HISTORY OF AGRARIAN REFORM

Land Ownership in the Philippines under Spain

When the Spaniards colonized the country, they brought with them a system of pueblo
agriculture, where rural communities, often dispersed and scattered in nature, were organized
into a pueblo and given land to cultivate. Families were not allowed to own their land—the King
of Spain owned the land, and Filipinos were assigned to these lands to cultivate them, and
they paid their colonial tributes to the Spanish authorities in the form of agricultural products.
Later on, through the Law of the Indies, the Spanish crown awarded tracts of land to (1)
religious orders; (2) repartamientos for Spanish military as reward for their service; and
(3) Spanish encomenderos, those mandated to manage the encomienda or the lands given to
them, where Filipinos worked and paid their tributes to the encomendero. Filipinos were not
given the right to own land, and only worked in them so that they might have a share of the
crops and pay tribute. The encomienda system was an unfair and abusive system as
“compras y vandalas” became the norm for the Filipino farmers working the land—they were
made to sell their products at a very low price or surrender their products to the encomenderos.
From this encomienda system, the hacienda system developed in the beginning of the
nineteenth century as the Spanish government implemented policies that would fast track the
entry of the colony into the capitalist world. In the 1860s, Spain enacted a law ordering
landholders to register their landholdings, and only those who knew benefitted from this. Lands
were claimed and registered in other people's names, and many peasant families who were
"assigned” to the land in the earlier days of colonization were driven out or forced to come under
the power of these people who claimed rights to the land because they held a title. This is the
primary reason why revolts in the Philippines were often agrarian in nature.
Land Ownership in the Philippines under the Americans
Under the American rule, the Philippine Bill of 1902 provided regulations on the disposal of
public lands. A private individual may own 16 hectares of land while corporate landholders may
have 1,024 hectares. Americans were also given rights to own agricultural lands in the country.
The Philippine Commission also enacted Act No. 496 or the Land Registration Act, which
introduced the Torrens system to address the absence of earlier records of issued land titles
and conduct accurate land surveys. In 1903, the homestead program was introduced, allowing
a tenant to enter into an agricultural business by acquiring a farm of at least 16 hectares. This
program, however, was limited to areas in Northern Luzon and Mindanao, where colonial
penetration had been difficult for Americans, a problem they inherited from the Spaniards.
Landownership did not improve during the American period; in fact, it even worsened, because
there was no limit to the size of landholdings people could possess and the accessibility of
possession was limited to those who could afford to buy, register, and acquire fixed property
titles. Not all friar lands acquired by the Americans were given to landless peasant farmers.
Some lands were sold or leased to American and Filipino business interest. The system
introduced by the Americans enabled more lands to be placed under tenancy, which led to
widespread peasant uprisings, such as the Colorum and Sakdal Uprising in Luzon.

The Sakdal (or Sakdalista) Uprisingwas a peasant rebellion in Central Luzon that lasted for two
days, May 2–3, 1935. It was easily crushed by government forces then, but this historical event tells of
the social inequality brought about by issues in land ownership and tenancy in the country.
 The Filipino word sakdal means "to accuse,” which is the title of the newspaper helmed by Benigno
Ramos. He rallied support from Manila and nearby provinces through the publication, which led to the
establishment of the Partido Sakdalista in 1933. They demanded reforms from the government, such
as the abolition of taxes and "equal or common” ownership of land, among others. They also opposed
the dominant Nacionalista Party's acceptance of gradual independence from the United States, and
instead demanded immediate severance of ties with America.
For a new party with a small clout, they did well in the 1934 general elections, scoring three seats in
the House of Representatives and several local posts. This encouraged them to attempt an uprising in
1935. Upon being crushed, Ramos fled to Tokyo and the Partido Sakdalista collapsed.

During the years of the Commonwealth government, the situation further worsened. President
Quezon laid down a social justice program focused on the purchase of haciendas, which were
to be divided and sold to tenants. His administration also created the National Rice and Corn
Corporation (NARIC) to assign public defenders to assist peasants in court battles for their
rights to the land, and the Court of Industrial Relations to 'exercise jurisdiction over
disagreements arising from landowner-tenant relationship. The homestead program also
continued through the National Land Settlement Administration (NLSA). Efforts toward
agrarian reform by the Commonwealth failed because of many problems such as budget
allocation for the settlement program and widespread peasant uprisings. World War II put a halt
to all interventions to solve these problems as the Japanese occupied the country.
Post-War Interventions toward Agrarian Reform
Rehabilitation and rebuilding after the war were focused on providing solutions to the problems
of the past. The administration of President Roxas passed Republic Act No. 34 to establish
a 70-30 sharing arrangement between tenant and landlord, respectively, which reduced the
interest of landowners' loans to tenants at six percent or less.
Under the term of President Elpidio Quirino, the Land Settlement Development
Corporation (LASEDECO) was established to accelerate and expand the resettlement
program for peasants. This agency later on became the National Resettlement and
Rehabilitation Administration (NARRA) under the administration of President Ramon
Magsaysay.
Magsaysay saw the importance of pursuing genuine land reform program and convinced the
Congress, majority of which were landed elites, to pass legislation to improve the land reform
situation. Republic Act No. 1199 or the Agricultural Tenancy Act was passed to govern the
relationship between landholders and tenant farmers, protecting the tenurial rights of tenants
and enforced tenancy practices. Through this law, the Court of Agricultural Relations was
created in 1955 to improve tenancy security, fix land rentals of tenanted farms, and resolve land
disputes filed by the landowners and peasant organizations. The Agricultural Tenancy
Commission was also established to administer problems created by tenancy.
The Agricultural Credit and Cooperative Financing Administration (ACCFA) was also
created mainly to provide warehouse facilities and assist farmers in marketing their products.
The administration spearheaded the establishment of the Agricultural and Industrial Bank to
provide easier terms in applying for homestead and other farmlands.
NARRA accelerated the government's resettlement program and distribution of agricultural
lands to landless tenants and farmers and members of the members of the Hukbalahap (Huks).
Despite a more vigorous effort toward agrarian reform, the situation for the farmers remained
dire since the government lacked funds and the landed elite did not fully cooperate. A major
stride in land reform arrived during the term of President Diosdado Macapagal through
the Agricultural Land Reform Code (Republic Act No. 3844).

Primary Source: Declaration of Policy under RA No. 3844 or Agricultural Land Reform Code

Section 2. Declaration of Policy—It is the policy of the State:

(1) To establish owner-cultivatorship and the economic family-size farm as the basis of Philippine
agriculture and, as a consequence, divert landlord capital in agriculture to industrial development;

(2) To achieve a dignified existence for the small farmers free from pernicious institutional restraints
and practices;

(3) To create a truly viable social and economic structure in agriculture conducive to greater
productivity and higher farm incomes;

(4) To apply all labor laws equally and without discrimination to both industrial and agricultural wage
earners;

(5) To provide a more vigorous and systematic land resettlement program and public land distribution;
and

(6) To make the small farmers more independent, self-reliant and responsible citizens, and a source of
genuine strength in our democratic society.

This Code abolished share tenancy in the Philippines and prescribed a program to convert
tenant-farmers to lessees and later on owner-cultivators. It also aimed to free tenants from
tenancy and emphasize owner- cultivatorship and farmer independence, equity, productivity
improvement, and public land distribution. However, Congress at that time did not make any
effort to come up with a separate bill to fund its implementation, despite the fact that it proved
beneficial in the provinces where it was pilot tested.
Agrarian Reform Efforts under Marcos
President Marcos declared Martial Law in 1972, enabling him to essentially wipe out the
landlord-dominated Congress. Through his “technocrats," he was able to expand executive
power to start a "fundamental restructuring” of government, including its efforts in solving the
deep structural problems of the countryside. Presidential Decree No. 27 or the Code of
Agrarian Reform of the Philippines became the core of agrarian reform during Marcos
regime.

Primary Source:Presidential Decree No. 27, 21 October 1972

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.

“Operation Land Transfer” on lands occupied by tenants of more than seven hectares on rice
and corn lands commenced, and through legal compulsion and an improved delivery of support
services to small farmers, agrarian reform seemed to be finally achievable. Under the rice self-
sufficiency program “Masagana ’99", farmers were able to borrow from banks and purchase
three-hectare plots of lands and agricultural inputs. However, this program contributed in the
near bankruptcy of rural banks because the programs’ credit loans were problematic. The
program itself collapsed because they forgot about the small farmer, and replaced the
technicians with non-agriculturists. Therefore, the program was both a success and failure since
this managed to resolve the rice shortage but in the long run the program collapsed due to
unsustainability and issues such as the problematic credit system, use of pesticides that were
damaging to the environment, and loss of properly-trained personnel.
However, the landlord class still found ways to circumvent the law. Because only rice lands
were the focus of agrarian reform, some landlords only needed to change crops to be exempted
from the program, such as coconut and sugar lands. Lands worked by wage labor were also
exempt from the program, so the landed elite only had to evict their tenants and hired workers
instead. Landlessness increased, which made it all the more difficult for the program to succeed
because landless peasants were excluded from the program. Many other methods were
employed by the elite to find a way to maintain their power and dominance, which were
worsened by the corruption of Marcos and his cronies who were also involved in the agricultural
sector.
Post-1986 Agrarian Reform
The overthrow of Marcos and the 1987 Constitution resulted in a renewed interest and attention
to agrarian reform as President Corazon Aquino envisioned agrarian reform to be the
centerpiece of her administration's social legislation.
On 22 July 1987, Aquino issued Presidential Proclamation 131 and Executive Order 229,
which outlined her land reform program. In 1988, the Congress passed Republic Act No. 6657
or the Comprehensive Agrarian Reform Law (CARL), which introduced the program with the
same name (Comprehensive Agrarian Reform Program or CARP). It enabled the redistribution
of agricultural lands to tenant-farmers from landowners, who were paid in exchange by the
government through just compensation and allowed them to retain not more than five hectares.
Corporate landowners were, however, allowed under law to voluntarily divest a proportion of
their capital stock, equity, or participation in favor of their workers or other qualified beneficiaries
instead of turning over their land to the government.
CARP was limited because it accomplished very little during the administration of Aquino. It only
accomplished 22.5% of land distribution in six years owing to the fact that Congress, dominated
by the landed elite, was unwilling to fund the high compensation costs of the program. It was
also mired in controversy, since Aquino seemingly bowed down to the pressure of her relatives
by allowing the stock redistribution option.
Under the term of President Ramos, CARP implementation was accelerated and by 1996, the
Department of Agrarian Reform (DAR) distributed only 58.25% of the total area target to be
covered by the program. To address the lacking funding and the dwindling time for the
implementation of CARP, Ramos signed Republic Act No. 8532 in 1998 to amend CARL and
extend the program to another ten years.
CARPER and the Future of Agrarian Reform in the Philippines
The new deadline of CARP expired in 2008, leaving 1.2 million farmer beneficiaries and 1.6
million hectares of agricultural land to be distributed to farmers. In 2009, President Arroyo
signed Republic Act No. 9700 or the Comprehensive Agrarian Reform Program Extension
with Reforms (CARPER), the amending law that extended the deadline to five more years.
From 2009 to 2014, CARPER has distributed a total of 1 million hectares of land to 900,000
farmer beneficiaries. After 27 years of land reform and two Aquino administrations, 500,000
hectares of lands remain undistributed. The DAR and the Department of Environment and
Natural Resources (DENR) are the government agencies mandated to fulfill CARP and
CARPER, but even the combined effort and resources of the two agencies have proved
incapable of fully achieving the goal of agrarian reform in the Philippines. The same problems
have plagued its implementation: the powerful landed elite and the ineffectual bureaucracy of
the Philippine government. Until these two challenges are surmounted, genuine agrarian reform
in the Philippines remains but a dream to Filipino farmers who have been fighting for their right
to landownership for centuries.
The status of agrarian reform under President Benigno Aquino III (2010-2016)
Under the administration of President Benigno Aquino III, the Agrarian Reform Community
Connectivity and Economic Support Services (ARCCESS) project was created to contribute
to the overall goal of rural poverty reduction especially in agrarian reform areas. Agrarian
Production Credit Program (APCP) provided credit support for crop production to newly
organized and existing agrarian reform beneficiaries’ organizations (ARBOs) and farmers’
organizations not qualified to avail themselves of loans under the regular credit windows of
banks.
The legal case monitoring system (LCMS), a web-based legal system for recording and
monitoring various kinds of agrarian cases at the provincial, regional and central offices of the
DAR. Aquino also enacted Executive Order No. 26, Series of 2011, to mandate the
Department of Agriculture-Department of Environment and Natural Resources-Department of
Agrarian Reform Convergence Initiative to develop a National Greening Program.
Agrarian reform initiatives under the current administration of President
Rodrigo Roa Duterte (2016 – present)
Under his leadership, the President wants to pursue an “aggressive” land reform
program. The President directed the DAR to launch the 2nd phase of agrarian reform where
landless farmers would be awarded with undistributed lands under the Comprehensive Agrarian
Reform Program (CARP). The President placed 400 hectares of agricultural lands in
Boracay under CARP. Under his administration, the DAR created an anti-corruption task
force to investigate and handle reports on alleged anomalous activities by officials and
employees of the department. The Department also pursues an “Oplan Zero Backlog” in the
resolution of cases in relation to agrarian justice delivery.

HISTORY OF TAXATION IN THE PHILIPPINES

Taxation in Spanish Philippines
The Philippines may have abundant natural resources even before the encroachment of the
Spaniards, but our ancestors were mainly involved in a subsistence economy, and while the
payment of tribute or taxes (buhis/ buwis/handug) or the obligation to provide labor services
to the datus in some early Filipino communities in the Philippines may resemble taxation, it is
essentially different from the contemporary meaning of the concept.

The arrival of the Spaniards altered this subsistence system because they imposed the payment
of tributos (tributes) from the Filipinos, similar to what had been practiced in all colonies in
America. The settlements were handled by encomenderos who received rewards from the
Spanish crown for their services. Exempted from payment of tributos were the principales:
alcaldes, gobernadores, cabezas de barangay, soldiers, members of the civil guard,
government officials, and vagrants.

Toward the end of the sixteenth century, the Manila-Acapulco trade was established through
the galleons, a way by which the Spaniards could make sure that European presence would be
sustained. Once a year, the galleon would be loaded up with merchandise from Asia and sent
to New Spain (Mexico), and back. Tax collection was still very poor and subsidy from the Spain
would be needed through the situado real delivered from the Mexican treasury to the
Philippines through the galleons.

In 1884, the payment of tribute was put to a stop and was replaced by a poll tax collected
through a certificate of identification called the cédula personal.

Two direct taxes were added in 1878 and imposed on urban incomes. Urbana is a tax on the
annual rental value of an urban real estate and industria is a tax on salaries, dividends, and
profits. The colonial government also gained income from monopolies, such as the sale of
stamped paper, manufacture and sale of liquor, cockpits, and opium, but the biggest of the state
monopolies was tobacco, which began in 1781 and halted in 1882. Only certain areas were
assigned to cultivate tobacco, which the government purchased at a price dictated to the
growers.

This monopoly made it possible for the colony to create a surplus of income that made it self-
sufficient without the need for the situado real and even contributed to the Treasury of
Spain. Forced labor was a character of Spanish colonial taxation in the Philippines and was
required from the Filipinos. This changed later on, as polos and servicios became lighter, and
was organized at the municipal level. Labor provided was used in public works, such as the
building of roads and bridges. Some were made to serve the municipal office or as night
guards. Males were required to provide labor for 40 days a year (reduced to 15 days a year in
1884). They may opt out by paying the fallas of three pesos per annum, which was usually
lost to corruption because it was collected at the municipal level and were known as caidas or
droppings. The polos would be called prestación personal (personal services) by the second
half of the nineteenth century.

NOTE: Primary Source: Mariano Herbosa Writes to Rizal About Taxes Source: Mariano
Herbosa to Jose Rizal, Calamba, 29 August 1886, Letters Between Rizal and Family Members
(Manila: National Heroes Commission, 1964), 239,241.

Taxation under the Americans

From 1898 to 1903, the Americans followed the Spanish system of taxation with some
modifications, noting that the system introduced by the Spaniards were outdated and
regressive. The military government suspended the contracts for the sale of opium, lottery, and
mint charges for coinage of money. Later on, the urbana would be replaced by tax on real
estate, which became known as the land tax. The land tax was levied on both urban and rural
real estates.

The Internal Revenue Law of 1904 was passed as a reaction to the problems of collecting land
tax. It prescribed ten major sources of revenue: (1) licensed taxes on firms dealing in alcoholic
beverages and tobacco, (2) excise taxes on alcoholic beverages and tobacco products, (3)
taxes on banks and bankers, (4) document stamp taxes, (5) the cédula, (6) taxes on insurance
and insurance companies, (7) taxes on forest products, (8) mining concessions, (9) taxes on
business and manufacturing, and (10) occupational licenses.

The cédula went through changes in the new law as the rate was fixed per adult male, which
resulted in a great decline in revenues. In 1907, some provinces were authorized to double the
fee for the cédula to support the construction and maintenance of roads. The industria tax was
levied on the business community and became a highly complex system that assigned a certain
tax to an industrial or commercial activity according to their profitability. The new act also
imposed a percentage tax on sales payable quarterly.

In 1913, the Underwood-Simmons Tariff Act was passed, resulting in a reduction in the
revenue of the government as export taxes levied on sugar, tobacco, hemp, and copra were
lifted. To make up for the loss, then Governor General Francis Burton Harrison urged that tax
receipts be increased to make up for the loss. Minor changes were made to the 1904
Internal Revenue Act such as the imposition of taxes on mines, petroleum products, and dealers
of petroleum products and tobacco. New sources of taxes were introduced later on. In 1914,
an income tax was introduced; in 1919, an inheritance tax was created; and in 1932, a national
lottery was established to create more revenue for the government.

Taxation during the Commonwealth Period

Income tax rates were increased in 1936, adding a surtax rate on individual net incomes
in excess of 10,000 pesos. Income tax rates of corporations were also increased.

In 1937, the cédula tax was abolished, which appeared to be a progressive move; but in 1940,
a residence tax was imposed on every citizen aged 18 years old and on every corporation. In
1939, the Commonwealth government drafted the National Internal Revenue Code,
introducing major changes in the new tax system, as follows:
 The normal tax of three percent and the surtax on income was replaced by a single tax at a progressive
rate
 Personal exemptions were reduced.
 Corporation income tax was slightly increased by introducing taxes on inherited estates or gifts donated in
the name of dead persons.
 The cumulative sales tax was replaced by a single turnover tax of10% on luxuries.
 Taxes on liquors, cigarettes, forestry products, and mining were increased
 Dividends were made taxable.
The introduced tax structure was an improvement of the earlier system introduced by the
Americans, but still remained inequitable.

As World War II reached the Philippine shores, economic activity was put to a stop and the
Philippines bowed to a new set of administrators, the Japanese. The Japanese military
administration in the Philippines during World War II immediately continued the system of
tax collection introduced during the Commonwealth, but exempted the articles belonging to
the Japanese armed forces. Foreign trade fell and the main sources of taxation came from
amusements, manufactures, professions, and business licenses.As the war raged, tax collection
was a difficult task and additional incomes of the government were derived from the sales of the
National Sweepstakes and sale of government bonds.

The economic situation was so problematic that by 1949, there was a severe lack of funds in
many aspects of governance, such as the military and education sectors. No efforts were made
to improve tax collection and the United States advised the adoption of direct
taxation. The administration of President Manuel Roxas declined the proposal because it did
not want to alienate its allies in Congress.

The impetus for economic growth came during the time of President Elpidio Quirino through
the implementation of import and exchange controls that led to import
substitution development. This policy allowed for the expansion of a viable manufacturing
sector that reduced economic dependence on imports. New tax measures were also passed,
which included higher corporate tax rates that increased government revenues—tax revenue in
1953 increased twofold compared to 1948, the year when Quirino first assumed presidency.

While the succeeding presidencies of Magsaysay, Garcia, and Macapagal promised to study
the tax structure and policy of the country (through the creation of a Tax Commission in 1959
by means of Republic Act No. 2211) to make way for a more robust and efficient tax collection
scheme, post-war fiscal policy remained regressive.

Indirect taxation still contributed to three quarters of tax revenues and the Omnibus Tax Law
of 1969 did not increase the ratio of income tax to general tax revenue. Collection of taxes
remained poor; tax structure was still problematic; and much of public funds were lost to
corruption, which left the government incapable of funding projects geared toward development.

Under the Marcos authoritarian regime, the tax system remained regressive. During the latter
part of the Marcos's years (1981-1985), the tax system was still heavily dependent on indirect
taxes, which made up 70% of total tax collection.

Post-1986 Taxation Reform

 As Corazon Aquino took the helm of the government after the EDSA Revolution, she reformed
the tax system through the 1986 Tax Reform Program. A major reform in the tax system
introduced under the term of Aquino was the introduction of the value-added tax (VAT), with
the following features:
1. uniform rate of 10% on sale of domestic and imported goodsand services and zero percent on exports
and foreign-currencydenominated sales;
2. ten (10) percent in lieu of varied rates applicable to fixed taxes (60nominal rates), advance sales tax, tax
on original sale, subsequentsales tax, compensating tax, miller's tax, contractor's tax, broker's tax, film
lessors and distributor's tax, excise tax on solvents and matches, and excise tax on processed
videotapes;
3. two percent tax on entities with annual sales or receipts of lessthan 5,200,000;
4. adoption of tax credit method of calculating tax by subtracting taxon inputs from tax on gross sales;
5. exemption of the sale of basic commodities such as agricultureand marine food products in their original
state, price-regulatedpetroleum products and fertilizers; and
6. additional 20% tax on non-essential articles such jewelry, perfumes,toilet waters, yacht, and other vessels
for pleasure and sports.
The VAT law was signed in 1986 and put to effect in 1988. Along with tax reform came the
administrative reforms, such as the restructuring of the Department of Finance and its attached
agency Bureau of Internal Revenue (BIR) through the Executive Order 127 collection and tax
audits were intensified. As a result of the tax reform both tax and revenue effort rose, increasing
from 10.7% in 1985 to 15.4% in 1992.

Greater political stability during the administration of Fidel Ramos in 1992 allowed for
continued economic growth. The Ramos administration ventured into its own tax reform
program in 1997 through the Comprehensive Tax Reform Program, which was implemented
to (1) make the tax system broad-based, simple, and with reasonable tax rates; (2) minimize
tax avoidance allowed by existing flaws and loopholes in the system; (3) encourage payments
by increasing tax exemptions levels, lowering the highest tax rates, and simplifying procedure;
and (4) rationalize the grant of tax incentives, which was estimated to be worth 531.7 billion
pesos in 1994.

The VAT base was also broadened in 1997 to include services, through Republic Act 7716.
The features of the improved VAT law were as follows:
1. Restored the VAT exemptions for all cooperatives (agricultural,electric, credit or multipurpose,
and others) provided that theshare capital of each member does not exceed 515,000 pesos.
2. Expanded the coverage of the term “simple processes” by includingbroiling and roasting,
effectively narrowing the tax base for foodproducts.
3. Expanded the coverage of the term “original state” by includingmolasses.
4. Exempted from the VAT are the following:
 Importation of meat
 Sale or importation of coal and natural gas in whatever formor state
 Educational services rendered by private educationalinstitutions duly accredited by the Commission
on Higher Education (CHED)
 House and lot and other residential dwellings valued at 51million and below, subject to adjustment
using the ConsumerPrice Index (CPI)
 Lease of residential units with monthly rental per unit of notmore than 58,000, subject to adjustment
using CPI
 Sale, importation, printing, or publication of books and anyNewspaper
The succeeding term of President Joseph Estrada in 1998 was too short to constitute any
change in the tax system. Then Vice President Gloria Macapagal-Arroyo was swept to power
through another EDSA Revolution. As president, she undertook increased government
spending without adjusting tax collections.In 2005, the Expanded Value Added Tax (E-
VAT) was signed into law as Republic Act 9337. This expanded the VAT base, subjecting to
VAT energy products such as coal and petroleum products and electricity generation,
transmission, and distribution. Select professional services were also taxed. In February
2006, the VAT tax rate was also increased from 10% to 12%.

As President Benigno Aquino III succeeded President Arroyo in 2010, he promised that no
new taxes would be imposed and additional revenue would have to come from adjusting
existing taxes. The administration ventured into the adjustment of excise tax on liquor and
cigarettes or the Sin Tax Reform, motivations for which was primarily fiscal, public health, and
social order. related considerations. Republic Act 10351 was passed, and government revenues
from alcohol and tobacco excise taxes increased.

The administration of the new President Rodrigo Duterte promised tax reform, particularly in
income taxes as it vowed to lower income tax rates shouldered by working Filipinos. The
present income tax scheme of the country is the second highest in Southeast Asia and the
current laws on income taxes were outdated as they were drafted two decades ago.
The proposed tax reform also seeks to limit VAT exemptions and increase excise taxes on
petroleum products and automobiles. It is hoped that reforms in the country's tax policy will
result in the much-desired economic development that will be felt even by the lowest classes in
society. The Tax Reform for Acceleration and Inclusion Law (TRAIN Law), officially
designated as Republic Act No. 10963, is the initial package of the Comprehensive Tax Reform
Program (CTRP) signed into law by President Rodrigo Duterte on December 19, 2017.
HISTORY OF PHILIPPINE CONSTITUTION
1897: Constitution of Biak-na-Bato

The Constitution of Biak-na-Bato was the provisionary Constitution of the Philippine Republic
during the Philippine Revolution, and was promulgated by the Philippine Revolutionary
Government on 1 November 1897. The constitution, borrowed from Cuba, was written by
Isabelo Artacho and Félix Ferrer in Spanish, and later on, translated into Tagalog.

The organs of the government under the Constitution were: (1) the Supreme Council, which
was vested with the power of the Republic, headed by the president and four department
secretaries: the interior, foreign affairs, treasury, and war; (2) the Consejo Supremo de Gracia
Y Justicia (Supreme Council of Grace and Justice), which was given the authority to make
decisions and affirm or disprove the sentences rendered by other courts and to dictate rules for
the administration of justice; and (3) the Asamblea de Representantes (Assembly of
Representatives), which was to be convened after the revolution to create a new Constitution
and to elect a new Council of Government and Representatives of the people. The Constitution
of Biak-na-Bato was never fully implemented, since a truce, the Pact of Biak-na-Bato, was
signed between the Spanish and the Philippine Revolutionary Army.

1899: Malolos Constitution

After the signing of the truce, the Filipino revolutionary leaders accepted a payment from Spain
and went to exile in Hong Kong. Upon the defeat of the Spanish to the Americans in the Battle
of Manila Bay on 1 May 1898, the United States Navy transported Aguinaldo back to the
Philippines. The newly reformed Philippine revolutionary forces reverted to the control of
Aguinaldo, and the Philippine Declaration of Independence was issued on 12 June 1898,
together with several decrees that formed the First Philippine Republic. The Malolos Congress
was elected, which selected a commission to draw up a draft constitution on 17 September
1898, which was composed of wealthy and educated men.

The document they came up with, approved by the Congress on 29 November 1898,
and promulgated by Aguinaldo on 21 January 1899, was titled "The Political Constitution
of 1899" and written in Spanish.

The constitution has 39 articles divided into 14 titles, with eight articles of transitory provisions,
and a final additional article. The document was patterned after the Spanish Constitution of
1812, with influences from the charters of Belgium, Mexico, Brazil, Nicaragua, Costa Rica, and
Guatemala, and the French Constitution of 1793. According to Felipe Calderon, main author
of the constitution, these countries were studied because they shared similar social, political,
ethnological, and governance conditions with the Philippines. Prior constitutional projects in the
Philippines also influenced the Malolos Constitution, namely, the Kartilya and the Sanggunian-
Hukuman, the charter of laws and morals of the Katipunan written by Emilio Jacinto in 1896; the
Biak-na-Bato Constitution of 1897 planned by Isabelo Artacho; Mabini's Constitutional Program
of the Philippine Republic of 1898; the provisional constitution of Mariano Ponce in 1898 that
followed the Spanish constitutions; and the autonomy projects of Paterno in 1898.

As a direct challenge to colonial authorities of the Spanish empire, the sovereignty was
retroverted to the people, a legal principle underlying the Philippine Revolution. The
people delegated governmental function to civil servants while they retained actual sovereignty.
The 27 articles Title IV detail the natural rights and popular sovereignty of Filipinos, the
enumeration of which does not imply the prohibition of any other rights not expressly stated.
Title III, Article V also declares that the State recognizes the freedom and equality of all beliefs,
as well as the separation of Church and State. These are direct reactions to features of the
Spanish government in the Philippines, where the friars were dominant agents of the state.

The form of government, according to Title II, Article 4 is to be popular, representative,

alternative, and responsible, and shall exercise three distinct powers—legislative, executive,
and judicial. The legislative power was vested in a unicameral body called the Assembly of
Representatives, members of which are elected for terms of four years. Secretaries of the
government were given seats in the assembly, which meet annually for a period of at least three
months. Bills could be introduced either by the president or by a member of the assembly.
Some powers not legislative in nature were also given to the body, such as the right to select its
own officers, right of censure and interpellation, and the right of impeaching the president,
cabinet members, the chief justice of the Supreme Court, and the solicitor-general.

A permanent commission of seven, elected by the assembly, and granted specific powers by
the constitution, was to sit during the intervals between sessions of the assembly. Executive
power was vested in the president, and elected by a constituent assembly of the Assembly of
Representatives and special representatives. The president will serve a term of four years
without re-election. There was no vice president, and in case of a vacancy, a president was to
be selected by the constituent assembly.

The 1899 Malolos Constitution was never enforced due to the ongoing war. The
Philippines was effectively a territory of the United States upon the signing of the Treaty of Paris
between Spain and the United States, transferring sovereignty of the Philippines on 10
December 1898.

1935: The Commonwealth Constitution

It is worth mentioning that after the Treaty of Paris, the Philippines was subject to the power of
the United States of America, effectively the new colonizers of the country. From 1898 to 1901,
the Philippines would be placed under a military government until a civil government would be
put into place.

Two acts of the United States Congress were passed that may be considered to have qualities
of constitutionality. First was the Philippine Organic Act of 1902, the first organic law for the
Philippine Islands that provided for the creation of a popularly elected Philippine Assembly. The
act specified that legislative power would be vested in a bicameral legislature composed of the
Philippine Commission as the upper house and the Philippine Assembly as lower house. Key
provisions of the act included a bill of rights for Filipinos and the appointment of two non-voting
Filipino Resident Commissioners of the Philippines as representative to the United States
House of Representatives.

The second act that functioned as a constitution was the Philippine Autonomy Act of 1916,
commonly referred to as “Jones Law”, which modified the structure of the Philippine
government through the removal of the Philippine Commission, replacing it with a Senate that
served as the upper house and its members elected by the Filipino voters, the first truly elected
national legislature. It was also this Act that explicitly declared the purpose of the United States
to end their sovereignty over the Philippines and recognize Philippine independence as soon as
a stable government can be established. In 1932, with the efforts of the Filipino independence
mission led by Sergio Osmeña and Manuel Roxas, the United States Congress passed the
Hare-Hawes-Cutting Act with the promise of granting Filipinos' independence. The bill was
opposed by then Senate President Manuel L. Quezon and consequently, rejected by the
Philippine Senate.

By 1934, another law, the Tydings-McDuffie Act, also known as the Philippine
Independence Act, was passed by the United States Congress that provided authority and
defined mechanisms for the establishment of a formal constitution by a constitutional
convention. The members of the convention were elected and held their first meeting on 30 July
1934, with Claro M. Recto unanimously elected as president.

The constitution was crafted to meet the approval of the United States government, and to
ensure that the United States would live up to its promise to grant independence to the
Philippines

The constitution created the Commonwealth of the Philippines, an administrative body that
governed the Philippines from 1935 to 1946. It is a transitional administration to prepare the
country toward its full achievement of independence. It originally provided for a unicameral
National Assembly with a president and vice president elected to a six-year term without re-
election. It was amended in 1940 to have a bicameral Congress composed of a Senate and a
House of Representatives, as well as the creation of an independent electoral commission, and
limited the term of office of the president and vice president to four years, with one re-election.

Rights to suffrage were originally afforded to male citizens of the Philippines who are twenty-one
years of age or over and are able to read and write; this was later on extended to women within
two years after the adoption of the constitution.

While the dominant influence in the constitution was American, it also bears traces of the
Malolos Constitution, the German, Spanish, and Mexican constitutions, constitutions of several
South American countries, and the unwritten English Constitution. The draft of the constitution
was approved by the constitutional convention on 8 February 1935, and ratified by then U.S.
President Franklin B. Roosevelt on 25 March 1935. Elections were held in September 1935 and
Manuel L. Quezon was elected President of the Commonwealth.

The Commonwealth was briefly interrupted by the events of the World War II, with the Japanese
occupying the Philippines. Afterward, upon liberation, the Philippines was declared an
independent republic on 4 July 1946.

1973: Constitutional Authoritarianism

In 1965, Ferdinand E. Marcos was elected president, and in 1967, Philippine Congress passed
a resolution calling for a constitutional convention to change the 1935 Constitution. Marcos won
the re-election in 1969, in a bid boosted by campaign overspending and use of government
funds. Elections of the delegates to the constitutional convention were held on 20 November
1970, and the convention began formally on 1 June 1971, with former President Carlos P.
Garcia being elected as convention president. Unfortunately, he died, and was succeeded by
another former president, Diosdado Macapagal.

Before the convention finished its work, Martial Law was declared (September 21, 1972).
Marcos cited a growing communist insurgency as reason for the Martial Law, which was
provided for in the 1935 Constitution. Some delegates of the ongoing constitutional convention
were placed behind bars and others went into hiding or were voluntary exiled. With Marcos as
dictator, the direction of the convention turned, with accounts that the president himself dictated
some provisions of the constitution, manipulating the document to be able to hold on to power
for as long as he could. On 29 November 1972, the convention approved its proposed
constitution.

The constitution was supposed to introduce a parliamentary-style government, where

legislative power was vested in a unicameral National Assembly, with members being elected to
a six-year term. The president was to be elected as the symbolic and ceremonial head of state
chosen from the members of the National Assembly. The president would serve a six-year
term and could be re-elected to an unlimited number of terms. Executive power was
relegated to the Prime Minister, who was also the head of government and Commander-in-Chief
of the Armed Forces who was also to be elected from the National Assembly.

President Marcos issued Presidential Decree No. 73 setting the date of the plebiscite to ratify or
reject the proposed constitution on 30 November 1973. This plebiscite was postponed later on
since Marcos feared that the public might vote to reject the constitution. Instead of a plebiscite,
Citizen Assemblies were held, from 10–15 January 1973, where the citizens coming together
and voting by hand, decided on whether to ratify the constitution, suspend the convening of the
Interim National Assembly, continue Martial Law, or place a moratorium on elections for a
period of at least several years.

The President, on 17 January 1973, issued a proclamation announcing that the proposed
constitution had been ratified by an overwhelming vote of the members of the highly irregular
Citizen Assemblies.

The constitution was amended several times. In 1976, Citizen Assemblies, once again, decided
to allow the continuation of Martial Law, as well as approved the amendments: an Interim
Batasang Pambansa to substitute for the Interim National Assembly, the president to also
become the Prime Minister and continue to exercise legislative powers until

Martial Law was lifted and authorized the President to legislate on his on an emergency basis.
An overwhelming majority would ratify further amendments succeedingly. In 1980, the
retirement age of members of the judiciary was extended to 70 years. In 1981, the
parliamentary system was formally modified to a French-style, semi-presidential system where
executive power was restored to the president, who was, once again, to be directly elected; an
Executive Committee was to be created, composed of the Prime Minister and 14 others, that
served as the president's Cabinet; and some electoral reforms were instituted. In 1984, the
Executive Committee was abolished and the position of the vice president was restored. After
all the amendments introduced, the 1973 Constitution was merely a way for the President to
keep executive powers, abolish the Senate, and by any means, never acted as a parliamentary
system, instead functioned as an authoritarian presidential system, with all the real power
concentrated in the hands of the president, with the backing of the constitution.

The situation in the 1980s had been very turbulent. As Marcos amassed power, discontent has
also been burgeoning. The tide turned swiftly when in August 1983, Benigno Aquino Jr.,
opposition leader and regarded as the most credible alternative to President Marcos, was
assassinated while under military escort immediately after his return from exile in the United
States. There was widespread suspicion that the orders to assassinate Aquino came from the
top levels of the government and the military. This event caused the coming together of the non-
violent opposition against the Marcos authoritarian regime. Marcos was then forced to hold
“snap" elections a year early, and said elections were marred by widespread fraud. Marcos
declared himself winner despite international condemnation and nationwide protests. A small
group of military rebels attempted to stage a coup, but failed; however, this triggered what came
to be known as the EDSA People Power Revolution of 1986, as people from all walks of life
spilled onto the streets. Under pressure from the United States of America, who used to support
Marcos and his Martial Law, the Marcos family fled into exile. His opponent in the snap
elections, Benigno Aquino Jr.'s widow, Corazon Aquino, was installed as president on 25
February 1986.

1987: Constitution After Martial Law

President Corazon Aquino's government had three options regarding the constitution: revert to
the 1935 Constitution, retain the 1973 Constitution and be granted the power to make reforms,
or start anew and break from the “vestiges of a disgraced dictatorship.” They decided to make a
new constitution that, according to the president herself, should be “truly reflective of the
aspirations and ideals of the Filipino people.”

In March 1986, President Aquino proclaimed a transitional constitution to last for a year
while a Constitutional Commission drafted a permanent constitution. This transitional
constitution, called the Freedom Constitution, maintained many provisions of the old one,
including in rewritten form the presidential right to rule by decree. In 1986, a constitutional
convention was created, composed of 48 members appointed by President Aquino from varied
backgrounds and representations. The convention drew up a permanent constitution, largely
restoring the setup abolished by Marcos in 1972, but with new ways to keep the president in
check, a reaction to the experience of Marcos's rule. The new constitution was officially
adopted on 2 February 1987.

The Constitution begins with a preamble and eighteen self-contained articles. It established the
Philippines as a "democratic republican State" where “sovereignty resides in the people and all
government authority emanates from them.” It allocates governmental powers among the
executive, legislative, and judicial branches of the government.

The Executive branch is headed by the president and his cabinet, whom he appoints. The
president is the head of the state and the chief executive, but his power is limited by significant
checks from the two other co-equal branches of government, especially during times of
emergency. This is put in place to safeguard the country from the experience of martial law
despotism during the presidency of Marcos. In cases of national emergency, the president may
still declare martial law, but not longer than a period of sixty days. Congress, through a majority
vote, can revoke this decision, or extend it for a period that they determine. The Supreme Court
may also review the declaration of martial law and decide if there were sufficient justifying facts
for the act. The president and the vice president are elected at large by a direct vote, serving a
single six-year term. The legislative power resides in a Congress divided into two Houses:
the Senate and the House of Representatives. The 24 senators are elected at large by
popular vote, and can serve no more than two consecutive six- year terms. The House is
composed of district representatives representing a particular geographic area and makes up
around 80% of the total number of representatives. There are 234 legislative districts in the
Philippines that elect their representatives to serve three-year terms.
The 1987 Constitution created a party-list system to provide spaces for the participation
of under. represented community sectors or groups. Party-list representatives may fill up
not more than 20% of the seats in the House. Aside from the exclusive power of legislation,
Congress may also declare war, through a two-thirds vote in both upper and lower houses. The
power of legislation, however, is also subject to an executive check, as the president retains the
power to veto or stop a bill from becoming a law. Congress may only override this power with a
two-thirds vote in both houses.

The Philippine Court system is vested with the power of the judiciary, and is composed
of a Supreme Court and lower courts as created by law. The Supreme Court is a 15-
member court appointed by the president without the need to be confirmed by Congress. The
appointment the president makes, however, is limited to a list of nominees provided by a
constitutionally specified Judicial and Bar Council. The Supreme Court Justices may hear, on
appeal, any cases dealing with the constitutionality of any law, treaty, or decree of the
government, cases where questions of jurisdiction or judicial error are concerned, or cases
where the penalty is sufficiently grave. It may also exercise original jurisdiction over cases
involving government or international officials. The Supreme

Court is also in charge of overseeing the functioning and administration of the lower courts and
their personnel. The Constitution also established three independent Constitutional
Commissions, namely, the Civil Service Commission, a central agency in charge of government
personnel; the Commission on Elections, mandated to enforce and administer all election laws
and regulations; and the Commission on Audit, which examines all funds, transactions, and
property accounts of the government and its agencies. To further promote the ethical and lawful
conduct of the government, the Office of the Ombudsman was created to investigate complaints
that pertain to public corruption, unlawful behavior of public officials, and other public
misconduct. The Ombudsman can charge public officials before the Sandiganbayan, a special
court created for this purpose.

Only the House of Representatives can initiate the impeachment of the president, members of
the Supreme Court, and other constitutionally protected public officials such as the
Ombudsman. The Senate will then try the impeachment case. This is another safeguard to
promote moral and ethical conduct in the government.

Attempts to Amend or Change the 1987 Constitution

The 1987 Constitution provided for three methods by which the Constitution can be amended,
all requiring ratification by a majority vote in a national referendum. These methods were
constituent Assembly, Constitutional Convention, and People's Initiative. Using these modes,
there were efforts to amend or change the 1987 Constitution, starting with the presidency of
Fidel V. Ramos who succeeded Corazon Aquino. The first attempt was in 1995, when then
Secretary of National Security Council Jose Almonte drafted a constitution, but it was exposed
to the media and it never prospered. The second effort happened in 1997, when a group called
PIRMA hoped to gather signatures from voters to change the constitution through a people's
initiative. Many were against this, including then Senator Miriam Defensor-Santiago, who
brought the issue to court and won—with the Supreme Court judging that a people's initiative
cannot push through without an enabling law.

The succeeding president, Joseph Ejercito Estrada, formed a study commission to investigate
the issues surrounding charter change focusing on the economic and judiciary provisions of the
constitution. This effort was also blocked by different entities. After President Estrada was
replaced by another People Power and succeeded by his Vice President, Gloria Macapagal-
Arroyo, then House Speaker Jose de Venecia endorsed constitutional change through a
Constituent Assembly, which entails a two-thirds vote of the House to propose amendments or
revision to the Constitution. This initiative was also not successful since the term of President
Arroyo was mired in controversy and scandal, including the possibility of Arroyo extending her
term as president, which the Constitution does not allow.

The administration of the succeeding President Benigno Aquino III had no marked interest in
charter change, except those emanating from different members of Congress, including the
Speaker of the House, Feliciano Belmonte Jr., who attempted to introduce amendments to the
Constitution that concern economic provisions that aim toward liberalization. This effort did not
see the light of day.

In an upsurge of populism, President Rodrigo Duterte won the 2016 presidential elections in a
campaign centering on law and order, proposing to reduce crime by killing tens of thousands of
criminals. He is also a known advocate of federalism, a compound mode of government
combining a central or federal government with regional governments in a single political
system. This advocacy is in part an influence of his background, being a local leader in
Mindanao that has been mired in poverty and violence for decades. On 7 December 2016,
President Duterte signed an executive order creating a consultative committee to review the
1987 Constitution.