CHAPTER 4-PART 11

POLICIES ON AGRARIAN REFORM

AGRARIAN REFORM
AGRARIAN REFORM
 Is essentially the rectification of the whole system of
agriculture, an important aspect of the Philippine
economy because nearly half of the population is
employed in the agricultural sector, and most
citizens live in rural areas.
 It is centered on the relationship between production
and the distribution of land among farmers.
 It also focused on the political and economic class
character of the relations of production and
distribution in farming and related enterprises, and
how these connect to the wider class structure.
Landownership in the Philippines under Spain

 Pueblo Agriculture – when the Spaniards colonized

the country, they brought with them a system
where rural communities, often dispersed and
scattered in nature, were organized into a pueblo
and given land to cultivate.
 Families were not allowed to own their land – the
King of Spain owned the land
 Filipinos were assigned to these lands to cultivate
them.
 Filipinos were paid their colonial tributes to the
Spanish authorities in the form of agricultural
products.
LAW OF INDIES
 Law of Indies – through this law, the Spanish crown awarded
tract of land to:

 Religious orders

 Repartamientos for Spanish military as reward for their service

 Spanish Encomenderos, those mandated to manage the

encomienda or the lands given to them, where Filipinos worked
and paid their tributes to encomendero. Filipinos were not
given the right to own the land, and only worked in them so
that they might have a share of the crops and pay tribute.
THE ENCOMIENDA SYSTEM
 The Encomienda System – it was an unfair
and abusive system as “compras y vandalas”
became the norm for the Filipino farmers
working the land – they were made to sell
their products at a very low price or surrender
their products to the encomenderos, who
resold this at a profit. Filipinos in the
encomienda were also required to render
services to their encomederos that were
unrelated to farming
Hacienda System
 Hacienda System – developed in the
beginning of the nineteenth century as the
Spanish government implemented policies
that would fast tract the entry of the colony
into the capitalist world. The economy was
tied to the world market as the Philippines
became an exporter of raw materials and
importer of goods. Agricultural exports were
demanded and the hacienda system was
developed as a new form of ownership.
Landownership in the Philippines under the Americans

 The American were aware that the main cause

of social unrest in the Philippines was
landlessness, and they attempted to put an
end to the deplorable conditions of the
tenant farmers by passing several land
policies to increase the small landholders and
distribute ownership to a bigger number of
Filipino tenants and farmers.
Philippine Bill of 1902
 Philippine Bill of 1902 – provided regulations
on the disposal of public lands. A private
individual may own 16 hectares of land while
corporate landholders may have 1, 024
hectares. Americans were also given rights to
own agricultural lands in the country.
Act No. 496 or Land Registration Act

 Act No. 496 or Land Registration Act – The

Philippine Commission enacted this and
introduces the Torrens system to address the
absence of earlier records of issued land
titles and conduct accurate land surveys.
Homestead Program in 1903
 Homestead Program in 1903 – allowing a
tenant to enter into an agricultural business
by acquiring a farm of at least 16 hectares.
This program, however, was limited to areas
in Northern Luzon and Mindanao, where
colonial penetration had been difficult for
Americans, a problem they inherited from the
Spaniards.
Effects of Landownership in the Philippines during American Period:

 It did not improve, in fact, it even worsened,

because there was no limit to the size of
landholdings people could possess and the
accessibility of possessions was limited to
those who could afford to buy, register, and
acquire fixed property titles.
 Not all friar lands acquired by the Americans

were given to landless peasant farmers. Some

land were sold or leased to American and
Filipino business interest.
 This early land reform program was also
implemented without support mechanisms –
if a landless peasant farmer received land, he
only received land, nothing more.
 Many were forced to return to tenancy and

wealthy Filipino hacienderos purchased or

forcefully took over lands from farmers who
could not afford to pay their debts.
 Enabled more lands to be placed under
tenancy, which led to widespread peasant
uprisings, such as the Colorum and Sakdal
Uprising in Luzon.
 During the years of the Commonwealth

government, the situation further worsened

as peasant uprisings increased and landlord-
tenant relationship became more and more
disparate.
President Quezon
 – laid down a social justice program focused
on the purchase of haciendas, which were to
be divided and sold to tenants.
 His administration also created the National

Rice and Corn Corporation (NARIC) to assign

public defenders to assist peasants in court
battles for their rights to the land, and the
Court of Industrial Relations to exercise
jurisdiction over disagreements arising from
landowner-tenant relationship.
 The Homestead program also continued
through the National Land Settlement
Administration (NLSA). Efforts toward
agrarian reform by the Commonwealth failed
because of many problems such as budget
allocation for the settlement program and
widespread peasant uprisings. World War II
put a halt to all interventions to solve these
problems as the Japanese occupied the
country.
Post-War Interventions toward Agrarian Reform

 Rehabilitation and rebuilding after the war

were focused on providing solutions to the
problems of the past.
Administration of President Roxas
 - passed the Republic Act No. 34 established
a 70-30 sharing arrangement between tenant
and landlord, respectively, which reduced the
interest of landowners’ loans to tenants at six
percent or less.
 The government also attempted to

redistribute hacienda lands, falling prey to

the woes of similar attempts since no support
was given to small farmers who were given
lands.
Under the term of President Elpidio
Quirino

 – Land Settlement Development Corporation

(LASEDECO) was established to accelerate and
expand the resettlement program for
peasants. This agency later on became the
under the administration of President
Administration of President Ramon
Magsaysay
 - Land Settlement Development Corporation
(LASEDECO) became the National
Resettlement and Rehabilitation
Administration (NARRA).
 Magsaysay saw the importance of pursuing

genuine land reform program and convinced

the Congress, majority of which were landed
elites, to pass legislation to improve the land
reform situation.
Republic Act No. 1199 or the
Agricultural Tenancy Act
 – was passed to govern the relationship
between landholders and tenant farmers,
protecting the tenurial rights of tenants and
enforced practices. Through this law, the
court of Agricultural Relations was created in
1955 to improve tenancy security, fix land
rentals of tenanted farmers, and resolve land
disputes filed by the landowners and peasant
organizations.
Agricultural Credit and Cooperative
Financing Administration (ACCFA)

 created mainly to provide warehouse facilities

and assist farmers in marketing their
products. The administration spearheaded
the establishment of the Agricultural and
Industrial Bank to provide easier terms in
applying for homestead and other farmlands.
National Resettlement and
Rehabilitation Administration (NARRA)
 accelerated the government’s resettlement
program and distribution of agricultural lands
to landless tenants and farmers. It also aimed
to convince members of the Huks, a
movement of rebels in Central Luzon, to
resettle in areas where they could start their
lives as peaceful citizens.
Term of President Diosdado
Macapagal
 a major stride in land reform arrived during his term
through the Agricultural Land Reform Code (Republic
Act No. 3844).
 Agrarian Reform Efforts under Marcos
 President Marcos declared Martial Law in 1972,
enabling him to essentially wipe out the landlord-
dominated Congress. Through his “technocrats” he
was able to expand executive power to start a
“fundamental restructuring” of government, including
its efforts in solving the deep structural problems of
the countryside. Presidential Decree No. 27 or the
Code of Agrarian Reform of the Philippines became the
core of agrarian reform during Marcos regime.
 “Operation Land Transfer” – on lands
occupied by tenants of more that seven
hectares on rice and corn lands commenced,
and through legal compulsion and an
improved delivery of support services to
small farmers, agrarian reforms seemed to be
finally achievable.
 “Masagana 88” – rice self-sufficiency

program, farmers were able to borrow from

banks and purchase three-hectares plots of
lands and agricultural inputs.
Post-1986 Agrarian Reform

 The overthrow of Marcos and the 1987

Constitution resulted in a renewed interest
and attention to agrarian reform as President
Corazon Aquino envisioned agrarian reform
to be the centerpiece of her administration’s
social legislation, which proved difficult
because her background betrayed her – she
came from a family of a wealthy and landed
clan that owned the Hacienda Luisita.
 Proclamation 131 and Executive Order 229 – Aquino issued
these on July 22, 1987 which outline her land reform program.

 Republic Act No. 6657 or the Comprehensive Agrarian Reform

Law (CARL), which introduced the program with the same name
(Comprehensive Agrarian Reform Program or CARP) – it enable
the redistribution of agricultural lands to tenant-farmers from
landowners, who were paid in exchange by the government
through just compensation and allowed them to retain not
more than five hectares. Corporate landowners were, however,
allowed under law to voluntarily divest a proportion of their
capital stock, equity, or participation in favor of their workers
or other qualified beneficiaries instead of turning over their
land to the government.
Under the term of President Fidel
Ramos
 – CARP implementation was speeded in order
to meet the ten-year time frame, despite
limitations and constraints in funding,
logistics, and participation of involved
sectors. To address the lacking funding and
the dwindling time for the implementation of
CARP, Ramos signed Republic Act No. 8532
to amend CARL and extend the program to
another ten years.
CARPER and the Future of Agrarian Reform in the Philippines

 President Gloria Arroyo – in 2009, she signed

Republic Act No. 9700 or the Comprehensive
Agrarian Reform Program Extension with
Reforms (CARPER), the amendatory law that
extended the deadline to five more years.
Section 30 of the law also mandates that any
case and/or proceeding involving the
implementation of the provisions of CARP, as
amended, which may remain pending on 30
June 2014 shall be allowed to proceed to its
finality and executed even beyond such date.
EVOLUTION OF PHILIPPINE TAXATION

 Taxation – in today’s world, it is a reality that

all citizens must contend with for the primary
reason that governments raise revenue from
the people they govern to be able to function
fully. In exchange for the taxes that people pay,
the government promises to improve the
citizens’ lives through good governance.
 It is a government mechanism to raise funds,
developed and evolved through time, and in the
context of the Philippines, we must understand
that it came with our colonial experience.
Taxation in Spanish Philippines

 The Philippines have abundant natural

resources even before the encroachment of
the Spaniards, but our ancestors were mainly
involved in a subsistence economy, and while
the payment of tribute or taxes
(buhis/buwis/handug) or the obligation to
provide labor services to the datus in some
early Filipino communities in the Philippines
may resemble taxation, it is essentially
different from the contemporary meaning of
the concept.
Payment of tributos (tributes)
– Spaniards imposed this and altered the
subsistence economy from the Filipinos, similar
to what had been practiced in all colonies in
America. The purpose is to generate resources
to finance the maintenance of the islands, such
as salaries of government officials and
expenses of the clergy.
Excempted from payment of tributos
– principales: alcaldes, gobernadores, cabezas
de barangay, soldiers, members of the civil
guard, government officials and vagrants
 Cedula Personal – a poll tax collected through

a certificate of identification, a replacement

for payment of tribute in 1884. This is
required from every resident and must be
carried while travelling. Unlike tribute the
payment for cedulas is by person, not by
family. Payment of cedula is progressive and
according to income categories.
 This system, however, was a heavy burden for
the peasants and was easy for the wealthy.
But, because of this, revenue collection
greatly increased and became the main
source of government income. The Chinese in
the Philippines were also made pay their
discriminatory cedula which was bigger than
what the Filipinos paid.
 Katipunero Cedula in 1886
Contemporary Cedula
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Two direct taxes added in 1878 and
imposed on urban incomes
 : these taxes were universal and affected all
kinds of economic activity except agriculture,
which was exempt to encourage growth.
 Urbana – is a tax on the annual rental value of

an urban real state

 Industria – is a tax on salaries, dividends, and

profit.
Forced Labor
 a character of Spanish colonial taxation in the
Philippines and was required from the Filipinos.

 Taxation in the Philippines during the Spanish colonial
period was characterized by the heavy burden placed on
the Filipinos, and the corruption of the principales, or
the former datus and local elites who were co-opted by
the Spaniards to subjugate and control the natives on
their behalf. Taxation appeared progressive but the
disparity between the less taxed principales and the
heavily taxed peasants made the rich richer and the poor
poorer.

Taxation under the Americans

 Land Tax – replacement of urbana, a tax on

real estate. The land tax was levied on both
urban and rural real estates.
 The problem with land tax was that land

titling in the rural area was very disorderly:

the appraising of land value was influenced
by political and familial factors and the
introduction of a taxation system on
agricultural land faced objections from the
landed elite. Tax evasion was prevalent,
especially among the elites.
Internal Revenue Law of 1904
 Internal Revenue Law of 1904 – was passed as a reaction to the
problems of collecting land tax. It prescribed ten major
sources of revenue:
 Licensed taxes on firms dealing in alcoholic beverages and
tobacco
 Excise taxes on alcoholic beverages and tobacco products
 Taxes on banks and bankers
 Document stamp taxes
 The cedula
 Taxes on insurance and insurance companies
 Taxes on forest products
 Mining concessions
 Taxes on business and manufacturing
 Occupational licenses
Underwood-Simmons Tariff Act
 – it was passed on 1913, resulting in a
reduction in the revenue of the government
as export taxes levied on sugar, tobacco,
hemp, and copra were lifted. To make up for
the loss, then Governor General Francis
Burton Harrison urged that the tax receipts
be increased to make up for the loss. Minor
changes were made to the 1904 Internal
Revenue Act such as the imposition of taxes
on mines, petroleum products, and dealers of
petroleum products and tobacco.
Taxation during the Commonwealth
Period
 New measures and legislations were
introduced to make the taxation system appear
more equitable during the Commonwealth.
Income tax rates were increased in 1936,
adding a surtax rate on individual net incomes
in excess of 10,000 pesos. Income tax rates of
corporations were also increased. In 1937, the
cedula tax was abolished, which appeared to
be a progressive move; but in 1940, a
residence tax was imposed on every citizen
aged 18 years old and on every corporations.
System of Tax Collection as World
War II reached the Philippine shores –
 Japanese armed forces immediately continued the
system of tax collection introduced during the
Commonwealth. Foreign trade fell and the main
sources of taxation came from amusements,
manufactures, professions, and business licenses.
As the war raged, tax collection was a difficult task
and additional incomes of the government were
derived from the sales of the National Sweepstakes
and sale of government bonds.
 The expenditure of the Japanese military
government grew greatly, and they issued military
notes in order to cover the cost of the war.
Fiscal Policy from 1946 to Present

 The impact of the war on the Philippine economy

was effectively disparate, as Manila, the capital,
was razed to the ground while the rest of the
Philippines was relatively untouched. But the
highly agriculture-based economy was disrupted.
The United States may have declared the
Philippine independent, but as the country
needed rehabilitation funds from the United
States, the dependency of the Philippines to the
Americans was an opportunity to be taken
advantage of by the former colonial
administrators.
 The economic situation was so problematic
that by 1949, there was a severe lack of
funds in many aspects of governance, such as
the military and education sectors. No efforts
were made to improve tax collection and the
United States advised the adoption of direct
taxation. The administration of President
Manuel Roxas declined the proposal because
it did not want to alienate its allies in
congress.
Time of President Elpidio Quirino
 – the impetus for economic growth came
through the implementation of import and
exchange controls that led to import
substitution development. New tax measures
were also passed, which included higher
corporate tax rates that increase government
revenues.
Presidencies of Magsaysay, Garcia
and Macapagal
 promised to study the tax structure and
policy of the country (through the creation of
a Tax Commission in 1959 by means of
Republic Act No. 221) to make way for a more
robust and efficient tax collection scheme,
post-war fiscal policy remained regressive,
characterized by the overburdening of the
lowest classes while the landed elite who held
business interest were in Congress to ensure
that taxes would not be levied to them who
belonged to the higher classes of society.
Under Marcos authoritarian regime –

 the tax system remained regressive. The tax

system was still heavily dependent on indirect
taxes. The tax system remained
unresponsive. Taxes grew at an average
annual rate of 15% and generated a low tax
yield.
Administration of Corazon Aquino
 took the helm of the government after the EDSA
Revolution, she reformed the tax system through the
1986 Tax Reform Program. The aim was to improve
the responsiveness of the tax system, promote equity
by ensuring that similarly situated individuals and
firms bare the same tax burden, promote growth by
withdrawing or modifying taxes that reduce incentives
to work or produce, and improve tax administration
by simplifying the tax system and promoting tax
compliance.
 A major reform in the tax system introduced under
the term of Aquino was the introduction of the value-
added tax (VAT).
 Value-Added Tax Law – was signed by 1986
and put to effect in 1988. A reliable source of
revenue for the government, new tax laws
would reduce its reliability as legislated
exemptions grew.
Administration of Fidel Ramos
 ventured into its own tax reform program in 1997
through The Comprehensive Tax Reform Program,
which was implemented to:
 Make the tax system broad-based, simple and with
reasonable tax rates.
 Minimize tax avoidance allowed by existing flaws
and loopholes in the system.
 Encourage payments by increasing tax exemptions
levels, lowering the highest tax rates, and
simplifying procedures.
 Rationalize the grant of tax incentives, which was
estimated to be worth 531.7 billion pesos in 1994.
Under Gloria Macapagal-Arroyo
 – she undertook increased government
spending without adjusting tax collections.
This resulted in large deficits from 2002 to
2004. The government had to look for
additional sources of revenue, and in 2005,
the Expanded Value-Added Tax (E-VAT) was
signed into law as Republic Act 9337.
President Benigno Aquino III
 – he promised that no new taxes would be
imposed and additional revenue would have
to come from adjusting existing taxes. The
administration ventured into the adjustment
of excise tax on liquor and cigarettes or the
Sin Tax Reform, motivations for which was
primarily fiscal, public health, and social
order-related considerations.
Republic Act 10351
 – government revenues from alcohol and
tobacco excise taxes increased. Collections
from tobacco and alcohol in 2015 made up
1.1% of the Gross Domestic Product and the
improvement in tax collection resulted in the
Philippines receiving a credit rating upgrade
into investing grade status.
Sin Tax Reform -
 an exemplar on how tax reform could impact
social services as it allowed for the increase
of the Department of Health budget (triple in
2015) and free health insurance premiums
for the poor people enrolled in PhilHealth
increased (from 55.2 million in 2012 to 515.4
million in 2015).
Administration of the new President
Rodrigo Duterte
 – promised tax reform particularly in income taxes
as it vowed to lower income tax rates shouldered by
working Filipinos. The present income tax scheme
of the country is the second highest in Southeast
Asia and the current laws on income taxes were
outdated as they were drafted two decades ago. The
proposed tax reform also seeks to limit VAT
exemptions and increase excise taxes on petroleum
products and automobiles. It is hoped that reforms
in the country’s tax policy will result in the much-
desired economic development that will be felt even
by the lowest classes in society.
Assessments:

ACTIVITY 1:
 Complete the table below to compare and

contrast the seven-constitution framed in the

country.
 Form of Ratifying/ in the country.
Length of Distinctive
Government Promulgating Effectivity Features
Body
Biak-na-Bato
Constitution
Malolos
Republic
Constitution
1935
Constitution
Second
Philippine
Republic
Constitution
1973
Constitution
Freedom
Constitution
1987
Constitution
ACTIVITY 2: INFOGRAPHIC MAKING

 Form groups with four to five members each.

Each group will think of a specific social,
political, economic, or cultural issue in the
Philippines. Research on its evolution and
propose recommendations and solutions.
Prepare a presentation to showcase your
research.
 RUBRICS IN INFOGRAPHIC MAKING:
 a. Infographic Content – 5 pts.
 Principle of Designs – 5 pts.
 Graphics – 5 pts.
 Presentation/Formatting – 5 pts.
 Work Quality – 5 pts.
 Work Cited – 5 pts.
 Total: 30 pts.
 See the link for complete details:
 https://www.rcampus.com/rubricshowc.cfm?sp=ye
s&code=MX6987W&
