INTEGRATE. PROPEL. SUSTAIN
Technology and Knowledge Transfer
Technology and Knowledge Transfer
and Management - Philippines
Center for Land Administration
Land Management Bureau
LMB-CLAMP
© 2010 Land Management Bureau / Center for Land Administration and Management - Philippines
Need for Change
LAMP I, started in 2001, was a Learning and Innovation Loan (LIL) project that was carried out to test alternative approaches for large scale registration and improve land records and information management; and to propose policies to institute reforms in the institutional and policy environment in the sector. LAMP I, had an implementation period of about three years of learning and
Innovation.
The efforts of LAMP 1 at improving the Philippine system of land administration and
management (LAM) originated from a request made by the Philippine government for the World Bank to undertake a review of the Philippine situation in the lands sector. A GOP/World Bank Fact Finding Mission was fielded in 1998 to investigate the underlying issues affecting the sector, and how these impinge on the promotion of the country’s objectives of investments and growth, poverty reduction and improved management of natural resources. The study highlighted a complex web of issues, with a core problem of an inefficient and inequitable land market which constrains economic development, reduces opportunities for the poor and discourages sustainable management of
resources.
The Mission observed that this situation has arisen because of:
A weak and inefficient land administration system:
i. There is a multiplicity of agencies involved in land administration with no appropriate
mechanisms for coordination. Moreover, there is no over-all institutional mechanism to
resolve outstanding issues. As a result, many issues have remained unresolved for a long
time.
ii. The major land administration laws are outdated, restrictive and some are not in accord
with recent legislations.
iii. Not all privately claimed A&D land are believed to be titled. Of the estimated 14 million hectares of A and D lands, only 9 million hectares are titled, leaving the remaining 5 million hectares with no secure property rights.
iv. Existing land records systems are inefficient and there are limited inventories of land
records.
v. A large proportion of records has been destroyed through war, theft, fire and water
damage or simply misplaced in the frequent transfer of records. It is further believed that
some records have been deliberately removed from the archives. Many of the remaining
records are in exceedingly fragile condition and some have been illegally altered.
vi. There is no complete set of cadastral maps that show titled and untitled properties on
A&D land. Information in the Registry of Deeds (RODs) cannot be searched by parcel or
cadastral map number. Thus, the titling system does not support quality control and, as a
result, duplicate and fake titles exist and are not easily detected.
vii. The Land Registry is not easily accessible and transaction costs are high, both of which discourage registration and act as a disincentive to investment.
viii. A proliferation of fake and spurious titles, coupled with all of the foregoing, has eroded confidence in the entire titling and registration system.
Because of the inefficiency of the land administration system, it could take between six months to several years to get original title and several weeks to a few months to register subsequent land transactions, compared to only two and half hours in Thailand. This has resulted in a high level of untitled land (around 1/3 of parcels in rural areas). This has also resulted in numerous cases of land grabbing by those who can afford to pay the expenses for first time registration. Furthermore, this inefficiency, combined with high land taxes, has encouraged an informal land market, especially among the poor communities, which has resulted in lack of tenure security and reduced government
revenues from land related taxes.
Rigid and outdated land management policies
A key issue in land policy has been a land classification system that has been rigid and unresponsive to the evolving needs of agricultural and urban development. Neither has it been effective in promoting sound management of natural resources. Several forest, agrarian and urban land programs have been imposed on this fairly static land classification system by different government agencies in recent years, leading to problems with overlapping mandates and multiple land management and administrative processes. This has added to the difficulty of changing the classification system to respond to the need for economic growth and poverty reduction.
There have been procedural barriers to the flow of land from agriculture to non-agricultural use in response to relative economic returns, particularly in urban fringe areas. There is a need to review land conversion policy and procedures in order to respond to the growing demand for urban development without compromising the effective implementation of the CARP.
Fragmented responsibilities for land management and administration among several government agencies without appropriate mechanisms for coordination has resulted in ineffective land management and administration, clearly manifested in the issuance of conflicting policies on the status of lands, creating confusion and social unrest among those who reside in affected areas.
Multiple and inconsistent land valuation systems used in various government agencies.
There are several systems and methodologies for the valuation of real properties in different government agencies. These are utilised for different purposes including real property taxation, compensation for land acquired for public investment and for valuation under CARP. The multiplicity of systems and methods has often produced doubtful valuations which, when contested in court, have caused long delays in the implementation of government programs. Doubtful and contested land valuations have also had an adverse impact on the efficiency of land markets and land administration.
Below market valuation of land prevents the efficient allocation of lands to their best use, leads to a relatively low tax burden which encourages land speculation and undermines the generation of significant revenues from land ownership. In contrast, the absence of national standards and methods of valuation in accord with international standards and practice also provides a loophole which can be used to overvalue real property and underestimate the risk in property-related lending.
This undermines the integrity of financial transactions and the stability of the financial system.
There is clearly a lack of national standards and methods for valuation, coupled with lack of training for valuers in the absence of formal valuation training in the Philippines.
The local councils at the LGU levels have not regularly updated their land values, limiting the ability of the tax Assessor’s Offices to come up with market based land values required by law. This has resulted in low revenue collections from real property taxation, and has severely undermined the ability of LGUs to raise enough revenues to finance their local development plans.
Inefficient land markets
An inefficient and ineffective land administration system, combined with fragmentation of institutional responsibilities and inconsistent and outdated land policies, has resulted in inefficient land markets.
In the urban land market, there is an unmet demand for housing, commercial and industrial land because urban land supply is far short of demand. In addition, difficulties surrounding the conversion of agricultural lands to non-agricultural use, whether for housing, commercial or industrial purposes, have constricted the supply of urban land. This shortage of urban land has led to rising urban land prices that have made it unaffordable for the majority of the population.
The high cost of urban land has driven many people to invade public and private lands to establish informal settlements. The CARP, which is achieving some success in promoting social equity through the transfer of land to landless farmers, has, nonetheless, had an adverse effect on formal rural land markets. The CARP law has restrictions on the buying and selling of agricultural land under the program. In addition, many untitled privately claimed A&D lands are outside the formal rural land market. This phenomenon and the CARP law restrictions are the main cause of stagnation in formal rural land markets.
The Land Administration and Management Project (LAMP I)
As a first step towards the implementation of the long-term Program, the GOP sought the support of the World Bank and AusAID for funding. LAMP 1 was designed as a Learning and Innovation Loan to lay the foundations for the subsequent phases through the development of appropriate policy proposals and enable the testing of alternative approaches to improve the land administration systems. Between 1999 and 2000 the GOP, the World Bank and AusAID collaborated in the design of LAMP 1 with the specific purpose of:
• building consensus among GOP institutions in key policy areas of land administration and commencing implementation of recommended changes to the system;
• testing, via prototypes, of efficient procedures for land registration and land records
management that will eliminate fake and duplicate titles and increase public confidence in the land administration system; and
• developing a firm institutional base for subsequent phases of the LAM Program.
In January 2001 the GOP approved the implementation of LAMP I. The discussion that follows details the progress for each of the project components, the outstanding issues and lessons learned to date.
1. Policy Studies, Consensus-building and Policy Mainstreaming
This component provides support for the study of priority land policy issues and consultations on the changes required to laws, regulations, procedures and institutional responsibilities to be agreed in readiness for the implementation of LAMP II. The study areas include:
• Institutional Structure - which details the existing institutional responsibilities for land
administration and management; evaluates their effectiveness and appropriateness and
identifies areas and options for improvement; identifies changes which are within the
authority of individual agencies; and secures interagency agreements to implement
improvements and change. The lead agency is DBM-OPIB.
• Fragmented Land Laws and Regulations - which reviews and builds upon previous work undertaken on laws and regulations in the areas of public land disposition, land titling and land registration; examines and updates the relevance of these; and identifies options for change and determines implications for implementation. The lead agency is the DOJ.
• Finance and Fee Structure - which details: the current tax and fee structure to validate the perception that high fees and taxes are a disincentive for both initial and subsequent land registration; the financial status and income and expenditure flows of land administration and management; a model that allows the impact of suggested changes to be examined from a financial and economic point of view. The lead agency is the DOF-NTRC.
• Land Valuation - which details the current role of property valuation, its strengths and
weaknesses, the cost of the existing system; and options and costs for establishing a
framework for a market-based property valuation system in accordance with internationally accepted standards. The lead agency is the DOF-NTRC.
• Forest Boundary Delineation- which details a system for data-basing the general
characteristics of various land uses in the uplands; a policy framework on what to do with
areas not being used in accordance with their existing land classification; and develops
further studies to address gaps in the policy framework. The lead agency is DENR.
• Land Development Process - which details and proposes improvements to the existing system of land allocation and utilization so as to effect the highest and best use of land for present and future generations. The lead agency is NEDA-RDCS.
Five policy studies have now been completed, with the sixth - the Land Development Process study- still in the final stages.
Innovation.
The efforts of LAMP 1 at improving the Philippine system of land administration and
management (LAM) originated from a request made by the Philippine government for the World Bank to undertake a review of the Philippine situation in the lands sector. A GOP/World Bank Fact Finding Mission was fielded in 1998 to investigate the underlying issues affecting the sector, and how these impinge on the promotion of the country’s objectives of investments and growth, poverty reduction and improved management of natural resources. The study highlighted a complex web of issues, with a core problem of an inefficient and inequitable land market which constrains economic development, reduces opportunities for the poor and discourages sustainable management of
resources.
The Mission observed that this situation has arisen because of:
A weak and inefficient land administration system:
i. There is a multiplicity of agencies involved in land administration with no appropriate
mechanisms for coordination. Moreover, there is no over-all institutional mechanism to
resolve outstanding issues. As a result, many issues have remained unresolved for a long
time.
ii. The major land administration laws are outdated, restrictive and some are not in accord
with recent legislations.
iii. Not all privately claimed A&D land are believed to be titled. Of the estimated 14 million hectares of A and D lands, only 9 million hectares are titled, leaving the remaining 5 million hectares with no secure property rights.
iv. Existing land records systems are inefficient and there are limited inventories of land
records.
v. A large proportion of records has been destroyed through war, theft, fire and water
damage or simply misplaced in the frequent transfer of records. It is further believed that
some records have been deliberately removed from the archives. Many of the remaining
records are in exceedingly fragile condition and some have been illegally altered.
vi. There is no complete set of cadastral maps that show titled and untitled properties on
A&D land. Information in the Registry of Deeds (RODs) cannot be searched by parcel or
cadastral map number. Thus, the titling system does not support quality control and, as a
result, duplicate and fake titles exist and are not easily detected.
vii. The Land Registry is not easily accessible and transaction costs are high, both of which discourage registration and act as a disincentive to investment.
viii. A proliferation of fake and spurious titles, coupled with all of the foregoing, has eroded confidence in the entire titling and registration system.
Because of the inefficiency of the land administration system, it could take between six months to several years to get original title and several weeks to a few months to register subsequent land transactions, compared to only two and half hours in Thailand. This has resulted in a high level of untitled land (around 1/3 of parcels in rural areas). This has also resulted in numerous cases of land grabbing by those who can afford to pay the expenses for first time registration. Furthermore, this inefficiency, combined with high land taxes, has encouraged an informal land market, especially among the poor communities, which has resulted in lack of tenure security and reduced government
revenues from land related taxes.
Rigid and outdated land management policies
A key issue in land policy has been a land classification system that has been rigid and unresponsive to the evolving needs of agricultural and urban development. Neither has it been effective in promoting sound management of natural resources. Several forest, agrarian and urban land programs have been imposed on this fairly static land classification system by different government agencies in recent years, leading to problems with overlapping mandates and multiple land management and administrative processes. This has added to the difficulty of changing the classification system to respond to the need for economic growth and poverty reduction.
There have been procedural barriers to the flow of land from agriculture to non-agricultural use in response to relative economic returns, particularly in urban fringe areas. There is a need to review land conversion policy and procedures in order to respond to the growing demand for urban development without compromising the effective implementation of the CARP.
Fragmented responsibilities for land management and administration among several government agencies without appropriate mechanisms for coordination has resulted in ineffective land management and administration, clearly manifested in the issuance of conflicting policies on the status of lands, creating confusion and social unrest among those who reside in affected areas.
Multiple and inconsistent land valuation systems used in various government agencies.
There are several systems and methodologies for the valuation of real properties in different government agencies. These are utilised for different purposes including real property taxation, compensation for land acquired for public investment and for valuation under CARP. The multiplicity of systems and methods has often produced doubtful valuations which, when contested in court, have caused long delays in the implementation of government programs. Doubtful and contested land valuations have also had an adverse impact on the efficiency of land markets and land administration.
Below market valuation of land prevents the efficient allocation of lands to their best use, leads to a relatively low tax burden which encourages land speculation and undermines the generation of significant revenues from land ownership. In contrast, the absence of national standards and methods of valuation in accord with international standards and practice also provides a loophole which can be used to overvalue real property and underestimate the risk in property-related lending.
This undermines the integrity of financial transactions and the stability of the financial system.
There is clearly a lack of national standards and methods for valuation, coupled with lack of training for valuers in the absence of formal valuation training in the Philippines.
The local councils at the LGU levels have not regularly updated their land values, limiting the ability of the tax Assessor’s Offices to come up with market based land values required by law. This has resulted in low revenue collections from real property taxation, and has severely undermined the ability of LGUs to raise enough revenues to finance their local development plans.
Inefficient land markets
An inefficient and ineffective land administration system, combined with fragmentation of institutional responsibilities and inconsistent and outdated land policies, has resulted in inefficient land markets.
In the urban land market, there is an unmet demand for housing, commercial and industrial land because urban land supply is far short of demand. In addition, difficulties surrounding the conversion of agricultural lands to non-agricultural use, whether for housing, commercial or industrial purposes, have constricted the supply of urban land. This shortage of urban land has led to rising urban land prices that have made it unaffordable for the majority of the population.
The high cost of urban land has driven many people to invade public and private lands to establish informal settlements. The CARP, which is achieving some success in promoting social equity through the transfer of land to landless farmers, has, nonetheless, had an adverse effect on formal rural land markets. The CARP law has restrictions on the buying and selling of agricultural land under the program. In addition, many untitled privately claimed A&D lands are outside the formal rural land market. This phenomenon and the CARP law restrictions are the main cause of stagnation in formal rural land markets.
The Land Administration and Management Project (LAMP I)
As a first step towards the implementation of the long-term Program, the GOP sought the support of the World Bank and AusAID for funding. LAMP 1 was designed as a Learning and Innovation Loan to lay the foundations for the subsequent phases through the development of appropriate policy proposals and enable the testing of alternative approaches to improve the land administration systems. Between 1999 and 2000 the GOP, the World Bank and AusAID collaborated in the design of LAMP 1 with the specific purpose of:
• building consensus among GOP institutions in key policy areas of land administration and commencing implementation of recommended changes to the system;
• testing, via prototypes, of efficient procedures for land registration and land records
management that will eliminate fake and duplicate titles and increase public confidence in the land administration system; and
• developing a firm institutional base for subsequent phases of the LAM Program.
In January 2001 the GOP approved the implementation of LAMP I. The discussion that follows details the progress for each of the project components, the outstanding issues and lessons learned to date.
1. Policy Studies, Consensus-building and Policy Mainstreaming
This component provides support for the study of priority land policy issues and consultations on the changes required to laws, regulations, procedures and institutional responsibilities to be agreed in readiness for the implementation of LAMP II. The study areas include:
• Institutional Structure - which details the existing institutional responsibilities for land
administration and management; evaluates their effectiveness and appropriateness and
identifies areas and options for improvement; identifies changes which are within the
authority of individual agencies; and secures interagency agreements to implement
improvements and change. The lead agency is DBM-OPIB.
• Fragmented Land Laws and Regulations - which reviews and builds upon previous work undertaken on laws and regulations in the areas of public land disposition, land titling and land registration; examines and updates the relevance of these; and identifies options for change and determines implications for implementation. The lead agency is the DOJ.
• Finance and Fee Structure - which details: the current tax and fee structure to validate the perception that high fees and taxes are a disincentive for both initial and subsequent land registration; the financial status and income and expenditure flows of land administration and management; a model that allows the impact of suggested changes to be examined from a financial and economic point of view. The lead agency is the DOF-NTRC.
• Land Valuation - which details the current role of property valuation, its strengths and
weaknesses, the cost of the existing system; and options and costs for establishing a
framework for a market-based property valuation system in accordance with internationally accepted standards. The lead agency is the DOF-NTRC.
• Forest Boundary Delineation- which details a system for data-basing the general
characteristics of various land uses in the uplands; a policy framework on what to do with
areas not being used in accordance with their existing land classification; and develops
further studies to address gaps in the policy framework. The lead agency is DENR.
• Land Development Process - which details and proposes improvements to the existing system of land allocation and utilization so as to effect the highest and best use of land for present and future generations. The lead agency is NEDA-RDCS.
Five policy studies have now been completed, with the sixth - the Land Development Process study- still in the final stages.