THE COMPREHENSIVE AGRARIAN REFORM LAW farmers, farmworkers, and landowners, as well as cooperatives,

Republic Act No. 6657, as amended and other independent farmers' organizations to participate in the
planning, organization, and management of the program, and shall
provide support to agriculture through appropriate technology and
I. Introduction research, and adequate financial, production, marketing, and other
support services.
A. Constitutional Basis
6. Article XIII, Section 6: The State shall apply the principles of
1. Article II, Section 21: The State shall promote comprehensive agrarian reform or stewardship, whenever applicable in accordance
rural development and agrarian reform. with law, in the disposition or utilization of other natural resources,
including lands of the public domain under lease or concession
2. Article XII, Section 1: x x x The State shall promote indus- suitable to agriculture, subject to prior rights, homestead rights of
trialization and full employment based on sound agricultural small settlers, and the rights of indigenous communities to their
development and agrarian reform, x x x ancestral lands.
The State may resettle landless farmers and farmworkers in its
3. Article XIII, Section 3: x x x The State shall regulate the relations own agriculture estates which shall be distributed to them in the
between workers and employers, recognizing the right of labor to manner provided by law.
its just share in the fruits of production and the right of enterprises
to reasonable returns on investments, and to expansion and 7. Article XIII, Section 8: The State shall provide incentives to
growth. landowners to invest the proceeds of the agrarian reform program
to promote industrialization, employment creating, and
4. Article XIII, Section 4: The State shall, by law, undertake an privatization of public sector enterprises. Financial instruments
agrarian reform program founded on the rights of farmers and used as payment for their lands shall be honored as equity in
regular farmworkers, who are landless, to own directly or enterprises of their choice.
collectively the lands they till or, in the case of other farmworkers,
to receive a just share of the fruits thereof. To this end, the State
shall encourage and undertake the just distribution of all B. Declaration of Principles and Policies [Section 2]
agricultural lands, subject to such priorities and reasonable reten-
tion limits as the Congress may prescribe, taking into account It is the policy of the State to pursue a Comprehensive Agrarian
ecological, developmental, or equity considerations, and subject to Reform Program (CARP). The welfare of the landless farmers and
the payment of just compensation. In determining retention limits, farmworkers will receive the highest consideration to promote social
the State shall respect the right of small landowners. The State justice and to move the nation toward sound rural development and
shall further provide incentives for voluntary land-sharing. industrialization, and the establishment of owner cultivatorship of
economic-size farms as the basis of Philippine agriculture.
5. Article XIII, Section 5: The State shall recognize the rights of
The State shall promote industrialization and full employment practices.
based on sound agricultural development and agrarian reform, through
industries that make full and efficient use of human and natural The State recognizes that there is not enough agricultural land to be
resources, and which are competitive in both domestic and foreign divided and distributed to each farmer and regular farmworker so that
markets: Provided, That the conversion of agricultural lands into each one can own his/her economic-size family farm. This being the
industrial, commercial or residential lands shall take into account, case, a meaningful agrarian reform program to uplift the lives and
tillers' rights and national food security. Further, the State shall protect economic status of the farmer and his/her children can only be
Filipino enterprises against unfair foreign competition and trade achieved through simultaneous industrialization aimed at developing a
self-reliant and independent national economy effectively controlled by The State shall recognize the right of farmers, farmworkers and
Filipinos. landowners, as well as cooperatives and other independent farmers'
organizations, to participate in the planning, organization, and
To this end, the State may, in the interest of national welfare or management of the program, and shall provide support to agriculture
defense, establish and operate vital industries. through appropriate technology and research, and adequate financial,
production, marketing and other support services.
A more equitable distribution and ownership of land, with due
regard to the rights of landowners to just compensation, retention The State shall recognize and enforce, consistent with existing laws,
rights under Section 6 of Republic Act No. 6657, as amended, and to the the rights of rural women to own and control land, taking into
ecological needs of the nation, shall be undertaken to provide farmers consideration the substantive equality between men and women as
and farmworkers with the opportunity to enhance their dignity and qualified beneficiaries, to receive a just share of the fruits thereof, and
improve the quality of their lives through greater productivity of to be represented in advisory or appropriate decision-making bodies.
agricultural lands. These rights shall be independent of their male relatives and of their
civil status.
The agrarian reform program is founded on the right of farmers
and regular farmworkers, who are landless, to own directly or The State shall apply the principles of agrarian reform, or
collectively the lands they till or, in the case of other farmworkers, to stewardship, whenever applicable, in accordance with law, in the
receive a just share of the fruits thereof. To this end, the State shall disposition or utilization of other natural resources, including lands of
encourage and undertake the just distribution of all agricultural lands, the public domain, under lease or concession, suitable to agriculture,
subject to the priorities and retention limits set forth in this Act, taking subject to prior rights, homestead rights of small settlers and the rights
into account ecological, developmental, and equity considerations, and of indigenous communities to their ancestral lands.
subject to the payment of just compensation. The State shall respect the
right of small landowners, and shall provide incentive for voluntary The State may resettle landless farmers and farm workers in its
land-sharing. own agricultural estates, which shall be distributed to them in the
manner provided by law.
As much as practicable, the implementation of the program shall be
community-based to assure, among others, that the farmers shall have By means of appropriate incentives, the State shall encourage the
greater control of farmgate prices, and easier access to credit. formation and maintenance of economic-size family farms to be
constituted by individual beneficiaries and small landowners.
The State shall protect the rights of subsistence fishermen, labor administration the lands they own and thereby make the land
especially of local communities, to the preferential use of communal productive.
marine and fishing resources, both inland and offshore. It shall provide
support to such fishermen through appropriate technology and The State shall provide incentives to landowners to invest the
research, adequate financial, production and marketing assistance and proceeds of the agrarian reform program to promote industrialization,
other services. The State shall also protect, develop and conserve such employment and privatization of public sector enterprises. Financial
resources. The protection shall extend to offshore fishing grounds of instruments used as payment for lands shall contain features that shall
subsistence fishermen against foreign intrusion. Fishworkers shall enhance negotiability and acceptability in the marketplace.
receive a just share from their labor in the utilization of marine and
fishing resources. The State may lease undeveloped lands of the public domain to
qualified entities for the development of capital-intensive farms, and
The State shall be guided by the principles that land has a social traditional and pioneering crops especially those for exports subject to
function and land ownership has a social responsibility. Owners of the prior rights of the beneficiaries under this Act.
agricultural land have the obligation to cultivate directly or through
 C. Definition of Agrarian Reform

1. Agrarian Reform means the redistribution of lands, regardless of

crops or fruits produced, to farmers and regular farmworkers who
are landless, irrespective of tenurial arrangement, to include the
totality of factors and support services designed to lift the
economic status of the beneficiaries and all other arrangement
alternative to the physical redistribution of lands, such as produc-
tion or profit-sharing, labor administration, and the distribution of
stock, which will allow beneficiaries to receive a just share of the
fruits of the lands they work. [Section 3(a) of RA 6657]

2. Distinguished from Land Reform

* Land Reform is the physical redistribution of land such as the

program under Presidential Decree No. 27. Agrarian reform
means the redistribution of lands including the totality of
factors and support services designed to lift the economic
status of the beneficiaries. Thus, agrarian reform is broader
than land reform.

D. RA 6657 is Constitutional

In the case of Association of Small Landowners in the Philippines,

Inc. v. Secretary of Agrarian Reform,1 the Supreme Court held:

1 175 SCRA 343.

 "The case before us presents no knotty complication insofar as the discretion is abused to the detriment of the Bill of Rights.
question of compensable taking is concerned. To the extent that the
measures under challenge merely prescribe retention limits for "It is worth remarking at this juncture that a statute may be
landowners, there is an exercise of the police power for the regulation of sustained under the police power only if there is a concurrence of the
private property in accordance with the Constitution. But where, to lawful subject and the lawful method. Put otherwise, the interests of
carry out such regulation, it becomes necessary to deprive such owners the public generally as distinguished from those of a particular class
of whatever lands they may own in excess of the maximum area require the interference of the State and, no less important, the means
allowed, there is definitely a taking under the power of eminent domain employed are reasonably necessary for the attainment of the purpose
for which payment of just compensation is imperative. The taking sought to be achieved and not unduly oppressive upon individuals. As
contemplated is not a mere limitation of the use of the land. What is the subject and purpose of agrarian reform have been laid down by the
required is the surrender of the title to and the physical possession of Constitution itself, we may say that the first requirement has been
the said excess and all beneficial rights accruing to the owner in favor of satisfied. What remains to be examined is the validity of the method
the farmer-beneficiary. This is definitely an exercise not of the police employed to achieve the Constitutional goal.
power but of the power of eminent domain.
"Eminent domain is an inherent power of the State that enable it to
"Classification has been defined as the grouping of persons or forcibly acquire private lands intended for public use upon payment of
things similar to each other in certain particulars and different from just compensation to the owner. Obviously, there is no need to
each other in these same particulars. To be valid, it must conform to the expropriate where the owner is willing to sell under terms also
following requirements: (1) it must be based on substantial acceptable to the purchaser, in which case an ordinary deed of sale may
distinctions; (2) it must be germane to the purpose of the law; (3) it be agreed upon by the parties. It is only where the owner is unwilling to
must not be limited to existing conditions only; and (4) it must apply sell, or cannot accept the price or other conditions offered by the
equally to all the members of the class. The Court finds that all these vendee, that the power of eminent domain will come into play to assert
requisites have been met by the measures here challenged as arbitrary the paramount authority of the State over the interest of the property
and discriminatory. owner. Private rights must then yield to the irresistible demands of the
public interest on the time-honored justification, as in the case of the
"Equal protection simply means that all persons or things similarly police power, that the welfare of the people is the supreme law.
situated must be treated alike both as to the rights conferred and the
liabilities imposed. The petitioner have not shown that they belong to a "But for all its primacy and urgency, the power of expropriation is
different class and entitled to a different treatment. The argument that by no means absolute (as indeed no power is absolute). The limitation
not only landowners but also owners of other properties must be made is found in the constitutional injunction that "private property shall not
to share the burden of implementing land reform must be rejected. be taken for public use without just compensation" and in the abundant
There is a substantial distinction between these two classes of owners jurisprudence that has evolved from the interpretation of this principle.
that is clearly visible except to those who will not see. There is no need Basically, the requirements for a proper exercise of the power are: (1)
to elaborate on this matter. In any event, the Congress is allowed a wide public use and (2) just compensation.
leeway in providing for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except only where its
"[T]he determination of just compensation is a function addressed
to the courts of justice and may not be usurped by any other branch or "With these assumptions, the Court hereby declares that the
official of the government. EPZA v. Dulay resolved a challenge to several content and manner of the just compensation provided for in the afore-
decrees promulgated by President Marcos providing that the just quoted Section 18 of the CARP Law is not violative of the Constitution.
compensation for property under expropriation should be either the We do not mind admitting that a certain degree of pragmatism has
assessment of the property by the government or the sworn valuation influenced our decision on this issue, but after all this Court is not a
thereof by the owner, whichever was lower. cloistered institution removed from the realities and demands of society
 or oblivious to the need for its enhancement. The Court is as acutely 1. The Comprehensive Agrarian Reform Law of 1988 shall cover,
anxious as the rest of our people to see the goal of agrarian reform regardless of tenurial arrangement and commodity produced, ALL
achieved at last after the frustrations and deprivations of our peasant PUBLIC AND PRIVATE AGRICULTURAL LANDS as provided in
masses during all these disappointing decades. We are aware that Proclamation No. 131 and Executive Order No. 229, including other
invalidation of said section will result in the nullification of the entire lands of the public domain suitable for agriculture: Provided, That
program, killing the farmer's hopes even as they approach realization landholdings of landowners with a total area of five (5) hectares
and resurrecting the specter of discontent and dissent in the restless and below shall not be covered for acquisition and distribution to
countryside. That is not in our view the intention of the Constitution, qualified beneficiaries. [Section 4]
and that is not what we shall decree today.
a. Agricultural land refers to land devoted to agricultural activity
"Accepting the theory that payment of the just compensation is not and not classified as mineral, forest, residential, commercial or
always required to be made fully in money, we find further that the industrial land [Section 3(c)].
proportion of cash payment to the other things of value constituting the b. Agricultural activity means the cultivation of the soil, planting
total payment, as determined on the basis of the areas of the lands of crops, growing of fruit trees, raising of fish, including the
expropriated, is not unduly oppressive upon the landowner. It is noted harvesting of such farm products, and other farm activities and
that the smaller the land, the bigger the payment in money, primarily practices performed by a farmer in conjunction with such
because the small landowner will be needing it more than the big land- farming operations done by persons whether natural or juridi-
owner, who can afford a bigger balance in bonds and other things of cal [Section 3(b)].
value. No less importantly, the government financial instruments
making up the balance of the payment are "negotiable at any time." The 2. Specifically, the following lands are covered by the Comprehensive
other modes, which are likewise available to the landowner at his Agrarian Reform Program:
option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits, and other a. All alienable and disposable lands of the public domain devoted
things of value equivalent to the amount of just compensation." to or suitable for agriculture. No reclassification of forest or
mineral lands to agricultural lands shall be undertaken after
the approval of this Act until Congress, taking into account
II. Scope ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;

A. Lands Covered

b. All lands of the public domain in excess of the specific limits as 1. Under Section 102, excluded from the coverage of the CARL are
determined by Congress in the preceding paragraph; lands actually, directly and exclusively used for:

c. All other lands owned by the Government devoted to or suitable a. Parks;

for agriculture; and b. Wildlife;
c. Forest reserves;
d. All private lands devoted to or suitable for agriculture d. Reforestation;
regardless of the agricultural products raised or that can be e. Fish sanctuaries and breeding grounds;
raised thereon. f. Watersheds and mangroves.

B. Exclusions from the Coverage of CARL

2 As amended by Republic Act No. 7881.
 2. Private lands actually, directly and exclusively used for prawn farms a. National defense;
and fishponds shall be exempt from the coverage of this Act: b. School sites and campuses including experimental farm
Provided, That said prawn farms and fishponds have not been stations operated by public or private schools for educational
distributed and Certificate of Land Ownership Award (CLOA) purposes;
issued to agrarian reform beneficiaries under the c. Seeds and seedling research and pilot production center;
Comprehensive Agrarian Reform Program. d. Church sites and convents appurtenant thereto;
In cases where the fishponds or prawn farms have been subjected e. Mosque sites and Islamic centers appurtenant thereto;
to the Comprehensive Agrarian Reform Law, by voluntary offer to f. Communal burial grounds and cemeteries;
sell, or commercial farms deferment or notices of compulsory g. Penal colonies and penal farms actually worked by the inmates;
acquisition, a simple and absolute majority of the actual regular and
workers or tenants must consent to the exemption within one (1) h. Government and private research and quarantine centers.
year from the effectivity of this Act. When the workers or tenants
do not agree to this exemption, the fishponds or prawn farms shall 4. All lands with eighteen percent (18%) slope and over which are not
be distributed collectively to the worker-beneficiaries or tenants developed for agriculture are exempted from the coverage of CARL.
who shall form a cooperative or association to manage the same.
* An eighteen percent slope is not equivalent to an eighteen
3. Likewise, execluded from the coverage the CARL are lands actually, degree angle. Eighteen percent slope is obtained by having a
directly and exclusively used and found to be necessary for: 100 meter run and an 18 meter rise.

5. In the case of Luz Farms v. Secretary of Agrarian Reform,3 the word "ARABLE" to distinguish this kind of agricultural land from
Supreme Court has excluded agricultural Lands Devoted to such lands as commercial and industrial lands and residential
Commercial Livestock, Poultry and Swine Raising from the properties because all of them fall under the general classification
coverage of CARL. of the word "agricultural." This proposal, however, was not consid-
ered because the Committee contemplated that agricultural lands
The Supreme Court said: are limited to arable and suitable agricultural lands and therefore,
do not include commercial, industrial and residential lands (Re-
"The transcripts of the deliberations of the Constitutional cord, CONCOM, August 7, 1986, Vol. III, p. 30).
Commission of 1986 on the meaning of the word "agricultural,"
clearly show that it was never the intention of the framers of the "In the interpellation, then Commissioner Regalado (now a
Constitution to include livestock and poultry industry in the Supreme Court Justice), posed several questions, among others,
coverage of the constitutionally-mandated agrarian reform quoted as follows:
program of the Government.
xxx xxx xxx
"The Committee adopted the definition of "agricultural land" as "Line 19 refers to genuine reform program founded on the
defined under Section 166 of RA 3844, as lands devoted to any primary right of farmers and farmworkers. I wonder if it
growth, including but not limited to crop lands, saltbeds, fishponds, means that leasehold tenancy is thereby proscribed under this
idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, provision because it speaks of the primary right of farmers and
p. 11). farmworkers to own directly or collectively the lands they till.
As also mentioned by Commissioner Tadeo, farmworkers
"The intention of the Committee is to limit the application of include those who work in piggeries and poultry projects.
the word "agriculture." Commissioner Jamir proposed to insert the I was wondering whether I am wrong in my appreciation
that if somebody puts up a piggery or a poultry project and for
3 192 SCRA 51. that purpose hires farmworkers therein, these farmworkers
 will automatically have the right to own eventually, directly or xxx xxx xxx
ultimately or collectively, the land on which the piggeries and "Sa pangalawang katanungan ng Ginoo ay medyo hindi
poultry projects were constructed. (Record, CONCOM, August kami nagkaunawaan. Ipinaaalam ko kay Commissioner
2, 1986, p. 618). Regalado na hindi namin inilagay ang agricultural worker sa
xxx xxx xxx" kadahilanang kasama rito ang piggery, poultry at livestock
workers. Ang inilagay namin dito ay farm worker kaya hindi
"The question were answered and explained in the statement of kasama ang piggery, poultry at livestock workers (Record,
the then Commissioner Tadeo, quoted as follows: CONCOM, August , 1986, Vol. II, p. 621).

"It is evident from the foregoing discussion that Section 11 of 2. Factors to consider in the Implementation
RA 6657 which includes "private agricultural lands devoted to
commercial livestock, poultry and swine raising" in the definition of a. Need to distribute lands to the tillers at the earliest practical
"commercial farms" is invalid, to the extent that the aforecited agro- time;
industrial activities are made to be covered by the agrarian reform b. Need to enhance agricultural productivity; and
program of the State. There is simply no reason to include livestock c. Availability of funds and resources to implement and support
and poultry lands int he coverage of agrarian reform. (Rollo, p. 21). the program

"PREMISES CONSIDERED, the instant petition is hereby 3. Phases of Implementation

GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as
the inclusion of raising of livestock, poultry and swine in its Phase One: During the five (5)-year extension period hereafter all
coverage as well as the Implementing Rules and Guidelines remaining lands above fifty (50) hectares shall be covered for purposes
promulgated in accordance therewith, are hereby DECLARED null of agrarian reform upon the effectivity of this Act. All private
and void for being unconstitutional and the writ of preliminary agricultural lands of landowners with aggregate landholdings in excess
injunction issued is hereby MADE permanent." of fifty (50) hectares which have already been subjected to a notice of
coverage issued on or before December 10, 2008; rice and corn lands
under Presidential Decree No. 27; all idle or abandoned lands; all
III. Schedule of Implementation private lands voluntarily offered by the owners for agrarian reform:
Provided, That with respect to voluntary land transfer, only those
submitted by June 30, 2009 shall be allowed: Provided, further, That
A. Period for Implementation [Section 5] after June 30, 2009, the modes of acquisition shall be limited to
voluntary offer to sell and compulsory acquisition: Provided,
1. The DAR, in coordination with the Presidential Agrarian Reform furthermore, That all previously acquired lands wherein valuation is
Council (PARC) shall plan and program the final acquisition and subject to challenge by landowners shall be completed and finally
distribution of all remaining unacquired and undistributed resolved pursuant to Section 17 of Republic Act No. 6657, as amended:
agricultural lands from the effectivity of this Act until June 30, Provided, finally, as mandated by the Constitution, Republic Act No.
2014. 6657, as amended, and Republic Act No. 3844,as amended, only farmers
(tenants or lessees) and regular farmworkers actually tilling the lands,
as certified under oath by the Barangay Agrarian Reform Council
B. Priorities [Section 7] (BARC) and attested under oath by the landowners, are the qualified
beneficiaries. The intended beneficiary shall state under oath before the
1. Guiding Principle: In effecting the transfer, priority must be given judge of the city or municipal court that he/she is willing to work on the
to lands that are tenanted. land to make it productive and to assume the obligation of paying the
amortization for the compensation of the land and the land taxes
 thereon; all lands foreclosed by government financial institutions; all suitable for agriculture, which shall be acquired and distributed
lands acquired by the Presidential Commission on Good Government immediately upon the effectivity of this Act, with the implementation to
(PCGG); and all other lands owned by the government devoted to or be completed by June 30, 2012.
Phase Two: (a) Lands twenty-four (24) hectares up to fifty (50) directly or collectively the lands they till.
hectares shall likewise be covered for purposes of agrarian reform upon
the effectivity of this Act. All alienable and disposable public The schedule of acquisition and redistribution of all agricultural
agricultural lands; all arable public agricultural lands under agro-forest, lands covered by this program shall be made in accordance with the
pasture and agricultural leases already cultivated and planted to crops above order of priority, which shall be provided in the implementing
in accordance with Section 6, Article XIII of the Constitution; all public rules to be prepared by the PARC, taking into consideration the
agricultural lands which are to be opened for new development and following: the landholdings wherein the farmers are organized and
resettlement: and all private agricultural lands of landowners with understand ,the meaning and obligations of farmland ownership; the
aggregate landholdings above twenty-four (24) hectares up to fifty (50) distribution of lands to the tillers at the earliest practicable time; the
hectares which have already been subjected to a notice of coverage enhancement of agricultural productivity; and the availability of funds
issued on or before December 1O, 2008, to implement principally the and resources to implement and support the program: Provided, That
rights of farmers and regular farmworkers, who are landless, to own the PARC shall design and conduct seminars, symposia, information
directly or collectively the lands they till, which shall be distributed campaigns, and other similar programs for farmers who are not
immediately upon the effectivity of this Act, with the implementation to organized or not covered by any landholdings. Completion by these
be completed by June 30, 2012; and farmers of the aforementioned seminars, symposia, and other similar
programs shall be encouraged in the implementation of this Act
(b) All remaining private agricultural lands of landowners with particularly the provisions of this Section.
aggregate landholdings in excess of twenty-four (24) hectares,
regardless as to whether these have been subjected to notices of
coverage or not, with the implementation to begin on July 1, 2012 and
to be completed by June 30, 2013 The PARC shall establish guidelines to implement the above
priorities and distribution scheme, including the determination of who
Phase Three: All other private agricultural lands commencing with are qualified beneficiaries: Provided, That an owner-tiller may be a
large landholdings and proceeding to medium and small landholdings beneficiary of the land he/she does not own but is actually cultivating
under the following schedule: to the extent of the difference between the area of the land he/she owns
and the award ceiling of three (3) hectares: Provided, further, That
(a) Lands of landowners with aggregate landholdings above ten (10) collective ownership by the farmer beneficiaries shall be subject to
hectares up to twenty- four (24)hectares, insofar as the excess Section 25 of Republic Act No. 6657, as amended: Provided,
hectarage above ten (10) hectares is concerned, to begin on July furthermore, That rural women shall be given the opportunity t o
1,2012 and to be completed by June 30, 2013; and participate in the development planning and implementation of this
Act: Provided, finally, That in no case should the agrarian reform
(b) Lands of landowners with aggregate landholdings from the beneficiaries' sex, economic, religious, social, cultural and political
retention limit up to ten (10) hectares, to begin on July 1, 2013 and attributes adversely affect the distribution of lands.
to be completed by June 30, 2014; to implement principally the
right of farmers and regular farmworkers who are landless, to own
C. Exceptions from the Implementation Phases by the Provincial Agrarian Reform Coordinating Committee
(PARCCOM), may declare certain provinces as priority land reform
1. Land acquisition and distribution shall be completed by June 30, areas, in which case the acquisition and distribution of private
2014 on a province-by- province basis. In any case, the PARC or the agricultural lands therein under advanced phases may be
PARC Executive Committee (PARC EXCOM), upon recommendation implemented ahead of the above schedules on the condition that
 prior phases in these provinces have been completed: Provided,
That notwithstanding the above schedules, phase three (b) shall
not be implemented in a particular province until at least ninety
percent (90%) of the provincial balance of that particular province
as of January 1, 2009 under Phase One, Phase Two (a), Phase Two
(b),,and Phase Three (a), excluding lands under the jurisdiction of
the Department of Environment and Natural Resources (DENR),
have been successfully completed. PARC, upon recommendation of
the Provincial Agrarian Reform Coordinating Committee
(PARCCOM), may declare certain provinces or regions as priority
land reform areas, in which case the acquisition and distribution of
private agricultural lands therein may be implemented ahead of
schedule. [Section 7]

2. The PARC may suspend the implementation of CARL with respect

to ancestral lands for purpose of identifying and delineating such
lands. [Section 9]

IV. Improvement of Tenurial and Labor Relations

A. Leasehold Tenancy

1. Tenancy in General

a. Definition: Agricultural tenancy is the physical possession by a

person of land devoted to agriculture, belonging to or legally
possessed by another for the purpose of production through
the labor of the former and of the members of his immediate
farm household in consideration of which the former agrees to
share the harvest with the latter or to pay a price certain or
ascertainable, either in produce or in money, or in both
[Section 3 of RA 1199, Guerrero v. CA4]

b. Types of Tenancy Relation

i. Sharehold Tenancy; and
ii. Leasehold Tenancy

2. Leasehold vs. Sharehold Tenancy

4 142 SCRA 136.

 * The two tenancy systems are distinct and different form each
other. In sharehold, the tenant may choose to shoulder, in
addition to labor, any one or more of the items of contributions Leasehold Tenancy Civil Law Lease
(such as farm implements, work animals, final harrowing,
transplanting), while in leasehold, the tenant or lessee always Subject Matter Agricultural lands only Both rural and urb
shoulders all items of production except the land. Under the ties
sharehold system, the tenant and the landholder are co-
Attention and Cultivation Tenant must personally culti- Lessee does not ha
managers, whereas in leasehold, the tenant is the sole manager
vate sonally cultivate
of the farmholding. Finally, in sharehold tenancy, the tenant
and the landholder divide the harvest in proportion to their Purpose Agriculture only Any lawful purpose
contributions, while in leasehold tenancy, the tenant or lessee
gets the whole produce with the mere obligation to pay a fixed Governing Law Special laws Civil Code
rental. [People v. Adillo5]
4. Purpose of the Leasehold Relation: To protect and improve the
tenurial and economic status of the farmers in tenanted lands.
Sharehold Leasehold [Section 12]
Expenses of Production Tenant and Landowner Tenant
5. Application [Section 12]
Management Tenant and Landowner Tenant
a. Tenanted lands under the retention limit; and
Payment Tenant and landowner divide Tenant gets the whole produce b. Tenanted lands not yet acquired under the CARL
the harvest in proportion to with the mere obligation to
their contributions. pay rent.
B. Production Sharing Plan
3. Leasehold vs. Civil Lease
1. Application [Section 13]
* There are important differences between a leasehold tenancy and a
civil law lease. The subject matter of leasehold tenancy is limited to a. Any enterprise adopting the scheme provided for in Section 32;
agricultural lands; that of civil law lease may be either rural or b. Any enterprise operating under a production venture, lease,
urban property. As to attention and cultivation, the law requires the management contract or other similar arrangement;
leasehold tenant to personally attend to, and cultivate the
agricultural land, whereas the civil law lessee need not personally
cultivate or work the thing leased. As to purpose, the landholding
in leasehold tenancy is devoted to agriculture, whereas in civil law
lease, the purpose may be for any other lawful pursuit. As to the
law that governs, the civil law lease is governed by the Civil Code,
whereas leasehold tenancy is governed by special laws. [Gabriel v.
Pangilinan6]

5 68 SCRA 90.

6 58 SCRA 590.
 c. Any farm covered by Section 8 (Private agricultural lands lowing information:
leased by Multinational corporations) and Section 11
(Commercial farming); and a. the description and area of the property;
d. Corporate farms pending final land transfer. b. the average gross income from the property for at least 3 years;
c. the names of all tenants and farmworkers therein;
2. Period for Compliance: Within ninety (90) days from effectivity of d. the crops planted in the property and the area covered by the crop
CARL as of June 1, 1987;
e. the terms of mortgages, leases and management contracts subsist-
3. Scheme (Applies to those individuals or enterprises realizing gross ing as of June 1, 1987; and
sales in excess of five million pesos per annum, unless the DAR f. the latest declared market value of the land as determined by the
sets a lower ceiling) [Section 32] city or provincial assessor. (Section 14)

a. Three percent (3%) of the gross sales from the production of

such lands; B. The DAR, in coordination with the Barangay Agrarian Reform
b. Distributed within sixty (60) days of the end of the fiscal year; Committee (BARC) shall register all agricultural lessees, tenants and
c. Treated as additional compensation to regular and other farm- farmworkers who are qualifies to be beneficiaries under the CARL.
workers of such lands; These potential beneficiaries shall provide the following data:
d. During the transitory period (before the land is turned over to
the farmworker-beneficiaries), at least one percent (1%) of the a. names and members of their immediate farm household;
gross sales shall be distributed to the managerial, supervisory b. owners and administrators of the lands they work on and the
and technical group; and length of tenurial relationship;
e. If profit is realized, an additional ten percent (10%) of the net c. location and area of the land they work;
profit after tax shall be distributed to the regular and other d. crops planted; and
farmworkers within ninety (90) days of the end of the fiscal e. their share in the harvest or amount of rental paid or wages
year. received.

V. Registration VI. Private Land Acquisition

A. Within 180 days from the effectivity of CARL, landowners, natural or A. Retention Limit [Section 6]
juridical, shall file a sworn statement in the assessor's office the fol-
1. Five hectares is the retention limit. No person may own or a. That the child is at least fifteen (15) years of age; and
retain, directly or indirectly, any public or private agricultural land, b. That the child is actually tilling the land or directly managing
the size of which shall vary according to factors governing a viable the farm.
family-sized farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential 3. Exceptions to the retention limit of five hectares.
Agrarian Reform Council (PARC), but in no case shall the retention
limit exceed five (5) hectares. a. Landowners whose lands have been covered by PD 27; and
b. Original homestead grantees or direct compulsory heirs who
2. Additional three hectares may be awarded to each child, subject still own the original homestead at the time of the approval of
to the following qualifications: CARL, as long as they continue to cultivate said homestead.
C. Provincial, city and municipal government ,units acquiring
 private agricultural lands by expropriation or other modes of retention.
acquisition to be used for actual, direct and exclusive public
purposes, such as roads and bridges, public markets, school
sites, resettlement sites, local government facilities, public
parks and barangay plazas or squares, consistent with the B. Procedure
approved local comprehensive land use plan, shall not be
subject to the five (5)-hectare retention limit under this Section 1. Voluntary Land Transfer (VLT) [Section 20]
and Sections 70 and 73(a) of Republic Act No. 6657, as
amended: Provided, That lands subject to CARP shall first a. Must be submitted to the DAR within one year from effectivity
undergo the land acquisition and distribution process of the of the CARl;
program: Provided, further, That when these lands have been b. Must not be less favorable to the transferee than those of the
subjected to expropriation, the agrarian reform beneficiaries government's standing ; and
therein shall be paid just compensation [Section 6-A]. c. Shall include sanctions for non-compliance by either party and
shall be duly recorded and its implementation monitored by
4. Right to choose the area to be retained. the DAR.
D. Only those submitted by June 30, 2009 shall be allowed.
The right to choose the area to be retained, which shall be
compact or contiguous, shall pertain to the landowner. If the land 2. Compulsory Acquisition [Section 16]
retained is tenanted, the tenant shall have the option to choose
whether to remain therein or be a beneficiary in the same or a. Notice to acquire the land shall be sent to the landowner and
another agricultural land. In case the tenant chooses to remain in the beneficiaries. The notice shall also be posted in a
the retained area, he shall be considered a leaseholder and shall conspicuous place in the municipal building and the barangay
lose his right to be a beneficiary under this Act. In case the tenant hall of the place where the property is located.
chooses to be a beneficiary in another agricultural land, he loses his b. Within thirty (30) days from receipt of the written notice, the
right as a leaseholder to the land retained by the landowner. The landowner shall inform the DAR of his acceptance or rejection
tenant must exercise this option within a period of one (1) year of the offer.
from the time the landowner manifest his choice of the area for
c. If the offer is accepted, the LBP pays the landowner and within harvest the same (Section 28).
thirty (30) days, the landowner executes and delivers a deed of
transfer to the Government and surrenders the Certificate of
Title and other muniments of title. C. Compensation
d. In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the 1. Determination of Just Compensation.
compensation. If he does concur with the compensation deter-
mined by the DAR, he can the matter to the Courts. In determining just compensation, the cost of acquisition of the
e. Payment of the just compensation as determined by the DAR or land, the value of the standing crop, the current: value of like
the Court. properties, its nature, actual use and income, the sworn valuation
f. Registration with the Register of Deeds for the issuance of by the owner, the tax declarations, the assessment made by
Transfer Certificate of Title in the name of the Republic of the government assessors, and seventy percent (70%) of the zonal
Philippines. valuation of the Bureau of Internal Revenue (BIR), translated into a
g. Standing Crops: The landowner shall retain his share of any basic formula by the DAR shall be considered, subject to the final
standing crops unharvested at the time the DAR shall take decision of the proper court. The social and economic benefits
possession of the land and shall be given reasonable time to contributed by the farmers and the farmworkers and by the
 Government t o the property as well as the nonpayment of taxes or
loans secured from any government financing institution on the * In case of VOS, the landowner shall be entitled to an
said land shall be considered as additional factors to determine its additional 5% cash payment. [Section 19]
valuation [Section 17].
b. Balance in any of the following:

2. Under EO 405 (1990), Land Bank of the Philippines shall be i. Shares of stock in government-owned or controlled
primarily responsible for the determination of the land valuation corporations, LBP preferred shares, physical assets or
and compensation. other qualified investments;
ii. Tax credits which can be used against any tax liability;
3. Mode of Payment [Section 18] iii. Land Bank of the Philippines Bonds which shall have the
following features:
a. Cash under the following scheme: * Market interest rates aligned with 91-day treasury bill
rates;
i. For lands above 50 hectares : 25% * Ten percent (10%) of the face value of the bonds shall
ii. For lands above 24 and up to 50 : mature every year from the date of issuance until the
30% tenth year; and
iii. For lands 24 and below : * Transferability and negotiability
35%
c. Set-off

* All arrearages in real property taxes, without penalty or A. Beneficiaries [Section 22]
interest, shall be deductible from the compensation to
which the owner is entitled. [Section 66] Beneficiaries, in their order of priority, are:

1. Agricultural lessees and share tenants;

D. Exemptions from Taxes and Fees 2. Regular Farmworkers: a natural person who is employed on a
permanent basis by an agricultural enterprise or farm [Section
1. Transactions under CARL involving a transfer of ownership, 3(h)];
whether from natural or juridical persons, shall be exempted from
taxes arising from capital gains. These transactions shall also be a. Farmer refers to a natural person whose primary livelihood is
exempted from the payment of registration fees, and all other taxes cultivation of land or the production of agricultural crops,
and fees for the conveyance or transfer thereof; Provided, That all livestock and/or fisheries either by himself/herself, or
arrearages in real property taxes, without penalty or interest, shall primarily with the assistance of his/her immediate farm
be deducted from the compensation to which the owner may be household, whether the land is owned by him/her, or by
entitled. [Section 66] another person under a leasehold or share tenancy agreement
or arrangement with the owner thereof [Section 3(f)].
2. All Registers of Deeds are hereby directed to register, free from b. Farmworker is a natural person who renders service for value
payment of all fees and other charges, patents, titles and documents as an employee or laborer in an agricultural enterprise or farm
required for the implementation of CARP. [Section 67] regardless of whether his compensation is paid on a daily,
weekly, monthly or "pakyaw" basis. It includes an individual
whose work has ceased as a consequence of, or in connection
VII. Land Redistribution with, a pending agrarian dispute and who has not obtained a
 substantially equivalent and regular farm employment [Section 4. Other farmworkers: a farmworker who is not a regular nor a
3(g)]. seasonal farmworker [Section 3(j)];

3. Seasonal farmworkers: a natural person who is employed on a 5. Actual tillers or occupants of public lands;
recurrent, periodic or intermittent basis by an agricultural
enterprise or farm, whether as a permanent or an non-permanent 6. Collective or cooperatives of the above beneficiaries; and
laborer, such as "dumaan", "sacada", and the like [Section 3(i)];

* Cooperatives shall refer to organizations composed primarily farm practices. [Belmi v. CAR7]
of small agricultural producers, farmers, farmworkers, or other
agrarian reform beneficiaries who voluntarily organize 3. Beneficiaries with at least three (3) hectares of agricultural land;
themselves for the purpose of pooling land, human, technolog- and
ical, financial or other economic resources, and operated on the
principle of one member, one vote. A juridical person may be a * Under the CARL, a beneficiary is landless if he owns less than
member of a cooperative, with the same rights and duties as a three (3) hectares of agricultural land. [Section 25]
natural person [Section 3(k)].
4. Beneficiaries whose land have been the subject of foreclosure by
7. Others directly working on the land. the Land Bank of the Philippines. [Section 26]

Before any award is given to a farmer, the qualified children of the * Under the CARL, the LBP may foreclose on the mortgage for
landowner must receive their three hectare award. non-payment of the beneficiary of an aggregate of three (3)
annual amortizations. [Section 26]
Rural women refer to women who are engaged directly or indirectly
in farming and/or fishing as their source of livelihood, whether paid or
unpaid, regular or seasonal, or in food preparation, managing the C. Awards
household, caring for the children, and other similar activities [Section
3(l)]. 1. Emancipation Patents (EPs) are issued for lands covered under
Operation Land Transfer (OLT) of Presidential Decree No. 27.

B. Disqualifications of Beneficiaries [Section 22] 2. Certificates of Land Ownership Award (CLOAs) are issued for
private agricultural lands and resettlement areas covered under
1. Beneficiaries under Presidential Decree No. 27 who have culpably Republic Act No. 6657, otherwise known as the Comprehensive
sold, disposed of, or abandoned their land; Agrarian Reform Law of 1988.

2. Beneficiaries guilty of negligence or misuse of the land or any 3. Free Patents are issued for public agricultural lands.
support extended to them;
* Under Section 15 of EO 229 (1987), all alienable and dispos-
* The mere fact that the expected quantity of harvest, as able lands of the public domain suitable for agriculture and
visualized and calculated by agricultural experts, is not actually outside proclaimed settlements shall be redistributed by the
realized, or that the harvest did not increase, is not a sufficient Department of Environment and Natural Resources (DENR).
basis for concluding that the tenants failed to follow proven

7 7 SCRA 812.
 4. Certificates of Stewardship Contracts are issued for forest areas hereditary succession, or to the government, or to the Land Bank of
under the Integrated Social Forestry Program. the Philippines, or to other qualified beneficiaries for a period of
ten (10) years. [Section 27]

D. Manner of Payment [Section 26] * If the land is sold to the government or to the LBP, the children
or the spouse of the transferee shall have a right to repurchase
1. Lands awarded shall be paid by the beneficiaries to the LBP in within a period of two (2) years.
thirty (30) annual amortizations at six percent (6%) interest per
annum. The payments for the first three (3) years after the awards 2. Conversions of Lands. - An application for conversion may be
may be at reduced amounts as established by the PARC: Provided, entertained only after the lapse of five (5) years from the award,
That the first five (5) annual payments may not be more than five when the land ceases to be economically feasible and sound for
percent (5%) of the value of the annual gross production as agricultural purposes or the locality has become urbanized and the
established by the DAR. Should the scheduled annual payments land will have a greater economic value for residential, commercial
after the fifth year exceed ten percent (10%) of the annual gross or industrial purpose. [Section 66]
production and the failure to produce accordingly is not due to the
beneficiary's fault, the LBP may reduce the interest rate or reduce
the principal obligation to make the repayment affordable. VIII. Corporate Farms

2. Payment shall be:

A. Definition
a. Thirty (30) annual amortizations (First 3 years may be at
reduced amounts); * Corporate farms are farms which are owned or operated by
b. Six percent (6%) interest per annum; and corporations or other business associations. [Section 29]
c. First five (5) annual payments may not be more than five
percent (5%) of the value of the annual gross production.
B. Distribution

1. Land Transfer (Voluntarily Offer to Sell or Compulsory Acquisition)

E. Ownership Limitations on the Awarded Lands
a. General rule: Lands shall be distributed directly to the
1. Transferability of Awarded Lands. - Lands acquired by bene- individual farmworker-beneficiaries.
ficiaries may not be sold, transferred or conveyed except through
b. Exception: However, if it is not economically feasible and a. This is a non-land transfer. Corporations or associations which
sound to divide the land, then it shall be owned collectively by voluntarily divest a proportion of their capital stock, equity or
the farmworker-beneficiaries through a workers' cooperative participation in favor of their workers or other qualified
or association. [Section 29] beneficiaries shall be deemed to have complied with CARL.
c. In case the land is transferred to a cooperative or association, b. Amount to be divested: Corporations owning agricultural lands
the individual members of the cooperatives shall be provided may give their qualified beneficiaries the right to repurchase
with homelots and small farmlots for their family use, to be such proportion of the capital stock of the corporation that the
taken from the land owned by the cooperative. [Section 30] agricultural land, actually devoted to agricultural activities,
bears in relation to the company's total assets.
2. Capital Stock Transfer [Section 31]
* Agricultural activity means the cultivation of the soil,
 planting of crops, growing of fruit trees, raising of fish, d. Period for Compliance: If within TWO (2) YEARS from the
including the harvesting of such farm products, and other approval of CARL or from the approval of the PARC of the plan
farm activities and practices performed by a farmer in for stock distribution, the stock transfer is not made or
conjunction with such farming operations done by persons realized, the agricultural land shall be subject to compulsory
whether natural or juridical [Section 3(b)]. coverage of the CARL.

c. Conditions of the Capital Stock Transfer. IX. Support Services

i. The books of the corporation shall be subject to periodic

audit by certified public accountants chosen by the A. General Support and Coordinative Services [Section 35]
beneficiaries;
ii. The beneficiaries shall be assured of at least one (1) 1. Irrigation facilities;
representative in the board of directors, or in a 2. Infrastructure development and public works projects in areas and
management or executive committee, if one exists; settlements that come under agrarian reform;
iii. Any share acquired by the beneficiaries shall have the 3. Government subsidies for the use of irrigation facilities;
same rights and features as all other shares; and 4. Price support and guarantee for all agricultural produce;
iv. Any transfer of shares of stock by the original beneficiaries 5. Extending the necessary credit;
shall be void ab initio unless said transaction is in favor of a 6. Promoting, developing and extending financial assistance to small
qualified and registered beneficiary within the same and medium scale industries in agrarian reform areas;
corporation. 7. Assigning sufficient numbers of agricultural extension workers to
farmers' organizations;
8. Undertaking research, development and dissemination of 4. Infrastructure such as access trail, mini-dams, public utilities,
information on agrarian reform and low-cost and ecologically marketing and storage facilities; and
sound farm inputs and technologies to minimize reliance on 5. Research, production and use of organic fertilizers and other local
expensive and imported agricultural inputs; substances necessary in farming and cultivation.
9. Development of cooperative management through intensive
training;
10. Assistance in the identification of ready markets for agricultural C. Support Services to Landowners [Section 38]
produce and training in other various aspects of marketing; and
11. Administration, operation, management and funding of support 1. Investment information, financial and counselling assistance;
service programs and projects including pilot projects and models 2. Facilities, programs and schemes for the conversion or exchange of
related to agrarian reform. bonds issued for payment of the lands acquired with stocks and
bonds issued by the National Government, the Central Bank and
other government institutions and instrumentalities;
B. Support Services to Beneficiaries [Section 37] 3. Marketing of LBP bonds, as well as promoting the marketability of
said bonds in traditional and non-traditional financial markets and
1. Land surveys and titling; stock exchanges;
2. Liberalized terms on credit facilities and production loans; 4. Other services designed to utilize productively the proceeds of the
3. Extension services by way of planting, cropping, production and sale of such lands for rural industrialization;
post-harvest technology transfer, as well as marketing and 5. Incentives granted to a registered enterprise engaged in a pioneer
management assistance and support to cooperatives and farmers' or preferred area of investment as provided for in the Omnibus
organizations; Investment Code or granted by the PARC, the LBP or other
 government financial institutions for those who invests in rural- * At least twenty-five percent (25%) of all appropriations for
based industries; and agrarian reform shall be immediately set aside and made available
6. Redemption by the LBP of up to thirty percent (30%) of the face for support services. In addition, the DAR shall be authorized to
value of the its bonds for landowners who will invest the proceeds package proposals and receive grants, aid and other forms of
of the redemption in a BOI-registered company or in any agri- financial assistance from any source. [Section 36]
business or agro-industrial enterprise in the region where they
have previously made investments.
X. Special Areas of Concern [Section 40]

D. Funding

A. Subsistence Fishing: Small fisherfolk, including seaweed farmer, shall force must be guaranteed and assured equal rights to ownership of the
be assured of greater access to the utilization of water resources. land, equal shares of the farm's produce, and representation in advisory
or appropriate decision-making bodies.

B. Logging and Mining Concessions: Subject to the requirement of a F. Veterans and Retirees: Landless ware veterans and veterans of
balanced ecology and conservation of water resources, suitable areas in military campaigns, their surviving spouses and orphans, retirees of the
logging, mining and pasture areas, shall be opened up for agrarian Armed Forces of the Philippines and the Integrated National Police,
settlements whose beneficiaries shall be required to undertake returnees, surrenderees and similar beneficiaries shall be given due
reforestation and conservation production methods. consideration in the disposition of agricultural lands of the public
domain.
* Certificates of Stewardship Contracts are issued for forest areas
under the Integrated Social Forestry Program. G. Agriculture Graduates: Graduates of agricultural schools who are
landless shall be assisted by the government in their desire to own and
C. Sparsely Occupied Public Agricultural Lands: Sparsely occupied till agricultural lands.
agricultural lands of the public domain shall be surveyed, proclaimed
and developed as farm settlements for qualified landless people.

* Agricultural land allocations shall be made for ideal family-size XI. Program Implementation
farms.

* Uncultivated lands of the public domain shall be made available on A. Presidential Agrarian Reform Council (PARC)
a lease basis to interested and qualified parties. Priority shall be
given to those who will engage in the development of capital- 1. Composition [Section 41]
intensive, traditional or pioneering crops.
a. Chairman: President of the Philippines
D. Idle, Abandoned, Forecloses and Sequestered Lands: Idle, b. Vice-Chairman: Secretary of Agrarian Reform
abandoned, foreclosed and sequestered lands shall be planned for c. Members:
distribution as home lots and family-size farmlots to actual occupants. i. Secretary of Agriculture;
If land area permits, other landless families shall be accommodated in ii. Secretary of Environment and Natural Resources;
these lands. iii. Secretary of Budget and Management;
iv. Secretary of Local Government;
E. Rural Women: All qualified women members of the agricultural labor v. Secretary of Public Works and Highways;
 vi. Secretary of Trade and Industry;
vii. Secretary of Finance; 4. PARC Secretariat [Section 43]
viii. Secretary of Labor and Employment;
ix. Director-General of National Economic and Development a. A PARC Secretariat is established to provide general support
Authority; and coordinative services such as inter-agency linkages,
x. President of Land Bank of the Philippines; program and project appraisal and evaluation and general
xi. Administrator of National Irrigation Authority; operations monitoring for the PARC.
xii. Three (3) representatives of affected landowners to b. Composition: The Secretariat shall be headed by the Secretary
represent Luzon, Visayas and Mindanao; and of Agrarian Reform who shall be assisted by an Undersecretary
xiii. Six (6) representatives of agrarian reform beneficiaries, and supported by a staff whose composition shall be deter-
two (2) each from Luzon, Visayas and Mindanao, provided mined by the PARC Executive Committee.
that one of them shall be from cultural communities.

2. Functions and Duties [EO 229, 1987] B. Provincial Agrarian Reform Coordinating Committee (PARCCOM)

a. Formulate and implement policies, rules and regulations 1. Composition (Section 44)
necessary to implement the CARP;
b. Recommend small farm economy areas; a. Chairman: an appointee of the President upon recom-
c. Schedule the acquisition and distribution of specific agrarian mendation of the PARC EXCOM;
reform areas; and b. Executive Officer: Provincial Agrarian Reform Officer;
d. Control mechanisms for evaluating the owner's declaration of c. Members:
current fair market value. i. Representative from the Department of Agriculture;
ii. Representative for the Department of Environment and
3. Executive Committee (EXCOM) of the PARC [Section 42] Natural Resources;
iii. Representative for the Land Bank of the Philippines;
a. There shall be an Executive Committee of the PARC which shall iv. One representative each from existing farmers' orga-
meet and decide on any and all matters in between meetings of nizations, agricultural cooperatives and non-governmental
the PARC: Provided, however, That its decision must be organizations in the province;
reported in the PARC immediately and not later than the next v. Two representatives from the landowners, at least one of
meeting. whom shall be a producer representing the principal crop
b. Composition: The Secretary of Agrarian Reform shall be the of the province;
Chairman and its members shall be designated by the vi. Two representatives from farmers and farmworker bene-
President, taking into account Article XIII, Section 5 of the ficiaries, at least one of whom shall be a farmer or
Constitution (Rights of farmers to participate in the planning, farmworker representing the principal crop of the
organization and management of the CARP). province; and
vii. In areas where there are cultural communities, there shall province implementation of the CARP. The ten-year
be one representative from them. program of distribution of public and private lands in each
province shall be adjusted from year to year by the
2. Functions and Duties province's PARCCOM, in accordance with the level of
operations previously established by the PARC, in every
a. Coordinate and monitor the implementation of the CARP in the case ensuring that support services are available or have
province; been programmed before actual distribution is effected.
* The PARC shall provide the guidelines for a province-by- [Section 45]
 b. Provide information on the following:
i. Provisions of the CARP; 2. Functions [EO 229, 1987 and Section 47]
ii. Guidelines issued by the PARC; and
iii. Progress of the CARP in the province. * The BARC shall have the following functions:

a. Mediate and conciliate between parties involved in an agrarian

C. Barangay Agrarian Reform Committee (BARC) dispute;
b. Assist in the identification of qualified beneficiaries and
1. Composition [EO 229, 1987] landowners within the barangay;
c. Attest to the accuracy of the initial parcellary mapping of the
* The BARC shall be operated on a self-help basis and will be beneficiary's tillage;
composed of the following: d. Assist qualified beneficiaries in obtaining credit from lending
institutions;
a. Representatives of farmer and farmworker beneficiaries; e. Assist n the initial determination of the value of the land;
b. Representatives of farmer and farmworker non-beneficiaries; f. Assist the DAR representative in the preparation of periodic
c. Representatives of agricultural cooperatives; reports on the CARP implementation;
d. Representatives of other farmer organizations; g. Coordinate the delivery of support services to beneficiaries;
e. Representatives of the Barangay Council; h. Participate and give support in the implementation of CARP;
f. Representatives of non-governmental organization (NGOs); and
g. Representatives of landowners; i. Perform such other functions as may be assigned by the PARC
h. Department of Agriculture official assigned to the area; and DAR.
i. Department of Environment and Natural Resources official
assigned to the area;
j. DAR Agrarian Reform Technologist assigned to the area; and
k. Land Bank of the Philippines representative.
D. Others
1. The Department of Agrarian Reform is hereby vested with primary
1. No injunction, restraining order, prohibition or mandamus shall be jurisdiction to determine and adjudicate agrarian reform
issued by the lower courts against the DAR, DA, DENR and DOJ in matters and shall have exclusive original jurisdiction over all
their implementation of CARP. [Section 68] matter involving the implementation of agrarian reform, except
those falling under the exclusive jurisdiction of the Department of
* This does not apply to the Supreme Court. Agriculture and the Department of Environment and Natural
Resources. [Section 50]
2. The PARC, in the exercise of its functions, is hereby authorized to
call upon the assistance and support of other government agencies, 2. DAR Adjudicator
bureaus and offices, including government-owned or controlled
corporations. [Section 69] a. Department of Agrarian Reform Adjudication Board (DARAB)
i. Exercises both original and appellate jurisdiction
ii. Exercises functional supervision over the RARADs and
XII. Administrative Adjudication PARADs

b. Regional Agrarian Reform Adjudicator (RARAD)

A. Jurisdiction i. Executive Adjudicator in his region
 ii. Receives, hears and adjudicates cases which the PARAD B. BARC Certification Requirement
cannot handle because the latter is disqualified or inhibits
himself or because the case is complex or sensitive 1. The DAR shall not take cognizance of any agrarian dispute of
controversy unless a certification from the BARC that the dispute
c. Provincial Agrarian Reform Adjudicator (PARAD) has been submitted to it for mediation and conciliation without any
success of settlement is presented. [Section 53]
3. Exclusive Jurisdiction of the Secretary of Agrarian Reform
* Failure to present a BARC certification is not a ground for
* Matter involving strictly the administrative implemen- dismissal of the action. The complainant or petitioner will be
tation of the CARP and agrarian laws and regulations shall given every opportunity to secure the BARC certification. [Rule
be the exclusive prerogative of and cognizable by the Secretary III, Section 1(c) of the DARAB Rules]
of Agrarian Reform
2. Exceptions to the BARC Certification Requirement:

a. Failure of the BARC to issue a certification within thirty (30) 1. It shall not be bound by technical rules of procedure and evidence
days after a matter or issue is submitted to it; but shall proceed to hear and decide all cases, disputes or
b. The required certification cannot be complied with for valid controversies in a most expeditious manner, employing all
reasons like the non-existence or non-organization of the BARC reasonable means to ascertain the facts of every case in accordance
or the impossibility of convening it. A certification to that with justice and equity and the merits of the case. [Section 50]
effect may be issued by the proper agrarian reform officer in
lieu of the BARC certification; [Rule III, Section 1(b) of DARAB 2. Responsible leaders shall be allowed to represent themselves, their
Rules] fellow farmers, or their organizations in any proceedings before the
c. The issue involves the valuation of the land to determine just DAR [Section 50]
compensation; [Rule III, Section 2 of DARAB Rules]
d. The parties reside in different barangays, unless they adjoin 3. To discourage frivolous or dilatory appeals from the decision or
each other; order on the local or provincial levels, the DAR may impose
* Where the lands involved in the dispute straddles two or reasonable penalties, including but not limited to fines or censures
more barangays, the BARC of the Barangay where the upon erring parties. [Section 52]
biggest portion lies, shall have the authority to conduct the
mediation or conciliation proceeding.
e. One of the party is a public or private corporation, a D. Enforcement Powers
partnership, association or juridical person, or a public officer
or employee and the dispute relates to the performance of his 1. It shall have the power to summon witnesses, administer oaths,
official functions; take testimony, require submission of reports, compel the
f. The issue involves merely the administrative implementation of production of books and documents and answers to interrogatories
agrarian reform law, rule, guideline or policy; and and issue subpoena, and subpoena duces tecum and to enforce its
g. The issue is beyond the pale of mediation, conciliation or writs through sheriffs or other duly deputized officers. It shall
compromise, as determined by the Secretary of Agrarian likewise have the power to punish direct and indirect contempt in
Reform. the same manner and subject to the same penalties as provided in
the Rules of Court. [Section 50]

C. Rules of Procedure 2. The DAR has executed a Memorandum of Agreement with the
Philippine National Police, in order that the latter may assist the
 DAR in the enforcement of its orders. E. Judicial Review

1. Any decision, order, award or ruling of the DAR on any agrarian 1. Appeal from the Decision of the Special Agrarian Court
dispute or on any matter pertaining to the application,
implementation, enforcement or interpretation of the CARL and * Within fifteen (15) days from the receipt of the decision of the
other pertinent laws on agrarian reform may be brought to the Special Agrarian Court, an appeal may be taken by filing a petition
Court of Appeals by certiorari within fifteen (15) days from for review with the Court of Appeals.
receipt of a copy thereof. [Section 54]
2. Appeal from the Decision of the Court of Appeals
2. The findings of fact of the DAR shall be final and conclusive if based
on substantial evidence. * Within a non-extendible period of fifteen (15) days from the
receipt of the decision of the Court of Appeals, an appeal may be
3. Notwithstanding an appeal to the Court of Appeals, the decision of taken by filing a petition for review with the Supreme Court.
the DAR shall be immediately executory. [Section 50]

XIV. Prohibited Acts and Omissions

XIII. Special Agrarian Court

A. Prohibited Acts and Omissions

A. Jurisdiction [Section 57]
1. Section 73. The following are prohibited.
1. The Special Agrarian Courts (Regional Trial Courts) shall have
original and exclusive jurisdiction over: a. The ownership or possession, for the purpose of circumventing
the provisions of CARL, of agricultural lands in excess of the
a. All petitions for the determination of just compensation to total retention limits or award ceilings by any person, natural
landowners; and or juridical, except those under collective ownership by farmer-
b. The prosecution of all criminal offenses under the CARL. beneficiaries.
b. The forcible entry or illegal detainer by persons who are not
2. The Special Agrarian Courts, upon their own initiative or at the qualified beneficiaries to avail themselves of the rights and
instance of any of the parties, may appoint one or more benefits of the CARP.
commissioners to examine, investigate and ascertain facts relevant c. The conversion by any landowner of his agricultural land into
to the dispute, including the valuation of properties and to file a non-agricultural uses with intent to avoid the application of
written report thereof with the court. CARL to his landholdings and to dispossess his tenant farmers
of the land tilled by them.
d. The willful prevention or obstruction by any person,
B. Appeals association or entity of the implementation of the CARP.

e. The sale, transfer, conveyance or change of the nature of lands lands executed by the original landowner in violation of
outside of urban centers and city limits either in whole or in CARL shall be null and void; Provided, however, that those
part after the effectivity of CARL. executed prior to CARL shall be valid only when registered
i. Upon the effectivity of CARL, any sale, disposition, lease, with the Register of Deeds within a three (3) months after
management contract or transfer of possession of private the effectivity of CARL. [Section 6]
 pesos (P 15,000.00), or both at the discretion of the court.
* Exception: Banks and other financial institutions allowed If the offender is a corporation or association, the officer
by law to hold mortgage rights or security interests in responsible therefor shall be criminally liable.
agricultural lands to secure loans and other obligations of
borrowers, may acquire title to these mortgaged
properties, regardless of area, subject to existing laws on B. Conversions
compulsory transfer of foreclosed assets and acquisition as
prescribed under Section 16 of CARL [Section 71] 1. Authority to Allow Conversion of Agricultural Land for Non-
agricultural Uses
ii. Disposition of private lands is in violation of CARL if it is
over the retention limit. a. Under Executive Order No. 129-A, Series of 1987, the Depart-
ment of Agrarian Reform is authorized to:
iii. The date of registration of the deed of conveyance in the i. Approve or disapprove the conversion, restructuring or
Register of Deeds with respect to title lands and the date of readjustment of agricultural lands into non-agricultural
the issuance of the tax declaration to the transferee of the uses; [Section 4(j)]
property with respect to untitled lands shall be conclusive ii. Have exclusive authority to approve or disapprove
for this purpose. conversion of agricultural lands for residential,
commercial, industrial and other land uses as may be
f. The sale, transfer of conveyance by a beneficiary of the right to provided for by law. [Section 5(l)]
use or any other usufructuary right over the land he acquired
by virtue of being a beneficiary, in order to circumvent the b. The Comprehensive Agrarian Reform Law provides that the
provisions of CARL. [Refer to VII(E) of this Outline] DAR ... may authorize the reclassification or conversion on the
land and its disposition. [Section 65]
2. Any person who knowingly or willfully violates the provisions of
CARL shall be punished by imprisonment of not less than one (1) 2. Conversion
month to not more than three (3) years or a fine of not less than one
thousand pesos (P 1,000.00) and not more than fifteen thousand
a. After the lapse of five (5) years from its award, when the land for residential, commercial or industrial purposes; and
ceases to be economically feasible and sound for agricultural iii. Beneficiary shall have fully paid his obligation.
purposes, or the locality has become highly urbanized and the
land will have greater economic value for residential, c. Administrative Order No. 20, Series of 1992 [Took effect on 30
commercial or industrial purposes, the DAR, upon application December 1992]
of the beneficiary or the landowner, may authorize the
reclassification or conversion on the land and its disposition: * President Fidel V. Ramos directed the observance by all
Provided, That the beneficiary shall have fully paid his obliga- agencies and local government units the following interim
tion. [Section 65] guidelines on agricultural land use conversion.

b. Grounds for conversion i. All irrigated or irrigable agricultural lands shall not be
subject to and non-negotiable for conversion;
i. Five (5) years had lapsed from the award of the land; ii. All other agricultural lands may be converted only
ii. The land ceases to be economically feasible and sound for upon strict compliance with existing laws, rules and
agricultural purposes, or the locality has become highly regulations.
urbanized and the land will have greater economic value
 3. Disturbance Compensation B. Repealing Clause: Section 35 of Republic Act No. 3844, Presidential
Decree No. 316, the last two paragraphs of Section 12 of Presidential
* Section 36(1) of Republic Act No. 3844, as amended provides: Decree No. 946, Presidential Decree No. 1038, and all other laws,
the agricultural lessee shall be entitled to disturbance decrees, executive orders, rules and regulations, issuances or parts
compensation equivalent to five years rental on his thereof inconsistent with CARL are hereby repealed or amended ac-
landholding. cordingly.

* Displaced farmers are entitled to disturbance compensation

which varies depending on the agreement between the farmers XVI.Effectivity
and the landowners.
* CARL takes effect immediately after publication in at least two (2)
national newspapers of general circulation. CARL was printed 15 June
1988.
XV. Relation to Other Laws

A. Suppletory Application: The provisions of Republic Act No. 3844, as

amended, Presidential Decree Nos. 27 and 266, as amended, Executive
Order Nos. 228 and 229, both Series of 1987; and other laws not
inconsistent with this Act shall have suppletory effect. [Section 75]

Prepared by: Atty. Ferdinand M. Casis

MALACAÑANG In case of default, the amortization due shall be paid by the farmers' cooperative
Manila in which the defaulting tenant-farmer is a member, with the cooperative having
a right of recourse against him;
PRESIDENTIAL DECREE No. 27 October 21, 1972
The government shall guaranty such amortizations with shares of stock in
DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF government-owned and government-controlled corporations;
THE SOIL, TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY
TILL AND PROVIDING THE INSTRUMENTS AND MECHANISM THEREFOR No title to the land owned by the tenant-farmers under this Decree shall be
actually issued to a tenant-farmer unless and until the tenant-farmer has
In as much as the old concept of land ownership by a few has spawned valid and become a full-fledged member of a duly recognized farmer's cooperative;
legitimate grievances that gave rise to violent conflict and social tension,
Title to land acquired pursuant to this Decree or the Land Reform Program of
The redress of such legitimate grievances being one of the fundamental the Government shall not be transferable except by hereditary succession or to
objectives of the New Society, the Government in accordance with the provisions of this Decree, the Code of
Agrarian Reforms and other existing laws and regulations;
Since Reformation must start with the emancipation of the tiller of the soil from
his bondage, The Department of Agrarian Reform through its Secretary is hereby empowered
to promulgate rules and regulations for the implementation of this Decree.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution as Commander-in-Chief of All laws, executive orders, decrees and rules and regulations, or parts thereof,
all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, inconsistent with this Decree are hereby repealed and or modified accordingly.
dated September 21, 1972, and General Order No. 1 dated September 22, 1972,
as amended do hereby decree and order the emancipation of all tenant farmers Done in the City of Manila, this 21st day of October, in the year of Our Lord,
as of this day, October 21, 1972: nineteen hundred and seventy-two.

This shall apply to tenant farmers of private agricultural lands primarily devoted
to rice and corn under a system of sharecrop or lease-tenancy, whether
classified as landed estate or not;

The tenant farmer, whether in land classified as landed estate or not, shall be
deemed owner of a portion constituting a family-size farm of five (5) hectares if
not irrigated and three (3) hectares if irrigated;

In all cases, the landowner may retain an area of not more than seven (7)
hectares if such landowner is cultivating such area or will now cultivate it;

For the purpose of determining the cost of the land to be transferred to the
tenant-farmer pursuant to this Decree, the value of the land shall be equivalent
to two and one-half (2 1/2) times the average harvest of three normal crop years
immediately preceding the promulgation of this Decree;

The total cost of the land, including interest at the rate of six (6) per centum per
annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal
annual amortizations;
REPUBLIC ACT No. 3844 (3) An authority for the acquisition and equitable distribution of
agricultural land;
AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO
INSTITUTE LAND REFORMS IN THE PHILIPPINES, INCLUDING THE (4) An institution to finance the acquisition and distribution of
ABOLITION OF TENANCY AND THE CHANNELING OF CAPITAL INTO agricultural land;
INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING AGENCIES,
APPROPRIATE FUNDS THEREFOR AND FOR OTHER PURPOSES (5) A machinery to extend credit and similar assistance to agriculture;

PRELIMINARY CHAPTER (6) A machinery to provide marketing, management, and other

technical services to agriculture;
TITLE
DECLARATION OF POLICY AND COMPOSITION OF CODE (7) A unified administration for formulating and implementing projects
of land reform;
Section 1. Title - This Act shall be known as the Agricultural Land Reform Code.
(8) An expanded program of land capability survey, classification, and
Section 2. Declaration of Policy - It is the policy of the State: registration; and

(1) To establish owner-cultivatorship and the economic family-size (9) A judicial system to decide issues arising under this Code and other
farm as the basis of Philippine agriculture and, as a consequence, divert related laws and regulations.
landlord capital in agriculture to industrial development;
CHAPTER I
(2) To achieve a dignified existence for the small farmers free from AGRICULTURAL LEASEHOLD SYSTEM
pernicious institutional restraints and practices;
Section 4. Abolition of Agricultural Share Tenancy - Agricultural share tenancy,
(3) To create a truly viable social and economic structure in agriculture as herein defined, is hereby declared to be contrary to public policy and shall be
conducive to greater productivity and higher farm incomes; abolished: Provided, That existing share tenancy contracts may continue in force
and effect in any region or locality, to be governed in the meantime by the
(4) To apply all labor laws equally and without discrimination to both pertinent provisions of Republic Act Numbered Eleven hundred and ninety-nine,
industrial and agricultural wage earners; as amended, until the end of the agricultural year when the National Land
Reform Council proclaims that all the government machineries and agencies in
(5) To provide a more vigorous and systematic land resettlement that region or locality relating to leasehold envisioned in this Code are
program and public land distribution; and operating, unless such contracts provide for a shorter period or the tenant
sooner exercise his option to elect the leasehold system: Provided, further, That
(6) To make the small farmers more independent, self-reliant and
in order not to jeopardize international commitments, lands devoted to crops
responsible citizens, and a source of genuine strength in our democratic
covered by marketing allotments shall be made the subject of a separate
society.
proclamation that adequate provisions, such as the organization of cooperatives,
Section 3. Composition of Code - In pursuance of the policy enunciated in marketing agreements, or other similar workable arrangements, have been
Section two, the following are established under this Code: made to insure efficient management on all matters requiring synchronization
of the agricultural with the processing phases of such crops: Provided,
(1) An agricultural leasehold system to replace all existing share furthermore, That where the agricultural share tenancy contract has ceased to
tenancy systems in agriculture; be operative by virtue of this Code, or where such a tenancy contract has been
entered into in violation of the provisions of this Code and is, therefore, null and
(2) A declaration of rights for agricultural labor; void, and the tenant continues in possession of the land for cultivation, there
shall be presumed to exist a leasehold relationship under the provisions of this
Code, without prejudice to the right of the landowner and the former tenant to surviving spouse; (b) the eldest direct descendant by consanguinity; or (c) the
enter into any other lawful contract in relation to the land formerly under next eldest descendant or descendants in the order of their age: Provided, That
tenancy contract, as long as in the interim the security of tenure of the former in case the death or permanent incapacity of the agricultural lessee occurs
tenant under Republic Act Numbered Eleven hundred and ninety-nine, as during the agricultural year, such choice shall be exercised at the end of that
amended, and as provided in this Code, is not impaired: Provided, finally, That if agricultural year: Provided, further, That in the event the agricultural lessor fails
a lawful leasehold tenancy contract was entered into prior to the effectivity of to exercise his choice within the periods herein provided, the priority shall be in
this Code, the rights and obligations arising therefrom shall continue to subsist accordance with the order herein established.
until modified by the parties in accordance with the provisions of this Code.
In case of death or permanent incapacity of the agricultural lessor, the leasehold
Section 5. Establishment of Agricultural Leasehold Relation - The agricultural shall bind his legal heirs.
leasehold relation shall be established by operation of law in accordance with
Section four of this Code and, in other cases, either orally or in writing, expressly Section 10. Agricultural Leasehold Relation Not Extinguished by Expiration of
or impliedly. Period, etc. - The agricultural leasehold relation under this Code shall not be
extinguished by mere expiration of the term or period in a leasehold contract
Section 6. Parties to Agricultural Leasehold Relation - The agricultural leasehold nor by the sale, alienation or transfer of the legal possession of the landholding.
relation shall be limited to the person who furnishes the landholding, either as In case the agricultural lessor sells, alienates or transfers the legal possession of
owner, civil law lessee, usufructuary, or legal possessor, and the person who the landholding, the purchaser or transferee thereof shall be subrogated to the
personally cultivates the same. rights and substituted to the obligations of the agricultural lessor.

Section 7. Tenure of Agricultural Leasehold Relation - The agricultural leasehold Section 11. Lessee's Right of Pre-emption - In case the agricultural lessor decides
relation once established shall confer upon the agricultural lessee the right to to sell the landholding, the agricultural lessee shall have the preferential right to
continue working on the landholding until such leasehold relation is buy the same under reasonable terms and conditions: Provided, That the entire
extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding offered for sale must be pre-empted by the Land Authority if the
landholding and cannot be ejected therefrom unless authorized by the Court for landowner so desires, unless the majority of the lessees object to such
causes herein provided. acquisition: Provided, further, That where there are two or more agricultural
lessees, each shall be entitled to said preferential right only to the extent of the
Section 8. Extinguishment of Agricultural Leasehold Relation - The agricultural area actually cultivated by him. The right of pre-emption under this Section may
leasehold relation established under this Code shall be extinguished by: be exercised within ninety days from notice in writing which shall be served by
the owner on all lessees affected.
(1) Abandonment of the landholding without the knowledge of the
agricultural lessor; Section 12. Lessee's Right of Redemption - In case the landholding is sold to a
third person without the knowledge of the agricultural lessee, the latter shall
(2) Voluntary surrender of the landholding by the agricultural lessee, have the right to redeem the same at a reasonable price and consideration:
written notice of which shall be served three months in advance; or Provided, That the entire landholding sold must be redeemed: Provided, further,
That where these are two or more agricultural lessees, each shall be entitled to
(3) Absence of the persons under Section nine to succeed to the lessee,
said right of redemption only to the extent of the area actually cultivated by him.
in the event of death or permanent incapacity of the lessee.
The right of redemption under this Section may be exercised within two years
Section 9. Agricultural Leasehold Relation Not Extinguished by Death or from the registration of the sale, and shall have priority over any other right of
Incapacity of the Parties - In case of death or permanent incapacity of the legal redemption.
agricultural lessee to work his landholding, the leasehold shall continue
Section 13. Affidavit Required in Sale of Land Subject to Right of Pre-emption - No
between the agricultural lessor and the person who can cultivate the
deed of sale of agricultural land under cultivation by an agricultural lessee or
landholding personally, chosen by the agricultural lessor within one month from
lessees shall be recorded in the Registry of Property unless accompanied by an
such death or permanent incapacity, from among the following: (a) the
affidavit of the vendor that he has given the written notice required in Section Any contract by which the agricultural lessee is required to accept a loan or to
eleven of this Chapter or that the land is not worked by an agricultural lessee. make payment therefor in kind shall also be contrary to law, morals or public
policy.
Section 14. Right of Pre-emption and Redemption Not Applicable to Land to be
Converted into Residential, Industrial and Similar Purposes - The right of pre- Section 16. Nature and Continuity of Conditions of Leasehold Contract - In the
emption and redemption granted under Sections eleven and twelve of this absence of any agreement as to the period, the terms and conditions of a
Chapter cannot be exercised over landholdings suitably located which the owner leasehold contract shall continue until modified by the parties: Provided, That in
bought or holds for conversion into residential, commercial, industrial or other no case shall any modification of its terms and conditions prejudice the right of
similar non-agricultural purposes: Provided, however, That the conversion be in the agricultural lessee to the security of his tenure on the landholding: Provided,
good faith and is substantially carried out within one year from the date of sale. further, That in case of a contract with a period an agricultural lessor may not,
Should the owner fail to comply with the above condition, the agricultural lessee upon the expiration of the period increase the rental except in accordance with
shall have the right to repurchase under reasonable terms and conditions said the provisions of Section thirty-four.
landholding from said owner within one year after the aforementioned period
for conversion has expired: Provided, however, That the tenure of one year shall Section 17. Form and Registration of Contract - Should the parties decide to
cease to run from the time the agricultural lessee petitions the Land Authority to reduce their agreement into writing, the agricultural leasehold contract shall be
acquire the land under the provisions of paragraph 11 of Section fifty-one. drawn in quadruplicate in a language or dialect known to the agricultural lessee
and signed or thumb-marked both by the agricultural lessee personally and by
Section 15. Agricultural Leasehold Contract in General - The agricultural lessor the agricultural lessor or his authorized representative, before two witnesses, to
and the agricultural lessee shall be free to enter into any kind of terms, be chosen by each party. If the agricultural lessee does not know how to read,
conditions or stipulations in a leasehold contract, as long as they are not the contents of the document shall be read and explained to him by his witness.
contrary to law, morals or public policy. A term, condition or stipulation in an The contracting parties shall acknowledge the execution of the contract before
agricultural leasehold contract is considered contrary to law, morals or public the justice of the peace of the municipality where the land is situated. No fees or
policy: stamps of any kind shall be required in the preparation and acknowledgment of
the instrument. Each of the contracting parties shall retain a copy of the
(1) If the agricultural lessee is required to pay a rental in excess of that contract. The justice of the peace shall cause the third copy to be delivered to the
which is hereinafter provided for in this Chapter; municipal treasurer of the municipality where the land is located and the fourth
copy to the Office of the Agrarian Counsel.
(2) If the agricultural lessee is required to pay a consideration in excess
of the fair rental value as defined herein, for the use of work animals Except in case of mistake, violence, intimidation, undue influence, or fraud, an
and/or farm implements belonging to the agricultural lessor or to any agricultural contract reduced in writing and registered as hereinafter provided,
other person; or shall be conclusive between the contracting parties, if not denounced or
impugned within thirty days after its registration.
(3) If it is imposed as a condition in the agricultural leasehold contract:
(a) that the agricultural lessee is required to rent work animals or to Section 18. Registration of Leasehold Contract - The municipal treasurer shall,
hire farm implements from the agricultural lessor or a third person, or upon receipt of his copy of the contract, require the agricultural lessee and
to make use of any store or services operated by the agricultural lessor agricultural lessor to present their respective copies of the contract, and shall
or a third person; or (b) that the agricultural lessee is required to cause to be annotated thereon the date, time and place of registration as well as
perform any work or render any service other than his duties and its entry or registration number.
obligations provided in this Chapter with or without compensation; or
(c) that the agricultural lessee is required to answer for any fine, Section 19. Registry of Agricultural Leasehold Contracts - The Municipal
deductions and/or assessments. Treasurer of the municipality wherein the land is situated shall keep a record of
all such contracts drawn and executed within his jurisdiction, to be known as
"Registry of Agricultural Leasehold Contracts". He shall keep this registry
together with a copy of each contract entered therein, and make annotations on
said registry of all subsequent acts relative to each contract, such as its renewal, Section 25. Right to be Indemnified for Labor - The agricultural lessee shall have
novation, cancellation, etc. No registration fees or documentary stamps shall be the right to be indemnified for the cost and expenses incurred in the cultivation,
required in the registration of said contracts or of any subsequent acts relative planting or harvesting and other expenses incidental to the improvement of his
thereto. crop in case he surrenders or abandons his landholding for just cause or is
ejected therefrom. In addition, he has the right to be indemnified for one-half of
Section 20. Memorandum of Loans - No obligation to pay money on account of the necessary and useful improvements made by him on the landholding:
loans including interest thereon obtained by the agricultural lessee from the Provided, That these improvements are tangible and have not yet lost their
agricultural lessor or his representative shall be enforceable unless the same or utility at the time of surrender and/or abandonment of the landholding, at
a memorandum thereof be in writing in a language or dialect known to the which time their value shall be determined for the purpose of the indemnity for
agricultural lessee, and signed or thumb-marked by him, or by his agent. improvements.

Section 21. Exemption from Lien and/or Execution - The following shall be Section 26. Obligations of the Lessee - It shall be the obligation of the
exempt from lien and/or execution against the agricultural lessee: agricultural lessee:

(1) Twenty-five per centum of the entire produce of the land under (1) To cultivate and take care of the farm, growing crops, and other
cultivation; and improvements on the landholding as a good father of a family and
perform all the work therein in accordance with proven farm practices;
(2) Work animals and farm implements belonging to the agricultural
lessee: Provided, That their value does not exceed one thousand pesos. (2) To inform the agricultural lessor within a reasonable time of any
But no article or species of property mentioned in this Section shall be trespass committed by third persons upon the farm, without prejudice
exempt from execution issued upon a judgment recovered for its price to his direct action against the trespasser;
or upon a judgment of foreclosure of a mortgage thereon.
(3) To take reasonable care of the work animals and farm implements
Section 22. Use of Accepted Standards of Weights and Measures - In all delivered to him by the agricultural lessor and see that they are not used
transactions entered into between the agricultural lessee and the agricultural for purposes other than those intended or used by another without the
lessor concerning agricultural products the official or, upon agreement of the knowledge and consent of the agricultural lessor: Provided, however,
parties, the accepted standards of weights and measures shall be used. That if said work animals get lost or die, or said farm implements get
lost or are destroyed, through the negligence of the agricultural lessee,
Section 23. Rights of Agricultural Lessee in General - It shall be the right of the he shall be held responsible and made answerable therefor to the extent
agricultural lessee: of the value of the work animals and/or farm implements at the time of
the loss, death or destruction;
(1) To have possession and peaceful enjoyment of the land;
(4) To keep his farm and growing crops attended to during the work
(2) To manage and work on the land in a manner and method of
season. In case of unjustified abandonment or neglect of his farm, any
cultivation and harvest which conform to proven farm practices;
or all of his expected produce may, upon order of the Court, be forfeited
(3) To mechanize all or any phase of his farm work; and in favor of the agricultural lessor to the extent of the damage caused
thereby;
(4) To deal with millers and processors and attend to the issuance of
quedans and warehouse receipts for the produce due him. (5) To notify the agricultural lessor at least three days before the date of
harvesting or, whenever applicable, of threshing; and
Section 24. Right to a Home Lot - The agricultural lessee shall have the right to
continue in the exclusive possession and enjoyment of any home lot he may have (6) To pay the lease rental to the agricultural lessor when it falls due.
occupied upon the effectivity of this Code, which shall be considered as included
in the leasehold.
Section 27. Prohibitions to Agricultural Lessee - It shall be unlawful for the (2) To propose a change in the use of the landholding to other
agricultural lessee: agricultural purposes, or in the kind of crops to be planted: Provided,
That in case of disagreement as to the proposed change, the same shall
(1) To contract to work additional landholdings belonging to a different be settled by the Court according to the best interest of the parties
agricultural lessor or to acquire and personally cultivate an economic concerned: Provided, further, That in no case shall an agricultural lessee
family-size farm, without the knowledge and consent of the agricultural be ejected as a consequence of the conversion of the land to some other
lessor with whom he had entered first into household, if the first agricultural purpose or because of a change in the crop to be planted;
landholding is of sufficient size to make him and the members of his
immediate farm household fully occupied in its cultivation; or (3) To require the agricultural lessee, taking into consideration his
financial capacity and the credit facilities available to him, to adopt in
(2) To employ a sub-lessee on his landholding: Provided, however, That his farm proven farm practices necessary to the conservation of the
in case of illness or temporary incapacity he may employ laborers land, improvement of its fertility and increase of its productivity:
whose services on his landholding shall be on his account. Provided, That in case of disagreement as to what proven farm practice
the lessee shall adopt, the same shall be settled by the Court according
Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural to the best interest of the parties concerned; and
Year - The agricultural lessee may terminate the leasehold during the
agricultural year for any of the following causes: (4) To mortgage expected rentals.

(1) Cruel, inhuman or offensive, treatment of the agricultural lessee or Section 30. Obligations of the Agricultural Lessor - It shall be the obligation of
any member of his immediate farm household by the agricultural lessor the agricultural lessor:
or his representative with the knowledge and consent of the lessor;
(1) To keep the agricultural lessee in peaceful possession and
(2) Non-compliance on the part of the agricultural lessor with any of cultivation of his landholding; and
the obligations imposed upon him by the provisions of this Code or by
his contact with the agricultural lessee; (2) To keep intact such permanent useful improvements existing on the
landholding at the start of the leasehold relation as irrigation and
(3) Compulsion of the agricultural lessee or any member of his drainage system and marketing allotments, which in the case of sugar
immediate farm household by the agricultural lessor to do any work or quotas shall refer both to domestic and export quotas, provisions of
render any service not in any way connected with farm work or even existing laws to the contrary notwithstanding.
without compulsion if no compensation is paid;
Section 31. Prohibitions to the Agricultural Lessor - It shall be unlawful for the
(4) Commission of a crime by the agricultural lessor or his agricultural lessor:
representative against the agricultural lessee or any member of his
immediate farm household; or (1) To dispossess the agricultural lessee of his landholding except upon
authorization by the Court under Section thirty-six. Should the
(5) Voluntary surrender due to circumstances more advantageous to agricultural lessee be dispossessed of his landholding without
him and his family. authorization from the Court, the agricultural lessor shall be liable for
damages suffered by the agricultural lessee in addition to the fine or
Section 29. Rights of the Agricultural Lessor - It shall be the right of the imprisonment prescribed in this Code for unauthorized dispossession;
agricultural lessor:
(2) To require the agricultural lessee to assume, directly or indirectly,
(1) To inspect and observe the extent of compliance with the terms and the payment of the taxes or part thereof levied by the government on
conditions of their contract and the provisions of this Chapter; the landholding;
 (3) To require the agricultural lessee to assume, directly or indirectly, processing, whichever are applicable: Provided, That if the land has been
any part of the rent, "canon" or other consideration which the cultivated for a period of less than three years, the initial consideration shall be
agricultural lessor is under obligation to pay to third persons for the use based on the average normal harvest during the preceding years when the land
of the land; was actually cultivated, or on the harvest of the first year in the case of newly-
cultivated lands, if that harvest is normal: Provided, further, That after the lapse
(4) To deal with millers or processors without written authorization of of the first three normal harvests, the final consideration shall be based on the
the lessee in cases where the crop has to be sold in processed form average normal harvest during these three preceding agricultural years:
before payment of the rental; or Provided, furthermore, That in the absence of any agreement between the
parties as to the rental, the maximum allowed herein shall apply: Provided,
(5) To discourage, directly or indirectly, the formation, maintenance or finally, That if capital improvements are introduced on the farm not by the lessee
growth of unions or organizations of agricultural lessees in his to increase its productivity, the rental shall be increased proportionately to the
landholding, or to initiate, dominate, assist or interfere in the formation consequent increase in production due to said improvements. In case of
or administration of any such union or organization. disagreement, the Court shall determine the reasonable increase in rental.
Section 32. Cost of Irrigation System - The cost of construction of a permanent Section 35. Exemption from Leasehold of Other Kinds of Lands - Notwithstanding
irrigation system, including distributory canals, may be borne exclusively by the the provisions of the preceding Sections, in the case of fishponds, saltbeds, and
agricultural lessor who shall be entitled to an increase in rental proportionate to lands principally planted to citrus, coconuts, cacao, coffee, durian, and other
the resultant increase in production: Provided, That if the agricultural lessor similar permanent trees at the time of the approval of this Code, the
refuses to bear the expenses of construction the agricultural lessee or lessees consideration, as well as the tenancy system prevailing, shall be governed by the
may shoulder the same, in which case the former shall not be entitled to an provisions of Republic Act Numbered Eleven hundred and ninety-nine, as
increase in rental and shall, upon the termination of the relationship, pay the amended.
lessee or his heir the reasonable value of the improvement at the time of the
termination: Provided, further, That if the irrigation system constructed does not Section 36. Possession of Landholding; Exceptions - Notwithstanding any
work, it shall not be considered as an improvement within the meaning of this agreement as to the period or future surrender, of the land, an agricultural lessee
Section. shall continue in the enjoyment and possession of his landholding except when
his dispossession has been authorized by the Court in a judgment that is final
Section 33. Manner, Time and Place of Rental Payment - The consideration for and executory if after due hearing it is shown that:
the lease of the land shall be paid in an amount certain in money or in produce,
or both, payable at the place agreed upon by the parties immediately after (1) The agricultural lessor-owner or a member of his immediate family
threshing or processing if the consideration is in kind, or within a reasonable will personally cultivate the landholding or will convert the landholding,
time thereafter, if not in kind. if suitably located, into residential, factory, hospital or school site or
other useful non-agricultural purposes: Provided; That the agricultural
In no case shall the agricultural lessor require the agricultural lessee to file a lessee shall be entitled to disturbance compensation equivalent to five
bond, make a deposit or pay the rental in advance, in money or in kind or in years rental on his landholding in addition to his rights under Sections
both, but a special and preferential lien is hereby created in favor of the twenty-five and thirty-four, except when the land owned and leased by
agricultural lessor over such portion of the gross harvest necessary for the the agricultural lessor, is not more than five hectares, in which case
payment of the rental due in his favor. instead of disturbance compensation the lessee may be entitled to an
advanced notice of at least one agricultural year before ejectment
Section 34. Consideration for the Lease of Riceland and Lands Devoted to Other
proceedings are filed against him: Provided, further, That should the
Crops - The consideration for the lease of riceland and lands devoted to other
landholder not cultivate the land himself for three years or fail to
crops shall not be more than the equivalent of twenty-five per centum of the
substantially carry out such conversion within one year after the
average normal harvest during the three agricultural years immediately
dispossession of the tenant, it shall be presumed that he acted in bad
preceding the date the leasehold was established after deducting the amount
faith and the tenant shall have the right to demand possession of the
used for seeds and the cost of harvesting, threshing, loading, hauling and
 land and recover damages for any loss incurred by him because of said (3) Right to minimum wage;
dispossessions.
(4) Right to work for not more than eight hours;
(2) The agricultural lessee failed to substantially comply with any of the
terms and conditions of the contract or any of the provisions of this (5) Right to claim for damages for death or injuries sustained while at
Code unless his failure is caused by fortuitous event or force majeure; work;

(3) The agricultural lessee planted crops or used the landholding for a (6) Right to compensation for personal injuries, death or illness; and
purpose other than what had been previously agreed upon;
(7) Right against suspension or lay-off.
(4) The agricultural lessee failed to adopt proven farm practices as
Section 40. Right to Self-Organization - The farm workers shall have the right to
determined under paragraph 3 of Section twenty-nine;
self-organization and to form, join or assist farm workers' organizations of their
(5) The land or other substantial permanent improvement thereon is own choosing for the purpose of collective bargaining through representatives of
substantially damaged or destroyed or has unreasonably deteriorated their own choosing: Provided, That this right shall be exercised in a manner as
through the fault or negligence of the agricultural lessee; will not unduly interfere with the normal farm operations. Individuals employed
as supervisors shall not be eligible for membership in farm workers'
(6) The agricultural lessee does not pay the lease rental when it falls organizations under their supervision but may form separate organizations of
due: Provided, That if the non-payment of the rental shall be due to crop their own.
failure to the extent of seventy-five per centum as a result of a fortuitous
event, the non-payment shall not be a ground for dispossession, Section 41. Right to Engage in Concerted Activities - The farm workers shall also
although the obligation to pay the rental due that particular crop is not have the right to engage in concerted activities for the purpose of collective
thereby extinguished; or bargaining and other mutual aid or protection.

(7) The lessee employed a sub-lessee on his landholding in violation of For the purpose of this and the preceding Section, it shall be the duty of the farm
the terms of paragraph 2 of Section twenty-seven. employer or manager to allow the farm workers, labor leaders, organizers,
advisers and helpers complete freedom to enter and leave the farm, plantation
Section 37. Burden of Proof - The burden of proof to show the existence of a or compound at the portion of the same where said farm workers live or stay
lawful cause for the ejectment of an agricultural lessee shall rest upon the permanently or temporarily.
agricultural lessor.
Section 42. Right to Minimum Wage - Notwithstanding any provision of law or
Section 38. Statute of Limitations - An action to enforce any cause of action contract to the contrary, farm workers in farm enterprises shall be entitled to at
under this Code shall be barred if not commenced within three years after such least P3.50 a day for eight hours' work: Provided, That this wage may, however,
cause of action accrued. be increased by the Minimum Wage Board as provided for in Republic Act
Numbered Six hundred and two.
CHAPTER II
BILL OF RIGHTS FOR AGRICULTURAL LABOR Section 43. Right to Eight Hours' Work - Notwithstanding the provision of
existing laws to the contrary, farm workers shall not be required to work for
Section 39. Rights for Agricultural Labor - To enable the farm workers to enjoy more than eight hours daily. When the work is not continuous, the time during
the same rights and opportunities in life as industrial workers, they shall enjoy which the farm worker is not working and can leave his working place and can
the following: rest completely shall not be counted.

(1) Right to self-organization; Work may be performed beyond eight hours a day in case of actual or impending
emergencies caused by serious accidents, fire, flood, typhoon, epidemic, or other
(2) Right to engage in concerted activities; disaster or calamity, or in case of urgent work to be performed on farm
machines, equipment or installations in order to avoid a serious loss which the employer or farm manager as prescribed by Section twenty-four of
farm employer or manager would otherwise suffer, or some other just cause of a Commonwealth Act Numbered One hundred and three, as amended.
similar nature, but in all such cases the farm workers shall be entitled to receive
compensation for the overtime work performed at the same rate as their regular Section 47. Other Applicable Provisions - All other existing laws applicable to
wages, plus at least twenty-five per centum additional, based on their daily non-agricultural workers in private enterprises which are not inconsistent with
wages. this Code shall likewise apply to farm workers, farm labor organizations and
agrarian disputes as defined in this Code, as well as to relations between farm
No farm employer or manager shall compel a farm worker to work during management and farm labor and the functions of the Department of Labor and
Sundays and legal holidays: Provided, however, That should the farm worker other agencies.
agree to work on said days, he shall be paid an additional sum of at least twenty-
five per centum of his regular compensation; Provided, further, That the farm Section 48. Exceptions to Preceding Section - The preceding Sections of this
employer or manager shall not be held liable for any claim for overtime work Chapter, except Sections forty, forty-one, forty-two and forty-three shall not
which he had not previously authorized, except if the work rendered was to apply to farm enterprises comprising not more than twelve hectares.
avoid damages to crops, produce, work animals or implements, buildings or the
CHAPTER III
like.
LAND AUTHORITY
Any agreement or contract between the farm employer or manager and the farm
worker contrary to the provisions of this Section shall be null and void.
ARTICLE I
Section 44. Right of Action for Damages - Notwithstanding the provisions of Organization and Functions of the Land Authority
existing laws to the contrary, Act Numbered Eighteen hundred and seventy-four,
as amended, entitled "An Act to extend and regulate the responsibility of Section 49. Creation of the Land Authority - For the purpose of carrying out the
employers for personal injuries and death suffered by their employees while at policy of establishing owner-cultivatorship and the economic family-size farm
work", shall apply to farm workers insofar as it may be applicable. as the basis of Philippine agriculture and other policies enunciated in this Code,
there is hereby created a Land Authority, hereinafter called the Authority, which
Section 45. Right to Compensation for Personal Injuries, Death, or Illness - shall be directly under the control and supervision of the President of the
Notwithstanding the provisions of existing laws to the contrary, Act Numbered Philippines. The Authority shall be headed by a Governor who shall be
Thirty-four hundred and twenty-eight, as amended, entitled "An Act prescribing appointed by the President with the consent of the Commission on
the compensation to be received by employees for personal injuries, death or Appointments.
illness contracted in the performance of their duties", shall apply to farm
workers insofar as it may be applicable. He shall be assisted by two Deputy Governors who shall be appointed by the
President with the consent of the Commission on Appointments, each of whom
Section 46. Right Against Suspension of Lay-off - The landowner, farm employer shall head such operating departments as may be set up by the Governor. The
or farm manager shall not suspend, lay-off or dismiss any farm worker without Governor and the Deputy Governors shall hold office for five years.
just cause from the time a farm workers' organization or group of farm workers
has presented to the landowner a petition or complaint regarding any matter Section 50. Qualifications and Compensation of Governors - No person shall be
likely to cause a strike or lockout and a copy thereof furnished with the appointed Governor or Deputy Governor of the Authority unless he is a natural-
Department of Labor, or while an agricultural dispute is pending before the born citizen of the Philippines, with adequate background and experience in
Court of Agrarian Relations. If it is proved during the said period that a worker land reform here and/or elsewhere, and at least thirty-five years of age.
has been suspended or dismissed without just cause, the Court may direct the
The Governor shall receive an annual compensation of twenty-four thousand
reinstatement and the payment of his wage during the time of his suspension or
pesos; the Deputy Governors shall each receive an annual compensation of
dismissal or of any sum he should have received had he not been suspended or
eighteen thousand pesos.
dismissed, without prejudice to any criminal liability of the landowner, farm
Section 51. Powers and Functions - It shall be the responsibility of the Authority: 5. those whose area exceeds 75 hectares but is not
more than 144 hectares.
(1) To initiate and prosecute expropriation proceedings for the
acquisition of private agricultural lands as defined in Section one (2) To help bona fide farmers without lands or agricultural owner-
hundred sixty-six of Chapter XI of this Code for the purpose of cultivators of uneconomic-size farms to acquire and own economic
subdivision into economic family-size farm units and resale of said farm family-size farm units;
units to bona fide tenants, occupants and qualified farmers: Provided,
That the powers herein granted shall apply only to private agricultural (3) To administer and dispose of agricultural lands of the public domain
lands subject to the terms and conditions and order of priority under the custody and administration of the National Resettlement and
hereinbelow specified: Rehabilitation Administration prior to the approval of this Code and
such other public agricultural lands as may hereafter be reserved by the
a. all idle or abandoned private agricultural lands, except those President of the Philippines for resettlement and sale, in accordance
held or purchased within one year from the approval of this with such terms and conditions as are set forth under this Chapter:
Code by private individuals or corporations for the purpose of Provided, That the exercise of the authority granted herein, as well as in
resale and subdivision into economic family-size farm units in the preceding sub-paragraph, shall not contravene public policy on the
accordance with the policies enunciated in this Code: Provided, permanency of forest reserves or other laws intended for the
That the subdivision and resale shall be substantially carried preservation and conservation of public forests;
out within one year from the approval of this Code;
(4) To develop plans and initiate actions for the systematic opening of
b. all private agricultural lands suitable for subdivision into alienable and disposable lands of the public domain for speedy,
economic family-size farm units, owned by private individuals distribution to and development by deserving and qualified persons or
or corporations worked by lessees, no substantial portion of corporations;
whose landholding in relation to the area sought to be
expropriated, is planted to permanent crops under labor (5) To recommend to the President, from time to time after previous
administration, in excess of seventy-five hectares except all consultation with the Secretary of Agriculture and Natural Resources,
private agricultural lands under labor administration and lands what portion of the alienable or disposable public lands shall be
acquired under Section seventy-one of this Code; and reserved for settlement or disposition under this chapter;

c. in expropriating private agricultural lands declared by the (6) To give economic family-size farms to landless citizens of the
National Land Reform Council or by the Land Authority within Philippines who need, deserve, and are capable of cultivating the land
a land reform district to be necessary for the implementation of personally, through organized resettlement, under the terms and
the provisions of this Code, the following order of priority shall conditions the Authority may prescribe, giving priority to qualified and
be observed: deserving farmers in the province where such lands are located;

1. idle or abandoned lands; (7) To reclaim swamps and marshes, obtain titles thereto whenever
feasible and subdivide them into economic family-size farms for
2. those whose area exceeds 1,024 hectares; distribution to deserving and qualified farmers;

3. those whose area exceeds 500 hectares but is not (8) To undertake measures which will insure the early issuance of titles
more than 1,024 hectares; to persons or corporations who have actually settled and cultivated
disposable alienable lands of the public domain;
4. those whose area exceeds 144 hectares but is not
more than 500 hectares; and (9) To survey, subdivide and set aside lands or areas of landholdings
under its administration for economic family-size farms, large-scale
 farm operations, town sites, roads, parks, government centers and other provisions of Chapter VII of this Code, institute and prosecute expropriation
civic improvements as circumstances may warrant and to submit proceedings for the acquisition of private agricultural lands and home lots
subdivision survey plans conducted either by the government or private enumerated under Section fifty-one. In the event a landowner agrees to sell his
surveyors on parcels of lands under its administration for verification property under the terms specified in this Chapter and the National Land
and approval either by the Director of Lands or by the Land Registration Reform Council finds it suitable and necessary to acquire such property, a joint
Commission; motion embodying the agreement, including the valuation of the property, shall
be submitted by the Land Authority and the land-owner to the Court for
(10) To inform the Agricultural Productivity Commission and the Office approval: Provided, That in such case, any person qualified to be a beneficiary of
of the Agrarian Counsel of the problems of settlers and farmers on lands such expropriation or purchase may object to the valuation as excessive, in
under its administration; which case the Court shall determine the just compensation in accordance with
Section fifty-six of this Code.
(11) To acquire for agricultural lessees exercising their right of pre-
emption under Chapter I of this Code, any landholdings mentioned Section 54. Possession of the Land; Procedure - The Authority, after commencing
thereunder; the expropriation suit, may take immediate possession of the land upon deposit
with the Court that has acquired jurisdiction over the expropriation proceedings
(12) To conduct land capability survey and classification of the entire in accordance with the Rules of Court, of money, and bonds of the Land Bank, in
country and print maps; accordance with the proportions provided for under Section eighty of this Code,
equal to the value as determined by the Court in accordance with the provisions
(13) To make such arrangements with the Land Bank with respect to
of Section fifty-six hereof.
titles of agricultural lands of the public domain under its administration
as will be necessary to carry out the objectives of this Code; Section 55. Expeditious Survey and Subdivision - Immediately after the Authority
takes possession of lands to be acquired by it under this Code, it shall undertake
(14) To expropriate home lots occupied by agricultural lessees outside
a subdivision survey of the land into economic family-size farms which shall be
their landholdings for resale at cost to said agricultural lessees; and
immediately assigned to beneficiaries selected in accordance with Section one
(15) To submit to the President of the Philippines and to both Houses of hundred and twenty-eight subject to such rules and regulations as it may
Congress through their presiding officers, to the Secretary of Finance prescribe.
and to the Auditor General within sixty days of the close of the fiscal
Section 56. Just Compensation - In determining the just compensation of the
year, an annual report showing its accomplishments during the year;
land to be expropriated pursuant to this Chapter, the Court, in land under
the expropriation proceedings it has undertaken; the expenditures it
leasehold, shall consider as a basis, without prejudice to considering other
has incurred and other financial transactions undertaken with respect
factors also, the annual lease rental income authorized by law capitalized at the
thereto.
rate of six per centum per annum.
Section 52. Appointment of Subordinate Officials and Employees - The Governor
The owner of the land expropriated shall be paid in accordance with Section
shall organize the personnel in such departments, divisions and sections of the
eighty of this Act by the Land Bank and pursuant to an arrangement herein
Authority as will insure their maximum efficiency. He shall appoint, subject to
authorized.
civil service rules and regulations, fix the compensation, subject to WAPCO rules
and regulations, and determine the duties of subordinate officials and Section 57. Duty of Court in Expropriation Proceedings - In expropriation
employees as the exigencies of the service may require. proceedings, it shall be the duty of the Court to include in its resolution or order
of expropriation a provision that the Land Authority shall, after taking
ARTICLE II
possession of the land and after the subdivision thereof, allow the Land Bank to
Expropriation of Private Agricultural Lands
have the title thereto for the purpose of paying the owner the just compensation
Section 53. Compulsory Purchase of Agricultural Lands - The Authority shall, therefor.
upon petition in writing of at least one-third of the lessees and subject to the
Section 58. Issuance of Certificates of Title for Parcel or Lot - After the payment of Section 61. Organization of Cooperative Associations - For the purpose of more
just compensation on the land expropriated the Land Bank shall cause the efficient management, adoption of modern farm methods and techniques, and
issuance of separate certificates of titles for each parcel or lot in accordance spreading risk, either through diversification of farm projects or mutual
with the subdivision survey made under Section fifty-five. assumption of risks the farmer beneficiaries may organize themselves into
cooperative associations with the advice or assistance of the Agricultural
Section 59. Prohibition Against Alienation and Ejectment - Upon the filing of the Productivity Commission and in accordance with the guidelines established by
petition referred to in Section fifty-three the landowner may not alienate any said Commission for such associations.
portion of the land covered by such petition except in pursuance of the
provisions of this Code, or enter into any form of contract to defeat the purposes Section 62. Limitation on Land Rights - Except in case of hereditary succession
of this Code, and no ejectment proceedings against any lessee or occupant of the by one heir, landholdings acquired under this Code may not be resold,
land covered by the petition shall be instituted or prosecuted until it becomes mortgaged, encumbered or transferred until after the lapse of ten years from the
certain that the land shall not be acquired by the Authority. date of full payment and acquisition and after such ten-year period, any transfer,
sale or disposition may be made only in favor of persons qualified to acquire
Section 60. Disposition of Expropriated Land - After separate certificates of titles economic family-size farm units in accordance with the provisions of this Code:
have been issued in accordance with Section fifty-eight, the Land Authority, on Provided, That a purchaser who acquired his landholding under a contract to
behalf of the Republic of the Philippines and in representation of the Land Bank sell may secure a loan on the same from any private lending institution or
as the financing agency, shall allot and sell each parcel or lot to a qualified individual for an amount not exceeding his equity on said landholding upon a
beneficiary selected under Section fifty-five of this Code, subject to uniform guaranty by the Land Bank.
terms and conditions imposed by the Land Bank: Provided, That the resale shall
be at cost which shall mean the purchase price not more than six per centum Section 63. Inscription of Specific Prohibition Against Resale and Subdivision of
per annum, which shall cover administrative expenses, and actual expenses for Landholding - Certificates of titles of landholdings acquired by the Land
subdivision, surveying, and registration: Provided, further, That such cost shall Authority and resold to purchasers shall contain therein a specific inscription
be paid on the basis of an amortization plan not exceeding twenty-five years at prohibiting further subdivision and the resale, transfer or encumbrance of said
the option of the beneficiary. landholdings except as provided in the preceding Section.

In case some agricultural lessees working portions of agricultural lands Section 64. Exemption from Attachment - Lands acquired under the provisions
acquired by the government under this Code prefer to remain as lessees thereof, of this Chapter shall be exempt from execution and attachment, except when the
which preference shall be expressed in writing and attested by a representative land itself is the property mortgaged, in accordance with Section sixty-two of
of the Office of Agrarian Counsel, the resale and redistribution to them shall be this Code.
deferred until such time that such lessees are ready and willing to assume the
obligations and responsibilities of independent owners, which shall be Section 65. Precedence of Expropriation Cases - Expropriation cases filed by the
manifested by a written notice to this effect by the lessees and which shall oblige Authority under provisions of this Chapter shall take precedence over all other
the Land Authority forthwith to allot and sell such portions to such lessees civil cases pending before the Court and shall be terminated within a period not
under the same uniform terms and conditions. Pending the sale, such lessees exceeding six months from the date of filing.
shall continue to work on their landholdings and receive the produce thereof,
ARTICLE III
subject, however, to the requirement that they pay the Land Bank the allowable
Distribution of Agricultural Lands of the Public Domain
rental established in Section thirty-four. The Land Bank shall apply the rental to
the six percent added to the acquisition price and credit the balance to the Section 66. Title to Public Agricultural Land - Upon reservation by the President
acquisition cost in the name of the lessee as partial payment for the land. of the Philippines of public agricultural land available for disposition by the
Land Authority, such land shall be surveyed, titled and transferred to the Land
The Land Authority shall administer said parcels of land during the period they
Bank, which shall reduce said title into individual titles for specific parcels or
are under lease. Competent management and adequate production credit shall
lots in accordance with the subdivision survey conducted by the Land Authority
be provided in accordance with the program developed by the Land Reform
Project Team for such area.
under paragraph 9 of Section fifty-one: Provided, however, That existing laws and other pertinent agencies of the Government, in providing services necessary
governing the acquisition of public lands shall have been complied with. for the proper establishment of community facilities.

The Land Authority shall thereupon distribute in accordance with the provisions Section 71. Power of the Land Authority to Sell to Holders of Bonds Issued to
of this Code, each parcel or lot, subject to the terms and conditions of the Land Former Landowners Whose Lands Have Been Purchased for Redistribution - The
Bank, to a beneficiary selected pursuant to Section seventy-one or in accordance Land Authority shall sell, for a price not less than the appraised value, any
with paragraph 3 of Section fifty-one, to a beneficiary selected pursuant to portion not exceeding one hundred forty-four hectares in the case of individuals
paragraph 3 of Section one hundred twenty-eight. or one thousand twenty-four hectares in the case of corporations of the public
agricultural lands transferred to the Land Bank which is suitable for large-scale
Section 67. Census of Settlements - The Authority shall take a census of all farm operations to any holder, who is qualified to acquire agricultural lands
settlements already made or started by farmers on their own initiative on public through purchase, of bonds issued to former landowners whose lands have been
agricultural lands, forest lands, and on private titled lands which had been purchased for redistribution under this Code, subject to the condition that the
cleared, occupied and cultivated wholly or partially by them, with or without purchaser shall, within two years after acquisition, place under cultivation at
legal sanction. The census shall include, among other things, the bona fide least thirty per centum of the entire area under plantation administration and
character of the settlements, the character of the settlers or farmers, the exact the remaining seventy per centum within five years from the date of acquisition.
status of the lands settled, the feasibility of enlarging the settlements, The Governor of the Land Authority shall issue the title of said land upon
particularly in connection with the resources of the land occupied and the showing that the purchaser has begun the development and cultivation of his
neighboring areas, actual and potential accessibility to markets, as well as land under plantation administration: Provided, That public agricultural land
strategic location of the settlement with respect to national security. sold as hereinabove specified shall not be the object of any expropriation as long
as the same shall be developed and cultivated for large-scale production under
Section 68. Assistance to Settlers in Transporting Themselves and Their farm labor management, except as allowed by the Constitution.
Belongings - The Authority may, in certain projects, assist settlers in
transporting themselves, their belongings, work animals and farm equipment, if The selling price of the portion of the public agricultural land sold under this
any, from the communities from which they are migrating to the settlement Section shall be credited to the Government's subscription to the Land Bank. As
areas reserved for the purpose and for subsistence necessary until credit can be payment for the land sold under this Section, the Land Bank shall accept as sole
provided by government financing agencies, or by any other credit institution by instruments of payment the bonds issued pursuant to Section seventy-six.
loaning to them the full amount required for such purposes. These loans from Issued bonds accepted as payment for the land sold shall be cancelled to the
the Land Authority shall be non-interest bearing, shall constitute a lien upon the extent of the amount paid.
land, and shall be amortized over a period of ten years, payable annually
beginning with the end of the third year, after the date of arrival in the All sales under this Code shall be subject to the provision of Chapter V of the
settlement areas, subject to the right of the borrower to pay in the full at any Public Land Act covering sales of public agricultural lands insofar as they are
time prior to the maturity of the loan. not inconsistent with the provisions of this Code.

Section 69. Assistance to Settlers in Securing Equipment - The Authority may Section 72. Duplicate Records to be Furnished the Bureau of Lands - The Land
assist the settlers in securing equipment, supplies and materials needed; or Authority shall furnish the Bureau of Lands with the duplicate records of
assist the cooperative associations of the new settlers in securing the most proceedings on applications for the sale or other disposition of public
advantageous prices or terms on farm implements and supplies needed. agricultural lands under its administration.

Section 70. Providing Housing and Accommodations to Settlers - The Authority Section 73. Transfer of Appropriations, Powers, Functions, etc - The National
may help provide housing and other accommodations for the new settlers upon Resettlement and Rehabilitation Administration and the Land Tenure
their arrival in the settlement areas by the stationing them in properly surveyed administration are hereby abolished and their powers and functions not
and subdivided lots reserved for the purpose: help them organize community inconsistent with this Code, balances of all appropriations, funds, equipment,
activities; and cooperate with the Bureau of Health, the Bureau of Public Schools records and supplies, as well as agricultural lands, public and private, under
their administration, are hereby transferred to the Authority: Provided, That the
function of the Land Tenure Administration with respect to the expropriation of bonds or other securities capable of giving the Bank a reasonably
urban lands as provided by existing laws is hereby transferred to and all assured income sufficient to support its financing activities and give its
hereafter be undertaken by the People's Homesite and housing Corporation. private stockholders a fair return on their holdings: Provided, however,
That pending the organization of the Committee on Investments, the
In addition to the appropriations herein transferred there is hereby Bank may exercise the powers herein provided without the
appropriated from the general funds in the National Treasury not otherwise recommendation of said Committee on Investments: Provided, further,
appropriated the sum of five million pesos, or so much thereof as may be That in case of the dissolution of the Land Bank all unsold public lands
necessary, to carry out the purposes of this Code. transferred to it which may be allocated to the Government of the
Philippines in the course of liquidation of the business of the Bank shall
To carry out the land capability survey and classification mentioned in revert to the Department of Agriculture and Natural Resources; and
paragraph 12 of Section fifty-one and Section one hundred thirty-two of this
Code, there is hereby appropriated out of the unappropriated funds of the (6) To provide, free of charge, investment counselling and technical
National Treasury the amount of ten million pesos. services to landowners whose lands have been acquired by the Land
Bank. For this purpose, the Land Bank may contract the services of
CHAPTER IV private consultants.
LAND BANK
Section 76. Issuance of Bonds - The Land Bank shall, upon recommendation by
Section 74. Creation - To finance the acquisition by the Government of landed the Board of Trustees and approval of the Monetary Board of the Central Bank,
estates for division and resale to small landholders, as well as the purchase of issue bonds, debentures and other evidences of indebtedness at such terms,
the landholding by the agricultural lessee from the landowner, there is hereby rates and conditions as the Bank may determine up to an aggregate amount not
established a body corporate to be known as the "Land Bank of the Philippines", exceeding, at any one time, five times its unimpaired capital and surplus. Such
hereinafter called the "Bank", which shall have its principal place of business in bonds and other obligations shall be secured by the assets of the Bank and shall
Manila. The legal existence of the Bank shall be for a period of fifty years be fully tax exempt both as to principal and income. Said income shall be paid to
counting from the date of the approval hereof. The Bank shall be subject to such the bondholder every six (6) months from the date of issue. These bonds and
rules and regulations as the Central Bank may from time to time promulgate. other obligations shall be fully negotiable and unconditionally guaranteed by the
Government of the Republic of the Philippines and shall be redeemable at the
Section 75. Powers in General - To carry out this main purpose, the Bank shall
option of the Bank at or prior to maturity, which in no case shall exceed twenty-
have the power:
five years. These negotiable instruments of indebtedness shall be mortgageable
(1) To prescribe, repeal, and alter its own by laws, to determine its in accordance with established banking procedures and practices to
operating policies, and to issue such rules and regulations as may be government institutions not to exceed sixty per centum of their face value to
necessary to achieve the main purpose for the creation of the Bank; enable the holders of such bonds to make use of them in investments in
productive enterprises. They shall also be accepted as payments for reparation
(2) To adopt, alter and use a corporate seal; equipment and materials.

(3) To acquire and own real and personal property and to sell, mortgage The Board of Trustees shall have the power to prescribe rules and regulations
or otherwise dispose of the same; for the registration of the bonds issued by the Bank at the request of the holders
thereof.
(4) To sue and be sued, make contracts, and borrow money from both
local and foreign sources. Such loans shall be subject to approval by the Section 77. Issuance of Preferred Shares of Stock to Finance Acquisition of Landed
President of the Philippines and shall be fully guaranteed by the Estates - The Land Bank shall issue, from time to time, preferred shares of stock
Government of the Philippines; in such quantities not exceeding six hundred million pesos worth of preferred
shares as may be necessary to pay the owners of landed estates in accordance
(5) Upon recommendation of the Committee on Investments, to hold, with Sections eighty and eighty-one of this Code. The amount of shares that the
own, purchase, acquire, sell or otherwise invest, or reinvest in stocks, Bank may issue shall not exceed the aggregate amount need to pay for acquired
estates in the proportions prescribed in said Section eighty of this Code. The The guaranty fund shall be administered by the Central Bank of the Philippines
Board of Trustees shall include as a necessary part of the by-laws that it shall in the manner most consistent with its charter. For the purpose of such fund,
issue under Section seventy-five of this Code, such formula as it deems adequate there shall be appropriated annually the sum of one million pesos out of any
for determining the net asset value of its holdings as a guide and basis for the moneys in the National Treasury not otherwise appropriated, until the total
issuance of preferred shares. The shares of stock issued under the authority of amount of twenty million pesos shall have been attained.
this provision shall be guaranteed a rate of return of six per centum per annum.
In the event that the earnings of the Bank for any single fiscal year are not Section 79. Receiving Payments and Time Deposits - The Bank, under the
sufficient to enable the Bank, after making reasonable allowance for supervision of the Monetary Board and subject to the provisions of the General
administration, contingencies and growth, to declare dividends at the Banking Act, shall receive savings and time deposits from the small landholders
guaranteed rate, the amount equivalent to the difference between the Bank's in whose favor public lands or landed estates acquired by the Land Authority
earnings available for dividends and that necessary to pay the guaranteed rate have been sold and, for this purpose, establish, and maintain branches and
shall be paid by the Bank out of its own assets but the Government shall, on the offices in such areas as may be necessary to service such deposits. The
same day that the Bank makes such payment, reimburse the latter in full, for Monetary Board shall supervise and authorize the Bank to receive savings and
which purpose such amounts as may be necessary to enable the Government to time deposits from the public in areas where facilities for such a service do not
make such reimbursements are hereby appropriated out of any moneys in the exist or cannot be adequately provided by other deposit institutions.
National Treasury not otherwise appropriated. The Bank shall give sufficient
Section 80. Making Payment to Owners of Landed Estates - The Land bank shall
notice to the Budget Commissioner and the President of the Philippines in the
make payments in the form herein prescribed to the owners of land acquired by
event that it is not able to pay the guaranteed rate of return on any fiscal period.
the Land Authority for division and resale under this Code. Such payment shall
The guaranteed rate of return on these shares shall not preclude the holders
be made in the following manner: ten per centum in cash and the remaining
thereof from participating at a percentage higher than six per centum should the
balance in six percent, tax-free, redeemable bonds issued by the Bank in
earnings of the Bank for the corresponding fiscal period exceed the guaranteed
accordance with Section seventy-six, unless the landowner desires to be paid in
rate of return. The Board of Trustees shall declare and distribute dividends
shares of stock issued by the Land Bank in accordance with Section seventy-
within three months after the close of each fiscal year at the guaranteed rate
seven in an amount not exceeding thirty per centum of the purchase price.
unless a higher rate of return in justified by the Bank's earnings after making
reasonable allowance for administration, contingencies and growth, in which In the event there is an existing lien on encumbrance on the land in favor of any
case dividends shall be declared and distributed at a higher rate. The capital Government institution at the time of acquisition by the Land Bank, the bonds
gains derived from the sale or transfer of such shares and all income derived and/or shares, in that order, shall be accepted as substitute collaterals to secure
therefrom in the form of dividends shall be fully exempt from taxes. the indebtedness.
Section 78. Special Guaranty Fund - In the event that the Bank shall be unable to The profits accruing from payment shall be exempt from the tax on capital gains.
pay the bonds, debentures, and other obligations issued by it, a fixed amount
thereof shall be paid from a special guaranty fund to be set up by the Section 81. Capital - The authorized capital stock of the Bank shall be one
Government, to guarantee the obligation of the Land Bank, and established in billion five hundred million pesos divided into ninety million shares with a par
accordance with this Section, and thereupon, to the extent of the amounts so value of ten pesos each, which shall be fully subscribed by the Government and
paid, the Government of the Republic of the Philippines shall succeed to all the sixty million preferred shares with a par value of ten pesos each which shall be
rights of the holders of such bonds, debentures or other obligations: Provided, issued in accordance with the provisions of Sections seventy-seven and eighty-
however, That for the next four years after the establishment of the Bank, the three of this Code. Of the total capital subscribed by the Government, two
payment to the special guaranty fund should not exceed one million pesos per hundred million pesos shall be paid by the Government within one year from the
year, after which period, the Government shall pay into the guaranty fund the approval of this Code, and one hundred million pesos every year thereafter for
sum of five hundred thousand pesos each year until the cumulative total of such two years for which purpose the amount of two hundred million pesos is hereby
guaranty fund is no less than twenty percent of the outstanding net obligation of appropriated upon the effectivity of this Code, and one hundred million pesos
the Land Bank at the end of any single calendar year. every year for the next two years thereafter, out of the funds in the National
Treasury not otherwise appropriated for the purpose: Provided, That if there are
not enough funds in the National Treasury for the appropriation herein made, (2) Payment for the purchase of shares of stock of all or substantially all
the Secretary of Finance, with the approval of the President of the Philippines, of the assets of the following Government owned or controlled
shall issue bonds or other evidence of indebtedness to be negotiated either corporations: The National Development Company; Cebu Portland
locally or abroad in such amount as may be necessary to cover any deficiency in Cement Company; National Shipyards and Steel Corporation; Manila
the amount above-appropriated but not exceeding four hundred million pesos, Gas Corporation; and the Manila Hotel Company.
the proceeds of which are hereby appropriated: Provided, further, That the
bonds to be issued locally shall not be supported by the Central Bank: Provided, Upon offer by the bondholder, the corporation owned or controlled by
finally, That there is automatically appropriated out of the unappropriated funds the Government shall, through its Board of Directors, negotiate with
in the National Treasury such amounts as is necessary to cover the losses which such bondholder with respect to the price and other terms and
shall include among other things loss of earnings occasioned by the limitation of conditions of the sale. In case there are various bondholders making the
the resale cost herein provided such that said amount together with the offer, the one willing to purchase under terms and conditions most
administrative expenses mentioned in Section ninety hereof shall not exceed in favorable to the corporation shall be preferred. If no price is acceptable
the aggregate the equivalent of two and one-half per centum of its assets limited to the corporation, the same shall be determined by a Committee of
therein. Appraisers composed of three members, one to be appointed by the
corporation, another by the bondholder making the highest or only
Section 82. Government Shares - All shares of stock in the Bank subscribed or offer, and the third by the two members so chosen. The expenses of
owned by the Government shall not be entitled to participate in the income appraisal shall be borne equally by the corporation and the successful
earned by the Bank from its investments and other operations, whether in the purchaser.
form of cash or stock dividends or otherwise. Amounts expended for the
administration of the Bank shall not be deemed as a participation of the Should the Government offer for sale to the public any or all of the
Government in income. shares of stock or the assets of any of the Government owned or
controlled corporations enumerated herein, the bidder who offers to
Section 83. Preferred Shares - All preferred shares of stock issued under Section pay in bonds of the Land Bank shall be preferred provided that the
seventy-seven of this Code shall be entitled to the income earned by the Bank on various bids be equal in every respect except in the medium of payment.
its investments and other operations and shall have a limited right to elect
annually one member of the Board of Trustees and one member of the (3) Surety or performance bonds in all cases where the Government
Committee on Investments: Provided, That the holders of such preferred shares may require or accept real property as bonds; and
of stock shall not bring derivative suits against the Bank. Such preferred shares
(4) Payment for, reparations goods.
shall be fully transferable: Provided, further, That upon the liquidation of the
Bank, the redemption of such preferred shares shall be given priority and shall Section 86. Board of Trustees - The affairs and business of the Bank shall be
be guaranteed at par value. directed, its powers exercised and its property managed and preserved by a
Board of Trustees. Such Board shall be composed of one Chairman and four
Section 84. Voting of Shares - The voting power of all the shares of stock of the
members, one of whom shall be the head of the Land Authority who shall be an
Land Bank owned or controlled by the Government shall be vested in the
ex-officio member of such Board and another to be elected by the holders of
President of the Philippines or in such person or persons as he may from time to
preferred shares. The Chairman and two members of the Board of Trustees shall
time designate.
serve on full-time basis with the Bank. With the exception of the head of the
Section 85. Use of Bonds - The bonds issued by the Land Bank may be used by Land Authority and the member elected by the holders of preferred shares, the
the holder thereof and shall be accepted in the amount of their face value as any Chairman and all members of the Board shall be appointed by the President
of the following: with the consent of the Commission on Appointments for a term of seven years,
except that the first Chairman and members to be appointed under this Code
(1) Payment for agricultural lands or other real properties purchased shall serve for a period of three, five and seven years, such terms to be specified
from the Government; in their respective appointments. Thereafter the Chairman and members, with
the exception of the ex-officio member, appointed after such initial appointment
shall serve for a term of seven years including any Chairman or member who is interested, in a joint meeting held for that purpose where full and fair
appointed in place of one who resigns or is removed or otherwise vacates his information of the extent of such interest or participation has been adequately
position before the expiration of his seven-year term. The Chairman and the two disclosed in writing and recorded in the minutes of the meeting: Provided, That
full-time members of the Board shall act as the heads of such operating such interested member shall not in any manner participate in the deliberations
departments as may be set up by the Board under the authority granted by and shall refrain from exerting any pressure or influence whatever on any
Section eighty-seven of this Code. The Chairman shall have authority, official or member of the Bank whose functions bear on or relate to the
exerciseable at his discretion, to determine from time to time the organizational investment of the funds of the Bank in the enterprise: Provided, further, That the
divisions to be headed by each member serving full time and to make the total investment in any single corporation, partnership, company, or association
corresponding shifts in designations pursuant thereto. The compensation of the shall not exceed five per centum of the total investible funds.
Chairman and the members of the Board of Trustees serving full time shall be
twenty-four thousand and eighteen thousand pesos, respectively. The other Section 90. Personnel; Cost of Administration - The Administrative expenses of
members of the Board shall receive a per diem of one hundred pesos for each the Bank during any single fiscal year shall not in any case exceed two and one-
session of the Board that they attend. half per centum of its total assets. The Board of Trustees shall provide for an
organization and staff of officers and employees necessary to carry out the
Section 87. The Chairman and Vice-Chairman - The Chairman of the Board shall functions of the Bank, fix their compensation, and appoint and remove such
be the chief executive officer of the Bank. He shall have direct control and officers and employees for cause. The Bank officers and employees shall be
supervision of the business of the Bank in all matters which are not by this Code subject to the rules and regulations issued by the Civil Service Commission but
or by the by-laws of the Bank specifically reserved to be done by the Board of shall not fall under the Wage and Position Classification Office. The Board of
Trustees. He shall be assisted by an Executive Vice-Chairman and one or more Trustees shall recommend to the Civil Service Commission rules and regulations
vice-chairman who shall be chosen and may be removed by the Board of for the recruitment, appointment, compensation, administration, conduct,
Trustees. The salaries of the Vice-Chairmen shall be fixed by the Board of promotion and removal of all Bank officers and employees under a strict merit
Trustees with the approval of the President of the Philippines. system and prepare and conduct examinations under the supervision of said
Commission.
Section 88. Qualifications of Members - No person shall be appointed Chairman
or member of the Board unless he is a man of accepted integrity, probity, Section 91. Legal counsel - The Secretary of Justice shall be ex-officio legal
training and experience in the field of banking and finance, at least thirty-five adviser of the Bank. Any provision of law to the contrary notwithstanding, the
years of age and possessed of demonstrated administrative skill and ability. Land Bank shall have its own Legal Department, the chief and members of
which shall be appointed by the Board of Trustees. The composition, budget and
Section 89. Committee on Investments - There shall be a Committee on operating expenses of the Office of the Legal Counsel and the salaries and
Investments composed of three members; the member of the Board of Trustees traveling expenses of its officers and employees shall be fixed by the Board of
elected by the holders of preferred shares as Chairman, one member to be Trustees and paid by the Bank.
appointed by the President of the Philippines from among the government
members of the Board of Trustees, and another member to be selected by the Section 92. Auditor - The Auditor General shall be the ex-officio auditor of the
holders of preferred shares under Section eighty-three of this Code. The Bank and shall appoint a representative, who shall be the auditor in charge of
Committee on Investments shall recommend to the Board of Trustees the the auditing office of the Bank. The Auditor General shall, upon the
corporations or entities from which the Land Bank shall purchase shares of recommendation of the auditor of the Bank, appoint or remove the personnel of
stock. the auditing office. The compensation, budget and operating expenses of the
auditing office and the salaries and traveling expenses of the officers and
The Land Bank shall not invest in any corporation, partnership or company employees thereof shall be fixed by the Board of Trustees and paid by the Bank
wherein any member of the Board of Trustees or of the Committee on notwithstanding any provision of law to the contrary.
Investments or his spouse, direct descendant or ascendant has substantial
pecuniary interest or has participation in the management or control of the Section 93. Report on Condition of Bank - The representative of the Auditor
enterprise except with the unanimous vote of the members of the Board of General shall make a quarterly report on the condition of the Bank to the
Trustees and of the Committee on Investments, excluding the member President of the Philippines, to the Senate through its President, to the House of
Representatives through its Speaker, to the Secretary of Finance, to the Auditor more than the actual cost of such collection services as it may extend. The
General and to the Board of Trustees of the Bank. The report shall contain, claims transferred under this Section shall not be considered as part of the
among other things, a statement of the resources and liabilities including Government's subscription to the capital of the Bank.
earnings and expenses, the amount of capital stock, surplus, reserve and profits,
as well as losses, bad debts, and suspended and overdue paper carried in the Section 97. Regulation - The Bank shall not be subject to the laws, rules and
books as assets of the Bank, and a plantilla of the Bank. regulations governing banks and other financial institutions of whatever type
except with respect to the receipt of savings and time deposits in accordance
Section 94. Auditing Rules and Regulations - The Auditor General shall, with with Section seventy-nine of this Code, in which case the legal reserve and other
respect to the Bank, formulate improved and progressive auditing rules and requirements prescribed by the Central Bank for such deposits shall apply. The
regulations designed to expedite the operations of the Bank and prevent the Bank shall be operated as an autonomous body and shall be under the
occurrence of delays and bottlenecks in its work. supervision of the Central Bank.

Section 95. Removal of Members - The President of the Philippines may, at any Section 98. Tax Exemption - The operations, as well as holdings, equipment,
time, remove the Chairman or any member of the Board appointed by him if the property, income and earnings of the Bank from whatever sources shall be fully
interest of the Bank so requires, for any of the following causes: exempt from taxation.

(1) Mismanagement, grave abuse of discretion, infidelity in the conduct Section 99. Organization of Bank - The Bank shall be organized within one year
of fiduciary relations, or gross neglect in the performance of duties; from the date that this Code takes effect.

(2) Dishonesty, corruption, or any act involving moral turpitude; and Section 100. Penalty for Violation of the Provisions of this Chapter - Any trustee,
officer, employee or agent of the Bank who violates or permits the violation of
(3) Any act or performance tending to prejudice or impair the any of the provisions of this Chapter, or any person aiding or abetting the
substantial rights of the stockholders. violations of any of the provisions of this Chapter, shall be punished by a fine not
to exceed ten thousand pesos or by imprisonment of not more than five years, or
Conviction of the Chairman or a member for a crime carrying with it a penalty both such fine and imprisonment at the discretion of the Court.
greater than arresto mayor shall cause the removal of such Chairman or
member without the necessity of Presidential action. CHAPTER V
AGRICULTURAL CREDIT ADMINISTRATION
The Chairman or member may, in any of the above cases, be civilly liable for any
damage that may have been suffered by the stockholders. Section 101. Reorganization of ACCFA to Align Its Activities - The administrative
machinery of the Agricultural Credit and Cooperative Financing Administration
Section 96. Transfer of Claims and Liabilities - The assets of the former Land created under Republic Act Numbered Eight hundred twenty-one, as amended
Tenure Administration and the National Resettlement and Rehabilitation by Republic Act Numbered Twelve hundred and eighty-five, shall be reorganized
Administration in the form of claims and receivables arising from the sale or to enable it to align its activities with the requirements and objectives of this
transfer of private and public lands, agricultural equipment, machinery, tools Code and shall be known as the Agricultural Credit Administration.
and work animals, but excluding advances made for subsistence, to small
landholders shall, after an exhaustive evaluation to determine their true asset Section 102. Financing - To finance the additional credit functions of the
value, be irrevocably transferred to the Bank under such arrangements as the Agricultural Credit Administration as a result of the land reform program laid
Land Authority and the Bank shall agree upon. Thereafter, the Bank shall have down in this Code, there is hereby appropriated the sum of one hundred fifty
authority and jurisdiction to administer the claims, to collect and make million pesos out of funds in the National Treasury not otherwise appropriated
adjustments on the same and, generally, to do all other acts properly pertaining in addition to existing appropriations for the Agricultural Credit and
to the administration of claims held by a financial institution. The Land Cooperative Financing Administration.
Authority, upon request of the Bank, shall assist the latter in the collection of
such claims. The Land Authority shall be entitled to collect from the Bank no
Section 103. Privilege of Rediscounting - The Agricultural Credit Administration Section 107. Security for Loans - The production of the borrower, after
is hereby granted the privilege of rediscounting with the Central Bank of the deducting the lease rental and/or liens thereon, shall be accepted as security for
Philippines, the Development Bank of the Philippines and the Philippine loans: Provided, That said production is pledged to the Agricultural Credit
National Bank eligible evidence of indebtedness acquired by it in carrying on its Administration with appropriate safeguards to insure against its unauthorized
authorized activities, at an interest rate equal to the lowest charged by the above disposition: Provided, further, That the amount of loan shall not exceed sixty per
financing institution on any private person or entity. centum of the value of the estimated production.

Section 104. Power to Obtain Additional Funds - Nothing in this Section shall Section 108. Loans to Cooperatives - The Agricultural Credit Administration is
limit the power of the Agricultural Credit Administration to obtain from the hereby authorized to extend such types of loans as it may deem necessary for
Central Bank of the Philippines, the Development Bank of the Philippines, the the effective implementation of this Code, to eligible farmers' cooperatives as
Philippine National Bank and other financing institutions, such additional funds herein defined, under such terms and conditions as it may impose and with such
as may be necessary for the effective implementation of this Act: Provided, That securities as it may require. A farmers' cooperative that has been registered
such additional funds are to be utilized as loans to farmers and/or farmers' with the Securities and Exchange Commission and affiliated with the
cooperatives. Agricultural Credit Administration shall be eligible for loans if, in the judgment
of the latter, its organization, management and business policies are of such
Section 105. Loaning Activities - Loaning activities of the Agricultural Credit character as will insure the safety and effective use of such loans.
Administration shall be directed to stimulate the development and operation of
farmers' cooperatives. The term "Farmers' Cooperatives" shall be taken to Section 109. Loans for Construction or Acquisition by Purchase of Facilities -
include all cooperatives relating to the production and marketing of agricultural Loans for the construction or acquisition by purchase of facilities of farmers'
products and those formed to manage and/or own, on a cooperative basis, cooperatives may be granted by the Agricultural Credit Administration.
services and facilities, such as irrigation and transport system, established to
support production and/or marketing of agricultural products. Section 110. Interest on Loans - The total charges including interest and
insurance fees on all kinds of loans shall not be more than eight per centum per
Under such rules and regulations in accordance with generally accepted annum: Provided, That if an impairment of the capitalization of the Agricultural
banking practices and procedures as may be promulgated by the Agricultural Credit Administration is imminent by reason of the limitation of the interest rate
Credit Administration, Rural Banks and Development Banks may, in their herein provided, there is automatically appropriated out of the unappropriated
respective localities, be designated to act as agents of the Agricultural Credit funds in the National Treasury such amounts as is necessary to cover the losses
Administration in regard to its loaning activities. of the Agricultural Credit Administration, but not exceeding six million pesos for
any one year.
Section 106. Credit to Small Farmers - Production loans and loans for the
purchase of work animals, tillage equipment, seeds, fertilizers, poultry, livestock, Section 111. Institution of Supervised Credit - To provide for the effective use of
feed and other similar items, may be extended to small farmers as defined in credit by farmers, the Agricultural Credit Administration may institute a
Republic Act Numbered Eight hundred twenty-one, based upon their paying program of supervised credit in cooperation with the Agricultural Productivity
capacity and such securities as they can provide, and under such terms and Commission.
conditions as the Agricultural Credit Administration may impose, provided the
amount thereof does not exceed two thousand pesos, or such amount as may be Section 112. Guidance to Cooperatives - The Agricultural Credit Administration
fixed by the President, but in no case shall the amount of loan exceed eighty per shall have the power to register and provide credit guidance or assistance to all
centum of the value of the collateral pledged. In instances where credit is agricultural cooperatives including irrigation cooperatives and other
extended for items which are not consumed in their use, such items may be cooperative associations or fund corporations.
pledged as security therefor. The Agricultural Credit Administration shall
Section 113. Auditing of Operations - For the effective supervision of farmers'
promulgate such rules and regulations as may be necessary in the extension of
cooperatives, the head of the Agricultural Credit Administration shall have the
the loans herein authorized so as to assure their repayment: Provided, That such
power to audit their operations, records and books of account and to issue
rules and regulations shall follow and be in accordance with generally accepted
subpoena and subpoena duces tecum to compel the attendance of witnesses and
financing practices and procedures.
the production of books, documents and records in the conduct of such audit or and informational activities pertaining to agriculture, the present Bureau of
of any inquiry into their affairs. Any person who, without lawful cause, fails to Agricultural Extension of the Department of Agriculture and Natural Resources
obey such subpoena or subpoena duces tecum shall, upon application of the is hereby placed directly under the executive supervision and control of the
head of Agricultural Credit Administration with the proper court, be liable to President and hereinafter renamed Agricultural Productivity Commission.
punishment for contempt in the manner provided by law and if he is an officer
of the association, to suspension or removal from office. Upon the effectivity of this Code, the Agricultural Tenancy Commission of the
Department of Justice, together with its powers, duties, responsibilities, files,
Section 114. Prosecution of Officials - The Agricultural Credit Administration, records supplies, equipment, personnel and unexpended balance of
through the appropriate provincial or city fiscal, shall have the power to file and appropriations, is hereby placed under the Agricultural Productivity
prosecute any and all actions which it may have against any and all officials or Commission as a separate office thereof.
employees of farmers' cooperatives arising from misfeasance or malfeasance in
office. Section 120. Commissioner of the Agricultural Productivity Commission - The
Agricultural Productivity Commission shall be administered by an Agricultural
Section 115. Free Notarial Services - Any justice of the peace, in his capacity as Productivity Commissioner who shall be appointed by the President with the
notary ex-officio, shall render service free of charge to any person applying for a consent of the Commission on Appointments and who shall have a
loan under this Code either in administering the oath or in the acknowledgment compensation of sixteen thousand pesos per annum. No person shall be
of instruments relating to such loan. appointed as a Agricultural Productivity Commissioner unless he be a holder of
at least a Bachelor of Science degree in Agricultural from a reputable school or
Section 116. Free Registration of Deeds - Any register of deeds shall accept for college of agriculture and shall have practiced agriculture for at least five years,
registration, free of charge any instrument relative to a loan made under this and who is of recognized competence in agricultural economics or any of its
Code. equivalents.

Section 117. Writing-off Unsecured and Outstanding Loans - Subject to the Section 121. Powers and Duties - The Agricultural Productivity Commissioner
approval of the President upon recommendation of the Auditor General, the shall exercise the same powers and duties vested in the Director of the Bureau of
Agricultural Credit Administration may write-off from its books, unsecured and Agricultural Extension.
outstanding loans and accounts receivable which may become uncollectible by
reason of the death or disappearance of the debtor, should there be no visible Section 122. Division on Cooperatives - In addition to the existing divisions of
means of collecting the same in the foreseeable future, or where the debtor has the Bureau of Agriculture Extension, herein renamed as Agricultural
been verified to have no income or property whatsoever with which to effect Productivity Commission, there shall be a Division of Cooperatives and such
payment. In all cases, the writing-off shall be after five years from the date the other divisions and sections as the Agricultural Productivity Commissioner may
debtor defaults. deem necessary to organize in order to carry out the promotional and
educational activities of the Commission.
Section 118. Exemption from Duties, Taxes and Levies - The Agricultural Credit
Administration is hereby exempted from the payment of all duties, taxes, levies, Section 123. Recruitment, Selection and Training of Extension Workers - The
and fees, including docket and sheriff's fees, of whatever nature or kind, in the extension workers shall be recruited and selected from graduates of agricultural
performance of its functions and in the exercise of its powers hereunder. college with adequate practical experience and training in actual crop, tree,
poultry and livestock farming: Provided, however, That in the event there are no
CHAPTER VI graduates of agricultural colleges available, graduates of agricultural high
AGRICULTURAL PRODUCTIVITY COMMISSION schools may be temporarily employed. Training of extension workers shall be
done in conjunction with research institutions to insure their maximum
Section 119. Creation of the Agricultural Productivity Commission - For the efficiency.
purpose of accelerating progressive improvement in the productivity of farms,
the advancement of farmers and the strengthening of existing agricultural
extension services through the consolidation of all/promotional, educational
Section 124. Functions of Extension Workers - In addition to their functions Administrator of the Agricultural Credit Administration, the Chairman of the
under Republic Act Numbered Six hundred eighty, it shall be the duty of Board of Trustees of the Land Bank, the Commissioner of the Agricultural
extension workers: Productivity Commission and another member appointed by the President upon
recommendation of the minority party receiving the second largest number of
(1) To reside in the locality where they are assigned, to disseminate votes in the last Presidential election who shall hold office at the pleasure of
technical information to farmers, and to demonstrate improved farm such minority party, unless sooner removed for cause by the President as
management practices and techniques; members and the Agrarian Counsel as legal counsel: Provided, That the Council
shall not be considered fully constituted and ready to function until after the
(2) To work with individual farmers in farm planning and budgeting, member representing the minority party has been appointed by the President of
guide them in the proper conduct of farm business and work out the Philippines: Provided, further, That the minority party shall submit its
schedules of re-payment of loans obtained by farmers; recommendation to the President within sixty days from the approval of this
Code, in the absence of which the Council shall be deemed to be so constituted
(3) To assist farmers in securing the services or assistance of other
even without such member from the minority party: Provided, finally, That the
agencies, or their personnel, having to do with relevant activities and
minority representative shall receive a per diem of fifty pesos for each day he
problems of farmers;
attends a council meeting, chargeable to the appropriations of the Land
(4) To visit newly-established independent farm operators either singly Authority.
or collectively at least once a month;
Section 127. Meetings; Resolutions - The Chairman of the Council shall convoke
(5) To conduct educational activities that will acquaint leaseholders the Council as its responsibilities enumerated in Section one hundred twenty-
and other independent farm operators with their rights and eight may warrant, and shall preside over its meetings.
responsibilities under this Code;
It shall be the duty of the members to attend any meeting of the Council upon
(6) To encourage the formation and growth of private associations, the call of the Chairman. In case of inability, a member may require the officer
study clubs, committees and other organized groups of farmers, next in rank in his agency to attend the meeting in his behalf.
familiarize them with modern methods of farming and interest them to
A majority vote of the members present if there is a quorum shall be necessary
actively participate, collaborate or take the initiative in agricultural
for the approval of a resolution. Upon such approval the resolution shall be final
research, experimentation and implementation of projects in
and binding upon all members of the Council and their respective agencies
cooperation with the Agricultural Productivity Commissioner and other
insofar as their functions, powers and duties required under this Code are
agencies; and
concerned.
(7) To promote, stimulate and assist in the organization of farmers'
The refusal of any member to implement any resolution or part thereof falling
cooperatives.
within the scope of the powers granted to his agency shall be sufficient ground
Section 125. Appropriation - In addition to the funds herein transferred, there is for the President of the Philippines to remove said member from office or to
hereby appropriated from the general funds in the National Treasury not impose upon him disciplinary or administrative sanctions.
otherwise appropriated the sum of five million pesos, or so much thereof as may
Section 128. Functions of National Land Reform Council - It shall be the
be necessary to carry out the purposes of this Chapter.
responsibility of the Council:
CHAPTER VII
(1) To construct the general program of land reform contemplated by
LAND REFORM PROJECT ADMINISTRATION
this Code;
Section 126. Creation of National Land Reform Council - There is hereby created
(2) To establish guidelines, plans and policies for its member-agencies
a National Land Reform Council, hereinafter called the Council, which shall be
relative to any particular land reform project;
composed of the Governor of the Land Authority, who shall act as Chairman, the
 (3) To formulate such rules and regulations as may be necessary to (2) Its suitability for economic family-size farms;
carry out the provisions of this Code for (a) the selection of agricultural
land to be acquired and distributed under this Code; (b) the (3) The tenancy rate in the area;
determination of sizes of family farms as defined in Section one
(4) The minimum fixed capital outlay required to develop the area;
hundred sixty-six; and (c) the selection of beneficiaries to family farms
available for distribution: Provided, That priority shall be given in the (5) The proximity of the area to resettlement projects; and
following order: First, to members of the immediate family of the
former owner of the land within the first degree of consanguinity who (6) The number of farmers that cultivate uneconomic-size farms, the
will cultivate the land personally with the aid of labor available within ability and readiness of such farmers to be resettled, and the availability
his farm household; Second, to the actual occupants personally of idle or abandoned lands that may be acquired or expropriated as well
cultivating the land either as agricultural lessees or otherwise with as of other resettlement facilities.
respect to the area under their cultivation; Third, to farmers falling
under the preceding category who are cultivating uneconomic-size Section 130. Regional Land Reform Committee - For the purpose of
farms with respect to idle or abandoned lands; Fourth, to owner- implementing the program and policies of the Council on the local level, the
operators of uneconomic-size farms; and Fifth, to such other categories Council shall establish in each region of the Philippines a Regional Land Reform
as may be fixed by virtue of this Code, taking into consideration the Committee which shall be composed of the representatives of the agencies
needs and qualifications of the applicants: composing the National Land Reform Council and shall be under the
chairmanship of the representative of the Land Authority. The committee shall
(4) To revise, approve, or reject any land reform proposal or project; and recommend to the Council such plans for projects of land reform in its
jurisdiction as it may deem appropriate. The Committee shall conduct public
(5) To proclaim in accordance with the provisions of this Code, which hearings, gather and analyze data, estimate the essentials of such plans for
proclamation shall be considered as having been promulgated projects or programs and consolidate its findings in a report to be submitted to
immediately after three successive weekly publications in at least two the Council for its consideration. The decision of the Council upon such projects
newspapers of general circulation in the region or locality affected by or programs shall be returned to the Committee, within thirty days from the
the proclamation, preference being given to local newspapers, if any, submission thereof, for early implementation or execution by said Committee
that all the government machineries and agencies in any region or and the agencies represented therein.
locality relating to leasehold envisioned in this Code are operating:
Provided, That the conversion to leasehold in the proclaimed area shall Section 131. Land Reform Project Team - The Regional Land Reform Committee
become effective at the beginning of the next succeeding agricultural shall direct and assign a Land Reform Project Team for any project or projects
year after such promulgation: Provided, further, That the proclamation within the region, to be composed of an appropriate number of personnel from
shall be made after having considered factors affecting feasibility and the member-agencies. The team shall be headed by a representative of the Land
fund requirements and the other factors embodied in Sections one Authority designated by the Committee, but each agency shall, in every case, be
hundred twenty-nine, one hundred thirty and one hundred thirty-one. duly represented by at least one member in the Team. On the basis of national,
regional, and local policies and programs formulated and approved by the
Section 129. Creation of Land Reform Districts - The Council shall exercise the Council through the Committee, the Team shall determine (a) the suitability of
functions enumerated in the preceding Section for particular areas which the any area for redistribution into economic family-size farms; (b) the economic
Council shall select and designate as land reform districts. A district shall size of farm units; (c) the feasibility of acquiring and distributing the area; (d)
constitute one or more reform projects, each project to comprise either a large the willingness of the lessees to assume the responsibilities of ownership; and
landed estate or several areas within small estates. In the selection of a district, (e) the financial and other requirements of the project. For this purpose, it shall
the Council shall consider factors affecting the feasibility of acquiring for gather data, obtain opinions, conduct surveys, pursue investigations, and
redistribution the areas within the district, including: incorporate any information thus established in a development program for the
area concerned to be submitted in the form of a consolidated report to the
(1) The productivity of the area;
Committee.
CHAPTER VIII amounts representing the proportional shares of the costs taxed against lots
LAND CAPABILITY SURVEY AND CLASSIFICATION surveyed at the request and expense of their owner and for which a plan other
than the cadastral plan has been made by a duly authorized surveyor prior to
Section 132. Land Survey to Conform to Legal Requirements - To provide the the decision in the cadastral proceeding, or which have been registered in
necessary basis for the implementation of the land reform program formulated accordance with the provisions of Act Numbered Four hundred ninety-six,
under this Code, the Land Authority is hereby authorized to undertake a land entitled "The Land Registration Act", or surveyed, patented, or leased under the
capability survey and classification in cooperation with the relevant agencies Public Land and Mining Laws, prior to the decision in the cadastral proceeding,
that will be directly benefited by such survey and classification. The survey shall or have been declared to the public lands by the Court, shall not constitute a lien
be made to conform to the requirements of the Department of Agriculture and against said lot nor shall be collected from the owner thereof: Provided, further,
Natural Resources for implementation of Agricultural programs and forestry That the owner of any lot may, if he so desires, pay any installment of the costs
inventory, of the Board of Technical Surveys and Maps, and of the National taxed against his lot at any time before the same becomes due.
Economic Council and other agencies for agricultural planning and other
purposes. Section 136. Payment of Costs of Land in Its Entirety in Case of Transfer of Land -
In case of the sale, transfer, or conveyance, for a pecuniary consideration, of any
Section 133. Cadastral Survey - To resolve the rights of landholders holding property, or part thereof, registered by virtue of a decree issued in a cadastral
unregistered property, the Bureau of Lands is directed to undertake an expanded proceeding, prior to the payment of the total amount of the costs taxed against
cadastral survey and land registration program commencing within three such property in accordance with the preceding Section endorsed as an
months from the passage of this Code. encumbrance or lien upon each cadastral certificate of title, the vendor or his
legal representative shall pay such costs in their entirety in case the order
Section 134. Costs of Fees and Charges - Notwithstanding any provisions of law apportioning the costs has already been issued in the cadastral proceeding in
to the contrary, the following rules shall apply with respect to the costs, fees and which the property being sold, transferred, or conveyed is included, and the
charges in the survey, monumenting, and registration of lands of whatever register of deeds concerned shall demand of the vendor, before registering the
description and nature had in relation to cadastral proceedings undertaken by deed for such sale, transfer, or conveyance of said property, that he exhibit a
the National Government, either alone through its offices, agencies and receipt signed by the Director of Lands or his duly authorized representative
instrumentalities, or in conjunction with provincial and municipal governments. showing that such encumbrance or lien has been paid.
Section 135. Apportionment of Cost of Survey - One-half of the cost of survey and Section 137. Costs of Registration Proceedings - The costs of the registration
monumenting and registration proceedings shall be fully assessed and collected proceedings under the provisions of this Code shall consist of a sum equivalent
against each and all of the lots included in cadastral proceedings and shall be to ten per centum of the costs of the survey and monumenting of the land. The
apportioned in accordance with the area thereof, but in no case shall less than amount of the costs of the proceeding so taxed shall be for all services rendered
ten pesos be charged against each lot, the other half being chargeable to the by the Land Registration Commission and the clerk or his deputies in each
National Government. The amounts taxed against each of the lots or parcels of cadastral proceeding, and the expense of publication, mailing, and posting
land shall be considered as a special assessment of taxes against the respective notice, as well as the notices of the decision and the order apportioning the cost
parcels, shall constitute a first lien upon the land and shall be collected by the shall be borne by the Land Registration Commission.
Director of Lands or his duly authorized representatives in equal installments
within a period of three years, bearing interest at the rate of six per centum per Section 138. Laws Covering Survey and Registration of Land in Forces - Unless
annum. The first installment shall become due and payable at the same time as otherwise provided in this Chapter, all provisions of law covering the survey and
the general land taxes for the year next succeeding the year in which the registration of land shall remain in full force and effect.
assessment of the cost shall be received by the Provincial Treasurer, and shall be
collected in the same manner as such general taxes. Each succeeding installment Section 139. Revolving Fund - All amounts collected by the Bureau of Lands or
shall become due and payable at the same time as the general land taxes for the its duly authorized representatives from the owners of the various lots as costs
corresponding current year and shall be collected in the same manner. The of proceedings, survey, and monumenting in relation to the cadastral survey
Director of Lands shall for this purpose send to the officer in charge of such program herein described shall be paid into a Special Cadastral Program
collection a copy of said assessment of costs: Provided, however, That the
Revolving Fund to finance the cadastral land survey and registration of other The sixth Regional District, of the City of Manila, Quezon City, Pasay
unregistered lands. City, the province of Rizal, the City of Cavite, the province of Cavite, the
City of Tagaytay, Trece Martires City, and the province of Palawan, with
Section 140. Appropriation - To finance and support the expanded cadastral seat in Manila for Branch I (Executive Judge), in Cavite City for Branch II
land survey and registration program set forth herein, the amount of one and in Pasig, Rizal for Branch III; The seventh Regional District, of the
hundred million pesos is hereby appropriated out of funds in the National province of Laguna, the City of San Pablo, the province of Batangas, the
Treasury not otherwise appropriated, which amount shall be paid into a City of Lipa, and the provinces of Oriental Mindoro and Occidental
"Special Cadastral Program Revolving Fund", to finance the cadastral land Mindoro, with seat in Los Banñ os, Laguna for Branch I, in Batangas,
survey and registration of other unregistered areas. Batangas for Branch II and in Mamburao, Mindoro Occidental for
Branch III;
CHAPTER IX
COURTS OF AGRARIAN RELATIONS The eight Regional District, of the province of Quezon, the subprovince
of Aurora, the City of Lucena, and the province of Camarines Norte, with
Section 141. Creation - Courts of Agrarian Relations are hereby organized and seat in the City of Lucena for Branch I and in Daet, Camarines Norte for
established throughout the Philippines in conformity with the provisions of this Branch II;
Chapter.
The ninth Regional District, of the province of Camarines Sur, Naga City,
Section 142. Regional Districts - Regional districts for the Courts of Agrarian Legaspi City and the provinces of Albay, Catanduanes, Sorsogon and
Relations in the Philippines are constituted as follows: Masbate, with seat in Naga City for Branch I, in Legaspi City for Branch
II and in Sorsogon, Sorsogon for Branch III;
The first Regional District shall consist of the provinces of Cagayan,
Batanes, Isabela and Nueva Vizcaya, with seat in Tuguegarao, Cagayan The tenth Regional District, of the province of Capiz, Roxas City, the
for Branch I and in Ilagan, Isabela for Branch II; provinces of Aklan, Romblon, Marinduque and Iloilo, the City of Iloilo,
and the province of Antique, with seat in the City of Iloilo for Branch I
The second Regional District, of the provinces of Ilocos Norte, Ilocos
and in Roxas City for Branch II;
Sur, Abra, Mountain Province, La Union and the City of Baguio, with seat
in Laoag, Ilocos Norte for Branch I and in San Fernando, La Union for The eleventh Regional District, of the province of Occidental Negros, the
Branch II; Cities of Bacolod and Silay, the province of Oriental Negros, Dumaguete
City, and the subprovince of Siquijor, with seat in Bacolod City for
The third Regional District of the provinces of Pangasinan and
Branch I, in Dumaguete City for Branch II and in San Carlos City for
Zambales, and the City of Dagupan, with seat in Lingayen, Pangasinan
Branch III;
for Branch I, in Tayug, Pangasinan for Branch II and in Iba, Zambales for
Branch III; The twelfth Regional District, of the province of Samar, the City of
Calbayog, the province of Leyte, and the Cities of Ormoc and Tacloban,
The fourth Regional District, of the provinces of Nueva Ecija and Tarlac,
with seat in Catbalogan, Samar for Branch I and in Ormoc City for
and Cabanatuan City, with seat in Cabanatuan City for Branch I, in
Branch II;
Guimba, Nueva Ecija for Branch II, in Tarlac, Tarlac for Branch III and in
Moncada, Tarlac for Branch IV; The thirteenth Regional District, of the province of Cebu, the City of
Cebu, and the province of Bohol, with seat in the City of Cebu for Branch
The fifth Regional District, of the provinces of Pampanga, Bataan and
I and in Tagbilaran, Bohol for Branch II;
Bulacan, with seat in Malolos, Bulacan for Branch I, in San Fernando,
Pampanga for Branch II, in Angeles, Pampanga for Branch III and in The fourteenth Regional District, of the provinces of Surigao and
Balanga, Bataan for Branch IV; Agusan, Butuan City, the province of Oriental Misamis, Cagayan de Oro
City, the provinces of Bukidnon, Lanao del Sur and Lanao del Norte, and
 the Cities of Iligan and Marawi, with seat in Cagayan de Oro City for Instance and the Regional District Judges shall receive an annual compensation
Branch I and in Iligan City for Branch II; of one thousand pesos less than that of the Executive Judge.

The fifteenth Regional District, of the province of Davao the City of Section 145. Leave Privileges; Traveling Expenses - Judges of the Courts of
Davao, the provinces of Cotabato and Occidental Misamis, Ozamiz City, Agrarian Relations shall be entitled to same retirement and leave privileges now
the provinces of Zamboanga del Norte and Zamboanga del Sur, granted or may hereafter be granted to judges of the court of First Instance.
Zamboanga City, Basilan City and the province of Sulu, with seat in the They shall be entitled to traveling expenses when performing their duties
City of Davao for Branch I, Cotabato City for Branch II and Ozamiz City outside official stations.
for Branch III.
Section 146. Vacation of Courts of Agrarian Relations - The yearly vacation of
Section 143. Judges of Agrarian Relations - The judicial function of the Courts of Courts of Agrarian Relations shall begin with the first of April and close with the
Agrarian Relations shall be vested in an Executive Judge and the Regional first of June each year.
District Judges, who shall be appointed from time to time, depending on the
need for their services, by the President of the Philippines with the consent of Section 147. Assignment of Judges to Vacation Duty - During the month of
the Commission on Appointments: Provided, however, That the Executive Judge January of each year the Executive Judge shall issue an order naming the judges
and the eight Associate Judges, at the time of the approval of this Code, of the who are to remain on duty during the court vacation of that year; and,
Court of Agrarian Relations established and organized under Republic Act consistently with the requirements of the judicial service, the assignment shall
Numbered Twelve hundred and sixty-seven, shall continue as Agrarian Judges be so made that no judge shall be assigned to vacation duty, unless upon his own
without need of new appointments by the President of the Philippines and new request, with greater frequency than once in two years.
confirmation of the Commission on Appointments: Provided, further, That upon
Such order shall specify, in the case of each judge assigned to vacation duty, the
the approval of this Code, the said Executive Judge shall continue as such with
territory over which in addition to his own district his authority as vacation
authority to exercise the usual administrative functions over the Court of
judge shall extend.
Agrarian Relations not incompatible with the provisions of this Chapter and
shall have his office in Manila without prejudice to his holding court in any The Executive Judge may from time to time modify his order assigning the
district where the requirements of the service so warrant, and the eight judges to vacation duty as newly arising conditions or emergencies may require.
Associate Judges shall be assigned as Regional District Judges by the Executive
Judge to any of the regional districts as constituted in the preceding Section. A judge assigned to vacation duty shall not ordinarily be required to hold court
during such vacation; but the Executive Judge may, when in his judgment the
Section 144. Qualifications of Judges; Tenure of Office; Compensation - No person emergency shall require, direct any judge assigned to vacation duty to hold
shall be appointed as Executive Judge or Regional District Judge unless he has during the vacation a special term of court in any district.
been a citizen of the Philippines for ten years and has practiced law in the
Philippines for a period of not less than ten years or has held during a like Section 148. Judges of Regional Districts - Four judges shall be commissioned
period, within the Philippines, an office requiring admission to the practice of for each of the fourth and fifth Regional Districts; three judges shall be
law in the Philippines as an indispensable requisite. commissioned for each of the third, sixth, seventh, ninth, eleventh and fifteenth
Regional Districts; and two judges for each of the other Regional Districts.
Regional District Judges shall be appointed to serve during good behavior, until
they reach the age of seventy years or become incapacitated to discharge the Section 149. Oath of Office - Before entering upon the discharge of the duties of
duties of their office, unless sooner removed in accordance with law. their office, the judges shall take and subscribe to an oath of office in accordance
with the provisions of Section twenty-three of the Revised Administrative Code.
The judges may be suspended or removed in the same manner and upon the
same grounds as judges of the Court of First Instance: Section 150. Division of Business Between Branches - All business appertaining
to the Courts of Agrarian Relations of each Regional District shall be equitably
The Executive Judge shall receive an annual compensation which shall be equal distributed among the judges of the branches in such manner as shall be agreed
to that allowed or may hereafter be allowed for judges of the Court of First
upon by the judges themselves. Should the judges fail to agree on the (1) All cases or actions involving matters, controversies, disputes, or
distribution of business, then the Executive Judge shall make the distribution. money claims arising from agrarian relations: Provided, however, That
all cases still pending in the Court of Agrarian Relations, established
Section 151. Judges' Certification as to Work Completed - The judges of the under Republic Act Numbered Twelve hundred and sixty-seven, at the
Courts of Agrarian Relations shall certify at the end of each month that all time of the effectivity of this Code, shall be transferred to and continued
petitions and motions in all cases pending decision or resolution for a period of in the respective Courts of Agrarian Relations within whose district the
thirty days from submission by the parties have been determined and decided sites of the cases are located;
before the date of the making of the certificate. No leave shall be granted and no
salary shall be paid without such certificate. (2) All cases or actions involving violations of Chapters I and II of this
Code and Republic Act Number Eight hundred and nine; and
Section 152. Official Station of Regional District Judges - Within thirty days after
the approval of this Code, the Executive Judge shall issue an order designating (3) Expropriations to be instituted by the Land Authority: Provided,
the official station of the judges of the branches of each of the Regional Districts. however, That expropriation proceedings instituted by the Land Tenure
Administration pending in the Court of First Instance at the time of the
Section 153. Time and Place of Holding Court - Sessions of the Court shall be effectivity of this Code shall be transferred to and continued in the
convened on all working days when there are cases ready for trial or other court respective Courts of Agrarian Relations within whose district the
business to be dispatched. The hours for the daily session of the Court shall be subject matter or property is located.
from nine to twelve in the morning, and from three to five in the afternoon,
except on Saturdays, when a morning session only shall be required: but the Section 155. Powers of the Court; Rules and Procedures - The Courts of Agrarian
judge may extend the hours of session whenever in his judgment it is proper to Relations shall have all the powers and prerogatives inherent in or belonging to
do so. The judge, in his discretion, may order that but one session per day shall the Court of First Instance.
be held instead of two, at such hours as he may deem expedient for the
convenience both of the Court and of the public; but the number of hours that The Courts of Agrarian Relations shall be governed by the Rules of Court:
the Court shall be in session per day shall be not less than five. Provided, That in the hearing, investigation and determination of any question
or controversy pending before them, the Courts without impairing substantial
Sessions of the Court shall be held at the places of the official station of the rights, shall not be bound strictly by the technical rules of evidence and
respective judges: Provided, however, That whenever necessary in the interest of procedure, except in expropriation cases.
speedy and inexpensive justice and litigation, a judge shall hold court in the
municipality where the subject matter of the dispute is located, utilizing the sala Section 156. Appeals - Appeals from an order or decision of the Courts of
of the local justice of the peace court for this purpose. Agrarian Relations may be taken to the Court of Appeals on questions of fact and
of fact and law or to the Supreme Court on pure questions of law, as the case
A brief monthly report which shall be submitted within the first five days of the may be, in accordance with rules governing appeals from the Court of First
succeeding month showing the number and nature of the cases tried in his sala, Instance as provided in the Rules of Court.
the place of hearing in each case, the progress of the litigation with
corresponding dates and the disposition made thereon shall be rendered by Section 157. Detail of Judges to Another District - Whenever any judge in any of
every judge under his signature and copies thereof shall be furnished the the Court shall certify to the Executive Judge that the condition of the docket in
Executive Judge, who shall compile and report in an appropriate form the his Court is such as to require the assistance of an additional judge, or when
decisions promulgated in important cases. A judge who fails or neglects to make there is any vacancy in any Court, the Executive Judge may, in the interest of
his report shall, upon first offense, be liable to warning by the Executive Judge, justice, with the approval of the Supreme Court, assign any judge of the Court of
and upon repeated failure or neglect may be suspended or removed from office. Agrarian Relations whose docket permits his temporary absence from said
Court, to hold session in the Court needing such assistance or where such
Section 154. Jurisdiction of the Court - The Court shall have original and vacancy exists.
exclusive jurisdiction over:
Whenever a judge appointed or assigned in any branch of the Court shall leave Before entering upon the discharge of the duties of his office, he shall file a bond
his district by transfer or assignment to another Court of equal jurisdiction in the amount of ten thousand pesos in the same manner and form as required
without having decided a case totally heard by him and which was duly argued of the Clerk of the Supreme Court, such bond to be approved by, and filed with,
or opportunity given for argument to the parties of their counsel, it shall be the Treasurer of the Philippines and shall be subject to inspection by interested
lawful for him to prepare and sign his decision in said case anywhere within the parties. The Clerk of Court shall require his deputy to give an adequate bond as
Philippines and send the same by registered mail to the clerk of court to be filed security against loss by reason of his wrong-doing or gross negligence.
in the Court as of the date when the same was received by the clerk, in the same
manner as if the judge had been present in the Court to direct the filing of the The Clerks of Court shall each receive an annual compensation of seven
judgment: Provided, however, That if a case has been heard only in part, the thousand two hundred pesos. They shall exercise the same powers and perform
Supreme Court, upon petition of any of the interested parties to the case and the the same duties on all matters within the jurisdiction of the Courts as those
recommendation of the respective district judge, may also authorize the judge exercised by the Clerks of Court of the Courts of First Instance.
who has partly heard the case to continue hearing and to decide said case
Clerks of Courts and other subordinate employees of the Courts of Agrarian
notwithstanding his transfer or appointment to another court of equal
Relations shall, for administrative purposes, belong to the Department of Justice;
jurisdiction.
but in the performance of their duties, they shall be subject to the supervision of
Section 158. Personnel of the Courts of Agrarian Relations - the judges of the Court to which they respectively pertain.

(1) Court Commissioners; Qualifications and Compensation - There The Commissioners, otherwise known as Hearing Officers of the Court of
shall be twenty-four Court Commissioners who shall receive an annual Agrarian Relations, as well as the Clerks of Court at the time of the approval of
compensation of nine thousand pesos each and shall be appointed by this Code, shall continue as such without the need of new appointment by the
the President with the consent of the Commission on Appointments. A President of the Philippines and new confirmation by the Commission on
Court Commissioner shall be a member of the Philippine Bar and must Appointments.
have been engaged in the practice of law for five years or must have
Section 159. Appropriation - There is hereby appropriated the sum of three
held a position in the government requiring the qualifications of a
million five hundred thousand pesos, or so much thereof as may be necessary,
lawyer for the same period. A Court Commissioner may be assigned by
out of the unappropriated funds in the Philippine Treasury for expenses for
the Executive Judge to assist in the hearing and investigation of cases.
courtrooms and court offices, including equipment for the Courts and their
Subject to the latter's direction and supervision, he may hear evidence
personnel, for salaries, and for other necessary expenses that may be incurred in
for the Court on any disputed point or issue in any given case or cases
carrying out the provisions of this Chapter. The amount appropriated shall be
and shall after said hearing submit a report of all the cases heard by
carried in succeeding appropriations for the Courts of Agrarian Relations.
him together with the records thereof within the period prescribed by
the Court. During the hearing he may rule upon questions of pleading CHAPTER X
and procedure but not on the merits of the case. OFFICE OF AGRARIAN COUNSEL
(2) Clerks of Court; Qualifications, Duties, Compensation and Bond - Section 160. Creation of Office of Agrarian Counsel - To strengthen the legal
There shall be as many Clerks of Court as there are judges, who shall be assistance to agricultural lessees and agricultural owner-cultivators referred to
appointed by the President of the Philippines with the consent of the in this Code, the Tenancy Mediation Commission is hereby expanded and shall
Commission on Appointments. Deputy Clerks of Court and such other hereafter be known as the Office of the Agrarian Counsel. The head of the Office
employees as may be required shall be appointed by the Executive shall hereafter be known as Agrarian Counsel and shall have the rank,
Judge, subject to Civil Service law, rules and regulations. qualifications and salary of First Assistant Solicitor General. He shall be assisted
by a Deputy Agrarian Counsel, who shall have the rank, qualifications and salary
No person shall be eligible for appointment as Clerk of Court unless he is duly
of Assistant Solicitor General. The Agrarian Counsel and Deputy Agrarian
authorized to practice law in the Philippines.
Counsel shall be appointed by the President with the consent of the Commission
on Appointments of Congress and shall be under the direct supervision of the (1) "Agricultural Land" means land devoted to any growth, including but
Secretary of Justice. not limited to crop lands, salt beds, fish ponds, idle land and abandoned
land as defined in paragraphs 18 and 19 of this Section, respectively.
Section 161. Special Attorneys - There is hereby created in the Office of the
Agrarian Counsel eighty additional positions of Special Attorneys, who shall be (2) "Agricultural lessee" means a person who, by himself and with the
appointed by the President upon recommendation of the Secretary of Justice aid available from within his immediate farm household, cultivates the
and with the consent of the Commission on Appointments. They shall have the land belonging to, or possessed by, another with the latter's consent for
rank, qualifications and salary provided by law for a solicitor in the Office of the purposes of production, for a price certain in money or in produce or
Solicitor General with the lowest rank. both. It is distinguished from civil lessee as understood in the Civil Code
of the Philippines.
Section 162. Appointment of Subordinate Officials - The Agrarian Counsel shall
appoint the subordinate officials and employees of the Office of Agrarian (3) "Agricultural lessor" means a person, natural or juridical, who,
Counsel, subject to civil service rules and regulations, fix their compensation either as owner, civil law lessee, usufructuary, or legal possessor, lets or
and prescribe their duties. The compensation of special attorneys transferred to grants to another the cultivation and use of his land for a price certain.
the Office of Agrarian Counsel shall be fixed on salary scales corresponding to
solicitors of the Office of the Solicitor General: Provided, That in the fixing of (4) "Agricultural year" means the period of time required for raising a
their salary seniority in rank shall be taken into account. particular agricultural product, including the preparation of the land,
sowing, planting and harvesting of crops and, whenever applicable,
The Agrarian Counsel shall have the power to organize such divisions and threshing of said crops: Provided, however, That in case of crops
sections as will insure maximum efficiency of the Office. yielding more than one harvest from planting, "agricultural year" shall
be the period from the preparation of the land to the first harvest and
Section 163. Functions of the Office of Agrarian Counsel - It shall be the thereafter from harvest to harvest. In both cases, the period may be
responsibility of the Office of the Agrarian counsel, upon proper notification by shorter or longer than a calendar year.
the party concerned or by the association or organization to which belongs, to
represent agricultural lessees, agricultural farm workers and agricultural (5) "Court" means the Court of Agrarian Relations.
owner-cultivators referred to in this Code who cannot engage the services of
competent private counsel in cases before the Court of Agrarian Relations. (6) Fair rental value" means the value not in excess of allowable
depreciation plus six per cent interest per annum on the investment
Section 164. Authority to Administer Oath - The Agrarian Counsel, the Deputy computed at its market value: Provided, That the fair rental value for
Agrarian Counsel and the Special Attorneys of the Office of Agrarian Counsel are work animal or animals and farm implements used to produce the crop
hereby authorized to administer oaths free of charge. shall not exceed five per cent of the gross harvest for the work animal or
animals and five per cent for implements.
Section 165. Appropriations - There is hereby appropriated, in addition to the
appropriation of the Tenancy Mediation Commission for Fiscal Year 1964, the (7) "Farm implements" means hand tools or machines ordinarily
sum of three million pesos, or so much thereof as may be necessary, out of the employed in a farm enterprise.
unappropriated funds in the National Treasury, for salaries, wages, purchase of
motor vehicles, supplies, equipment, and other sundry expenses. The amount (8) "Immediate farm household" means the members of the family of
appropriated herein shall be carried in the appropriations for the Office of the the lessee or lessor and other persons who are dependent upon him for
Agrarian Counsel in the General Appropriations Acts for succeeding fiscal years. support and who usually help him in his activities.

CHAPTER XI (9) "Incapacity" means any cause or circumstance which prevents the
GENERAL PROVISIONS lessee from fulfilling his contractual and other obligations under this
Code.
Section 166. Definition of Terms - As used in Chapter I of this Code:
(10) "Inspect" means to enter, examine and observe. Under no whether the disputants stand in the proximate relation of farm
circumstance, however, shall such entrance, examination and employers and employees.
observation be utilized to commit any act of intimidation or coercion
nor shall it be utilized to impair the civil rights of the individuals As used in Chapter III of this Code:
affected.
(18) "Idle lands" means land not devoted directly to any crop or to any
(11) "Proven farm practices" means sound farming practices generally definite economic purpose for at least one year prior to the notice of
accepted through usage or officially recommended by the Agricultural expropriation except for reasons other than force majeure or any other
Productivity Commission for a particular type of farm. fortuitous event but used to be devoted or is suitable to such crop or is
contiguous to land devoted directly to any crop and does not include
(12) "Work animals" means animals ordinarily employed in a farm land devoted permanently or regularly to other essential and more
enterprise, such as carabaos, horses, bullocks, etc. productive purpose.

(13) "Personal cultivation" means cultivation by the lessee or lessor in (19) "Abandoned lands" means lands devoted to any crop at least one
person and/or with the aid of labor from within his immediate year prior to the notice of expropriation, but which was not utilized by
household. the owner for his benefit for the past five years prior to such notice of
expropriation.
As used in Chapter II:
(20) "Economic family-sized farm units" means an area of farm land
(14) "Farm employer" includes any person acting directly or indirectly that permits efficient use of labor and capital resources of the farm
in the interest of a farm employer whether for profit or not, as well as a family and will produce an income sufficient to provide a modest
labor contractor, but shall not include any labor organization standard of living to meet a farm family's needs for food, clothing,
(otherwise than when acting as a farm employer) or anyone acting in shelter, and education with possible allowance for payment of yearly
the capacity of an officer or agent of such labor organization. installments on the land, and reasonable reserves to absorb yearly
fluctuations in income.
(15) "Farm worker" includes any agricultural wage, salary or piece but
is not limited to a farm worker of a particular farm employer unless this (21) "Suitably for economic family-size farm" refers to situations where
Code explicitly states otherwise and any individual whose work has a parcel of land whose characteristics, such as climate, soil, topography,
ceased as a consequence of, or in connection with, a current agrarian availability of water and location, will support a farm family if operated
dispute or an unfair labor practice and who has not obtained a in economic family-size farm units and does not include those where
substantially equivalent and regular employment. large-scale operations will result in greater production and more
efficient use of land.
Whenever the term "farm worker" is used in this Code, it shall be
understood to include farm laborer and/or farm employee. (22) "Agricultural owner-cultivator" means any person who, providing
capital and management, personally cultivates his own land with the
(16) "Farm workers' organization" includes any union or association of aid of his immediate family and household.
farm workers which exists, in whole or in part, for the purpose of
collective bargaining or dealing with farm employers concerning terms (23) "Owner-manager" means the owner of a parcel of land devoted to
and conditions of employment. agricultural production who provides the capital and management in
the farm enterprise.
(17) "Agrarian dispute" means any controversy relating to terms, tenure
or conditions of employment, or concerning an association or (24) "Labor administration" means cases where farm workers are
representation of persons in negotiating, fixing, maintaining, changing, employed wholly in the agricultural production.
or seeking to arrange terms or conditions of employment, regardless of
 (25) "Share tenancy" as used in this Code means the relationship which and imprisonment, in the discretion of the court. If any violation of
exists whenever two persons agree on a joint undertaking for Sections forty and forty-one of this Code is committed by a corporation,
agricultural production wherein one party furnishes the land and the partnership or association, the manager or, in his default, the person
other his labor, with either or both contributing any one or several of acting as such when the violation took place shall be criminally
the items of production, the tenant cultivating the land personally with responsible.
the aid of labor available from members of his immediate farm
household, and the produce thereof to be divided between the (5) Any person who wilfully violates the provisions of Section forty-two
landholder and the tenant. of this Code shall, upon conviction thereof, be subject to a fine of not
more than two thousand pesos, or upon second conviction, to
(26) "Tax free" in reference to bonds and shares of stock issued by the imprisonment of not more than one year or both such fine and
Land Bank as payment for acquired private agricultural land shall mean imprisonment, in the discretion of the court. If any violation of the
all government taxes, except gift tax and inheritance tax. provisions of Section forty-two of this Code is committed by a
corporation, partnership or association, the manager or, in his default,
Section 167. Penal Provisions - the person acting as such when the violation took place shall be
criminally responsible.
(1) Violation of the provisions of Section thirteen and twenty-seven and
paragraph 1 of Section thirty-one of this Code shall be punished by a Section 168. Pending Application for Mechanization - Any provision of this Code
fine not exceeding one thousand pesos or imprisonment not exceeding to the contrary notwithstanding, any application for mechanization where
one year or both in the discretion of the court. In case of juridical corresponding certifications for suitability for mechanization and for
persons, the manager or the person who has charge of the management availability for resettlement by the Agricultural Tenancy Commission and the
or administration of the property or, in his default, the person acting in National Resettlement and Rehabilitation Administration, respectively, have
his stead, shall be liable under this Section. been issued and proper notices served on the tenants at least two months prior
to the approval of this Code shall be given due course and decided in accordance
(2) Any person, natural or juridical, who induces another, as tenant, to with the pertinent provisions and requirements of Republic Act Numbered
execute or enter into a share tenancy contract with himself or with Eleven hundred and ninety-nine, as amended.
another in violation of this Code shall be punished by a fine not
exceeding five thousand pesos with subsidiary imprisonment in Section 169. Personnel of Reorganized or Abolished Agencies - Permanent
accordance with the Revised Penal Code: Provided, That the execution officials and employees of all existing government agencies which are abolished
of a share tenancy contract shall be considered prima facie evidence of or reorganized under this Code, subject to Civil Service Rules and regulations,
such inducement as to the owner, civil law lessee, usufructuary or legal shall be absorbed and shall not be divested of their positions except presidential
possessor. In case of juridical persons, the manager or the person who appointees: Provided, That those presidential appointees who cannot be
has charge of the management or administration of the property or, in absorbed and such officials and employees who prefer to be laid-off shall be
his default, the person acting in his stead, shall be liable under this given gratuity equivalent to one month salary for every year of service but in no
Section. case more than twenty-four month's salary, in addition to all benefits to which
they are entitled under existing laws and regulations.
(3) Any person who executes an affidavit as required by Section thirteen
of Chapter I, knowing the contents thereof to be false, shall be punished To carry out the provisions of this Section, there is hereby appropriated the sum
by a fine not exceeding one thousand pesos or imprisonment of not of five hundred thousand pesos out of the unappropriated funds in the National
more than one year, or both, in the discretion of the court. Treasury.
(4) Any person who wilfully violates the provisions of Sections forty and Section 170. Budgeting and Disbursing of Appropriated Funds - Any provision of
forty-one of this Code shall be punished by a fine of not less than one this Code or of any existing law to the contrary notwithstanding, not more than
hundred pesos nor more than one thousand pesos or by imprisonment sixty per centum of the specific appropriations provided in this Code for
of not less than one month nor more than one year, or both such fine operating expenditures shall be used for personnel services: Provided, That in
the case of the appropriations for the Agricultural Productivity Commission not
more than twenty per centum shall be spent for office personnel and other
administrative expenses thereof: Provided, further, That the total operating
expenditures of the Agricultural Credit Administration shall not exceed three per
centum of its total capitalization in addition to the allowance for losses under
Section one hundred ten: Provided, furthermore, That all unexpended balances
of all appropriations provided in this Code for operating expenditures shall
revert to the National Treasury at the end of the fiscal year in conformity with
the provisions of Section twenty-three of Republic Act Numbered Nine hundred
ninety-two: And provided, finally, That all the financial requirements of the
various agencies established in this Code for their operation except the Land
Bank and the Agricultural Credit Administration shall be proposed in the
President's budget in order that such appropriation as may be necessary
therefor may be provided in the General Appropriation Acts for the succeeding
fiscal years.

Section 171. Separability of Provisions - If, for any reason, any section or
provision of this Code shall be questioned in any court, and shall be held to the
unconstitutional or invalid, no other section or provision of this Code shall be
affected thereby.

Section 172. Prior Inconsistent Laws - All laws or parts of any law inconsistent
with the provisions of this Code are hereby repealed.

Section 173. Effective Date - This Code shall take effect upon its approval.

Approved: August 8, 1963

 Republic of the Philippines group, at least one (1) of whom shall be a woman; and one (1), the
Congress of the Philippines general public whose representative shall have adequate knowledge
Metro Manila and experience regarding social security, to be appointed by the
President of the Philippines. The six (6) members representing workers
Tenth Congress and employers shall be chosen from among the nominees of workers'
and employers' organizations, respectively. The Chairman of the
Commission shall be designated by the President of the Philippines
from among its members. The term of the appointive members shall be
Republic Act No. 8282 May 01, 1997 three (3) years: Provided, That the terms of the first six (6) appointive
members shall be one (1), two (2) and three (3) years for every two
AN ACT FURTHER STRENGTHENING THE SOCIAL SECURITY SYSTEM
members, respectively: Provided, further, That they shall continue to
THEREBY AMENDING FOR THIS PURPOSE, REPUBLIC ACT NO. 1161, AS
hold office until their successors shall have been appointed and duly
AMENDED, OTHERWISE KNOWN AS THE SOCIAL SECURITY LAW
qualified. All vacancies, prior to the expiration of the term, shall be filled
Be it enacted by the Senate and House of Representatives of the Philippines in for the unexpired term only. The appointive members of the
Congress assembled:: Commission shall receive at least two thousand five hundred pesos
(P2,500.00) per diem for each meeting actually attended by them but
Section 1. Republic Act No. 1161, as amended, otherwise known as the "Social not to exceed Ten thousand pesos (P10,000.00) a month:: Provided, That
Security Law", is hereby furtheramended to read as follows: members of the Commission shall also receive a per diem of at least
Two thousand five hundred pesos (P2,500.00) but not to exceed Fifteen
"SECTION 1. Short Title. - This Act shall be known as the "AN thousand pesos (P15,000.00) a month: Provided , further, That said
ACT FURTHER STRENGTHENING THE SOCIAL SECURITY SYSTEM members of the Commission shall also receive reasonable
THEREBY AMENDING FOR THIS PURPOSE, REPUBLIC ACT NO. 1161, transportation and representation allowances as may be fixed by the
AS AMENDED, OTHERWISE KNOWN AS THE SOCIAL SECURITY LAW." Commission, but not to exceed Ten thousand pesos (P10,000.00) a
month.
"SEC. 2. Declaration of Policy. - It is the policy of the Republic of the
Philippines to establish, develop, promote and perfect a sound and "(b) The general conduct of the operations and management functions
viable tax-exempt social security service suitable to the needs of the of the SSS shall be vested in the SSS President who shall serve as the
people throughout the Philippines which shall promote social justice chief executive officer immediately responsible for carrying out the
and provide meaningful protection to members and their beneficiaries program of the SSS and the policies of the Commission. The SSS
against the hazards of disability, sickness, maternity, old age, death, and President shall be a person who has had previous experience in the
other contingencies resulting in loss of income or financial burden. technical and administrative fields related to the purposes of this Act.
Towards this end, the State shall endeavor to extend social security He shall be appointed by the President of the Philippines and shall
protection to workers and their beneficiaries. receive salary to be fixed by the Commission with the approval of the
President of the Philippines, payable from the funds of the SSS.
"SEC. 3. Social Security System. - (a) To carry out the purposes of this
Act, the Social Security System, hereinafter referred to as 'SSS', a "(c) The Commission, upon the recommendation of the SSS President,
corporate body, with principal place of business in Metro Manila, shall appoint an actuary, and such other personnel as may be deemed
Philippines is hereby created. The SSS shall be directed and controlled necessary, fix their reasonable compensation, allowances and other
by a Social Security Commission, hereinafter referred to as benefits, prescribe their duties and establish such methods and
'Commission', composed of the Secretary of Labor and Employment or procedures as may be necessary to insure the efficient, honest and
his duly designated undersecretary, the SSS president and seven (7) economical administration of the provisions and purposes of this
appointive members, three (3) of whom shall represent the workers' Act: Provided, however, That the personnel of the SSS below the rank of
group, at least one of whom shall be a woman; three (3), the employers' Vice-President shall be appointed by the SSS
President: Provided, further, That the personnel appointed by the SSS investments authorized under Section 26 hereof, under such
President, except those below the rank of assistant manager, shall be terms and conditions as it may prescribe and approved by the
subject to the confirmation by the Commission: Provided, further, That President of the Philippines; and
the personnel of the SSS shall be selected only from civil service
eligibles and be subject to civil service rules and "(7) To approve, confirm, pass upon or review any and all
regulations: Provided, finally, That the SSS shall be exempt from the actions of the SSS in the proper and necessary exercise of its
provisions of Republic Act No. 6758 and Republic Act No. 7430. powers and duties hereinafter enumerated.

"SEC. 4. Powers and Duties of the Commission and SSS. - (a) The "(b) The Social Security System. - Subject to the provision of Section
Commission. - For the attainment of its main objectives as set forth in four (4), paragraph seven (7) hereof, the SSS shall have the following
Section 2 hereof, the Commission shall have the following powers and powers and duties:
duties:
"(1) To submit annually not later than April 30, a public report
"(1) To adopt, amend and rescind, subject to the approval of the to the President of the Philippines and to the Congress of the
President of the Philippines, such rules and regulations as may Philippines covering its activities in the administration and
be necessary to carry out the provisions and purposes of this enforcement of this Act during the preceding year including
Act; information and recommendations on broad policies for the
development and perfection of the program of the SSS;
"(2) To establish a provident fund for the members which will
consist of voluntary contributions of employers and/or "(2) To require the actuary to submit a valuation report on the
employees, self-employed and voluntary members and their SSS benefit program every four (4) years, or more frequently as
earnings, for the payment of benefits to such members or their may be necessary, to undertake the necessary actuarial studies
beneficiaries, subject to such rules and regulations as it may and calculations concerning increases in benefits taking into
promulgate and approved by the President of the Philippines; account inflation and the financial stability of the SSS, and to
provide for feasible increases in benefits every four (4) years,
"(3) To maintain a provident fund which consists of including the addition of new ones, under such rules and
contributions made by both the SSS and its officials and regulations as the Commission may adopt, subject to the
employees and their earnings, for the payment of benefits to approval of the President of the Philippines: Provided, That the
such officials and employees or their heirs under such terms actuarial soundness of the reserve fund shall be
and conditions as it may prescribe; guaranteed: Provided, further, That such increases in benefits
shall not require any increase in the rate of contribution;
"(4) To approve restructuring proposals for the payment of due
but unremitted contributions and unpaid loan amortizations "(3) To establish offices of the SSS to cover as many provinces,
under such terms and conditions as it may prescribe; cities and congressional districts, whenever and wherever it
may be expedient, necessary and feasible, and to inspect or
"(5) To authorize cooperatives registered with the cooperative cause to be inspected periodically such offices;
development authority or associations registered with the
appropriate government agency to act as collecting agents of "(4) To enter into agreements or contracts for such service and
the SSS with respect to their members: Provided, That the SSS aid, as may be needed for the proper, efficient and stable
shall accredit the cooperative or association: Provided, further, administration of the SSS;
That the persons authorized to collect are bonded;
"(5) To adopt, from time to time, a budget of expenditures
"(6) To compromise or release, in whole or in part, any interest, including salaries of personnel, against all funds available to
penalty or any civil liability to SSS in connection with the the SSS under this Act;
 "(6) To set up its accounting system and provide the necessary "(c) Court Review. - The decision of the Commission upon any disputed
personnel therefor; matter may be reviewed both upon the law and the facts by the Court of
Appeals. For the purpose of such review, the procedure concerning
"(7) To require reports, compilations and analyses of statistical appeals from the Regional Trial Court shall be followed as far as
and economic data and to make investigation as may be needed practicable and consistent with the purposes of this Act. Appeal from a
for the proper administration and development of the SSS; decision of the Commission must be taken within fifteen (15) days from
notification of such decision. If the decision of the Commission involves
"(8) To acquire and dispose of property, real or personal, which only questions of law, the same shall be reviewed by the Supreme Court.
may be necessary or expedient for the attainment of the No appeal bond shall be required. The case shall be heard in a summary
purposes of this Act; manner, and shall take precedence over all cases, except that in the
Supreme Court, criminal cases wherein life imprisonment or death has
"(9) To acquire, receive, or hold, by way of purchase,
been imposed by the trial court shall take precedence. No appeal shall
expropriation or otherwise, public or private property for the
act as a supersedeas or a stay of the order of the Commission unless the
purpose of undertaking housing projects preferably for the
Commission itself, or the Court of Appeals or the Supreme Court, shall
benefit of low-income members and for the maintenance of
so order.
hospitals and institutions for the sick, aged and disabled, as
well as schools for the members and their immediate families; "(d) Execution of Decisions. - The Commission may, motu proprio or on
motion of any interested party, issue a writ of execution to enforce any
"(10) To sue and be sued in court; and
of its decisions or awards, after it has become final and executory, in the
"(11) To perform such other corporate acts as it may deem same manner as the decision of the Regional Trial Court by directing
appropriate for the proper enforcement of this Act. the city or provincial sheriff or the sheriff whom it may appoint to
enforce such final decision or execute such writ; and any person who
"SEC. 5. Settlement of Disputes. - (a) Any dispute arising under this Act shall fail or refuse to comply with such decision, award or writ, after
with respect to coverage, benefits, contributions and penalties thereon being required to do so shall, upon application by the Commission
or any other matter related thereto, shall be cognizable by the pursuant to Rule 71 of the Rules of Court, be punished for contempt.
Commission, and any case filed with respect thereto shall be heard by
the Commission, or any of its members, or by hearing officers duly "SEC. 6. Auditor and Counsel. - (a) The Chairman of the Commission on
authorized by the Commission and decided within twenty (20) days Audit shall be the ex-officio Auditor of the SSS. He or his representative
after the submission of the evidence. The filing, determination and shall check and audit all the accounts, funds and properties of the SSS in
settlement of disputes shall be governed by the rules and regulations the same manner and as frequently as the accounts, funds and
promulgated by the Commission. properties of the government are checked and audited under existing
laws, and he shall have, as far as practicable, the same powers and
"(b) Appeal to Courts. - Any decision of the Commission, in the absence duties as he has with respect to the checking and auditing of public
of an appeal therefrom as herein Provided, shall become final and accounts, funds and properties in general.
executory fifteen (15) days after the date of notification, and judicial
review thereof shall be permitted only after any party claiming to be "(b) The Secretary of Justice shall be the ex-officio counsel of the SSS.
aggrieved thereby has exhausted his remedies before the Commission. He or his representative shall act as legal adviser and counsel thereof.
The Commission shall be deemed to be a party to any judicial action
involving any such decision, and may be represented by an attorney "SEC. 7. Oaths, Witnesses, and Production of Records. - When authorized
by the Commission, an official or employee thereof shall have the power
employed by the Commission, or when requested by the Commission,
to administer oath and affirmation, take depositions, certify to official
by the Solicitor General or any public prosecutors.
acts, and issue subpoena and subpoena duces tecum to compel the
attendance of witnesses and the production of books, papers,
correspondence and other records deemed necessary as evidence in
connection with any question arising under this Act. Any case of the remuneration in excess of the maximum salary credit
contumacy shall be dealt with by the Commission in accordance with as Provided under Section Eighteen of this Act.
law.
"(g) Monthly salary credit - The compensation base for contributions
"SEC. 8. Terms Defined. - For purposes of this Act, the following terms and benefits as indicated in the schedule in Section Eighteen of this Act.
shall, unless the context indicates otherwise, have the following
meanings: "(h) Monthly - The period from one end of the last payroll period of the
preceding month to the end of the last payroll period of the current
"(a) SSS - The Social Security System created by this Act. month if compensation is on hourly, daily or weekly basis; if on any
other basis, 'monthly' shall mean a period of one (1) month.
"(b) Commission - The Social Security Commission as herein created.
"(i) Contribution - The amount paid to the SSS by and on behalf of the
"(c) Employer- Any person, natural or juridical, domestic or foreign, members in accordance with Section Eighteen of this Act.
who carries on in the Philippines any trade, business, industry,
undertaking, or activity of any kind and uses the services of another "(j) Employment - Any service performed by an employee for his
person who is under his orders as regards the employment, except the employer except:
Government and any of its political subdivisions, branches or
instrumentalities, including corporations owned or controlled by the "(1) Employment purely casual and not for the purpose of
Government: Provided, That a self-employed person shall be both occupation or business of the employer;
employee and employer at the same time.
"(2) Service performed on or in connection with an alien vessel
"(d) Employee - Any person who performs services for an employer in by an employee if he is employed when such vessel is outside
which either or both mental or physical efforts are used and who the Philippines;
receives compensation for such services, where there is an employer-
"(3) Service performed in the employ of the Philippine
employee relationship: Provided, That a self-employed person shall be
Government or instrumentality or agency thereof;
both employee and employer at the same time.
"(4) Service performed in the employ of a foreign government
"(e) Dependents - The dependents shall be the following:
or international organization, or their wholly-owned
"(1) The legal spouse entitled by law to receive support from instrumentality: Provided, however, That this exemption
the member; notwithstanding, any foreign government, international
organization or their wholly-owned instrumentality employing
"(2) The legitimate, legitimated or legally adopted, and workers in the Philippines or employing Filipinos outside of
illegitimate child who is unmarried, not gainfully employed, the Philippines, may enter into an agreement with the
and has not reached twenty-one (21) years of age, or if over Philippine Government for the inclusion of such employees in
twenty-one (21) years of age, he is congenitally or while still a the SSS except those already covered by their respective civil
minor has been permanently incapacitated and incapable of service retirement systems: Provided, further, That the terms of
self-support, physically or mentally; and such agreement shall conform with the provisions of this Act
on coverage and amount of payment of contributions and
"(3) The parent who is receiving regular support from the benefits: Provided, finally, That the provisions of this Act shall
member. be supplementary to any such agreement; and

"(f) Compensation - All actual remuneration for employment, including "(5) Such other services performed by temporary and other
the mandated cost-of-living allowance, as well as the cash value of any employees which may be excluded by regulation of the
remuneration paid in any medium other than cash except that part of Commission. Employees of bona fide independent contractors
 shall not be deemed employees of the employer engaging the eighty five (1985) up to the calendar year containing the semester prior
service of said contractors. to the contingency. For a member covered in or after January nineteen
hundred and eighty five (1985), the number of calendar years in which
"(k) Beneficiaries - The dependent spouse until he or she remarries, the six (6) or more contributions have been paid from the year of coverage
dependent legitimate, legitimated or legally adopted, and illegitimate up to the calendar year containing the semester prior to the
children, who shall be the primary beneficiaries of the contingency: Provided, That the Commission may provide for a different
member: Provided, That the dependent illegitimate children shall be number of contributions in a calendar year for it to be considered as a
entitled to fifty percent (50%) of the share of the legitimate, legitimated credited year of service.
or legally adopted children: Provided, further, That in the absence of the
dependent legitimate, legitimated children of the member, his/her "(r) Member - The worker who is covered under Section Nine and
dependent illegitimate children shall be entitled to one hundred percent Section Nine-A of this Act.
(100%) of the benefits. In their absence, the dependent parents who
shall be the secondary beneficiaries of the member. In the absence of all "(s) Self-employed - Any person whose income is not derived from
the foregoing, any other person designated by the member as his/her employment, as defined under this Act, as well as those workers
secondary beneficiary. enumerated in Section Nine-A hereof.

"(l) Contingency - The retirement, death, disability, injury or sickness "(t) Net earnings - Net income before income taxes plus non-cash
and maternity of the member. charges such as depreciation and depletion appearing in the regular
financial statement of the issuing or assuming institution.
"(m) Average monthly salary credit - The result obtained by dividing the
sum of the last sixty (60) monthly salary credits immediately preceding "(u) Fixed charges - Recurring expense such as amortization of debt
the semester of contingency by sixty (60), or the result obtained by discount or rentals for leased properties, including interest on funded
dividing the sum of all the monthly salary credits paid prior to the and unfunded debt.
semester of contingency by the number of monthly contributions paid
"SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory upon all
in the same period, whichever is greater: Provided, That the injury or
employees not over sixty (60) years of age and their
sickness which caused the disability shall be deemed as the permanent
employers: Provided, That in the case of domestic helpers, their monthly
disability for the purpose of computing the average monthly salary
income shall not be less than One thousand pesos (P1,000.00) a
credit.
month: Provided, further, That any benefit already earned by the
"(n) Average daily salary credit- The result obtained by dividing the employees under private benefit plans existing at the time of the
sum of the six (6) highest monthly salary credits in the twelve-month approval of this Act shall not be discontinued, reduced or otherwise
period immediately preceding the semester of contingency by one impaired: Provided, further, That private plans which are existing and in
hundred eighty (180). force at the time of compulsory coverage shall be integrated with the
plan of the SSS in such a way where the employer's contribution to his
"(o) Semester - A period of two (2) consecutive quarters ending in the private plan is more than that required of him in this Act, he shall pay to
quarter of contingency. the SSS only the contribution required of him and he shall continue his
contribution to such private plan less his contribution to the SSS so that
"(p) Quarter - A period of three (3) consecutive calendar months ending the employer's total contribution to his benefit plan and to the SSS shall
on the last day of March, June, September and December. be the same as his contribution to his private benefit plan before the
compulsory coverage: Provided, further, That any changes, adjustments,
"(q) Credited years of service - For a member covered prior to January modifications, eliminations or improvements in the benefits to be
nineteen hundred and eighty five (1985) minus the calendar year of available under the remaining private plan, which may be necessary to
coverage plus the number of calendar years in which six (6) or more adopt by reason of the reduced contributions thereto as a result of the
contributions have been paid from January nineteen hundred and integration, shall be subject to agreements between the employers and
employees concerned: Provided, further, That the private benefit plan employer's contribution on his account and his obligation to pay
which the employer shall continue for his employees shall remain under contributions arising from that employment shall cease at the end of
the employer's management and control unless there is an existing the month of separation, but said employee shall be credited with all
agreement to the contrary: Provided, finally, That nothing in this Act contributions paid on his behalf and entitled to benefits according to
shall be construed as a limitation on the right of employers and the provisions of this Act. He may, however, continue to pay the total
employees to agree on and adopt benefits which are over and above contributions to maintain his right to full benefit.
those Provided under this Act.
"SEC. 11-A. Effect of Interruption of Business or Professional Income. - If
"(b) Spouses who devote full time to managing the household and the self-employed realizes no income in any given month, he shall not
family affairs, unless they are also engaged in other vocation or be required to pay contributions for that month. He may, however, be
employment which is subject to mandatory coverage, may be covered allowed to continue paying contributions under the same rules and
by the SSS on a voluntary basis. regulations applicable to a separated employee member: Provided, That
no retroactive payment of contributions shall be allowed other than as
"(c) Filipinos recruited by foreign-based employers for employment prescribed under Section Twenty-two-A hereof.
abroad may be covered by the SSS on a voluntary basis.
"SEC. 12. Monthly Pension. - (a) The monthly pension shall be the
"SEC. 9-A. Compulsory Coverage of the Self-Employed. - Coverage in the highest of the following amounts:
SSS shall also be compulsory upon such self-employed persons as may
be determined by the Commission under such rules and regulations as "(1) The sum of the following:
it may prescribe, including but not limited to the following:
"(i) Three hundred pesos (P300.00; plus
"1. All self-employed professionals;
"(ii) Twenty percent (20%) of the average monthly
"2. Partners and single proprietors of businesses; salary credit; plus

"3. Actors and actresses, directors, scriptwriters and news "(iii) Two percent (2%) of the average monthly salary
correspondents who do not fall within the definition of the credit for each credited year of service in excess of ten
term "employee" in Section 8 (d) of this Act; (10) years; or

"4. Professional athletes, coaches, trainers and jockeys; and "(2) Forth percent (40%) of the average monthly salary credit;
or
"5. Individual farmers and fishermen.
"(3) One thousand pesos (P1,000.00): Provided, That the
"Unless otherwise specified herein, all provisions of this Act applicable monthly pension shall in no case be paid for an aggregate
to covered employees shall also be applicable to the covered self- amount of less than sixty (60) months.
employed persons.
"(b) Notwithstanding the preceding paragraph, the minimum pension
"SEC. 10. Effective Date of Coverage. - Compulsory coverage of the shall be One thousand two hundred pesos (P1,200.00) for members
employer shall take effect on the first day of his operation and that of with at least ten (10) credited years of service and Two thousand four
the employee on the day of his employment: Provided, That the hundred pesos (P2,400.00) for those with twenty (20) credited years of
compulsory coverage of the self-employed person shall take effect upon service.
his registration with the SSS.
"SEC. 12-A. Dependents' Pension. - Where monthly pension is payable on
"SEC. 11. Effect of Separation from Employment. - When an employee account of death, permanent total disability or retirement, dependents'
under compulsory coverage is separated from employment, his pension equivalent to ten percent (10%) of the monthly pension or Two
hundred fifty pesos (P250.00), whichever is higher, shall also be paid "SEC. 13. Death Benefits. - Upon the death of a member who has paid at
for each dependent child conceived on or before the date of the least thirty-six (36) monthly contributions prior to the semester of
contingency but not exceeding five (5), beginning with the youngest and death, his primary beneficiaries shall be entitled to the monthly
without substitution: Provided, That where there are legitimate or pension: Provided, That if he has no primary beneficiaries, his
illegitimate children, the former shall be preferred. secondary beneficiaries shall be entitled to a lump sum benefit
equivalent to thirty-six (36) times the monthly pension. If he has not
SEC. 12-B. Retirement Benefits. - (a) A member who has paid at least paid the required thirty-six (36) monthly contributions, his primary or
one hundred twenty (120) monthly contributions prior to the semester secondary beneficiaries shall be entitled to a lump sum benefit
of retirement and who: (1) has reached the age of sixty (60) years and is equivalent to the monthly pension times the number of monthly
already separated from employment or has ceased to be self-employed; contributions paid to the SSS or twelve (12) times the monthly pension,
or (2) has reached the age of sixty-five (65) years, shall be entitled for whichever is higher.
as long as he lives to the monthly pension: Provided, That he shall have
the option to receive his first eighteen (18) monthly pensions in lump "SEC. 13-A. Permanent Disability Benefits. - (a) Upon the permanent
sum discounted at a preferential rate of interest to be determined by the total disability of a member who has paid at least thirty-six (36)
SSS. monthly contributions prior to the semester of disability, he shall be
entitled to the monthly pension: Provided, That if he has not paid the
"(b) A covered member who is sixty (60) years old at retirement and required thirty-six (36) monthly contributions, he shall be entitled to a
who does not qualify for pension benefits under paragraph (a) above, lump sum benefit equivalent to the monthly pension times the number
shall be entitled to a lump sum benefit equal to the total contributions of monthly contributions paid to the SSS or twelve (12) times the
paid by him and on his behalf: Provided, That he is separated from monthly pension, whichever is higher. A member who (1) has received a
employment and is not continuing payment of contributions to the SSS lump sum benefit; and (2) is reemployed or has resumed self-
on his own. employment not earlier than one (1) year from the date of his disability
shall again be subject to compulsory coverage and shall be considered a
"(c) The monthly pension shall be suspended upon the reemployment new member.
or resumption of self-employment of a retired member who is less than
sixty-five (65) years old. He shall again be subject to Section Eighteen "(b) The monthly pension and dependents' pension shall be suspended
and his employer to Section Nineteen of this Act. upon the reemployment or resumption of self-employment or the
recovery of the disabled member from his permanent total disability or
"(d) Upon the death of the retired member, his primary beneficiaries as his failure to present himself for examination at least once a year upon
of the date of his retirement shall be entitled to receive the monthly notice by the SSS.
pension: Provided, That if he has no primary beneficiaries and he dies
within sixty (60) months from the start of his monthly pension, his "(c) Upon the death of the permanent total disability pensioner, his
secondary beneficiaries shall be entitled to a lump sum benefit primary beneficiaries as of the date of disability shall be entitled to
equivalent to the total monthly pensions corresponding to the balance receive the monthly pension: Provided, That if he has no primary
of the five-year guaranteed period, excluding the dependents' pension. beneficiaries and he dies within sixty (60) months from the start of his
monthly pension, his secondary beneficiaries shall be entitled to a lump
"(e) The monthly pension of a member who retires after reaching age sum benefit equivalent to the total monthly pensions corresponding to
sixty (60) shall be the higher of either: (1) the monthly pension the balance of the five-year guaranteed period excluding the
computed at the earliest time he could have retired had he been dependents' pension.
separated from employment or ceased to be self-employed plus all
adjustments thereto; or (2) the monthly pension computed at the time "(d) The following disabilities shall be deemed permanent total:
when he actually retires.
"1. Complete loss of sight of both eyes;
 "2. Loss of two limbs at or above the ankle or wrists;
One leg 46
"3. Permanent complete paralysis of two limbs;
One ear 10
"4. Brain injury resulting to incurable imbecility or insanity;
and Both ears 20
"5. Such cases as determined and approved by the SSS.
Hearing of one ear 10
"(e) If the disability is permanent partial, and such disability occurs
before thirty-six (36) monthly contributions have been paid prior to the Hearing of both ears 50
semester of disability, the benefit shall be such percentage of the lump
sum benefit described in the preceding paragraph with due regard to Sight of one eye 25
the degree of disability as the Commission may determine.
"(g) The percentage degree of disability which is equivalent to the ratio
"(f) If the disability is permanent total and such disability occurs after that the designated number of months of compensability bears to
thirty-six (36) monthly contributions have been paid prior to the seventy-five (75), rounded to the next higher integer, shall not be
semester of disability, the benefit shall be the monthly pension for additive for distinct, separate and unrelated permanent partial
permanent total disability payable not longer than the period disabilities, but shall be additive for deteriorating and related
designated in the following schedule: permanent partial disabilities to a maximum of one hundred percent
(100%), in which case, the member shall be deemed as permanently
Complete and permanent Number of totally disabled.
loss of use of Months
"(h) In case of permanent partial disability, the monthly pension benefit
One thumb 10 shall be given in lump sum if it is payable for less than twelve (12)
months.
One index finger 8
"(i) For the purpose of adjudicating retirement, death and permanent
total disability pension benefits, contributions shall be deemed paid for
One middle finger 6
the months during which the member received partial disability
pension: Provided, That such contributions shall be based on his last
One right finger 5 contribution prior to his disability.

One little finger 3 "(j) Should a member who is on partial disability pension retire or die,
his disability pension shall cease upon his retirement or death.
One big toe 6
"SEC. 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve
thousand pesos (P12,000.00) shall be paid, in cash or in kind, to help
One hand 39
defray the cost of funeral expenses upon the death of a member,
including permanently totally disabled member or retiree.
One arm 50
"SEC. 14. Sickness Benefit. - (a) A member who has paid at least three
One foot 31 (3) monthly contributions in the twelve-month period immediately
preceding the semester of sickness or injury and is confined therefor for
more than three (3) days in a hospital or elsewhere with the approval of days after receipt of the notification from the employee member, said
the SSS, shall, for each day of compensable confinement or a fraction employer shall be reimbursed only for each day of confinement starting
thereof, be paid by his employer, or the SSS, if such person is from the tenth calendar day immediately preceding the date of
unemployed or self-employed, a daily sickness benefit equivalent to notification to the SSS: Provided, finally, That the SSS shall reimburse
ninety percent (90%) of his average daily salary credit, subject to the the employer or pay the unemployed member only for confinement
following conditions: within the one-year period immediately preceding the date the claim
for benefit or reimbursement is received by the SSS, except confinement
"(1) In no case shall the daily sickness benefit be paid longer than one in a hospital in which case the claim for benefit or reimbursement must
hundred twenty (120) days in one (1) calendar year, nor shall any be filed within one (1) year from the last day of confinement.
unused portion of the one hundred twenty (120) days of sickness
benefit granted under this section be carried forward and added to the "(d) Where the employee member has given the required notification
total number of compensable days allowable in the subsequent year; but the employer fails to notify the SSS of the confinement or to file the
claim for reimbursement within the period prescribed in this section
"(2) The daily sickness benefit shall not be paid for more than two resulting in the reduction of the benefit or denial of the claim, such
hundred forty (240) days on account of the same confinement; and employer shall have no right to recover the corresponding daily
allowance he advanced to the employee member as required in this
"(3) The employee member shall notify his employer of the fact of his section.
sickness or injury within five (5) calendar days after the start of his
confinement unless such confinement is in a hospital or the employee "(e)The claim of reimbursement shall be adjudicated by the SSS within
became sick or was injured while working or within the premises of the a period of two (2) months from receipt thereof: Provided, That should
employer in which case, notification to the employer is no payment be received by the employer within one (1) month after the
necessary: Provided, That if the member is unemployed or self- period prescribed herein for adjudication, the reimbursement shall
employed, he shall directly notify the SSS of his confinement within five thereafter earn simple interest of one percent (1%) per month until
(5) calendar days after the start thereof unless such confinement is in a paid.
hospital in which case notification is also not
necessary: Provided, further, That in cases where notification is "(f) The provisions regarding the notification required of the member
necessary, the confinement shall be deemed to have started not earlier and the employer as well as the period within which the claim for
than the fifth day immediately preceding the date of notification. benefit or reimbursement may be filed shall apply to all claims filed
with the SSS.
"(b) The compensable confinement shall begin on the first day of
sickness, and the payment of such allowances shall be promptly made "SEC. 14-A. Maternity Leave Benefit. - A female member who has paid at
by the employer every regular payday or on the fifteenth and last day of least three (3) monthly contributions in the twelve-month period
each month, and similarly in the case of direct payment by the SSS, for immediately preceding the semester of her childbirth or miscarriage
as long as such allowances are due and payable: Provided, That such shall be paid a daily maternity benefit equivalent to one hundred
allowance shall begin only after all sick leaves of absence with full pay percent (100%) of her average daily salary credit for sixty (60) days or
to the credit of the employee member shall have been exhausted. seventy-eight (78) days in case of caesarian delivery, subject to the
following conditions:
"(c) One hundred percent (100%) of the daily benefits Provided in the
preceding paragraph shall be reimbursed by the SSS to said employer "(a) That the employee shall have notified her employer of her
upon receipt of satisfactory proof of such payment and legality pregnancy and the probable date of her childbirth, which notice shall be
thereof: Provided, That the employer has notified the SSS of the transmitted to the SSS in accordance with the rules and regulations it
confinement within five (5) calendar days after receipt of the may provide;
notification from the employee member: Provided, further, That if the
notification to the SSS is made by the employer beyond five (5) calendar
"(b) The full payment shall be advanced by the employer within thirty shall be recognized, except when they are physically unable to collect
(30) days from the filing of the maternity leave application; personally such benefits: Provided, further, That in case of death
benefits, if no beneficiary qualifies under this Act, said benefits shall be
"(c) That payment of daily maternity benefits shall be a bar to the paid to the legal heirs in accordance with the law of succession.
recovery of sickness benefits Provided by this Act for the same period
for which daily maternity benefits have been received; "SEC. 16. Exemption from Tax, Legal Process and Lien. -- All laws to the
contrary notwithstanding, the SSS and all its assets and properties, all
"(d) That the maternity benefits Provided under this section shall be contributions collected and all accruals thereto and income or
paid only for the first four (4) deliveries or miscarriages; investment earnings therefrom as well as all supplies, equipment,
papers or documents shall be exempt from any tax, assessment, fee,
"(e) That the SSS shall immediately reimburse the employer of one charge, or customs or import duty; and all benefit payments made by
hundred percent (100%) of the amount of maternity benefits advanced the SSS shall likewise be exempt from all kinds of taxes, fees or charges,
to the employee by the employer upon receipt of satisfactory proof of and shall not liable to attachments, garnishments, levy or seizure by or
such payment and legality thereof; and under any legal or equitable process whatsoever, either before or after
receipt by the person or persons entitled thereto, except to pay any debt
"(f) That if an employee member should give birth or suffer miscarriage
of the member to the SSS. No tax measure of whatever nature enacted
without the required contributions having been remitted for her by her
shall apply to the SSS, unless it expressly revokes the declared policy of
employer to the SSS, or without the latter having been previously
the State in Section 2 hereof granting tax-exemption to the SSS. Any tax
notified by the employer of the time of the pregnancy, the employer
assessment imposed against the SSS shall be null and void. (As
shall pay to the SSS damages equivalent to the benefits which said
amended by Sec. 9, P.D. No. 24, S. 1972; and Sec. 14, P. D. No. 735, S.
employee member would otherwise have been entitled to.
1975).
"SEC. 15. Non-Transferability of Benefits. - The SSS shall promptly pay
"SEC. 17. Fee of Agents, Attorneys, Etc. - No agent, attorney or other
the benefits Provided in this Act to such persons as may be entitled
person in charge of the preparation, filing or pursuing any claim for
thereto in accordance with the provisions of this Act: Provided, That the
benefit under this Act shall demand or charge for his services any fee,
SSS shall pay the retirement benefits on the day of contingency to
and any stipulation to the contrary shall be null and void. The retention
qualified members who have submitted the necessary documents at
or deduction of any amount from any benefit granted under this Act for
least six (6) months before: Provided, further, That the beneficiary who
the payment of fees for such services is prohibited: Provided, however,
is a national of a foreign country which does not extend benefits to a
That any member of the Philippine Bar who appears as counsel in any
Filipino beneficiary residing in the Philippines, or which is not
case heard by the Commission shall be entitled to attorneys' fees not
recognized by the Philippines, shall not be entitled to receive any
exceeding ten percent (10%) of the benefits awarded by the
benefit under this Act: Provided, further, That notwithstanding the
Commission, which fees shall not be payable before the actual payment
foregoing, where the best interest of the SSS will be served, the
of the benefits, and any stipulation to the contrary shall be null and
Commission may direct payments without regard to nationality or
void.
country of residence: Provided, further, That if the recipient is a minor
or a person incapable of administering his own affairs, the Commission "Any violation of the provisions of this Section shall be punished by a
shall appoint a representative under such terms and conditions as it fine of not less than Five hundred pesos (P500.00) nor more than Five
may deem proper: Provided, further, That such appointment shall not be thousand pesos (P5,000.00), or imprisonment for not less than six (6)
necessary in case the recipient is under the custody of or living with the months nor more than one (1) year, or both, at the discretion of the
parents or spouse of the member in which case the benefits shall be court.
paid to such parents or spouse, as representative payee of the recipient.
Such benefits are not transferable and no power of attorney or other "SEC. 18. Employee's Contributions. - (a) Beginning as of the last day of
document executed by those entitled thereto in favor of any agent, the calendar month when an employee's compulsory coverage takes
attorney or any other person for the collection thereof on their behalf effect and every month thereafter during his employment, the employer
shall deduct and withhold from such employee's monthly salary, wage, "The foregoing schedule of contribution shall also apply to self-
compensation or earnings, the employee's contribution in an amount employed and voluntary members.
corresponding to his salary, wage, compensation or earnings during the
month in accordance with the following schedule: "The maximum monthly salary credit shall be Nine thousand pesos
(P9,000.00) effective January Nineteen hundred and ninety six
SALARY RANGE OF MONTHLY (1996); Provided, That it shall be increased by One thousand pesos
BRACKET COMPENSATION SALARY (P1,000.00) every year thereafter until it shall have reached Twelve
CREDIT EMPLOYER thousand pesos (P12,000.00) by Nineteen hundred and ninety nine
(1999): Provided, further, That the minimum and maximum monthly
I 1,000.00 - 1,249.99 1000 salary credits as well as the rate of contributions may be fixed from
time to time by the Commission through rules and regulations taking
II 1,250.00 - 1,749.99 1500 into consideration actuarial calculations and rate of benefits, subject to
the approval of the President of the Philippines.
III 1,750.00 - 2,249.99 2000 101.30
"SEC. 19. Employer's Contributions. - (a) Beginning as of the last day of
the month when an employee's compulsory coverage takes effect and
IV 2,250.00 - 2,749.99 2500 126.70
every month thereafter during his employment, his employer shall pay,
with respect to such covered employee, the employer's contribution in
V 2,750.00 - 3,249.99 3000 152.00
accordance with the schedule indicated in Section Eighteen of this Act.
Notwithstanding any contract to the contrary, an employer shall not
VI 3,250.00 - 3,749.99 3500 177.30 deduct, directly or indirectly, from the compensation of his employees
covered by the SSS or otherwise recover from them the employer's
VII 3,750.00 - 4,249.99 4000 202.70 contributions with respect to such employees.

VIII 4,250.00 - 4,749.99 4500 228.00 "(b) The remittance of such contributions by the employer shall be
supported by a quarterly collection list to be submitted to the SSS at the
IX 4,750.00 - 5,249.99 5000 253.30 end of each calendar quarter indicating the correct ID number of the
employer, the correct names and the SSS numbers of the employees and
X 5,250.00 - 5,749.99 5500 278.70 the total contributions paid for their account during the quarter.

XI 5,750.00 - 6,249.99 6000 304.00 "SEC. 19-A. Contributions of the Self-Employed Member. - The
contributions to the SSS of the self-employed member shall be
XII 6,250.00 - 6,749.99 6500 329.30 determined in accordance with Section Eighteen of this Act: Provided,
That the monthly earnings declared by the self-employed member at
XIII 6,750.00 - 7,249.99 7000 354.70 the time of his registration with the SSS shall be considered as his
monthly compensation and he shall pay both the employer and the
XIV 7,250.00 - 7,749.99 7500 380.00 employee contributions: Provided, further, That the contributions of
self-employed persons earning One thousand pesos (P1,000.00)
XV 7,750.00 - 8.249.99 8000 403.30 monthly or below may be reduced by the Commission.

"The monthly earnings declared by the self-employed member at the

XVI 8,250.00 - 8,749.99 8500 430.70 time of his registration shall remain the basis of his monthly salary
credit, unless he makes another declaration of his monthly earnings, in
XVII 8,750.00 - OVER 9000 456.00
which case such latest declaration becomes the new basis of his known or the assessment is made by the SSS, or from the time the
monthly salary credit. benefit accrues, as the case may be.

"SEC. 20. Government Contribution. - As the contribution of the "(c) Should any person, natural or juridical, default in any payment of
Government to the operation of the SSS, Congress shall annually contributions, the Commission may also collect the same in either of
appropriate out of any funds in the National Treasury not otherwise the following ways:
appropriated, the necessary sum or sums to meet the estimated
expenses of the SSS for each ensuing year. In addition to this "1. By an action in court, which shall hear and dispose of the
contribution, Congress shall appropriate from time to time such sum or case in preference to any other civil action; or
sums as may be needed to assure the maintenance of an adequate
"2. By issuing a warrant to the Sheriff of any province or city
working balance of the funds of the SSS as disclosed by suitable
commanding him to levy upon and sell any real and personal
periodic actuarial studies to be made of the operations of the SSS.
property of the debtor. The Sheriff's sale by virtue of said
"SEC. 21. Government Guarantee. -- The benefits prescribed in this Act warrant shall be governed by the same procedure prescribed
shall not be diminished and to guarantee said benefits the Government for executions against property upon judgments by a court of
of the Republic of the Philippines accepts general responsibility for the record.
solvency of the SSS.
"(d) The last complete record of monthly contributions paid by the
"SEC. 22. Remittance of Contributions. -- (a) The contributions imposed employer or the average of the monthly contributions paid during the
in the preceding Section shall be remitted to the SSS within the first ten past three (3) years as of the date of filing of the action for collection
(10) days of each calendar month following the month for which they shall be presumed to be the monthly contributions payable by and due
are applicable or within such time as the Commission may prescribe. from the employer to the SSS for each of the unpaid month, unless
Every employer required to deduct and to remit such contributions contradicted and overcome by other evidence: Provided, That the SSS
shall be liable for their payment and if any contribution is not paid to shall not be barred from determining and collecting the true and correct
the SSS as herein prescribed, he shall pay besides the contribution a contributions due the SSS even after full payment pursuant to this
penalty thereon of three percent (3%) per month from the date the paragraph, nor shall the employer be relieved of his liability under
contribution falls due until paid. If deemed expedient and advisable by Section Twenty-eight of this Act.
the Commission, the collection and remittance of contributions shall be
"SEC. 22-A. Remittance of Contributions of Self-Employed Member. - Self-
made quarterly or semi-annually in advance, the contributions payable
employed members shall remit their monthly contributions quarterly
by the employees to be advanced by their respective
on such dates and schedules as the Commission may specify through
employers: Provided, That upon separation of an employee, any
rules and regulations: Provided, That no retroactive payment of
contribution so paid in advance but not due shall be credited or
contributions shall be allowed, except as Provided in this Section.
refunded to his employer.
"SEC. 23. Method of Collection and Payment. - The SSS shall require a
"(b) The contributions payable under this Act in cases where an
complete and proper collection and payment of contributions and
employer refuses or neglects to pay the same shall be collected by the
proper identification of the employer and the employee. Payment may
SSS in the same manner as taxes are made collectible under the
be made in cash, checks, stamps, coupons, tickets, or other reasonable
National Internal Revenue Code, as amended. Failure or refusal of the
devices that the Commission may adopt.
employer to pay or remit the contributions herein prescribed shall not
prejudice the right of the covered employee to the benefits of the "SEC. 24. Employment Records and Reports. - (a) Each employer shall
coverage. immediately report to the SSS the names, ages, civil status, occupations,
salaries and dependents of all his employees who are subject to
"The right to institute the necessary action against the employer may be
compulsory coverage: Provided, That if an employee subject to
commenced within twenty (20) years from the time the delinquency is
compulsory coverage should die or become sick or disabled or reach unless the necessary corrections to such records and reports have been
the age of sixty (60) without the SSS having previously received any properly made by the parties concerned before the right to the benefit
report or written communication about him from his employer, the said being claimed accrues, and shall be made the basis for the adjudication
employer shall pay to the SSS damages equivalent to the benefits to of the claim. If as a result of such adjudication the SSS in good faith pays
which said employee member would have been entitled had his name a monthly pension to a beneficiary who is inferior in right to another
been reported on time by the employer to the SSS, except that in case of beneficiary or with whom another beneficiary is entitled to share, such
pension benefits, the employer shall be liable to pay the SSS damages payments shall discharge the SSS from liability unless and until such
equivalent to the accumulated pension due as of the date of settlement other beneficiary notifies the SSS of his claim prior to the payments.
of the claim or to the five (5) years' pension, including dependents'
pension: Provided, further, That if the contingency occurs within thirty "(d) Every employer shall keep true and accurate work records for such
(30) days from the date of employment, the employer shall be relieved period and containing such information as the Commission may
of his liability for damages: Provided, further, That any person or entity prescribe, in addition to an "Annual Register of New and Separated
engaging the services of an independent contractor shall be subsidiarily Employees" which shall be secured from the SSS wherein the employer
liable with such contractor for any civil liability incurred by the latter shall enter on the first day of employment or on the effective date of
under this Act: Provided, finally, That the same person or entity separation, the names of the persons employed or separated from
engaging the services of an independent contractor shall require such employment, their SSS numbers, and such other data that the
contractor to post a surety bond to guarantee the payment of the Commission may require and said annual register shall be submitted to
worker's benefits. the SSS in the month of January of each year. Such records shall be open
for inspection by the SSS or its authorized representatives quarterly or
"(b) Should the employer misrepresent the true date of employment of as often as the SSS may require.
the employee member or remit to the SSS contributions which are less
than those required in this Act or fail to remit any contribution due "The SSS may also require each employer to submit, with respect to the
prior to the date of contingency, resulting in a reduction of benefits, the persons in his employ, reports needed for the effective administration of
employer shall pay to the SSS damages equivalent to the difference this Act.
between the amount of benefit to which the employee member or his
"(e) Each employer shall require, as a condition to employment, the
beneficiary is entitled had the proper contributions been remitted to
presentation of a registration number secured by the prospective
the SSS and the amount payable on the basis of contributions actually
employee from the SSS in accordance with such procedure as the SSS
remitted: Provided, That if the employee member or his beneficiary is
may adopt: Provided, That in case of employees who have been assigned
entitled to pension benefits, damages shall be equivalent to the
registration numbers by virtue of a previous employment, such
accumulated pension due as of the date of settlement of the claim or to
numbers originally assigned to them should be used for purposes of this
the five (5) years' pension, whichever is higher, including dependents'
Section: Provided, further, That the issuance of such registration
pension.
numbers by the SSS shall not exempt the employer from complying with
"In addition to the liability mentioned in the preceding paragraphs (a) the provisions of paragraph (a) of this Section.
and (b) hereof, the employer shall also be liable for the corresponding
"(f) Notwithstanding any law to the contrary, microfilm, or non-
unremitted contributions and penalties thereon.
erasable optical disk and other similar archival media copies of original
"(c) The records and reports duly accomplished and submitted to the SSS records and reports, duly certified by the official custodian thereof,
SSS by the employer or the member, as the case may be, shall be kept shall have the same evidentiary value as the originals and be admissible
confidential by the SSS except in compliance with a subpoena duces as evidence in all legal proceedings.
tecum issued by the Court, shall not be divulged without the consent of
"(g) Notwithstanding any law to the contrary, local government units
the SSS President or any official of the SSS duly authorized by him, shall
shall, prior to issuing any annual business license or permit, require
be presumed correct as to the data and other matters stated therein,
submission of certificate of SSS coverage and compliance with the
provisions of this Act: Provided, That the certification or clearance shall "(b) In bonds, securities, promissory notes or other evidence of
be issued by the SSS within five (5) working days from receipt of the indebtedness of the Government of the Philippines, or any agencies or
request. instrumentalities to finance domestic infrastructure projects such as
roads, bridges, ports, telecommunications, and other similar
"SEC. 24-A. Report and Registration of the Self-Employed Member. - Each projects: Provided, That the instruments issued by an agency or
covered self-employed person shall, within thirty (30) days from the instrumentality of the government shall be guaranteed by the
first day he started the practice of his profession or business operations Government of the Philippines or any government financial institution
register and report to the SSS his name, age, civil status, and or acceptable multilateral agency: Provided, further, That the SSS shall
occupation, average monthly net income and his dependents. have priority over the revenues of the projects: Provided, finally, That
such investments shall not exceed thirty percent (30%) of the
"SEC. 25. Deposits and Disbursements. - All money paid to or collected by Investment Reserve Fund;
the SSS every year under this Act, and all accruals thereto shall be
deposited, administered and disbursed in the same manner and under "(c) In bonds, securities, promissory notes or other evidence of
the same conditions and requirements as Provided by law for other indebtedness of government financial institutions or government
public special funds: Provided, That not more than twelve percent corporations with acceptable credit or guarantee: Provided, That such
(12%) of the total yearly contributions plus three percent (3%) of other investments shall not exceed thirty percent (30%) of the Investment
revenues shall be disbursed for operational expenses such as salaries Reserve Fund;
and wages, supplies and materials, depreciation and the maintenance of
offices of the SSS: Provided, further, That if the expenses in any year are "(d) In bonds, securities, promissory notes or other evidence of
less than the maximum amount permissible, the difference shall not be indebtedness of any bank doing business in the Philippines and in good
availed of as additional expenses in the following years. standing with the Bangko Sentral ng Pilipinas to finance loans to private
corporations doing business in the Philippines, including schools,
"SEC. 26. Investment of Reserve Funds. - All revenues of the SSS that are hospitals, small-and-medium scale industries, cooperatives and non-
not needed to meet the current administrative and operational expenses governmental organizations, in which case the collaterals or securities
incidental to the carrying out of this Act shall be accumulated in a fund shall be assigned to the SSS under such terms and conditions as the
to be known as the "Reserve Fund." Such portions of the Reserve Fund Commission may prescribe: Provided, That in the case of bank deposits,
as are not needed to meet the current benefit obligations thereof shall they shall not exceed at any time the unimpaired capital and surplus or
be known as the "Investment Reserve Fund" which the Commission total private deposits of the depository bank, whichever is
shall manage and invest with the skill, care, prudence and diligence smaller: Provided, further, That said bank shall first have been
necessary under the circumstances then prevailing that a prudent man designated as a depository for this purpose by the Monetary Board of
acting in like capacity and familiar with such matters would exercise in the Bangko Sentral ng Pilipinas: Provided, finally, That such investments
the conduct of an enterprise of a like character and with similar aims. shall not exceed forty percent (40%) of the Investment Reserve Fund;
Pursuant thereto, and in line with the basic principles of safety, good
yield and liquidity, the Commission shall invest the funds to earn an "(e) In bonds, securities, promissory notes or other evidence of
annual income not less than the average rates of treasury bills or any indebtedness of shelter agencies of the National Government or
other acceptable market yield indicator in any or in all of the following: financial intermediaries to finance housing loans of members; and in
long-term direct individual or group housing loans giving priority to the
"(a) In bonds, securities, promissory notes or other evidence of low-income groups, up to a maximum of ninety percent (90%) of the
indebtedness of the Government of the Philippines, or in bonds, appraised value of the properties to be mortgaged by the borrowers;
securities, promissory notes or other evidence of indebtedness to which and
the full faith, credit and unconditional guarantee of the Government of
the Philippines is pledged; "In short and medium term loans to members such as salary,
educational, livelihood, marital, calamity and emergency
loans: Provided, That not more than thirty five percent (35%) of the
Investment Reserve Fund at any time shall be invested for housing period: Provided, That such investments shall not exceed thirty percent
purposes: Provided, further, That not more than ten percent (10%) of (30%) of the Investment Reserve Fund;
the Investment Reserve Fund shall be invested in short and medium
term loans; "(j) In domestic or foreign mutual funds in existence for at least three
(3) years; Provided, That such investments shall not exceed twenty
"(f) In bonds, securities, promissory notes or other evidence of percent (20%) of the Investment Reserve Fund: Provided, further, That
indebtedness of educational or medical institutions to finance the investments in foreign mutual funds shall not exceed one percent (1%)
construction, improvement and maintenance of schools and hospitals of the Investment Reserve Fund in the first year which shall be
and their equipment and facilities: Provided, That such investments increased by one percent (1%) for each succeeding year, but in no case
shall not exceed ten percent (10%) of the Investment Reserve Fund; shall it exceed seven and one-half percent (7.5%) of the Investment
Reserve Fund;
"(g) In real estate property, including shares of stocks involving real
estate property, and investment secured by first mortgages on real "(k) In foreign currency deposits or triple "A" foreign currency
estate or other collaterals acceptable to the SSS: Provided, That such denominated debts, prime and non-speculative equities, and other
projects and investments shall, in the determination of the Commission, Bangko Sentral ng Pilipinas approved financial instruments or other
redound to the benefit of the SSS, its members, as well as the general assets issued in accordance with the existing laws of the countries
public: Provided, further, That investment in real estate property, where such financial instruments are issued: Provided, That these
including shares of stocks involving real estate property shall not exceed instruments or assets are listed in bourses of the respective countries
five percent (5%) of the Investment Reserve Fund: Provided, finally, where these instruments or assets are issued: Provided, further, That
That investments in other income earning projects and investments the issuing company has proven track of record of profitability over the
secured by first mortgages or other collaterals shall not exceed twenty last three (3) years and a record of regular dividend pay-out over the
five percent (25%) of the Investment Reserve Fund; same period: Provided, finally, That such investments shall not exceed
one percent (1%) of the Investment Reserve Fund in the first year
"(h) In bonds, debentures, securities, promissory notes or other which shall be increased by one percent (1%) for each succeeding year,
evidence of indebtedness of any prime corporation or multilateral but in no case shall it exceed seven and one-half percent (7.5%) of the
institutions to finance domestic projects: Provided, That the issuing or Investment Reserve Fund;
assuming entity or its predecessors shall not have defaulted in the
payment of interest on any of its securities and that during each of any "(l) In loans secured by such collaterals like cash, government securities
three (3) including the last two (2) of the five (5) fiscal years next or guarantees of multilateral institutions: Provided, That such
preceding the date of acquisition by the SSS of such bonds, debentures investments shall not exceed thirty percent (30%) of the Investment
or other evidence of indebtedness, the net earnings of the issuing or Reserve Fund; and
assuming institution available for its fixed charges, as defined in this
Act, shall have been not less than one and one-quarter times the total of "(m) In other Bangko Sentral ng Pilipinas approved investment
its fixed charges for such year: Provided, further, That such investments instruments with the same intrinsic quality as those enumerated in
shall not exceed thirty percent (30%) of the Investment Reserve Fund; paragraphs (a) to (l) hereof, subject to the policies and guidelines which
the Commission may formulate.
"(i) In preferred or common shares of stocks listed or about to be listed
in the stock exchange or options or warrants to such stocks or, subject "No portion of the Investment Reserve Fund or income thereof shall
to prior approval of the Bangko Sentral ng Pilipinas, such other risk accrue to the general fund of the National Government or to any of its
management instruments of any prime or solvent corporation or agencies or instrumentalities, including government-owned or
financial institution created or existing under the laws of the controlled corporations, except as may be allowed under this
Philippines with proven track record of profitability over the last three Act: Provided, That no portion of the Investment Reserve Fund shall be
(3) years and payment of dividends at least once over the same invested for any purpose or in any instrument, institution or industry
over and above the prescribed cumulative ceilings as follows:
 40% in private securities shall be furnished the Office of the President of the Philippines within a
reasonable time after the close of the examination: Provided, That for
35% in housing each examination, the SSS shall pay to the Insurance Commission an
amount equal to the actual expense of the Insurance Commission in the
30% in real estate related investments conduct of examination, including the salaries of the examiners and of
the actuary of the Insurance Commission who have been assigned to
10% in short and medium-term member loans
make such examination for the actual time spent in said
30% in government financial institutions and corporations examination: Provided, further, That the general law on insurance and
the rules and regulations promulgated thereunder shall have suppletory
30% in infrastructure projects application insofar as it is not in conflict with this Act and its rules and
regulations.
15% in any particular industry
"SEC. 27. Records and Reports. - The SSS President shall keep and cause
7.5% in foreign-currency denominated investments to keep records of operations of the funds of the SSS and of
disbursements thereof and all accounts of payments made out of said
"SEC. 26-A. Fund Managers. - As part of its investment operations, the funds. During the month of January of each year, the SSS President shall
SSS may appoint local or, in the absence thereof, foreign fund managers prepare for submission to the President of the Philippines and to
to manage the Investment Reserve Fund, as it may deem appropriate. Congress of the Philippines a report of operations of the SSS during the
preceding year, including statistical data on the number of persons
"SEC. 26-B. Mortgagor Insurance Account. - (a) As part of its investment
covered and benefited, their occupations and employment status, the
operations, the SSS shall act as insurer of all or part of its interest on
duration and amount of benefits paid, the finances of the SSS at the
SSS properties mortgaged to the SSS, or lives of mortgagors whose
close of the said year, and recommendations. He shall also cause to be
properties are mortgaged to the SSS. For this purpose, the SSS shall
published in two (2) newspapers of general circulation in the
establish a separate account to be known as the "Mortgagors' Insurance
Philippines a synopsis of the annual report, showing in particular the
Account." All amounts received by the SSS in connection with the
status of the finances of the SSS and the benefits administered.
aforesaid insurance operations shall be placed in the Mortgagors'
Insurance Account. The assets and liabilities of the Mortgagors' "SEC. 28. Penal Clause. - (a) Whoever, for the purpose of causing any
Insurance Account shall at all times be clearly identifiable and payment to be made under this Act, or under an agreement thereunder,
distinguishable from the assets and liabilities in all other accounts of where none is authorized to be paid, shall make or cause to be made
the SSS. Notwithstanding any provision of law to the contrary, the false statement or representation as to any compensation paid or
assets held in the Mortgagors' Insurance Account shall not be received or whoever makes or causes to be made any false statement of
chargeable with the liabilities arising out of any other business the SSS a material fact in any claim for any benefit payable under this Act, or
may conduct but shall be held and applied exclusively for the benefit of application for loan with the SSS, or whoever makes or causes to be
the owners or beneficiaries of the insurance contracts issued by the SSS made any false statement, representation, affidavit or document in
under this paragraph. connection with such claim or loan, shall suffer the
penalties Provided for in Article One hundred seventy-two of the
"(b) The SSS may insure any of its interest or part thereof with any
Revised Penal Code.
private company or reinsurer. The Insurance Commission or its
authorized representatives shall make an examination into the financial "(b) Whoever shall obtain or receive any money or check under this Act
condition and methods of transacting business of the SSS at least once or any agreement thereunder, without being entitled thereto with intent
in two (2) years, but such examination shall be limited to the insurance to defraud any member, employer or the SSS, shall be fined not less than
operation of the SSS as authorized under this paragraph and shall not Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos
embrace the other operations of the SSS; and the report of said
examination shall be submitted to the Commission and a copy thereof
(P20,000.00) and imprisoned for not less than six (6) years and one (1) "(g) Any employee of the SSS who receives or keeps funds or property
day nor more than twelve (12) years. belonging, payable or deliverable to the SSS and who shall appropriate
the same, or shall take or misappropriate, or shall consent, or through
"(c) Whoever buys, sells, offers for sale, uses, transfers or takes or gives abandonment or negligence, shall permit any other person to take such
in exchange, or pledges or gives in pledge, except as authorized in this property or funds, wholly or partially, or shall otherwise be guilty of
Act or in regulations made pursuant thereto, any stamp, coupon, ticket, misappropriation of such funds or property, shall suffer the
book or other device, prescribed pursuant to Section Twenty-three penalties Provided in Article Two hundred seventeen of the Revised
hereof by the Commission for the collection or payment of Penal Code.
contributions required herein, shall be fined not less than Five thousand
pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), "(h) Any employer who, after deducting the monthly contributions or
or imprisoned for not less than six (6) years and one (1) day nor more loan amortizations from his employee's compensation, fails to remit the
than twelve (12) years, or both, at the discretion of the court. said deduction to the SSS within thirty (30) days from the date they
became due, shall be presumed to have misappropriated such
"(d) Whoever, with intent to defraud, alters, forges, makes or contributions or loan amortizations and shall suffer the
counterfeits any stamp, coupon, ticket, book or other device prescribed penalties Provided in Article Three hundred fifteen of the Revised Penal
by the Commission for the collection or payment of any contribution Code.
required herein, or uses, sells, lends, or has in his possession any such
altered, forged or counterfeited materials, or makes, uses, sells or has in "(i) Criminal action arising from a violation of the provisions of this Act
his possession any such altered, forged, material in imitation of the may be commenced by the SSS or the employee concerned either under
material used in the manufacture of such stamp, coupon, ticket, book or this Act or in appropriate cases under the Revised Penal Code: Provided,
other device, shall be fined not less than Five thousand pesos That such criminal action may be filed by the SSS in the city or
(P5,000.00) non more than Twenty thousand pesos (P20,000.00) or municipality where the SSS office is located, if the violation was
imprisoned for not less than six years (6) and one (1) day nor more committed within its territorial jurisdiction or in Metro Manila, at the
than twelve (12) years, or both, at the discretion of the court. option of the SSS.

"(e) Whoever fails or refuses to comply with the provisions of this Act "SEC. 29. Government Aid. - The establishment of the SSS shall not
or with the rules and regulations promulgated by the Commission, shall disqualify the members and employers from receiving such government
be punished by a fine of not less than Five thousand pesos (P5,000.00) assistance, financial or otherwise, as may be Provided.
nor more than Twenty thousand pesos (P20,000.00), or imprisonment
for not less than six (6) years and one (1) day nor more than twelve (12) "SEC. 30. Transitory Clause. - Any employer who is delinquent or has not
years, or both, at the discretion of the court: Provided, That where the remitted all contributions due and payable to the SSS may, within six (6)
violation consists in failure or refusal to register employees or himself, months from the effectivity of this Act, remit said contributions or
in case of the covered self-employed or to deduct contributions from the submit a proposal to pay the same in installment within a period of not
employees' compensation and remit the same to the SSS, the penalty more than twelve (12) months from the effectivity of this Act without
shall be a fine of not less Five thousand pesos (P5,000.00) nor more incurring the prescribed penalty, subject to the implementing rules and
than Twenty thousand pesos (P20,000.00) and imprisonment for not regulations which the Commission may prescribe: Provided, That the
less than six (6) years and one (1) day nor more than twelve (12) years. employer submits the corresponding collection lists together with the
remittance or proposal to pay in installments: Provided, further, That in
"(f) If the act or omission penalized by this Act be committed by an case the employer fails to remit contributions within the six-month
association, partnership, corporation or any other institution, its grace period or defaults in the payment of any
managing head, directors or partners shall be liable for the amortization Provided the approved proposal, the prescribed penalty
penalties Provided in this Act for the offense. shall be imposed from the time the contributions first became due
as Provided in Section 22 (a) hereof."
Section 2. Separability Clause. - If any provision of this Act is declared invalid,
the other provisions not affected thereby shall remain valid.

Section 3. Repealing Clause. - All laws, proclamations, executive orders, rules

and regulations or parts thereof inconsistent with this Act are hereby repealed,
modified or amended accordingly: Provided, That no person shall be deemed to
be vested with any property or other right by virtue of the enactment or
operation of this Act.

Section 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after
its complete publication in the Official Gazette or in at least two (2) national
newspapers of general circulation whichever comes earlier.

Approved: May 01, 1997

 Republic of the Philippines "(e) Active Member- A member who is not separated from the service;
Congress of the Philippines
Metro Manila "(f) Dependents- Dependents shall be the following: (a) the legitimate
spouse dependent for support upon the member or pensioner; (b) the
Tenth Congress legitimate, legitimated, legally adopted child, including the illegitimate
child, who is unmarried, not gainfully employed, not over the age of
majority, or is over the age of majority but incapacitated and incapable
of self-support due to a mental or physical defect acquired prior to age
Republic Act No. 8291 May 30, 1997 of majority; and (c) the parents dependent upon the member for
support;
AN ACT AMENDING PRESIDENTIAL DECREE NO. 1146, AS AMENDED,
EXPANDING AND INCREASING THE COVERAGE AND BENEFITS OF THE "(g) Primary beneficiaries- The legal dependent spouse until he/she
GOVERNMENT SERVICE INSURANCE SYSTEM, INSTITUTING REFORMS remarries and the dependent children;
THEREIN AND FOR OTHER PURPOSES
"(h) Secondary beneficiaries- The dependent parents and, subject to the
Be it enacted by the Senate and House of Representatives of the Philippines in restrictions on dependent children, the legitimate descendants;
Congress assembled::
"(i) Compensation- The basic pay or salary received by an employee,
Section 1. Presidential Decree No. 1146, as amended, otherwise known as pursuant to his election/appointment, excluding per diems, bonuses,
the "Revised Government Service Insurance Act of 1977", is hereby further overtime pay, honoraria, allowances and any other emoluments
amended to read as follows: received in addition to the basic pay which are not integrated into the
basic pay under existing laws;
"SECTION 1. Title. - The title of this Act shall be: "The Government
Service Insurance System Act of 1997." "(j) Contribution- The amount payable to the GSIS by the member and
the employer in accordance with Section 5 of this Act;
"A. DEFINITIONS
"(k) Current Daily Compensation- The actual daily compensation or the
"SEC. 2. Definition of terms.- Unless the context otherwise indicates, the actual monthly compensation divided by the number of working days in
following terms shall mean: the month of contingency but not to exceed twenty-two (22) days;
"(a) GSIS- The Government Service Insurance System created by "(l) Average Monthly Compensation (AMC)- The quotient arrived at after
Commonwealth Act No. 186; dividing the aggregate compensation received by the member during
his last thirty-six (36) months of service preceding his
"(b) Board- The Board of Trustees of the Government Service Insurance
separation/retirement/ disability/death by thirty-six (36), or by the
System;
number of months he received such compensation if he has less than
"(c) Employer- The national government, its political subdivisions, thirty-six (36) months of service: Provided, That the average monthly
branches, agencies or instrumentalities, including government-owned compensation shall in no case exceed the amount and rate as may be
or controlled corporations, and financial institutions with original respectively set by the Board under the rules and regulations
charters, the constitutional commissions and the judiciary; implementing this Act as determined by the actuary of the
GSIS: Provided, further, That initially the average monthly compensation
"(d) Employee or Member- Any person receiving compensation while in shall not exceed Ten thousand pesos (P10,000.00), and premium shall
the service of an employer as defined herein, whether by election or be nine percent (9%) and twelve percent (12%) for employee and
appointment, irrespective of status of appointment, including barangay employer covering the AMC limit and below and two percent (2%) and
and Sanggunian officials;
twelve percent (12%) for employee and employer covering the "SEC. 3. Compulsory Membership. - Membership in the GSIS shall be
compensation above the AMC limit; compulsory for all employees receiving compensation who have not
reached the compulsory retirement age, irrespective of employment
"(m) Revalued average monthly compensation- An amount equal to one status, except members of the Armed Forces of the Philippines and the
hundred seventy percent (170%) of the first One thousand pesos Philippine National Police, subject to the condition that they must settle
(P1,000.00) of the average monthly compensation plus one hundred first their financial obligation with the GSIS, and contractuals who have
percent (100%) of the average monthly compensation in excess of One no employer and employee relationship with the agencies they serve.
thousand pesos (P1,000.00);
"Except for the members of the judiciary and constitutional
"(n) Lump sum- The basic monthly pension multiplied by sixty (60); commissions who shall have life insurance only, all members of the GSIS
shall have life insurance, retirement, and all other social security
"(o) Pensioner- Any person receiving old-age permanent total disability protections such as disability, survivorship, separation, and
pension or any person who has received the lump sum excluding one unemployment benefits.
receiving survivorship pension benefits as defined in Section 20 of this
Act; "SEC. 4. Effect of Separation from the Service. - A member separated
from the service shall continue to be a member, and shall be entitled to
"(p) Gainful Occupation- Any productive activity that provided the whatever benefits he has qualified to in the event of any contingency
member with income at least equal to the minimum compensation of compensable under this Act.
government employees;
"C. SOURCES OF FUNDS
"(q) Disability- Any loss or impairment of the normal functions of the
physical and/or mental faculty of a member which reduces or "SEC. 5. Contributions. -
(a) It shall be mandatory
eliminates his/her capacity to continue with his/her current gainful for the member and employer to pay the
occupation or engage in any other gainful occupation; monthly contributions specified in the
"(r) Total Disability- Complete incapacity to continue with his present following schedule:
employment or engage in any gainful occupation due to the loss or
impairment of the normal functions of the physical and/or mental "Monthly Compensation Percentage of
faculties of the member; MonthlyCompensation

"(s) Permanent Total Disability- Accrues or arises when recovery from Member Em
the impairment mentioned in Section 2 (Q) is medically remote;
I. Maximum Average
"(t) Temporary Total Disability- Accrues or arises when the impaired
Monthly Compensation
physical and/or mental faculties can be rehabilitated and/or restored to
(AMC) Limit and Below 9.0% 12.0%
their normal functions;

"(u) Permanent Partial Disability- Accrues or arises upon the II. Over the Maximum AMC Limit
irrevocable loss or impairment of certain portion/s of the physical
faculties, despite which the member is able to pursue a gainful -Up to the Maximum AMC Limit 9.0% 1
occupation.
-In Excess of the AMC Limit 2.0% 1
"B. MEMBERSHIP IN THE GSIS
"Members of the judiciary and constitutional commissioners shall pay "D. BENEFITS
three percent (3%) of their monthly compensation as personal share
and their employers a corresponding three percent (3%) share for their "SEC. 9. Computation of the Basic Monthly Pension. - (a) The basic
life insurance coverage. monthly pension is equal to:

"(b) The employer shall include in its annual appropriation the "1) thirty-seven and one-half percent (37.5%) of the revalued average
necessary amounts for its share of the contributions indicated above, monthly compensation; plus
plus any additional premiums that may be required on account of the
"2) two and one-half percent (2.5%) of said revalued average monthly
hazards or risks of its employee’s occupation.
compensation for each year of service in excess of (15)
"(c) It shall be mandatory and compulsory for all employers to include years: Provided, That the basic monthly pension shall not exceed ninety
the payment of contributions in their annual appropriations. Penal percent (90%) of the average monthly compensation.
sanctions shall be imposed upon employers who fail to include the
"(b) The basic monthly pension may be adjusted upon the
payment of contributions in their annual appropriations or otherwise
recommendation of the President and General Manager of the GSIS and
fail to remit the accurate/exact amount of contributions on time, or
approved by the President of the Philippines in accordance with the
delay the remittance of premium contributions to the GSIS. The heads
rules and regulations prescribed by the GSIS: Provided, however, that the
of offices and agencies shall be administratively liable for non-
basic monthly pension shall not be less than One thousand and three
remittance or delayed remittance of premium contributions to the GSIS.
hundred pesos (P1,300.00): Provided, further, that the basic monthly
"SEC. 6. Collection and Remittance of Contributions. - (a) The employer pension for those who have rendered at least twenty (20) years of
shall report to the GSIS the names of all its employees, their service after the effectivity of this Act shall not be less than Two
corresponding employment status, positions, salaries and such other thousand four hundred pesos (P2,400.00) a month.
pertinent information, including subsequent changes therein, if any, as
"SEC. 10. Computation of Service. - (a) The computation of service for
may be required by the GSIS; the employer shall deduct each month
the purpose of determining the amount of benefits payable under this
from the monthly salary or compensation of each employee the
Act shall be from the date of original appointment/election, including
contribution payable by him in accordance with the schedule
periods of service at different times under one or more employers,
prescribed in the rules and regulations implementing this Act.
those performed overseas under the authority of the Republic of the
"(b) Each employer shall remit directly to the GSIS the employee’s and Philippines, and those that may be prescribed by the GSIS in
employer’s contributions within the first ten (10) days of the calendar coordination with the Civil Service Commission.
month following the month to which the contributions apply. The
"(b) All service credited for retirement, resignation or separation for
remittance by the employer of the contribution to the GSIS shall take
which corresponding benefits have been awarded under this Act or
priority over and above the payment of any and all obligations, except
other laws shall be excluded in the computation of service in case of
salaries and wages of its employees.
reinstatement in the service of an employer and subsequent retirement
"SEC. 7. Interest on Delayed Remittances. - Agencies which delay the or separation which is compensable under this Act.
remittance of any and all monies due the GSIS shall be charged interests
"For the purpose of this section, the term service shall include full-time
as may be prescribed by the Board but not less than two percent (2%)
service with compensation: Provided, that part-time and other services
simple interest per month. Such interest shall be paid by the employers
with compensation may be included under such rules and regulations
concerned.
as may be prescribed by the GSIS.
"SEC. 8. Government Guarantee. - The government of the Republic of the
"SEPARATION BENEFITS
Philippines hereby guarantees the fulfillment of the obligations of the
GSIS to its members as and when they fall due.
"SEC. 11. Separation Benefits. - The separation benefits shall consist of: "The GSIS shall prescribe the detailed guidelines in the
(a) a cash payment equivalent to one hundred percent (100%) of his operationalization of this section in the rules and regulations
average monthly compensation for each year of service he paid implementing this Act.
contributions, but not less than Twelve thousand pesos (P12,000)
payable upon reaching sixty (60) years of age upon separation, "RETIREMENT BENEFITS
whichever comes later: Provided, that the member resigns or separates
"SEC. 13. Retirement Benefits. - (a) Retirement benefits shall be:
from the service after he has rendered at least three (3) years of service
but less than fifteen (15) years; or "(1) the lump sum payment as defined in this Act payable at the
time of retirement plus an old-age pension benefit equal to the
"(b) a cash payment equivalent to eighteen (18) times his basic monthly
basic monthly pension payable monthly for life, starting upon
pension at the time of resignation or separation, plus an old-age
expiration of the five-year (5) guaranteed period covered by the
pension benefit equal to the basic monthly pension payable monthly for
lump sum; or
life upon reaching the age of sixty (60): Provided, that the member
resigns or separates from the service after he has rendered at least "(2) cash payment equivalent to eighteen (18) months of his
fifteen (15) years of service and is below sixty (60) years of age at the basic monthly pension plus monthly pension for life payable
time of resignation or separation. immediately with no five-year (5) guarantee.
"SEC. 12. Unemployment or Involuntary Separation Benefits. - "(b) Unless the service is extended by appropriate authorities,
Unemployment benefits in the form of monthly cash payments retirement shall be compulsory for an employee of sixty-five (65) years
equivalent to fifty percent (50%) of the average monthly compensation of age with at least fifteen (15) years of service: Provided, That if he has
shall be paid to a permanent employee who is involuntarily separated less than fifteen (15) years of service, he may be allowed to continue in
from the service due to the abolition of his office or position usually the service in accordance with existing civil service rules and
resulting from reorganization: Provided, That he has been paying regulations.
integrated contributions for at least one (1) year prior to separation.
Unemployment benefits shall be paid in accordance with the following "SEC. 13-A. Conditions for Entitlement. - A member who retires from the
schedules: service shall be entitled to the retirement benefits enumerated in
paragraph (a) of Section 13 hereof: Provided, That:
"Contributions Made Benefit Duration
1 year but less than 3 years 2 months (1) he has rendered at least fifteen years of service;

3 or more years but less than 6 years 3 months (2) he is at least sixty (60) years of age at the time of
retirement; and
6 or more years but less than 9 years 4 months
(3) he is not receiving a monthly pension benefit from
9 or more years but less than 11 years 5 months permanent total disability.
11 or more years but less than 15 years 6 months "SEC. 14. Periodic Pension Adjustment. - The monthly pension of all
pensioners including all those receiving survivorship pension benefits
"The first payment shall be equivalent to two (2) monthly benefits. A
seven-day (7) waiting period shall be imposed on succeeding monthly shall be periodically adjusted as may be recommended by the GSIS
actuary and approved by the Board in accordance with the rules and
payments.
regulations prescribed by the GSIS.
"All accumulated unemployment benefits paid to the employee during
"PERMANENT DISABILITY BENEFITS
his entire membership with the GSIS shall be deducted from voluntary
separation benefits.
"SEC. 15. General Conditions for Entitlement. - A member who suffers "(3) he fails to present himself for medical examination when
permanent disability for reasons not due to his grave misconduct, required by the GSIS.
notorious negligence, habitual intoxication, or willful intention to kill
himself or another, shall be entitled to the benefits provided for under "(d) The following disabilities shall be deemed total and permanent:
Sections 16 and 17 immediately following, subject to the corresponding
"(1) complete loss of sight of both eyes;
conditions thereof.
"(2) loss of two (2) limbs at or above the ankle or wrist;
"SEC. 16. Permanent Total Disability Benefits. - (a) If the permanent
disability is total, he shall receive a monthly income benefit for life "(3) permanent complete paralysis of two (2) limbs;
equal to the basic monthly pension effective from the date of
disability:Provided, That: "(4) brain injury resulting in incurable imbecility or insanity;
and
(1) he is in the service at the time of disability; or
"(5) such other cases as may be determined by the GSIS.
(2) if separated from the service, he has paid at least thirty-six
(36) monthly contributions within the five (5) year period "SEC. 17. Permanent Partial Disability Benefits. - (a) If the disability is
immediately preceding disability, or has paid a total of at least partial, he shall receive a cash payment in accordance with a schedule
one hundred eighty (180) monthly contributions, prior to his of disabilities to be prescribed by the GSIS: Provided, That he satisfies
disability: Provided, further, That if at the time of disability, he either conditions (1) or (2) of Section 16 (a);
was in the service and has paid a total of at least one hundred
eighty (180) monthly contributions, in addition to the monthly "(b) The following disabilities shall be deemed permanent partial:
income benefit, he shall receive a cash payment equivalent to
eighteen (18) times his basic monthly pension: Provided, "(1) complete and permanent loss of the use of:
finally, That a member cannot enjoy the monthly income
(i) any finger
benefit for permanent disability and the old-age retirement
simultaneously. (ii) any toe
"(b) If a member who suffers permanent total disability does not satisfy (iii) one arm
conditions (1) and (2) in paragraph (a) of this section but has rendered
at least three (3) years of service at the time of his disability, he shall be (iv) one hand
advanced the cash payment equivalent to one hundred percent (100%)
of his average monthly compensation for each year of service he paid (v) one foot
contributions, but not less than Twelve thousand pesos (P12,000.00)
which should have been his separation benefit. (vi) one leg

"(c) Unless the member has reached the minimum retirement age, (vii) one or both ears
disability benefit shall be suspended when:
(viii) hearing of one or both ears
"(1) he is reemployed; or
(ix) sight of both eyes
"(2) he recovers from his disability as determined by the GSIS,
"(2) such other cases as my be determined by the GSIS.
whose decision shall be final and binding; or
"TEMPORARY DISABILITY BENEFITS
"SEC. 18. Temporary Total Disability Benefits. - (a) A member who (2) the dependent children’s pension not exceeding fifty
suffers temporary total disability for reasons not due to any of the percent (50%) of the basic monthly pension
conditions enumerated in Section 15 hereof shall be entitled to seventy-
five percent (75%) of his current daily compensation for each day or "SEC. 21. Death of a Member. - (a) Upon the death of a member, the
fraction thereof of temporary disability benefit not exceeding one primary beneficiaries shall be entitled to:
hundred twenty (120) days in one calendar year after exhausting all his
(1) survivorship pension: Provided, That the deceased:
sick leave credits and collective bargaining agreement sick leave
benefits, if any, but not earlier than the fourth day of his temporary total (i) was in the service at the time of his death; or
disability: Provided, That:
(ii) if separated from the service, has at least three (3)
"(1) he is in the service at the time of his disability; or years of service at the time of his death and has paid
thirty-six (36) monthly contributions within the five-
"(2) if separated, he has rendered at least three (3) years of
year period immediately preceding his death; or has
service and has paid at least six (6) monthly contributions in
paid a total of at least one hundred eighty (180)
the twelve-month period immediately preceding his disability.
monthly contributions prior to his death; or
"Provided, however, That a member cannot enjoy the temporary total
(2) the survivorship pension plus a cash payment equivalent to
disability benefit and sick leave pay simultaneously: Provided,
one hundred percent (100%) of his average monthly
further, That if the disability requires more extensive treatment that
compensation for every year of service: Provided, That the
lasts beyond one hundred twenty (120) days, the payment of the
deceased was in the service at the time of his death with at
temporary total disability benefit may be extended by the GSIS but not
least three (3) years of service; or
to exceed a total of two hundred forty (240) days.
(3) a cash payment equivalent to one hundred percent (100%)
"(b) The temporary total disability benefit shall in no case be less than
of his average monthly compensation for each year of service
Seventy pesos (P70.00) a day.
he paid contributions, but not less than Twelve thousand pesos
"(c) The notices required of the member and the employer, the mode of (P12,000.00): Provided, That the deceased has rendered at least
payment, and the other requirements for entitlement to temporary total three (3) years of service prior to his death but does not qualify
disability benefits shall be provided in the rules and regulations to be for the benefits under item (1) or (2) of this paragraph.
prescribed by the GSIS.
(b) The survivorship pension shall be paid as follows:
"SEC. 19. Non-scheduled Disability. - For injuries or illnesses resulting in
(1) when the dependent spouse is the only survivor, he/she
a disability not listed in the schedule of partial/total disability provided
shall receive the basic survivorship pension for life or until
herein, the GSIS shall determined the nature of the disability and the
he/she remarries;
corresponding benefits therefor.
(2) when only dependent children are the survivors, they shall
"SURVIVORSHIP BENEFITS
be entitled to the basic survivorship pension for as long as they
"SEC. 20. Survivorship Benefits. - When a member or pensioner dies, the are qualified, plus the dependent children’s pension equivalent
beneficiaries shall be entitled to survivorship benefits provided in to ten percent (10%) of the basic monthly pension for every
Sections 21 and 22 hereunder subject to the conditions therein dependent child not exceeding five (5), counted from the
provided for. The survivorship pension shall consist of: youngest and without substitution;

(1) the basic survivorship pension which is fifty percent (50%) (3) when the survivors are the dependent spouse and the
of the basic monthly pension; and dependent children, the dependent spouse shall receive the
 basic survivorship pension for life or until he/she remarries, (c) a pensioner, as defined in Section 2 (o) of this Act; or
and the dependent children shall receive the dependent
children’s pension mentioned in the immediately preceding (d) a retiree who at the time of his retirement was of
paragraph (2) hereof. pensionable age under this Act but who opted to retire under
Republic Act No. 1616.
(c) In the absence of primary beneficiaries, the secondary beneficiaries
shall be entitled to: "LIFE INSURANCE BENEFITS

(1) the cash payment equivalent to one hundred percent "SEC. 24. Compulsory Life Insurance. - All employees except for Members
(100%) of his average monthly compensation for each year of of the Armed Forces of the Philippines (AFP) and the Philippine
service he paid contributions, but not less than Twelve National Police (PNP) shall, under such terms and conditions as may be
thousand pesos (P12,000.00): Provided, That the member is in promulgated by the GSIS, be compulsorily covered with life insurance,
the service at the time of his death and has at least three (3) which shall automatically take effect as follows:
years of service; or
(1) for those employed after the effectivity of this Act, their
(2) in the absence of secondary beneficiaries, the benefits insurance shall take effect on the date of their employment;
under this paragraph shall be paid to his legal heirs.
(2) for those whose insurance will mature after the effectivity
(d) For purposes of the survivorship benefits, legitimate children shall of this Act, their insurance shall be deemed renewed on the day
include legally adopted and legitimated children. following the maturity or expiry date of their insurance;

"SEC. 22. Death of a Pensioner. - Upon the death of an old-age pensioner (3) for those without any life insurance as of the effectivity of
or a member receiving the monthly income benefit for permanent this Act, their insurance shall take effect following said
disability, the qualified beneficiaries shall be entitled to the effectivity.
survivorship pension defined in Section 20 of this Act, subject to the
"SEC. 25. Dividends. - An annual dividend may be granted to all
provisions of paragraph (b) of Section 21 hereof. When the pensioner
members of the GSIS whose life insurance is in force for at least one (1)
dies within the period covered by the lump sum, the survivorship
year in accordance with a dividends allocation formula to be
pension shall be paid only after the expiration of the said period.
determined by the GSIS.
"FUNERAL BENEFITS
"SEC. 26. Optional Insurance. - Subject to the rules and regulations
"SEC. 23. Funeral Benefits. - The amount of the funeral benefits shall be prescribed by the GSIS, a member may apply for insurance and/or pre-
determined and specified by the GSIS in the rules and regulations but need coverage embracing life, health, hospitalization, education,
shall not be less than Twelve thousand pesos memorial plans, and such other plans as may be designed by the GSIS,
(P12,000.00): Provided, That it shall be increased to at least Eighteen for himself and/or his dependents. Any employer may likewise apply
thousand pesos (P18,000.00) after five (5) years and shall be paid upon for group insurance coverage for its employees. The payment of the
the death of: premiums/installments for optional insurance and pre-need products
may be made by the insured or his employer and/or any person
(a) an active member as defined under Section 2 (e) of this Act; acceptable to the GSIS.
or
"SEC. 27. Reinsurance. - The GSIS may reinsure any of its interests or
(b) a member who has been separated from the service, but part thereof with any private company or reinsurer whether domestic
who may be entitled to future benefit pursuant to Section 4 of of foreign: Provided, That the GSIS shall submit an annual report on its
this Act; or reinsurance operations to the Insurance Commission.
"E. ADJUDICATION OF CLAIMS AND DISPUTES "SEC. 32. Execution of Decision. - When no appeal is perfected and there
is no order to stay by the Board, by the Court of Appeals or by the
"SEC. 28. Prescription. - Claims for benefits under this Act except for life Supreme Court, any decision or award of the Board shall be enforced
and retirement shall prescribe after four (4) years from the date of and executed in the same manner as decisions of the Regional Trial
contingency. Court. For this purpose, the Board shall have the power to issue to the
city or provincial sheriff or its appointed sheriff such writs of execution
"SEC. 29. Facility of Payment. - The GSIS shall prescribe rules and as may be necessary for the enforcement of such decision or award, and
regulations to facilitate payment of benefits, proceeds, and claims under any person who shall fail or refuse to comply with such decision, award,
this Act and any other laws administered by the GSIS. Payments made writ or process after being required to do so shall, upon application by
by the GSIS prior to its receipt of an adverse claim, to a beneficiary or the GSIS, be punished for contempt.
claimant subsequently found not entitled thereto, shall not bar the legal
and eligible recipient to his right to demand the payment of benefits, "SEC. 33. Oaths, Witnesses, and Production of Records. - When authorized
proceeds, and claims from the GSIS, who shall, however, have a right to by the Board, an official or employee of the GSIS shall have the power to
institute the appropriate action in a court of law against the ineligible administer oath and affirmation, take deposition, certify to official acts,
recipient. and issue subpoena ad testificandum and subpoena duces tecum to
compel the attendance of witnesses and the production of books,
"SEC. 30. Settlement of Disputes. - The GSIS shall have original and papers, correspondences, and other records deemed necessary as
exclusive jurisdiction to settle any disputes arising under this Act and evidence in connection with any question arising under this Act. Any
any other laws administered by the GSIS. case of contumacy shall be dealt with in accordance with the provisions
of Section 580 of the Revised Administrative Code.
The Board may designate any member of the Board, or official of the
GSIS who is a lawyer, to act as hearing officer to receive evidence, make "F. FUNDS OF THE GSIS
findings of fact and submit recommendations, together with all
documentary and testimonial evidence to the Board within thirty (30) "SEC. 34. Funds. - All contributions payable under Section 5 of this Act
working days from the time the parties have closed their respective together with the earnings and accruals thereon shall constitute the
evidence and filed their last pleading. The Board shall decide the case GSIS Social Insurance Fund. The said fund shall be used to finance the
within thirty (30) days from the receipt of the hearing officer’s findings benefits administered by the GSIS under this Act. In addition, the GSIS
and recommendations. The cases heard directly by the Board shall be shall administer the optional insurance fund for the insurance coverage
decided within thirty (30) working days from the time they are described in Section 26 hereof, the Employees’ Compensation Insurance
submitted by the parties for decision. Fund created under P.D. 626, as amended, General Insurance Fund
created under Act No. 656, as amended, and such other special funds
"SEC. 31. Appeals. - Appeals from any decision or award of the Board existing or that may be created for special groups or persons rendering
shall be governed by Rules 43 and 45 of the 1997 Rules of Civil services to the government. The GSIS shall maintain the required
Procedure adopted by the Supreme Court on April 8, 1997 which will reserves to guarantee the fulfillment of its obligations under this Act.
take effect on July 1, 1997: Provided, That pending cases and those filed
prior to July 1, 1997 shall be governed by the applicable rules of The funds of the GSIS shall not be used for purposes other than what
procedure: Provided, further, That the appeal shall take precedence over are provided for under this Act. Moreover, no portion of the funds of the
all other cases except criminal cases when the penalty of life GSIS or income thereof shall accrue to the General Fund of the national
imprisonment or death or reclusion perpetua is imposable. government and its political subdivisions, instrumentalities and other
agencies including government-owned and controlled corporations
The appeal shall not stay the execution of the order or award unless except as may be allowed under this Act.
ordered by the Board, by the Court of Appeals or by the Supreme Court
and the appeal shall be without prejudice to the special civil action of "SEC. 35. Deposits and Disbursements. - All revenues collected and all
certiorari when proper. accruals thereto shall be deposited, administered and disbursed in
accordance with the law. A maximum expense loading of twelve percent determination of the Board, redound to the benefit of the GSIS,
(12%) of the yearly revenues from all sources may be disbursed for its members as well as the general public;
administrative and operational expenses except as may be otherwise
approved by the President of the Philippines on the basis of actuarial (f) in debt instruments and other securities traded in the
and management studies. secondary markets;

"SEC. 36. Investment of Funds. - The funds of the GSIS which are not (g) in loans to, or in bonds, debentures, promissory notes or
needed to meet the current obligations may be invested under such other evidence of indebtedness of any solvent corporation
terms and conditions and rules and regulations as may be prescribed by created or existing under the laws of the Philippines;
the Board: Provided, That investments shall satisfy the requirements of
(h) in common and preferred stocks of any solvent corporation
liquidity, safety/security and yield in order to ensure the actuarial
or financial institution created or existing under the laws of the
solvency of the funds of the GSIS: Provided, further, That the GSIS shall
Philippines listed in the stock exchange with proven track
submit an annual report on all investments made to both Houses of
record of profitability over the last three (3) years and payment
Congress of the Philippines, to wit:
of dividends at least once over the same period;
(a) in interest-bearing bonds or securities or other evidence of
(i) in domestic mutual funds including investments related to
indebtedness of the Government of the Philippines;
the operations of mutual funds; and
(b) in interest-bearing deposits or securities in any domestic
(j) in foreign mutual funds and in foreign currency deposits or
bank doing business in the Philippines: Provided, That in the
foreign currency-denominated debts, non-speculative equities
case of such deposits, there shall not exceed at any time the
and other financial instruments or other assets issued in
unimpaired capital and surplus or total private deposits of the
accordance with existing laws of the countries where such
depository bank, whichever is smaller: Provided, further, That
financial instruments are issued: Provided, That these
the said bank has prior designation as a depository for the
instruments or assets are listed in bourses of the respective
purpose by the Monetary Board of the Central Monetary
countries where these instruments or assets are
Authority;
issued: Provided, further, That the issuing company has proven
(c) in direct housing loans to members and group housing track record of profitability over the last three (3) years and
projects secured by first mortgage, giving priority to the low payment of dividends at least once over the same period.
income groups and in short and medium term loans to
"SEC. 37. Records and Reports. - The GSIS shall keep and cause to keep
members such as salary, policy, educational, emergency stock
such records as may be necessary for the purpose of making actuarial
purchase plan and other similar loans: Provided, That no less
studies, calculations and valuations of the funds of the GSIS including
than forty percent (40%) of the investible fund of the GSIS
such data needed in the computation of rates of disability, mortality,
Social Insurance Fund shall be invested for these purposes;
morbidity, separation and retirement among the members and any
(d) in bonds, securities, promissory notes or other evidence of other information useful for the adjustment of the benefits of the
indebtedness of educational or medical institutions to finance members. The GSIS shall maintain appropriate books of accounts to
the construction, improvement and maintenance of schools record its assets, liabilities, income, expenses, receipts and
and hospitals; disbursement of funds and other financial transactions and operations.

(e) in real estate property including shares of stocks involving "SEC. 38. Examination and Valuation of the Funds. - The GSIS shall make
real state property and investments secured by first mortgages a periodic actuarial examination and valuation of its funds in
on real estate or other collaterals acceptable to the accordance with accepted actuarial principles.
GSIS: Provided, That such investment shall, in the
"SEC. 39. Exemption from Tax, Legal Process and Lien. - It is hereby "SEC. 41. Powers and Functions of the GSIS. - The GSIS shall exercise the
declared to be the policy of the State that the actuarial solvency of the following powers and functions:
funds of the GSIS shall be preserved and maintained at all times and
that contribution rates necessary to sustain the benefits under this Act (a) to formulate, adopt, amend and/or rescind such rules and
shall be kept as low as possible in order not to burden the members of regulations as may be necessary to carry out the provisions and
the GSIS and their employers. Taxes imposed on the GSIS tend to impair purposes of this Act, as well as the effective exercise of the
the actuarial solvency of its funds and increase the contribution rate powers and functions, and the discharge of duties and
necessary to sustain the benefits of this Act. Accordingly, responsibilities of the GSIS, its officers and employees;
notwithstanding any laws to the contrary, the GSIS, its assets, revenues
(b) to adopt or approve the annual and supplemental budget of
including all accruals thereto, and benefits paid, shall be exempt from
receipts and expenditures including salaries and allowances of
all taxes, assessments, fees, charges, or duties of all kinds. These
the GSIS personnel; to authorize such capital and operating
exemptions shall continue unless expressly and specifically revoked and
expenditures and disbursements of the GSIS as may be
any assessment against the GSIS as of the approval of this Act are
necessary and proper for the effective management and
hereby considered paid. Consequently, all laws, ordinances, regulations,
operation of the GSIS;
issuances, opinions or jurisprudence contrary to or in derogation of this
provision are hereby deemed repealed, superseded and rendered (c) to invest the funds of the GSIS, directly or indirectly, in
ineffective and without legal force and effect. accordance with the provisions of this Act;
"Moreover, these exemptions shall not be affected by subsequent laws to (d) to acquire, utilize or dispose of, in any manner recognized
the contrary unless this section is expressly, specifically and by law, real or personal property in the Philippines or
categorically revoked or repealed by law and a provision is enacted to elsewhere necessary to carry out the purposes of this Act;
substitute or replace the exemption referred to herein as an essential
factor to maintain or protect the solvency of the fund, notwithstanding (e) to conduct continuing actuarial and statistical studies and
and independently of the guaranty of the national government to secure valuations to determine the financial €condition of the GSIS
such solvency or liability. and taking into consideration such studies and valuations and
the limitations herein provided, re-adjust the benefits,
"The funds and/or the properties referred to herein as well as the contributions, premium rates, interest rates or the allocation or
benefits, sums or monies corresponding to the benefits under this Act re-allocation of the funds to the contingencies covered;
shall be exempt from attachment, garnishment, execution, levy or other
processes issued by the courts, quasi-judicial agencies or (f) to have the power of succession;
administrative bodies including Commission on Audit (COA)
disallowances and from all financial obligations of the members, (g) to sue and be sued;
including his pecuniary accountability arising from or caused or
occasioned by his exercise or performance of his official functions or (h) to enter into, make, perform and carry out contracts of
duties, or incurred relative to or in connection with his position or work every kind and description with any person, firm or association
except when his monetary liability, contractual or otherwise, is in favor or corporation, domestic or foreign;
of the GSIS.
(i) to carry on any other lawful business whatsoever in
"G. ADMINISTRATION pursuance of, or in connection with the provisions of this Act;

"SEC. 40. Implementing Body. - The Government Service Insurance (j) to have one or more offices in and outside of the Philippines,
System as created under Commonwealth Act No. 186 shall implement and to conduct its business and exercise its powers throughout
the provisions of this Act. and in any part of the Republic of the Philippines and/or in any
or all foreign countries, states and territories: Provided, That
the GSIS shall maintain a branch office in every province where (r) to submit annually, not later than June 30, a public report to
there exists a minimum of fifteen thousand (15,000) the President of the Philippines and the Congress of the
membership; Philippines regarding its activities in the administration and
enforcement of this Act during the preceding year including
(k) to borrow funds from any source, private or government, information and recommendations on board policies for the
foreign or domestic, only as an incident in the securitization of development and perfection of the programs of the GSIS;
housing mortgages of the GSIS and on account of its receivables
from any government or private entity; (s) to maintain a provident fund, which consists of
contributions made by both the GSIS and its officials and
(l) to invest, own or otherwise participate in equity in any employees and their earnings, for the payments of benefits to
establishment, firm or entity; such officials and employees or their heirs under such terms
and conditions as it may prescribe;
(m) to approve appointments in the GSIS except appointments
to positions which are policy determining, primarily (t) to approve and adopt guidelines affecting investments,
confidential or highly technical in nature according to the Civil insurance coverage of government properties, settlement of
Service rules and regulations: Provided, That all positions in the claims, disposition of acquired assets, privatization or
GSIS shall be governed by the compensation and position expansion of subsidiaries, development of housing projects,
classification system and qualifications standards approved by increased benefit and loan packages to members, and the
the GSIS Board of Trustees based on a comprehensive job enforcement of the provision of this Act;
analysis and audit of actual duties and
responsibilities: Provided, further, That the compensation plan (u) any provision of law to the contrary notwithstanding, to
shall be comparable with the prevailing compensation plans in authorize the payment of extra remuneration to the officials
the private sector and shall be subject to the periodic review by and employees directly involved in the collection and/or
the Board no more than once every four (4) years without remittances of contributions, loan repayments, and other
prejudice to yearly merit reviews or increases based on monies due to the GSIS at such rates and under such conditions
productivity and profitability; as it may adopt: Provided, That the best interest of the GSIS
shall be observed thereby;
(n) to design and adopt an Early Retirement Incentives Plan
(ERIP) and/or financial assistance for the purpose of (v) to determine, fix and impose interest upon unpaid
retirement for its own personnel; premiums due from employers and employees;

(o) to fix and periodically review and adjust the rates of interest (w) to ensure the collection or recovery of all indebtedness,
and other terms and conditions for loans and credits extended liabilities and/or accountabilities, including unpaid premiums
to members or other persons, whether natural or juridical; or contributions in favor of the GSIS arising from any cause or
source whatsoever, due from obligors, whether public or
(p) to enter into agreement with the Social Security System or private. The Board shall demand payment or settlement of the
any other entity, enterprise, corporation or partnership for the obligations referred to herein within thirty (30) days from the
benefit of members transferring from one system to another date the obligation becomes due, and in the event of failure or
subject to the provisions of Republic Act No. 7699, otherwise refusal of the obligor or debtor to comply with the demand, to
known as the Portability Law; initiate or institute the necessary or proper actions or suits,
criminal, civil or administrative or otherwise, before the courts,
(q) to be able to float proper instrument to liquefy long-term tribunals, commissions, boards, or bodies of proper
maturity by pooling funds for short-term secondary market; jurisdiction within thirty (30) days reckoned from the expiry
 date of the period fixed in the demand within which to pay or "(a) to formulate the policies, guidelines and programs to
settle the account; effectively carry out the purposes of this Act;

(x) to design and implement programs that will promote and "(b) to promulgate such rules and regulations as may be
mobilize savings and provide additional resources for social necessary or proper for the effective exercise of the powers and
security expansion and at the same time afford individual functions as well as the discharge of the duties and
members appropriate returns on their savings/investments. responsibilities of the GSIS, its officers and employees;
The programs shall be so designed as to spur socio-economic
take-off and maintain continued growth; and "(c) upon the recommendation of the President and General
Manager, to approve the annual and supplemental budget of
(y) to exercise such powers and perform such other acts as may receipts and expenditures of the GSIS, and to authorize such
be necessary, useful, incidental or auxiliary to carry out the operating and capital expenditures and disbursements of the
provisions of this Act, or to attain the purposes and objectives GSIS as may be necessary or proper for the effective
of this Act. management, operation and administration of the GSIS;

"SEC. 42. The Board of Trustees; its Composition; Tenure and "(d) upon the recommendation of the President and General
Compensation. - The corporate powers and functions of the GSIS shall be Manager, to approve the GSIS organizational and
vested in and exercised by the Board of Trustees composed of the administrative structure and staffing pattern, and to establish,
President and General Manager of the GSIS and eight (8) other fix, review, revise and adjust the appropriate compensation
members to be appointed by the President of the Philippines, one (1) of packages for the officers and employees of the GSIS and
whom shall be either the President of the Philippine Public School reasonable allowances, incentives, bonuses, privileges and
Teachers Association (PPSTA) or the President of the Philippine other benefits as may be necessary or proper for the effective
Association of School Superintendents (PASS), another two (2) shall management, operation and administration of the GSIS, which
represent the leading organizations or associations of government shall be exempt from Republic Act No. 6758, otherwise known
employees/retirees, another four (4) from the banking, finance, as the Attrition Law;
investment, and insurance sectors, and one (1) recognized member of
the legal profession who at the time of appointment is also a member of "(e) to fix and periodically review and adjust the rates of
the GSIS. The Trustees shall elect from among themselves a Chairman interest and other terms and conditions for loans and credits
while the President and General Manager of the GSIS shall extended to its members or other persons, whether natural or
automatically be the vice-chairman. juridical;

The Trustees, except the President and General Manager who shall "(f) the provision of any law to the contrary notwithstanding,
cease as trustee upon his separation, shall hold office for six (6) years to compromise or release, in whole or in part, any claim or
without reappointment, or until their successors are duly appointed settle liability to the GSIS, regardless of the amount involved,
and qualified. Vacancy, other than through the expiration of the term, under such terms and conditions as it may impose for the best
shall be filled for the unexpired term only. The members of the Board interest of the GSIS;
shall be entitled to a per diem of Two thousand five hundred pesos
"(g) to approve and adopt guidelines affecting investments,
(P2,500.00) for each board meeting actually attended by them, but not
insurance coverage of government properties, settlement of
to exceed Ten thousand pesos (P10,000.00) a month and reasonable
claims, disposition of acquired assets, development of housing
transportation and representation allowances as may be fixed by the
projects, increased benefit and loan packages to members, and
Board.
the enforcement of the provisions of this Act;
"SEC. 43. Powers and Functions of the Board of Trustees. - The Board of
Trustees shall have the following powers and functions:
 "(h) to determine, fix, and impose interest upon unpaid or contracts/agreements and others, as the GSIS may decide or determine
unremitted premiums and/or contributions; and from time to time: Provided, however, That the present legal services
group in the GSIS shall serve as its in-house legal counsel.
"(i) to do and perform any and all acts necessary, proper or
incidental to the attainment of the purposes and objectives of "The GSIS may, subject to approval by the proper court, deputize any
this Act. personnel of the legal service group to act as special sheriff in the
enforcement of writs and processes issued by the court, quasi-judicial
"SEC. 44. Appointment, Qualifications, and Compensation of the President agencies or administrative bodies in cases involving the GSIS.
and General Manager and of other Personnel. - The President and
General Manager of the GSIS shall be its Chief Executive Officer and "SEC. 48. Powers of the Insurance Commission. - The Insurance
shall be appointed by the President of the Philippines. He shall be a Commissioner or his authorized representatives shall make an
person with management and investments expertise necessary for the examination of financial condition and methods of transacting business
effective performance of his duties and functions under this Act. of the GSIS at least once every three (3) years and the report of said
examination shall be submitted to the Board of Trustees and copies
"The GSIS President and General Manager shall be assisted by one or thereof be furnished the Office of the President of the Philippines and
more executive vice-presidents, senior vice-presidents and managers in the two houses of the Congress of the Philippines within five (5) days
addition to the usual supervisory and rank-and-file positions who shall after the close of examination: Provided, however, That for each
be appointed and removed by the President and General Manager with examination, the GSIS shall pay the office of the Insurance
the approval of the Board, in accordance with the existing Civil Service Commissioner an amount equal to the actual expenses incurred by the
rules and regulations. said office in the conduct of examination, including the salaries of the
examiners and of the actuary of such examination for the actual time
"SEC. 45. Powers and Duties of the President and General Manager. - The spent.
President and General Manager of the GSIS shall, among others, execute
and administer the policies and resolutions approved by the Board and "H. GENERAL PROVISION
direct and supervise the administration and operations of the GSIS. The
President and General Manager, subject to the approval of the Board, "SEC. 49. Dispensation of Social Insurance Benefits. - (a) The GSIS shall
shall appoint the personnel of the GSIS, remove, suspend or otherwise pay the retirement benefits to the employee on his last day of service in
discipline them for cause, in accordance with the existing Civil Service the government: Provided, That all requirements are submitted to the
rules and regulations, and prescribe their duties and qualifications to GSIS within a reasonable period prior to the effective date of the
the end that only competent persons may be employed. retirement;

"SEC. 46. Auditor. - (a) The Chairman of the Commission on Audit shall "(b) The GSIS shall discontinue the processing and adjudication of
be the ex officio auditor of the GSIS, and the necessary personnel to retirement claims under R.A. No. 1616 except refund of retirement
assist said representative in the performance of his duties. premium under R. A. No. 910. Instead, all agencies concerned shall
process and pay the gratuities of their employees. The Board shall adopt
"(b) The Chairman of the Commission on Audit or his authorized the proper rules and procedures for the implementation of this
representatives, shall submit to the Board soon after the close of each provision.
calendar year, an audited statement showing the financial condition and
progress of the GSIS for the calendar year just ended. "SEC. 50. Development and Disposition of Acquired Assets. - The GSIS
shall have the right to develop and dispose of its acquired assets
"SEC. 47. Legal Counsel. - The Government Corporate Counsel shall be obtained in the ordinary course of its business. To add value to, improve
the legal adviser and consultant of the GSIS, but the GSIS may assign to profitability on, and/or enhance the marketability of an acquired asset,
the Office of the Government Corporate Counsel (OGCC) cases for legal the GSIS may further develop/renovate the same either with its own
action or trial, issues for legal opinions, preparation and review of
capital or through a joint venture arrangement with private companies budget the amount corresponding to the employer and employee
or individuals. contributions, or who fails or refuses or delays by more than thirty (30)
days from the time such amount becomes due and demandable, or to
"The GSIS may sell its acquired assets in accordance with existing deduct the monthly contributions of the employee shall, upon
Commission on Audit (COA) rules and regulations for an amount not conviction by final judgment, suffer the penalties of imprisonment from
lower than the current market value of the property. For this purpose, six (6) months and one (1) day to six (6) years, and a fine of not less
the GSIS shall conduct an annual appraisal of its property or acquired than Three thousand pesos (P3,000.00) but not more than Six thousand
assets to determine its current market value. All notices of sale shall be pesos (P6,000.00), and in addition, shall suffer absolute perpetual
published in newspapers of general circulation. disqualification from holding public office and from practicing any
profession or calling licensed by the government.
"No injunction or restraining order issued by any court, commission,
tribunal or office shall bar, impede or delay the sale and disposition by "(e) Any employee or member who receives or keeps fund or property
the GSIS of its acquired assets except on questions of ownership and belonging, payable or deliverable to the GSIS and appropriates the
national or public interest. same, or takes or misappropriates or uses the same for any purpose
other than authorized by this Act, or permits another person to take,
"SEC. 51. Government Assistance to the GSIS. - The GSIS may call upon misappropriate or use said fund or property by expressly consenting
any employer for such assistance as may be necessary in the discharge thereto, or through abandonment or negligence, or is otherwise guilty
of its duties and functions. of the misappropriation of said fund or property, in whole or in part,
shall suffer the penalties provided in Article 217 of the Revised Penal
"I. PENAL PROVISIONS
Code, and in addition, shall suffer absolute perpetual disqualification
"SEC. 52. Penalty. - (a) Any person found to have participated directly or from holding public office and from practicing any profession or calling
indirectly in the commission of fraud, collusion, falsification, or licensed by the government.
misrepresentation in any transaction with the GSIS, whether for him or
"(f) Any employee who, after deducting the monthly contribution or
for some other persons, shall suffer the penalties provided for in Article
loan amortization from a member’s compensation, fails to remit the
172 of the Revised Penal Code.
same to the GSIS within thirty (30) days from the date they should have
"(b) Whoever shall obtain or receive any money or check invoking any been remitted under Section 6(a), shall be presumed to have
provision of this Act or any agreement thereunder, without being misappropriated such contribution or loan amortization and shall
entitled thereto with the intent to defraud any member, any employer, suffer the penalties provided in Article 315 of the Revised Penal Code,
the GSIS, or any third party, shall be punished by a fine of not less than and in addition, shall suffer absolute perpetual disqualification from
Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos holding public office and from practicing any profession or calling
(P20,000.00) or by imprisonment of not less than six (6) years and one licensed by the government.
(1) day to twelve (12) years, or both, at the discretion of the court.
"(g) The heads of the offices of the national government, its political
"(c) Whoever fails or refuses to comply with the provisions of this Act or subdivisions, branches, agencies and instrumentalities, including
with the rules and regulations adopted by the GSIS, shall be punished by government-owned or controlled corporations and government
a fine of not less than Five thousand pesos (P5,000.00) nor more than financial institutions, and the personnel of such offices who are
Twenty thousand pesos (P20,000.00) or imprisonment of not less than involved in the collection of premium contributions, loan amortization
six (6) years and one (1) day to twelve (12) years, or both, at the and other accounts due the GSIS who shall fail, refuse or delay the
discretion of the court. payment, turnover, remittance or delivery of such accounts to the GSIS
within thirty (30) days from the time that the same shall have been due
"(d) The treasurer, finance officer, cashier, disbursing officer, budget and demandable shall, upon conviction by final judgment, suffer the
officer or other official or employee who fails to include in the annual penalties of imprisonment of not less than one (1) year nor more than
five (5) years and a fine of not less than Ten thousand pesos the law chosen are less than the benefits provided under this Act, the
(P10,000.00) nor more than Twenty thousand pesos (P20,000.00), and GSIS shall pay only the difference.
in addition, shall suffer absolute perpetual disqualification from
holding public office and from practicing any profession or calling "SEC. 56. Appropriations. - The amount necessary to carry out the
licensed by the government. provisions of this Act shall be included in the respective budgets of the
agencies in the national government obligation program of the year
"(h) The officers and/or personnel referred to in paragraph (g) of this following its enactment into law and thereafter."
section shall be liable not only criminally but also civilly to the GSIS or
to the employee or member concerned in the form of damages, Section 2. Separability Clause. - Should any provision of this Act or any part
including surcharges and interests. thereof be declared invalid, the other provisions, so far as they are separable
from the invalid ones, shall remain in force and effect.
"(i) For the charges or complaints referred to in paragraph (g) of this
section, the liabilities therein set forth shall be construed as waiver of Section 3. Repealing Clause. - All laws and any other law or parts of law
the State of its immunity from suit, hence, the above-mentioned officials specifically inconsistent herewith are hereby repealed or modified
and/or personnel may not invoke the defense of non-suability of the accordingly: Provided, That the rights under the existing laws, rules and
State. regulations vested upon or acquired by an employee who is already in the
service as of the effectivity of this Act shall remain in force and effect: Provided,
"(j) Failure of the Members of the GSIS Board, including the chairman further, That subsequent to the effectivity of this Act, a new employee or an
and the vice-chairman, to comply with the provisions of paragraph (w) employee who has previously retired or separated and is reemployed in the
of Section 41 hereof, shall subject them to imprisonment of not less service shall be covered by the provisions of this Act.
than six (6) months nor more than one (1) year or a fine of not less than
Five thousand pesos (P5,000.00) nor more than Ten thousand pesos Section 4. Effectivity. - This Act shall take effect fifteen (15) days after its
(P10,000.00) without prejudice to any civil or administrative liability publication in the Official Gazette or in at least two (2) newspapers of general
which may also arise therefrom. circulation.

"(k) Criminal actions arising from violations of the provisions of this This Act, which is a consolidation of Senate Bill No. 2013 and House Bill No.
Act may be commenced by the GSIS or by the aggrieved member, either 8561, was finally passed by the Senate and the House of Representatives on May
under this Act or, in appropriate cases, under the Revised Penal Code. 29, 1997 and May 28, 1997, respectively.

"SEC. 53. Implementing Rules and Regulations. - The implementing rules Approved: May 30, 1997.
and regulations to carry out the provisions of this Act shall be adopted
and promulgated by the GSIS not later than ninety (90) days after the
approval of this Act.

"SEC. 54. Non-impairment of Benefits, Powers, Jurisdiction, Rights,

Privileges, Functions and Activities. -Nothing in this Act shall be
construed to repeal, amend or limit any provision of existing laws,
Presidential Decrees and Letters of Instructions, not otherwise
specifically inconsistent with the provisions of this Act.

"SEC. 55. Exclusiveness of Benefits. - Whenever other laws provide

similar benefits for the same contingencies covered by this Act, the
member who qualifies to the benefits shall have the option to choose
which benefits will be paid to him. However, if the benefits provided by
REPUBLIC ACT No. 4119 and authority of Republic Act Numbered Nine hundred ninety-seven, as
amended by Republic Act Numbered Twelve hundred forty-one, shall continue to
AN ACT TO FURTHER AMEND CERTAIN SECTIONS OF ACT NUMBERED exercise the powers, functions and duties under Act Numbered Thirty-four
THIRTY-FOUR HUNDRED AND TWENTY-EIGHT, OTHERWISE KNOWN AS hundred and twenty-eight, as amended.
THE WORKMEN'S COMPENSATION ACT, AS AMENDED.
"The Chairman and the two associate commissioners shall have the same
Section 1. Section one of Act Numbered Thirty-four hundred and twenty-eight qualifications as those of judges of the court of first instance.
is amended to read as follows:
"Except as otherwise provided herein, the jurisdictions, powers and duties
"Sec. 1. Employees included. This Act shall be applicable to all employees in heretofore pertaining to the Commissioner and Deputy Commissioner of
industrial, commercial and agricultural establishments and in religious, Workmen's Compensation under Republic Act Numbered Seven hundred and
charitable and educational institutions, hereinafter specified." seventy-two shall be assumed and exercised by the Commission, which body is
authorized to delegate the same to the extent that it shall remain as an appeal
Section 2. Section three of the same Act, as amended, is further amended to source with corresponding duties of promulgating related rules and regulations.
read as follows: The referees assigned to regional offices shall have the power to hear and decide
all cases currently pending before said regional offices, which referees shall take
"Sec. 3. Applicable to Government. This Act shall also be applicable to all
jurisdiction thereof, administer and settle the same subject to appeal to the
officials, employees and laborers in the service of the National Government and
Commission in accordance with prescribed rules and regulations. Said referees
its political subdivisions and instrumentalities: Provided, however, That
shall assume original jurisdiction of all cases arising henceforth. The
officials, laborers, and employees insured with the Government Service
Commission may promulgate rules and regulations governing its internal
Insurance System, and their dependents when entitled to the benefits of the said
functions as a quasi-judicial body including the power of each member to decide
insurance system shall, in addition to the same, be entitled to the benefits
appealed cases from a referee, allowance for appeal from the decision of an
granted by this Act."
individual member to the Commission en banc, and other allied rules covering
Section 3. Section four-A of the same Act, as added by Republic Act Numbered jurisdiction to review, modify, or affirm all rules and regulations prepared by the
Seven hundred seventy-two, is amended to read as follows: Bureau."

"Sec. 4-A. Right to additional compensation. In case of the employee's death, Section 5. Section eight of the same Act, as amended, is further amended to read
injury or sickness due to the failure of the employer to comply with any law, or as follows:
with any order, rule or regulation of the Workmen's Compensation Commission
"Sec. 8. Death benefit. If the disease contracted or injury received by the
or the Bureau of Labor Standards or should the employer violate the provisions
employees as provided in Section two hereof cause his death within two years
of Republic Act Numbered Six hundred seventy-nine and its amendments or fail
from the date of such injury or sickness, the employer shall pay to the persons
to install and maintain safety appliances, or take other precautions for the
entitled thereto, or, in cases there shall be none, to the person representing the
prevention of accidents or occupational disease, he shall be liable to pay an
deceased employee the burial expenses in the amount of two hundred pesos,
additional compensation equal to fifty per centum of the compensation fixed in
and shall also pay to or for the following persons, in the order of priority and
this Act."
during the periods hereinafter set forth, compensation equivalent to the
Section 4. Section seven-A of the same Act, as added by Republic Act Numbered following percentages of the average weekly wages of the employee as
Seven hundred seventy-two, is amended to read as follows: determined in Section nineteen of this Act:

"Sec. 7-A. Bureau of Workmen's Compensation and Workmen's Compensation "(a) To the dependent widow or widower, in case there are no
Commission. The Bureau of Workmen's Compensation, hereinafter referred to as dependent children, forty-five per centum.
the Bureau, and the Workmen's Compensation Commission attached thereto for
"(b) To the dependent widow or widower in case there are one or two
a close working relationship as constituted and organized under the provisions
dependent children, fifty per centum, and if there are three or more
 dependent children, sixty per centum. The compensation to the widow reckoned at more than fifty pesos nor less than fourteen pesos; but the total
or widower shall be for the use or benefit of the widow or widower and weekly compensation shall not in any case exceed the average weekly wages
of the dependent children, and the Bureau may from time to time adjust computed in accordance with Section nineteen of this Act, nor shall the
the compensation between them in the most equitable manner compensation paid in any case exceed in its aggregate the sum of six thousand
possible. pesos.

"(c) If there is no dependent widow or widower, but a dependent child "The bona fide payment of a death compensation by an employer to a dependent
or children, such child or children shall be paid forty per centum, with entitled thereto in the second place after another dependent or dependents shall
ten per centum additional for each child in excess of two, up to a protect and exonerate the employer, unless and until the dependent or
maximum of fifty per centum, which shall be distributed in equal shares dependents having priority right shall notify him of his or their claim.
among the children if there were more than one.
"In the event of death occurring after a period of total or partial disability, the
"(d) It there are no dependent widow, widower or children but there is period of disability shall be deducted from the respective total periods
a dependent father or mother, forty per centum to the father or mother established in Section ten of this Act.
if totally dependent, or twenty-five per centum if partly dependent, and
if both parents are dependent; each shall be paid one-half of such "The compensation of a demented person shall be paid to the guardian of such
compensation. It there is no parent, but dependent grandparents, the person."
same compensation shall be paid as to a father or mother.
Section 7. Section thirteen of the same Act, as amended is further amended to
"(e) If there are no dependent widow, widower, child, parent, or read as follows:
grandparent, but there is dependent grandchild, brother or sister or two
"Sec. 13. Services, appliances and supplies. Immediately after an employee has
or more such, then twenty-five per centum shall be paid for one
suffered an injury or contracted sickness and during the subsequent period of
dependent and five per centum additional for each additional
disability, the employer or insurance carrier shall provide the employee with
dependent, up to a maximum of forty per centum, which shall be
such services, appliances and supplies as the nature of his disability and the
distributed share and share alike among the dependents if there be
process of his recovery may require: and that which will promote his early
more than one.
restoration to the maximum level of his physical capacity.
"(f) If there are no legal dependents, the employer shall pay the amount
"The word 'services' used herein shall include medical, surgical, dental, hospital
of one thousand pesos to the Workmen's Compensation Fund: Provided,
and nursing attendance and treatment as well as the proper fitting and training
That the said Bureau shall have direct control and supervision over
in the use of appliances and the necessary training for purposes of
such funds, subject to general auditing requirements, which shall be
rehabilitation; 'appliances' shall include crutches, artificial members and other
spent for the rehabilitation of crippled men in industry.
devices of the same kind, and the replacements or repairs of such artificial
"When several persons are entitled to compensation and there is members or such devices unless the replacement or repair is made necessary by
disagreement concerning the share of the compensation each should the lack of proper care by the employee; and 'supplies' shall include medicines,
receive, the Commission shall act as referee and designate the share to as well as medical, surgical and dental supplies.
be allotted to each dependent."
"In case the employer or insurance carrier cannot furnish the aforementioned
Section 6. The first paragraph of Section twelve of the same Act, as amended by services, appliances and supplies promptly, the injured or sick employee may
Republic Act Numbered seven hundred seventy-two, is further amended to read acquire the same at the expense of the employer or insurance carrier.
as follows:
"If it is shown before the Commission or its authorized representatives that the
"Sec. 12. Sundry provisions regarding death benefits. In computing death injured or sick employee voluntarily refused to accept without justifiable cause,
benefits, the average weekly wages of the deceased employee shall not be the services, appliances and supplies provided by the employer or insurance
carrier or voluntarily obstructed without justifiable cause the giving of such case six thousand pesos. But no award of permanent disability shall take effect
services, appliances and supplies, such refusal or obstruction shall be construed until after two weeks have elapsed from the date of the injury.
as a waiver of all or part of his rights to the same and in this case the employer
or insurance carrier shall be liable only for the disability of any nature that "In the case of an employee whose average weekly wages are less than fourteen
would have ensued if the injured or sick employee had accepted the services, pesos per week, the weekly compensation shall be the entire amount of such
appliances and supplies tendered by the employer or insurance carrier: average weekly wages; but if the disability is permanent, the compensation shall
Provided, however, That the refusal as well as the kind of disability that would be fourteen pesos in such case. In the event that the total disability begins after a
have been the result of the injury or illness if the injured or sick person had period of partial disability, the amount of compensation due for the latter and
accepted such services, appliances and supplies shall set forth in an affidavit for any other disability shall not exceed the maximum amount of six thousand
made within twenty-four hours after such refusal by the physician or other pesos."
person called to render such services or furnish such appliances or supplies.
Section 9. Section sixteen of the same Act, as amended, is further amended to
What shall constitute justifiable cause shall be determined by the representative
read as follows:
of the Commission who may, on his own initiative, determine the necessity,
character and sufficiency of any service, appliance and supplies furnished by the "Sec. 16. Partial disability. In case the injury or sickness causes partial disability
employer or insurance carrier or acquired by the employee himself at the for labor, the employer, during such disability and except as hereinafter
employer's or insurance carrier's expense, and order a change of such service, provided, shall pay to the injured or sick employee for a period of not to exceed
appliance and supplies when in his judgment such change is desirable or two hundred and eight weeks, beginning with the first day of disability, a weekly
necessary. compensation equal to fifty per centum of the difference between his average
weekly wages before the accident and the weekly wages which he could
"No claim for such services, appliances or supplies shall be valid and
probably each thereafter; but not more than eighteen pesos per week. The
enforceable against the employer or insurance carrier unless the attending
weekly payments shall not in any case continue after the disability has ceased,
physician or other person concerned, within twenty days following the first
and in case partial disability sets in after a period of total disability, such period
treatment, attendance, or furnishing of supplies and thereafter within the same
of total disability shall be deducted from the total period of two hundred and
period following every treatment, attendance, or furnishing of supplies, furnish
eight weeks and the amount of the compensation paid shall not in any case be in
the employer or insurance carrier and the Commission a report of such injury
excess of the total sum of six thousand pesos. No award for disability shall be
and treatment on a form prescribed by the Commission.
made before a lapse of two weeks counted from the date of the injury."
"The liability of an employer or insurance carrier for the aforementioned
Section 10. Section eighteen of the same Act, as amended by Republic Act
services, appliances and supplies shall not be affected by the fact that his
Numbered Seven hundred seventy-two, is further amended to read as follows:
employee was disabled through the fault or negligence of a third party."
"Sec. 18. Amputation and non-scheduled disability. Amputation between elbow
Section 8. Section fourteen of the same Act, as amended, is further amended to
and wrist shall be considered an equivalent to the loss of a hand. Amputation
read as follows:
between knee and ankle shall be considered as loss of a foot. Amputation at or
"Sec. 14. Total disability. In case the injury or sickness causes temporary total above the elbow shall be considered as equivalent to the loss of an arm.
disability for labor, the employer shall, during such disability, pay to the injured Amputation at or above the knee shall be considered as equivalent to the loss of
employee a weekly compensation equivalent to sixty per centum of his average a leg.
weekly wage but not less than fourteen pesos per week, except in the case
"Compensation for the injuries above-specified shall exclude all other
provided for in the next following paragraph. No compensation shall be allowed
compensation except the benefits provided for in Sections thirteen, fourteen and
for the first three calendar days of incapacity resulting from an injury except the
fifteen.
benefits provided for in the preceding section; but if the incapacity extends
beyond that period, compensation shall allowed from the first day of such "In case of an injury producing a serious disfigurement of the face or head, the
incapacity. Such weekly payments shall in no case continue after the disability Commission may, at the request of an interest party, determine and award such
has ceased, nor shall the aggregate sum paid as compensation exceed in any
compensation as may seem fair and proper in view of the nature of the "Sec. 30. Security for payment of workmen's compensation. Employers shall
disfigurement, but which shall not exceed six thousand pesos. secure the payment of compensation and other benefits to their employees or
laborers and their dependents:
"In all other cases of this kind of disability not mentioned in other sections of
this Act, the compensation shall be fifty per centum of the difference between "(1) By insuring and keeping insured the full payment of such
the average weekly wages of the injured person and his subsequent earning compensation and other benefits with an insurance company
capacity in the same or some other employment, payable while the partial authorized to do business in the Philippines; or
disability lasts; but subject to reconsideration of the degree of impairment by
the Commission at the request of an interested party: Provided, however, That "(2) By furnishing satisfactory proof to the Bureau of Workmen's
the weekly payments shall in no case be continued for a period longer than two Compensation of their financial ability to shoulder such liabilities
hundred and eight weeks. directly in accordance with paragraph one hereof. An employer
securing payment of such liabilities in accordance with this paragraph
"The total compensation prescribed in this and the next preceding section and shall be known as self-insurer.
the total compensation prescribed in Section fourteen and fifteen of this Act,
shall, together, not exceed the sum of six thousand pesos: Provided, however, "a. Where the employer secures his liability for payment of
That after the payment has been made for the period specified by the Act in each workmen's compensation under paragraph one of this section,
case, the Workmen's Compensation Commission may from time to time cause the premiums of the policy shall be paid in their entirely by
the examination of the condition of the disabled laborer, with a view to said employer and any contract or device for the deduction of
extending, if necessary, the period of compensation which shall not, however, any portion thereof from the wages of the employees or
exceed the said amount of six thousand pesos." laborers shall be null and void.

Section 11. Section twenty-three of the same Act, as amended by "b. Every employer who has secured the payment of
Commonwealth Act Numbered Two hundred ten, is further amended to read as compensation to his employees and their dependents in
follows: accordance with the provisions of this section shall post and
maintain in a conspicuous place or places in and about his
"Sec. 23. Medical and rehabilitative examination. After receiving an injury or place or places of business written or printed notices in a form
contracting sickness and during the period of his disability and rehabilitation, prescribed by the Bureau of Workmen's Compensation stating
the laborer shall at reasonable times and places submit to examination by a duly that he has complied with all the rules and regulations of said
qualified physician or surgeon and rehabilitation technician designated and Bureau under the law and that he has secured without cost to
paid by the employer or insurance carrier. The laborer shall be entitled to have a the employees the payment of compensation and other benefits
physician or surgeon and rehabilitation technician designated and paid by to them and their dependents.
himself at such examination; but this right shall not be construed as denying to
the physician or surgeon and rehabilitation technician of the employer or "c. Every contract for the insurance of the liabilities herein
insurance carrier the right to visit the injured or sick laborer at any reasonable provided for shall be deemed to be made subject to the
time and under any reasonable conditions during his total disability and period provisions of this Act, and provisions thereof inconsistent with
of rehabilitation. In case an injured or sick employee refuses to submit to, or this Act shall be null and void. Such contract shall be construed
does in any manner obstruct the examination mentioned without justifiable to grant full coverage of all liabilities of the assured under and
cause, his right to proceed under this Act shall be suspended until such refusal according to the provisions of this Act notwithstanding any
or obstruction shall cease, and no compensation shall be payable for the entire agreement of the parties to the contrary.
time of such obstruction."
"d. No policy or contract of insurance stated above shall be
Section 12. Section thirty of the same Act, as amended, is further amended to canceled within the policy period nor terminated upon the
read as follows: expiration date without a written notice having been
previously given to the Bureau of Workmen's Compensation
and to the assured, stating the date on which the contract is the provisions of Section fifty-one of this Act. In the event that
proposed to be canceled, or declaring that the insurance carrier the award made against the carrier is finally affirmed, the
or the employer does not intent to renew the policy upon its employer shall be entitled to the return of said security
expiration without the prior approval of the Bureau of deposited or, if the said award has been paid, to an award by
Workmen's Compensation. No such cancellation or termination way of reimbursement against the said carrier for the amount
shall be effective until after thirty days from the service of such of money paid upon the award or decision thereon to the
notice, unless it can be shown that the employer has obtained a claimant. If the award against the carrier is finally reversed on
new policy with another insurance carrier or has obtained appeal, then the carrier is relieved of liability.
authority from the Bureau of Workmen's Compensation to
become self-insurer under paragraph two of this section. "h. If any insurance company licensed to transact the business
of workmen's compensation insurance shall fail promptly to
"e. The acceptance of a premium on a policy securing pay claims for which it shall become liable or if it shall fail to
compensation liability to any employee or laborer or his make reports to the Bureau of Workmen's Compensation when
dependents shall stop the insurance carrier so accepting from so required, the Bureau may recommend to the Insurance
pleading that the employment of such employee or laborer is Commissioner that the license of such company be revoked,
not covered by this Act. setting forth in detail the reasons for its recommendation. The
Commissioner shall thereupon furnish a copy of such report to
"f. Every policy of insurance issued under this section shall the insurance company concerned and shall set a date for a
contain a provision that, as between the employee and the hearing, at which both the insurance company and the Bureau
insurance carrier, the notice to or knowledge of the occurrence of Workmen's Compensation shall be afforded an opportunity
of the injury or accident on the part of the employer shall be to present evidence. If after such hearing the Commissioner is
deemed notice or knowledge, as the case may be, on the part of satisfied that the insurance company has failed to live up to all
the insurance carrier; that jurisdiction over the employer is its obligations under the provisions of this Act, he shall
jurisdiction over the insurance carrier; and that the insurance promptly revoke its license, otherwise he shall dismiss the
carrier shall in all things be bound by the subject to the orders, complaint.
findings, decision or awards rendered against the employer for
the payment of compensation under the provisions of this Act. "i. An employer who desires to insure his liability for payment
Every such policy shall also contain a provision to the effect of workmen's compensation in accordance with paragraph (2)
that the insolvency or bankruptcy of the employer shall relieve of this section shall obtain prior authorization from the Bureau
the insurance carrier from the payment of compensation for of Workmen's Compensation and, as a condition to the granting
injury, illness or death sustained by an employee during the life of such authorization , the Bureau shall require such employer
of such policy. to deposit with the Bureau an indemnity bond or such other
securities of a kind and in an amount to be determined by the
"g. Where the sole issue raised by a carrier in any hearing or Bureau. The securities so deposited shall be subject to such
proceeding before the Workmen's Compensation Commission rules and regulations as the Bureau may prescribe which shall
is policy coverage and an appeal is taken by the carrier, include authorization, in case of default, to sell any such
although the award is made in favor of the claimant therein securities sufficient to pay compensation awards, orders or
against the employer and the carrier, the Commission may, decisions.
nevertheless, require the employer to deposit the amount of
said award or furnish such security therefor as may be deemed "j. The bureau may revoke at any time the authorization
satisfactory by the Commission. If the employer shall fail to granted to any employer under the preceding paragraph upon
make such deposit or give such security, the award may be the failure of such employer to promptly pay claims for
enforced promptly against said employer in accordance with compensation for which he shall become liable or upon a
 showing that he is no longer in a financial position to pay the Section 14. Paragraph (d) and (e) of Section thirty-nine of the same Act, as
compensation to the claimant directly. Where such amended, is further amended to read as follows:
authorization has been revoked, the employer shall insure his
liability for payment of workmen's compensation with any "Sec. 39. Definition of various words.
insurance company authorized to transact business of
"(d) 'Employment' in case of private employers includes all employment or work
workmen's compensation insurance in the Philippines.
at a trade, occupation or profession exercised by an employer except domestic
"k. Any employer coming within the coverage of this Act who service.
fails to insure his liability under the Act in accordance with the
"(e) 'Public employment' signifies employment in the service of the National
provisions of this section shall, upon conviction, be punished
Government and its political subdivisions and instrumentalities. It does not
by a fine of not less than one thousand pesos nor more that five
include employment as public officer elected by the popular vote."
thousand pesos or by imprisonment of not less that six months
nor more than one year or by both such fine and imprisonment; Section 15. Section forty-two of the same Act, as amended, is further amended
but where the employer is a corporation, the president, to read as follows:
secretary and treasurer shall be jointly and severally liable for
such fine or imprisonment as provided herein and for any "Sec. 42. Law applicable to small private employers. All claims for compensation
compensation and/or other benefits which may accrue to any by reason of an accident in an enterprise, industry, or business carried on or in a
worker of such corporation. trade, occupation or profession exercised by an employer whose capital
amounts to less than ten thousand pesos or who regularly employs less than six
"l. In cases where the fine prescribed above is imposed the employees and whose enterprise, industry or business is not hazardous or
court rendering judgment shall, within fifteen days from the deleterious to employees, shall be governed by the provisions of Act Numbered
payment thereof, remit to the Workmen's Compensation Fund Eighteen hundred and seventy-four and its amendments or those of the Civil
one-half of the fine so imposed. Code of the Philippines: Provided, however, That the following enterprises or
establishments shall be among those considered hazardous or deleterious to
"m. The Director of the Bureau of Workmen's Compensation
employees:
shall within sixty days from the approval of this Act adopt such
rules as may be necessary to carry out the provisions of this "(1) Any business for the transportation of persons or goods, or both;
section.
"(2) Any factory, establishment, or shop where machinery is used;
Section 13. Section thirty-one of the same Act, as amended, is further amended
to read as follows: "(3) Any factory, establishment, or shop where the employee is exposed
to dust or other particles of matter, fumes, gases, and other chemical
"Sec. 31. Intervention of the Workmen's Compensation Commission. In case a substances;
laborer who suffers an accident or contracts an illness comprised within the
provisions of Section two of this Act, or his dependents, contracts the services of "(4) Plants or establishments for the making or manufacture of
a lawyer or other persons to help him or direct him in his claim for fireworks, dynamite, ammunitions, and similar things or articles;
compensation against his employer, the fees of said lawyer or person which shall
be chargeable against said employer shall not be more than five per cent of the "(5) Employment for circus boxing, football basketball, wrestling,
total sum which said injured or sick laborer of his dependent in case of his death racing, and similar sports; and
shall receive by way of compensation; but if his services shall take place in an
appealed case, his fees shall not be in excess of ten per centum of said sum, and "(6) Fishing, lumbering, and mining;"
any person who, in violation of this provision, makes an excessive charge, shall
Section 16. Section forty-eight of the same Act, as amended by Republic Act
be punished by a fine of not more than two hundred pesos."
Numbered Seven hundred seventy-two is further amended to read as follows:
"Sec. 48. Referees Duties and powers. There shall be appointed from members of "For every final decision or letter computation awarding compensation, the
the bar with at least five years of hearing experience or legal practice one or uninsured employer or insurance carrier against whom the decision or letter
more referees for each regional office as the exigencies of the service may computation is made shall pay into the Fund the sum of one peso and an
require who shall devote their entire time to the duties of their office and shall additional charge of one peso for every one hundred pesos of the entire amount
receive compensation of not less than forty-eight hundred pesos per annum. of compensation to be paid: Provided, That the total amount to be paid under
They shall assume original jurisdiction over all workmen's compensation cases this paragraph shall not be less than five pesos.
in the regional offices where they are assigned ands shall be under the
administrative supervision of the regional labor administrator but their "For every adjourned hearing, and for every decision of a referee affirmed by the
decisions, orders and resolutions shall not be subject to the review of the said Commission on review, the uninsured employer or insurance carrier making the
administrator but shall become final fifteen days from receipt thereof by the request for adjournment or seeking such review shall pay into the Fund the sum
parties, unless appealed to the Commission within said period. of five pesos.

"There shall also be appointed in each regional office sufficient personnel to "If the monies in the Fund are not sufficient to cover the expenses of
constitute a workmen's compensation unit to carry out workmen's administration in any fiscal year, the Bureau shall determine as soon as possible
compensation functions within the jurisdiction of such regional office. However, the amount of the deficiency. The Bureau shall then assess upon and collect from
the personnel at present drawing salaries from the Workmen's Compensation each insurance carrier and each uninsured employer the proportion of such
Fund shall, upon approval of this Act, serve as the nucleus of such workmen's deficiency that the total premium collected by an insurance carrier for the year
compensation units in their respective regional offices. The units so formed immediately preceding or the total insurance premium an uninsured employer
shall be under the technical and functional supervision of the Bureau." would have paid for the same period, bears to the total insurance premiums
collected by all insurance carriers plus the total premiums that would have been
Section 17. Sections fifty-one and fifty-five of the same Act, as amended, are paid by the uninsured employers for the year immediately preceding. The
further amended to read as follows: amounts so collected shall be used to reimburse the National Treasury for the
appropriations therefor made by the Government for the payment of the
"Sec. 51. Enforcement of award. As soon as a decision, order or award has expenses for administering this Act.
become final and executory, the Commission or the duly deputized official in the
regional offices under the Department of Labor, as the case may be, shall, motu "There is hereby created a committee composed of the head of the Bureau as
propio or on motion of the interested party, issue a writ of execution requiring chairman, two representatives of insurance carriers, and two representatives of
the sheriff of the proper officer to whom it is directed to execute said decision, uninsured employers, who shall be appointed by the Secretary of Labor which
order or award, pursuant to Rule thirty-nine of the Rules of Court of the shall have the duty of advising the head of the Bureau in carrying out the
Philippines. purposes of this section.

"Sec. 55. Expenses of administration. There is hereby created a special fund to "The members, unless government officials, shall be entitled to ten pesos per
be known as the Workmen's Compensation Fund, which shall be under the diem every time the committee meets."
custody and control of the Department of Labor, and shall be used exclusively for
the payment of the expenses for the administration of this Act. All monies Section 18. This Act shall take effect upon its approval.
collected under Sections thirty-one, forty-four, forty-seven (6), fifty-four and
Approved: June 20, 1964
fifty-six of this Act shall be paid into said fund: Provided, however, That the
expenses of the Bureau of Workmen's Compensation and the Workmen's
Compensation Commission shall be included in the annual budget of the
Department of Labor: And provided, further, That the surplus amounts of the
Workmen's Compensation Fund shall accrue to the fund for the rehabilitation of
disabled men in industry.