The failure of agrarian reform under Cory Aquino



MEMBERS of the yellow tribe will mark today the 30th anniversary of what they call people power revolt. Hopefully, their numbers will be small enough to confine themselves to a road which is perpendicular to the 23.8-kilometer Epifanio delos Santos Avenue (EDSA, formerly called Highway 54.

The restriction may be justified by the fact that not many Filipinos believe anymore in EDSA’s spirit of unity against the alleged dictatorial regime of the late President Ferdinand Marcos. To some who choose to forget EDSA day even if February 25 has been declared a holiday, the late President Marcos was even a better leader than the first woman president who succeeded him.

This piece, however, is neither about EDSA nor about the yellow followers of the late President Corazon Aquino, whose son is the present temporary occupant of Malacañang Palace. I prefer to write again about the failed legacy of the first woman president of the Philippines, which was Hacienda Luisita Inc. (HLI), as I did on February 27, 2014.

Stock corporation
Why HLI? Why don’t I write about the uprising that had, as claimed by the yellows, successfully driven the Marcoses out of Malacañang Palace?

I am sticking to the topic that is HLI to illustrate how, as the Supreme Court has ruled, shares of stock could never replace a piece of farmland that the hacienda’s tenant farmers truly deserve to own.

HLI was a circumvention of the agrarian reform law. It was not only a frustration even as it was mandated under the governing provisions of the Comprehensive Agrarian Reform Program (CARP) of the late first woman president.

The agrarian reform version of Aquino the mother was bound to fail from the day HLI farmers agreed to become its stockholders on May 11, 1989. After 22 years, however, the high court upheld the Department of Agrarian Reform’s decision which declared as illegal the stock certificates instead of farm lots in complying with the law on agrarian reform.

Not beneficial to farmers
Here are the reasons why Cory’s version of agrarian reform was intended to benefit her family’s hacienda and not the tenants:

Aside from not being compliant with the agrarian reform law, HLI deprived its tenants the opportunity to own a piece of the property. Shares of stocks could never replace farm lots, which the Cojuangcos tried to impose on most of their tenants. Those who agreed to become HLI stockholders did not know what they were getting in exchange for farm lots. The company in which they were to own 37 percent, or even more, would eventually collapse with an accumulated deficit of more than P1 billion.

What happens to a company that has incurred that kind of deficit and continues to lose money? Definitely, it is bound to end in liquidation by the time its creditors start filing collection suits against it.

So, what happens to stockholders of such a bankrupt company?

In the order of priorities of claims against the assets of financially distressed corporations, the government enjoys the right to be paid ahead of other claimants, then the suppliers, workers, secured creditors and finally, the unsecured creditors, in that order. Being the tail-enders among claimants, the stockholders would get nothing.

In the case of Hacienda Luisita, had it been liquidated, the Bureau of Internal Revenue would have run after it for unpaid taxes, if it had any. Unluckily for the hacienda’s tenants-turned stockholders, as owners of a stock corporation, they would have been at the tail-end of the list of claimants.

Luckily, the high court ruled against the Cojuangcos by outlawing CARP’s stock distribution scheme that could have been a strategy to preserve one family’s ownership of 4,915 hectares of farm lands instead of distributing them to their tenants.

Had the SC’s ruling gone against the farmers, HLI would have served as the model for other wealthy families with vast tracts of tenanted farm lands. Unfortunately for the very rich, the high court saw in the Cojuangcos’ hacienda a diversionary tactic against the successful implementation of the Agrarian Reform law.

Today, the temporary resident of Malacañang Palace will probably join the yellows’ celebration of a forgotten EDSA spirit. He would probably wish his late mother were still alive to witness what to him would be a historic event, which it is obviously not.

Some, if not many, of those who were at EDSA on February 25, 1986 also wished that his mother should have lived long enough to have witnessed how the high tribunal led by Chief Justice Renato Corona nullified the distribution of stock certificates that she had conceived to protect the inheritance of her children.


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  1. Mr. Perez, please realize that 99% of agri lands were 24 hectares and below before the CARP law was implemented. In short Hda. Luisita for all its faults is not the agrarian reform program. In fact, the stock and distribution option the Cojuangco-Aquino branch exploited was only availed of 13 entities because it had a one year time limit and Cory & et al hid it from the public. Check your history.

    Another note is, agrarian reform for all its good intentions and political propaganda was a leftist political experiment that was never intended to solve an economic problem like poverty. It violates economics 101. Remember for production to succeed, four factors have to be present, land(big enough for economies of scale to work), labor(aging population- 57years old on average), capital(support services), and entrepreneurship(the glue that harmonizes the land, labor, and capital; but our farmers not only are poorly educated(national ave. is only grade 4, entrepreneurship is much more than education).

    What agrarian reform really is is to use it to propel the Left(socialists & communists) to Malacanang with the help of a hypocritical & infiltrated catholic church who with all its trillions stashed in various banks & stocks around the world give a pittance to the poor it “wants” to help.

    • What you think you know what the Catholic Church is is the source of your judgmental condemnation of the whole kit and caboodle. “Catholic” simply means “universal” in Greek to describe the various LOCAL (as in parochial, diocesan, archdiocesan) churches that were curiously “one” as in “one Lord, one faith, one baptism” (Ephesians 4:5). Since you seem to be knowledgeable about economics, you tend to lump the catholic church as one global corporation. That is another misconception that is a logical source for imagining “trillions stashed” in various banks (where else would economists deposit — in piggy banks?) True, “corporation” has “corpus” (body) for a root word. And the same “one Lord, one faith, one baptism” forms one body. Hence, corporation? And “those who believed shared everything in common” (Acts 2:44). Communists? So the catholic church is a communist corporation? How meanings change over time! The present day catholic religious orders such as the Jesuits, Franciscans, etc., are veritable communists, because they continue sharing everything in common.

      Here is the reality of the catholic church in this valley of tears. A catholic archdiocese is centered in an urban location. Progress spreads outward, and dioceses form around the Archdiocese. One diocese may in time turn into an urban center and it becomes an Archdiocese. But no matter the development in time, each diocese remains one corporation “sole”. The Pope is a bishop of the Diocese of Rome. An Archdiocese is just a plain diocese. So you have several corporations. Each is a corporation “sole”. (Sole comes from the latin “solus” for alone). However, in the spirit of “catholicity” no one diocese is really alone; the poor ones can always ask for financial and other help from other economically gifted dioceses. “Begging” aside, each local church puts its trust in divine providence.

      Can you imagine a scenario where all Pilipino farmers are landowners? And all landowners band together “sharing everything in common”? That is an ideal national corporation for “maximum productivity” and optimum elimination of hunger and want (not including “wants” which connote luxury).

      “I plead with you, then, as prisoner for the Lord, to live a life worthy of the calling you have received, with perfect humility, meekness, and patience, bearing with one another lovingly. Make every effort to preserve the unity which has the Spirit as its origin and peace as its binding force. There is but one body and one Spirit, just as there is but one hope given all of you by your call. There is one Lord, one faith, one baptism; one God and Father of all, who is over all, and works through all, and is in all” (Ephesians 4:1-6).

  2. Extremely good article and enlightening especially to those who believe cory Aquino was a good president. Goes with the son too.