Agricultural Land Conversion in the Philippines: A Comprehensive Legal Article (Updated 28 June 2025)

Abstract

This article unpacks the entire legal ecosystem that governs the conversion of agricultural land in the Philippines. It synthesises constitutional policy, statutes, administrative regulations, jurisprudence, and recent policy shifts, offering practitioners and scholars a single reference on how—and when—farmland may lawfully be shifted to non-agricultural uses.

1. Foundational Legal Framework

Layer	Instrument	Key Provisions
Constitution	1987 Phil. Constitution, Art. XII §§1-6	• Declares State ownership of lands of the public domain and a duty to promote equitable land distribution • Empowers Congress to determine limits and circumstances of land utilisation
Primary Statutes	RA 6657 (Comprehensive Agrarian Reform Law, 1988) §65; RA 9700 (CARPER, 2009)	• §65: Allows conversion of agricultural lands when “no longer economically feasible or sound” for agriculture • RA 9700: Tightens rules, emphasises food security, expands notice & consultation requirements
	RA 8435 (Agriculture & Fisheries Modernization Act, 1997)	• Declares prime, irrigated and irrigable lands “non-negotiable” for conversion
	RA 7160 (Local Government Code, 1991)	• LGUs empowered to reclassify agri-lands through Comprehensive Land Use Plans (CLUPs)
Delegated Legislation	DAR Administrative Order (AO) 01-2002 DAR AO 01-2019 DAR AO 03-2021 (streamlining edits)	• 2002 AO: “Comprehensive Rules on Land Use Conversion” (baseline) • 2019 AO: Shorter timelines, electronic filing, stricter post-conversion monitoring • 2021 AO: Moves small-scale conversions (≤5 ha, residential) to the regional office, further digitisation
Executive Orders & MCs	EO 129-A (1987) (reorganises DAR); EO 124 (2021) (fast-tracks conversions for flagship infra); Joint DAR-DENR-DA-HLURB-NHA MCs	• Inter-agency clearances, geo-tagging, online tracking
Related Environmental Regs	PD 1586 (EIS System); DENR DAO 2003-30	• Require an Environmental Compliance Certificate (ECC) for conversions ≥1 ha or in environmentally critical areas

2. Core Concepts and Distinctions

Term	Statutory Source	Essence
Land Use Conversion	RA 6657 §65; DAR AOs	Post-acquisition act of DAR authorising a change in actual use of land from agricultural to residential, commercial, industrial, or other non-agricultural purposes
Land Reclassification	RA 7160 §20	Prospective zoning power of LGUs; amends the CLUP but does not by itself allow a landowner to change use
Exemption/Exclusion	SC in Spouses Banal v. DAR (G.R. No. 142733, 2003)	Lands already non-agricultural, forest, mineral, fishponds etc.—outside CARP coverage
Retention	RA 6657 §6	Landowner’s retained area (≤5 ha) cannot be converted for 5 yrs without DAR clearance
Illegal Conversion	RA 6657 §73(a)	Changing use without DAR approval; penalised by reversion, fines, or imprisonment (up to 6 yrs)

3. Agencies and Their Roles

DAR – Lead agency; issues Conversion Orders, monitors compliance, may revoke.
DA – Certifies whether land is irrigated, irrigable, or prime (non-negotiable).
LGU – Enacts CLUP and zoning ordinances; issues Locational Clearance/Zoning Certification.
HLURB/DHSUD – Subdivision and housing approval, site development permits.
DENR-EMB – Processes ECCs under the EIS system.
LRA/Registry of Deeds – Annotates Conversion Orders on titles.
NIA, NFA, NEDA, SHFC, NCIP – Consulted case-to-case (irrigation, food security, development planning, social housing, ancestral domain).

4. Step-by-Step Procedure (DAR AO 01-2019)

Timelines run in working days unless otherwise stated.

Pre-Application
- Secure LGU Reclassification Ordinance & CLUP map.
- Obtain DA Certification on land classification (irrigated/prime, etc.).
- Prepare site development concept, socio-economic study, vicinity map, photos.
Filing of Application
- File at DAR Provincial Office (DARPO); regional office if ≤ 5 ha.
- Documentary requirements (notarised):
  1. Proof of ownership (TCT/OCT, tax declarations)
  2. Approved survey plan (Bureau of Lands/Geodetic Engineer)
  3. ECC or DENR Certificate of Non-Coverage (CNC)
  4. Affidavit of non-tenancy or waiver/compensation agreement signed by tenants/ARBs
  5. Recent tax clearances, barangay clearance, zoning certificate
Posting of Notice & Ocular Inspection
- DARPO posts in barangay hall, municipal hall, and on-site for 15 days.
- Technical Working Group (DAR, DA, LGU, DENR, NIA) conducts joint investigation within 15 days.
Evaluation & Recommendation
- ≤ 5 ha: DAR Regional Director decides within 30 days.
- > 5 ha: DARPO evaluation (15 days) → DARCO (Central Office) review; DAR Secretary decides within 60 days of complete docket.
Decision & Issuance of Conversion Order
- Specifies area, new use, development schedule (max 5 yrs), conditions (e.g., buffer strips, green spaces, tenants’ compensation).
- Posting & Registration: Annotated on title; copy furnished LGU & DENR.
Post-Approval Monitoring
- Annual reports on development progress.
- Compliance Audit after 5 yrs. Failure = automatic revocation; land reverts to agricultural use and is subject to CARP distribution.
Appeal
- Aggrieved party may file Motion for Reconsideration with DAR within 15 days; further appeal to the Office of the President (OP) within 15 days; judicial review via Rule 65 petition to Court of Appeals/Supreme Court.

5. Development & Financial Obligations

Item	Basis	Typical Rate / Detail
Conversion Fee	DAR AO 1-2002, revised 2019	2 % of zonal value per BIR schedule (residential) — higher for commercial/industrial
Disturbance Compensation	RA 3844 §36; RA 6657 §32	At least 5× average gross harvest of 3 yrs for each dispossessed tenant, or as agreed
Socialised Housing Quota	DHSUD Res. No. 1-2019	Developers ≥10 ha may comply via Balanced Housing (20 % socialised)
Environmental Bonds	DENR DAO 2010-05	For projects requiring ECC, refundable upon compliance

6. Restrictions & Prohibited Conversions

Prime Agricultural Lands (RA 8435) – Those with fertile class I-III soils, irrigated or irrigable, and >60% suitability index.
Lands Awarded Under CARP
- CLOA/EP lands may not be converted within 5 yrs from award and must have DAR approval thereafter.
Retention Areas – Owner’s 5-ha retention cannot be converted for 5 yrs (§6 RA 6657).
Standing Crop Moratorium – Applications must respect cropping seasons; forced harvest prohibited.

7. Jurisprudential Landscape

Case	G.R. Number / Date	Doctrinal Contribution
“Spouses Banal v. DAR”	142733, 05 Sept 2003	Clarified exemption vs conversion; lands already reclassified before 15 June 1988 need DAR Exemption Clearance, not Conversion Order
“Natalia Realty v. DAR”	103302, 03 Aug 1990 & 225, 07 June 1991	Upheld requirement of DAR conversion even for previously HLURB-approved subdivisions if still agriculturally devoted
“Alvarez v. PICOP”	162823, 10 June 2003	CARP cannot impair vested timber licence agreements; illustrates limits of conversion in forestlands
“Department of Agrarian Reform v. Bello”	215207, 26 Nov 2014	DAR retains jurisdiction over conversion disputes despite claims of vested rights
“Lazaro v. Amores”	182383, 06 Apr 2015	Lack of DAR approval renders deed of sale void ab initio for public policy

Note: While the Supreme Court has occasionally entertained equitable considerations, the trend remains conservative—favouring agrarian protection and strict compliance with DAR procedures.

8. Recent Policy Shifts (2020-2025)

EO 124 (27 Jan 2021) – Declared flagship Build-Better-More (BBM) infra as “nationally significant”; DAR to act on such conversion applications in 30 days.
DAR AO 03-2021 – Allows e-payment of fees, mandatory GIS-based maps, drone imagery.
House Bill 8162 / Senate Bill 42 (National Land Use Act, pending Bicameral) – Proposes hierarchical zoning (National-Regional-Local), would migrate conversion authority to a new Land Use Commission; grand-fathering clause for pending DAR cases.
Food Security Concerns – DA Administrative Circular 04-2024 listed 57 “Strategic Production Zones” off-limits to conversion unless substituted hectare-for-hectare.

9. Common Pitfalls & Best-Practice Tips

Pitfall	Mitigation
Filing before LGU reclassification is final and CLUP approved by DHSUD	Synchronise project timeline with next CLUP cycle; secure provisional LGU endorsement
Overlooking tenants/farm-workers	Engage early, execute voluntary disturbance agreements, or offer “developer-assisted” resettlement
Failure to complete development within 5 yrs	Apply for extension (max 2 yrs) before expiry, citing force majeure or market downturn
Piecemeal applications to skirt >5 ha threshold	DAR may consolidate; risk of fraud finding
Proceeding on ECC assumption	Apply for DENR Certificate of Non-Coverage if project genuinely below thresholds—saves time

10. Penalties & Enforcement

Administrative: Revocation, forfeiture of fees, blacklisting of developer, restitution of illegally disturbed tenants.
Criminal: Illegal conversion punishable by up to 6 years’ imprisonment and/or fine up to ₱1 million (RA 6657 §74, as amended).
Civil: DAR or affected ARBs may sue for damages; titles may be nullified.

DAR created Conversion Monitoring and Enforcement Teams (COMETs) in 2022 armed with drone surveillance and LIDAR data to detect non-compliance.

11. Conclusion

The Philippine agricultural land conversion regime rests on a delicate policy balance: protecting food security and agrarian reform gains while enabling urbanisation and investment. The law imposes layered clearances, public participation, and strict deadlines, but also offers accelerated lanes for strategic projects. Practitioners must therefore choreograph LGU zoning, environmental permitting, tenancy relations, and DAR procedures as an integrated whole; a mis-step in any stage can unravel the entire project years later.

Annex A – Key Issuances (Chronological)

PD 27 (1972) – Emancipation of Tenant-Farmers
EO 129-A (1987) – Reorganising DAR
RA 6657 (1988) – CARL
HLURB Res. No. 1-1998 – CLUP Guidelines
RA 8435 (1997) – AFMA
DAR AO 12-1994 – Conversion for Socialised Housing
DAR AO 01-2002 – Comprehensive Rules on Land Use Conversion
RA 9700 (2009) – CARPER
DAR AO 06-2014 – Delegation to Regional Offices (≤5 ha pilot)
DAR AO 01-2019 – Revised Conversion Rules
EO 124 (2021) – Expedited Infra-Related Conversions
DAR AO 03-2021 – e-Conversion System
DA AC 04-2024 – Strategic Production Zones

This list is non-exhaustive; consult the Official Gazette and DAR website for the most current circulars.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific projects, always consult the latest DAR issuances and engage counsel familiar with local zoning and agrarian-law practice.