G.R. No.
165547 January 24, 2007
DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary, RENE
C. VILLA, Petitioner,
vs.
SARANGANI AGRICULTURAL CO., INC., ACIL CORPORATION, NICASIO ALCAN-
TARA and TOMAS ALCANTARA, Respondents.
Facts:
Respondents are the owners of the lands in question which have been reclassified
from agricultural into non-agricultural uses by virtue of a municipal zoning ordinance,
and are included in the comprehensive land use plan of the Municipality of Alabel.
The Province of Sarangani was created pursuant to Republic Act No. 7228 on March
16, 1992, composed of seven (7) municipalities, namely, Alabel, Glan, Maasin, Mai-
tum, Malapatan, Malungon and Kiamba which were segregated from the Province of
South Cotabato. Under said Act, the Municipality of Alabel was made the capital of the
new province where the capitol building and all other national and provincial offices
shall be established.
Sangguniang Bayan of Alabel passed Resolution No. 97-08 or "Resolution Adopting
and Endorsing the Ten-Year Municipal Comprehensive Development Plan of the Mu-
nicipality of Alabel and Its Land Use Development Plan and Zoning Ordinance for
Adoption and Approval of the Provincial Governor.
Pursuant to Municipal Zoning Ordinance No. 08, Series of 1997, and to accelerate the
development and urbanization of Alabel, the Sangguniang Bayan of Alabel passed
Resolution No. 98-03 reclassifying lots that were located within the built-up areas,
based on the 1995-2005 Land Use Plan of the municipality, from agricultural to non-
agricultural uses.
The Sangguniang Panlalawigan of Sarangani approved Resolution No. 98-018 or the
"Resolution Adopting the Ten-Year Municipal Comprehensive Development Plan
(MCDP 1995-2205) and the Land Use Development Plan and Zoning Ordinance of the
Municipality of Alabel, Sarangani Per Resolution No. 97-08 and Municipal Ordinance
No. 97-08, S. of 1997 of the Sangguniang Bayan of Alabel." A portion of the area in-
volving 376.5424 hectares, however, was covered by the Comprehensive Agrarian Re-
form Law (R.A. No. 6657) commercial farms deferment scheme.
The Zoning Certification issued by the office of the Municipal Planning and Develop-
ment Council (MPDC) showed that respondents’ properties located at Barangay
Maribulan, Alabel were among those reclassified from agricultural and pasture land to
residential, commercial institutional, light industrial and open space in the 1995-2005
land use plan of Alabel. Sarangani Agricultural Company, Inc. (SACI) filed an applica-
tion for land use conversion of several parcels of land with an aggregate area of 1,005
hectares.
Meanwhile, members of the Sarangani Agrarian Reform Beneficiaries Association, Inc.
(SARBAI) sent a letter-petition to the DAR Secretary oppposing the application for land
use conversion filed by SACI. SARBAI alleged that its members were merely forced to
sign the waiver of rights, considering that the commercial farm deferment period ended
on June 15, 1998. Later, an "Urgent Petition for the Denial of Land Use Conversion
Application of Banana Commercial Farm of SACI" was filed by SARBAI and was re-
ceived by the PARC Secretariat
In the March 30, 2000 deliberation of the PLUTC, the committee agreed to recommend
the disapproval of 158.0672 hectares that had been planted with bananas and co-
conuts. The committee noted that said portion of the property was still viable for agri-
culture, irrigated, with Notice of Coverage, and under protest or with opposition from
SARBAI.
DAR Secretary Horacio R. Morales, Jr. denied SACI’s application for land use conver-
sion ruling that SACI, failed to submit the oath of undertaking to pay disturbance com-
pensation to affected workers being required by the Committee and as provided under
DAR Administrative Order No. 01, Series of 1999. Instead, SACI submitted an under-
taking executed by the affected workers stating that they are amenable to the package
of benefits offered by the company. Nevertheless, those who executed the deed of un-
dertaking did not represent the majority of the farm workers.
Petitioner filed a Motion for Reconsideration of the above decision but the same was
denied by the Court of Appeals. Their Motion for Reconsideration of the above Order
having been denied, respondents appealed to the Office of the President the Office of
the President through Presidential Assistant Manuel C. Domingo who dismissed the
appeal and affirmed in toto the challenged DAR Orders. Respondents’ motion for re-
consideration was denied, so they filed with the Court of Appeals a petition for review
raising substantially the same issues.
On July 19, 2004, the Court of Appeals rendered a Decision granting the petition
Issue: Whether the CA committed an error in ruling that DAR should use the compre-
hensive land use plans and accompanying ordinance of the Local Sanggunian as pri-
mary reference so as to not to defeat the very purpose of the LGU concerned in re-
classifying certain areas to achieve social and economic benefits in pursuance to its
mandate toward the general welfare (NO)
Held:
DAR Administrative Order No. 7, Series of 1997, or the Omnibus Rules and Proce-
dures Governing Conversion of Agricultural Lands to Non-agricultural Uses prescribes
the guidelines for land use conversion1 . In connection with the afore-stated adminis-
1 Conversion may be allowed if at the time of the application, the lands are reclassi-
fied as commercial, industrial, residential or other non-agricultural in the new or revised
trative order, Section 20 of Republic Act No. 7160, otherwise known as the Local Gov-
ernment Code of 1991, empowers the local government units to reclassify agricultural
lands2
Memorandum Circular No. 54 "Prescribing the Guidelines Governing Section 20 of
R.A. No. 7160 Otherwise Known as the Local Government Code of 1991 Authorizing
Cities and Municipalities to Reclassify Agricultural Lands Into Non-Agricultural Uses"
issued by President Fidel V. Ramos on June 8, 1993 specified the scope and limita-
tions on the power of the cities and municipalities to reclassify agricultural lands into
other uses. It provided that all ordinances authorizing reclassification of agricultural
lands shall be subject to the review and approval of the province in the case of compo-
nent cities or municipalities, or by the HLURB for highly urbanized or independent
component cities in accordance with Executive Order No. 72, thus:
SECTION 4. Use of the comprehensive land use plans and ordinances as primary ref-
erence documents in land use conversions. - Pursuant to RA 6657 and EO 129-A, ac-
tions on applications for land use conversions on individual landholdings shall remain
town plans promulgated by the local government unit (LGU) and approved by the
Housing and Land Use Regulatory Board (HLURB) or by the Sangguniang Panlalaw-
igan (SP) after June 15, 1988, in accordance with Section 20 of R.A. No. 7160, as im-
plemented by MC No. 54, and Executive Order No. 72, Series of 199317 of the Office
of the President.
2 Sec. 20. Reclassification of Lands. - (a) A city or municipality may, through an ordi-
nance passed by the Sanggunian after conducting public hearings for the purpose, au-
thorize the reclassification of agricultural lands and provide for the manner of their uti-
lization or disposition in the following cases: (1) when the land ceases to be economi-
cally feasible and sound for agricultural purposes as determined by the Department of
Agriculture or (2) where the land shall have substantially greater economic value for
residential, commercial, or industrial purposes, as determined by the Sanggunian con-
cerned: Provided, That such reclassification shall be limited to the following percent-
age of the total agricultural land area at the time of the passage of the ordinance:
(1) For highly urbanized and independent component cities, FIFTEEN PERCENT
(15%);
(2) For component cities and first to third class municipalities, ten percent (10%), and
(3) For fourth to sixth class municipalities, five percent (5%); Provided further, That
agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act
No. 6657, otherwise known as "The Comprehensive Agrarian Reform Law," shall not
be affected by the said reclassification and the conversion of such lands into other pur-
poses shall be governed by Section 65 of said Act.
…
(c) The local government units shall in conformity with existing laws, continue to pre-
pare their respective comprehensive land use plans enacted though zoning ordinances
which shall be the primary and dominant bases for the future use of land resources:
Provided, That the requirements for food production, human settlements, and industrial
expansion shall be taken into consideration in the preparation of such plans.
as the responsibility of DAR, which shall utilize as its primary reference documents the
comprehensive land use plans and accompanying ordinance passed upon and ap-
proved by the LGUs concerned, together with the National Land Use Policy.
Hence, with regard to agricultural lands that have been reclassified for non-agricultural
uses by the local government unit concerned, the CA is correct in declaring that DAR
should refer to the comprehensive land use plans and the ordinances of the Sanggu-
nian in assessing land use conversion applications, thus:
Construing Sec. 20 of the Local Government Code and the subsequent administrative
issuances implementing the same, we are of the opinion that while the DAR retains the
responsibility for approving or disapproving applications for land use conversion filed
by individual landowners on their landholdings, the exercise of such authority should
be confined to compliance with the requirements and limitations under existing laws
and regulations, such as the allowable percentage of agricultural area to be reclassi-
fied, ensuring sufficient food production, areas non-negotiable for conversion and
those falling under environmentally critical areas or highly restricted for conversion un-
der the NIPAS law. Definitely, the DAR’s power in such cases may not be exercised in
such a manner as to defeat the very purpose of the LGU concerned in reclassifying
certain areas to achieve social and economic benefits in pursuit of its mandate towards
the general welfare. Precisely, therefore, the DAR is required to use the comprehen-
sive land use plans and accompanying ordinances of the local Sanggunian as primary
references in evaluating applications for land use conversion filed by individual
landowners. In this case, petitioners have already complied with the standard require-
ments laid down under the applicable rules and regulations of the DAR.
The conversion of agricultural lands into non-agricultural uses shall be strictly regu-
lated and may be allowed only when the conditions prescribed under R.A. No. 6657
are present. In this regard, the Court agrees with the ratiocination of the CA that DAR’s
scope of authority in assessing land use conversion applications is limited to examin-
ing whether the requirements prescribed by law and existing rules and regulations
have been complied with. This holds true in the present case where, because of the
creation of the Province of Sarangani and in view of its thrust to urbanize, particularly
its provincial capital which is the Municipality of Alabel, the local government has re-
classified certain portions of its land area from agricultural to non-agricultural. Thus, to
reiterate, in accordance with E.O. No. 72, Series of 1993, and subject to the limitations
prescribed by law, DAR should utilize the comprehensive land use plans in evaluating
the land use conversion application of respondents whose lands have already been re-
classified by the local government for non-agricultural uses.