All acquired/forfeited real properties classified as agricultural and occupied by farmers, and/or even without tillers shall be communicated immediately with the Department of Agrarian Reform (DAR) and the Land Bank of the Philippines (LBP) pursuant to the provisions of EO No. 407 dated June 14, 1990, to determine whether or not the acquired assets are, in reality, suitable for agriculture. All acquired agricultural real properties that will be declared as suitable for agriculture by the DAR and LBP shall be transferred immediately to the DAR. All restrictions imposed by law, rules and agreements on the disposition of agricultural lands, pasture lands, fish ponds, and other classifications of real properties shall, however, be observed and respected.
Landholdings that were confirmed by DAR and the LBP as suitable for agriculture shall be transferred immediately to the former. In order to effect the transfer, a Deed of Transfer shall be executed between the Commissioner of lnternal Revenue (CIR) and the Secretary of DAR, and/or the Regional Director of the BIR and the Regional Director of DAR, where the property is located, in accordance with existing policies. For this purpose, the BIR shall surrender to DAR all pertinent ownership documents covering the transferred asset such as:
Owner's duplicate copy of the certificates of title;
Tax declaration of the property; and
Other necessary documents to effect the transfer of ownership to DAR.
The LBP shall pay the BIR the appropriate or reasonable value of the land within thirty 30 days from the registration of the Deed of Transfer by the Register of Deeds in favor of the The payment by the LBP shall be made in the following manner:
Ten percent (10%) in cash; and
The balance in LBP bonds, payable in ten (10) years, bearing market rates of interest that are aligned with 91-day treasury bill rates, net of the applicable final withholding tax. One-tenth (1/10) of the face value of the bonds will mature every year from the date of issuance until the end of the tenth (10th) year.
Direct payment in cash may, however, be mutually agreed upon between the farmer beneficiaries and the BIR, subject to the approval of the DAR and the LBP.
Procedures in the Disposition of Acquired Real Property Covered by the Comprehensive Agrarian Reform Program (CARP)
The RDO shall:
- Prepare and transmit to the Regional Collection Division the inventory of all acquired/forfeited real assets classified as agricultural lands for endorsement to the DAR and the LBP, for necessary determination whether or not the acquired/ forfeited real properties are suitable for agriculture, pursuant to the provisions of EO 407;
- Prepare a memorandum for the Regional Director, thru the Regional Collection Division, for the authority to submit to DAR the lists of acquired/forfeited real properties classified as suitable for agriculture; and
- Submit to DAR the lists of landholdings classified as agricultural lands, pursuant to EO No. 407. For this purpose, the sale and/or disposal of acquired agricultural real properties to DAR shall be undertaken under the following steps and/or procedures:
- Receive the confirmation letter from the DAR on the properties classified as suitable for agriculture, after inspection by the DAR and the LBP;
- Receive the valuation of the property from LBP and/or DAR;
- Coordinate with the Regional Legal Division for the preparation of the Deed of Transfer (Annex 400-1.36) of the acquired land suitable for agriculture, for the signature of the Commissioner and the Secretary of DAR;
- Receive the copy of the duly notarized Deed of Transfer signed by the Commissioner and the Secretary of DAR;
- Transmit to the DAR all pertinent ownership documents such as;
- Owner's duplicate copy of the certificates of title;
- Tax declaration of the property; and
- Other documents necessary to effect the transfer of ownership to DAR.
- Prepare and submit to the Regional Director a memorandum report within two (2) days after the transfer of the acquired/forfeited asset to DAR, detailing all the relevant information pertinent to the property that was sold/transferred to DAR;
- Follow-up the payment of the just compensation by LBP to the BIR for the agricultural property sold/transferred within thirty (30) days after the transfer of the registration of ownership documents has been made by the Register of Deeds in favor of the DAR;
- Submit/Transmit to the Regional Finance Division, copy furnished the Regional Collection Division a report, including the certified photocopies of all pertinent supporting documents, on the agricultural lands sold to DAR for necessary recording in the NG Books of Accounts (Refer to CM 404.2 Recording of Sale/Disposition of Acquired Assets and Updating the Inventory);
- Tum-over to the Regional Administrative Division the original copy of the LBP bond certificate received for safekeeping; and
- Prepare and submit immediately to the Regional Collection Division a report on the receipt of the LBP cash payments and the LBP bond certificates and the physical tum-over of the certificates to the Regional Administrative Division, for monitoring
The Regional Collection Division shall:
- Receive memorandum from the concerned RDOs on the list of acquired/forfeited real properties to be forwarded to the DAR classified as suitable for agriculture, for approval by the Regional Director;
- Review and evaluate the accuracy and propriety of the report;
- Coordinate closely with DAR and LBP for the speedy determination of the suitability of acquired/forfeited real properties for agricultural purposes, the fair valuation of these properties, the ultimate sale or disposition thereof to the farmer-beneficiaries, and the immediate payment by LBP to the BIR of the just compensation for the properties sold/disposed; and
- Receive from the concerned RDO a report on the agricultural lands sold to DAR and submit a report thereon to the CED for the update of the inventory of acquired assets (Refer to CM 404.4 Recording of Sale/Disposition of Acquired Assets and Updating the Inventory).
The Regional Legal Division shall:
- Prepare the corresponding Deed of Sale/Transfer covering the sale of acquired/ forfeited lands suitable for agriculture, for the signature of the Commissioner and the Secretary of DAR; and
- Transmit to the Commissioner, thru the Regional Director, the Deed of Sale/ Transfer of acquired/forfeited asset to be sold/transferred to DAR, for final review, approval and
The Regional Director shall:
- Forward to the Commissioner, for final review, approval and signature, the Deed of Sale/Transfer of acquired/forfeited asset to be transferred/sold to DAR.
The Commissioner of Internal Revenue shall:
- Review, approve and sign the Deed of Sale.