CREATING THE AGRARIAN REFORM FUND TO SUPPORT FINANCING REQUIREMENTS OF AGRARIAN REFORM PROVIDED IN PRESIDENTIAL DECREE NO. 27 AND FOR OTHER PURPOSES.

• Number: Presidential Decree No. 85
• Sections: 11

Preamble

WHEREAS, there is an imperative need for immediate

implementation of agrarian reform provided in Presidential Decree No.

27,dated October 21, 1972;

WHEREAS, such implementation calls for timely and

adequate financial support in all phases involved in the execution of

desired agrarian reforms;

WHEREAS, there is need to mobilize and harness

properly available resources to provide necessary funds for the

realization of government agrarian reform;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of

the Philippines, by virtue of the powers in me vested by the

Constitution, as Commander-in-Chief of the Armed Forces of the

Philippines and pursuant to Proclamation No. 1081, dated September 21,

1972 and General Order No. 1, dated September 22, 1972, as amended, do

hereby order and decree:

Section 1 Establishment of the Agrarian Reform Fund.

SECTION 1. Establishment of the Agrarian Reform Fund.

— An Agrarian Reform Fund, hereinafter referred to as the "Fund," is

hereby established to finance and/or guaranty the payment of farm lots

acquired under Proclamation No. 27, dated October 21, 1972, and to

extend agricultural credit support and the corresponding guarantee

coverage to achieve a high level of production in land reform areas of

the country.

The resources of the Fund shall be drawn from the following:

Central Bank of the Philippines

a. Bonds in Portfolio

Guarantee Funds

a. Agricultural Guarantee Fund

b. Agricultural Guarantee & Loan Fund

c. CB-Loan Guarantee Fund (Calamity Fund)

Development Bank of the Philippines

a. Preferred shares in client corporations

b. Government-counterpart preferred stocks in rural banks

c. Preferred stocks in development banks

d. Acquired assets

e. Reparations Account Receivables

f. Other disposable assets

Philippine National Bank

a. Acquired assets

National Investment and Development Corporation

a. Acquired assets

Government Service Insurance System

a. Acquired assets

Land Bank

a. Shares of stock owned or controlled by the Government

Agrarian Reform Special Account

a. Allocation for Agricultural Guarantee Fund and Land Bank

Proceeds from foreign loans

Social Security System

a. Acquired assets

Other disposable assets of the Government as may be available for the land reform

program.

Other funds and resources provided by law.

The resources listed above shall be turned over to the Agrarian

Reform Fund at such time, terms, prices and conditions as shall be

agreed upon between the Agrarian Reform Fund Commission and the

financial institution and government agencies concerned, payment to be

made by the former to latter in Agrarian Reform Bonds issued pursuant to

Section 2 Utilization of the Resources of the Fund.

SEC. 2. Utilization of the Resources of the Fund. — All resources of the Fund shall be utilized for the attainment of the objectives of the Fund as follows:

(1) Financing of acquisition of lands under any of the following modes of settlement:

Cash payment, subject to availability of funds, for small landholdings;

Exchange arrangement for government stocks in

government-owned or controlled corporations or private corporations

where the Governmental as holdings;

Payment through the establishment of annuities of pensions with guarantee against inflation and/or medical insurance;

Full guaranty on the payment of the fifteen (15) equal annual amortizations to be made by the tenant-farmers; and

Such other modes of settlement as may be adopted by the Agrarian Reform Fund Commission.

(2) Financing agricultural production and/or commodity loans

through banking institutions and/or issuance of guarantee of losses up

to eighty-five (85%) per cent of the amount of the production loan under

such terms and conditions as the Agrarian Reform Fund Commission may

prescribe.

Section 3 Administration of the Fund.

SEC. 3. Administration of the Fund. — There

is hereby created an Agrarian Reform Fund Commission, hereinafter

referred to as the Commission, composed of the Secretary of Finance as

Chairman and the Governor of the Central Bank of the Philippines and the

Secretary of Agrarian Reform as members, which shall administer the

Fund. In the event that the Chairman or any members of the Commission is

unable to attend any meeting thereof he shall designate the next

ranking official of the office or agency concerned to represent him in

the meeting of the Commission.

Operational expenses of the Commission shall be advanced by the

Central Bank of the Philippines until such time as the Fund generates

income sufficient for the purpose. The Commission shall reimburse the

Central Bank for its advances, including interests, if any, as soon as

possible.

Section 4 Powers and Duties of the Commission.

SEC. 4. Powers and Duties of the Commission.

— The Commission shall have exclusive administration and control of the

Fund, which shall include the authority to invest and dispose of the

assets under its administration. For this purpose, it shall be empowered

to promulgate such rules and regulations necessary for effective

operations of the Fund and may execute acts or perform activities for

the best interest of the Fund.

Section 5

Section 5 of this Decree.

Section 6 Reorganization of the Land Bank.

SEC. 6. Reorganization of the Land Bank. —

The Agrarian Reform Fund Commission, as holder of all the shares of the

Land Bank owned or controlled by the Government, is hereby authorized,

with the approval of the President of the Philippines, to reorganize the

Land Bank, modify its operations and functions and exercise its powers

and manage its property, the provisions of Republic Act No. 3844, as

amended, notwithstanding.

Section 7 Tax Exemptions.

SEC. 7. Tax Exemptions. — All assets and earnings of the Fund shall be exempt from

all national, provincial, municipal and city taxes and assessments now in force and may hereinafter be imposed.

Section 8 Repeating Clause.

SEC. 8. Repeating Clause. — All laws,

executive orders, rules and regulations or parts thereof inconsistent

with this Decree are hereby repealed and/or modified accordingly.

Section 9 Effectivity.

SEC. 9. Effectivity. — This Decree shall take effect immediately.

Done in the City of Manila, this 24th day of December,' in the year of Our Lord, nineteen hundred and seventy-two.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ALEJANDRO MELCHOR

Executive Secretary

Section 5 Issuance of Bonds.

SEC. 5. Issuance of Bonds. — The Secretary

of Finance shall, upon recommendation of the Commission and the Monetary

Board of the Central Bank and with the approval of the President of the

Philippines, issue bonds, debentures and other evidences of

indebtedness for the account of the Fund at such terms, rates and

conditions to be determined by the Commission. Such bonds and other

obligations shall be secured by the assets of the Fund and shall be

fully tax exempt both as to principal and income. Said income shall be

paid to the landholders every six months from the date of issue.

These bonds and other obligations issued for the account of the Fund

shall be direct obligations of the Government of the Republic of the

Philippines and shall be redeemable at the option of the Commission at

or prior to maturity, which, in no case shall exceed twenty-five (25)

years.