“Land Reform” for the Elite: “Voluntary offers to sell” under C.A.R.P.

By David Wurfel, University of Windsor
prepared for presentation at Annual Meeting of the Association for Asian Studies, Los Angeles, California, March 25-28, 1993

The “voluntary offer to sell” provision of the comprehensive Agrarian Reform Program was the first to be implemented and was highly corruption prone, causing the resignation of the Secretary of Agrarian Reform. This happened because of a badly written law and poorly framed regulations, implemented within the framework of a neopatrimonial system, and weak state, though not exactly as described by Migdal. Prospects for change in the short term are poor.

Among many peasants and their advocates there was high hope of land reform when Cory Aquino came to power. She had promised it during her campaign; some of its more forceful proponents were given key appointments. But during her first year in office she seemed to be abandoning the peasants’ cause.

Not until the horrified national reaction to the shooting down of unarmed demonstrators for agrarian reform in front of Malacanang Palace in 1987 did she appoint a cabinet action committee to draft an executive order on the subject. That process seemed to go fairly well for a few months, until landlord interests and the prejudices of her executive secretary intervened. The result was an executive order(No. 229) in July — just before the convening of an elected Congress and the end of the President’s transitional legislative powers powers — that was conservative in tone and referred the hard decisions to Congress.

When a Congress in which landlord interests were amply represented finally passed a law (Republic Act 6657) for a “comprehensive agrarian reform program” (CARP) in June 1988, the President called it the “centerpiece” of her administration. But, in fact, the post of Secretary of Agrarian Reform was left vacant months; it was never filled by anyone of great political weight; and the president herself never exhibited any personal interest in the program. Thus the subsequent inability of officials of the Department of Agrarian Reform (DAR) to fend off pressures or avoid succumbing to temptations is not surprising.

They had no leadership or support for doing their assigned task, and the task itself was very poorly defined by law and regulation.

The peasant movement, organized in a coalition called Congress for a People’s Agrarian Reform (CPAR), was partly responsible for the fact that there was any new legislation at all. But its members had almost no role in program implementation.

The program began with the announcement of the impossibly ambitious goal of distributing over 10 million hectares of land (more than the total farm area as reported by the 1980 Census of Agriculture) to nearly 4 million farmer beneficiaries (FBs). By the end of 1991 the always bloated DAR statistics reported that certificates of award (not yet titles) had been distributed to 167,297 FBs covering 376,255 hectares. Most of this was rice and corn land on which reform was initiated by Marcos. The “centerpiece” had become, in the words of a well-informed cynic from Bicol, just what it was intended to be, “decorative and stationary”.

Merely to cite failure in Philippine agrarian reform has tiresome, however. The real challenge is to explain the of that failure and find ways of overcoming them.

We will attempt to meet that challenge at the end of this paper, in the meantime using a case study of voluntary land transfer under Republic Act 6657 as a means of providing some new insight into causes and solutions.

For some the monotony of failure in Philippine agrarian policy has led to severe doubts about whether reform can ever be achieved and questions as to whether it is even necessary or desirable for the development process. Intellectual fatigue is understandable, but to find a rational and empirical basis for dismissing the need for agrarian reform is very difficult. It is still an essential stepping stone to optimal agricultural productivity and to stable representative democracy.

Voluntary Transfer: History of the Concept and Legal provision

The reason for the introduction of the concept of voluntary transfer was summed up in a position paper of the Integrated Bar of the Philippines: “… less problems will be met in this mode of coverage.” (IBP, 1987).

“Less problems” meant especially less between landowners and the DAR, as compared with compulsory acquisition. Indicative of the early consensus on this measure was its appearance in the draft bill presented by CPAR to the House Committee on Agrarian Reform in August 1987.

CPAR in “phase one” priority “private holdings voluntarily offered by their owners”

Later, however, the early concept was divided into two measures, on which there were different opinions. “Voluntary land transfer”, which ultimately was the subject matter of two sections in the law (Sec. 20, 21), came to mean direct transfer from landowner to beneficiary, not involving government acquisition of the land. There had already been a section on VLT in the earlier, stronger drafts of the executive order. Some feared, however, that provision would help preserve the subordination of the tenant-client to the landlord-patron, and might even postpone the acquisition of clear title by the tenant. It would certainly have placed greater pressure on the tenant to pay his amortization installments than existed under the terms of government acquisition. Certain of these concerns were met later in the draft bills in Congress. Nevertheless, despite criticisms by the World Bank team, provision for VLT was still not opposed in principle by the peasant coalition in 1988.

After passage of RA 6657, which CPAR regarded as an entirely unsatisfactory piece of legislation, was revealed by Sec. 6 (3) of the proposed People’s Agrarian Reform Code (PARCODE). That provision read: “Direct sale by the landowners to the beneficiaries under the terms and conditions of this code” is an accepted “procedure for acquisition”. The moral right of landowners to negotiate directly with and transfer land to their tenants or farmworkers was widely accepted in Philippine society.

The option for landowners to make a “voluntary offer to sell” (VOS) to the government at first received less attention in drafts of and debates on agrarian reform legislation. As late as the May 25, 1987 draft of the cabinet action committee the VOS option offered no particular advantage to the landowners. (Sec. 8)

By June, however, the draft executive order included certain tax exemptions for landowners who made a voluntary offer.

Policy makers saw this as worthy of encouragement. When the legislation had completed its passage through Congress there was an even more tempting incentive: “Landowners … who voluntarily offer their lands for sale shall be entitled to an additional five percent cash payment.” (RA 6657, Sec. 19) Under compulsory acquisition lands above 50 has. were limited to 25% payment in cash.

The pricing formula for compulsory and voluntary sales was to be the same, however. Both VLT and VOS were welcomed by administrators who thought they would lessen the administrative overload that RA 6657 was sure to impose on DAR. Woe to those with lack of foresight!

VLT. VOS and BARC: Law and Regulations

Philip Juico was appointed Secretary of Agrarian Reform in July 1987, just after Pres. Aquino signed Executive Order 229, which left so many issues to Congress to decide. The office had been vacant for months. Reasserting the secretary’s authority over a sprawling, faction-ridden agency was not easy. Juico, originally from an agribusiness background, was working in the Department of Agricul ture at the time of his appointment. He was a family friend of the President.

By the passage of RA 6657 in June 1988, Juico had been in office for a year. But it took more than six months before some basic administrative orders were issued so that all portions of the act could be implemented. Early attention had to be given to VLT since RA 6657 required that landowners wishing to avail themselves of this option should notify the DAR within one year of passage of the act.

(Sec. 20[a]) Failure of the landowner to come to an on the price with qualified beneficiaries within a year of commencement of negotiations would cause the land to be subject to government acquisition. Thus the landowner could not extract a price from his tenants—if they were well informed—higher than that to be determined by the DAR for government purchase. Perhaps more important, however, was the fact that landowners were left with the responsibility of collecting amortization payments from tenants, as onerous as collecting rent. And there was no prospect of cash up front. The VLT process was therefore less popular among landowners than the law’s drafters had expected.

Because of rising demand, DAR’s attention necessarily shifted to VOS. By the end of 1990 nearly a half million applications had been received in the DAR central office, and more remained in regional and provincial files.

Administrative Order No. 3, the first to be issued on VOS, was signed on Feb. 20, 1989. It provided for a long and complex bureaucratic procedure to be followed by the landowner and by DAR officials themselves. That helps explain why by Dec. 31, 1990 only 71,000 landowners’ VOS applications had been processed and submitted to the Land Bank of the Philippines (LBP) for payment.

But AO#3 cannot be fully understood outside of the regulations on land valuation, set forth in AO#6, signed on March 8, 1989.

Land valuation was, of course, at the center of the political over agrarian reform fought within the executive and legislative branches of government.

In the early drafts of the cabinet action committee land valuation was to be based on “market “ as determined by the tax assessor, with a maximum of ten percent of the payment in cash. (Tax assessments are traditionally only a tiny fraction of real market value.) By the time the President signed the executive order, the provision on land had escalated to “the owners declaration of current full market value”, but “subject to certain controls to be promulgated by the Presidential Agrarian Reform Council”. In fact, little was done before Congress passed legislation a year later.

The first, and most radical bill (No. 400) filed on agrarian reform in the House of Representatives had called for expropriation entirely without compensation for properties of more than 50 has. Many months and many landlord amendments later RA 6657 in Sec. 17 provided that “in determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, tax declaration and the assessment made by government assessors shall be considered.” The imprecision of this passage has been the bane of bureaucrats and the source of solicitors’ income ever since.

It was inevitable that DAR would simplify and clarify this provision.

Administrative Order No. 6 (March 8, 1989) did just . It ignored “cost of acquisition” and “actual income” and set forth the (almost) simple formula: Market value as determined by comparable sales plus assessment plus declared value (which could not be more than twice the average of the other two components) divided by . The vaguest provisions, and thus the most difficult to implement were those regarding “comparable sales”; no guidelines were given.

And where there were no “comparable sales”, the average of the other two was to be the true land value.

While such a formula might have been accepted in other countries, many Filipino landowners were outraged. The “true” value might actually be less than “comparable sales”. The law gave landowners the right to appeal land valuations to the courts, and hundreds did.

In May 1989, during the brief term of office of Miriam Santiago, DAR Administrative Order No. 17 was promulgated, both further complicating and clarifying the formula. Capitalized net income was spelled out and given a prominent place; guidelines were provided for the application of “comparable sales”. The new formula, which was supposed to take effect only after Dec. 31, 1989, slightly reduced the weighting for the tax assessment, which, of course, favored landowners.

The biggest change in favor of landowners took place in the term of Ernesto Garilao, Pres. Ramos’ appointee as Secretary of Reform. Admin. Order No. 6 of Oct. 30, 1992, reduced the weight of the tax assessment in the formula by 2/3; the capitalization of net income was changed from 20% to 12%. These and other changes in AO#17 would allow a valuation of the same land with the same production at a price more than 50% higher than before. AO#6 also helped break some administrative bottlenecks by providing special formulas for land with different types of crops, for instance, raising the valuation for rubber plantations on which there had been a deadlock between DAR and landowners. Sec. Garilao made it clear that he believed the major cause for the slow rate of acquiring private lands “is the discontent among landowners on the low valuation of their lands.” (DAR, “Toward a Faster, Fairer and More Meaningful CARP…”)

There were other reasons, of course, for DAR’s low rate of output. Despite the clarifications in AO#17 there were still ambiguities, allowing tremendous administrative , and thus DAR bargaining with landowners—nor were DAR officials always bargaining on behalf of peasants.

Recognizing, at least superficially, that peasants needed to be given a chance to look after their own interests, Congress had written into RA 6657 that Barangay Agrarian Reform Committees (BARCs), to be formed in every village, should be allowed to “assist in the initial determination of the value of the land”, other functions. (Sec. 47)

It was a vague reference, without much force. The provisions on BARC in Sec. 19 of Executive 229 were not much help either; while the categories of membership were mentioned, the exact number of BARC members was never specified. On March 3, 1989, Secretary Juico signed Admin. Order No. 5 which provided for the structure and functions of the BARCs in more detail.

A BARC was to have eleven members, one from the barangay and four from government agencies, the Dept. Of Agriculture, the Dept. of Environment and National Resources, DAR, and LBP. Two were to be farmers or farmworkers; another was to represent a farmers organization, and a fourth, an agricultural cooperative. There was be one NGO and one landowners’ representative. Except for the first five, all were to be elected in a meeting called for the purpose, from among and by the members “of each sector”. “Sectors” referred to farmers, landowners, NGOs, farmers organizations and agricultural cooperatives. The Municipal Agrarian Reform Officer (MARO) was to prepare a voters’ list for each sectoral group. This was a concept and a procedure left over from martial law days.

But there was no definition of membership in any sector. While this might cause no difficulty in many barangays_,_ where social Class identities were unclear, disputes would surely arise if the BARC became an important organization in the community, wielding real power.

Most potential problems were avoided by simply ignoring the regulations. BARC members were usually appointed by DAR personnel, according to a study commissioned by DAR itself. (Ledesma, 1991)

More than 2/3 of BARCs never met after they were organized. In , the author’s field interviews revealed that many BARCs existed on paper only. In effect, they were an unwanted burden on local DAR officials. And since their functions were so poorly defined, e.g. To “assist in the initial determination of the value of the land”, they could easily be ignored. However, as we shall find later, they could called into service when the MARO needed them.

By 1990 DAR leadership had become aware of the non-functioning BARCs. Admin. Order No. 14 was promulgated in August to try to the problems.

The change in BARC membership was an step in the right direction. Voting members were limited to seven, including only one non-cultivating landowner; all voting members were to be _barangay_residents. Government agency and NGO representatives became non-voting members.

There was also a refreshing realism in the decision to limit DAR assistance to BARC formation to “barangays which have expressed needs for one”, with the MARO in a strategic position to overlook “expressed need” if he wished.

Nor was there any sharpening of the definition of BARC functions. In any case, for nearly a year after the AO was signed, very little was done to implement it. BARCs are still mostly non-existent, even in barrios with agrarian reform activity. The ionalized voice for the peasantry in the agrarian reform decision-making process is still missing.

But even if BARCs had been active there was a provision in the law that reduced the likelihood that they could have become watchdogs of VOS overpricing. Sec. 26 of RA 6657, which expressed sentiments of many peasant advocates at the time of passage, limits amortization payments for land reform beneficiaries to “5% of the value of the annual gross production” in the first five years, and allows the LBP to reduce payments in the following years so that they do not exceed 10% of annual gross production. The paid by the government to the landowner is thus less relevant to the prospective beneficiaries. Yet if the massive non-payment of amortization payment of amortization under the Marcos-era Operation Land Transfer continues to be tolerated, then these legal provisions become insignificant to the peasant.

In sum, the law and regulations providing the context for the transfer of land were designed to increase landowner co operation and reduce the administrative burden on DAR—but had different consequences.

The language was vague and imprecise, considerable discretion to officials and opportunities for intervention by landowners; clarifications were usually in the landlords’ favor, but in the long run did not secure their cooperation. An institutionalized opportunity for a peasant voice in the agrarian reform process was suggested by the formal provision for BARCs, but it did not materialize.

Policy Implementation

Because of the lack of incentives to landlords mentioned , only 2,036 farmers had received certificates of award to land under the VLT provision by the end of 1990, which jumped to 11,839 by the end of 1991.

Still this was only 7% of the total of certificates received under all provisions of RA 6657 in the same period. In any case, while the advantages to the farmer beneficiary from the VLT procedures may have been less than when the land was acquired by the government, depending on the attitude of the landlord, it can be said that VLT produced no headlines about corruption. If it happened, it was on a small enough scale to escape wide public notice. The same could not be said for VOS.

As mentioned, voluntary offers to sell from landowners had piled up by the end of 1991 which covered a half million or more hectares. Landowners who had studied the law or talked to their favorite DAR official had visions of sugarplums dancing in their heads. This was all the more remarkable in view of the fact that before RA 6657 was finally passed, landlord groups in both Negros and Mindanao had threatened to take up arms against the government rather than give up their lands.

In fact, by 1991 new applications for VOS had slowed to a trickle. Applications covering only 21,817 has. were received in the central office in that year and they had undoubtedly been sitting in provincial or regional offices some time before that.

Even in the first half of 1990 applications for only 34,015 has. had been received in Manila. About 80% of all applications were already in the head office by late 1989. Why the slowdown? Did the VOS somehow lose its attractiveness? The cause was to be found in a case of excessive greed by people with good connections, and its aftermath.

Applications for VOS were not distributed evenly around the country; 31% came from the Bicol region. (Putzel, 1992: 316) The Southern Tagalog and Central Luzon regions were not far behind. But why Bicol? Perhaps the Regional Director, Salvador Pejo, gave landowners some encouragement, or so one might deduce from subsequent events.

The nation’s eyes were opened to the underlying realities of VOS by a single transaction, in the province of Camarines Sur, Bicol. In 1982 the United Coconut Planter’s Bank (then controlled by the top Marcos crony, Danding Cojuangco) acquired through foreclosure a 1,887 ha. estate in a remote area of the province.

It was once owned by an established Spanish family, the Garchitorenas, whose name was also that of the municipality, by early 1980s a stronghold of the NPA.

In February 1988, in with Exec. Order 229, it was registered with DAR by the UCPB with a declared value of P3.2 million.

With Cojuangco in exile abroad and his properties being sequestered, the UCPB was circumspect.

In April it executed a contract to sell the property to Sharp International Marketing, Inc. By its president, Lina, for P3 million, with a downpayment of PI million. The next month Lina filed an offer to sell the exact same land to the government under CARP for P56 million (sic). In early August Lina visited Sec. Juico and, by then, Undersecretary Pejo to complain about the delay in processing his offer. Within a couple of weeks a party of ten set out for a seven day ocular inspection of the land, 17 kilometers of which was on foot. The party, headed by the DAR district officer, included the BARC chairman. All but one of the members of the team, including the BARC representative, commented on the “good production” of the land and agreed to a price of more than P30,OOO per hectare, greater than the asking price! Only the Land Bank member, noting that most of the area was simply grazing land, recommended the still generous price of P15,OOO per ha. (See Senate, Committee on Agrarian Reform/Report,” June 1989)

This one slightly sour note did not slow the progress of the , however. It received top flight help. Only in December did the UCPB finally execute its deed of sale to Sharp, with the assistance of a fraudulent document from Undersecretary Pejo. When the Sharp VOS claim folder finally reached the Land Acquisition and Valuation Division in the DAR central office on December 15 th it was accompanied by a personal note from Sec. Juico marked “rush” which concluded, “Please expedite. This is being followed up by Sen. [Joey] Lina.” Obviously Alex Lina, a relative, was confident things were going well.

The same day he “borrowed” his claim folder from DAR, returning it on the morrow with the price changed P56 to P65 million!! On December 28 th the first meeting of the DAR-LBP Compensation Clearing Committee was held, under the chairmanship of Undersecretary Pejo, making the approval of the Sharp offer their first item of business.

(The committee also approved three offers by Romeo Santos, the major financial backer Sharp, whose election to Congress was under challenge for irregularities.) A few days later Sec. Juico signed the deed of absolute sale and order of payment for P62.7 million (only) to Sharp International; the money would come from the Land Bank. But in February 1989 Land Bank President Deogracias Vistan called Secretary Juico, informing him of Sharp’s P3 million acquisition cost and declaring there is…“no way Land Bank will pay.” Juico agreed with Vistan to suspend payment to Sharp. The matter did not end there, however.

Apparently in early April Ateneo de Manila University President, Fr. Joaquin Bernas, S. J., who sometimes acted as an advisor to the president, told Mrs. Aquino about the scandal. (Putzel, 1992: 315)

(Perhaps she already knew what later hit the press, that her brother Congressman ‘Peping’ Cojuangco was closely associated with Romeo Santos.) She met with Vistan and Juico. But the story still did not reach the public domain until Vistan, to let the matter be covered up, told Congress; the ensuing uproar practically brought the work of DAR to a halt.

In addition to all the press coverage, the Senate and House of Representatives committees on agrarian reform held a joint hearing, after visiting Garchitorena. The joint committee pointed out that the Garchitorena estate was, in large part, not eligible for DAR purchase in any case, since it was too hilly. After chronicling the series of frauds, they accused Sec. Juico of “grave abuse of discretion” and asked for his resignation.

Undersec. Pejo was charged with violation of the Anti-Graft and Corrupt Practices Act, lesser officials were said to be guilty of falsification of public documents. Juico did resign; Pejo and others were suspended.

But criminal charges were not pressed, and most of those suspended eventually returned to DAR. Pejo probably already knew, if you cavort with the very powerful, they can and will protect you, for they are simply protecting themselves.

Nevertheless, the spotlight of publicity was shining on the VOS process. Rumors circulated that the scandal only the tip of the iceberg, that Congressman Cojuangco had prompted a number of anomalous VOS transactions as a means of raising money for the 1992 election campaign.

Certainly Romeo was involved in more than just the Garchitorena deal. What was most interesting was that the Bicol scandal contained so many elements that were common in VOS transactions.

In fact, the price almost paid in Garchitorena was not too much higher than the price actually paid for 305 has. In Northern Mindanao, an impressive P27,161 per ha. (DAR sources, as compiled by Putzel, 1992: 313). Prices paid in Region 2 (Cagayan Valley), Region 11 (So. Mindanao) were also higher than the per ha. Price of P20,951 actually paid for VOS in the Bicol region.

In Basilan province in Region 9 (Western Mindanao) no land VOS had actually been acquired and paid for by the LBP as late as February 1991.

A special reason for this was hard with plantation owners about the price of rubber land. A rubber industry committee was formed in early 1991 to hammer out an agreement.

Not until October 1992, however, was a new administrative order (AO#6) issued that had specific provisions for “landholdings planted to permanent crops”.

Interest in the VOS option had been widespread in the province for two reasons: Muslim rebels were active in many areas, sometimes disrupting the harvest, or the transportation of the product to market.

They also made financial demands on plantations. In fact, plantation managers they were losing money, both for the above reasons and because world market prices for rubber were down.

Sime Darby, the Malaysian-based multinational, offered over 1000 has. of its Tumajubong Plantation for a handsome P75,489 per ha., while Menzi Agricultural Corporation offered its 1020 ha. farm, planted mostly to rubber, for a mere P61,500. (Interview with MAC mgr., Feb. 1991) In both cases, despite complaints about poor rubber prices, it was clear that the corporations did not want to stop producing, but planned to sign an agreement with the new owners, a workers’ cooperative, that would give the corporations to labor more cheaply than under then current conditions. But because the corporations either temporarily suspended operations or stopped planting new trees, which cut present or future income for workers, their unions became the loudest voices for early payment by the Land Bank. Union officers did not seem to be particularly worried about the high land prices being demanded.

On both plantations the corporations expected to retain ownership of processing facilities and the land where it was located, thus preserving powerful leverage on the workers’ cooperative.

In Negros Occidental, the Philippines’ premier sugar producing province, there were similar conditions on VOS lands. One field investigation found thousands of hectares that were far from the , in hilly and mountainous terrain, and the scene of clashes between the NPA and the military.

Negros also had its own land scam, where DAR purchased the 374 hectare Villasor Estate for P7.7 , an average of P20,517 per ha. (Putzel, 1992: 317) This land, which was mostly abandoned, upland property, had originally offered by the owners for P3 million! Receiving much less publicity than the Garchitorena case, there were no suspensions, dismissals or prosecutions of DAR officials.

Other cases of exorbitant overpricing and suspected fraud were reported from Sorsogon, Sulu and Agusen del Sur provinces. (Daily Globe, May 7, 1990).

In Bicol the anomalies in the implementation of VOS extended far beyond the municipality of Garchitorena.

Romeo Santos, the angel for Sharp, had been playing a double, or triple, game for years, usually with the cooperation of Atty. Pejo. Santos was a high flier, who used to survey his land from atop a thoroughbred horse, clad in embroidered shirts and expensive cowboy boots. He had been a friend of Marcos chief of staff, Gen. Fabian Ver, until 1986, and soon thereafter became close to President Aquino ‘s brother, who backed his appointment as manager of the Manila International Airport, a strategic position if one were interested in smuggling.

Soon after the initiation of Marcos land reform in 1972, Santos, who had acquired considerable holdings by marriage into the Garchitorena family, physically drove off tenants planting corn in the town of Tigaon, Camarines Sur, to avoid coverage of PD 27, so he could then plant sugar, cashing in on high world prices. When the sugar boom collapsed, he offered these, and other acquired lands, to the government under operation Land Transfer in the late Development of Human Resources in Rural Areas [PHILDHRRA]), and researchers for the Institute of Popular Democracy.

The 1036 ha. Estate was offered by the Tuazon family to DAR under EO 229 even before the enactment of RA 6657. Though about 80% of the land was in pasture, the owners asked P40 million in compensation. The municipal office of DAR, however, with honest diligent leadership, concluded that it was only worth P12 million. (After all, the owners had abandoned the hacienda in 1985 because of NPA activity.)

Then the Tuazons challenged the DAR valuation in court; in the long delay problems erupted.

In early 1988 DAR had compiled a list of about 480 “pre beneficiaries”, most of whom had been hacienda employees before 1985, all landless residents of the barangay where the hacienda was located. But with the delay over pricing, the land remained vacant and uncul ti vated.

In late 1989 a group of 55 farmers—Iater expanding to more than 200—entered and proceeded to portions of the estate, claiming to be a chapter of the long established Federation of Free Farmers.

They were led by an employee of the office of the provincial governor (a very large ); the mayor was also the governor’s protege. The Tuazons filed a suit against the FFF group, who were then defended by the national FFF legal staff. In various appeals to DAR, the national and regional offices seemed to favor the FFF, while the MARO and CSPARD community workers sided with the originally designated beneficiaries. Despite a court order ejecting the FFF as “illegal entrants” on the land, they remain. In the meantime 316 of the “qualified beneficiaries” also entered and began cultivating plots of land.

The good news is that there has not been an armed struggle between the groups, thanks in part to NGO help in forming a “peace council”. But as of 1992 the land valuation was still not resolved to the satisfaction of the parties and both groups of claimants were occupying the land.

In sum, the VOS came to be seen as a chance for a top price the government for abandoned, unproductive, or unprofitable land. Some, like Santos or Villasor and scores of others with strong political connections, did get paid. But by late 1989 the gravy train was over.

This was not the result of the moral of the president, or of the force of the protest by peasant organizations but of an intense inter-bureaucratic rivalry between the DAR and the Land Bank over control of the valuation process.

From the beginning of the implementation of CARP the initial evaluation had been made by DAR, which was then passed on to the LBP for checking. After field observation in early 1991 I wrote: “The relationship of the two main CARP agencies, DAR and the Land Bank, often seems like guerilla warfare, with each…tossing VOS claim files back and forth like hot potatoes”.(Wurfel, 1991:5)

But DAR’s tarnished reputation after Garchitorena left an opening for the Land Bank. Despite last minute press releases from DAR indicating that the LBP did not have sufficient field personnel to conduct land valuations (Business World, June 6, 1990), the president on June 14, 1990 issued Executive Order No. 405 which that

“The Land Bank of the Philippines shall be primarily responsible for the determination of land valuation and compensation for all private lands suitable for agriculture…as governed by RA 6657. The Department of Agrarian Reform shall make use of the determination of the land valuation and compensation by the Land Bank…in the performance of its functions.”

DAR was still expected to gather and help provide the Bank with documentation, however. (The Registrars of Deeds were particularly recalcitrant, both because they were embarrassed by the fact that the records of “comparable sales” were so often fraudulent and because they were bargaining for more money to hire additional personnel.)

While the executive order may have simplified the valuation process, it certainly didn’t speed it up. The LBP had to recheck many documents from DAR, so the rate of payments under vas actually slowed down. Nothing was paid to landowners in 1990. This reinforced the growing complaint from landowners that “the government doesn’t have any money”, a complaint, though untrue, echoed by some mayors and governors. In fact, landowners, disillusioned about the prospects of generous compensation, by 1990 began to drag their feet on the submission of documents. This stance was made safer after it became clear that there was to be no enforcement of the compulsory acquisition provisions of RA 6657 — almost certain after the failure of the Commission on Appointments to confirm Florencio Abad, the only pro-peasant Secretary of Reform, who after a few months in office was abandoned by the president. In 1991 many landowners began to “withdraw” their offers to sell, even though there was no legal procedure for doing so. In fact, Admin. Order No. 19, issued by Sec. Santiago in November 1989, had specifically said that “all lands which are voluntarily offered for sale to the government may no longer be withdrawn.”

The issuance of DAR Administrative Order No. 5 on April 6, 1992 (just before the presidential election) may have marked the beginning of the end of the VOS era. It provided that “DAR may allow the withdrawal of voluntary offers to sell” if the notice of valuation has not been issued. It also provided three conditions which DAR could reject a VOS: if the land is not suitable for agriculture (which should have been used in Garchitorena);if there are no beneficiaries who want to farm the land; and if the only identified beneficiaries are the children of the landowner!! The Secretary of Agrarian Reform appointed by President Ramos, who comes from an NGO background, seems to have learned a great deal from DAR’s past failure. He has made a very cautious start, but those who are committed to genuine agrarian reform have observed that Sec. Garilao is saying and doing some good things, in spite of the fact that most land reform specialists expected the Ramos Administration to be “inactive” in this area.

In a September 1992 document from the secretary’s office (“Toward a Faster, Fairer and More Meaningful CARP…”) it is said that “The active participation of non-government organizations and people’s organizations in coordinative bodies will be encouraged.”

High priority is to be given the distribution of the vast lands owned by government banks and corporations which have been transferred to DAR; landlord intervention is thus minimized. Most is the revival of an old, important, but politically unpalatable proposal for the imposition of a progressive land tax. Yet all of the political forces and economic interests which have frustrated land reform in the past are still present and active.

Thus hope for early accomplishment by Sec. Garilao is dimmed by our concluding analysis.


As has been frequently asserted, the Philippine state is weak.

A former Sec. of Agrarian Reform, Heherson Alvarez, has been frank in admitting it. The state exists within the context of a neo-patrimonial political system, a system in which patron-client hierarchies define the most important dimension of social structure.

Thus state policy embodied in legislation cannot be implemented if it embraces goals that are in conflict with the interests of dominant patrons.

Policy which in any way attempts to reflect mass pressures or values of social justice will frustrated by the involvement of the neo-patrimonial oligarchy in the implementation process. As Joel Migdal has said, “The state is part of society”. (Migdal, 1987: 396) The making and enforcing of rules will largely reflect the structure and interests of patrimonial society.

But Migdal’s analysis is not entirely suitable for the Philippine case. He contrasts the role of the “state leader”, using modern bureaucratic mechanisms or mass mobilization as his instruments of power, and “strong men”, patrimonial figures at the l or local level. However, state leaders themselves may be part of the patrimonial hierarchy, manipulating their own clients, who may include local “strong men”. Peping Cojuangco was certainly one of the most powerful national patrons during the Aquino Administration, some would say, without peer. Romeo Santos fits Migdal’s definition of the “strong man” rather neatly: large landowner, with political ambitions, even capable of manipulating the state’s armed forces to his benefit. But he was not acting in competition with state leaders; he was in cahoots! He was a cooperative client of the major national patron.

President Vistan of the Land Bank was acting more like a “state leader”, protecting the bureaucratic interests, the turf, of the institution he headed. Unlike the head of a line agency who required annual budgetary appropriations by the Congress, a bank president needed to protect his capital, avoiding its extravagent use.

He did not have to cultivate Congressmen in order to get funds annually. Sec. Juico was less isolated from congressional pressure.

But a strong secretary maintains some autonomy by multiplying his patrons in Congress and not relying too much on one.

Within the DAR was an undersecretary who, when he was regional director, had taken on the role of “strong man” himself, even trying to run for elected office. But he was wise enough— according to the rules of patronage politics—to subordinate himself to a more powerful regional strongman, Romeo Santos, and find national patrons as well. The bureaucracy was not only penetrated by the patrimonial hierarchy, but some leading bureaucrats took on the role of patrons, or clients, themselves, more identified with society than with state. Salvador Pejo was terribly unusual in the Philippines. The only thing special about the Garchitorena scandal in the history of Philippine land reform was the percentage of corrupt profit on the deal and the level of protection the schemers had.( It ranks with the Buenavista-Tambobong scandal in the Quirino administration.) In return for protection from the President’s brother, however, Santos and Pejo undoubtedly had to share generously. That aspect of the deal was never investigated.

Even in a neo-patrimonial system, however, there may be pockets of mass mobilization, and not necessarily initiated by state leaders. In fact, in the Philippines such mobilization in recent years has been more often directed against them. Mobilized peasants could have an impact on policy implementation if the law permitted it and if those peasants developed strong, institutionalized organizations. As we noted with CSPARD at the Pecuaria Estate, NGOs could make some positive contribution, even without clear and effective provisions in law or regulation on the creation of the BARC. Yet mass organizations could also be penetrated by landlord patrons, as was also true at Rancho Pecuaria, in some plantation unions in Basilan, and in the Garchitorena BARC.

Sadly the weakness of peasant organizations was not simply the result of outside pressures. The intensity of the competition for land tended to factionalize potential beneficiaries of land redistribution. Furthermore, the ideology of the peasant movement may immobilize its participation in policy implementation. Unlike the Federation of Free Farmers, which was a major force pushing for the implementation of agrarian reform legislation in the late 1950s and ’60s, a large part of the peasant movement in the 1980s was guided by a revolutionary ideology, and many of those organizations who were not of the Left were more utopian than the FFF (which was in the 1990s a mere remnant of its former self).

Thus there was almost no effort on the part of peasant organizations to help in the formation of BARCs, as difficult as that would have been. Nor were there any steps to monitor the valuation process in other ways.

When CPAR leaders made presentations to a joint hearing of the House and Senate committees on agrarian reform in March 1989, some of their criticisms were valid, but others revealed some ignorance of what was happening in DAR. CPAR admitted that attendance at that hearing was the first time since the passage of RA 6657 that any CPAR representatives had taken part in a government-initiated forum. (Agrarian Reform Monitor, First Quarter 1989: 4) The main of CPAR’s coalition activity in 1988 and ’89 had been seeking signatures on a petition for the enactment of the People’s Agrarian Reform Code (PARCODE), under provisions of Art. VI, Sec. 32 of the constitution, which allowed people’s initiatives. CPAR sometimes failed to explain to those whose signatures were sought that even if the daunting 10% of all registered voters were signed up, this would merely present the CPAR draft bill to the Congress for debate, amendment, and enactment—or rejection.

Eventually, however, the complexity of the task became more widely known and by , with less than half of the required signatures, the campaign was abandoned in most communities. The draft bill was so strong that, though desirable, it would never have passed through Congress.

In the meantime, most chapters of CPAR’ s largest constituent organization, Kilusang Magbubukid ng Pilipinas (KMP) , regarded their major role to be that of “mass base” for the armed struggle by the NPA. So there was no enthusiasm for helping to implement a clearly flawed piece of legislation.

If one puts landowner reaction to land reform in five ¯ignoring, evasion, obstruction, manipulating and cooperation—VOS seemed to produce one of the milder forms at , manipulation.

But as one should expect in a patrimonial , landowners didn’t usually act as a group, but individually, in dyadic relations with patrons and clients. (Interviews with Wifredo Clavecilla, LBP, and with Engelberto Barbosa, newspaper editor, Naga city, 1991)

Only rarely did the formal political elite at the local level, headed by the mayor, act on behalf of landowners. Most landlords went directly to DAR, their level of access depending on the size of their holding and their political connections. Conversely, DAR municipal officials who- rarely—appeared to side too openly with the peasants were sometimes subject to physical threats by landowners who wanted no part of reform, which fits in the “obstruction” category. By the 1990s the reaction of many landowners to VOS had regressed to “ignoring” when they failed to respond to requests from DAR or the LBP for documents necessary to the valuation process.

Even under the very inadequate law and regulations that exist today, it would be possible to improve the rate of land distribution to the peasant. Concentrating on those lands to which DAR already has title would seem to be a wise strategy.

But it will require an honest and forceful secretary of agrarian reform, with backing from Malacanang, ready and willing to prevent any improper intervention in administration processes. It would also NGOs and peasant organizations dedicated to working both within and alongside the reconstituted BARCs to defend farmers’ interests and help prevent factional struggles among local peasants that would make it very difficult to allocate land. Foreign aid projects for agrarian reform with built-in corruption monitoring and automatic cut off mechanisms would certainly help. (Dutch funding of phantom settlement projects could have been avoided.)

No substantial progress toward distributive agrarian reform is possible, however, without major changes in law and regulations. What such legislation should contain, and how it might be enacted are subjects for another paper. It is encouraging that such questions are getting new attention under the framework of the peace process. But one has little hope that an agenda for genuine agrarian reform can be successfully transplanted from the NUC to Congress.

Haydee Yorac the miracle worker will probably not be able to go that far.

Table 1. CARP Accomplishments

1989 Dec. 31 (Cumul.)1990 Dec. 31 (Cumul.)1991
Dec. 31 (Accompl. during)
1992 Jan. 1 (Cumul.)1992 Jan.-Nov.1992 Nov (cumul)
CLOA Distribution
no. of Farmers

Area (Has.) [includes PD 27]

Voluntary Offers to Sell
Area of Applic- ations Received in Central Office396,653471,13621,817

LO Claims Submitted to LBP
no. of FBs3,81220,47842,98263,460

CLOAs Distributed[204,021]
no. of FBs8763,59814,87118,469


LO Claims Approved for payment by LBP
no. of FBs1,6031,603


Voluntary land Transfer CLOAs Distributed
no. of FBs


Compulsory Acquisition CLOA Distribution (over 50 has.)


Total: CARP
ID Claims Submitted to LBP [processed by DAR]


Sources: DAR, “National Summary of Accomplishments, as of Dec. 31, 1991”; DAR, “Claim Folders Transmitted to Land Bank of the Philippines”; [ca Jan. 1993]


DAR, [1992] “Toward a Faster, Fairer and More Meaningful CARP Implementation under the Ramos Administration”.

DAR, 1992, “National Summary of Accomplishments as of Dec. 31st, 1991”.

DAR, [1993], “Claim Folders Transitted to the Land Bank of the Philippines”.

DAR, Administrative Orders.

Integrated Bar of the Philippines, 1987,“Position Paper on the 1987 Agrarian Reform”, October 8.

Ledesma, Antonio, 1991, “Community Based Agrarian Reform: The BARCs” paper presented at International Conference on Agrarian Reform, San Leonardo, Nueva Ecija.

Migdal, Joel, 1987, “Strong States, Weak States: Power and Accommodation” in Myron Weiner and Samuel Huntington, eds., Understandinq Political Development. Boston: Little, Brown.

Putzel, James, 1992, A Captive Land: The Politics of Agrarian Reform in the Philippines. Quezon City: Ateneo de Manila University Press.

Republic Act 6657, 1988, “The Comprehensive Agrarian Reform Law of 1988”.

Senate of the Philippines, Committee on Agrarian Reform, 1989, “Report on Legislative Inquiry into the Garchitorena Estate Transaction…”, June 28.

Wurfel, David, 1988, Filipino Politics: Development and Decay. : Cornell University Press.

Wurfel, David, 1989, “Land Reform: Contexts, Accomplishments and Prospects under Marcos and Aquino”, Philipinas, No. 12, pp. 3554.

Wurfel, David, 1991, “Elites and Agrarian Reform in the Philippines: Preliminary Comments on a Research Project”, February, 12pp.

Agrarian Reform Monitor

Business World

Daily Globe

Handiong (weekly, Naga City)

Interviews in Manila, Camarines Sur, Negros Occidental, and Basilan, 1991

Categories Philippines, Agrarian policy