MALACAÑANG

Manila

PRESIDENTIAL DECREE No. 27 October 21, 1972

DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL,

In as much as the old concept of land ownership by a few has spawned valid and legitimate grievances
that gave rise to violent conflict and social tension,

The redress of such legitimate grievances being one of the fundamental objectives of the New
Society,

Since Reformation must start with the emancipation of the tiller of the soil from his bondage,

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the

This shall apply to tenant farmers of private agricultural lands primarily devoted to rice and corn under
a system of sharecrop or lease-tenancy, whether classified as landed estate or not;

The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a
portion constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if
irrigated;

In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner
is cultivating such area or will now cultivate it;

For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to
this Decree, the value of the land shall be equivalent to two and one-half (2 1/2) times the average
harvest of three normal crop years immediately preceding the promulgation of this Decree;

The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid
by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations;

In case of default, the amortization due shall be paid by the farmers' cooperative in which the defaulting
tenant-farmer is a member, with the cooperative having a right of recourse against him;

The government shall guaranty such amortizations with shares of stock in government-owned and
government-controlled corporations;

No title to the land owned by the tenant-farmers under this Decree shall be actually issued to a tenant-
farmer unless and until the tenant-farmer has become a full-fledged member of a duly recognized
farmer's cooperative;
Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall
not be transferable except by hereditary succession or to the Government in accordance with the
provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulations;

The Department of Agrarian Reform through its Secretary is hereby empowered to promulgate rules
and regulations for the implementation of this Decree.

All laws, executive orders, decrees and rules and regulations, or parts thereof, inconsistent with this
Decree are hereby repealed and or modified accordingly.

Done in the City of Manila, this 21st day of October, in the year of Our Lord, nineteen hundred and
seventy-two.

MALACAÑANG
Manila

LETTER OF INSTRUCTIONS NO. 474

TO: The Secretary of Agrarian Reform

WHEREAS, last year, I ordered that small landowners of tenanted rice/corn lands with areas of less
than twenty-four hectares but above seven hectares shall retain not more than seven hectares of such
lands except when they own other agricultural lands containing more than seven hectares or lands
used for residential, commercial, industrial or other urban purposes from which they derive adequate
income to support themselves and their families;

WHEREAS, the Department of Agrarian Reform found that in the course of implementing my directive
there are many landowners of tenanted rice/corn lands with areas of seven hectares or less who also
own other agricultural lands containing more than seven hectares or lands used for residential,
commercial, industrial or other urban purposes where they derive adequate income to support
themselves and their families;

WHEREAS, it is therefore necessary to cover said lands under the Land Transfer Program of the
government to emancipate the tenant-farmers therein.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order the
following:

1. You shall undertake to place under the Land Transfer Program of the government pursuant to
Presidential Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less belonging
to landowners who own other agricultural lands of more than seven hectares in aggregate areas or
lands used for residential, commercial, industrial or other urban purposes from which they derive
adequate income to support themselves and their families.

2. Landowners who may choose to be paid the cost of their lands by the Land Bank of the Philippines
shall be paid in accordance with the mode of payment provided in Letter of Instructions No. 273 dated
May 7, 1973.

Done in the City of Manila, this 21st day of October in the year of Our Lord, nineteen hundred and
seventy-six.
 MALACAÑANG
Manila

PRESIDENTIAL DECREE No. 1040 October 21, 1976

REITERATING THE PROHIBITION AGAINST AGRICULTURAL SHARE TENANCY IN ALL

WHEREAS, under the provisions of the Code of Agrarian Reforms, agricultural share tenancy in
private agricultural lands covered by Presidential Decree No. 27 with the exceptions and/or
qualifications provided for therein, has been declared contrary to public policy and automatically
converted into agricultural leasehold;

WHEREAS, Presidential Decree No. 2 proclaimed the whole country as a land reform area;

WHEREAS, notwithstanding such provisions in the Code of Agrarian Reforms and Presidential Decree
No. 2, many landowners landholders, civil law lessees, legal possessors, usufructuaries of tenanted
private agricultural lands, including persons acting for and in their behalf still insist that the cropsharing
system govern the tenancy relationship between them and their tenants;

WHEREAS, the penal provisions of the Code of Agrarian Reforms are inadequate to enforce full
compliance with the declared policy on leasehold, and therefore, it is imperative to strengthen said
penal provisions by including therein, landholders, civil law lessees, legal possessors, usufructuaries,
or persons acting for and in their behalf, and by imposing stiffer penalties;

WHEREAS, the continuation of the feudal agricultural share tenancy system adversely impedes and
obstructs the implementation of the Agrarian Reform Program of the New Society.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the

Section 1. The leasehold system shall govern the relation between the landowner, landholder, civil
law lessee, legal possessor, usufructuary, or any person acting for and in behalf, and the tenant-farmer
in all tenanted private agricultural lands that have come under or are covered by and subject to the
provisions of Presidential Decree No. 27.

Section 2. In all cases covered by Section 1 hereof, the existence of an actual sharing arrangement
between the landowner, landholder, civil law lessee, legal possessor, usufructuary, or any person
acting for and in his behalf, and his tenants shall give rise to the presumption that such landowner,
landholder, civil law lessee, legal possessor, usufructuary or person has continued and maintained, or
has entered into a share tenancy contract or relationship with the tenant.

Section 3. The landowner, landholder, civil law lessee, legal possessor, usufructuary, or any person
acting for and in his behalf, shall be given one agricultural year from the promulgation of this Decree
before the penal provisions hereof shall operate against him. In case the tenant is alleged to be
unwilling to accept leasehold, then the landowner, landholder, civil law lessee, legal possessor,
usufructuary or any person acting for and in his behalf, shall report the matter to the Department of
Agrarian Reform which shall immediately give effect to the provisions of all laws governing tenancy,
making them retroactive whenever necessary and proper to comply with said laws.
Section 4. The Department of Agrarian Reform is hereby empowered to promulgate rules and
regulations to implement this Decree.

Section 5. The Secretary of National Defense shall assist the Secretary of Agrarian Reform in the
implementation of this Decree.

Section 6. Any landowner, landholder, civil law lessee, legal possessor, usufructuary, or any person
acting for and in behalf, who shall violate Section 1 of this Decree by continuing and maintaining the
share tenancy system, or by entering into a share tenancy contract or relationship with another, as
tenant, shall, upon conviction, suffer the penalty of prision mayor or a fine ranging from P5,000 to
P10,000, or both, in the discretion of the court. In the case of juridical persons, the manager or the
person who has charge of the management or administration of the property, or in his absence the
person acting in his stead, shall be liable under this Section.

Section 7. Violations of the penal provision of this Decree shall exclusively be cognizable by the
Courts of Agrarian Relations.

Section 8. All provisions of existing laws, decrees, orders, and rules and regulations inconsistent
herewith are hereby repealed or modified accordingly.

Section 9. This Decree shall take effect immediately.

Done in the City of Manila, this 21st day of October in the year of Our Lord, nineteen hundred and
seventy-six.