Article 122Labor and Agrarian Laws and Social Legislation, p. 122

LABOR LAWS AND SOCIAL LEGISLATION SPECIAL LAWS AND IMPLEMENTING RULES AND REGULATIONS

shall be paid from a special guaranty fund to be set up by

the Government, to guarantee the obligation of the Bank,

and established in accordance with this Section and,

thereupon, to the extent of the amounts so paid, the

Government of the Republic of the Philippines shall

succeed to all rights of the holders of such bonds,

debentures or other obligations: Provided, however , That

the Government shall pay into the guaranty fund the sum

of five million pesos each year until the cumulative total

of such guaranty fund is no less than twenty per cent of

the outstanding net obligation of the Bank at the end of

any calendar year.

The special guaranty fund shall be administered by the

Central Bank of the Philippines in the manner most

consistent with its charter. For the purpose of such funds,

the sum of five million pesos is hereby appropriated

annually out of any moneys in the National Treasury not

otherwise appropriated, until the total amount of one

hundred

million

pesos

shall

have

been

attained

therefrom. (Amending R.A. No. 3844 As Amended (Code

of Agrarian Reform), Presidential Decree No. 251, [July 21,

1973])

Apart

from

the

foregoing

which

pertains

to

the

twenty-five years bonds previously issued by the bank

and pursuant to its role as the financial intermediary of

the Comprehensive Agrarian Reform Program , mandated

under Republic Act No. 6657 , the National Government

through the Presidential Agrarian Reform Council (PARC),

shall provide and/or allocate from the existing Agrarian

Reform

Fund or other unappropriated funds of the

National

Treasury

an

amount

sufficient

to

pay

all

maturing bonds, debentures and all other obligations

together with interest due thereon issued and/or incurred

by

the

bank

as

compensation

to

the

landowners

including expenses related thereto. In the apportionment

and distribution of funds from the Agrarian Reform Fund,

the

PARC

shall

give

priority and preference to the

payment

of

landowner

compensation

in

the

chronological sequence or order at which the voluntary

offers of sale were made by the landowners. (Amendment

to

R.A.

No.

3844 (Code of Agrarian Reform in the

Philippines), Republic Act No. 7907, [February 23, 1995])

Section 79. Receipts of Deposits - The Bank, subject to

the provisions of the General Banking Act , as amended, is

authorized to receive demand, savings and time deposits.

The Secretary of Finance, the National Treasurer and his

authorized representatives, city and municipal treasurers

as well as custodians of funds or those belonging to

government-owned or controlled corporations, may be

authorized by the Monetary Board to make and actually

maintain deposits of any government or corporate funds

with the Land Bank.

Section 79-A . Administration of Agricultural Guarantee

Funds .

—

All

agricultural

guarantee

funds

shall

be

converted into a trust fund to be administered by the

Bank. (Amending R.A. No. 3844 As Amended (Code of

Agrarian Reform), Presidential Decree No. 251, [July 21,

1973])

Section 80. Modes of Payment - The Bank shall finance

the acquisition of farm lots under any of the following

modes of settlement:

1. Cash payment of 10% and balance in 25-year

tax-free 6% Land Bank bonds;

2. Payment of 30% in preferred shares of stock

issued by the Bank and balance in 25-year tax-free 6%

Land Bank bonds;

3. Full guarantee on the payment of the fifteen

(15) equal annual amortizations to be made by the

tenant/farmer;

4.

Payment

through

the

establishment

of

annuities or pensions with insurance;

5. Exchange arrangement for government stocks

in

government-owned

or

controlled

corporations

or

private corporations where the government has holdings;

6. Such other modes of settlement as may be

further adopted by the Board of Directors and approved

by the President of the Philippines.

7. At least sixty percent (60%) of the proceeds of

the sale of the stocks, securities and other assets of the

government now under administration by the Assets

Privatization Trust (APT) shall be transferred to the Land

Bank of the Philippines for use in the payment of

agricultural

lands

acquired

pursuant

to

Presidential

Decree No. 27 and Republic Act No. 6657. (Amendment to

R.A.

No.

3844

(Code

of

Agrarian

Reform

in

the

Philippines), Republic Act No. 7907, [February 23, 1995])

In the event there is existing lien or encumbrance

on

the

land

in

favor

of

any

Government

lending

institution at the time of acquisition by the Bank, the

landowner shall be paid the net value of the land (i.e., the

value of the land determined under Proclamation No. 27

minus

the

outstanding balance/s of the obligation/s

secured

by

the

lien/s

or

encumbrance/s),

and

the

outstanding balance/s of the obligations to the lending

institution/s shall be paid by the Land Bank in Land Bank

bonds or other securities; existing charters of those

institutions to the contrary notwithstanding. A similar

settlement may be negotiated by the Land Bank in the

case of obligations secured by liens or encumbrances in

favor of private parties or institutions.

Whenever the Bank pays the whole or a portion of the

total cost of farm lots, the Bank shall be subrogated by

reason thereof, to the right of the landowner to collect

and receive the yearly amortizations on farm lots or the

amount

paid

including

interest

thereon,

from

tenant/farmers in whose favor said farm lots had been

transferred pursuant to Presidential Decree No. 27, dated

October 21, 1972 .

The profits accruing from payment shall be exempt from

tax

on

capital

gains. (Amendments

to

RA

No.

3844

(Agricultural Land Reform Code), Republic Act No. 6389,

[September 10, 1971], further amended by Presidential

Decree No. 251, [July 21, 1973])

Section 81. Capital - The authorized capital stock of the

Bank shall be nine billion pesos, divided into seven

hundred and eighty million common shares with a par

value of ten pesos each, which shall be fully subscribed by

the Government, and one hundred and twenty million

preferred shares with a par value of ten pesos each, which

shall be issued in accordance with the provisions of

Sections seventy-seven and eighty-three of this Code.

These preferred shares shall be non-voting. The Board,

upon the recommendation of the Secretary of Finance

and with the approval of the President of the Philippines,

may increase the capitalization of the Bank up to such an

amount as may be necessary to attain the objectives of

this

Act.

The

total

capital

stock

subscribed

by the

Government shall be paid by the Agrarian Reform Fund

Commission created under Presidential Decree No. 85 ,

hereinafter referred to as the "Commission," as follows:

four hundred million pesos within sixty (60) days from the

approval of this Decree, and at least one hundred million

pesos every year thereafter until the total subscription of

the Government is fully paid: Provided , That the common

and preferred shares of the Bank which have been issued,

including those already subscribed, shall form part of the

increased capitalization of the Bank: Provided, further ,

That the additional common shares subscribed by the

Government shall be paid by the bank through its

banking operations in an amount equivalent to at least

ten percent (10%) of its annual net income or any form of

retained earnings until fully paid: Provided, finally , That

the dividends due the Government shall first be paid.

(Amending R.A. No. 3844 As Amended (Code of Agrarian

Reform), Presidential Decree No. 251, [July 21, 1973], further

amended by Republic Act No. 7907, [February 23, 1995])

Section 82. Government Shares - All shares of stock in

the Bank subscribed or owned by the government shall

not be entitled to participate in the income earned by the

Bank from its investment and other operations, whether

in the form of cash or stock dividends or otherwise.

© Compiled By RGL

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