August 23rd, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) has filed House Bill No. 3797, or the “New Agrarian Emancipation Act,” which will result in the condonation of agrarian debts of 654,000 agrarian reform beneficiaries, possessing or overseeing a total of 1.18 million hectares of awarded lands. Salceda’s version was endorsed to the Albay solon by the Department of Agrarian Reform and is the administration version of the reform that President Ferdinand Marcos Jr. proposed in the State of the Nation Address.
“This measure, first proposed by this representation in the 1990s, then as a private sector analyst, and later officially to the Cabinet in 2007 during his stint in the Arroyo administration as Presidential Chief of Staff, is long overdue, and will cost the government only some P58.125 billion in receivables that the government has found difficult to collect anyway,” Salceda said.
Salceda adds that “the productive capacities that such emancipation will unlock far outweigh the fiscal implications, which have already been incurred anyway.”
“National Scientist and economist Raul Fabella estimates that, in 2019 alone, the economy lost P390 billion in economic activity due to suboptimal use of agrarian reform lands,” Salceda cited.
“The debt burden has also meant that farmers are “married to their land” rather than economically uplifted, which was the initial purpose of the Comprehensive Agrarian Reform Program. The ARBs’ obligations for the land transferred to them under the CARP are imposed an annual interest of 6 percent and should be paid in 30 years. However, only 17 percent of ARBs are paying their amortization, resulting in massive loan defaults. As such, liens and encumbrances are attached to their lands, making these beneficiaries unable to sell their lands, and making such lands idle in the absence of a financial capable or willing farmer to exploit them,” Salceda explained.
“This proposal will release farmers from debt and release lands from unproductive possession by condoning agrarian reform debts, lifting liens and encumbrances on agrarian reform land. This will allow the transfer of such lands to younger farmers or more efficient users, allow existing ARBs to collateralize their land for productive credit, and unlock transfer taxes for the national government,” Salceda said.
Estate tax as incentive to partially paid ARBs
Salceda also crafted an incentives package for those who have already paid part or all of their agrarian reform debts.
“The proposal also includes an estate tax amnesty as an incentive for those who have paid part of their amortizations, until June 30, 2025. I expect the measure to yield P6.1 billion in additional estate tax collections every year,” Salceda said.
“The proposal also mandates the Department of Agriculture and the Department of Agrarian Reform to compile a list of support programs where ARBs that have paid part of their amortizations will be given preference to. This will serve as an equalizing provision for those who have exerted efforts to pay at least part of their amortizations,” Salceda added.
The measure is expected to speed through Congress, as a priority measure of President Marcos.