DAP Benefitted Agrarian Reform Stakeholders - DAR

pic1july18The Department of Agrarian Reform (DAR) said today that funding under the Disbursement Acceleration Program (DAP) concept made possible the implementation of rural and social infrastructure subprojects under the Agrarian Reform Communities Project 2 (ARCP 2). These ARCP 2 subprojects eventually benefited some 738,505 farmers and community members of whom 440,387 were agrarian reform beneficiaries.

The ARCP2 is a US$208 million foreign-assisted project of the DAR of which US$100 million is financed by a concessional loan from the Asian Development Bank and the OPEC Fund for International Development (ADB-OFID). The ARCP 2 project includes the construction and rehabilitation of rural infrastructure such as farm to market roads, flood protection works, bridges, potable water systems, post-harvest facilities, and social infrastructure. ARCP 2 project sites are located in 19 of the country's poorest provinces in the country, including the five provinces of the ARMM.pic2july18

Under this project, local government units (LGUs) are required put up, as equity counterpart, 27% of total project cost or US$56 million.

DAR Secretary Virgilio de los Reyes explained that ARCP 2 initially suffered from the inability of many LGUs to put up the equity requirements of the project. The result was that a lot of rural infrastructure subprojects of the ARCP 2 remained unimplemented in 2011. Because of this, ARCP 2 was considered an “actual problem project” by the ADB. 

Thus, the DAR requested the Office of the President and the DBM for funding to subsidize LGUs to enable them to put up the equity for the ARCP 2 subprojects in their communities. This was approved on September 2011 and additional funding for infrastructure projects and other social programs under the 2011 GAA was provided under the DAP concept. Funds to subsidize up to 25% of the subproject cost were made available for LGUs in ARCP 2 subproject areas in order for them to meet the equity counterpart requirement of the ARCP 2.

De los Reyes also said that PhP1.29 billion was allocated but this amount was to be released in tranches according to the implementation schedule submitted by the DAR.

From January 2012 to August 2013, the DBM released more than PhP800 million in six installments to the ARCP 2. He, however, added that the remaining balance was not released since on September 2013, the DBM deferred the processing of further releases pending the resolution of the issues surrounding the DAP.

The ARCP 2 was able to disburse PhP841 million as subsidy for the LGU equity counterpart. This enabled the implementation of rural and social infrastructure subprojects worth a total of PhP3.365 billion. Thus, 612.46 km of roads were built along with 31 post-harvest facilities, 144 units of social infrastructure, and 9 units of level II potable water systems in 19 provinces in some of the poorest communities.

De los Reyes related, “I consider this additional funding under the DAP concept crucial in ensuring that the ARCP 2 succeed in providing the farmers with the necessary infrastructure support.”

In a related matter, Secretary de los Reyes explained although an amount was indicated for landowners compensation in the list of DAP-Identified Projects. This item was included only because it was part of the disbursement strategy; it only required the release of NCA (cash) and not an additional funding landowners compensation already has an appropriation for fiscal years 2010 and 2011.

De los Reyes further explained, that in 2010 and 2011, Congress appropriated a budget of PhP 3.966 billion for each of these years[1] for landowners (LO) compensation but no cash was immediately released to the Landbank.

In September 2011, the Department endorsed the request of the Landbank for the cash release to the Landbank of PhP7.932 billion representing the total appropriation for LO compensation for 2010 and 2011. This request was prompted by the prospect of the depletion of the available cash of the Agrarian Reform Fund for LO compensation in the wake of the Supreme Court decision on the case of Apo Fruits Corporation and Hijo Plantation, Inc. vs. Land Bank of the Philippines in April 2011. The Supreme Court had ordered the Landbank to pay Apo-Hijo not only the actual valuation for land DAR acquired for distribution but also a penalty interest from the time the DAR acquired the landholding in December 9, 1996 until the Landbank paid the amount on May 9, 2008.

De los Reyes said that in October 2011, a Notice of Cash Allocation in the amount of PhP7.932 billion corresponding to appropriations in the General Appropriations Act of both 2010 and 2011 was released to the Landbank. A part of this amount, PhP5.4 billion, was through the Disbursement Acceleration Program. PhP5.4 billion of the cash release was indicated as part of the disbursement strategy.

“I wish to emphasize that this PhP5.432 billion was not an augmentation of the fund for Landowners Compensation,” de los Reyes added, “The entire PhP 7.932 billion corresponds to the 2010 and 2011 appropriation for Landowners Compensation in the GAA for those years.”

From 2011 to June 2014, Landbank disbursed PhP4.052 billion representing the cash portion of Landowners Compensation to more than 4,000 landowners whose lands were distributed to farmer-beneficiaries of the agrarian reform program. The landowners of Apo Fruits Corp./Hijo Plantation and of Hacienda Luisita are but two of the more than 4,000 landowners paid by the Landbank.

De los Reyes branded as baseless and untrue the accusations that DAP was released to the Landbank in order to primarily pay for Hacienda Luisita lands. He repeated that the PhP 7.932 billion released to the Landbank was the total of the 2010 and 2011 budget for landowners compensation approved by the Philippine Congress and that it was used to pay not only Hacienda Luisita, Inc. but more than 4,000 landowners.