Securing Our Future: Establishing a Residential Land Titling Program

La Salle Institute of Governance

LAND MARKETS DEVELOPMENT PROJECT

Securing Our Future: Establishing a Residential Land Titling Program

La Salle Institute of Governance LAND MARKETS DEVELOPMENT PROJECT

Current Situation

•There are 24 million land parcels in the Philippines

•Almost 46% or 11 M parcels are untitled

•Approximately 70% or 7.8 million untitled parcels are residential lands▫the balance is agricultural, industrial, commercial

•About 39 million Filipinos live on these untitled residential parcels

*Data from the LAMP Land Tenure Status Report – Book 1


The Impact of Untitled Lands•Landowners are at a risk of losing their property

to land grabbing

•Landowners has no access the formal land market since it requires a title (loan mortgages with banks, etc.)

•Rights over untitled lands is unrecorded causing conflicts and uncertainty (between family members, neighbors, etc.)

•Economic growth stifled

▫Few titles few loans less investment lower economic growth lower job creation


Current Policy Environment

Two options for titling the 7.8 million residential parcels

1. Judicial Titling Process▫ Confirmation of an Imperfect Title

2.Administrative Process ▫ Sales Patent or Miscellaneous Sales Patent

Applications


Findings

1. Judicial Titling Process▫ Complicated and Costly

Highly technical Non-lawyers cannot appear in court Expensive professional fees, filing fees, other

costs▫ Time consuming and Tedious

Rules of Evidence, Adversarial, Appeals Months to many years


Findings

2. Administrative Process – Sales Patent▫ Expeditious ▫ Limited coverage

Only applicable to public lands ▫ Can be costly

When applicable, land parcel is subject to appraisal

Landowner may have to pay the government to “purchase” parcel from government

▫ Some uncertainty In certain cases, parcel may be subject to bidding


Year Court Issued Titles

DENR Issued Residential

Sales Patents

DENR Issued Agricultural Free Patent

2003 1,325 4,057 98,486

2004 1,761 2,918 110,960

2005 975 2,607 101,143

2006 892 3,125 113,620

Untitled Residential Lands = Estimated at 7.8 million Parcels

Title issued by DENR under Residential Sales = Assume 5,000/annum

Title issued by the Court = Assume 1,000/annum

At the present rate, it will take 1,300 years to title the 7.8 million residential parcels

Findings


Findings

1. The financial and administrative burden of titling residential parcels is currently on the individual owner

▫ Constraints prevents landowners in registering their land, thus, many residential parcels remain untitled

2. Government titling programs focused on agricultural lands

▫ Land for the Landless, Handog Titulo, CARP3. There is no government program to address

titling of public residential lands


Findings•Without government assistance, individuals do

not have the financial resources to undergo either a judicial or administrative process

•Government has the ability and financial resources to properly title residential parcels

•It is good public policy to create government program focused on residential land parcel titling


Policy Recommendation

Establish a program to grant free patent for the almost 7.8 million parcels of residential lands

Re-enact and expand theResidential Free Patent Law (Batas Pambansa 223)


BP 223•The grant of free patent on residential lands

was authorized under Batas Pambansa 223 on April 1982

•Limited to 5th and 6th class municipalities

•Lapsed on December 31, 1987

•Given the limited scope and time frame, BP 223 did not effect the titling of residential lands


Proposed Key Provisions

1. Establish an expeditious administrative program (free patent) for titling residential land

▫ Provide an alternative to the judicial process▫ Many countries title property through an

administrative process▫ An administratively granted title provides

equal security as a judicially granted title



2. Extend the program to all municipalities and cities

▫ Administrative titling should benefit landowners in all cities and municipalities

▫ BP 223 was limited to 5th and 6th class municipalities to have an impact to the economy



3. Remove restrictions on transfer and other conveyances for titles acquired through the Residential Free Patent Program

▫ Allow landowners to use their properties as collateral for entrepreneurial and homebuilding/improvement activities

▫ Restrictions on Agricultural Free Patents should not be extended to the Residential Free Patent Program

No sales or mortgage for 5 year period The five-year restriction imposed in CA 141

hampers the creation of efficient land markets


Benefits of Residential Free Patent Program

•Provides security of tenure to as many as 39 M Filipinos

•Jumpstarts economic development▫Allows homeowners access to credit in banking

institutions for entrepreneurial or homebuilding activities

▫Increases lending activities of banks and other financial institutions with better collateral

▫Increased employment ▫Allows for efficient urban and housing

development


Benefits of Residential Free Patent Program•Greater social stability

▫Less family and social conflicts due to secure and well-defined property rights

•Increased revenue for the government▫Broadened tax base▫Increased land values▫More land transactions


Conclusion

•A government program to title residential parcels can change the lives of millions of Filipinos

•This will unlock economic growth, investment, and job creation

•This program will promote social cohesion by giving beneficiaries an economic stake in society

•Secure property rights are essential for a prosperous and peaceful Philippines

Documents

Securing Our Future: Establishing a Residential Land Titling Program