July 2, 1996

DAR OPINION NO. 48-96

Director Santiago R. Obien

Phil. Rice Research Institute

Maligaya, Muñoz

Nueva Ecija

Dear Director Obien:

This refers to your request for advice regarding the acquisition by the Philippine Rice Research Institute of 4 parcels of land covered by Emancipation Patents which were awarded as follows:

                                                                                                   Date of EP      Date of EP

Name of tenant/beneficiary            Title No.               Area          Issuance     Registration

1.      Guillermo Salvatierra           TCT No. EP-90899           8,212            8/15/94          10/4/94

2.      Guillermo Salvatierra           TCT No. EP-67398          23,049            10/5/90          12/11/92

3.      Emilio Dacayo                     TCT No. EP-90901           4,505            8/15/94          10/3/94

4.      Emilio Dacayo                     TCT No. EP-67399           1,082            11/5/90          12/11/92

                                                   Total Area                           36,848  sq. m.

                                                                                       ============

You state that Philippine Rice Research Institute needs the land to expand its seed production areas to produce more badly needed seeds, and for research and development purposes; that areas adjacent to its existing areas are preferred for reasons of efficiency; that all areas around Philrice, however, are covered by EPs, thus Philrice has no other option but to negotiate with EP holders for more land. You further state that Philrice has an approved budget of 4 million for the acquisition of said lands, which is more than enough to purchase the land outright; that the restriction on the EPs relative to the transfer thereof prevents Philrice from purchasing the same; and that you have been advised by your lawyers to instead rent the properties, with option to purchase the same.

It is submitted that there exists no legal impediment for the purchase by Philrice of subject farmlots. Considering that Philrice is a government institute under the Department of Agriculture, and the intention is to use the farmlots as seed production areas and for research and development purposes, and the fact that transfers in favor of the government are excepted from the prohibition, the same may be effected. However, since the farmer is under obligation to pay the full compensation on the land as well as his other obligations thereon, the DAR clearance for the registration of the transaction shall be issued only if the following documents are submitted:

1.         Certificate of Full Payment of Amortizations to be issued by the LBP on lands financed by the said bank or by DAR in the case of lands covered by the Voluntary Land Transfer/Direct Payment Scheme (VLT/DPS);

2.         Certification regarding Full Payment of Irrigation Fees (NIA);

3.         Certification regarding Loans (equipment), production, etc. (DAR/LBP);

4.         Tax Clearance (Treasurer's Office); and

5.         Affidavit of the transferor stating that the subject property has no pending case at the DARAB or any of its Adjudicators, the DAR, the Courts or at the Office of the President.

We advise that a written request to transfer their farmlots be filed by the tenant-beneficiaries with the DAR Muñoz, Nueva Ecija, following the procedures outlined in DAR AO 8, Series of 1995 (copy attached). Since Philrice is a government entity and the land will be used as a seed production area and for research and development purposes, the requirements under III-B(2) of said AO are inapplicable and need not be complied with.

We hope to have clarified matters with you.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-Undersecretary
LAFMA