Agrarian Reforms and Economic Nationalism

Pre-Colonial Land Concepts and the Transition to Spanish Rule

Before the arrival of the Spanish, most native groups in the Philippines did not possess a modern concept of individual land ownership. Land was viewed as a communal property administered by the chief or datu, and it effectively belonged to everyone within the community. The majority of the population, including the Oripun and Alipin, labored on the land. While they did not own the land itself, they were entitled to own the resources derived from it, such as wood and crops. The produce generated from these lands was shared among the community members.

Upon the arrival of the Spanish, the colonial system introduced the legal concept that land could be owned as a personal possession, documented by physical papers. The principalia class, consisting of datus and pre-colonial leaders, collaborated with the new regime to maintain their power. They utilized this transition to claim lands that previously belonged to the whole community as their personal property. This shift marked the beginning of a system where legal titles became the sole proof of ownership, often at the expense of the communal rights of the masses.

The Spanish Colonial Period and the Hacienda System

The Spanish colonial administration introduced the encomienda system, which involved assigning specific lots for housing to indio families and parcels of land in the outskirts for the cultivation of crops and the raising of animals. In $1861$, the Ley Hipotecaria, or the Mortgage Law (also known as the Law on the Inscription of Titles to Immovable Property), was implemented. This law classified lands and buildings as immovable properties, further formalizing the legal structure of land ownership.

As the Philippines opened to world trade, the cultivation of commercial crops increased land values, leading to the rise of haciendas or large land estates. These estates were often owned by friars and members of the principalia or cacique class, who expanded their holdings through purchase or land-grabbing. This hacienda system inaugurated the practice of agricultural tenancy. It necessitated the hiring of inquilinos, who acted as land managers for friar estates, and tenant farmers known as kasama to till the soil.

The American Colonial Period and the Homestead System

During the American colonial period, there was a pressing need to improve the conditions of small farmers and tenants by addressing the land problem. The administration expropriated friar lands and implemented land registration. Through the Homestead program, the government initiated a system where interested persons could apply to acquire public lands on the condition that they reside in and cultivate those lands. This was intended to encourage tenant ownership.

However, the Homestead system faced significant failures in practice. Approximately half of the lands awarded ended up being sold or rented out to American and Filipino business owners. The other half of the participants often ended up borrowing money from wealthy landowners or selling their lands back to them, eventually becoming tenants on the very land they were supposed to own. The $1920s$ and $1930s$ saw eruptions of large-scale peasant uprisings in Luzon led by groups such as the Colorums and the Sakdalistas.

The Commonwealth Period and Peasant Unrest

By $1935$, relations between most Filipino farmers/tenants and their landowners had reached a state of crisis. The period was characterized by absentee landowners who preferred to live in cities while their provincial holdings were managed from afar. The prevailing harvest sharing agreement was often a $30/70$ split, where the tenant received only $30\%$ of the harvest while the landlord took $70\%$. Additionally, unfair loaning practices were rampant; tenants often borrowed rice measured in cavans (with one cavan weighing approximately $75\,kg$), but the interest and repayment terms were predatory.

In response, President Manuel Quezon attempted to implement land reforms by purchasing large estates and dividing them for resale to tenants. He aimed to stabilize the agricultural sector through the establishment of the National Rice and Corn Corporation and the National Sugar Board. Laws were passed during this period to regulate the relationship between landlords and tenants and to protect the land tenure of farmers, though the fundamental issues remained largely unresolved.

The Japanese Occupation and the HUKBALAHAP

Between $1941$ and $1945$, during the Japanese occupation, the Hukbo ng Bayan Laban sa Hapon, or HUKBALAHAP (Huk), emerged as an anti-Japanese resistance movement. This group had a peasant mass base located primarily in Central Luzon. Farmers and tenants took up arms and engaged in guerrilla resistance, which significantly weakened the Japanese military hold over various Luzon provinces. During this time, they also seized private properties across the region as part of their struggle.

Post-War Agrarian Reforms and the Huk Rebellion

Following the war, President Manuel Roxas oversaw the passage of Republic Act No. $34$ in $1946$. This act established a $70-30$ sharing agreement in favor of the tenant (where the tenant receives $70\%$ and the landlord receives $30\%$), provided the tenant furnished the necessary work animals and farm implements. It also reduced interest rates on landlord loans to a maximum of $6\%$. Despite these efforts, Roxas's proposed reforms—including the acquisition of large estates for subdivision and opening public lands for resettlement—were cut short by his death in $1948$.

From $1946$ to $1954$, the Huk Rebellion, led by Luis Taruc and the Hukbong Magpapalaya ng Bayan (HMB), raged in Central Luzon. The movement accused the government of serving American and landlord interests. The government responded with military campaigns and arrests. Although Taruc was granted amnesty by President Elpidio Quirino in $1948$, negotiations failed, and the insurgency continued until Taruc finally surrendered to President Ramon Magsaysay in $1954$.

The Agricultural Land Reform Code (Republic Act No. 3844)

In $1963$, President Diosdado Macapagal undertook the first comprehensive agrarian reform program through Republic Act No. $3844$. The primary goal was the gradual abolition of the tenancy system, replacing it with an agricultural leasehold system. The aims included converting tenant farmers into owner-cultivators, focusing on land redistribution, promoting farmer independence, and improving productivity. While initial results were promising, the program faced a major setback when Congress failed to enact a bill to fund its implementation.

According to Section $2$ of the act, the state policy was to establish owner-cultivatorship and economic family-size farms as the basis of Philippine agriculture. This move was intended to divert landlord capital toward industrial development and create a viable social structure conducive to higher farm incomes. It also aimed to apply labor laws equally to both industrial and agricultural workers and to make farmers self-reliant and responsible citizens.

Agrarian Reform Under President Ferdinand Marcos

Upon declaring Martial Law in $1972$, President Ferdinand Marcos cited widespread farmer discontent as a reason for reform. Presidential Decree No. $2$ proclaimed the entire country a land reform area. This was followed by Presidential Decree No. $27$, which mandated the distribution of tenanted private agricultural lands devoted to rice and corn production to the tenants. Under this decree, a tenant farmer was deemed the owner of a family-size farm of $5$ hectares if the land was not irrigated, or $3$ hectares if it was irrigated.

Landowners were allowed to retain an area of not more than $7$ hectares. The value of the land for transfer was set at $2.5$ times the average harvest of three normal crop years preceding the decree. The total cost, including interest at a rate of $6\%$ per annum, was to be paid by the tenant in $15$ equal annual amortizations. To receive the title, a tenant had to become a member of a recognized farmer's cooperative. Titles were non-transferable except by hereditary succession or to the government. Despite these provisions, very few tenants were actually awarded lands, and the program's scope was criticized as limited.

Comprehensive Agrarian Reform Law of 1988 (Republic Act No. 6657)

Following the Mendiola Massacre on January $22$, $1987$, where farmer-protesters were killed by police, President Corazon Aquino issued Proclamation $131$ and later signed Republic Act No. $6657$. This created the Comprehensive Agrarian Reform Program (CARP), which covered all public and private agricultural lands regardless of tenurial arrangement or commodity produced. The government provided an initial Agrarian Reform Fund of $P50,000,000,000$ to cover implementation costs from $1987$ to $1992$.

The Department of Agrarian Reform (DAR) was reorganized and expanded to facilitate the Land Tenure Improvement Program, providing support services and legal assistance. However, CARP faced challenges, including budgetary shortages, allegations of lack of political will, and corruption scandals involving land valuation. One notable example was the Garchitorena scam involving an $1,888$-hectare estate in Camarines Sur. It was bought by Sharp International Marketing for $P3.8$ million from UCPB and was subsequently offered to the government for $P62.7$ million (with a final valuation of $P56$ million mentioned in some records).

CARPER and Continuing Challenges

CARP was originally intended to run for $10$ years. After an initial extension, it was considered unsuccessful by its scheduled end in $2008$. Consequently, President Gloria Macapagal-Arroyo signed Republic Act No. $9700$, which created the Comprehensive Agrarian Reform Program Extension with Reforms (CARPER), extending the program for another $5$ years. Throughout these various iterations of reform, violence continued as landowners and farmers clashed over land rights, and landlord influence in government was often cited as a barrier to effective implementation.

Economic Nationalism and Post-War Challenges

Economic nationalism is defined as a set of practices designed to create, bolster, and protect national economies within the context of world markets. It emphasizes government intervention, operating on the principle that society has interests distinct from those of any individual. In the post-war Philippines, the economic climate was dominated by foreign interests, particularly Americans. Key legislative milestones including the Hare-Hawes-Cutting Act ($1933$) and the Tydings-McDuffie Law ($1934$) set the stage for transition, promising independence after a $10$-year Commonwealth period.

Post-War Trade Acts and Parity Rights

The Bell Trade Act of $1946$ and the Rehabilitation Act were central to post-war recovery but highly controversial. The Rehabilitation Act provided approximately $P800$ million in cash and kind for reconstruction, but it was tied to the acceptance of the Bell Trade Act. This act included "parity rights," which granted United States citizens and corporations equal rights with Filipinos in exploiting the country's natural resources and operating public utilities. Opponents argued this violated the $1935$ Constitution, but President Manuel Roxas and Vice President Elpidio Quirino felt compelled to accept these terms and amend the Constitution to facilitate aid.

In $1955$, the Laurel-Langley Agreement amended the trade act, expanding parity rights to include "all forms of business enterprises." These rights were accorded "national treatment" and were set to expire in $1975$. This era was characterized by a semi-colonial economic status despite political independence, as agricultural nations remained dependent on manufacturing nations for finished goods and wealth generation.

The 1935 Constitution and the Retail Trade Nationalization Law

Article XII, Section $1$ of the $1935$ Constitution originally stipulated that the disposition and utilization of natural resources should be limited to Filipino citizens or corporations with at least $60\%$ Filipino capital. Under the influence of critics like Senator Claro M. Recto, the government eventually moved toward more protectionist policies. The Retail Trade Nationalization Law of $1954$ (which took full effect in $1964$) prohibited non-citizens and non-wholly-owned Filipino corporations from engaging in retail business.

Licenses for non-citizens were forfeited for violations of labor or economic control laws, and no new licenses were issued for additional branches. This legislation was a direct response to the dominance of foreign interests in the local market and sought to ensure that the retail sector remained in the hands of the Filipino people.

President Carlos P. Garcia and the Filipino First Policy

In his $1960$ State of the Nation Address (SONA), President Carlos P. Garcia articulated the "Filipino First Policy." He stated that while the Philippines had been politically independent since $1946$, it remained economically semi-colonial. The policy aimed to regain economic independence by ensuring Filipinos obtained dominant participation in their own national economy. Garcia welcomed foreign capital but preferred it on a joint-venture basis. The policy was designed to protect Filipino products and interests, ensuring that the benefits of the country's resources primarily served its citizens.

The Perspective of Claro M. Recto on Economic Ownership

Claro M. Recto, a primary critic of foreign economic dominance, argued that political independence is hollow without economic independence. He defined economic nationalism as the control of a country's resources by its own people for their own interest and enjoyment. Recto emphasized that agricultural nations exporting raw materials are inherently dependent on manufacturing nations.

He argued that Filipino ownership of industries is necessary because foreign-owned industries result in wealth leaving the country. If wealth remains in the Philippines and is reinvested, it creates a self-sustaining cycle that raises the standard of living for the majority. Without this control, the few rich (often aliens) get richer while the poor get poorer, a condition he noted historically led to revolutions, such as the Fidel Castro revolution in Cuba.