, Section 5,
Paragraph 2b).
The Forms of Taxes Imposed on Persons and Property
A) Personal, capitation or poll taxes
These are taxes of fixed amount upon residents or
persons of a certain class without regard to their
property or business
B) Property taxes
1. Real Property Tax - an annual tax that may be
imposed by a province or city or a municipality on
real property such as land, building, machinery and
other improvements affixed or attached to real
property.
The Forms of Taxes Imposed on Persons and Property
2. Estate Tax (Inheritance Tax) - a tax on the right of
transmitting property at the time of death and on
the privilege that a person is given in controlling to a
certain extent the disposition of his property to take
effect upon death.
3. Gift or Donor’s Tax - a tax on the privilege of
transmitting one’s property or property rights to
another or others without adequate and full
valuable consideration.
The Forms of Taxes Imposed on Persons and Property
4. Capital Gains Tax - tax imposed on the
sale or exchange of property . Those
imposed are presumed to have been
realized by the seller for the sale,
exchange or other disposition of real
property located in the Philippines,
classified as capital assets.
C. Income Taxes - Taxes imposed on the
income of the taxpayers from whatever
sources it is derived. Tax on all yearly
profits arising form property,
possessions, trades or
 The Forms of Taxes Imposed on Persons and Property

D. Excise or License Taxes - Taxes

imposed on the privilege, occupation or
business not falling within the
classification of poll taxes or property
taxes. These are imposed on alcohol
products; on tobacco products; on
petroleum products like lubricating oils,
grease, processed gas etc; on mineral
products such as coal and coke and
quarry resources; on miscellaneous
articles such as automobiles.
The Branches of Government vis-à-vis the Tax Law
Under these lies two other taxes:
1. Documentary Stamp Tax - a tax imposed upon
documents, instruments, loan agreements and papers
and upon acceptance of assignments, sales and
transfers of obligation and etc.
2. Value added tax- is imposed on any person who, in
the course of trade or business sells, barters,
exchanges, leases, goods or properties, renders
services, or engages in similar transactions.
Products like Papawash have value-added taxes, too.
 Who Should Pay Taxes?
1. Individuals
a. Resident Citizen
b. Non-resident Citizen
c. Resident Aliens
d. Non-resident Aliens
2. Corporations
a. Domestic Corporations
b. Foreign Corporations
3. Estate under judicial settlement
4. Trusts irrevocable both as to the trust
property and as to the income.
Who (or What) are those exempted in paying taxes?

The Constitution expressly grants tax exemption on certain

entities and institutions such as:

1. Charitable institutions, churches, parsonages or convents

appurtenant thereto, mosques, and nonprofit cemeteries and
all lands, buildings and improvements actually, directly and
exclusively used for religious, charitable or educational
purposes (Article VI, Section 28, Paragraph 3).
2. Non-stock non-profit educational institutions used actually,
directly, and exclusively for educational purposes. (Article XVI,
Section 4 (3).
Exempted to tax as stated in the Article 283 of Rules and
Regulations Implementing Local Government Code of 1991 (RA
7160):
➢ Local water districts
➢ Cooperatives duly registered under RA 6938, otherwise known
as the Cooperative Code of the Philippines
➢ Non-stock and non-profit hospitals and educational institutions
➢ Printer and/or publisher of books or other reading materials
prescribed by DECS (now DepEd) as school texts or
references, insofar as receipts from the printing and / or
publishing thereof are concerned.