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From the Chairman

Charlie A.V. Gorayeb

Charlie A.V. Gorayeb

Chairman of the Board, CREBA Chairman, CREBA Advocacy & Legislative Affairs Committee Honorary Consul General, Republic of Djibouti

Land Conversion Moratorium: Untimely

Many investors and businessmen, not only in the real estate and housing development sector, are confused, stuck in a push and pull decision about their projects amidst the looming 2-year moratorium that the Department of Agrarian Reform (DAR) seems bent to impose against the conversion of agricultural lands for human settlements and other non-agri uses.

Several government agencies themselves have expressed opposition against the issuance of an executive order that will effect a “blanket” moratorium which would be detrimental to the economy and cause a slow-down in the delivery of housing units, particularly to the millions of homeless poor. Such was the position taken by the National Economic and Development Authority (NEDA) and the Housing and Urban Development Coordinating Council (HUDCC). 

Now on its fourth draft, the proposed EO exempts “urgent, necessary and vital projects for national development” subject to certification from concerned government agencies. The draft, however, is clear that exemption does not automatically mean conversion.

 However, real estate developers all over the country who are members of the Chamber of Real Estate & Builders’ Associations, Inc. (CREBA) pin their hopes that the government will reconsider the proposal as a moratorium of any kind, in its lonesome, is not the end-all and be-all of an effective agrarian reform system where efforts of past administrations have fallen short.

There is no argument that prime agricultural lands must be preserved for food security. But problem is the Asian agri power of the 70’s that was once the Philippines has fallen farther and farther behind in the race to modern farming that has made Thailand and Vietnam leading net exporters of rice. Is it because there is more money in importation?  To quote Mike Enriquez in his DZBB radio program last week, grapevine sources, he said, estimate that kickbacks on imported rice runs at about 7 pesos per cavan. At 50 million imported cavans, that’s easily 350 million pesos!

CREBA fears that a moratorium will bring efforts to deliver decent and affordable homes (including other types of projects aside from just socialized housing) to at least 5.7 million homeless families to a standstill. Jobs created by housing construction are at stake; substantial taxes and other revenues from related business activities will be lost. All-in-all, the economic pump-priming effect of the industry will be suppressed. Limited space will worsen urban congestion as tension between agricultural land use and rapid urbanization escalates.

Republic Act 6657 or the Comprehensive Agrarian Reform Law recognizes that under certain conditions, some agricultural lands are better reserved for non-agri uses, such as when the land ceases to be economically feasible for agriculture or locality has become highly urbanized and the land will have a greater economic value for other purposes. Republic Act 7160 or the Local Government Code, on the other hand, provides LGUs the power to reclassify lands in accordance with their Comprehensive Land Use Plans (CLUP).

For many years, there has been misconception that the real estate sector is the “culprit” for food shortage resulting from supposed “indiscriminate” or “rampant” conversion of lands. But let us examine official figures. 

Data from the National Mapping and Resource Information Authority (NAMRIA) compiled and analyzed by CREBA showed that agri lands account for some 12.5 million hectares or 42.72 percent of the country’s total hectarage of 29.5 million.  Yet, the built-up areas – including all roads – amounted to only 741,353 hectares or 2.52 percent of the total. 

This means that lands built up or developed for various non-agricultural uses all these years hardly made a dent in the country’s agri-lands despite all government and private infrastructure nationwide. Agri-land area even expanded by 5.4 percent from 2003 to 2010.

 Thailand, Malaysia and Vietnam have bigger total land areas than us, but they all have lesser agricultural hectareage: 38.75 percent in Thailand, 24 percent in Malaysia, and 28.51 percent in Vietnam.

The solution: a rational and holistic land use policy that reflects the realities on the ground, covering all areas of land use, and factoring in all the development requirements of every sector to achieve a well-balanced and stable economy. An equitable national land use plan has long been needed by this country to be a key policy reference for all local comprehensive land use and development plans in all sectors, including housing and real estate.

CREBA, hence, calls for the passage of the proposed national land use act (NLUA) filed in Congress to put the country’s economic and physical development in order by setting 4 major categories of land uses for planning purposes – Protection, Production, Settlements, and Infrastructure.

In response to President Duterte’s clarion call for real and decisive change in society, we in the private property sector commits to do our share in building the nation, ensuring in the process “a home for every Filipino.”

Published in the Manila Bulletin March 2017

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