Govt eases restrictions on agri free patents
Farmers holding agricultural free patents may now sell their land or use it as collateral after President Duterte signed a measure that removed Commonwealth-era restrictions on lands covered by the Public Land act.
The President signed the Agricultural Free Patent Reform Act, or Republic Act 11231, on February 22. Under RA 11231, agricultural public lands alienated or disposed in favor of qualified public land applicants shall not be subject to restrictions imposed on the registration, acquisition, encumbrance, transfer and conveyance of land covered by free patents under the Public Land Act.
“Agricultural free patent shall… not be subject to any restriction on
encumbrance or alienation,” read a portion of the newly signed law, a copy of which was obtained by the BusinessMirror.
The law shall also have a retroactive effect. Any restriction regarding acquisitions, encumbrances, conveyances, transfers or dispositions imposed on agricultural free patents issued under Section 44 of Commonwealth Act 141, as amended, before the effectivity of RA 11231 are lifted.
The Foundation for Economic Freedom (FEF) welcomed the pas- sage of the law, saying this will benefit more than 2.5 million agricultural patent landowners and spur agricultural lending.
“It will facilitate transactions in the rural land market that will lead to the highest and best use of agricultural land,” FEF said in a post on its official Facebook page.
FEF said the restrictions prohibit land owners from selling and mortgaging their land within the first five years of the patent grants and gives original landowners the option to buy back the property within five years from the date of sale.
“The latter restriction has made agricultural patents unbankable inasmuch as banks do not want to hold a property for five years before its disposition,” read the statement FEF issued after the ratification of the bicameral report on the measure.
Johnson Melo, director of Rural Bankers Associations of the Philippines, also said in the same statement that lifting the restrictions on agricultural free patents will also improve access to credit of farmers, as well as micro, small and medium enterprises.
“It will empower millions of free patent holders who, prior to this, could not freely use their land as capital asset due to the restrictions,” the statement read.
A study by FEF published in 2016 estimated that agricultural land/asset covered by the five-year restriction amounts to at least P387 billion. This amount may even reach trillions of pesos if patents prior to 1980 are included, according to the study.