8/30/2017 E.O. No.

228

TodayisWednesday,August30,2017

EXECUTIVEORDERNO.228July17,1987

DECLARINGFULLLANDOWNERSHIPTOQUALIFIEDFARMERBENEFICIARIESCOVEREDBY
PRESIDENTIALDECREENO.27:DETERMININGTHEVALUEOFREMAININGUNVALUEDRICEANDCORN
LANDSSUBJECTTOP.D.NO.27ANDPROVIDINGFORTHEMANNEROFPAYMENTBYTHEFARMER
BENEFICIARYANDMODEOFCOMPENSATIONTOTHELANDOWNER

WHEREAS, Presidential Decree No. 27 for purposes of determining the cost of the land to be transferred to the
tenantfarmerprovidedthatvaluationshallbedeterminedbycropproductivity

WHEREAS,thereisaneedtocompleteOperationLandTransferandacceleratethepaymenttothelandownersof
landstransferredtotenantfarmersand

WHEREAS,thereisalsoaneedtomaintainthefinancialvalidityoftheLandBankofthePhilippines,thefinancing
armoftheagrarianreformprogramofthegovernment

NOWTHEREFORE,I,CORAZONC.AQUINO,PresidentofthePhilippines,byvirtueofthepowersvestedinmeby
theConstitution,hereorderthat:

Sec. 1. All qualified farmer beneficiaries are now deemed full owners as of October 21, 1972 of the land they
acquiredbyvirtueofPresidentialDecreeNo.27(hereinafterreferredtoasP.D.No.27).

Sec.2.Henceforth,thevaluationofriceandcornlandscoveredbyP.D.No.27shallbebasedontheaveragegross
production determined by the Barangay Committee on Land Production in accordance with Department
MemorandumCircularNo.26,Seriesof1973,andrelatedissuancesandregulationsoftheDepartmentofAgrarian
Reform.Theaveragegrossproductionperhectareshallbemultipliedbytwoandahalf(2.5),theproductofwhich
shallbemultipliedbyThirtyFivePesos(P35.00),thegovernmentsupportpriceforonecavanof50kilosofpalayon
October21,1972,orThirtyOnePesos(P31.00),thegovernmentsupportpriceforonecavanof50kilosofcornon
October21,1972,andtheamountarrivedatshallbethevalueofthericeandcornland,asthecasemaybe,forthe
purposeofdeterminingitscosttothefarmerandcompensationtothelandowner.

Lease rentals paid to the landowner by the farmer beneficiary after October 21, 1972, shall be considered as
advancepaymentfortheland.Intheeventofdisputewiththelandownerregardingtheamountofleaserentalpaid
by the farmer beneficiary, the Department of Agrarian Reform and the Barangay Committee on Land Production
concernedshallresolvethedisputewithinthirty(30)daysfromitssubmissionpursuanttoDepartmentofAgrarian
ReformMemorandumCircularNo.26,Seriesof1973,andotherpertinentissuances.Intheeventapartyquestions
incourttheresolutionofthedispute,thelandowner'scompensationclaimshallstillbeprocessedforpaymentand
theproceedsshallbeheldintrustbytheTrustDepartmentoftheLandBankinaccordancewiththeprovisionsof
Section5hereof,pendingtheresolutionofthedisputebeforethecourt.

Sec. 3. Compensation shall be paid to the landowners in any of the following modes, at the option of the
landowners:

(a)Bondpaymentoverten(10)years,withtenpercent(10%)ofthevalueofthelandpayableimmediatelyin
cash,andthebalanceintheformofLBPbondsbearingmarketratesofinterestthatarealignedwith90day
treasury bills rates, net of applicable final withholding tax. Onetenth of the face value of the bonds shall
matureeveryyearfromthedateofissuanceuntilthetenthyear.

TheLDPbondsissuedhereundershallbeeligibleforthepurchaseofgovernmentassetstobeprivatized.

(b)Directpaymentincashorinkindbythefarmerbeneficiarieswiththetermstobemutuallyagreeduponby
thebeneficiariesandlandownersandsubjecttotheapprovaloftheDepartmentofAgrarianReformand

(c)OthermodesofpaymentasmaybeprescribedorapprovedbythePresidentialAgrarianReformCouncil.

Sec.4.AlloutstandingLandBankbondsthatareretainedbytheoriginallandownerspayeeorbytheirheirs,are
deemed matured up to ontwenty fifth (1/25) of their yearly face value from their date of issue to the date of this
ExecutiveOrderandmaybeclaimedbytheoriginallandownerpayeebysurrenderingthebondstotheLandBank.

http://www.lawphil.net/executive/execord/eo1987/eo_228_1987.html 1/3
8/30/2017 E.O. No. 228
The original landownerpayee may claim payment for the remaining unmatured period of the surrendered bonds
underanyofthemodesofcompensationprovidedinSection3,subsections(a)(b)or(c)hereof.

InordertomeetthefinancialrequirementsmentionedinthisSection,theCentralBankshallremittotheLandBank
such sums as may b necessary from the Sinking Fund established by the Land Bank from the retirement of its
bonds and other longterm obligations and which Sinking Fund is administered by the Central Bank: Provided,
however, That there is no change in maturity of other outstanding Land Bank bonds acquired and held by
transfereesfromoriginalbondholders.

ThelandownerisexemptfromcapitalgainstaxonthecompensationpaidtohimunderthisExecutiveOrder.

Sec.5.Intheeventthatthelandownerdoesnotacceptpaymentofthecompensationduehim,hiscompensation
shallbeheldintrustforhimbytheTrustDepartmentoftheLandBank.Thecashportionofthecompensationand
such portions that mature yearly shall be invested by the Trust Department only in government securities fully
guaranteedbytheRepublicofthePhilippines.Allthenetearningsoftheinvestmentshallbeforthebenefitofthe
landowner,hisheirsorsuccessorsininterest.

Therightsofthelandownersmaybeexercisedbyhisheirsuponhisdeath.

Sec.6.Thetotalcostsofthelandincludinginterestattherateofsixpercent(6%)perannumwithatwopercent
(2%)interestrebateforamortizationspaidontime,shallbepaidbythefarmerbeneficiaryorhisheirstotheLand
Bank over a period up to twenty (20) years in twenty (20) equal annual amortizations. Lands already valued and
financed by the Land Bank are likewise extended a 20year period of payment of twenty (20) equal annual
amortizations. However, the farmerbeneficiary if he so elects, may pay in full before the twentieth year or may
requesttheLandBanktostructurearepaymentperiodoflessthantwenty(20)yearsiftheamounttobefinanced
andthecorrespondingannualobligationsarewellwithinthefarmer'scapacitytomeet.Ownershipoflandsacquired
bythefarmerbeneficiarymaybetransferredafterfullpaymentofamortizations.

Sec.7.AsofthedateofthisExecutiveOrder,alienbywayofmortgageshallexistinfavoroftheLandBankonall
lands it has financed and acquired by the farmerbeneficiary by virtue of P.D. No. 27 for all amortizations, both
principalandinterest,duefromthefarmerbeneficiaryoravalidtransfereeuntiltheamortizationsarepaidinfull.

Sec. 8. Henceforth, failure on the part of the farmerbeneficiary to pay three (3) annual amortizations shall be
sufficientcausefortheLandBanktoforecloseonthemortgage.

Sec.9.Thirty(30)daysafterfinalnoticeforpaymenttothedefaultingtenantfarmer,acopyofwhichnoticeshallbe
furnished to the Department of Agrarian Reform, the Land Bank may foreclose on the mortgage by registering a
certificationunderoathofitsintenttoforeclosewiththeRegistryofDeedsofthecityorprovincewherethelandis
located attaching thereto: a copy of the final notice for payment proof of service to the tenantfarmer and the
Department of Agrarian Reform of the final notice for payment and a certification that at least three (3) annual
amortizationsonthelandorthesumthereofremainunpaid.Themortgageisdeemedforecloseduponregistration
ofsaiddocumentswiththeRegistryofDeeds.

Intheeventthedefaultingtenantfarmercouldnotbeservedthefinalnoticeforpayment,theLandBankshallpost
thenoticeforpaymentinthetownhall,publicmarketandbarangayhalloranyothersuitableplacefrequentedby
thepublicofthebarangaywherethedefaultingtenantfarmerresides.AcertificationbytheLandBanktothiseffect
willsubstitutefortheproofofserviceofthefinalnoticeofpaymentforpurposesofforeclosure.

The Register of Deeds of all cities and provinces are directed to have a separate registry book to enter all the
requirementsofforeclosureasprovidedherein.

Sec.10.Thetenantfarmer,oranyofhiscompulsoryheirsmaylifttheforeclosurewithinaperiodoftwo(2)years
fromitsregistrationbypayingtheLandBankallunpaidamortizationsonthelandwithinterestthereonofsixpercent
(6%) per annum. In case of failure to lift the foreclosure within the said period, ownership of the land shall be
deemedtransferredtotheLandBank.

Sec.11.TheLandBank,notlaterthanthree(3)monthsafteritsacquisitionoftheland,shallselltheforeclosedland
to any interested landless farmer duly certified to as a bona fide landless farmer by the Department of Agrarian
Reformofthebarangayorthetwoclosestbarangayswherethelandissituated.Thecostofthelandistheunpaid
amortizationsdueonthelandsasofthedateofthesalewithinterestthereonofsixpercent(6%)perannum.Inthe
eventthatthereismorethanoneinterestedbuyer,theactualbuyershallbedeterminedbylotteryinthepresenceof
all the buyers or their representatives and a representative of the Department of Agrarian Reform. The Deed of
Conveyance executed by the Land Bank in favor of the farmer transferee shall be registered with the Register of
Deedsofthecityorprovincewherethelandislocated.Ownershipshalltransfertothefarmertransfereeonlyupon
registration with the Registry of Deeds. The lien of the Land Bank by way of mortgage on the remaining unpaid
amortizationsshallsubsistsonthetitleofthetransferee.

http://www.lawphil.net/executive/execord/eo1987/eo_228_1987.html 2/3
8/30/2017 E.O. No. 228
Sec.12.TheLandBank,atleastone(1)monthpriortothesale,shallfurnishtheDepartmentofAgrarianReform
withanoticeofsaleandshallpostasimilarnoticeinthetownhall,publicmarketandbarangayhalloranyother
suitable place frequented by the public of the barangay where the property is located. The notice shall state the
descriptionofthepropertysubjectofthesale,theprice,thedateandplaceofsale.

Sec.13.TheNationalLandTitlesandDeedsRegistrationAdministrationisherebyauthorizedtoissuesuchrules
and regulations as may be necessary relative to the registration with the Register of Deeds of all
transactions/activities required herein taking into consideration the need to protect the integrity of the Torrens
System,theinterestsofthepartiesandinnocentthirdparties.

Alltransactions/activitiesandtheircorrespondingdocumentsthatareregisteredwiththeRegisterofDeedspursuant
to the requirements of P.D. No. 27 and this Executive Order shall be free from all documentary stamps and
registrationfees.

Sec.14.TheDepartmentofAgrarianReformandtheLandBankareauthorizedtoissuetheadditionalimplementing
guidelinesofthisExecutiveOrderwhichshallnotbelaterthansixty(60)daysfromthedatehereof.

Sec.15.ToensurethesuccessfulimplementationoftheAgrarianReformProgram,anAgrarianReformOperating
Fund(AgrarianFund)shallbesetupbytheNationalGovernmentintheLandBank.TheamountofthisAgrarian
Fund,tobedeterminedbytheGovernmentCorporationMonitoringandCoordinatingCommitteehereinafterreferred
to as GCMCC), will source the funding requirements for Land Bank to carry out the full implementation of this
programwhichwillincludethenetoperatinglossesdirectlyandindirectlyattributabletothisprogramandthecredit
facilitiestofarmersandfarmers'organizations.Withinthirty(30)daysfromtheeffectivityofthisExecutiveOrder,the
LandBankshallsubmittotheGCMCCitsfundingrequirementsfor1987.Thereafter,withinsixty(60)daysafterthe
endofeachcalendaryear,theLandBankshallsubmittotheGCMCCanaccountingofalldrawingstheLandBank
hadmadeagainsttheFund.Atthesametime,itwillalsosubmititsprospectivefundingrequirementsforthecurrent
yearforreviewandvalidationoftheGCMCC.TheamountapprovedbytheGCMCCshallbedeemedappropriate
andtheamountprogrammedforreleaseincoordinationwiththeDepartmentofFinance,BudgetandManagement
andtheNationalEconomicandDevelopmentAuthority.Withinthirty(30)daysfromGCMCC'sapproval,suchfunds
shallberemittedtotheLandBankforcredittotheAgrarianFund.

Sec.16.IfanypartofthisExecutiveOrderisdeclaredinvalidorunconstitutional,itshallnotaffectanyotherpart
thereof.

Sec.17.Alllaws,presidentialdecrees,orders,lettersofinstructions,rulesandregulations,andotherissuancesor
partsthereofinconsistentwiththisExecutiveOrderareherebyrepealedormodifiedaccordingly.

Sec.18.ThisExecutiveOrdershalltakeeffectuponitssigningandpublicationasprovidedbylaw.

DONEintheCityofManila,this17thdayofJuly,intheyearofOurLord,nineteenhundredandeightyseven.

TheLawphilProjectArellanoLawFoundation

http://www.lawphil.net/executive/execord/eo1987/eo_228_1987.html 3/3