December 13, 1996

DAR OPINION NO. 113-96

MR. NARCISO B. NIETO

OIC-PARO

Provincial Agrarian Reform Office

San Fernando, Pampanga

Dear PARO Nieto:

Your query stemmed from the fact that the Philippine National Bank refuses despite your request to execute the Deed of Transfer of the foreclosed properties approximately 48.6215 hectares located at Lubao and Floridablanca, Pampanga to the Department of Agrarian Reform on the ground that the properties are subject to the Sugar Restitution Law (R.A. 7202). You further state that the PNB has no more reason to withhold the transfer of the subject properties to the DAR because it is now planted to crops other than sugar and therefore the privilege extended by R.A. 7202 will no longer apply.

Anent such query relative td the acquisition and distribution of agricultural lands foreclosed by Government Financial Institutions (GFIs) as embodied in Section 7 of RA 6657 and implemented by EO 407 and R.A. 7202 (otherwise known as the Sugar Restitution Law), which provides for the condonation and restructuring of loans of sugar producers, we wish to inform you that DOJ Opinion No. 91, Series of 1995, holds the view "that sugarlands already foreclosed by GFIs as of the effectivity of R.A. No. 7202 are not excluded from the coverage of the CARL although their respective owners are entitled to the benefit of recomputation of their paid loan accounts for the purpose of determining if they had made any excess payments on interests, penalties surcharges which are condoned, and if so, for such excess payments to be credited to payment of their remaining accounts, if any or refunded to them." In fine, the DOJ concludes, that "R.A. 7202 has not repealed R.A. No. 6657 insofar as the latter covers foreclosed sugarland, referring to foreclosed land where title has fully vested in the purchaser after the lapse of the period of redemption without the previous owner having exercised his right of redemption."

It is therefore submitted that the PNB should immediately execute the Deed of Transfer in favor of the government through the DAR.

We hope to have clarified the matter with you.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-Undersecretary
LAFMA

Copy furnished:

Ms. Elizabeth Camaya

Asst. Department Manager

Special Assets Management Department

9th Floor, PNB Financial Center

Roxas Blvd., Pasay City

The Regional Director

DAR, Region II

San Fernando, Pampanga