September 16, 1994

DAR OPINION NO. 74-94

Mayor Elizabeth T . Salcedo

Municipality of Concepcion

Province of Iloilo

Dear Mayor Salcedo:

This has reference to your letter of 22 August 1994 requesting that the Municipality of Concepcion be exempted from the requirement of DAR Clearance for the registration of the sale in its favor of a 23.6855-hectare foreclose property of PCI. You state that the Municipality intends to use said landholding as site for the Municipal Nursery, National High School, Agro-Forestry projects, income-generating projects, tourism projects and pro-poor projects. In effect, you are requesting that said property be exempted from CARL coverage on the ground that the same will be acquired by the Municipal Government for its project.

Section 71 of RA 6657 (the Comprehensive Agrarian Reform Law or CARL) provides that foreclosed assets of banks are subject to acquisition as prescribed under Section 16 of said Act. This means that the 23.6855-hectare foreclosed asset of PCI falls under CARL coverage and is subject to redistribution to beneficiaries. The transfer of the property in favor of government entity, specifically the Municipality of Concepcion does not constitute a ground for its exemption from CARL coverage. However, we are aware that under Section 19 of RA 7160 (The Local Government Code), a local government unit like Concepcion may exercise the power of eminent domain and believe that expropriation of the property will be more expedient under the circumstances. There would then be no longer any need for the request DAR exemption nor for conversion clearance for the property.

Very truly yours,

(SGD.) HECTOR D. SOLIMAN
Assistant Secretary
Legal Affairs Office

Copy furnished:

OSEC

Doc. No. 94080692

The Regional Director

DAR Region VI, Iloilo City

The PARO

DAR, Iloilo

The MARO

DAR, Concepcion, Iloilo