October 19, 1995
DAR OPINION NO. 65-95
Atty. Noe T . Laguindam
DCLaw Bruno Gempesaw St.
Davao City
Dear Atty. Laguindam:
This has reference to your request for clarification on certain queries relative to R.A. 7881, to wit:
1. Is there any existing implementing rules and regulations enacted to render effective the implementation of R.A. No. 7881, subsequent to its enactment on February 20, 1995?
2. a) Is the provision of Sec. 6 of R.A. 7881 tantamount to allowing banks to make sales, transfers or conveyances of their agricultural lands to private individuals or entities?
b) What does the phrase "is made necessary" in Section 6 mean and when is it applicable?
Your first query is answered in the affirmative. DAR Administrative Order No. 3, Series of 1995 provides the guidelines on the exemption/exclusion of fishpond and prawn farms from the coverage of the Comprehensive Agrarian Reform Law (CARL), pursuant to R.A. No. 6657, as amended by R.A. No. 7881. DAR A.O. No. 4, Series of 1995 provides the supplemental guidelines to Administrative Order No. 12, Series of 1994 on conversion of agricultural lands to non-agricultural uses, pursuant to Republic Act No. 7881 (copy of guidelines attached for your reference).
Anent your second query, please be informed that the net effect of Sec. 6 of RA 7881 is to allow the government financing institutions to dispose of their properties under the General Banking Act. However, since said properties fall under CARP coverage, the same shall still be acquired by the government through the DAR for distribution to qualified farmer-beneficiaries as mandated under R.A. 6657.
The phrase "is made necessary" in Sec. 6 of R.A. 7881 refers to the compulsory transfer of foreclosed assets pursuant to the provision in the last paragraph of Sec. 25 of R.A. No. 337 (the General Banking Act) that no bank shall hold the possession of any real estate under mortgage or trust deed, or the title and possession of any real estate purchased to secure any debt due to it, for a longer period than five years.
We hope to have enlightened you on the matter.
Very truly yours,
(SGD.) HECTOR D. SOLIMAN
Assistant Secretary Legal Affairs Office
Copy furnished:
Dir. Alejo V. Duque
ARDO Rodolfo T. Inson
DAR Region XI
Quimpo Ave., Ecoland
Davao City