September 12th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district), principal author of the administration version of the New Agrarian Emancipation Act, which will condone the P58 billion in agrarian reform debts of 654,000 agrarian reform beneficiaries and involving a total of 1.18 million hectares of awarded land, says that President Ferdinand Marcos Jr. will sign an Executive Order issuing a moratorium on the collection of agrarian reform debts tomorrow.
“It’s the first major Executive Order that PBBM will issue for farmers, so it is historic,” Salceda said.
“And it sends an unmistakable signal to Congress about where the President wants to take this. He means what he says in the SONA. We need to enact a law condoning the P58 billion in ARB debts.”
Salceda says that he was a lead drafter of Administrative Order No. 176, s. 2007, which created an inter-agency task force to review the possibility of condoning outstanding land amortization liabilities of ARBs. Salceda was Chief of Staff to then President Gloria Macapagal Arroyo. (See: https://ops.gov.ph/wp-content/uploads/News%20Releases/2007/may13.htm)
Salceda says that a ceremonial signing of the Executive Order will take place in Malacanang tomorrow.
“With this EO, PBBM is wielding the might of his 59% mandate – a mandate built heavily on his emphasis on farmer and rural development. Things that were not politically possible then are possible now. That is the message he sends with this EO.”
Salceda says that the “signal” will communicate to lawmakers “how urgently the President sees this matter.”
“On Wednesday, the Committee on Agrarian Reform in the House is set to meet on this. The DAR, under Secretary Estrella, has already endorsed to Congress my version of the reform. Sec. Estrella and I were had just been long-time colleagues in Congress when I first proposed this, fresh during my appointment as PGMA’s Presidential Chief of Staff.”
“When I first proposed it, the debt was at P42 billion. Now it’s at P58 billion. Far from being paid down, the debt actually increased. So, these are not good loans. These are clearly tying down economic output and the efficient use of land,” Salceda added.
“It was actually approved internally in the Arroyo cabinet, but there was some skepticism among the fiscal managers, particularly given that we had just imposed taxes the years before. Forgiving debts after imposing taxes was not necessarily a good look, although I strongly believed then, as now, that it was ultimately a justified cost.”
“Besides, the cost was the condonation of a non-recoverable asset – bad loans. And the harm in not doing it then was the stagnation of the agricultural sector.”
“These are zombie loans. And because the owners cannot collateralize the land for farm loans, or sell it to better farmers, we also have zombie farms – neglected rural land that nobody is farming, even when they have already been awarded to the tenants.”
Salceda said that the economic managers of the Marcos administration appear more willing to support the measure for condonation now.
“I have had conversations with the economic managers, and I was never given any indication that they oppose the measure,” Salceda added.
Salceda says that the measure will pave the way for more efficient use of agrarian lands in the country, including greater farm consolidation, resulting in economies of scale.
“This measure will allow ARBs to lease their lands to more efficient farmers, or consolidate their lands within cooperatives or farmer corporations. The DA of course has support programs for farm consolidation, so it will also open up opportunities for more government assistance towards ARBs.”
“With this EO, PBBM cures one of the most glaring self-inflicted wounds in our agriculture sector. It’s going to be one of the great achievements of this administration.”