September 2, 2003
DAR OPINION NO. 16-03
Gregorio Ma. Araneta III
President and CEO
Araneta Properties, Inc.
21st, Floor Citibank Tower
Valero cor. Villar Sts., Salcedo Village
Makati City
Dear CEO Araneta:
This refers to your letter (with attachments) requesting for a certification as to the validity and effectivity of the Exemption Order from Comprehensive Agrarian Reform Program (CARP) coverage dated 09 October 1996 issued by DAR in favor of Carmel Farms, Inc. AaDSTH
In your letter, you stated, among others, that an order was issued by DAR Regional Office No. 03 granting the application for exemption of Carmel Farms, Inc.; that at present, said property has been transferred to Real Estate Company-Araneta Properties, Inc.; that you have invited several local and foreign investors in developing a New Township in San Jose del Monte, Bulacan; that your joint venture partners are, however, questioning the validity of the exemption order; that you believe the exemption certificate/order is a valid document and does not warrant an application for a conversion certificate/order since the city government has reclassified the area as residential-commercial by virtue of a reclassification issued by the city council; that the city council has accepted the exemption certificate/order and, thus, the reclassification; and that you are in a stage of preparing to develop the property for a mix-use residential development.
Relating to the issue posed in your letter, pertinent are the following provisions of DAR guidelines and policy pronouncements:
1. Item II.F of DAR Administrative Order No. 13, series of 1990 (Rules and Procedures Governing Exemption of Lands From CARP Coverage Under Section 10, R.A. No. 6657)
"II. POLICIES
In the application of the aforecited provisions of law, the following guidelines shall be observed:
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F. In all cases, the DAR shall conduct a continuing review and verification of exempted lands to ascertain which of the areas declared exempt or which portions thereof are no longer actually, directly and exclusively used and found necessary for said purpose. If the purpose for the grant of exemption no longer exists, the area or portion involved shall be covered under CARP pursuant to the guidelines on land acquisition and distribution." (emphasis supplied)
2. Item I, 2nd paragraph of DAR Administrative Order No. 4, series of 2003 (2003 Rules on Exemption of Lands from CARP Coverage under Section 3 (c) of Republic Act No. 6657 and Department of Justice (DOJ) Opinion No. 44, Series of 1990)
"I. PREFATORY STATEMENT
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Department of Justice Opinion No. 44, Series of 1990, (or "DOJ Opinion No. 44-1990" for brevity) and the case of Natalia Realty versus Department of Agrarian Reform (12 August 1993, 225 SCRA 278) opines that with respect to the conversion of agricultural lands covered by R.A. No. 6657 to non-agricultural uses, the authority of the Department of Agrarian Reform (DAR) to approve such conversion may be exercised front the date of its effectivity, on 15 June 1988. Thus, all lands that are already reclassified as commercial, industrial or residential before 15 June 1988 no longer need any conversion clearance." (emphasis supplied)
3. Section 3.1. of DAR Administrative Order No. 1, series of 2002 (2002 Comprehensive Rules on Land Use Conversion)
"Section 3. Applicability of Rules. — These guidelines shall apply to all applications for conversion, from agricultural to non-agricultural uses or to another agricultural use, such as:
3.1. Conversion into residential, commercial, industrial, institutional and other non-agricultural purposes."
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3.4. Conversion of agricultural lands or areas that have been reclassified by the LGU of by way of a Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of R.A. No. 6657 on 15 June 1988, pursuant to Section 20 of R.A. No. 7160, and other pertinent laws and regulations and are to be converted to such uses. However, for those reclassified prior to 15 June 1988, the guidelines in securing an exemption clearance from the DAR shall apply." (emphasis supplied)
4. 3rd to the last paragraph, DAR Opinion No. 3, series of 2003
"Moreover, it bears noting that aforesaid exemption does not include or contemplate exemption order or clearances issued not in pursuance of DOJ 44 or Section 3 (c) of R.A. No. 6657 in relation to DAR Administrative Order No. 6, series of 1994 such as those exempted pursuant to DAR Administrative Order No. 13, series of 1990 (Section 10, R.A. No. 6657 as amended), DAR Administrative Order No. 9, series of 1993 (Livestock, Poultry and Swine) and DAR Administrative Order No. 3, series of 1995 (Fishponds and Prawn Farms). The lands under the latter-enumerated exemptions may revert to agricultural if they are no longer actually, directly and exclusively used for the purpose for which they were exempted. Thus, they would still necessitate a conversion clearance should they later be converted to other non-agricultural uses such as residential, commercial or industrial." (emphasis supplied) EHaCID
5. Penultimate paragraph of DAR Opinion No. 11, series of 2001
"It should be emphasized that DOJ opinion No. 44, series of 1994 (sic) is the only ground for exemption which does not require a conversion order/clearance. All other grounds for CARP-exemption of agricultural land provided under R.A. No. 6657 always require a conversion order/clearance whenever its use is changed from agricultural to non-agricultural." (emphasis supplied)
The aforequoted provisions and policy pronouncements are anchored on the spirit and intent of the law to cover all agricultural lands suitable for agriculture. Moreover, since R.A. No. 6657 is a social welfare legislation, the rules of exemptions and exclusions must be interpreted restrictively and any doubt as to the applicability of the law should be resolved in favor of inclusion.
Thus, should the subject land be converted into non-agricultural uses such as residential, commercial or industrial, the provisions of DAR Administrative Order No. 1, series of 2002 shall apply. Hence, application for conversion shall still be required.
Accordingly, your request for certification as to the validity and effectivity of the subject exemption order, even assuming arguendo that it will be granted, will not operate to do away with the requisite application for conversion and DAR conversion order.
We hope to have clarified the matter and please be guided accordingly.
Very truly yours,
(SGD.) RICARDO S. ARLANZA
Undersecretary for Policy, Planning
and Legal Affairs Office