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DOJ OPINION NO. 033, s. 2007
June 21, 2007


Hon. Jeffrey M. Galan
Department of Agrarian Reform
DAR Bldg., Elliptical Road, Diliman
Quezon City


   Sir :

This has reference to your request for opinion relative to the financial accounting treatment of all collections and income derived from the irrigation projects of National Irrigation Administration (NIA) being implemented under the Comprehensive Agrarian Reform Program (CARP) and funded by the Agrarian Reform Fund (ARF) and other sources.    IcHTED

You state that NIA, one of the CARP implementing agencies which receives regular budget allocation for the construction and/or rehabilitation of communal irrigation projects/system, maintains that under its charter, R.A. No. 3610, it is authorized to recover funds or portions thereof expended for the implementation of the projects which fund shall accrue to the NIA's operating capital; that the said funds include the amortization payments as irrigation fees made by beneficiaries; and that NIA OIC Simeon S. Basuil claims that NIA's charter prevails over R.A. 6657 or R.A. 8532, the former being a special law and the latter law is a general statute applying to all the people with equal force.

You also say that the Presidential Agrarian Reform Council (PARC) Secretariat, however, maintains the contrary view anchored on the following:

1.)     The CARP Law, R.A. 6557, as amended by R.A. 8532, is a special law dealing on specific subject that has been fittingly enshrined in the Constitution. Every government of the post martial law republic has pre-occupied itself with agrarian reform, making it the centerpiece or cornerstone of the government's program for development. Hence, the paramount significance being placed on the program cannot be overemphasized. This being so, all efforts directed towards the realization of the program should not be thwarted.

2.)     Section 63 of R.A. 6657 provides for the creation of the Agrarian Reform Fund for the purpose of implementing the Agrarian Reform Program. It is a reiteration of Section 2 Proclamation No. 131, to wit:    AHEDaI

"SEC. 63.      Funding Source. — The initial amount needed to implement this Act for the period of ten (10) years upon approval hereto shall be funded from the Agrarian Reform Fund created under Sections 20 and 21 of the Executive Order No. 229. . . ."

Proclamation No. 131, Section 2. Agrarian Reform Fund. There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and receipts of the ill-gotten wealth received through the Presidential Commission on Good Government and such other sources as government may deem appropriate. The amounts collected and accruing to this special fund shall be considered automatically appropriated for the purpose authorized in this Proclamation.

3.)     Section 1(d) of Republic Act 8532, amending R.A. 6657 (CARP Law), provides among others, that "all income and collections arising from agrarian operations, projects and programs of CARP implementing agencies shall be among the sources of funds or appropriation in implementing CARP.

4.)     Further, R.A. 8532 is a much later law than NIA's Charter. The provision in the former law would, therefore, constitute as an exception to the provision of R.A. 3601 relative to the accrual of the said agency's collection to its own funds. It is maintained that the said provision in NIA's charter would only refer to collection of the payments from projects funded out from its own regular operation and would not refer to other projects, funding for which come from other sources as the ARF and even those Official Development Assistance (ODA) on account of CARP. Meanwhile, R.A. 8532 is explicit when it provided that the CARP's funding sources shall come from, among others, "all income and collections arising from agrarian reform operations." This being the case, the amortization payments made by the beneficiaries of ARF-funded projects should accrue to the ARF.    DEcTIS

In view thereof, you maintain that R.A. 8532 should prevail over NIA's charter and that NIA must accordingly remit all income and collection arising from agrarian reform operations to the Bureau of Treasury for crediting under the account of ARF. Hence, the instant request.

It appearing that the subject matter of our query involves a controversy between the NIA and the DAR, both government agency, arising from the interpretation and application of the provisions of Republic Act No. 6657, as amended by R.A. 8532 and 3610, in relation to Proclamation No. 131, the same is matter proper for administrative settlement or adjudication under Presidential Decree No. 242, 1 as adopted in Chapter 14, Book IV of Executive Order No. 242, 2 which reads:

Section 66.    How Settled. — All disputes, claims and controversies, solely between or among departments, bureaus, offices, agencies and instrumentalities of the National Government, including government-owned or controlled corporations, such as those arising from the interpretation and application of statutes, contracts or agreements, shall be administratively settled or adjudicated in the manner provided in this Chapter. This Chapter shall, however, not apply to disputes involving the Congress, the Supreme Court, the Constitutional Commissions, and local governments.

Section 67.    Disputes Involving Questions of Law. — All cases involving only questions of law shall be submitted to and settled or adjudicated by the Secretary of Justice as Attorney-General of the National Government and as ex-officio legal adviser of all government-owned or controlled corporations. His ruling or decision thereon shall be conclusive and binding on all parties concerned.

Section 68.    Disputes Involving Questions of Fact and Law. — Cases involving mixed questions of law and fact or only factual issues shall be submitted to and settled or adjudicated by:

(1)     The Solicitor General, if the dispute, claim, or controversy involves only departments, bureaus, offices and other agencies of the National Government as well as government-owned or controlled corporations or entities of whom he is the principal law officer or general counsel; and

(2)     The Secretary of Justice, in all other cases not falling under paragraph (1).    TcSAaH

As matter of procedure, the petition for administrative settlement of disputes or controversy shall be signed by the chief of the office, bureau or agency concerned, copy furnished the other party as respondent. The petition shall state the name(s) and addresses of all the parties, the legal question(s), factual issues and all the relief(s) sought.

For your reference and guidance, enclosed herewith, is a copy of this Department's Administrative Order No. 121 dated July 25, 1973, which provides for the rules concerning the administrative settlement or adjudication of cases under P.D. 242, as adopted in the Administrative Code of 1987. 3

Very truly yours,




  1.       Prescribing the Procedure for Administrative Settlement or Adjudications of Disputes, Claims and Controversies Between or Among Government Offices, Agencies and Instrumentalities, Including Government-Owned or Controlled Corporations, and for other Purposes.

  2.       Administrative Code of 1987.

  3.       Secretary of Justice Opinion Nos. 9 and 29, s. 2006.


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

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