MODULE 4 IN GEC 2

(READINGS IN PHILIPPINE HISTORY)

MODULE IV – SOCIAL, POLITICAL, ECONOMIC AND CULTURAL ISSUES IN

PHILIPPINE HISTORY: THE THREE MANDATED TOPICS:
1. AGRARIAN REFORM POLICIES
2. THE PHILIPPINE CONSTITUTION
3. TAXATION

CHAPTER INTRODUCTION
This chapter focuses on the issues in the Philippine society, which history could
give a clear understanding and thereby give solutions. The topics included in the
discussions are mandated: the Philippine Agrarian Reform policies, Philippine
Constitutions, and Taxation. It is expected that these discussions will help as propose
recommendations or solutions to present-day problems based on our understanding of
the root causes and how we anticipate future scenarios in the Philippine setting.

VALUE/THRUSTS INTEGRATION

Equitable distribution of wealth; Social justice

LESSON 1 – AGRARIAN REFORM POLICIES

INTRODUCTION:
The Philippine economy is largely agricultural and industrial. Agriculture has been
existing even during pre-colonial times considering that rice is an Asian staple food along
with other crops. The agricultural economy, however, brought about economic and social
problems concerning the agrarian structure as well as land tenancy with the farmers – the
ones who are actually cultivating the fields – as the losers in the system (Torres, 2018).

Agrarian reform is essentially the rectification of the whole system of agriculture,

which is an important backbone in the Philippine economy. Thus, in our attempt to
understand the development of agrarian reform in the country, it is time to turn back our
 attention to our country’s history, especially our colonial past where we can find the root
of the agrarian woes the country has experienced up to this present time (Candelaria,
2018). Thus in this lesson we are to discuss the Agrarian Reform policies of our country.

INTENDED OUTCOME/LEARNING OBJECTIVES:

At the end of the lesson the students will be able to:
1. Trace the history of the land reform program in the Philippines;
2. Communicate using various techniques and genres, historical analysis of a
particular event or issue that could help others understand the topic;
3. Propose recommendation or solutions to present day problems based on their
understanding of root causes, and their anticipation of future scenarios
INCULCATING CONCEPTS (Input/Lesson Proper)
LUPA AY LAYA: TRACING THE HISTORICAL DEVELOPMENT OF AGRARIAN
REFORM IN THE PHILIPPINES
DEFINITION OF AGRARIAN REFORM AND LAND REFORM
LAND REFORM
 Full range of measures that may or
should be taken to improve or
remedy the defects in the relations
among the tiller, landowners,
employee and employer in the farm.
 Distribution of land regardless of
crops or fruits produced to farmers
and regular farm workers who are
landless;
 Solving the agrarian problem and
thereby elevate the quality of life of
the rural populace and make them
active participants in the economic,
social, and political affairs of their
locality.
AGRARIAN REFORM
 Agrarian Reform means redistribution of
lands, regardless of crops or fruits
produced, to farmers and regular
farmworkers who are landless,
irrespective of tenurial arrangement, to
include the totality of factors and support
services designed to lift the economic
status of the beneficiaries and all other
arrangements alternative to the physical
redistribution of lands, such as production
or profit-sharing, labor administration, and
the distribution of shares of stocks, which
will allow beneficiaries to receive a just
share of the fruits of the lands they work.
 PRESIDENTIAL DECREE 27
 Mandating the emancipation of the
country’s rice and corn tenants from
their bondage by transferring to them
the ownership of the lands they till.
 Requires that the covered agricultural
land be tenanted and primarily
devoted to rice or corn cultivation.
REPUBLIC ACT 6657
 Aimed at helping the small and
marginal farmers of Philippines by
providing them easy access to land
and other necessary inputs.
 It is broader in scope than Presidential
Decree No. 27, for the for it applies to
all agricultural lands in which
agricultural activities are conducted

HISTORICAL DEVELOPMENT OF AGRARIAN REFORM IN THE PHILIPPINES

A. PRE-SPANISH
 Land was commonly owned by the community known as barangay. This is a small
unit of government consisting of 30-100 families administered by the chiefs.
 Everyone in the barangay regardless of status had access on the land and
mutually shares resources and the fruits of their labor.
 They believed in and practiced the concept of “stewardship” where relationship
between man and nature is important.
 Land cultivation was done commonly by kaingin system or the slash and burn.
 Food production was intended for family consumption only.
 Barter trade, exchanging their goods with others.
 Some even traded their agricultural products with luxury items
 The tribal hunters and gatherers existed in their resource ranges, with no system
of land-ownership.
 Land was not distributed during the pre-colonial period. The notion of private
property was unknown.
 No formal procedures for recognizing private ownership such as documents,
deeds or titles.
 During these times, the land is communal – the community or barangay commonly
owned the land.
  The pre-Spanish classes who lived in barangays determined the landownership
system.
 A datu (headman) ruled the barangay and lead the other classes – maharlica
(nobles), timawa (freeman), and the alipin (dependents).

B. SPANISH PERIOD
 Through the Laws of the Indies, the Spanish crown awarded vast tracts of land
to:
a) Religious orders (Friar lands)
b) Spanish military as a reward for their service; (Repartiamentos) and
Spaniards (Encomienda)
c) Natives within these areas became mere tillers working for a share of
crops and they did not even have any rights to the land.

DEVELOPMENT OF TENANCY UNDER SPAIN

1. Encomienda System
 Introduced in the Philippines in compliance with the decree issued by King Philip
II in 1558;
 A subdivision of the Philippines to facilitate the pacification campaign;
 Not a land grant but a favor from the king to the encomendero (given the right to
collect taxes or tribute; perform duties of protecting the natives; convert the
natives into Christianity, and promote education)
 Subsequently, the development of Hacienda system in the 19th century as a new
form of landownership.
2. Rise of Cacique class
 In replacing of the encomiendas, the Spaniards began to group several barangays
together into administrative units termed as pueblos or municipios;
 The barangay continued to be ruled by datus who then became the “cabeza de
barangays” or “barrio tenientes”
 The pueblos or municipios were governed by “gobernadorcillos” came from
cacique class.
3. Early Rebellion
 As the cacique system grew, it also became oppressive that led to occasional
rebellions during the 18th century that occurred in the areas of greatest agricultural
activity such as Central Luzon.
 Enforced labor, heavy head tax, and required contributions to the church and the
officials were the principal cause of rebellion.
 Conflicts over land ownership
 In the 19th century, several developments took place tended to solidify the land
tenure system and arouse antagonism over its injustices and inequalities;
 Land tax were not levied but rather a head tax, and few records were kept relative
to land ownership;
 Spaniards issued two royal decrees (1880 and 1894) urging the landholders
whether the caciques or peasants to secure legal titles of their lands.
4. Friar lands
 Another source of friction in the late 19th century were the amount of land held in
grant from the Spanish crown by the religious orders;
 Friars were not only granted encomienda but the authority to rule over the new
domain that friar lands came into being.
 Tenants living in the church lands paid a tax known as “canon” to the friars.
 The Dominicans, Augustinians, and Recollect orders share vast tract of lands
located on the most populous area of the country particularly in the provinces of
Cavite, Laguna, Rizal, and Bulacan.
5. The Philippine Revolution
 During the revolution church estates were confiscated by Aguinaldo and landless
peasants were allowed to settle on church lands;
 The cut of the revolutionary movement by the US Armed forces and the end of
Spanish period, witnessed that majority of agriculturally productive lands still in the
hands of the caciques and the friars, and small minority land in the legal
possession of the peasants.
LAWS ON REGISTRATION OF LANDS
1. The Ley Hipotecaria or the Mortgage Law of 1893
 The peasant mortgaged his land to loan money.
 During the loan period, the peasant-borrower paid his landlord-creditor a rent for
cultivating his land until he has repaid the loan.
 If the peasant-borrower failed to repay the creditor, his land would be forfeited.
 To keep the mortgaged lands, high interest rates were imposed for the loan.
2. The Maura Law or Royal Decree of 1894
 Granted landholders to secure legal title to their land or suffer its forfeiture.
 Filipino peasants, either because of ignorance of the processes of the law or the
inability to comprehend the Spanish-written instructions, failed to respond
immediately.
 At the close of the Spanish Period, Gen. Emilio Aguinaldo confiscated the friar
lands and gave it to landless peasants.
 This declaration was contained in the Malolos Constitution: “all the lands, buildings,
and other properties belonging to the religious corporations in these islands shall
be understood to have been restored to the Filipino state.”
 However, majority of the agriculturally productive lands were still in the hands of
the caciques and the friars and a small minority of the land in the legal possession
of peasants.

C. LAND TENURE SITUATION UNDER AMERICAN RULE, 1898-1935

 Actual Increase in Tenancy Rate
 Tenancy rate increased during American period from 1903-1938:
 Land ownership decreased by 31.6 % from 80.8% to 49.2%
 tenancy increased by 15.8% from 19.2 % to 35.0%
 From 1918 -1938, a 16.4% decrease in the number of farm attributed towards the
greater concentration of farms in the hands of fewer individuals and the rapid
increase in the number operated under some from tenancy.
LAND SYSTEM AND LAWS
1. Philippine Bill of 1902 - provides regulation on the disposal of public lands wherein a
private individual can own 16 hectares of land while the corporate landholdings can
avail of 1,024 hectares.
2. Torrens System of Land Registration
 To resolve agrarian problems rooted in Spanish times and of the farmers’
ignorance of various laws.
 The situation was aggravated by the absence of records of issued titles and
accurate land surveys.
 Enforcing the registration of lands and issuance of certificates of land title granted
by the court after appropriate proceedings.
 Government-purchased titles were issued only after completing a survey and
establishing the land ownership.
 This system did not resolve the problem because the farmers did not understand
the law and could not pay the survey cost.
3. The Land Registration Act of 1902 (Act No. 496) by the Philippine Commission
 This provided for a comprehensive registration of land titles under the Torrens
system.
 Landlords expanded their landholdings by simply registering and acquiring Torrens
titles to untilled lands. The farmers, unaware of this law, were either expelled by
the new landowners or became their tenants.
4. Homestead Program
 Offered plots not in excess of 16 hectares to families who had occupied and
cultivated the land they were residing on since August 1, 1898.
 Plots of the same size were promised to those who would be willing to relocate on
lands of public domain in other less densely populated parts of the country.
5. The Cadastral Act of 1903
 Through cadastral survey, the government redefined the lands that will be
classified as private or public.
 Unschooled peasants lost their lands massively to those who are familiar with the
processes of this law.
6. The Friar Lands Act of 1904 (Act No. 1120)
 Provided the terms and conditions on the sale and lease of purchased friar estates
of 410,000 hectares
 Preference to buy or lease would be given to the actual settlers of the land acquired
by the government.
 Land estates were offered for sale to the actual tenant-tillers at an interest of 8%
for a 25 year period.

D. COMMONWEALTH PERIOD
Manuel Quezon implemented the Rice Share Tenancy Act of 1933 (Act No. 4054)
 This is to regulate the share-tenancy contracts
 The Act provided for better tenant-landlord relationship, a 50-50 sharing of the
crop, regulation of interest to 10% per agricultural year, and a safeguard against
arbitrary dismissal by the landlord.
 The major loophole of this act was that it could be used only when the majority of
the municipal councils in a province petitioned for it.
 Since landowners usually controlled such councils, no province ever asked that
the law be applied.
Sugarcane Tenancy Contract Act of 1933 or Act No. 4113 – this regulated
relationships between landowners and tenants of sugarcane fields, and required tenancy
contracts on land planted with sugarcane.

COMMONWEALTH ACT NO. 103

 Created the court of industrial relations which originally also referred to
agricultural workers.
COMMONWEALTH ACT NO. 213
 Defined and regulated legitimate labor organizations.
COMMONWEALTH ACT NO. 178
 Amendment to Rice Tenancy Act providing for certain controls in the landlord-
tenant relationships.
COMMONWEALTH ACT NO. 461 OF 1937
 Gave more protection to agricultural tenants under the Rice Tenancy Act wherein
dismissal of Tenant should first have approval of the Tenancy Division of the
Department of justice.

COMMONWEALTH AGRARIAN SITUATION

 Contrasting economic and political lifestyle between tenant and the landlord
became very common·
 Absentee landowners increased.
 A small plot of land cultivated by an average peasant farmer could not sustain a
decent living for the family.
 Tenants and farmers shouldered excessive fines, unfair taxation and usury.
 ·Systems for credit and marketing of rice were lacking thus, farmers received a
very low selling price.
 Peasant uprising became widespread all over the country.

PEASANT REBELLION AND OPPOSITION

1. Tayug incident in 1931: armed peasants looted and destroyed land records
in Tayug City Hall.Widespread peasant uprisings:
2. Colorum (Pedro Calosa, a 34-year old farmer from the barrio of Magallanes,
Tayug, Pangasinan; Colorum – the Colorum movement is traced to the Spanish
regime when, in 1843, Apolinario de la Cruz, founded the Cofradia de San Jose
in the province of Tayabas
3. Sakdalista (Benigno Ramos) - Sakdalista-was a peasant rebellion in Central
Luzon that lasted for 2 days, May 2-3, 1935;
RESPONSE OF THE COMMONWEALTH
- Implementation of social justice program of Manuel L. Quezon focused on:
 Expropriation of large haciendas as a possible way to solve the problem of
inequitable land ownership.
 Homestead program was continued through Commonwealth Act No. 441
 Implementation of social justice program of Manuel L. Quezon focused on:
This program was in lined with the provision of Article II, Sec. 5 of the 1935
constitution states that, “The promotion of social justice to ensure the well-being
and economic security of all people should be the concern of the state.”

ESTABLISHMENT OF NATIONAL RICE AND CORN CORPORATION (NARIC).

 Assigning public defenders to assist peasant in court battles.
 Setting up Court of Industrial Relations
 Amendments on the Rice Tenancy Act which has a built-in section (29) hindering
its full implementation.
 Settlement of virgin public agricultural lands was begun by the National Land
Settlement Administration (NLSA).
 At the outbreak of WWII, major settlement areas containing more than 65,000
hectares were already established.

SECOND PHILIPPINE REPUBLIC (Jose Laurel) - JAPANESE OCCUPATION (1941-

45)
Hukbo ng Bayan Laban sa Hapon (HUKBALAHAP)
 Took upon the cause of peasants against the landlords, who often collaborated
with the Japanese to maintain their position led by peasant charismatic leader Luis
Taruc.
POST WAR PHILIPPINES
ROXAS ADMINISTRATION (1946-48)
 Proclaimed the Rice Share Tenancy Act of 1933 (Act No. 4050) effective
throughout the country;
 But problems on land tenure persisted and in many areas became worse;
 A remedial measures enacted was (Republic Act No. 34 of 1946) Tenancy Act of
1946.
 Provided a 70-30 sharing arrangements and regulated share-tenancy contracts
between tenant and landlord
 It provided that whoever shouldered the expenses of planting and harvesting and
provided the work would be entitled to 70 percent of the harvest.
 It also reduced the interest on landowner loans to tenant at no more than 6 percent
instead of 10 percent.
 Republic Act No. 55- it provided for a more effective safeguard against arbitrary
ejection of tenants.

QUIRINO ADMINISTRATION (1948-53)

 Objectives of his administration: economic reconstruction and restoration of faith
and confidence of the people to the government
 EO 355 – on October 23, 1950 replaced the National Land Settlement
Administration with Land Settlement Development Corporation (LASEDECO)
which took over the responsibilities of the two agrarian offices: the Agricultural
Machinery Equipment Corporation and the Rice and Corn Production
Administration.
MAGSAYSAY ADMINISTRATION (1953-57)
 RA No.1160 (1954)- Free distribution, resettlement, and rehabilitation of
agricultural lands, an act abolishing LASEDECO and establishing National
Resettlement Rehabilitation Administration (NARRA) to resettle dissidents and
landless farmers.
 The Agricultural Tenancy Act of 1954 (RA 1199) - Provided security of tenure
for tenants; Allowed tenants to shift from share tenancy to leasehold
 In the leasehold system, a tenant paid a fixed amount to the landlord instead of a
variable share.
 This act prohibited the ejection of tenants, unless the Court of Agrarian Relations
found a just cause.
 Republic Act No. 821 (Creation of Agricultural Credit Cooperative Financing
Administration) - provide small farmers and share tenants’ loans with low interest
rates of six to eight percentage.
 Republic Act No. 1266 (1955) - expropriated Hacienda del Rosario situated at
Valdefuente, Cabanatuan City.
 The Land Reform Act of 1955 (RA 1400)
o Provided for the expropriation (to take possession of for public use) of
private agricultural land over 300 hectares of contiguous areas, if owned by
individuals.
o However, it allowed expropriation regardless of hectares in places where
there was justified agrarian unrest.
o Loophole: it prohibited the possession of lands less than the stated limits.
o Exempted many landowners who had large but parceled out landholdings.
o The law allowed only the possession of lands when the majority of tenants
petitioned for land purchase.
o known as land to the landless program;
o Created the Land Tenure Administration (LTA) responsible for the
acquisition and distribution of large tenanted rice and corn lands over 200
hectares for individuals and 600 hectares for corporations.
GARCIA ADMINISTRATION (1957-61)
 He did not make any law or major pronouncements on agrarian reform.
 It was then believed that at the rate of progress maintained under Magsaysay
and Garcia, it would have taken about 70 years to repurchase and redistribute
the 1.8 million hectares of tenanted agricultural land in the Philippines.

MACAPAGAL ADMINISTRATION (1961-65)

 Agricultural Land Reform Code of 1963 (RA 3844)
 This code provided for the purchase of private farmlands with the intention of
distributing them in small lots to the landless tenants on easy terms of payment.
 The law lowered the retention limit to 75 hectares
 It formulated a bill of rights that assured agricultural workers the right to self-
organization and to a minimum wage.
 By 1972, the code had benefited only 4500 peasants at the cost of P57 million to
the government.
 Republic Act No. 3844 of August 8, 1963 (Agricultural Land Reform Code) --
Abolished share tenancy, institutionalized leasehold, set retention limit at 75
hectares, invested rights of preemption and redemption for tenant farmers,
provided for an administrative machinery for implementation, institutionalized a
judicial system of agrarian cases, incorporated extension, marketing and
supervised credit system of services of farmer beneficiaries.
MARCOS ADMINISTRATION
Pre-Martial Law (First Term, 1965-69)
 Agricultural Land Reform Code of Macapagal was implemented
 Faster land purchase and redistribution compared to the Macapagal
 No Agrarian Law was made
 Amendments to the Agricultural Land Reform Code of 1971 (RA 6389)
 Right of tenants to have a disturbance compensation on land converted to
residential subdivision which is equivalent to five times the average gross harvest
for the past three agricultural years
 RA No. 6390 of 1971- Creation of the Department of Agrarian Reform (DAR)
MARTIAL LAW (1972-81)
 Presidential Decree No. 2 - Declared that the entire Philippines as land reform.
 Presidential Decree No. 27 - Emancipating farmers from the bondage of the soil
o The tiller automatically becomes the amortizing owner of the land he tills.
o The equitable distribution of property, especially among landless peasants,
and wealth never took place.
o Marcos’s family and its cronies allegedly exploited much of the wealth of the
country.

AQUINO ADMINISTRATION (1986-92)

 Executive Order No. 228 (July 16, 1987) - declared full ownership of qualified
farmer-beneficiaries covered by P.D. 27 and provided the manner of payment by
farmer-beneficiaries and mode of compensation to landowners.
 Executive Order 229(July 22, 1987) – provide mechanism for the implementation
of CARP.
 Executive Order No. 129-A – organizing and streamlining DAR.
 Proclamation 131 – instituting CARP as the centerpiece program of the
government.
 Unveiled the Comprehensive Agrarian Reform Program (CARP) which is governed
by the Comprehensive Agrarian Reform Law of 1988 (RA 6657-June 10, 1988).
 All matters involving the implementation of agrarian reform are now governed by
the said act
 Instrument which will correct landlordism and unjust land distribution in a span of
ten years
 There will be more economic activities that will encourage people to remain the
countryside instead of going to Manila or other Urban Centers.
 Executive Order No. 405 (June 14, 1990)- vested LBP the responsibility to
determine the valuation and compensation for all land covered by CARP.
RAMOS ADMINISTRATION (1992-98)
 No new agrarian reform law was passed by Congress.
 Ramos speeded up the implementation of CARP.
 RA 7881- AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM
PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION,
PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER
PURPOSES
 EO 363 - Limits the type of lands that may be converted by setting conditions under
which specific categories of agricultural land are either absolutely non-negotiable
for conversion.
 R.A. 8435, 1997 (Agriculture and Fisheries Modernization Act or AFMA) – plugged
the legal loopholes in land use conversion.
 R.A 8532, 1998 (Agrarian Reform Fund Bill)- provide another 50 Billion for CARP
and extended its implementation for another 10 years.

ESTRADA ADMINISTRATION (1998-01)

 Executive Order No. 151, September 1999 (Farmers Trust Fund)- allowed
voluntary consolidation of small farm operation into medium and large scale
integrated enterprise that can access long term capital.
 Launched the Magkabalikat para sa Kaunlarang Agraryo (MAGSASAKA)
 It was introduced to encourage foreign and private investments to the agricultural
sector and help farmers to learn advanced technology in crop production.
 Continued implementing the CARP.

ARROYO ADMINISTRATION (01-10)

 The agrarian reform program of this administration is based on the philosophy that
inequitable land distribution and poverty lead to social unrest while social justice
and rural development lead to peace.
 CARP ended in 2008 without successfully completing all its goals.
 The strategy of DAR in CARP implementation is manifested on the Kapit-Bisig sa
Kahirapan Agrarian Reform Zones (KARZONEs) which is a partnership and
 convergence strategy aimed at achieving asset reform, poverty reduction, good
governance, social equity, and empowerment of agrarian reform beneficiaries
(ARBs).
 Signing of the Comprehensive Agrarian Reform Program Extension and Reforms
(CARPER)
 Amended certain provisions of the 1988 CARL
 Extended the CARL to five more years and allocated more funds for the
implementation of the CARP.
 CARP will continue even when all landless farmers have owned a piece of
agricultural land
 CLEAR POLICY AGAINST CONVERSION OF AGRICULTURAL LANDS

NOYNOY AQUINO ADMINISTARTION (2010-2016)

 Sustained the gains of agrarian reform through its three major components.
1. Land Tenure Improvement
 Highly recognized as the most integral aspect of the program.
 This component seeks to secure the tenurial status of the farmers and
farmworkers.
 The DAR implements this component through Land Acquisition and Distribution
(LAD) or Non-land Transfer Schemes.
2. Program Beneficiaries Development
 It is a support service delivery component of CARP.
 Aims to aid the agrarian reform beneficiaries by providing them necessary support
services to make their lands more productive, and enable them to venture in
income generating livelihood projects in accordance to Sec. 14 of RA 9700(Sec.
37 of RA 6657 as amended)
 Under the support service delivery programs, the Presidential Agrarian Reform
Council ensures that agrarian reform beneficiaries are provided with support
services such as land surveys and titling, construction of infrastructures, marketing
and production assistance, credit and training.
3. Agrarian Justice Delivery
 Provides agrarian legal assistance and oversees the adjudication of cases.
 Under Section 19 of RA 97600 (Section 50 of RA 6657 as amended), the DAR is
hereby vested with the primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have exclusive original jurisdiction over all matters
involving the implementation of agrarian reform except those falling under the
exclusive jurisdiction of the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).

The Agrarian Reform Community Connectivity and Economic Support Services

(ARCCESS) project was created to contribute to the overall goal of rural poverty
reduction especially in agrarian reform areas.

Agrarian Production Credit Program (APCP) provided credit support for crop
production to newly organized and existing agrarian reform beneficiaries’
organizations (ARBOs) and farmers’ organizations.

The Legal Case Monitoring System (LCMS), a web-based legal system for recording
and monitoring various kinds of agrarian cases at the provincial, regional and central
offices of the DAR to ensure faster resolution and close monitoring of agrarian-related
cases, was also launched.

Executive Order No. 26, Series of 2011- mandate the Department of Agriculture-
Department of Environment and Natural Resources-Department of Agrarian Reform
Convergence Initiative to develop a National Greening Program in cooperation with
other government agencies.
THE LEGAL BASES OF AGRARIAN REFORM IN THE PHILIPPINES
 The 1987 Philippine Constitution, Article II Sec. 21, says that, “The State shall
promote comprehensive rural development and agrarian reform.”
 The present agrarian reform law implemented nation-wide is the R.A. 6657
otherwise known as, the Comprehensive Agrarian Reform Law (CARL), signed
into law by former President Corazon C. Aquino, and implemented the government
program known as Comprehensive Agrarian Reform Program (CARP).
 Concept. It provides not only for land distribution but also for appropriate support
services. It ensures the viability of the beneficiaries as independent small farmer-
landowners.
 Coverage. It covers not only private lands but also public lands of public domain
which are classified as agricultural regardless of the crops planted and tenurial
arrangement.
 Beneficiaries. Both the farmers and the landowners stand to benefit. The farmers
will own the land they till and the landowners will amply compensated and provided
with necessary capital to reinvest in the industry.

AGRARIAN REFORM AS DEFINED IN CARL R.A. 6657 SEC 3(A)

 Agrarian reform as the distribution of lands regardless of crops or fruits produced,
to farmers and regular farm workers who are landless, irrespective of tenurial
arrangement, to include the totality of factors and support services designed to lift
the status of the beneficiaries and all other arrangements alternative to the physical
redistribution of lands, such as production or profit-sharing, labor administration,
and the distribution of shares of stock with beneficiaries to receive a just share of
the fruits of the land they work.
 The biggest program of the government instituted in the leadership of Pres. Cory
Aquino. The underlying principle behind it is the promotion of equity coupled with
democratization of access to land and the benefits derived from it.
COVERAGE:
o all agricultural lands
o idle, foreclosed, or sequestered lands
o voluntary transfer
o lands to be expropriated
o sequestered agricultural properties

AGRARIAN REFORM COVERS THE FOLLOWING ELEMENTS:

 Distribution of land to the cultivator
 Security of tenure and fair system of rental payments
 Improved methods of cultivation through the improvement of rural institutions
serving the farmers such as:
 Adequate credit
 Cooperative marketing
 Agricultural investment

OBJECTIVES OF CARP
 seeks to eliminate feudal relations
 emancipate tenants from the bondage of soil
 promote agrarian peace
 divert landlord capital to a more productive industrial ventures

CONSTITUTIONAL BASIS FOR AGRARIAN REFORM

 Article II, Sec 21- The state shall promote comprehensive development and
agrarian reform.
 Article XII, Sec 21- The state shall, by law, undertake an agrarian reform program
founded on the right of the farmers and regular farm workers who are landless, to
own directly or collectively he land they till.
 Article XIII, Sec 5- The state shall recognize the right of farmers, farm workers and
land owners as well as cooperatives and other independent farmers organization
and management of the program
  Article XIII, Sec 6- The state shall apply the principles of agrarian reform or
stewardship whenever applicable in accordance with laws.
 Article XIII, Sec 8- The state shall provide incentives to land owners to invest the
proceeds of the agrarian reform program to invest the proceeds to promote
industrialization, employment, and creation of public sector enterprises.

PRINCIPLES BEHIND AGRARIAN REFORM

 The fundamental principle behind agrarian reform is social Justice.
 Provision of just compensation defined as the full and fair equivalent of the property
taken away from its owner by expropriation.

LAND TENURE MAY COME IN THE FORM OF:

 redistribution of private lands
 redistribution of lands in the public domain
 regulation of tenancy
 regulation of agricultural labor and contracts
 elimination of absentee landlords and transfer of land ownership to all land tillers

EXAMPLES OF AGRARIAN REFORM BENEFITS

 reform measures
 public health programs
 family planning
 education and training of workers
 reorganization of land reform agencies
 application of labor laws
RETENTION LIMITS
 RA No. 6657 provides that the landowners shall retain not more than 5 hectares
of agricultural land.
 PD No. 27 allows landowners to keep the area originally considered as homestead
at the time of the approval of RA 6657. They can retain the same area as long as
they continue to cultivate them.

LANDS EXEMPTED FROM CARL

 Actually and exclusively used as parks
 Reforestation
 Forest revenues
 Fish sanctuaries
 Breeding grounds
 Watersheds and mangroves

MODES OF PAYMENT OF LAND BY TENANTS

 25% cash for lands 50 hectares
 30% cash for lands above 24 hectares
 35% cash for lands 24 hectares and below

BENEFICIARIES OF CARL
 agricultural lessees and share tenants
 regular farm workers
 seasonal farm workers
 other farm workers
 actual tillers
 others directly working on the land
PAYMENT FOR LAND AWARDED TO BENEFICIARIES
 Beneficiary will pay Land Bank of the Philippines its 30% annual amortization.
 reducing the amount for the first three payment at 5% value of the annual gross
production
 land awarded remains under mortgage to LBP until fully paid
STATUS OF AWARDED LANDS TRANSFERABLE
 beneficiaries may not sell, transfer, or convey lands awarded to them, except
through hereditary succession as to the government or to the LBP or other qualities
beneficiaries for a period of ten years

IMPORTANCE, ASPECTS, AND COMPONENTS OF AGRARIAN REFORM

1. ASPECTS OF AGRARIAN REFORM
a. Economic Aspect
 Agrarian reform will help improve agricultural productivity to accelerate general
economic development.
 Increased efficiency in food production means more and better food for
everyone. Unemployment is resolved.
b. Socio-cultural Aspect
 Because of a sense of ownership, farmers are transformed to become leaders
because they enjoy the benefits of their own farm.
 Farmers will become more active and productive in leadership roles and nation-
building.
c. Religious Aspect
 Everyone must enjoy the fruit of having a piece of land to till.
 Land is given by God for everyone to enjoy.
d. Moral Aspect
 Unequal distribution of wealth and power to only few persons.
 The ignorant and poor farmers are abused
e. Legal & Political Aspect
 Formulation of laws are enacted to regulate the abuse existing between landlords
and tenant-farmers
Components of Agrarian Reform
 Land Distribution
 The very foundation of agrarian reform
 Farmers are given the chance to become owners of the land they are tilling
 Components of Agrarian Reform
 Support Services made by the Government to assist the farmers after the
redistribution:
 Irrigation facilities
 Infrastructure development and public works projects
 Suitable barangay sites
 Potable water and power resources
 Price support of products
 Collateral-free loans
 Financial assistance to small scale industries
 Research and development on low cost-technologies to minimize reliance on
expensive and imported agricultural inputs
 Development of cooperative management skills through intensive training
 Assistance in various aspects of marketing

REFERENCE TO/REFLECTION ON VALUE/THRUSTS INTEGRATION

1. Jose Victor Torres. “BATIS: Sources in Philippine History.” C and E Publishing,
Inc. 839 EDSA, South Triangle, Quezon City, 2018.
2. John Lee P. Candelaria and Veronica C. Alporha. Readings in Philippine History.
856
Nicanor Reyes Sr., St., Sampaloc, Manila. 2018
3. Evelyn J. Grey, Ph.D. and Ryan D. Biong, M.A.Ed. Malones Printing Press and
Publishing House. Door 32, Zerrudo Commercial Complex. E. Lopez St., Jaro,
Iloilo, Philippines, 2017.
LESSON 2 – THE EVOLUTION OF THE PHILIPPINE CONSTITUTION

VALUE/THRUSTS INTEGRATION

Knowing our rights; freedom; patriotism and nationalism

INTRODUCTION:
A constitution is defined as the fundamental law of the land or the State and
establishes the character and basic principles of the government. The Constitution is
codified into a single written document which forms the fundamental rules and principles
by which the State is managed and governed. It is in the same principles that make clear
the rights of the individual and creates limitations to government power.
The Constitution of the Philippines is the supreme law in which all laws, statutes,
and ordinances must conform to. The 1987 Philippine Constitution is our present
constitution that governed our country wherein some of its provisions were taken from our
previous constitutions starting from Malolos up to 1973 constitutions.
Hence, this topic is mandated to be taught in General Education Course 2 for the
students to enhance their understanding on how our present constitution came into being.

INTENDED OUTCOME/LEARNING OBJECTIVES:

At the end of the lesson the students will be able to:
1. Explain the importance of the constitution in our country;
2. Trace the development of the Philippine Constitution throughout the country’s
history;
3. Discuss the significant features and provisions included in our previous
constitutions as well as the salient features underlying our 1987 Philippine
Constitution.

INCULCATING CONCEPTS (Input/Lesson Proper)

 THE EVOLUTION OF THE PHILIPPINE CONSTITUTION

INTRODUCTION
As part of the evolution of the Philippine government, several constitutions were
enacted, either as mandated by the changing needs of the times, or as needed to satisfy
the desires, whims and caprices of the one holding the reigns of political life.

CONSTITUTION DEFINED
 That body of rules and principles in accordance with which the powers of the
sovereignty are regularly exercised; it covers both written and unwritten
constitutions.[Cooley, Constitution Limitations, p. 4].
 the fundamental and supreme law of the land
 Basis of all the other laws in the land;
 Serves as a guide to the government in making decisions;
 A written instrument by which the fundamental powers of the government are
established, limited and defined, and by which these powers are distributed among
the several departments or branches for their safe and useful exercise for the
benefit of the people. (de Leon, 2011).

NATURE AND PURPOSE OF A CONSTITUTION

1. Serves as the supreme or fundamental law. A constitution is the charter creating
the government. It has the status of a supreme or fundamental law as it speaks for
the entire people from whom it derives its claim to obedience.
 It is binding on all individual citizens and all organs of the government.
 It is the law to which all other laws must conform and in accordance with which all
private rights must be determined and all public authority administered.
 It is the test of the legality of all governmental actions, whether the proceeding from
the highest official or lowest functionary.
2. Establishes basic framework and underlying principles of government
 The constitution is also referred to as the organic or basic law being or relating to
the law by virtue of which the government exists as such.
THE PURPOSE OF A CONSTITUTION:
 prescribe the permanent framework of the system of government and to assign
to the different departments or branches
 primarily designed to preserve and protect the rights of the individuals against the
arbitrary actions of those authority;
 Set limits on the otherwise unlimited power of the legislature.

KINDS OF CONSTITUTION: The Constitution may be classified as follows:

AS TO THEIR ORIGIN AND HISTORY
1. Conventional or Enacted - An enacted or conventional constitution is formally
struck off at a definite time and place following a conscious or deliberate effort
taken by a constituent body or ruler i.e. Philippine Constitution.
2. Cumulative or Evolved - An evolved or cumulative constitution is the result of
political evolution not inaugurated at any specific time but changing by accretion
rather than any systematic method [Cruz, ibid., p. 5]. i.e. British Constitution.

AS TO THEIR FORM: THE WRITTEN AND UNWRITTEN

1. WRITTEN
o A written constitution is one whose precepts are embodied in one document or
set of documents; has given definite written form at a particular time;
2. UNWRITTEN
o A unwritten constitution consists of rules which have not been integrated into a
single, concrete form but are scattered in various sources, such as statutes of
fundamental character, judicial decisions, commentaries of publicists, customs
and traditions, and certain common principles [Cruz, Constitutional Law, pp. 4-5]
AS TO MANNER OF AMENDING: RIGID AND FLEXIBLE
1. Rigid/ Inelastic constitution is one that can be amended only by a formal and
usually difficult, and tedious process; regarded as a document of special sanctity
which cannot be amended except by some special machinery more cumbrous than
the ordinary legislative process.
2. Flexible or Elastic constitution is one that can be changed by ordinary legislation
[Cruz, ibid., p. 5]

ADVANTAGES AND DISADVANTAGES OF A WRITTEN CONSTITUTION

Advantages
 It has the advantage of clearness and definiteness over an unwritten one.
 This is because it is prepared with great care and deliberation;
 Such constitution cannot easily bent or twisted by the legislature or by the courts
to meet the temporary fancies of the moment.
 Advantages and disadvantages of a written Constitution
Disadvantages:
 lies in the difficulty of its amendment ;
 This prevents the immediate introduction of needed changes and may thereby
retard the healthy growth and progress of the state.

REQUISITES OF A GOOD WRITTEN CONSTITUTION: AS TO FORM

1. Broad. Not just because it provides for the organization of the entire government
and covers all persons and things within the territory of the State but because it
must be comprehensive enough to provide for every contingency;
2. Brief. It must confine itself to basic principles to be implemented with legislative
details more adjustable to change and easier to amend;
3. Definite. To prevent ambiguity in its provisions which could result in confusion and
divisiveness among the people [Cruz, ibid., pp. 5-6]
ESSENTIAL PARTS/AS TO CONTENT OF A GOOD WRITTEN CONSTITUTION:
a. Constitution of Liberty. The series of prescriptions setting forth the fundamental
civil and political rights of the citizens and imposing limitations on the powers of
government as a means of securing the enjoyment of those rights, e.g. Art. III.;
b. Constitution of Government. The series of provisions outlining the organization
of the government, enumerating its powers, laying down certain rules relative to its
administration, and defining the electorate, e.g., Art. VI, VII, VIII and IX.
c. Constitution of Sovereignty. The provisions pointing out the mode or procedure
in accordance with which formal changes in the fundamental law may be brought
about, e.g., Art. XVII. [Nachura, Reviewer in Political Law, 2006, p.3]

CONSTITUTION DISTINGUISHED FROM STATUTE

A CONSTITUTION A STATUTE
 A CONSTITUTION is a legislation direct from  A STATUTE is a
the people legislation from people’s
 A constitution merely states the general representatives;
framework of the law and the government  Statute provides the
 A constitution is intended not merely to meet details of the subject of
existing conditions but to govern the future which it treats.
 A constitution is the supreme or fundamental  Statute is intended
law of the State to which statute and all other primarily to meet existing
laws must conform. condition only

BRIEF CONSTITUTIONAL HISTORY OF THE PHILIPPINES:

1. BIAK-NA-BATO CONSTITUTION: Isabelo Artacho and Felix Ferrer, November 1,
1897
 1897 Biac-na-Bato Constitution- 32 Articles
 Nov. 1, 1897- Assembly; modifying the constitution
 Naic, Cavite March 22, 1897 Decree # 29- proclamation of the constitution “La
Constitucion Provisional De La Republica De Filipinas” Provision agreed:
o Separation of the Phil. from the Spanish monarchy and their formation into
an independent state with its own government. (Phil. Republic)
 o It also contained a Bill of Rights to safeguard the human rights of the people
(Articles XXII to XXV).
o The form of government was adopted from the provisions of the constitution
formed in Jimaguaya, Cuba.
 The government formed was a Supreme Council composed of: President, Vice-
President, Secretary of Interior, Secretary of Foreign Relations, Secretary of War,
and a Secretary of Treasury.
 The sweeping powers of the council are: power to issue orders and other laws for
the security of the state; impose and collect taxes; raise an army; ratify treaties,
and convene an Assembly of Representatives.
 The official language was Tagalog and the Judiciary was vested in another
Supreme Council of Justice.
 This Constitution lasted for only two (2) years which was later on superseded by
laws and decrees made by Aguinaldo.

2. THE MALOLOS CONSTITUTION (It has 100 Articles)

 Written by Felipe Calderon y Roca and Felipe Buencamino;
 June 23, 1898- decree-Revolutionary Congress convened at Barasoain Church,
Malolos, Bulacan; promulgation of the Malolos Constitution
 September 4, 1898- appointed members of the Congress (48 lawyers, 18 doctors,
5 pharmacists, 7 businessmen, 4 agriculturists, 3 educators, 3 soldiers, 2
engineers, 2 painters and 1 priest)
 When Aguinaldo entered the church, the secretary called on the names of the
delegates and introduced him
 Aguinaldo read his message (written by Felipe Buencamino)
 In the afternoon of the same day, the Congress elected its officers:
o President : Pedro A. Paterno
o Vice-President : Benito Legarda
o First Secretary : Gregorio Araneta
o Second Secretary : Pablo Ocampo
  September 9, 1898-ratification of Phil. independence which was proclaimed on
June 12, 1898
 Convent of Malolos Church- Aguinaldo’s official residence
 June 18 and 23, 1898- Mabini conceived the Congress as an advisory body to the
President of the Revolutionary government
 A committee was formed to draft the constitution as a prelude to the establishment
of a republic
 Felipe Calderon was a member; his draft was approved; framer of the constitution
 October 8, 1898- Calderon presented his draft of the constitution
 October 25, 1898- Congress deliberated on the draft
 November 29, 1898- the constitution was sent to Aguinaldo for approval
 Mabini warned Aguinaldo of the provisions that will give Congress so much powers
and the President merely a puppet; he delayed the approval
 With the issues laid down by Mabini, pressures of the influential Manila elite,
reluctance of Aguinaldo, the constitution was modified
AMENDMENTS WERE MADE
 January 21, 1899- the Malolos Constitution was approved and proclaimed
 Malolos Constitution- first Filipino document produced by the people’s
representatives though not all members who drafted the constitution were elected
by the people
 Democratic constitution
 Republican in nature-popular and representative

THE MOLOLOS CONSTITUTIONS CONTAINS THE FOLLOWING PROVISIONS:

 Its government was “popular, representative and responsible” with three distinct
Branches - executive, legislative, and judicial.
o Legislative powers were vested in the Assembly of Representatives
composed of delegates elected according to law.
o It provided for the separation of Church and State.
o The administration of justice was vested in the Supreme Court.
THE UNIQUE FEATURES OF MALOLOS CONSTITUTION:
o The Assembly or the legislative branch was superior to either the executive or
judicial branch.
o It provided for the permanent commission to sit as legislative body when the
Assembly was not in session.
o It established a unicameral legislative.

3. THE 1935 CONSTITUTION (1935 Constitution- 18 Articles)

 Based on the Tydings-McDuffie Law 1934 known as the Independence Act – it
provides for the drafting and guidelines of a constitution for a 10-year “transitional
period” government before granting of independence.
 Approval on May 5, 1934 of the Philippine Commission calling for a CONCON to
draft the constitution
 July 10, 1934- 202 delegates were elected by the people to write a constitution for
the Philippines
 July 30, 1934- Convention formally was inaugurated with Claro M. Recto as the
President
 The draft constitution was finished by January 31, 1935 and was approved on
February 8, 1935 by the Convention by a vote of 177 to 1(dissenter Tomas Cabili
of Lanao) and the signing completed on February 19, 1935;
 Approval of Pres. Roosevelt on March 23, 1935 of the constitution submitted to
him;
 May 14, 1935, a plebiscite held for the ratification of the Filipino electorate by a
vote of 1,213,046, with 44,963 against before the Commonwealth government be
established.
 Women suffrage
LIMITATIONS AND CONDITIONS: A CONSTITUTION DRAFTED SHOULD:
 Republican form;
 include a Bill of Rights;
 Contain certain provisions intended to define the relations between Philippines and
US during the Commonwealth period.

SOURCES OF 1935 CONSTITUTION

 Constitution was based on Biac-na-bato and Malolos Constitutions;
 The three Organic Laws: Phil. Bill of 1902; Instruction of President William
McKinley to the Second Philippine Commission and the Jones Law of 1916;
 The constitutions (US, Mexico, Germany and Italy etc.)

SCOPE OF 1935 CONSTITUTION

 The Constitution as approved by the Constitutional Convention was intended both
for the Commonwealth and a Republic;
 Thus, Article XVII as amended became Article XVIII declaring the government
established by this constitution shall be known as the Commonwealth of the
Philippines;
 Upon proclamation of Philippine independence, the Commonwealth of the
Philippines shall be known as the Republic of the Philippines.
 Amendments of 1935 Constitution
 The 1935 Constitution had been amended three times. Among the amendments
are:
o establishing a Bicameral legislature;
o re-eligibility of the President and the Vice-President for a second four-year
term of office;
o Creating a separate Commission on Elections;
o The so-called Parity Amendment which gave American citizens equal right
with the Filipinos in the exploitation of our natural resources and the
operation of the public utilities.
4. THE 1943 PHILIPPINE CONSTITUTION (1943 Constitution- 12 Articles)
 With the occupation of Manila, the Commander in Chief of the Japanese Forces
proclaimed, on January 2, 1942, the military administration over the territory
occupied by the army, and ordered that “all the laws now in force in the
Commonwealth, as well as executive and judicial institutions shall continue to be
effective for the time being as in the past”.
 “all public officials shall remain in their present posts and carry on faithfully their
duties as before” Executive Orders Nos. 1 and 4, dated January 30 and February
6, 1942,
 Continued the Supreme Court, the Court of Appeals, the Court of First Instance
and Justices of Peace Courts, with the same jurisdiction, in conformity with the
later instructions given by the Commander-in-Chief of the Japanese Imperial Army
in order No. 3, dated February 20, 1942.
 Jorge Vargas was appointed by Gen. Homma as head of the Executive
Commission (Where Filipinos report)
 June 18, 1943- the Kapisanan ng Pagllingkod sa Bagong Pilipinas (KALIBAPI)
created to form the Preparatory Commission for Phil. independence
 Preparatory Commission- Pres. Jose Laurel, VP Benigno Aquino & Ramon
Avanceña;
 September 4, 1943- constitution was ratified
 September 23, 1943- election of the members of the legislature
 September 25, 1943- the legislature elected Jose Laurel as the President of the
Republic of the Philippines
 October 14, 1943- Second Republic was born with Jose Laurel as the President
 The Constitution was basically a condensed version of the 1935 Constitution
consisting of a Preamble and 12 Articles. It created a republic with three offices
(Executive, Legislative, and judicial) but due to war, no legislature was convened.
5. THE FRAMING OF 1973 PHILIPPINE CONSTITUTION (The 1973 Constitution has
17 Articles)
 Revealed flaws and inadequacies of the 1935 constitution;
 March 16, 1967, the Congress in joint session passed both Resolution on both
Houses (as amended by Resolution no. 4 on June 17, 1969) authorizing the
holding of Constitutional Convention in 1971.
 On August 24, 1970, R.A. No. 6132 was approved setting November 10, 1970 as
Election Day for 320 delegates of the Constitutional Convention.
 June 1, 1971, the Convention started rewriting the Constitution based on the 1935
Constitution, with reference to the Malolos Constitution, for the drafting of
amendments of the new Constitution, and signed on November 30, 1972.
 Approval by Citizens Assemblies
 Earlier on September 21, 1972 , the President of the Philippines issued
Proclamation 1081 placing the entire country under Martial Law ;
 P.D. No.81 was issued on December 31, 1972 creating a Citizens Assembly in
each barrio in Municipalities and in each district in chartered cities throughout the
country;
 Subsequently, P.D. No. 86-A was issued on January 5, 1973 defining the role of
the barangays (formerly citizens’ assemblies).
 Approval by Citizens Assemblies
 Pursuant to P.D. No. 86-A, the Barangays were to a referendum on National issues
between January 10-15, 1973.
 The ratification was according to presidential Proclamation No. 1102 issued on
January 17, 1973: 14,976,561 members of all barangays (Citizens Assemblies)
voted for the adoption of the Constitution, as against 743,869 who vote for its
rejection;
 this Proclamation certified and proclaimed that the constitution proposed by the
1971 CONCON has been ratified by the Filipino people and had thereby come into
effect;
 SALIENT FEATURES OF THE 1973 CONSTITUTION
 It would have established for the first time in Philippine History a parliamentary
government , with the prime minister as the head of the government and the
president as a ceremonial head of state. However, this was not implemented.
Instead, President Marcos continued to rule under martial law powers until 1981.
 The legislative powers would have been vested in a unicameral National Assembly
composed of assemblyman elected by the people.
 The 1973 Constitution emphasized the duties and obligations of citizens, as well
as their rights. Voting was made compulsory for qualified voters, and suffrage was
extended to illiterates and youth down to 18-year olds.
AMENDMENTS
 January 20, 1980, another plebiscite was conducted to ratify the amendments of
extending the retirement age of the justices of the Supreme Court from 65 – 70
years old, barring the liberal and progressive justices from becoming Chief Justice.

6. THE 1986 PROVISIONAL CONSTITUTION (The 1986 Constitution has Seven (7)
Articles)
 President Aquino issued Proclamation No. 3, March 25, 1986, announcing the
promulgation of the Provisional [Freedom] Constitution, pending the drafting
and ratification of a new Constitution.
 It adopted certain provisions of the 1973 Constitution, contained additional articles
on the executive department, on government reorganization, and on existing laws.
 It also provided for the calling of a new Constitutional Commission to be
composed of 30-50 members, to draft a new Constitution.
 The 1987 Constitution has eighteen (18) Articles
 The event that led to the adoption of 1987 Philippine Constitution:
 President Aquino issued the Proclamation No. 9, creating the Constitutional
Commission of 50 members under the presidency of former Justice Cecilia
Muñoz-Palma.
 Approval of draft Constitution by the Constitutional Commission on October
15, 1986.
  Proclamation No. 58, proclaiming the ratification of the Constitution.
 Effectivity of the 1987 Constitution: February 2, 1987, the date of the
plebiscite when the people ratified the Constitution. [Nachura, Reviewer in
Political Law, 2006, pp 5-11]

7. THE OUTSTANDING FEATURES OF THE PRESENT CONSTITUTION [1987

CONSTITUTION]
 The new constitution consists of 18 articles, 321 sections and is excessively long
compared to the Constitutions of 1935 and 1973, on which it was largely based.
 Many of the original provisions of the 1935 Constitution, particularly those
pertaining to the legislative and the executive departments, have been restored
because of the revival of the bicameral Congress of the Philippines and strictly
presidential system.
 The independence of the judiciary has been strengthened, with the new provisions
for appointment thereto and an increase in its authority, which covers even political
questions formerly beyond its jurisdiction.
 Many provisions of the 1973 Constitution have been retained, like those on
Constitutional Commissions and local governments.
 The Bill of Rights of the Commonwealth and Marcos Constitutions has been
considerably improved in the Constitution of 1987 and even bolstered with the
creation of Commission of Human Rights.

THE 1987 PHILIPPINE CONSTITUTION. Basic Principles underlying the new

Constitution:
 Recognition of the aid of Almighty God (Preamble)
 Sovereignty of the People (Art. II, Sec. 1)
 Renunciation of War as an Instrument of National Policy (Art. II, Sec. 2)
 Supremacy of Civilian Authority over the Military (Art. II, Sec. 3)
 Separation of the Church and State (Art. II, Sec. 6)
 Guarantee of Human Rights (Art. III, Secs. 1-22)
 Separation of Powers (Art. VI, Sec. I)
  Independence of Judiciary (Art. VIII, Sec. I)
 Guarantee of Local Autonomy (Art. X, Sec. 2)
 Rule of the majority
 Government of laws and not of men

REFERENCE TO/REFLECTION ON VALUE/THRUSTS INTEGRATION

1. Hector S. De Leon. “Textbook on the Philippine Constitution.” Rex Book Store,
C.M. Recto Avenue, Manila, Philippines. 2011.
2. John Lee P. Candelaria and Veronica C. Alporha. Readings in Philippine History.
856 Nicanor Reyes Sr., St., Sampaloc, Manila. 2018
3. Evelyn J. Grey, Ph.D. and Ryan D. Biong, M.A.Ed. Malones Printing Press and
Publishing House. Door 32, Zerrudo Commercial Complex. E. Lopez St., Jaro,
Iloilo, Philippines, 2017.
4. Jose Victor Torres. “BATIS: Sources in Philippine History.” C and E Publishing,
Inc. 839 EDSA, South Triangle, Quezon City, 2018.
LESSON 3 – TAXATION

VALUE/THRUSTS INTEGRATION

Fair value; honesty

INTRODUCTION:
Taxation means laying a tax through which the government generates income to
defray its expenses. It is a way to raise funds for government program and services that
benefit Filipino citizens. A tax enforced as a contribution but it is proportionate to the
citizen’s ability to pay. It levied on persons and property as well as business transactions,
privileges, and benefits.
Thus, paying the right amount of taxes is a social responsibility to the country that
could probably use by the government in developing and improving its facilities for the
betterment of the life of the Filipinos. This topic will focus mainly on the historical
development of Philippine taxation; the concept, principles and its importance; and lastly,
the kinds of national and local taxes imposed by the government.

INTENDED OUTCOME/LEARNING OBJECTIVES:

At the end of the lesson the students will be able to:
1. Explain the historical development of Philippine taxation, its nature and purpose;
2. Identify the types of national and local taxes;
3. Argue for or against current taxation issues and reforms.
INCULCATING CONCEPTS (INPUT/LESSON PROPER)

EVOLUTION OF PHILIPPINE TAXATION

A. PRE-SPANISH PERIOD
The ancient Filipinos in the barangays started the practice of paying taxes. The
purpose of paying taxes was simple: for the protection that they received from the local
chieftain, the Datu. The collected taxes was called the “buwis” in which members of the
chieftain’s family naturally enjoying exemption from paying taxes. Non-payment of
“buwis” was already punishable during this period.

B. SPANISH PERIOD
1. The Tributo (tribute) and Cedula may be paid in any kind.
It was fixed at 8 reales and later, increased to 15. Ten reales goes to the
government, 1 to the town community chest and 3 to the church. Another one real
was for the tithes (diezmo pediales). Also collected is the vandala, an annual
enforced sale and requisitioning of goods such as rice. Custom duties and income
tax are also collected. Later, they imposed cedula personal or personal identity
paper wherein all Indios aged from 18 to 60 are obliged to pay for personal
identification. Polo is the forced labor for 40 days of men ranging from 16 to 60
years of age who were obligated to give personal service to community projects.
One could be exempted from polo by paying the falla, a daily fine of one and a half
real. In 1884, it was reduced to 15 days.
2. The encomienda system is a land management system similar to the feudal
system in Europe; A meritorious Spaniard (called an encomendero) is given
control over a piece of land and its inhabitants. The encomendero is duty-bound
to defend his encomienda and keep peace and order there. In return, he was
granted the right to collect tribute according to the limit. Part of this tribute goes to
the encomendero and the rest to the church and the government. This is subject,
however to several abuses.
 3. The Manila-Acapulco Trade is generally a trade between the Chinese and
Spaniards in Manila and the Spaniards in Mexico. This has resulted into economic
progress. But the negative effects of it far outbalanced the advantages. Some
income-producing economies were completely neglected and too much burden
were given to Filipinos during their annual polo y servicio.

C. AMERICAN PERIOD
 Americans aimed to make the economy self-sufficient by running the government
with the possible sum revenue and create surplus in the budget;
 From 1898 to 1903, the Americans followed the Spanish system of taxation with
some modifications
 Later on, the Urbana was replaced by tax on real estate, which became known as
land tax.
 The problem with the tax was that the land titling in the rural area was very
disorderly.

Civil Government in the Philippines:

 William H. Taft (1902)
 Luke E. Wright (1904)
o July 2, 1904 – Bureau of Internal Revenue (BIR) was created through the
passage of Reorganization Act No. 1189
o August 1, 1904 – the BIR was formally organized and made operational
under Secretary of Finance Henry Ide (author of the Internal Revenue Law
of 1904), with John S. Hord as the first Collector (Commissioner). The first
organization started with 69 employees, which consisted of a Collector,
Vice-Collector, one Chief Clerk, one Records Clerk, and three division
Chiefs; The following are the three more Collectors: 1) Ellis Cromwell (1909-
1912); William T. Holting (1912-1914); and James J. Rafferty (1914-1918)
appointed by the Governor-General with the approval of Philippine
Commission and the US President.
 o The Bureau is mandated by law to assess and all international revenue
taxes, fees, and charges.

Internal Revenue Law of 1904 was passed as a reaction to the problems of collecting
land tax. It prescribed major sources of revenue:
o License taxes on firms dealing in alcoholic beverages and tobacco;
o Excise taxes on alcoholic beverages and tobacco products;
o Taxes on Banks and banker;
o Documentary stamp taxes;
o Cedula;
o Taxes on business
o Taxes on insurance and insurance company;
o Taxes on forest product;
o Mining Concession;
o Tax on Business and manufacturing; and
o Occupational Licenses.

1907: Changes in cedula and industrial tax

In 1913, the Underwood-Simmon Tariff Act was passed, resulting to a reduction in the
revenue of the government as export taxed levied on sugar, tobacco, and copra were
lifted.
a) New measures and legislation were introduced to make the taxation system
appear more equitable;
b) Income Tax rates were increased in 1936, adding a surtax rate on individual net
incomes in excess of 10,000 pesos;
c) Increased in the Income Tax rates of Corporation;
1913 Reorganization of the Bureau: the creation of eight divisions namely:
1) Accounting;
2) Cash
3) Clerical
4) Inspection
5) Law
6) Real Estate
7) Records

In line with the Filipinization policy of US President McKinley, Filipino collectors were
appointed. The first three BIR Collectors were: Wenceslao Trinidad (1918-1922); Juan
Posadas Jr (1922-1934); and Alfredo Yatao (1934-1938)

New sources of tax were introduced:

Income Tax (1914)
Inheritance Tax (1919)

May 1921: by virtue of Act No. 299, the Real Estate, License and Cash Divisions were
abolished and their functions were transferred to the City of Manila. As a result of this
transfer, the Bureau was left with five (5) divisions, namely:
1) Administrative
2) Law
3) Accounting
4) Income Tax
5) inspection

In 1937, the Secretary of Finance promulgated Regulation No. 95, reorganizing the
Provincial Inspection Districts and maintaining in each province an Internal Revenue
Office supervised by a Provincial Agent.
In 1939, the Commonwealth government drafted the National Internal Revenue Code as
follow:
o Normal Tax of three percent and the surtax on income was replaced by a single
tax:
o Personal exemption were reduced;
o Corporation income tax was slightly increased
o The cumulative sales income tax replace by a single turnover over tax of 10% on
luxuries:
o Taxes on liquors, cigarettes, forestry products; and mining were increased.
o Dividend were made taxable.

In 1940, a residence tax was imposed

D. JAPANESE PERIOD
o The Japanese military administration in the Philippines during WWII immediately
continued the system of collection introduced during the commonwealth but the
exempted Japanese forces. Foreign trade fell, and the main sources of taxation
came from amusements, manufactures, professions, and business license. As
war raged, tax collection was difficult task, and additional incomes of the
government were derived from the sales of National Sweepstakes and sale of
government bonds.

E. POST-WAR PERIOD
o July 4, 1946 – declaration of Philippine Independence, BIR was established
separately that led to its reorganization on October 1, 1947 by virtue of Executive
Order No. 94.
o In January 1957, the position of the head of the Bureau was changed from
Collector to Commissioner. The last collector and the first Commissioner of BIR
was Jose Aranas.
 o 1973 significant amendments were put into effect following the enactment of the
local tax code, with amendments on the allocation of the residence tax and on who
are covered under it, as well as payment provisions.

F. MARCOS ADMINISTRATION
o The appointment of Misael Vera as Commissioner in 1965 led the Bureau to a
"new direction" in tax administration.
o The most notable programs implemented were the "Blue Master Program" and
the "Voluntary Tax Compliance Program". The first program was adopted to
curb the abuses of both the taxpayers and BIR personnel, while the second
program was designed to encourage professionals in the private and government
sectors to report their true income and to pay the correct amount of taxes.
o It was also during Commissioner Vera's administration that the country was further
subdivided into 20 Regional Offices and 90 Revenue District Offices, in addition to
the creation of various offices which included the Internal Audit Department
(replacing the Inspection Department), Administrative Service Department,
International Tax Affairs Staff and Specific Tax Department.
o Providing each taxpayer with a permanent Tax Account Number (TAN) in 1970
not only facilitated the identification of taxpayers but also resulted to faster
verification of tax records.
o The proclamation of Martial Law on September 21, 1972 marked the advent of the
New Society and ushered in a new approach in the developmental efforts of the
government. Several tax amnesty decrees issued by the President were
promulgated to enable erring taxpayers to start anew. Organization-wise, the
Bureau had also undergone several changes during the Martial Law period (1972-
1980).
o In 1976, under Commissioner Efren Plana's administration, the Bureau's
National Office transferred from the Finance Building in Manila to its own 12-storey
building in Quezon City, which was inaugurated on June 3, 1977.
o The same year that President Marcos promulgated the National Internal
Revenue Code of 1977, which updated the 1934 Tax Code.
 o On August 1, 1980, the Bureau was further reorganized under the administration
of Commissioner Ruben Ancheta. New offices were created and some
organizational units were relocated for the purpose of making the Bureau more
responsive to the needs of the taxpaying public.

G. AQUINO ADMINISTRATION
o After the People's Revolution in February 1986, a renewed thrust towards an
effective tax administration was pursued by the Bureau. "Operation: Walang
Lagay" was launched to promote the efficient and honest collection of taxes.
o On January 30, 1987, the Bureau was reorganized under the administration of
Commissioner Bienvenido Tan, Jr. pursuant to Executive Order (EO) No. 127.
Under the said EO, two (2) major functional groups headed and supervised by a
Deputy Commissioner were created, and these were: 1) the Assessment and
Collection Group; and 2) the Legal and Internal Administration Group.
o In 1988, the value-added tax (VAT) was implemented that aimed to promote and
encourage compliance with the requirements of the VAT was launched. The
adoption of the VAT system was one of the structural reforms provided for in the
1986 Tax Reform Program, which was designed to simplify tax administration and
make the tax system more equitable.
o The abolition of Revenue Information Systems Services Inc. (RISSI) in 1988 and
transferred back to the BIR by virtue of a Memorandum Order from the Office of
the President dated May 24, 1988.
o The entry of Commissioner Jose Ong in 1989 was the implementation of the
"Tax Administration Program", embodying the Bureau's mission to improve tax
collection and simplify tax administration. The Program contained several tax
reform and enhancement measures, which included the use of the Taxpayer
Identification Number (TIN) and the adoption of the New Payment Control
System and Simplified Net Income Taxation Scheme.
H. RAMOS ADMINISTRATION
o The year 1993 marked the entry of the first lady Commissioner in the Bureau,
Liwayway Vinzons-Chato. In order to attain the Bureau's vision of transformation,
a comprehensive and integrated program known as the ACTS or Action-
Centered Transformation Program was undertaken to realign and direct the
entire organization towards the fulfillment of its vision and mission.
o In 1994, Chato implemented a five-year Tax Computerization Project (TCP) that
involved the establishment of a modern and computerized Integrated Tax
System and Internal Administration System.
o Further streamlining of the BIR was approved on July 1997 through the passage
of EO No.430, in order to support the implementation of the computerized
Integrated Tax System. Highlights of the said EO included the: 1) creation of a
fourth Revenue Group in the BIR, which is the Legal and Enforcement Group
(headed by a Deputy Commissioner); and 2) creation of the Internal Affairs
Service, Taxpayers Assistance Service, Information Planning and Quality Service
and the Revenue Data Centers.

I. ESTRADA ADMINISTRATION

o Beethoven Rualo, was appointed as Commissioner of Internal Revenue and

undertook priority reform measures to enhance voluntary compliance and improve
the Bureau's productivity. One of the most significant reform measures was the
implementation of the Economic Recovery Assistance Payment (ERAP)
Program, which granted immunity from audit and investigation to taxpayers who
have paid 20% more than the tax paid in 1997 for income tax, VAT and/or
percentage taxes.
o Encourage and educate consumers/taxpayers of demanding sales invoices and
receipts, which was institutionalized in 1999 through the raffle promo "Humingi ng
Resibo, Manalo ng Libo-Libo".
o The Large Taxpayers Monitoring System was also established under
Commissioner Rualo's administration to closely monitor the tax compliance of the
country's large taxpayers.
 o The coming of the new millennium, Dakila Fonacier was appointed as the new
Commissioner of Internal Revenue. The most significant of these measures
include: full utilization of tax computerization in the Bureau's operations;
expansion of the use of electronic Documentary Stamp Tax metering
machine and establishment of tie-up with the national government agencies
and local government units for the prompt remittance of withholding taxes;
and implementation of Compromise Settlement Program for taxpayers with
outstanding accounts receivable and disputed assessments with the BIR.
o In September 1, 2000, the Large Taxpayers Service (LTS) and the Excise
Taxpayers Service (ETS) were established under EO No. 175 to reinforce the tax
administration and enforcement capabilities of the BIR.
o The passage of the Electronic Commerce Act of 2000 on June 14, the Bureau
implemented a Full Integrated Tax System (ITS) Rollout Acceleration Program to
facilitate the full utilization of tax computerization in the Bureau's operations. Under
the Program, seven (7) ITS back-end systems were released in stages in RR 8 -
Makati City and the Large Taxpayers Service.

J. ARROYO ADMINISTRATION
o After the EDSA II in January 2001, newly-installed President Gloria Macapagal-
Arroyo appointed a former Deputy Commissioner, Atty. René G. Bañez, as the
new Commissioner of Internal Revenue.
o Baňez implemented of change initiatives that were directed to: 1) reform the tax
system to make it simpler and suit the Philippine culture; 2) reengineer the tax
processes to make them simpler, more efficient and transparent; 3) restructure the
BIR to give it financial and administrative flexibility; and 4) redesign the human
resource policies, systems and procedures to transform the workforce to be more
responsive to taxpayers' needs.
o Implementation of the Voluntary Assessment Program and Compromise
Settlement Program and expansion of coverage of the creditable withholding tax
system. A technology-based system that promotes the paperless filing of tax
 returns and payment of taxes was also adopted through the Electronic Filing and
Payment System (eFPS).
o With the resignation of Commissioner Bañez on August 19, 2002, Finance
Undersecretary Cornelio C. Gison was designated as interim BIR
Commissioner. Eight days later (on August 27, 2002), former Customs
Commissioner, Guillermo L. Parayno, Jr. was appointed as the new
Commissioner of Internal Revenue (CIR).
o Commissioner Parayno offered a Voluntary Assessment and Abatement
Program (VAAP) to taxpayers with under-declared sales/receipts/income and
adopted the use of new systems such as the Reconciliation of Listings for
Enforcement or RELIEF System to detect under-declarations of taxable income
by taxpayers and the electronic broadcasting system to enhance the security of
tax payments.
o Moreover, under Parayno, the BIR expanded its electronic services to include the
web-based TIN application and processing; electronic raffle of
invoices/receipts; provision of e-payment gateways; e-substituted filing of
tax returns and electronic submission of sales reports.
o The conduct of special operations on high profile tax evaders, which resulted to
the filing of tax cases under the Run After Tax Evaders (RATE) Program as well
as the conduct of Tax Compliance Verification Drives and accreditation and
registration of cash register machines and point-of-sale machines.
o October 28, 2006, Deputy Commissioner for Legal and Inspection Group, Jose
Mario C. Buñag was appointed as full-fledged Commissioner of Internal Revenue
and undertook the expansion of the RATE Program to the Regional Offices;
inclusion of new payment gateways, such as the Efficient Service Machines and
the G-Cash and SMART Money facilities; implementation of the Benchmarking
Method and installation of the Bureau’s e-Complaint System, a new e-Service that
allows taxpayers to log their complaints against erring revenuers through the BIR
website.
o The Nationwide Rollout of Computerized Systems (NRCS) was also undertaken
to extend the use of the Bureau’s Integrated Tax System across its non-
computerized Revenue District Offices.
o In 2007, the National Program Support for Tax Administration Reform (NPSTAR),
a program funded by various international development agencies, was launched
to improve the BIR efficiency in various areas of tax administration (i.e. taxpayer
compliance, tax enforcement and control, etc.).
o On June 29, 2007, replaced by Lilian B. Hefti, making her the second lady
Commissioner of the BIR. Information sharing between the BIR and the Local
Government Units (LGUs) was also intensified through the LGU Revenue
Assurance System, which aims to uncover fraud and non-payment of taxes.
o To enhance the Bureau’s audit capabilities, the use of Computer-Assisted Audit
Tools and Techniques (CAATTs) was also introduced in the BIR under her term.
o October 2008, former BIR Deputy Commissioner for Legal and Enforcement
Group, Sixto S. Esquivias IV was appointed as the new Commissioner of Internal
Revenue which he launched the “Oplan Kandado” Program and a Taxpayer
Feedback Mechanism (through the eComplaint facility accessible via the BIR
Website) was also established.
o In 2009, the Bureau revived its “Handang Maglingkod” Project where the best
frontline offices were recognized for rendering effective taxpayer service.
o In November 2009, Joel L. Tan-Torres assumed the position of Commissioner of
Internal Revenue. He institutionalized several programs/projects to improve
revenue collections, and these include Project R.I.P (Rest in Peace); intensified
filing of tax evasion cases under the re-invigorated RATE Program; conduct of
Taxpayers Lifestyle Check and development of Industry Champions.
o Linkages with various agencies (i.e. LTO, SEC, BLGF, PHALTRA, etc.) were also
established through the signing of several Memoranda of Agreement to improve
specific areas of tax administration.
K. P-NOY AQUINO ADMINISTRATION

o Following the highly-acclaimed inauguration of President Benigno C. Aquino III on

June 30, 2010, a former BIR Deputy Commissioner, Atty. Kim S. Jacinto-
Henares, was appointed as the new Commissioner of Internal Revenue. During
her first few months in the BIR, Commissioner Henares focused on the filing of tax
evasion cases under the RATE Program, in compliance with the SONA
pronouncements of President Aquino;
o Enacted the Sin Taxes against cigarettes and alcohol products, as well as foreign
investors perceived improvement and in sincere efforts to fight graft and corruption.

Local Tax Code were later subsumed into the LGC of 1991.
1) The residence Tax and residence certificate were renamed into current community
tax and community tax certificate.
2) The problem with land tax was that land titling in the rural area was very disorderly,
the appraising of land value was influenced by political and familial factors.
3) Tax evasion was prevalent among elites.

National Tax Law

1987 Constitution stipulates limitations on the exercise of the power to tax:
a) All money collected on any tax levied for special purpose shall be treated purely special
fund. If the purpose for which the special fund was created has been fulfilled or
abandoned, the balance shall be transferred to the general funds of Government.
b) Congress may authorize the President to fix limitations of tariff rates, import and export
quotas and other duties within the national development program
c) In Local budgets, the Supreme Court has the power to revise, review, reverse and
modify laws relating to legalities of taxes, tolls and penalties in relation to taxes
imposed
d) Laws governing taxation are contained within the national Internal Revenue Code
Local Government Tax Law
o Local governments have the power to impose local taxes
o Local government units shall have just share in the national taxes
o Local government taxation shall include real property taxation, shares in the
Proceeds of national taxes, credit financing and local budgets

Fundamental Principles of LGU Tax Powers

o Taxation shall be uniform in each local government unit;
o Taxes, fees, charges and other impositions shall:
o Common Revenue-Raising Powers
o Service Fees and Charges
o Public Utility Charges
o Toll Fees or Charges

DEFINITION AND RATIONALE TAXATION

o It is the imposition of a mandatory levy on the citizens and/or the businesses of a
country by their government.
o It is where the government derives a majority of its revenues for financing public
services from taxation.
o Taxation is the inherent power of the State to impose and demand contribution
upon persons, properties, or rights for the purpose of generating revenues for
public purposes.

PRINCIPLES AND THEORIES OF TAXATION

1. The Benefit principle. This principle holds that individuals should be taxed in
proportion to the benefit they receive from the government and that taxes should
be paid by those people who received the direct benefit of the government
programs and projects out of taxes paid.
2. The Ability-to-Pay Principle. This principle holds that taxes should relate with
people’s income or the ability to pay, that is, people with greater income or wealth
can afford to pay more taxes should be taxed at a higher rate than with less wealth.
 3. The Equal Distribution Principle. This principle holds that income, wealth, and
transaction should be taxed at a fixed percentage, that is, people who earn more
and buy more should pay more taxes, but will not pay a higher rate taxes.

STRUCTURES OF A TAX SYSTEM

Government taxes and spending affect the distribution of income, imposing burdens on
some and conferring benefits on others.
As a source of income, a tax system is classified into three which are very important in
income distribution and for tax policy – the concept of equity and equality.
1) A Tax is Proportional. A proportional tax means that government takes an amount
of money from a person which in proportion to his/her income.
(For example, Ben’s salary is P10,000 and the government is deducting 10% of
his salary for tax. After a year his income increases to P15,000 and the
government now deducts 12% in his salary for tax. Hence, the said tax is
proportional)
2) A Tax is Regressive. A regressive tax means that the government takes a larger
percentage of a person’s income tax, while he is receiving a lower income. (For
example, Ben’s salary is P10,000 and the government is asking him to pay 15%
of his salary for tax which is contrary to our given example in number 1)
3) A Tax is Progressive. A progressive tax means that the government takes a larger
percentage of his salary for tax due to his high salary. (For example, Ben has a
monthly income of P30,000 and the government deducted 20% of his salary for
tax. Here, the tax amount is proportionately equal to someone’s status in the
society. A rich man should pay more than a poor man)

SIGNIFICANCE OF TAXATION
o The primary purpose of taxation is to generate funds/revenues used to defray
expenses incurred by the government in promoting the general welfare of the
citizenry.
o In most nations, especially our country, taxes are the major source of government
income. Others come from borrowings, sale of public lands and other government
 properties, and interests in investments. This manifest that taxes are the lifeblood
of a nation.

OTHER PURPOSES OF TAXATION INCLUDE:

To equitably distribute to the wealth of the nation.
To protect new industries (by providing tax exemptions to new or pioneering industries);
To protect local producers (by imposing higher custom duties on cheap imported goods)

CLASSIFICATION OF TAXES
1. As to subject matter
1.1. Personal, Poll, or Capitation Tax. This tax means that there is a fixed amount
upon all persons residing within specified territory without regard to their property
or the occupation in which they are may be engaged. Example: Residence Tax
(Cedula)
1.2. Property tax. This tax refers to one assessed on all property located within a
territory on a specified date in proportion to its value, or in accordance with some
other reasonable methods of apportionment, the obligation to pay which is
absolute and unavoidable and is not based upon any voluntary action of an
individual’s assessment. Example: Real estate tax
1.3. Excise Tax. This tax refers to any tax which does not fall within the classification
of a poll tax or a property tax and embraces every form of burden not laid directly
upon person property. Example: Value-added Tax
2. As to who bears the burden
2.1. Direct Tax. This tax refers to a tax which is demanded from an individual who
tends to buy or purchase a good or service. Example: Income Tax
2.2. Indirect Tax. This refers to the tax paid primarily by a person who can shift the
burden upon someone else, who is under no legal obligation to pay him/her.
Example: Buying of goods and services (VAT)
3. As to determination of account
3.1. Specific Tax. This tax is fixed or determinate sum imposed by the head or number
or some standard of weight or measurement, and requires no assessment beyond
a listing and classification of the object to be taxed. Example: Taxes on wine
3.2. Ad Valorem Tax. It is a tax of a fixed proportion of the value of the property with
respect to which the tax is assessed, and requires the intervention of assessors or
appraisers to estimate the value of such property before the amount due from each
tax payer can be determined. Ex. The value of Real estate tax
4. As to purpose
5.1. General Tax. It refers to the tax levied to an individual for a general public purpose.
Almost all taxes are an example of this classification.
5.2. Specific Tax. This tax is levied to an individual for a particular or specific purpose.

Entities Exempted from Taxation

The Constitution expressly grants tax exemption on certain entities/institutions such as:
1. Charitable institutions, churches, parsonages or convents appurtenant thereto,
mosques, and nonprofit cemeteries and all lands, buildings and improvements
actually, directly and exclusively used for religious, charitable or educational purposes
(Article VI, Section 28, Paragraph 3).
2. Non-stock non-profit educational institutions used actually, directly, and exclusively for
educational purposes. (Article XVI, Section 4 (3)).
3. Exempted to tax as stated in the Article 283 of Rules and Regulations Implementing
Local Government Code of 1991 (RA 7160):
4. Local water districts
5. Cooperatives duly registered under RA 6938, otherwise known as the Cooperative
Code of the Philippines
6. Non-stock and non-profit hospitals and educational institutions
7. Printer and/or publisher of books or other reading materials prescribed by DECS (now
DepEd) as school texts or references, insofar as receipts from the printing and / or
publishing thereof are concerned.
8. Foreign Diplomats
FORMS OF ESCAPE FROM TAXATION
1. Tax avoidance - use by a taxpayer of legally permissible means or methods in order
to avoid or reduce tax liability. It is not punishable by law; Tax Avoidance is the exploitation
by the taxpayer of legally permissible methods in order to avoid or reduce tax liability.
This is also known as “tax minimization.”
Can be done through shifting:
1.1. Forward shifting. It is one way of passing the burden of tax from one person to
another. Ex. Taxes paid by the manufacturer may be shifted to the consumer by
adding the amount of the tax paid to price of the product.
1.2. Backward shifting occurs when the burden of tax is transferred from the consumer
to the producer or manufacturer; this occurs when a producer of a taxed commodity
transfers the money burden of tax to the supplier of factors of production, who in turn
is paid a lower price for the factors of production. Ex. farmers are at time paid lower
prices for their produce when a tax is imposed on the processor of the produce.
2. Tax evasion - used by the taxpayer of illegal or fraudulent means to defeat or reduce
the payment of a tax. It is punishable by law; Tax evasion happens when there is fraud
through pretension and the use of other illegal devices to lessen one’s taxes, there is
tax evasion, under-declaration of income, and non-declaration of income and other
items subject to tax, Under-appraisal of goods subject to tariff, and over-declaration of
deductions; This is also known as “tax dodging.”

Note:
Tax Exemption is the grant of immunity or freedom from a financial charge, obligation, or
burden to which others are subjected.

TYPES OF NATIONAL TAXES

1. CAPITAL GAINS TAX
Tax imposed on gains that may have been realized by a seller from the sale, exchange,
or other disposition of capital assets located in the Philippines including pacto de retro
sales (a sale with a condition for repurchase) and other forms of conditional sale.
2. DOCUMENTARY STAMP TAX
Tax on documents, instruments, loan agreements, and papers evidencing the
acceptance, assignment, sale, or transfer of an obligation, rights, or property incident
thereto.
3. DOCUMENTARY STAMP TAX
Documentary Stamp taxes are evident on documents like bank promissory notes, deed
of sale, and deed of assignment on transfer of shares of corporate stock ownership.
4. DONOR’S TAX
Donor’s tax is a tax on a donation or gift. It is also tax imposed on the gratuitous transfer
of property between two or more persons who are living at the time of transfer. It shall
apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and
whether the property is real or personal, tangible or intangible.
5. ESTATE TAX
Tax on the right of the deceased person to transmit his/her estate to lawful heirs and
beneficiaries at the time of death and on certain transfers which are made by law as
equivalent to testamentary disposition.
It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon
death of the owner. The estate tax is based on the laws in force at the time of death
notwithstanding postponement of the actual possession or enjoyment of the estate by the
beneficiary.
6. INCOME TAX
Tax on all annual profits made from property ownership, profession, trades or offices. It
is also a tax on a person’s income, emoluments (salary), profits, etc.
7. PERCENTAGE TAX
Business tax imposed on people 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 the amount required to register as VAT-registered tax payers.
8. VALUE-ADDED TAX
Business tax imposed and collected from the seller in the course of trade or business on
every sale or properties, or vendors of services. This is an indirect tax, thus, it can be
passed on to the buyer, causing the increase of prices of most goods and services bought
and paid by customers.
9. EXCISE TAX
Tax imposed on good manufactured or produced in the Philippines for domestic (local)
sale or consumption or any other disposition. It is also imposed on things that are imported
to the Philippines.
10. WITHHOLDING TAX ON COMPENSATION
Tax withheld (restrained) from individuals receiving purely compensation income arising
from an employer-employee relationship. This is being remitted by the employer to the
government through the BIR or authorized accrediting agent.
11. EXPANDED WITHHOLDING TAX
Prescribed only for certain payors like those withheld on rental income and professional
income.
12. FINAL WITHHOLDING TAX
Kind of withholding tax prescribed only for certain payors and is not creditable against the
income tax due of the payee for the taxable year. An example is tax withheld by banks on
the interest income earned on bank deposits.
13. WITHHOLDING TAX ON GOVERNMENT MONEY PAYMENTS
Withholding tax withheld by government offices including government-owned or –
controlled corporations and local government units, before making any payments to
private individuals, corporations, partnerships, and/or associations.

LOCAL TAXES
Taxes based on the local government taxation in the Philippines as stated in the
Republic Act 7160 or the Local Government Code of 1991, as amended. These are taxes,
fees, or charges are imposed by the local government units such as provinces, cities,
municipalities, and barangays.
TYPES OF LOCAL TAXES
1. TAX ON TRANSFER OF REAL PROPERTY OWNERSHIP
Tax imposed on the sale, donation, barter, or on any other mode of transferring ownership
of real property.
2. TAX ON BUSINESS OF PRINTING AND PUBLICATION
Imposed on printing and publication businesses like that of books, cards, posters, leaflets,
handbills, certificates, receipts, pamphlet, and others of similar nature.
3. FRANCHISE TAX
Tax on franchised businesses, at the rate not exceeding 50% of 1% of the gross annual
receipts of the preceding calendar year based on the incoming receipt (annual earning)
with the territorial jurisdiction where the franchise is selling in.
4. TAX ON SAND, GRAVEL, AND OTHER QUARRY RESOURCES
Imposed on ordinary stones, sand, gravel, earth, and other quarry resources, as defined
under the National Internal Revenue Code, as amended. This refers to the above
materials extracted from public lands or from beds of seas, lakes, rivers, streams, creeks,
and other public waters within its territorial jurisdiction.
5. PROFESSIONAL TAX
Annual tax on each person engaged in the exercise or practice of his or her profession
that requires government examination, like licensure examinations.
6. AMUSEMENT TAX
Tax collected from the proprietors, lessees, or operators of theaters, cinemas, concert
halls, circuses, boxing stadia, and other places of amusement.
7. ANNUAL FIXED TAX FOR EVERY DELIVERY TRUCK OR VAN OF
MANUFACTURERS OR PRODUCERS, WHOLESALERS OF, DEALERS, OR
RETAILERS IN, CERTAIN PRODUCTS
Annual fixed tax for every truck, car, or any vehicle used by manufacturers, producers,
wholesalers, dealers, or retailers in the delivery or distribution of distiller spirits, fermented
liquors, soft drinks, cigars and cigarette and any other products to sales, outlets, or
consumers, whether directly or indirectly, within the province. This type of tax is usually
imposed as determined by the local provincial councils through which the truck or trucks
pass through or deliver their cargo.
8. TAX ON BUSINESS
Imposed by cities or municipalities o businesses before they will be issued a business
license or permit to start operations based on the schedule of rates prescribed by the
local government code, as amended.
9. TAX ON BUSINESS
Businessmen pay this tax if they apply for a Mayor’s Permit to conduct their business in
the local government unit. Rates of these taxes vary among cities and municipalities.
10. FEES FOR SEALING AND LICENSING OF WEIGHTS AND MEASURES
Imposed for the sealing and licensing of weights and measures. This is to impose
regulations with regards to such weights and measures as prescribed by the city,
provincial, or municipal council.
11. FISHERY RENTALS, FEES, AND CHARGES
Imposed by the municipality/city to grantees of fishery privileges in the municipality/city
waters especially the privilege to build fish corals, oysters, mussels, or other aquatic beds
or bangus fry areas and others as specified in the Local Government Code.
12. COMMUNITY TAX
Tax levied by cities or municipalities to every Filipino or alien living in the Philippines,
eighteen (18) years of age or over, who has been regularly employed on a wage or salary
basis for at least thirty (30) consecutive working days during any calendar year.
Community tax is also imposed on every corporation not matter how created or organized,
whether domestic or resident foreign, engaged in or doing business in the
Philippines.*Cedula
13. TAXES LEVIED BY THE BARANGAYS ON STORES OR RETAILERS WITH FIXED
BUSINESS ESTABLISHMENTS
Imposed on stores with gross sales of receipts of the preceding calendar year amounting
to P50,000.00 or less (for city barangays) and P30,000.00 or less for municipal
barangays) at a rate not exceeding 1% on such gross sales or receipts.
14. SERVICE FEES OR CHARGES
Collected by the barangay for services rendered in connection with the regulation or the
use of barangay-owned properties or service facilities, such as palay, copra, or tobacco
driers.
15. BARANGAY CLEARANCE
Fee collected by barangays upon issuance of barangay clearance, a document required
for many government transactions, such as when getting a business permit from a city or
municipal government or applying for a job in a government office or a private company.

TRAIN LAW (TAX REFORM FOR ACCELERATION AND INCLUSION)

o On December 19, 2017, President Rodrigo Duterte has signed into law Republic
Act 10963, otherwise known as the “Tax Reform For Acceleration and Inclusion
(TRAIN) Law”, which amended 69 Sections of the National Internal Revenue Code
(NIRC), as amended, created 8 new sections and repealed 3 sections.
o TRAIN will lower personal income tax (PIT) for all taxpayers except the richest.
o Those with taxable income below P250,000 will be exempt from paying PIT, while
the rest of taxpayers, except the richest, will see lower tax rates ranging from 15%
to 25% by 2020.
o The personal income tax system of TRAIN will exempt some 83% of current
taxpayers.
o Known as the Tax Reform for Acceleration and Inclusion (TRAIN) law, the tax
program overhauls the country's 20-year-old tax regime in a bid to make the tax
system fairer and simpler.
o Under the TRAIN, personal income tax rates will be adjusted to shift the burden off
lower-income segments toward the "ultra-rich.“
o Starting mid-January, the retail price of a one-liter bottle of Coca-Cola, for instance,
is projected to increase to P43 from the current P31, an increase of P12.
o This is because of the P12-per-liter tax on drinks using high fructose corn syrup.
For drinks using sugar and artificial sweeteners, a P6-per-liter tax has been
imposed. However, all kinds of milk, 3-in-1 coffee, natural fruit juices, vegetable
juices, and medically-indicated beverages are exempt.
o Expanding the Value-Added Tax (VAT) base
o The Philippines has one of the highest VAT rates but also the highest number of
exemptions in the Southeast Asia region.
 o These tax exemptions have created much confusion, complexity, and discretion in
our tax system resulting in leakages and opening doors for negotiation, corruption,
and tax evasion.
o TRAIN aims to clean up the VAT system to make it fairer and simpler and lower
the cost of compliance for both the taxpayers and tax administrators.
o The TRAIN will direct the way to protect the poor and vulnerable compared to the
tax exemptions and blind subsidies that are inefficient and largely beneficial to the
rich since they have higher purchasing power.

REFERENCE TO/REFLECTION ON VALUE/THRUSTS INTEGRATION

1. Evelyn J. Grey, Ph.D. and Ryan D. Beong, M.A.Ed. “Readings in Philippine
History.” Malones Printing Press and Publishing House, Door 32, Zerrudo
Commercial Complex, E. Lopez St., Jaro, Iloilo, Philippines. 2017.
2. Jose Victor Torres. BATIS: Sources in Philippine History. C & E Publishing, Inc.
839 EDSA, South Triangle, Quezon City. 2018.
3. Gabay, Bon Kristoffer G. et al. “Economics: Concepts and Principles (with Agrarian
Reform and Taxation).” Rex Book Store. Sampaloc, Manila. 2013
4. https://www.bir.gov.ph