Exemptions under Section 10 of the CARL, an Exclusive List

2019 July 24

The MDA Corporation obtained a commercial loan from the Government Service Insurance System. This loan was secured by a mortgage over a parcel of agricultural land.

Since the MDA Corporation was unable to pay the loan, the Government Service Insurance System foreclosed the agricultural land. After the lapse of the redemption period, ownership of said land was consolidated in the Government Service Insurance System.

Subsequently, the Department of Agrarian Reform issued a Notice of Coverage concerning the agricultural land and offered to pay the Government Service Insurance System more than Php4 million for the property.

The Government Service Insurance System, in turn, protested the coverage and filed before the Department of Agrarian Reform a Petition asking that the property be excluded from compulsory agrarian reform coverage. In support of its petition, the Government Service Insurance System asserts that under Section 39 of Republic Act No. 8291, or The Government Service Insurance System Act of 1997, its properties cannot be utilized for agrarian reform purposes as such provision exempts its properties from agrarian reform coverage.

Should the property be excluded from coverage of the Comprehensive Agrarian Reform Program?

No, the Court did not exclude the land from agrarian reform coverage because the exemptions under Section 10 of the Comprehensive Agrarian Reform Law of 1988 form an exclusive list. Thus, it could not simply impute into a statute an exception which Congress did not incorporate. Moreover, general welfare legislation such as land reform laws is to be construed in favor of the promotion of social justice to ensure the well-being and economic security of the people. Since a broad construction of the provision listing the properties exempted under the Comprehensive Agrarian Reform Law of 1988 would tend to denigrate the aims of agrarian reform, a strict application of these exceptions is in order.

Further reading:

  • Government Service Insurance System v. Datoy, G.R. No. 232863, July 24, 2019.