Landownership in the Philippines under Spain
The Spanish colonization of the Philippines introduced a system of pueblo
agriculture, where rural communities were organized into pueblos and given
land to cultivate. Filipinos were not allowed to own their land, but were
assigned to these lands to pay tributes. The Spanish crown awarded tracts of
land to religious orders, repartamientos for military service, and Spanish
encomenderos, who managed the encomienda. This system was unfair and
abusive, with Filipino farmers forced to sell their products at low prices or
surrender them to encomenderos. The hacienda system developed in the
19th century as the Philippines became an exporter of raw materials and
importer of goods. In the 1860s, Spain enacted a law ordering landholders to
register their landholdings, leading to agrarian revolts. The Filipino
Revolution was fought for freedom, but the necessity of owning land became
the greatest desire. The first Philippine republic was short-lived, and the
arrival of the Americans signaled a new era of colonialism and imperialism in
the Philippines.
Landownership in the Philippines under the Americans
The Americans in the Philippines addressed the issue of landlessness by
passing land policies to increase small landholders and distribute land more
evenly among Filipino tenants and farmers. The Philippine Bill of 1902
provided regulations on the disposal of public lands, while the Land
Registration Act introduced the Torrens system and the homestead program
in 1903. However, landownership worsened during the American period, with
no limit on the size of landholdings and limited accessibility to those who
could afford to buy, register, and acquire fixed property titles. This led to
widespread peasant uprisings, such as the Colorum and Sakdal Uprising in
Luzon. The Sakdal Uprising, a peasant rebellion in Central Luzon, was a
significant event in the country's history, highlighting the social inequality
caused by issues in land ownership and tenancy. President Quezon
implemented a social justice program and created the National Rice and Corn
Corporation (NARIC) to assist in the purchase of haciendas and improve
landlord-tenant relationships.
Post-War Interventions toward Agrarian Reform
Post-war rehabilitation efforts in the Philippines focused on addressing past
issues, with President Roxas passing Republic Act No. 34 to establish a 70-30
sharing arrangement between tenant and landlord. However, no support was
given to small farmers. Under President Quirino, the Land Settlement
Development Corporation (LASEDECO) was established to accelerate the
resettlement program for peasants, later becoming the National
Resettlement and Rehabilitation Administration (NARRA) under President
Ramon Magsaysay. The Agricultural Tenancy Act was passed to govern the
relationship between landholders and tenant farmers, protecting tenant
rights and enforcing tenancy practices. The Court of Agricultural Relations
was created in 1955 to improve tenancy security and resolve land disputes.
The Agricultural Credit and Cooperative Financing Administration (ACCFA)
was established to provide warehouse facilities and assist farmers in
marketing their products. NARRA accelerated the government's resettlement
program and distribution of agricultural lands to landless tenants and
farmers. However, the landed elite did not fully cooperate and criticized the
programs.
Agrarian Reform Efforts under Marcos
In 1972, President Marcos declared Martial Law, allowing him to eliminate
the landlord-dominated Congress and expand executive power. He initiated a
"fundamental restructuring" of the government, focusing on solving rural
problems. The Code of Agrarian Reform of the Philippines, also known as
Presidential Decree No. 27, became the core of agrarian reform during
Marcos' regime. The decree defined tenant farmers as owners of a family-
size farm of five hectares if not irrigated and three hectares if irrigated. The
landowner could retain an area of seven hectares if the landowner is
cultivating it. The land's cost was determined by the land's value and annual
amortizations. The government guaranted these amortizations with shares of
stock in government-owned and controlled corporations. The Department of
Agrarian Reform was empowered to promulgate rules and regulations for
implementing the decree. However, the landlord class continued to
circumvent the law, evicting tenants and hiring workers. The corruption of
Marcos and his cronies further weakened the regime's power.
Post-1986 Agrarian Reform
After the fall of Marcos and the 1987 Constitution, agrarian reform gained
importance, with President Corazon Aquino aiming to make it a key part of
her government. However, her ties to a wealthy family made it difficult. On
July 22, 1987, Aquino introduced land reform through Presidential
Proclamation 131 and Executive Order 229. The Comprehensive Agrarian
Reform Law (CARL), passed in 1988, aimed to redistribute land from owners
to tenant-farmers, with compensation from the government. However, during
Aquino's presidency, only 22. 5% of the land was distributed in six years,
primarily due to elite resistance in Congress and controversies over stock
distribution at Hacienda Luisita. Under President Ramos, the program's
implementation accelerated, but by 1996 only 58. 25% of the targeted area
was covered. To improve funding and extend the timeline, Ramos signed
Republic Act No. 8532 in 1998, prolonging the program by another ten years.
CARPER and the Future of Agrarian Reform in the Philippines
The Comprehensive Agrarian Reform Program (CARP) in the Philippines faced
a new deadline in 2008, leaving 1. 2 million farmers and 1. 6 million hectares
of land still to be distributed. In 2009, the government extended the program
for five more years with Republic Act No. 9700, known as CARPER. Between
2009 and 2014, CARPER allocated 1 million hectares to 900,000
farmers. Despite these efforts, 500,000 hectares remain unallocated. The
Department of Agrarian Reform (DAR) and the Department of Environment
and Natural Resources (DENR) are responsible for this task, but issues like
powerful landowners and government inefficiencies hinder progress. Without
overcoming these challenges, true agrarian reform seems out of reach for
farmers.
Evolution of Philippine Taxation
Taxation is a necessary part of society, as governments need funds to
operate. In the Philippines, taxation has evolved over time, influenced by its
colonial history. The government uses taxes to promise better governance
and improve citizens' lives.
Taxation in Spanish Philippines
The text discusses taxation in the Spanish-ruled Philippines and its impact on
local communities. Before the Spanish arrival, Filipinos lived in a subsistence
economy and had different forms of paying tribute, which varied from
modern taxation. The Spaniards changed this system by imposing tributes to
fund officials and church expenses. To improve tax collection, they
established pueblos where Filipinos were settled and farms were
provided. Some groups were exempt from tribute payments, leading to
increased agricultural production to meet demands. Over time, payments
included both cash and goods.
The establishment of the Manila-Acapulco trade route in the late 1500s
boosted the economy, helping sustain Spanish control. Tax collection relied
on support from Mexico until its independence in 1820. In 1884, the tribute
system was replaced with a poll tax based on individual income, which
heavily burdened peasants but improved revenue. Chinese residents faced
even larger tax payments.
In 1878, two direct taxes were introduced for urban incomes: urbana and
industria, while agriculture was exempt to encourage growth. Indirect taxes
were added as well. The colonial government also profited from monopolies
like tobacco and liquor. Forced labor, known as polo, required Filipino men to
work for public projects, which caused hardships and population declines.
Mariano Herbosa writes to Jose Rizal about the unjust tax system, where
local officials enriched themselves at the expense of the poor, creating a
significant wealth gap. Various taxes on land showed inconsistencies, leading
to a confusing payment system. Herbosa criticizes how local officials
benefited from this taxation while peasants continued to suffer, deepening
the divide between the wealthy landowners and poor farmers.
Primary Source: Mariano Herbosa Writes to Rizal About Taxes
Mariano Herbosa writes to Jose Rizal about the difficult tax system in their
area, which adds to local suffering. He describes various taxes based on land
use, where irrigated rice land requires specific payments, regardless of water
availability. Taxes can rise after good harvests but do not decrease with poor
ones. The rules for residential lots are unclear, leading to high fees for small
properties. Tax contracts last four years but still see annual increases,
causing residents to negotiate payments like buying fish. Herbosa seeks a
tax receipt to clarify amounts paid, noting that many receipts lack
signatures. Taxes on crops, like palay and maize, vary frequently, and recent
disasters, such as locusts destroying crops and low sugar purchases, have
made conditions worse. Although the governor offered funds for locust
catchers, the payment was insufficient, and efforts continue without further
support.
Taxation under the Americans
The Americans aimed to make the Philippine economy self-sufficient and
create a budget surplus after acquiring the islands. From 1898 to 1903, they
modified the outdated Spanish tax system, suspending contracts for opium,
lottery, and mint charges. The urban tax was replaced by a land tax on urban
and rural estates. However, land titling was disorganized, influenced by
politics, and faced resistance from landowners, leading to high tax
evasion. To address issues with land tax collection, the Internal Revenue Law
of 1904 was enacted, which established major revenue sources, including
taxes on alcohol and tobacco. Other taxes included document stamp taxes
and business taxes, but various reforms and new taxes, like income and
inheritance tax, failed to significantly increase revenue.
Taxation during the Commonwealth Period
During the Commonwealth period, new tax laws aimed to make the system
fairer emerged. In 1936, income tax rates were raised, and a surtax was
added for incomes over 10,000 pesos. Corporate taxes also increased. In
1937, the cédula tax was eliminated, but in 1940, a residence tax was
introduced for all citizens aged 18 and corporations. The National Internal
Revenue Code was drafted in 1939, which changed the tax system
significantly. It replaced the former income tax structure with a progressive
rate, reduced personal exemptions, slightly raised corporate taxes,
introduced a 10% turnover tax on luxuries, and increased taxes on alcohol,
cigarettes, and mining. Despite these changes, the tax system remained
unfair; the lower class faced a heavier burden, while the elite managed to
benefit. With World War II, the Japanese administration continued the tax
collection systems from the Commonwealth, focusing on licenses and
amusements, facing challenges in tax collection as economic activity
declined.
Fiscal Policy from 1946 to Present
The Philippine economy faced challenges after World War II, especially with
Manila destroyed and agriculture disrupted. Though declared independent,
the country relied on U. S. funding, leading to dependency and missed
opportunities for tax reforms. By 1949, the government struggled with
funding military and education, and tax collection efforts were
inadequate. President Manuel Roxas refused a U. S. suggestion for direct
taxation to appease Congress.
Economic growth started under President Elpidio Quirino, who introduced
measures that reduced reliance on imports and increased government
revenue through higher corporate taxes. However, later presidencies did not
significantly change the tax structure, leaving lower classes overburdened
while the wealthy evaded taxes. Between 1959 and 1968, no new tax laws
were passed, and corruption roamed free, threatening development funds.
Under Ferdinand Marcos’s rule, the regressive tax system continued, with
indirect taxes making up 70% of total collections. The tax system produced
low yields, with a tax effort at only 10. 7%. When Corazon Aquino became
president, major tax reforms began with the 1986 Tax Reform Program,
aiming for a fairer and more responsive tax system. A significant change was
the introduction of a value-added tax (VAT), which enhanced government
revenue but later faced challenges from exemptions.
Aquino’s administration also reformed the Department of Finance and
increased compliance through audits and computerization. As a result, tax
and revenue efforts improved from 10. 7% in 1985 to 15. 4% by 1992. Under
Fidel Ramos, tax reforms continued with the Comprehensive Tax Reform
Program in 1997, broadening the VAT base to include services and adjusting
exemptions.
Joseph Estrada’s term offered little change, but Gloria Macapagal-Arroyo
expanded government spending, leading to deficits. The Expanded VAT law
in 2005 broadened VAT to include energy products and increased the rate
from 10% to 12%. Benigno Aquino III, starting in 2010, adjusted existing
taxes rather than imposing new ones and implemented a Sin Tax Reform on
alcohol and tobacco, improving funding for health services.
Rodrigo Duterte aimed for tax reform to lower income tax rates and revise
outdated laws, hoping for economic growth benefiting all classes.
