Lesson 13 | THE PHILIPPINE CONSTITUTION

Learning Outcomes

At the end of this lesson, you should be able to:

Explain the importance of a constitution in a nation

Trace the development of the Philippine Constitution throughout the country’s history

Discuss the significant features and provisions incorporated in the seven Philippine Constitutions

A CONSTITUTION is defined as the fundamental law of a nation or state. It is the constitution

that establishes the character and basic principles of the government. The system that runs the
government is often codified in this written document, which forms the fundamental rules and
principles by which an organization is managed. It is these same principles that make clear the rights of
the individual and creates limitations to government power. A constitution is also described as “the
highest expression of the law.”

The purposes of a constitution are as follows:

1. It prescribes the kind of government that will exist in the state.

2. It creates the different departments and specifies their respective functions and duties.
3. It is the source of the sovereign powers of a government by establishing the fixed, first or basic
principles.
4. It promotes public welfare. The constitution establishes the rights of the people which the
government is obligated to protect.

The constitution is written by a constitutional convention which is a body assembled for the
express purpose of framing or writing a constitution, revising an existing one, or proposing amendments
to it.

After writing the constitution, the draft constitution or its amendments/revisions are submitted
to a plebiscite for ratification in which the people will decide whether it is acceptable to become a law of
the land. The results are then considered and followed by the government. This is different from a
referendum in which a law passed by a legislative body is brought before the people to be voted upon.
The results, however, may or may not be considered by the state.

A History of the Philippine Constitutions

At least seven Philippine Constitutions were framed in our history.

The Biak-na-Bato Republic Constitution (1897)

 The Philippine Revolution reached a stalemate in 1897 when the revolutionary forces of General
Emilio Aguinaldo fled to the mountains of Biak-na-Bato in San Miguel de Mayumo, Bulacan. The Spanish
forces led by Gen. Miguel Primo de Rivera realized that even though they could crush the rebels in
Bulacan, it did not mean the revolution would end for it was already widespread in the other provinces.
The Spaniards soon sued for a truce with the revolutionary forces.

In order to consolidate the forces still fighting in the other provinces, Aguinaldo met with his
leaders to establish a recognized government. A revolutionary government had already been formed in
March that year with Aguinaldo as President in Tejeros, San Francisco de Malabon (now General Trias) in
Cavite. It was this government that was now in Biak-na-Bato.

An assembly of Filipino rebel leaders were called and it was agreed that a republican form of
government would be formed. Two Filipinos, Isabelo Artacho and Felix Ferrer were tasked to write a
constitution. Both decided to adopt the provisions of the Constitution framed in Jimaguayu, Cuba and
from this, the Constitution of Biak-na-Bato was formulated.

The Constitution was promulgated by the Philippine Revolutionary Government on November 1,

1897, and became the provisionary constitution of the government during the Revolution against Spain.

In spite of being a copied constitution, the Biak-na-Bato Constitution had its own unique
features: its preamble reiterated the objective of the Revolution which was “the separation of the
Philippines from the Spanish monarchy and their formation into an independent state with its own
government.” The government that was formed was a Supreme Council composed of a President, a
Vice-President, a Secretary of the Interior, a Secretary of Foreign Relations, a Secretary of War, and a
Secretary of the Treasury. This Council had sweeping powers of government which included the power
to issue orders and other laws for the security of the State, to impose and collect taxes’ to raise an army,
to ratify treaties, and to convene an Assembly of Representatives.” The official language was Tagalog.
The judiciary power was vested in another Supreme Council of Justice. Articles XXII to XXV were
essentially the Bill of Rights accorded to every Filipino.

This constitution was to last only for two years during which, at certain periods, it was
superseded by laws and decrees made by Aguinaldo.

The Malolos Republic Constitution (1899)

Following the defeat of Spain by the United States in the Spanish-American War in 1898, the
Filipinos began their task of creating the independent nation they valiantly fought for in 1896. On June
12, 1898, Philippine independence was declared and, two weeks later, Aguinaldo ordered the convening
of a Congress in Malolos, Bulacan. Elections were held for the delegates in the provinces that were
already free from Spanish forces. For the other areas where battles against the Spaniards were still being
fought, Aguinaldo appointed delegates. The Malolos Congress had its inaugural session at Barasoain
Church in Malolos on September 15, 1898 amidst a large celebration and coverage by both the local and
foreign press. The delegates then convened Congress and elected its officers. One of its first acts was to
ratify the Independence declaration in Kawit.
 The Congress was originally conceived by presidential adviser Apolinario Mabini to be an
advisory body to the President. But another group led by delegate Pedro Paterno decided to create a
constitution to form a government that would be recognized by foreign powers. Mabini was against this
for he believed that peaceful conditions should first prevail before a constitution should be drafted. He
was, however, overruled by Paterno and his allies.

Discussions for the Constitution began on October 25 after the submission of a draft by Felipe
Calderon. Calderon drew inspiration from the constitutions of Mexico, Belgium, Guatemala, Costa Rica,
Brazil, and France. One of the heated discussions focused on the issue of the union of Church and State
where Catholicism would be the state religion. This proposal was voted on twice by the Congress. The
first was a tie and the second voting session resulted in the victory for separation by only one vote. The
constitution was approved by the Malolos Congress on November 29, 1898 and forwarded to President
Aguinaldo for approval.

The original draft of the constitution, however, emphasized a popular government which means
supreme power is given to a legislative body since it is the representative of the people. This means that
the President as well as the judiciary including the Supreme Court would be selected by the legislative
body which, at that time, was the Malolos Congress. Mabini objected to this proposal and the approval
of the Constitution was delayed. The amendments were made and the document was finally approved
by Aguinaldo on January 21.

The Malolos Constitution was the first republican constitution in Asia. Its main features were as
follows:

1. It was based on democratic traditions in which the government formed was “popular,
representative and responsible” with three distinct branches—the executive, the legislative, and
the judicial;
2. It called for a presidential form of government with the president elected for a term of four
years by a majority of the Assembly convened as a constituent assembly;
3. It recognized the freedom of religion and the separation of the Church and State;
4. It emphasized and safeguarded the basic civil rights of not only Filipinos but foreigners, through
a Bill of Rights (Articles XIX to XXIII).

The approval of the Constitution and the creation of the Republic did not end the strife between
the Congress and Mabini. Mabini was eventually replaced as president of the Cabinet several months
later.

The first Philippine Republic was inaugurated on January 23, 1899 at the Barasoain Church
where Emilio Aguinaldo took his oath of office as the first President of the Republic. This was followed
by the reading of the Malolos Constitution and the taking of the oath of loyalty by the Army.

The Malolos Republic was the first democratic government of the country. It had a form of
governance that included the management of social services, education, the creation of an Army, a
monetary system, and diplomatic activities. It even had a government publication in order to spread to
the foreign nations the ideals of the new republic and to ask for support for its recognition.

The Republic, however, was a short-lived government. Its demise began at the start of the
Philippine-American War in February 1899 and ceased to exist with the capture of President Aguinaldo
in Palanan, Isabela in March 1901. By that time, the Americans had firmly established themselves as the
new colonizers of the Philippines with a military government running the country. In July 1901, they
formally established the first civil government in the islands.

The 1935 Constitution and the Commonwealth Government

For over a decade, the Americans ran the government in the Philippines with Filipinos given a
role in the legislative function when the Philippine Assembly was established in 1907. It was only during
the administration of Governor-General Francis Burton Harrison (1913—1921) that the Filipinization
policy of the government was put in place. Filipinos were given a hand in running the country. Majority
of the Philippine Commission members and civil servants were replaced by Filipinos. Soon, the colonial
administration placed much of the country’s governance in the hands of Filipinos. One year later, the
Jones Law of 1916 also known as the Philippine Autonomy Act was passed by the US Congress.

The Jones Law reorganized the government with an American governor-general, a Cabinet, and
an all-Filipino legislature composed of the Senate and the House of Representatives. It also provided
both the executive and legislative sectors power over domestic affairs. The new Philippine Legislature
was inaugurated on October 16, 1916 with Sergio Osmenia as House Speaker and Manuel Quezon as
Senate President. In addition to this, Harrison also formed the Council of State as an advisory body to
the governor-general.

Despite the American concession of letting the Filipinos run their own government, the prospect
of independence was not erased from the minds and hearts of the Filipinos. To address this, the Jones
Law provided the presence of two resident commissioners to the US to sit and observe the proceedings
of the US Congress. They were eventually replaced by a Commission on Independence or parliamentary
missions to the US to petition for Philippine independence.

From 1918 to 1932, there were at least five Philippine independence missions to the United
States. The efforts paid off with the creation and approval of the Tydings-McDuffie Law by the US
Congress. This law was approved on March 24, 1934 and was known as the Philippine Independence
Act. It provided for the drafting and guidelines of a constitution for a 10-year “transitional period”
government before the granting of independence. This was known as the Commonwealth Government.

Following the signing of the Tydings-McDuffie Law, the Philippines began to ready itself for its
transition from a colonial country into a self-governing nation.

On July 10, 1934, an election was held to vote for the delegates to write a constitution for the
Philippines. Two hundred two delegates were elected and the convention was opened on July 30. The
draft of the Constitution was finished by January 31, 1935 and was approved by the convention on
February 8. There was only one dissenter, Tomas Cabili of Lanao, who felt that the Constitution did not
serve the people of Mindanao.

The Constitution was approved by US President Franklin Delano Roosevelt on March 23, 1935
and ratified by the Filipino people in a plebiscite on May 14, 1935.

The 1935 Constitution of the Philippines served as the fundamental law of the land from 1935 to
1972. It established the Commonwealth of the Philippines and provides that upon withdrawal of
American sovereignty in the country and the declaration of Philippine independence, the
Commonwealth shall be known as the Republic of the Philippines.

The 1935 Constitution enumerated the composition, powers, and duties of the three branches
of government (the executive, legislative, and judicial) and created the General Auditing Office and laid
down the framework in the establishment of the civil service in the country. The other provisions
included a Bill Of Rights, a provision for women’s e giving women the right to vote and to be a part of
Philippine politics for the first time, the creation of a Philippine Armed Forces for national defense, and
the development of a national language.

The framing of the 1935 Constitution was a momentous event for the Filipino people. It showed
the Americans that Filipinos had the capability for self-government with the creation of the
Commonwealth Government in 1935 that led to the country’s independence a decade later.

The Japanese Occupation and the Second Philippine Republic (1943 Constitution)

The Commonwealth Government was interrupted by the Second World War and the Japanese
Occupation of the Philippines. The Commonwealth under President Manuel Quezon went into exile in
the United States. As part of their policy of attraction in their Greater East Asia Co-Prosperity Sphere
program, the Japanese offered to grant the Philippines its independence.

Acting on the orders of the Japanese military, the Kapisanan ng Paglilingkod sa Bagong Pilipinas
or KALIBAPI, a Filipino political party that served as the political party during the Japanese occupation,
convened and elected a Philippine Commission for Philippine Independence (PCPI) to write a new
constitution. This was finished and signed on September 4, 1943 in a public ceremony and ratified by the
KALIBAPI a few days later. On October 14, 1943, as provided for in the new constitution, the Second
Philippine Republic was inaugurated with Jose P. Laurel as President.

The 1943 Constitution was basically a condensed version of the 1935 Constitution consisting
only of a preamble and 12 articles. It was transitory in nature as it was only effective during the duration
of the war. It created a Republic with three offices (executive, legislative, and judicial) but owing to the
war, no legislature was convened. Instead, the powers of government were concentrated with the
President. The Bill of Rights basically enumerated the citizen’s duties and obligations rather than their
constitutional rights and Tagalog was declared the national language.

The 1943 Constitution was recognized as legitimate and binding only in Japanese-controlled
areas of the Philippines but was ignored by the United States government and the Philippine
Commonwealth government in-exile. It was abolished eventually along with the Second Republic upon
the liberation of the Philippines by American forces in 1945 and the re-establishment of the
Commonwealth in the Philippines.
The 1973 Constitution and the Marcos Dictatorship

On June 1, 1971, a Constitutional Convention was convened at the Manila Hotel. Its purpose was
to write a new constitution that would meet the new challenges confronting the Philippine Republic that
developed since it was formed in 1946. It was during the second term of President Ferdinand that the
convention opened.

Almost immediately, the convention became controversial. The delegates concentrated more on
speeches and giving themselves allowances before actually sitting down to discuss the provisions of the
new constitution. Meanwhile, the peace and order situation brought about by the First Quarter Storm
deteriorated with student rallies and other protests rocking the metropolis. The biggest scandal came
when Leyte delegate Eduardo Quintero accused Marcos of bribing delegates to vote for a provision to
extend the presidential term of office and to change the form of government.

But the convention’s activities soon came to a temporary halt when President Marcos declared
martial law on September 21, 1972. He abolished Congress and reorganized the government. Several
days later, the convention was reconvened and a draft constitution was finally finished and approved on
November 30. Instead of being ratified by a plebiscite, however, Marcos submitted it to “citizen
assemblies” that was formed to approve or reject the new constitution. The plebiscite was held from
January 10—15, 1972 and the constitution was overwhelmingly approved. On January 17, 1973,
President Marcos signed Proclamation No. 1102 declaring the 1973 Constitution ratified.

The 1973 Constitution provided for a parliamentary form of government in which the President
was the symbolic head of state and the Prime Minister was the head of government. The Prime Minister,
who was nominated by the President, acted as head of the Cabinet.

Legislative power was vested in the Batasan Pambansa. The constitution also provided for the
establishment of the Service Commission, the Commission on Elections, and the Commission on Audit.

In 1981, amendments were made to the 1973 Constitution and the President was restored from
a symbolic head of state to its original status as the head of state and chief executive of the country. The
amended Constitution also granted the President several powers and functions which were originally
vested in the Prime Minister and the Cabinet.

The 1973 Constitution remained in force until the February 22—25 EDSA People Power
Revolution of 1986 which toppled the Marcos administration. It was abolished with the adoption of the
1986 Freedom Constitution by the administration of President Corazon Aquino.

The Freedom Constitution (1986)

On March 24, 1986, President Aquino signed Proclamation No. 3 entitled “Declaring a National
Policy to Implement the Reforms Mandated by the People, Protecting their Basic Rights, Adopting a
Provisional Constitution, and Providing for an Orderly Transition to a Government under New
Constitution.” The provisional constitution, later called the “Freedom Constitution,” was proclaimed,
setting aside the 1973 Constitution thereby recognizing the new Aquino administration as a temporary
revolutionary government until the framing of a new constitution. It basically adopted some provisions
of the 1973 Constitution especially the Bill of Rights.
 Under the Freedom Constitution, the President continued to exercise legislative powers until a
legislature was convened under a new constitution. Furthermore, the President was given the power to
appoint the members of a Constitutional Commission tasked to draft a new charter “truly reflective of
the ideals and aspirations of the Filipino people. “

The 1987 Constitution

By virtue of Sec. 1, Article 5 of the Freedom Constitution, President Aquino issued on April 23,
1986 Proclamation No. 9, constituting a Constitutional Commission (CONCOM) charged with drafting a
new constitution not later than September 2, 1986. In line with this issuance, President Aquino, on May
26, 1986, appointed the 50 CONCOM members representing the various sectors of society from politics
to the arts and to religion.

On June 2 the ConCom, headed by former Justice Cecilia Munoz Palma, commenced its sessions
at the Batasang Pambansa in Quezon City. The ConCom completed their task on October 12, 1986 and
presented the draft constitution to President Aquino on October 15. After a period of nationwide
information campaign, a plebiscite for its ratification was held on February 2, 1987. An overwhelming
17,059,495 voted to ratify the constitution while 5,058,714 voted against it.

On February 11, 1987, the New Constitution was proclaimed ratified and in effect. On that same
day, President Aquino, government officials, and the military pledged allegiance to the New
Constitution.

The 1987 Constitution consists of 18 articles with a preamble. Among its significant provisions
are as follows:

1. A presidential system of government restores the bicameral Congress of the Philippines,

composed of a Senate and a House of Representatives.
2. A modified Bill of Rights (Article Ill) details the rights of every Filipino citizen. Much emphasis
was placed on the writing of this provision after the violations committed during the Marcos
dictatorship. In addition, the constitution includes the abolition of death penalty, except when
Congress provides to “heinous crimes.”
3. The creation of a Commission on Human Rights which, under Section 18, Article XIII, is tasked to
investigate all forms of human rights violations involving civil and political rights. It provides
appropriate legal measures for the protection of human rights of all persons within the
Philippines, and several other powers in relation to the protection of human rights.
4. The recognition of an Autonomous Region of Muslim Mindanao and the Cordilleras.
5. Limited political autonomy for local government units like the provinces, cities, municipalities
and barangays and instructing the Congress to establish a Local Government Code.

The complete provisions are as follows:

Preamble

Article I: National Territory

Article Il: Declaration of Principles and State Policies

 Article Ill: Bill of Rights

Article IV: Citizenship

Article V: Suffrage

Article VI: Legislative Department

Article VII: Executive Department

Article VIII: Judicial Department

Article IX: Constitutional Commissions

Article X: Local Government

Article XI: Accountability of Public Officers

Article XII: National Economy and Patrimony

Article XIII: Social Justice and Human Rights

Article XIV: Education, Science and Technology, Arts, Culture, and Sports

Article XV: The Family

Article XVI: General Provisions

Article XVII: Amendments or Revisions

Article XVIII: Transitory Provisions

The Philippine government is administered by a presidential system of government with a

bicameral legislature and an independent judiciary, It has three branches of government:

1. The Executive headed by the President and Cabinet

2. The Legislative composed of the Senate headed by the Senate President and the House of
Representatives headed by the Speaker of the House
3. The Judiciary composed of the Supreme Court headed by the Chief Justice, and the lower courts

The House of Representatives is composed of the Congressmen/women (officially called

Representatives) elected to a three-year term and can be re-elected, but cannot serve more than three
consecutive terms. Sectoral representatives are members of party-list organizations who can give
“voice” to significant minorities of society that may not be adequately represented through geographical
district.

The Senate is composed of 24 senators who are elected and serve for six-year terms with half
the senators elected every three years.

The Supreme Court is the Philippines’ highest judicial court, as well as the court of last resort.
The court consists of 14 associate justices and a chief justice.
Lesson 14 | AGRARIAN REFORM

Learning Outcomes

At the end of this lesson, you should be able to:

Trace the history of the land reform program in the Philippines

Discuss the salient features of each agrarian system

Evaluate the Comprehensive Agrarian Reform Program

The Philippine economy is largely agricultural and industrial. Agriculture has been existing even
during the precolonial times considering that rice is an Asian staple food along with other crops. The
agricultural economy, however, has 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 this system.

American Colonization Period

During the American colonization of the Philippines, the colonial government tried to solve the
agrarian problem by purchasing the so-called “friar lands” from religious corporations and selling them
to the tenants. However, much of the land ended up with new landlords who were mostly Filipinos.

The agrarian problem worsened during the American period. Many tenants soon began to resort
to armed means to “get back” their land. Some of them claimed that the lands they were tilling were
owned by their ancestors before these lands were claimed by landlords with “land titles.” The Tayug
Uprising in Pangasinan in 1931 as well as the Sakdalista Uprising in 1935 prompted the government to
address the agrarian problem. As part of his program for the Commonwealth Government, President
Quezon espoused “social justice” in an attempt to stop the agrarian unrest in Central Luzon and alleviate
the poverty of the farmers. This program was in line with the provision of Article Il, Section 5 of the 1935
Constitution which 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. “

Commonwealth Era

Quezon enacted some land reform laws during the Commonwealth period. The Commonwealth
Act No. 178 on November 13, 1936 amending the Rice Tenancy Act No. 4045 of 1933 provided for
certain controls in the landlord tenant relationships with regard to rice lands. He also created the
National Rice and Corn Corporation (NARIC) in 1936 to control the prices of rice and corn which
benefited the farmers and consumers. The Rural Program Administration, an office created in 1939, was
mandated to facilitate the sale or lease of the haciendas to the tenants.
 Many of the social justice programs of the Commonwealth Government, however, were not
enforced. Legislation of these planned programs was thwarted by many of the landowning legislators in
the Commonwealth National Assembly who would be affected if they would pass these laws.

Third to Fifth Philippine Republic

Agrarian problems still remained even after Philippine independence was declared in 1946.
What made it worse was that the agrarian unrest became part of a full-blown revolt against the
government. The movement was spearheaded by former members of the peasant guerrilla army,
Hukbong Bayan Laban sa Hapon (HUKBALAHAP) who later changed their name to Hukbong
Mapagpalaya ng Bayan (People’s Liberation Army). The succeeding administrations tried to address
these agrarian problems while, at the same time, attempted to suppress the insurgency.

During the Roxas Administration (1946—1948), President Manuel Roxas enacted Republic Act
No. 34 which established 70-30 sharing arrangements between landlord and tenants and regulated
share-tenancy contracts. There was also Republic Act No. 55 which provided security to tenants from
arbitrary ejectment from the land they are cultivating.

On October 30, 1950, President Elpidio Quirino (1948— 1953) issued Executive Order No. 355
which replaced the National Land Settlement Administration, a government agency, with the Land
Settlement Development Corporation (LASEDECO). LASEDECO took over the two agrarian offices: the
Agricultural Machinery Equipment Corporation and the Rice and Corn Production Administration.

It was during the Magsaysay Administration (1953—1957) that an attempt on land reform was
made. In 1954, President Ramon Magsaysay signed Republic Act No. 1199 or the Agricultural Tenancy
Act of 1954 which governed the tenant landowner relationship by organizing the share-tenancy and
leasehold system. It also created the Court of Agrarian Relations, Two other laws, Republic Act No. 1400
(Land Reform Act Of 1955) and Republic Act No. 821 (Creation of Agricultural Credit Cooperative
Financing Administration) were also signed to help tenant farmers, R.A. 1400, created the Land Tenure
Administration (LTA) to handle the acquisition and distribution of large tenanted rice and corn lands
over 200 hectares for individuals and 600 hectares for corporations. R.A. 821, on the other hand,
created an agricultural bank that provided small farmers and share tenants with low-interest loans.

The Macapagal Administration (1961—1965) continued the efforts to advance agrarian reform.
On August 8, 1963, President Diosdado Macapagal signed Republic Act No. 3844 or Agricultural Land
Reform Code which heavily favored tenant farmers. Its provisions included the abolition of share
tenancy and provided for the leasing of agrarian lands to farmers. It also set a retention limit of 75
hectares for landowners; invested rights of preemption and redemption for tenant farmers; put in place
an administrative machinery for implementation; institutionalized a judicial system for agrarian cases;
and incorporated extension, marketing, and supervised credit system of services for farmer
beneficiaries.

This law was hailed as one that would emancipate Filipino farmers from the bondage of tenancy.
It became the precursor of the agrarian reform programs of the succeeding administration.
 Following the imposition of martial law in 1972, President Ferdinand Marcos declared the entire
country a land reform area through Presidential Decree No. 2 issued on September 26, 1972. It was
almost a year before Marcos signed Republic Act No. 6389 or the Code of Agrarian Reform which
created the Department of Agrarian Reform (DAR). The DAR began efforts to implement land reform in
the Philippines with the full support of the government. This independent body was formed to replace
the existing Land Authority. The Department of Agrarian Reform was renamed the Ministry of Agrarian
Reform in 1978 when the government adopted the parliamentary system.

In October 1972 President Marcos signed Presidential Decree No. 27 which provided for
tenanted lands devoted to rice and corn to pass ownership to the tenants, and lowered the ceiling for
landholding to seven hectares. The law stipulated that share tenants who worked on a landholding of
over seven hectares could purchase the land they tilled while share tenants on land less than seven
hectares would become leaseholders. Marcos’s agrarian reform program also included credit support,
infrastructure, and legal assistance for farmers.

The 1987 Constitution which was ratified during the Corazon Aquino Administration (1986—
1992) included the provisions creating an agrarian reform law (Article XIII, Section 4) and promoting
rural development and agrarian reform (Article Il, Section 21). In 1988, President Aquino signed Republic
Act No. 6657, popularly known as the Comprehensive Agrarian Reform Law or CARL. The CARL was
enacted to offer a lawful basis for the implementation of the Comprehensive Agrarian Reform Program
or CARP. It took effect on June 15, 1988. Aquino also enacted other laws such as:

1. Executive Order No. 228 (July 16, 1987) which gave full ownership to qualified farmer-
beneficiaries covered by PD 27
2. Executive Order No. 229 (July 22, 1987) which provided a mechanism for the implementation of
the Comprehensive Agrarian Reform Program (CARP)
3. Proclamation No. 131 (July 22, 1987) which instituted the CARP as a major program of the
government and provided for an Agrarian Reform Fund (ARF), with an initial amount of Php50
billion to cover the estimated cost of the program from 1987—1992
4. Executive Order No. 129-A (July 26, 1987) that streamlined and expanded the power and
operations Of the DAR
5. Executive Order No. 407 (June 14, 1990) that ordered the acceleration of the acquisition and
distribution of agricultural lands, pasture lands, fishponds, agroforestry lands and other lands of
the public domain suitable for agriculture

A dilemma during the Ramos Administration (1992—1998) was to revive public trust in the
agrarian reform program. The program was deemed a failure during the Aquino administration because
former President Aquino was a member of the Cojuangco Family which owned one of the largest
haciendas in Luzon—the Hacienda Luisita. The hacienda which was mainly devoted to sugarcane
production was notably exempted from agrarian reform which was concentrated mostly on rice and
corn lands.

Thus, President Fidel Ramos made the program one of the priorities of his administration. He
enacted laws that strengthened the implementation of CARP (Republic Act No. 7905). He limited the
land conversion scheme by making certain types of agricultural land as non-negotiable for conversion or
highly-restricted to be converted. He also signed Republic Act No. 8532 (Agrarian Reform Fund Bill)
which provided an additional P50 billion for CARP and extended its implementation for another 10
years.

Though he had a short term of office, President Joseph Estrada (1998—2000) enacted Executive
Order No. 151 that consolidated small farm operations into medium- or large-scale enterprises to qualify
for long-term capital. He also ordered the DAR to plan joint projects between private investors and the
agrarian sector under his ‘Magkabalikat Para sa Kaunlarang Agraryo or MAGKASAKA program.

The Department of Agrarian Reform was re-named twice during the administration of President
Gloria Macapagal Arroyo (2000—2010). It was named the Department of Land Reform (Executive Order
No. 364, September 27, 2004) and got back to using DAR again (Executive Order No. 456, August 23,
2005). Executive Order No. 364 was enacted to widen the function of the Department of Land Reform
vis-ä-vis land reform programs in the Philippines. Also, the order added jurisdiction over the Philippine
Commission on Urban Poor (PCUP) and the recognition of the ownership of ancestral lands.

However, less than a year later, President Arroyo signed Executive Order No. 456 which
instructed the Department of Land Reform to revert to its original name, Department of Agrarian
Reform. This order considered all the important factors for agrarian reform to promote beneficial
activities for the agricultural sector. It stated that “the Comprehensive Agrarian Reform Law goes
beyond just land reform but includes the totality of all factors and support services designed to lift the
economic status of the beneficiaries. “

On August 7, 2009, President Arroyo signed Republic Act No. 9700 extending the
Comprehensive Agrarian Reform Program for another five years beginning July 2009. That same law
allots P150 billion for the acquisition and distribution of 1.6 million hectares of land for 1.2 million
beneficiaries and the provision of support services for farmers.

Agrarian reform seems to have not fared well under the administration of President Benigno
Aquino Ill. A report by a non-governmental organization (NGO), the Focus on the Global South, in 2013
—halfway through the PNoy Administration— showed a dismal performance by the Department of
Agrarian Reform in land redistribution in spite of the promise by the government to complete it by June
2014. The priorities of the Department of Agriculture (DA) which were concentrated on the agribusiness
sector made the DAR the sole department that provided farmers support for their agricultural
production. The farmers also competed with foreign agricultural products which entered the local
market through the economic liberalization program of the government.
Lesson 15 | TAXATION

Learning Outcomes

At the end of this lesson, you should be able to:

Explain the nature and purpose of taxation

Identify the types of national and local taxes

Argue for or against a current taxation issue

Taxation means laying a tax through which the government generates income to defray its
expenses. It is a way to raise funds for government programs and services that benefit Filipino citizens.
Economic investments and businesses in the Philippines have created several definitions of taxation
enforced by national or local laws for income collection and development of the government.

A tax is enforced as a contribution but it is proportionate to the citizen’s ability to pay. It is levied
on persons (who actually pay with money) and property as well as on business transactions, privileges,
and benefits. The imposition of taxes is done by law through the Bureau of Internal Revenue.

Types of Taxes

There are two types of taxes: national and local. National taxes are the ones paid to the
government through the Bureau of Internal Revenue. The national taxation system is based on the
National Internal Revenue Code of 1997 or the Republic Act No. 8424 otherwise known as the Tax
Reform Act of 1997, as amended.

The types of national taxes are as follows:

1. Capital Gains Tax is a 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 is a tax on documents, instruments, loan agreements, and papers
evidencing the acceptance, assignment, sale, or transfer of an obligation, rights, or property
incident thereto. 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.
3. Donor’s Tax is a tax on a donation or gift. It is also a tax imposed on the gratuitous transfer of
property between two or more persons who are living at the time of the 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.
4. Estate Tax is a 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 the death of the owner. The estate tax is based on the
 laws in force at the time of death notwithstanding the postponement of the actual possession or
enjoyment of the estate by the beneficiary.
5. Income Tax is a tax on all annual profits made from property ownership, profession, trades or
offices. It is also a tax on a person’s income, emoluments, profits and the like. Self-employed
individuals and corporate taxpayers pay quarterly income taxes from the first quarter to the
third quarter. And instead of filing quarterly income tax on the fourth quarter, they file and pay
their annual income tax return for the taxable year. Individual income tax is based on graduated
schedule of tax rate, while corporate income tax in based on a fixed rate prescribed by the tax
law or special law.
6. Percentage Tax is a business tax imposed on persons or entities who sell or lease goods,
properties, or services in the course of trade or business whose gross annual sales or receipts do
not exceed the amount required to register as VAT-registered taxpayers. Percentage taxes are
usually based on a fixed rate. They are usually paid monthly by businesses or professionals.
However, some special industries and transactions pay percentage tax. On a quarterly basis.
7. Value-Added Tax is a business tax imposed and collected from the seller in the course of trade
or business on every sale of properties (real or personal), lease of goods or properties (real or
personal), or vendors of services. It 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 consumers. VAT
returns are usually filed and paid monthly and quarterly.

The latest law on Taxation is RA 9337 signed on May 24, 2005 by President Gloria Arroyo is
known as the “expanded value-added tax” or the “E-VAT” law.
8. Excise Tax is a tax imposed on goods manufactured or produced in the Philippines for domestic
sale or consumption or any other disposition. It is also imposed on things that are imported.
9. Withholding Tax on Compensation is the tax withheld from individuals receiving purely
compensation income arising from an employer-employee relationship. This tax is what
employers withheld in their employees’ compensation income and remit to the government
through the BIR or authorized accrediting agent.
10. Expanded Withholding Tax is prescribed only for certain payors like those withheld on rental
income and professional income. It is creditable against the income tax due of the payee for the
taxable quarter year.
11. Final Withholding Tax is a kind of withholding tax which is prescribed only for certain payors
and is not creditable against the income tax due of the payee for the taxable year. An example
of final withholding tax is the tax withheld by banks on the interest. Income earned on bank
deposits.
12. Withholding Tax on Government Money Payments is the 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, on the other hand, is based on the local government taxation in the Philippines as
stated in Republic Act 7160 or the Local Government Code of 1991, as amended. These taxes, fees, or
charges are imposed by the local government units, such as provinces, cities, municipalities, and
barangays.
 Local taxes, on the other hand, include:

1. Tax on Transfer of Real Property Ownership is 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 is imposed on printing and publication businesses
like that of books, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, and others
of similar nature.
3. Franchise Tax is a tax on franchised businesses, at the rate not exceeding fifty percent (50%) of
one percent (1%) of the gross annual receipts of the preceding calendar year based on the
incoming receipt (the annual earning) within the territorial jurisdiction where the franchise is
selling in.
4. Tax on Sand, Gravel, and Other Quarry Resources is 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 that are extracted from public lands or from the
beds of seas, lakes, rivers, streams, creeks, and other public waters within its territorial
jurisdiction.
5. Professional Tax is an 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 is a 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 is an annual fixed tax for every truck, van or any
vehicle used by manufacturers, producers, wholesalers, dealers, or retailers in the delivery or
distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and 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 is imposed by cities or municipalities on 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. 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.
9. Fees for Sealing and Licensing of Weights and Measures are 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.
10. Fishery Rentals, Fees, and Charges are imposed by the municipality/city to grantees of fishery
privileges in the municipal/city waters especially the privilege to build fish corrals, oysters,
mussels, or other aquatic beds or bangus fry areas and others as specified in the Local
Government Code.
11. Community Tax is the 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, or who is
engaged in business or occupation, or who owns real property with an aggregate assessed value
of one thousand pesos (P1,000.00) or more, or who is required by law to file an income tax
return. Community tax is also imposed on every corporation no matter how created or
 organized, whether domestic or resident foreign, engaged in or doing business in the
Philippines.
12. Taxes levied by the barangays on stores or retailers with fixed business establishments with
gross sales of receipts of the preceding calendar year amounting to fifty thousand pesos or less,
(for city barangays) and thirty thousand pesos or less, (for municipal barangays), at a rate not
exceeding one percent (1%) on such gross sales or receipts.
13. Service Fees or Charges are fees or charges collected by the barangays for services rendered in
connection with the regulation or the use of barangay-owned properties or service facilities,
such as palay, copra, or tobacco dryers.
14. Barangay Clearance is a 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.