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March 4, 1994




Prefatory Statement

It has been determined that the effects of volcanic eruptions of Mount Pinatubo have drastically  affected our agrarian reform programs in terms of land acquisition and distribution, landowners compensation and farmers amortization.

Based on the information provided by the Philippine Institute of Volcanology and Seismology (PHIVOLCS) approximately  6.65 billion cubic meters of pyroclastic flow were deposited on the slopes of Mt.  Pinatubo since it first erupted on June 12, 1991. Out of these pyroclastic deposits, the PHIVOLCS has estimated that 50% will be washed away from Mt. Pinatubo's slopes for over a period of ten (10) years.

As of 1992, the PHIVOLCS has observed  that 37% or 1.32 billion cubic meters of pyroclastic deposits had flowed down the Mt. Pinatubo slopes and settled on low lying areas of almost all the provinces in Region III and Pangasinan in Region I, and it is estimated that this will further increase in the succeeding years.

It has been noted that there is no definite pattern in the direction of flow of lahar such that those formerly unaffected lands became depositories thereof, thus affecting their utilization and  productivity as well as their suitability  for agricultural activity.

In this connection, the Department of Agrarian Reform  (DAR) and the Land Bank of the Philippine (LBP), realizing the need to address these problems, have formulated these policy guidelines and procedures on the land acquisition, distribution, landowners compensation, as well as the concomitant, landowners compensation, as well as the concommitant obligation of the agrarian reform beneficiaries to pay for the lands awarded to them.



These rules shall cover all private agricultural lands subject of Operation Land Transfer under PD 27/EO 228, Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) under RA 6657 and all other agricultural lands transferred to the DAR pursuant to EO 407, as amended, which are affected by the Mt. Pinatubo eruptions.



Agricultural lands affected by the Mt. Pinatubo eruptions are classified into three (3) categories based on the recent NEDA Regional  Office No. 3 Geographic Information System (GIS) Database and on the Pinatubo Volcano Lahar Hazard Map, and on actual ocular inspection.

1.      Category I (actually affected)

These are agricultural lands which are covered with lahar and pyroclastic deposits, including those areas which have become silted, eroded or continuously flooded for an indefinite period of time, as a result of the Mt. Pinatubo eruptions.

2.      Category II (not yet affected)

These are agricultural  lands not falling under Category I as described above but have the possibility of being actually affected as appearing on the aforementioned map.

3.      Category III (lands covered by ashfall)

These are agricultural lands actually covered or affected by ashfall but the same remain to be productive.



1.      The acquisition and distribution of agricultural lands classified under Categories I and II shall be deferred until such time that the Department of Agrarian Reform, Land bank of the Philippines and Department of Agriculture (DA) in coordination with other competent  authorities shall have determined their suitability to agricultural production or they  shall have been declared as no longer within the endangered area.

2.      As a general rule, agricultural lands classified under Category III shall be acquired and distributed.

3.      The compensation of landowners of agricultural  lands falling under Categories I and II shall be effected under the following circumstances:

3.1       Claims approved by LBP

3.1.1   The landowner has executed a Deed of Assignment, Warranty and Undertaking (DAWU) on or before the issuance of this order; or

3.1.2   Transfer Certificate of Title was already registered in the name of RP on or before the issuance of this Order; or

3.1.3   Partial payment was already effected.

3.2       Emancipation Patents/Certificates of Land Ownership Award registered  on or before June 12, 1991 regardless of whether or not the claim folder is with the Land Bank of the Philippines.

4.      The compensation of landowners of lands falling under Category III shall continue.

5.      Payment of amortization is the major obligation and responsibility of a farmer beneficiary under the agrarian reform program. However, said payment shall be  deferred if subject landholding falls under Category  I until such time that the land becomes productive again,  without prejudice to the farmer's voluntary payment of amortization. The deferment of payment shall not take effect until after the farmer has notified Land Bank in writing of his intention of deferring payment and the same is approved by the Land Bank. In case of direct payment scheme, the amortization payment shall likewise be deferred. In such case, it shall  be the responsibility of the farmer-beneficiary concerned to notify the landowner in writing with the assistance of DAR of his intention to defer payment pursuant to this Order.

6.      Under Categories II and III, the farmer shall continue to pay the amortization until the subject landholding has been determined to be within Category I  in which case, the notice of deferment and approval thereof shall be required as discussed in the preceding policy.


Operating Procedures

1.      In addition to the usual land acquisition and distribution documentation, an ocular inspection report shall be jointly  signed and submitted by DAR, LBP, DA and BARC representatives using the annex form to determine, among others, the actual category of the landholding subject of acquisition and distribution pursuant to Item No. III.

2.      A copy of the ocular inspection report shall be posted for at least ten (10) days in the barangay hall and municipal hall where the property is located for the purpose of informing the affected landowners, farmer beneficiaries and other interested parties provided that non-resident landowner shall be notified in writing of the aforesaid ocular inspection report.

3.      Regarding the farmer beneficiary's request for the doferment of amortization pursuant to Section III-5 hereof, the LBP shall immediately act on the same upon receipt thereof and inform the farmer beneficiary concerned of the action taken thereon.


Periodic Review

These policy guidelines shall be subject to periodic review as the need arises.



This Order shall take effect ten (10) days after its publication in two (2) national newspapers of general circulation

Adopted:  4 Mar. 1994



Department of Agrarian Reform



Land Bank of the Philippines


Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines
Tel. No.: (632) 928-7031 to 39

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