The Agrarian Reform

Program of the
Philippines
Chapter 7

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Land Reform

is a process of redistributing land from

the landlords to tenant-farmers in order
that they will be given a chance to own a
piece of land to improve their plight
It abolishes unfair land tenancy
programs and changes in the land
tenure systems
Is just a part of agrarian reform

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Agrarian Reform

It is concerned with the total

development of the farmers economic,
social and political transformation
It covers:
Distribution of land to cultivators
Security of tenure and fair system of rental
payments
Improved methods of cultivation through the
improvement of rural institutions serving
farmers such as:
Adequate farming
Cooperative marketing
Agricultural investment

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History of Agrarian
Reform
Pre-Spanish Period
Spanish Period

American Period
Present Republic

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Pre-Spanish Period

Social Classes:
T h e N o b l e s could own their own land
and were free from tribute payment
T h e S e r f s entitled to cultivate
certain lands, but were required to pay an
annual fee of one-half of the yield of their
crops to the Datu; they remained with the
land as a result of this regular payment
T h e S l a v e s served the Datu or the
Nobles and were owned by them; they
could be sold or traded

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Spanish Period

Encomienda System
- the system of giving lands to
people
- resulted in the exploitation of the
inhabitants
The encomienderos were replaced by
the cacique class
Kasama system or share tenancy
Gen. Emilio Aguinaldo confiscated the
friar lands and gave it to landless
peasants
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American Period

US negotiated the purchase of 23 Friar

Estates during the early years of the
century.
The land was subdivided and offered for
sale to the Filipinos residing on it
SAKDALISTA movement was initiated in
1930 by Benigno Ramos

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Present Republic

Pres. Manuel Roxas - RA No. 34 of

1946, providing for a 70-30 crops

sharing arrangements
Pres. Ramon Magsaysay - RA No. 1199

which allowed for the division of

crops
Pres. Diosdado Macapagal RA
No.3844 (Agricultural Land Reform
Code)
Pres. Ferdinand Marcos PD No.2
declaring entire Philippines as land
reform area
PD No. 27 emancipating the tenant- farmers
from the bondage of the soil
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Objections in the Implementation of

Agrarian Reform

Fragmentation of farm-holdings
Small farms become less
productive
Ineffective government programs
Agrarian reform failed in the past

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Pertinent Laws on Agrarian Reform

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Importance of Land Reform

Land reform will:

Diffuse tension existing between tenantfarmers and landlords
Give farmers a dignified existence in our
society
Bring social justice
Increase the efficiency and productivity
of the farmers
Help solve unemployment
Increase food production
Enhance the living conditions of the
poor farmers

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Aspects of Agrarian Reform

Economic aspect
AR will help improve agricultural
productivity to accelerate general
economic development
Socio-cultural aspect
AR brings about socio-cultural
transformation on the life of the
farmers
Religious aspect
When God created earth, He gives it
all to His children, hence, all people
must enjoy the fruit of having a piece
of land to till

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Aspects of Agrarian Reform

Moral aspect
It is the moral obligation of the
government to bring about peace and
prosperity to our country
Legal aspect
The Constitution serves as the basis
in the formulation of laws
Political aspect
AR is ultimately the product of
deliberate political decisions, hence,
AR must be the highest priority of govt
programs

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Components of Agrarian Reform

Land Distribution
Considered as the very foundation of
agrarian reform
Support Services
Irrigation facilities
Infrastructure development
Price support and guarantee for all
agricultural produce
Financial assistance

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The Comprehensive Agrarian

Reform Program (CARP)

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On June 10, 1988, President Corazon C.

Aquino signed into law RA No. 6657,
otherwise known as the
Comprehensive Agrarian Reform Law of
1988

The program provides the farmers

and farm workers the opportunity to
improve the quality of their lives and
at the same time enhance the
dignity of the farmers.

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Principles

The welfare of the landless farmers and

farm workers will receive the highest
consideration to promote social justice
By means of appropriate incentives, the
State shall encourage the formation and
maintenance of economically sized family
farms to be constituted by individual
beneficiaries and small land owners
The State shall be guided by the
principles that land has a social function
and landownership has a social
responsibility
The State may lease underdeveloped
lands
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Salient Features of CARP (RA No.6657)

1. CARP covers all public and private

agricultural lands
2. Ownership of agricultural lands is
based on a family size farm which is
not more than three (3) hectares.
Landowner can retain five (5)
hectares. Three (3) hectares may be
awarded to each child of the
landowner if he is not less than 15
years old

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Salient Features of CARP (RA No.6657)

3. Qualified beneficiaries in the ff. order of

priority are the agricultural lessees and
share tenants, regular farm workers,
seasonal farm workers, actual tillers or
occupants of public lands, collectives or
cooperatives of the aforementioned
beneficiaries, and other directly working on
the land
4. The distribution of the lands covered by
CARP shall be implemented within 10 years
effective immediately upon signing of the
law by Pres. Corazon C. Aquino on June 10,
1988.

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Salient Features of CARP (RA No.6657)

5. Exemptions and exclusions include

lands for wildlife, forest reserves,
reforestation, fish sanctuaries and
breeding grounds, watersheds and
mangroves, national defense, school
sites and campuses
6.

Payments to landowners:
Above 50 hectares

25% cash and 75%

govt bonds

above 24 and up to 50
hectares

30% cash and 70%

govt bonds

24 hectares and below

35% cash and 65%

govt bonds

Payments are made in 10 years at 10% interest

per annum

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Salient Features of CARP (RA No.6657)

7. Beneficiaries pay Land Bank of the

Philippines in 30 annual amortization
at six per cent (6%) interest per
annum.
8. Valuation of lands is determined by
PARC (Presidential Agrarian Reform
Council), headed by the President of
the Philippines.

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TAXATION
Chapter 8

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Taxation

Is the supreme power of a

sovereign state to impose burdens
or charges upon persons, property
or property rights for public
purpose
It is the power vested upon the
legislature for the purpose of
raising revenues to finance
government expenditures and for
the general welfare and protection
of its citizen

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Tax

Compulsory contributions to
support the State
Considered as lifeblood of a
government that without which, a
government may not be able to
perform and expenditures are
financed by tax revenues

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Basis of Taxation

Found in the reciprocal duties of

protection and support between
the state and those that are
subject to its authority.
In return of their contribution,
taxpayer enjoys services and
protection from the government.

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Importance of Taxation

Raise revenue
Protect locally produced
goods against competition
from import by imposing
higher custom duties
Protect new industries by
granting tax exemptions
Regulate property
Distribute equally the wealth
of the nation

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Essential Characteristics of Taxation

It is
An enforced contribution
Generally payable in money
Proportionate in character
Levied on persons, property or
property rights
Levied by the state, which has the
jurisdiction over the person or
property
Levied by the legislative branch o
the state
Levied for public purposes

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Basic Principles of a Sound Tax System

Fiscal adequacy
(the source of revenue should be
sufficient to address the demands of
public expenditures)

Equality or theoretical justice

(the tax burden should be
proportionate to the taxpayers ability
to pay)

Administrative feasibility
(the tax should be capable of
convenience, just and effective
administration)

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Classification of Taxes

National Taxes
These are taxes imposed by the national
government under the National Internal
Revenue Code and other laws
particularly the Tariff and Custom Code

Local Taxes
These are taxes imposed by the local
government to meet particular needs
under the Local Government Code,
such as real property tax and the
community tax

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Forms of Taxes

Direct Taxes
Form of tax paid directly by the
individual or corporations directly
to the government

Indirect Taxes
Taxes imposed on a particular
article or transaction which are
paid by others than those from
whom the tax collector receives
payment

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Direct Taxes

Income Tax
Derived from the individuals, corporate, estates and
trusts income

Inheritance Tax
Paid on property passed on from a deceased
person to those who are to inherit it

Estate Tax
Tax on the right of the deceased person to transmit
his estates to his lawful heirs at the time of death

Donors Tax
Tax levied on donation or gift and is imposed on the
gratuitous transfer of property between two or more
persons who are living at the time of the transfer

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Direct Taxes

Capital Gains Tax

Tax imposed on income from sale of
capital assets, which includes stocks,
bonds, real estate, and partnership

Property Tax
Tax levied on the assess value of land
and permanently attached improvements
owned by individuals or corporations

Documentary Stamp Tax

Tax imposed on documents, instruments,
loan agreements and papers evidencing
acceptance, assignment, sale or transfer
of an obligation

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Indirect Taxes

Value-added Tax
Tax imposed by the government at each stage
in the production of a good or service

Sales Tax
Tax levied on the sale of goods and services

Percentage Tax
Business tax imposed on persons or entities
who sell or lease goods, properties or services
in the course of trade or business whose
gross annual sales or receipts do not exceed
P550,000 and are not VAT registered

Excise Tax
Tax on manufacture, sale or use of goods or
services levied by local , state or national
governments

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Some Fees, Charges and Burdens

Collected by the Bureau of Customs

Harbor Fee
Amount which the owner, agent, operator or
master of a vessel has to pay for each
entrance into or departure from a port of entry
in the Philippines

Wharfage due
Amount assesses against the cargo of a vessel
engaged in foreign trade, based on the quantity,
weight or measure received and/or discharged by
such vessel

Berthing charge
Amount assessed against a vessel for mooring or
berthing at pier at any port of the Philippines

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Some Fees, Charges and

Burdens Collected by the
Bureau of Customs
Storage charge
Amount assessed on articles for storage
in customs premises, cargo shed and
warehouses of the government
Arrastre charge
Amount which the owner, consignee or
agent of article or baggage has to pay
for the handling, receiving and custody
of the imported or exported article or
baggage of passengers
Tonnage due
Amount paid by the owner, agent or
operator of a vessel engaged in foreign
trade coming to the Philippines from
foreign port or vv based on the net
tonnage of the vessel or weight of the
articles discharged or laden
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Limitations On The
Power Of Taxation

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Classification of Limitation

Constitutional Limitation
those expressly found in the
constitution or implied from its
provisions
Inherent Limitation
those which restrict the power
although they are not
embodied in the constitution

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Constitutional Limitations

Due process of law

Equal protection of the laws
Rule of uniformity and equity in taxation
Prohibition for imprisonment for nonpayment of a poll tax
Non-impairment of the obligation of contracts
Non-infringement of religious freedom
No appropriation for religious purposes
Exemption from taxation of religious
institutions, charitable institutions, non-profit
and non-stock educational institutions and
non-profit cemeteries
Concurrence by a majority of all the
members of Congress for the passage of a
law granting exemption

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Requirement for due process of law

No person shall be deprived of

life, liberty or property without
due process of law
There must be appropriate
notice to the taxpayer and the
tax imposed is for public
purpose
Due process of law - done (1) under the authority of a
law that is valid, or of the Constitution itself, and (2)
after compliance with fair and reasonable methods of
procedure prescribed by law

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Requirement of Equal protection of the

laws

The equality it guarantees is

legal equality or as it is
usually put, the equality of all
persons before the law, which
does not treat the persons
differently because of who he
is or what he is or what he
possesses.

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Requirement of uniformity and equity

in taxation

The rule of taxation shall be

uniform and equitable
A tax is uniform when it
operates with the same force
and effect and in every place
where the subject of it is
found

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Prohibition against imprisonment for

non-payment of Poll tax

Poll tax cedula tax or residence

certificate tax
The constitution does not prohibit
cedula tax but it prohibits
imprisonment for non-payment of
the cedula or residence tax
A poll tax maybe understood as a
tax, the payment of which is made
a requirement for the exercise of
the right of suffrage

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Prohibition against impairment of

obligation of contracts

No law impairing obligation of

contracts shall be passed.
Impairment of obligation of
contracts - when a right is taken or
when a person is deprived of the
means for enforcing such right

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Prohibition against infringement of

religious freedom

No law shall be made respecting

an establishment of religion, or
prohibiting the free exercise
thereof.
The free exercise and enjoyment of
religious profession and worship,
without discrimination shall forever be
allowed.

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Prohibition against appropriation for

religious purpose

No public money or property shall

be appropriated, applied, paid, or
employed, directly or indirectly, for
the use, benefit or support of any
sect, church, denomination,
sectarian, institution, or system of
religious, or of any priest, preacher,
minister, or other religious teacher

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Prohibition against taxation of religious

institutions, charitable institutions, non-profit
and non-stock educational institutions and
non-profit cemeteries

charitable institutions, mosques, and

non-profit cemeteries are required that
for the exemption of lands, buildings,
and improvements they should not only
be exclusively but also actually and
directly used for religious, charitable or
educational purposes.
There must be a proof therefore of the
actual and direct use of lands, buildings,
and improvements for religious or
charitable (or educational) purposes to
be exempt of taxation

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Requirement of concurrence by a majority

of all the members of Congress for the
passage of a law granting exemption

No law granting any tax

exemption shall be passed
without the concurrence of a
majority of all the members of
the congress

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Inherent Limitations

Requirement that levy must be for a

public purpose
Non-delegation of the legislative power
to tax
Exemption from taxation of government
entities
International comity
Territorial jurisdiction

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Requirement that levy must be for a

public purpose

The power to tax exists for

general welfare. Hence implicit
in the power is the limitation
that it should be exercised only
for a public purpose.

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Prohibition against delegation of the

taxing power

The power to impose tax is

purely legislative. Congress
cannot delegate the power to
others
Doctrine of separation of
powers:
Each branch must exercise its
powers without intruding into the
exercise of the powers of the other
branches, for they are independent
and coordinate

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Prohibition against taxation of

government entities

Government agencies and

instrumentalities are generally
exempted from taxation,
unless otherwise provided by
law.

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Limitation on International comity

The property of foreign state or

government may not be taxed by
another. Foreign Diplomats/
Ambassadors are also exempted
from taxation, this principle is
based on the sovereign equality
among states under international
law that foreign government may
not be sued without its consent so
that it is useless to assess the tax,
since anyway it cannot be
collected

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Limitation on Territorial jurisdiction

A state may not tax property lying

outside the borders or right or
privilege in another state. The
reason is that tax laws do not
always operate beyond a countrys
jurisdictional limits.
In movable property taxation, the rule is:
Mobilia Sequntur Personan meaning
movables follow the law person

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Income Taxation

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Income
- It means all the wealth which
flows into the taxpayer other
than mere return of capital
Income tax
- a tax levied directly on
personal income in one taxable
period

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Classifications of Income

Gross income
All income derived from
whatever source
Ordinary income
Includes any gain from any sale
or exchange of property which
is not a capital asset or
property
Taxable income
Pertinent items of gross income
less the deductions and/or
personal and additional
exemptions
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Classifications of Income

Passive income
Income such as interest on
bank deposits, dividends,
royalties, prizes and other
winnings
Net income
Gross income minus allowable
deductions

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Taxpayer

Any person subject to tax imposed

by the National Internal Revenue
Code

Classification of Taxpayers
Individual taxpayer
Corporate taxpayer
General Professional Partnership
Estates and Trusts

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Basic Personal Exemption (BPE)

A mandatory deduction allowed to

individual citizens in the
Philippines regardless of the
status at the amount of
P50,000.00. This applies to all
individual citizen taxpayers
engaged in trade or business,
practice of professions, and
employees earning compensation
income
Deducted from gross income

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Basic Personal Exemption (BPE)

Single / Legally Separated

/Judicially annulled
P50,000.00
Head of the
Family...P50,000.0
0
Married.P50,000.0
0

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Additional Personal Exemptions (APE)

A mandatory deduction of
P25,000.00 for each qualified
dependent child up to
maximum of four (4) qualified
dependent children in the
Philippines or maximum
amount of P100,000.00

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Head of the Family

An unmarried or legally
separated man or woman with
one or both parents, or with
one or more brothers/sisters,
or with one or more
legitimate, recognized natural
or legally adopted children
living with and dependent
upon him for their chief
support

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Dependent

A legitimate, legitimated, illegitimate, or

legally adopted child of the taxpayer
Not more than 21y/o, unless physically
or mentally handicapped
Living with the taxpayer
Dependent upon the taxpayer for chief
support
Not gainfully employed, even if the child
is employed but the taxpayer is still
supporting the child at least 51% of its
living expenses
File a Certificate of Tax Exemptions or BIR
Form No. 2305

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Income Tax Rates

Over

But not over

P 10,000

5%

P 10,000

30,000

P 500 + 10% of excess over 10,000

30,000

70,000

P 2,500 + 15% of the excess over 30,000

70,000

140,000

P 8,500 +20% of the excess over 70,000

140,000

250,000

P 22,500 + 25% of the excess over 140,000

250,000

500,000

P 50,000 + 30% of the excess over 250,000

500,000

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P 125,000 +32% of the Excess over 500,000

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Tax Evasion

It is the use by the

taxpayer of illegal or
fraudulent means to defeat
or lessen the amount of
tax

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Tax Avoidance

It is the use by the

taxpayer of legally
permissible methods in
order to avoid or reduce
tax liability

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Tax Exemption

It is the grant of immunity or

freedom from financial
charges, burdens or fees
extended by the State to the
taxpayers.

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Cooperative Programs In The

Philippines
Chapter 9

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Cooperative

derived from the Latin word

cooperatus
Co means with and operatus means to
work
= working together
A group of persons who pool their resources
under the procedure and principle of equality
and common understanding for their mutual
benefits
Based on the saying that:
in union, there is strength

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Why Previous Cooperative Failed

Incompetent Management
Inadequate Capital
Lack of knowledge on the concept
of cooperative
Inability to meet competition

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 Republic Act 6938 The Cooperative

Code of the Philippines
Fosters the creation and growth of
cooperatives as a practical vehicle
promoting self-reliance and harnessing
people towards the attainment of
economic development and social
justice

Republic Act 6939 The Cooperative

Development Authority
Provides for the creation of CDA tasked
to implement the programs of
cooperatives in the Philippines

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Purposes of the Cooperative

Development Program

Facilitate redistribution of income and

wealth
It is a means for community
development
To systematize the developments of
cooperatives
to give more opportunities to the poor

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Objectives of Cooperatives

To provide goods and services to its

members and thus enables them to attain
increased income and savings,
investments, productivity, and purchasing
power and promote among them equitable
distribution of net surplus through
maximum utilization of economies of scale,
cost-sharing and risk sharing without,
however, conducting the affairs of the
cooperative for charitable purposes.
It shall provide maximum benefits to its
members, teach them efficient ways of
doing things in a cooperative manner,
propagate cooperative practices and new
ideas in business and management and
allow the lower income groups to increase
their ownership in the wealth of the nation.
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Types of Cooperatives

1) Credit Cooperatives
(composed of persons who are bounded
y common interest in promoting the virtue
of thrift among its members by pooling
their savings into a common fund)
2) Consumers Cooperatives
(composed of consumers residing in a
particular community who have pooled
their resources together to procure and
distribute commodities at low prices;
serves the need of its members)
3) Producers Cooperatives
(Composed of skilled workers and
craftsmen engaged in small scale industry
who have pooled their economic
resources)
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Types of Cooperatives

4) Marketing Cooperatives
(Engaged in the sale of farm products
produced individually by memberfarmers in their respective farms)
5) Service Cooperatives
(Established by members to provide
themselves with certain services which
would help ameliorate their life)

6) Multi-purpose Cooperatives
(combines two or more of the business
activities of these different types of
cooperatives)

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Factors Contributing to the Success of

Cooperatives

Economic needs
(Man is a social being, his economic
problems can best be solved through
cooperation)
Sound Business Policies
(Refers to efficiency of operation, careful
planning, foresight and fair dealing with
customers)
Honest and Competent management
(The persons who are to serve as
members of the board of directors should
have adequate business experience)
Exemption from Taxes
(Cooperatives has a decided edge or
advantage over private enterprises)

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Knowing is not enough;

we must apply. Willing is
not enough; we must do.
Johann Wolfgang von Goethe

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