A SUBSTITUTE bill setting the terms for the condonation of debt taken on by agrarian reform beneficiaries (ARB) was approved in committee on Wednesday.
The substitute measure allows for the condonation of all unpaid amortization and interest, including penalties and surcharges, on loans obtained under the Comprehensive Agrarian Reform Program or other programs.
Beneficiaries are to be relieved of the obligation to compensate landowners, with the government taking on the responsibility via the Agrarian Reform Fund, to be dispensed via the Land Bank of the Philippines.
The estimated cost to the government of the condonation exercise is P58 billion, said Albay Rep. Jose Ma. Clemente S. Salceda during a hearing of the House committee on agrarian reform.
The committee report was forwarded to the ways and means committee, which is chaired by Mr. Salceda, for review of the provisions involving tax.
“Condonation of ARB debt could result in increase in productivity of between 23.8% and 38.3% if productivity-enhancing interventions are increased among the lands condoned,” he said in a statement on Wednesday.
“I commit that the House committee on ways and means will hear the tax provisions, without delay. We will have this on third reading before the end of the month. We will comply with the President’s request that we pass this measure by the end of the year,” Mr. Salceda said.
Agrarian Reform Committee Chairman and Ifugao Rep. Solomon R. Chungalao said such a condonation would allow beneficiaries to mortgage the land 10 years after the law comes into force.
Mr. Chungalao was responding to a proposal by Albay Rep. Edcel C. Lagman to prohibit ARBs from selling property received under the agrarian reform program.
The Comprehensive Agrarian Reform Law of 1988 requires beneficiaries to take on a 30-year mortgage on the land at 6% interest.
In September, President Ferdinand R. Marcos, Jr. ordered one-year moratorium on ARB amortizations. — Matthew Carl L. Montecillo