DOJ OPINION NO. 035, s. 1988
March 2, 1988

Secretary Rainerio O. Reyes
Chairman, Government Corporate
Monitoring & Coordinating Committee
M a n i l a

S i r :

        This has reference to your request for opinion on the following queries:

1.      Is the Agrarian Reform Fund created under E.O. No. 229 the same as the Agrarian Reform Operation Fund established by E.O. 228?

2.      What is the role of the Government Corporate Monitoring and Coordinating Committee ("GCMCC") in the Agrarian Reform Program?

3.      Would the determination by the GCMCC of the amount of the Agrarian Reform Operating Fund under Section 15 of E.O. 228 mean the automatic budgetary allocation of such amount chargeable against government funds?

        The pertinent provisions of said Executive Orders read as follows:

Section 15, E.O. No. 228 —

"SEC. 15.      To ensure the successful implementation of the Agrarian Reform Program, an Agrarian Reform Operating Fund (Agrarian Fund) shall be set up by the National Government in the Land Bank. The amount of this Agrarian Fund, to the determined by the Government Corporate Monitoring and Coordinating Committee thereinafter referred to as GCMCC), will source the funding requirements for Land Bank to carry out the full implementation of this program which will include the net operating losses directly and indirectly attributable to this program and the credit facilities to farmers and farmer's organizations. Within thirty (30) days from the effectivity of this Executive Order, the Land Bank shall submit to the GCMCC its funding requirements for 1987. Thereafter, within sixty (60) days after the end of each calendar year, the Land Bank shall submit to the GCMCC an accounting of all drawings the Land Bank had made against the Fund. At the same time, it will also submit its prospective funding requirements for the current year for review and validation of the GCMCC. The amount approved by the GCMCC shall be deemed appropriated and the amount programmed for release in coordination with the Department of Finance, Budget and Management and the National Economic an Development Authority. Within thirty (30) days from GCMCC's approval, such funds shall be remitted to the Land Bank for credit to the Agrarian fund" (Emphasis supplied)

Section 20, E.O. No. 229 —

"SEC. 20.      Agrarian Reform Fund. — As provided in Proclamation No. 131 dated July 22, 1987, a special fund is created, known as 'The Agrarian Reform Fund', an initial amount of FIFTY BILLION PESOS (P50 billion) to cover the estimated cost of the CARP from 1987 to 1992 which shall be soured from the receipts of the sale of the assets of the Asset Privatization Trust (APT) and receipts of sale of ill-gotten wealth recovered through the Presidential Commission on Good Government and such other sources as government may deem appropriate. The amount collected and accruing to this special fund shall be considered automatically appropriated for the purpose authorized in this Order."

        With respect to the first query, an examination of the provisions of Executive Orders Nos. 228 and 229 reveals a distinction between the Agrarian Reform Operating Fund under the first and the Agrarian Reform Fund under the first and the Agrarian Reform Fund under the second. The Agrarian Reform Operating Fund was set up "to ensure the successful implementation of the Agrarian Reform Program" under P.D. No. 27 which covers rice and corn lands, in line with the intention of E.O. No. 228 to complete the Operation Land Transfer program and accelerate payments to the landowners of lands transferred to tenant-farmers (2nd "whereas" clause and Sec. 15, E.O. No. 228). Upon the other hand, the Agrarian Reform Fund was put up to cover the costs of the Comprehensive Agrarian Reform Program (CARP) which includes all kinds of public and private agricultural lands, regardless of tenurial arrangement and commodity produced (Sec. 1, E.O. No. 229) and the primary sources of its funding are the receipts of the sale of assets by the Asset Privatization Trust and of the sale of ill-gotten wealth by the Presidential Commission on Good Government. In other words, the Agrarian Reform Operating Fund under E.O. No. 228 is intended to finance the cost of Operation Land Transfer pursuant to P.D. No. 27, while the Agrarian Reform Fund under E.O. No. 229 is intended to cover the funding requirements of the CARP. The legislative intent to constitute two different funds for two different purposes is clear from section 27 of E.O. No. 229 which provides:

"SEC. 27.      Application of Existing Legislation Presidential Decree No. 27, as amended, shall continue to operate with respect to rice and corn lands, covered thereunder. The provisions of Republic Act No. 3844 and other agrarian laws not inconsistent with this Order shall have suppletory effect." (Emphasis supplied)

        As regard the second question, the role of the GCMCC vis-a-vis the agrarian reform program is specifically defined in Section 15 of E.O. No. 228, abovequoted, pursuant to which the said body shall determine the amount of the Agrarian Reform Operating Fund and review and validate the funding requirements of the Land Bank of the Philippines in the implementation of the agrarian reform program from year to year, the amount of which, when approved by the GCMCC, "shall be deemed appropriated" and such "amount programmed for release in coordination with the Departments of Finance, Budget and Management and the National Economic and Development Authority". It bears stress, however, that GCMCC's participation in the said program is limited to Operation Land Transfer involving rice and corn lands under P.D. No. 27, inasmuch as E.O. No. 229 is silent as to GCMCC's involvement in the Comprehensive Agrarian Reform Program.

        Anent the last query, it is believed that the answer thereto should be in the affirmative. The reason is that by express provision of law, once the GCMCC has approved the total funding requirements of the Land Bank for the implementation of the Agrarian Reform Program for a given year, the said amount is "deemed appropriated" and shall be "programmed for release". In legal contemplation, such amount is considered or adjudged as appropriated since when something is by statute "deemed" to have been done, it is to be treated as having been done (King vs. McElroy, 21 P2d 80). The legislative intent to have such amount ipso facto appropriated is additionally shown by the funding provisions of E.O. No. 229 which automatically appropriate funds needed for the Agrarian Reform Fund established thereunder (see Secs. 20 & 21). It is noted that the principle of automatic appropriation of public funds is recognized under existing law (Sec. 31, P.D. No. 1177).

        Please be guided accordingly.

Very truly yours,

SEDFREY A. ORDOÑEZ

Secretary of Justice