PRESIDENTIAL DECREE NO. 85, December 24, 1972
CREATING THE AGRARIAN REFORM FUND TO SUPPORT FINANCING REQUIREMENTS OF AGRARIAN REFORM PROVIDED IN PRESIDENTIAL DECREE NO. 27 AND FOR OTHER PURPOSES.
implementation of agrarian reform provided in Presidential Decree No.
27,dated October 21, 1972;
WHEREAS, such implementation calls for timely and
adequate financial support in all phases involved in the execution of
desired agrarian reforms;
WHEREAS, there is need to mobilize and harness
properly available resources to provide necessary funds for the
realization of government agrarian reform;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers in me vested by the
Constitution, as Commander-in-Chief of the Armed Forces of the
Philippines and pursuant to Proclamation No. 1081, dated September 21,
1972 and General Order No. 1, dated September 22, 1972, as amended, do
hereby order and decree:
SECTION 1. Establishment of the Agrarian Reform Fund.
— An Agrarian Reform Fund, hereinafter referred to as the “Fund,” is
hereby established to finance and/or guaranty the payment of farm lots
acquired under Proclamation No. 27, dated October 21, 1972, and to
extend agricultural credit support and the corresponding guarantee
coverage to achieve a high level of production in land reform areas of
the country.
The resources of the Fund shall be drawn from the following:
- Central Bank of the Philippines
a. Bonds in Portfolio
- Guarantee Funds
a. Agricultural Guarantee Fund
b. Agricultural Guarantee & Loan Fund
c. CB-Loan Guarantee Fund (Calamity Fund) - Development Bank of the Philippines
a. Preferred shares in client corporations
b. Government-counterpart preferred stocks in rural banks
c. Preferred stocks in development banks
d. Acquired assets
e. Reparations Account Receivables
f. Other disposable assets - Philippine National Bank
a. Acquired assets
- National Investment and Development Corporation
a. Acquired assets
- Government Service Insurance System
a. Acquired assets
- Land Bank
a. Shares of stock owned or controlled by the Government
- Agrarian Reform Special Account
a. Allocation for Agricultural Guarantee Fund and Land Bank
- Proceeds from foreign loans
- Social Security System
a. Acquired assets
- Other disposable assets of the Government as may be available for the land reform
program.
- Other funds and resources provided by law.
The resources listed above shall be turned over to the Agrarian
Reform Fund at such time, terms, prices and conditions as shall be
agreed upon between the Agrarian Reform Fund Commission and the
financial institution and government agencies concerned, payment to be
made by the former to latter in Agrarian Reform Bonds issued pursuant to
Section 5 of this Decree.
SEC. 2. Utilization of the Resources of the Fund. — All resources of the Fund shall be utilized for the attainment of the objectives of the Fund as follows:
(1) Financing of acquisition of lands under any of the following modes of settlement:
- Cash payment, subject to availability of funds, for small landholdings;
- Exchange arrangement for government stocks in
government-owned or controlled corporations or private corporations
where the Governmental as holdings;- Payment through the establishment of annuities of pensions with guarantee against inflation and/or medical insurance;
- Full guaranty on the payment of the fifteen (15) equal annual amortizations to be made by the tenant-farmers; and
- Such other modes of settlement as may be adopted by the Agrarian Reform Fund Commission.
(2) Financing agricultural production and/or commodity loans
through banking institutions and/or issuance of guarantee of losses up
to eighty-five (85%) per cent of the amount of the production loan under
such terms and conditions as the Agrarian Reform Fund Commission may
prescribe.
SEC. 3. Administration of the Fund. — There
is hereby created an Agrarian Reform Fund Commission, hereinafter
referred to as the Commission, composed of the Secretary of Finance as
Chairman and the Governor of the Central Bank of the Philippines and the
Secretary of Agrarian Reform as members, which shall administer the
Fund. In the event that the Chairman or any members of the Commission is
unable to attend any meeting thereof he shall designate the next
ranking official of the office or agency concerned to represent him in
the meeting of the Commission.
Operational expenses of the Commission shall be advanced by the
Central Bank of the Philippines until such time as the Fund generates
income sufficient for the purpose. The Commission shall reimburse the
Central Bank for its advances, including interests, if any, as soon as
possible.
SEC. 4. Powers and Duties of the Commission.
— The Commission shall have exclusive administration and control of the
Fund, which shall include the authority to invest and dispose of the
assets under its administration. For this purpose, it shall be empowered
to promulgate such rules and regulations necessary for effective
operations of the Fund and may execute acts or perform activities for
the best interest of the Fund.
SEC. 5. Issuance of Bonds. — The Secretary
of Finance shall, upon recommendation of the Commission and the Monetary
Board of the Central Bank and with the approval of the President of the
Philippines, issue bonds, debentures and other evidences of
indebtedness for the account of the Fund at such terms, rates and
conditions to be determined by the Commission. Such bonds and other
obligations shall be secured by the assets of the Fund and shall be
fully tax exempt both as to principal and income. Said income shall be
paid to the landholders every six months from the date of issue.
These bonds and other obligations issued for the account of the Fund
shall be direct obligations of the Government of the Republic of the
Philippines and shall be redeemable at the option of the Commission at
or prior to maturity, which, in no case shall exceed twenty-five (25)
years.
SEC. 6. Reorganization of the Land Bank. —
The Agrarian Reform Fund Commission, as holder of all the shares of the
Land Bank owned or controlled by the Government, is hereby authorized,
with the approval of the President of the Philippines, to reorganize the
Land Bank, modify its operations and functions and exercise its powers
and manage its property, the provisions of Republic Act No. 3844, as
amended, notwithstanding.
SEC. 7. Tax Exemptions. — All assets and earnings of the Fund shall be exempt from
all national, provincial, municipal and city taxes and assessments now in force and may hereinafter be imposed.
SEC. 8. Repeating Clause. — All laws,
executive orders, rules and regulations or parts thereof inconsistent
with this Decree are hereby repealed and/or modified accordingly.
SEC. 9. Effectivity. — This Decree shall take effect immediately.
Done in the City of Manila, this 24th day of December,’ in the year of Our Lord, nineteen hundred and seventy-two.
(Sgd.) FERDINAND E. MARCOS
President
Republic of the Philippines
By the President: (Sgd.) ALEJANDRO MELCHOR Executive Secretary