Chamber of Real Estate & Builders' Associations, Inc.

A Home for Every Filipino


Perhaps no other governmental act has been as detrimental to housing and other non-agricultural activities as the Comprehensive Agrarian Reform Program (CARP).

So much so that the rancor attending the ensuing long-standing battle for land access was unprecedented in the history of CREBA.

In 1987, then President Corazon Aquino promulgated three major issuances that led to the uncontrolled spiraling of land prices and scarcity of land for residential, commercial and industrial development purposes – situations that pervade to this day.

These issuances were:

  • Executive Order (EO) No. 229, vesting the Department of Agrarian Reform (DAR) with quasi-judicial powers and exclusive original jurisdiction over all matters involving agrarian reform implementation;
  • Proclamation No. 131, instituting a comprehensive agrarian reform program; and
  • EO 129-A, expanding the powers of the DAR and vesting it with the exclusive authority to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into nonagricultural uses.

A year later, Republic Act 6657 otherwise known as the Comprehensive Agrarian Reform Law was enacted.

CREBA first locked horns with the DAR when the agency issued its first conversion rules under Administrative Order (AO) No. 15 dated 05 December 1988. AO 15 covered ALL private agricultural lands, whether tenanted or not and regardless of crop or commodity produced.

CREBA immediately lodged a vehement protest, contending that under Section 65 of RA 6657, DAR’s conversion authority embraced only those lands which have already been awarded to CARP beneficiaries.

Consequently, in March 1990, the Department of Justice issued Opinion No. 44 which stated:

“While there is no specific and express authority given to DAR in the CARP law to approve or disapprove conversion of agricultural lands to non- agricultural uses, because Section 65 only refers to conversions effected after five years from date of the award, we opined that the authority of the DAR to approve or disapprove conversions of agricultural lands to non-agricultural uses applies only to conversions made on or after June 15, 1988, the date of effectivity of R.A. No. 6657.”

“…xxx… True, the DAR’s express power over land use conversion is limited to cases in which agricultural lands already awarded have, after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes. But to suggest that these are the only instances when the DAR can require conversion clearances would open a loophole in the R.A. No. 6657, which every landowner may use to evade compliance with the agrarian reform program. Hence, it should logically follow from the said department’s express duty and function to execute and enforce the said statute that any reclassification of a private land as a residential, commercial or industrial property should first be cleared by the DAR.”


Armed with the excuse provided by DOJ Opinion 44, and with the support of vocal militant groups such as the Kilusang Magbubukid ng Pilipinas (KMP) and an Executive Branch apparently more concerned with appeasing said groups, the DAR proceeded to promulgate successive conversion rules and administrative issuances that practically crippled non-agricultural land development activity.

The worst of these issuances were:

  • Administrative Order (AO) No. 20 which banned the conversion of all irrigated and “irrigable” lands, and restricted the conversion and reclassification of all other lands not covered by the conversion ban;
  • Memorandum Circular (MC) No. 54, which provided that all lands banned from conversion are also banned from LGU reclassification; and
  • EO 363 which enlarged the coverage of the conversion ban, and made LGU land reclassification subject to DAR rules and requirements for conversion.

In effect, these issuances served to:

  • Expand CARP coverage to include even those lands that are specifically exempt or excluded m under RA 6657.
  • Expand the scope of DAR’s conversion authority to cover practically all lands, beyond the restrictive limits set by Congress specifically Section 65 of RA 6657;
  • Emasculate local governments by making LGU land reclassification and zoning subject to DAR’s approval; and
  • Provide limitless opportunities for corruption by placing land development completely at the mercy of the DAR’s bloated bureaucracy, with applications for land conversion having to pass through agrarian reform officers at the barangay, municipal, provincial, regional and national levels.

For over three decades, CREBA bitterly fought and publicly campaigned against each new conversion restriction, in the process succeeding in being branded and publicly pilloried by the militant peasant groups as the “devil incarnate”.

Meanwhile, developers had to find ways to cope with the DAR’s BAROs, MAROs, PAROs, RAROs and its central office bureaucrats. Many ended up suffering from costly litigations instituted by the DAR for some alleged violation of the rules.

The position that CREBA has maintained over the years, based on a comprehensive legal study undertaken by CREBA founder Manuel Serrano, is summarized below.


1.  Exclude from the scope of all DAR conversion guidelines, and from the scope of the DAR’s authority – whether for purposes of conversion clearance, or CARP exemption clearance, or application of penalties for pre-mature conversion – all lands that have been previously reclassified, or may hereafter be reclassified, by either Congress or LGUs.

Such exclusion should apply regardless of whether or not these reclassified lands are (a) irrigated, (b) irrigable, or (c) covered by various DAR-issued notices of CARP coverage.

 These lands are:

  • Striplands which, prior to effectivity of RA 8435, have already been included and set aside in land use plans and zoning ordinances for non-agricultural uses;
  • All cities and all municipalities that meet the population density requirement, which are defined as urban areas and set aside for urban development and housing purposes under RA 7279; and
  • Lands identified and set aside for Ecozone purposes under RA 7916.

2. Conversion of agricultural (non-reclassified) lands should be effected under any of the following modes as may be applicable:

  • Conversion of SAFDZ lands. – Conversion of SAFDZ lands that are irrigated, irrigable or suitable for high-value crops shall be effected by the DAR subject to the conditions imposed under Section 9 of RA 8435, namely: (1) within 5 years from effectivity of the Act, conversion shall be allowed only up to the extent of 5% of the total area of these lands; (2) such conversion shall be subject to compliance with existing laws and issuances on conversion; and (3) in case of conversion, the landowner will pay the Department the amount of the government’s investment.

In case these SAFDZ lands have been awarded under the CARP, conversion – consistent with the proviso of Section 9 of RA 8435 that it shall be effected upon compliance with existing laws governing conversion – shall be additionally subject to the provisions of Section 65 of RA 6657, namely: (1) after the lapse of 5 years from the land’s award, (2) when the locality has become urbanized and the land is determined to be more economically feasible for nonagricultural use, (3) upon application by the beneficiary and with due notice to affected parties, and (4) when the beneficiary has fully paid his obligation.

  • Conversion of agricultural lands for Ecozone purposes. – In case of agricultural lands that conform to the parameters and criteria for the identification and establishment of Ecozones, pursuant to Section 6 of RA 7916, conversion shall be effected by the President through a Presidential Proclamation upon recommendation of the PEZA.

In case these lands have been awarded under the CARP, however, conversion shall be effected by the President subject not only to the parameters and criteria under Section 6 of RA 7916, but also additionally to the conditions imposed under Section 65 of RA 6657, consistent with Section 31 of RA 7916.

  • Conversion of awarded lands for all other non-agricultural purposes. – In all other cases of agricultural lands awarded under the CARP but not included in the SAFDZ or identified for Ecozone purposes, conversion shall be effected by the DAR subject to the conditions of Section 65 of RA 6657.
  • All other agricultural lands the conversion of which is not provided for under either Section 65 of RA 6657, Section 6 of RA 7916 or Section 9 of RA 8435, may not be converted, and may be developed for non-agricultural purposes only upon their reclassification.


1.  Reclassification of agricultural lands should be subject only to the conditions imposed under Section 20 of RA 7160. Said provision should be properly interpreted to the effect that:

  • A resolution by the sanggunian that the land is more economically viable for non-agricultural purposes should suffice, without need of further approval by the DA, regardless of whether or not the land is included in either the NPAAAD or SAFDZ; and
  • Reclassification of CARP-awarded lands in 4th to 6th class municipalities is not subject to the percentage limitations under Section 20 of RA 7160, but shall be in accordance with the conditions set forth under section 65 of RA 6657.

2.   No clearance or approval by the DAR should be required for reclassification (except for awarded lands in 4th to 6th class municipalities pursuant to Section 65 of RA 6657 and Section 20 of RA 7160, even if the land is covered by various DAR-issued notices of CARP coverage. Any such notices should be revoked upon reclassification. Any legitimate farmer-tenant who may be affected by the land’s development subsequent to reclassification should be entitled to disturbance compensation as provided for under RA 3844 as amended by RA 6389.

3.  Lands identified by various agencies as priority development areas pursuant to EO 124, if these are agricultural lands, should be submitted to the LGU concerned for reclassification, and once reclassified should cease to be covered by DAR’s jurisdiction.

4.  The review and approval process for zoning ordinances should involve no other agency except (a) the provincial sanggunians as the reviewing authority in the case of component LGUs pursuant to RA 7160, (b) the DENR for purposes of evaluating whether or not lands identified as NIPAS pursuant to RA 7586 are involved, and (c) the HLURB as the approving authority in all cases pursuant to EO 648.

5.  For purposes of developing reclassified lands, issuance of a development  permit by the LGU concerned should suffice, without need of conversion clearance or further intervention from the DAR or the DA, subject however to a HLURB certification that the zoning ordinance effecting the re-classification has been approved, and further subject to a DENR ECC in case the land is located in a Presidentially-proclaimed environmentally critical area.


On 15 March 2008, DAR issued a Memorandum suspending the processing and approval of all land use conversion applications effective immediately.

Having exhausted all administrative remedies, CREBA decided to seek relief via a petition before the Supreme Court. In its decision in G.R. No. 183409, the Court dismissed the petition, stating: “Memorandum No. 88 was issued upon the instruction of the President in order to address the unabated conversion of prime agricultural lands for real estate development because of the worsening rice shortage in the country at that time. Such measure was made in order to ensure that there are enough agricultural lands in which rice cultivation and production may be carried into. The issuance of said Memorandum No. 88 was made pursuant to the general welfare of the public, thus, it cannot be argued that it was made without any basis.”

The fight for equitable land access goes on.

Perhaps a more enlightened Congress will act more sensibly, having seen the damage wrought by the DAR’s rules upon the economy and the non-peasant population of the country, particularly the more than 6 million families without homes of their own.