September 27, 1995
DAR OPINION NO. 55-95
Atty. Gerardo A. Noveras
Chief, Legal Assistance Division
DAR, Baler, Aurora
Dear Atty. Noveras:
This has reference to your letter of 14 August 1995 requesting for an opinion on the legal implication of Section 6 of R.A. 7881 in relation to Land Acquisition and Distribution.
You state that the Development Bank of the Philippines executed deeds of conveyance over foreclosed agricultural lands after the effectivity of Executive Order No. 407 and that the vendees of these lands are invoking the provision of Section 6 of RA 7881 so that title thereto may be transferred in their names and excluded from CARP coverage. You believe that RA 7881 particularly Section 6 thereof did not ipso facto allow government financial institutions to alienate foreclosed agricultural lands to private individuals and that said Section contemplates that agricultural lands may be offered and alienated as a consequence of a foreclosure sale only, not when ownership has already been transferred to government financial institutions.
As gleaned from Section 6 of R.A. 7881, government financial institutions are permitted to dispose of their properties pursuant to the General Banking Act. However, since said properties fall under CARP coverage, the same shall be acquired by the government through the DAR for distribution to qualified farmer-beneficiaries, as mandated under R.A. 6657. The same holds true as regards foreclosed assets of private banks, as expressly provided in Section 71 of CARL.
As regards the properties disposed of by DBP, title thereto may be transferred in the name of the vendees. However, the properties transferred shall still be subjected to acquisition and redistribution to qualified beneficiaries pursuant to CARL. Simply stated, although the transfer of said properties is allowed under RA 7881, the same are not excluded from CARP coverage.
Please be guided accordingly.
Very truly yours,
(SGD.) HECTOR D. SOLIMAN
Assistant Secretary Legal Affairs Office
Copy furnished:
OSEC Code No. 9580344
Development Bank of the Philippines
Baler, Aurora Branch
Atty. Carlos R. Cruz
Chief Legal Counsel
Development Bank of the Philippines
Head Office, Makati City
P.O. Box 800, Central Post Office 1200