Land reform in the Philippines: do as I do, not just as I say

Author: Vikram Nehru, Carnegie Endowment

Philippine President Benigno S. Aquino III is facing a crucial test of his leadership and has an opportunity to show his country that he is serious about reform.

The Supreme Court has ruled that his family must distribute almost half of its 25,000 acre holding in Hacienda Luisita — the family’s large sugar plantation located in the province of Tarlac — to some 6,300 farmers. The president should convince his family to abide by the ruling and cooperate fully — and demonstrate to the country that nobody, not even the president’s family, is above the law.

Aquino has been locked in a battle with the country’s Supreme Court, which he considers an impediment to his anti-corruption program, especially in bringing corruption charges against the previous president, Gloria Macapagal-Arroyo. The chief justice of the Supreme Court, Renato Corona, was appointed by Arroyo a week after Aquino was elected and a few weeks before he assumed office. Prior to that, Corona had served as Arroyo’s chief of staff, spokesman and acting executive secretary. Arroyo’s ‘midnight’ appointment of Corona was seen by many as an obvious attempt to protect herself against legal action by her successor.

Impeachment proceedings now underway against Chief Justice Corona need to be seen within this broader political context. President Aquino ran and won his 2010 campaign on an anti-poverty, anti-corruption platform. His campaign slogan, ‘there is no poverty without corruption’, directly placed the blame for the country’s stubbornly high poverty rate at the door of its endemic corruption. He made effective and honest governance the centrepiece of his development agenda. The Aquino administration’s new Philippine Development Plan prioritises effectiveness, transparency and accountability in public-service delivery, scaling up anti-corruption efforts, enhancing the rule of law, and expanding citizens’ access to information and participation. Improvements in government contract bidding procedures, especially in the construction of roads and highways, seem to have paid dividends by lowering costs by one-third. As part of this campaign, Aquino also launched impeachment proceedings against the anticorruption ombudsman, Merceditas Navarro-Gutierrez, who resigned days before her trial was to begin in the Senate.

Initially, the complaint against Chief Justice Corona had eight articles of impeachment, covering three broad areas: betrayal of the public trust, violation of the constitution, and graft and corruption. Five of these have since been dropped. The Senate is in the midst of the impeachment proceedings (hearings resumed on 7 May), and a final decision is expected in June.

The Philippine Supreme Court has now bared its teeth by ordering that about 4,335 hectares of the Hacienda Luisita estate, belonging to President Aquino’s family, be distributed to 6,296 farmers and their families, who have worked the land for decades. It was President Aquino’s mother, Corazon Aquino, who made land reform the centrepiece of her 1986 campaign for the presidency. Congress passed the Comprehensive Agrarian Reform Law in 1988, and in May 1989, the 7,000 tenants of the Aquino family estate agreed to take one-third of the hacienda’s corporate stock instead of the land itself. Since two-thirds of the corporate stock remained with the Aquino family, effective control of the hacienda and its land remained with the family.

In November 2011, the Supreme Court rescinded the stock distribution option and overwhelmingly voted to distribute the land to those tilling the soil. The latest ruling in April not only confirms the earlier decision, but sets the land transfer at 1989 prices (when the stock option was exercised), rather than the 2006 prices that the Aquino family was seeking. The difference is significant — at 1989 prices, the value of the land comes to a mere 196 million Philippine pesos; at 2006 prices, it could be anywhere between five and ten billion pesos.

Although President Aquino sold his interests in Hacienda Luisita before the presidential election in 2010, it is important he influence his family to cooperate fully with the Supreme Court decision. The president has made the rule of law a central platform of his presidency. His family now needs to observe the same principles the president himself has trumpeted.

Indeed, the Aquino family could prolong the case further by not cooperating with the Department of Agrarian Reform, the agency responsible for implementing the Supreme Court’s decision. But this would damage the president and his efforts to clean up the government. The nation is watching. He needs to make sure that nobody — not even the family of the sitting president — is above the law. Moreover, there are 15 other major land-reform cases pending, and the outcome of the Hacienda Luisita case will significantly affect the outcome of those that follow. Land reform, and breaking up the stranglehold the Philippine oligarch families have on the country’s land, is not only central to improving the livelihoods of the rural poor, but to accelerating broader economic progress. The president and his family should lead the way.

Vikram Nehru is Senior Associate in the Asia Program and Bakrie Chair in Southeast Asian Studies at the Carnegie Endowment for International Peace.

An earlier version of this article was first published here by the Carnegie Endowment for International Peace.