Conversion (Separate Guidelines)

Rules
Exceptions

Disturbance Compensation

Conversion
 Paid in cash or in kind to farmers, agricultural lessees, share tenants, occupants affected by
conversion
 at least 5x of average of gross annual harvests for the last 5 years
 compensation in kind may be partly/wholly homelot, employment, benefits etc, but terms have
to be agreed upon by the DAR
 must be complied with no later than 60 days from approval of conversion
 if they fail to agree on amount of disturbance compensation, or raise a prejudicial issue that
tends to raise doubt on payment of disturbance compensation  either or both refer issue to
PARAD for resolution
o pending resolution, occupants may not be evicted until such time it is decided with
finality

Who are the Beneficiaries

In the order of priority:
1. agricultural lessees and share tenants
2. regular farmworkers (a natural person permanently employed by an agricultural enterprise)
a. farmer – primary work is in cultivation, agriculture, fisheries livestock etc by himself or
with assistance
b. farmworker – renders service in a farm as an employee
3. seasonal farmworkers (person employed on a recurrent/intermittent basis)
4. other farmworkers
5. actual tillers or occupants of public lands
6. collective or cooperatives of the above beneficiaries
7. others directly working on the land

Disqualification
 beneficiaries under PD 27 who have culpably sold, disposed of, and abandoned their land
 beneficiaries guilty of negligence or misuse of the land
 beneficiaries who own at least 3 hectares of agricultural land
 beneficiaries whose land has been subject of foreclosure by LBP (because LBP can foreclose on
land if beneficiary failed to pay 3 annual amortizations)

How to pay for the land

Beneficiary to government
 paid by beneficiary to the LBP
 30 annual amortizations (6% interest pa)
 payments for the first three years after award may be reduced at amounts established by PARC
provided:
o first 5 annual payments  may not be more than 5% of value of gross annual
production
 o “Should the scheduled annual payments after the fifth year exceed ten percent (10%) of
the annual gross production and the failure to produce accordingly is not due to the
beneficiary's fault, the LBP may reduce the interest rate or reduce the principal obligation
to make the repayment affordable.

Just compensation, how computed

DAR Formula
Land Valuation = 60%(Net income) + 30%(Comparable Sales) + 10%(Market Value)
Market Value = lower between (a) owner’s declaration of property value or (b) assessor’s valuation
Comparable Sales = 70% of zonal valuation
Capitalized Net Income = [gross sales/harvest less expense[20% of gross sales)] / 12
Factors in determining just compensation
 acquisition cost
 actual income and use
 70% of zonal valuation of BIR
 value of standing crop
 current value of like properties
 sworn valuation by the owner
 assessment made by city assessors
 tax declaration
 social and economic benefits contributed by the farmers, farmworkers and the government
 nonpayment of taxes or loans secure from any government financial institution on said land

How landowners are paid

Government to landowner
 Under EO 405, LBP to determine land valuation and compensation
 Mode of payment
o 24 ha and less – 35% paid in cash
o more than 24 ha to 50 ha – 30% paid in cash
o more than 50 ha – 35% paid in cash
o but if through voluntary land transfer, incentive of additional 5% paid in cash for each
(so 40%, 35%, 30%)
o Balance to be paid thru any of the following
 Shares of stock in GOCCs, LBP preferred shares, physical assets or other
qualified investments
 Tax credits which can be used against tax liability
 LBP bonds
 10% of the bond to mature every year until 10 th year
 transferable and negotiable
o Real property tax arrears (without penalty and interest) deductible from compensation
to be receive by the landowner
 Only when there has been a deposit can the government acquire title to the property

Rules of procedure DARAB (Notes from class)

What is covered and not

Covered
  All agricultural land whether public or private
 Agricultural land – land devoted to agricultural activity and not classified as residential,
commercial, industrial, mineral, or forest
 Agricultural activity - cultivation of the soil, planting of crops, growing of fruit trees, raising of
fish, including the harvesting of such farm products, and other farm activities and practices
performed by a farmer in conjunction with such farming operations done by persons whether
natural or juridical
 All alienable and disposable land of the public domain suitable for agriculture
 All other lands owned by government devoted to agriculture
 All private lands devoted to agriculture regardless of agriculture products raised thereon

Not covered
 Section 10
o Parks
o Wildlife
o Watershed and mangroves
o Forest reserves
o Reforestation
o Fish sanctuaries and breeding grounds
 Private lands ADE used for prawn farms and fish ponds
o Majority of farmers consent to exemption within one year from coverage of CARP. If
not, land will be distributed to beneficiaries
 Lands ADE used and necessary for
o National defense
o School sites and campuses including experimental farm stations operated for
educational purposes
o Seeds and seedling research and pilot production center
o Church sites and convents appurtenant thereto
o Mosque sites and Islamic centers appurtenant thereto
o Communal burial grounds and cemeteries
o Penal colonies and penal farms actually worked on by the inmates
o Government and private research and quarantine centers
 Lands with 18% slope and over and which are not devoted for agricultural use (100 meter run,
18 meter rise)
 Agricultural land devoted to commercial raising for livestock, poultry, and swine (Luz Farms)

June 15, 1988

 Effectivity of CARL
 As to conversion, all lands already converted to residential, commercial, or industrial purposes
prior to this date no longer need conversion clearances

Retention area
 5 hectares
 additional 3 hectares to each child subject to following conditions:
o child is at least 15 years old
o actually tilling the land or managing the same
o and before award given to farmer, the 3 hectares must be first given to the child
  landowner has right to choose area to be retained, which must be compact and contiguous
 if the land is tenanted, the tenant shall choose whether to remain or be a beneficiary in it or
another land
o if he chooses to remain, he will be considered as a leasholder and shall lose his right to
be a beneficiary
o conversely, if he chooses to be a beneficiary, he will lose his right to be a leaseholder in
the land
o but he must exercise his right to choose within one year after the landowner expresses
his desire to retain

Exception to the 5 hectares:

 landowners whose lands are covered under PD 27
 original homestead grantees or direct compulsory heirs who still own original homestead at
time of approval of CARP, as long as they continue to cultivate the land
 provincial, city, municipal government units who acquire private agricultural land through
expropriation or any other mode actually, directly, exclusively used for public purposes such as
roads, bridges, public markets etc

GSIS (SocLeg reviewer)

SSS
Procedures in general (what are benefits, how to apply)
Conditions of benefits
Not contribution conditions

Portability
Portability - the transfer of funds for the account and benefit of a worker who transfers from one system
to the other (RA 7699, Portability Law)

Totalization – process of adding up the periods of creditable services or contributions under each of the
Systems, for purposes of eligibility and computation of benefits

Totalization shall apply in the following:

a. If a worker is not qualified for any benefits from both Systems;
b. If a worker in the public sector is not qualified for any benefits in the GSIS; or
c. If a worker in the private sector is not qualified for any benefits from the SSS.

For the purpose of computation of benefits, totalization shall apply in all cases so that:
a. the contributions made by the worker‐member in both Systems shall provide maximum benefits
which otherwise will not be available
b. In no case shall the contribution be lost or forfeited

Benefits
a. Old‐age benefit
b. Disability benefit
c. Survivorship benefit
d. Sickness benefit
e. Medicare benefit, provided that the member shall claim said benefit from the System where he was
last a member
f. Such other benefits common to both System that may be availed of through totalization

If a worker qualifies for benefits in both Systems – Totalization shall not apply.

Under RA 7699, otherwise known as the Portability Law, government retirees who do not meet the
required number of years provided under PD 1146 and RA 8291 may still avail themselves of retirement
and other benefits.

Under this law, retirees may combine their years of service in the private sector represented by
contributions to the Social Security System (SSS) with their government service and contributions to the
GSIS to satisfy the required years of service under PD 1146 and RA 8291. However, if retirees have
already satisfied the required years of service under the GSIS retirement option they have chosen, they
would not be allowed to incorporate their contributions to the SSS anymore for availment of additional
benefits.

In case of death, disability and old age, the periods of creditable services or contributions to the SSS and
GSIS shall be added to entitle retirees to receive the benefits under either PD 1146 or RA 8291.

If qualified under RA 8291, all the benefits shall apply EXCEPT the cash payment. The Portability Law
provides that only benefits common to both Systems (GSIS and SSS) shall be paid. Cash payment is NOT
included in the benefits provided by the SSS.

Employee Compensation