The Philippines is a young country – but it is relatively old in land struggles. Hundreds of recorded revolts against the foreign land grabber which were always bloody and nearly always speedily crushed did not make the Filipino peasants tired enough to just quit – but tired enough to just rest and fight again another day – hundreds of times, over a four-hundred year period – launching just about one revolt a year! They must have had something very deep in mind to make them behave that way.

In fact, yes, our forebears were rather clear in their mind about “ownership” – or what was “mine” or “yours”, “ours” or “theirs” – which the foreign invaders found weird. For starters, unlike the foreigners that only had one, our forebears had two distinct terms for “ours”. One could use the term “amin,” meaning “exclusively ours”, and refer to village lands as collectively belonging to a given village to the exclusion of others; or one could use the term “atin,” meaning “ours” in an inclusive sense, comprehending literally everyone, both within and outside that particular village or barangay.

Thus some lands were amin (“ours” exclusively) because we applied our exclusive labor for the productivity of those lands, while rivers and forests were atin (ours inclusively) because they were just “there” as nature’s gift for the welfare and enjoyment of all.

Secondly, the people of the Philippines, like most other peoples on earth, knew the important implications of this truth that the absolute appropriation by some individuals of the land on which and from which all must live inevitably condemned the non-owning producers of wealth to deprivation. When it came to land, to be fair and just, ancient peoples adhered to the natural notion of owner-producers in the nature of stewardship. In fact, they felt they did not so much own the land as the land owned them.

The converse would mean that while non-owning producers worked and tilled the land, at their expense a few non-producing owners were pampered in luxury.

The non-owning producers were denied the right to either a part or the whole of their own produce. This fact that non-owning real producers were denied in whole or in part the fruits of their own labor would result in injustice not just on an individual but on a social scale. Injustice on a social scale was referred to now as social injustice – and, no question about it, it was merely the necessary result of society’s acceptance of an unjust ownership concept – the concept that allowed the ownership by some of what belonged to all.

Under that unjust concept the non-producing owner was able and allowed to appropriate for himself the produce of other persons’ labor as the price of his giving them permission to work the land – something which he had not made, and therefore should have always been acknowledged as there for the benefit of all, not just for some – for wasn’t land simply “there” as a free gift of nature? In the end the non-producing owners (or landlords) would own the labor power on the land. And of course, ownership of that on which and from which all people must live would be little different from owning the people themselves.

Under this foreign notion of land ownership, which started early in Rome and came to the Philippines via Spain, the heads of barangays (villages) were now allowed and even encouraged to individually own what had hitherto been always communal lands of the whole barangay. For the first time ever they would now appropriate for themselves as their exclusive and absolute individual property the lands that in their mind then and in actual practice truly belonged to all. This process of individual appropriation accelerated in the Philippines throughout the seventeenth century.

During the 18th century and on to the 19th, as this archipelago became more part of a commercial world, the modernization demand in agriculture became acute with the impact of a global commercial revolution that now wanted lands in the Philippines to grow and export such crops as sugar, tobacco and indigo for the promise of profits from a rich market. To meet these demands of the market, one needed large tracts of land and technology and capital. At that point we began to see real wealth rising – from land grabbing and cash cropping.

And guess who led the abominable practices leading to social injustice? Who ensured that the Church’s social teaching sourced from bible and tradition would remain well-kept secrets – teachings that clearly rejected the Roman law concept of absolute ownership in favor of stewardship? None other than religious orders of the Catholic Church who ironically all made a solemn vow of poverty – a fact current church people might do well never to forget, especially during times when it is so easy and so ugly to take before others a holier-than-thou attitude regarding land reforms. After all, was it not their predecessors-in-interest that caused so much of the current mess?

There can be no denying the historical fact that some religious orders became the top land grabbers and consolidators in the islands. In so doing they produced mass poverty, and later on, some wealth.

Of course the religious and the church people did not themselves till the lands they grabbed from the locals. They leased their grabbed lands to civil lessees who became known as inquilinos. The mestizo (mixed race) class, some of whom morphed to become our present “oligarchs,” dominated this leasing of friar lands and arranged for native peasants to sharecrop the land.

From inquilino (land-leasing) activities, the mestizos branched out to money-lending operations. Cash crops meant precisely that – a growing cash economy. Money was becoming an important commodity. Since they could not sell their lands for cash, in accordance with law, they went to the mestizos for money. The latter willingly obliged on the following condition: that the peasants should mortgage their land by the Spanish contract known as pacto de retroventa, translated as “sanglang-bili”, which was a sale option to re-purchase.

For the most part, of course, the peasants were unable to pay and the option to re-purchase lapsed. The contract then became a straight sale, and the Chinese mestizo moneylender acquired full ownership of the land. With tracts of land now, he could modernize at last and attain economies of scale. Doesn’t all this sound familiar?

In the late 19th century, the most modern and the biggest consolidated contiguous piece of earth in the Philippines was put together not by a Spanish-Chinese mestizo nor by a Catholic friar but by a very interesting Spaniard who was an adventurer and an astute businessman.

The most influential Spanish businessman of his generation, his ambition was to take over the Philippine Tobacco Monopoly from the Spanish colonial government. In fact, for this reason, the name of the company he founded was “Tabacalera” or the “Compania General de Tabacos de Filipinas”. He also deliberately planted cane and produced sugar in his haciendas. What we now know as “Luisita” was Tabacalera then.

The man’s name was Don Antonio Lopez y Lopez, of Santander, Cantabria and Santiago de Cuba. He was also known as the first Marques de Comillas. He was a close associate of the first Spanish-Filipino Prime Minister of Spain and, of course, of the King as well.
Tabacalera owned the consolidated estate “Hacienda Luisita” (named after wife Luisita Bru y Lassus), and the “Hacienda Antonio” (named after his eldest son), the “Hacienda San Fernando” and the “Hacienda Isabel” (named after his eldest daughter) in Cagayan and Isabela provinces where the legendary La Flor de Isabela cigar was cultivated.

Tabacalera’s incorporators were the Sociedad General de Credito Inmobiliario Español, Banque de Paris which is now Paribas and Bank of the Netherlands which is now ABN-AMRO.

Tabacalera was so modern and profitable and wealth-creating that it realized a surplus big enough to help in the establishment of the Jesuit Pontifical University of Comillas, a university outside Madrid, as well as the construction of their own luxurious Palacio de Sobrellano in Comillas and the Güell park (designed by Gaudi) in Barcelona.

With the defeat of the Spaniards by the Americans in the Philippines, would one not have thought that the Spanish-owned Hacienda Luisita (Tabacalera) would also go under? It did not. Rather, the American sweet tooth ensured that it would prosper – at one time cornering as much as 20% of the sugar market in the United States that, in addition, helped it to modernize its equipment and more than double its production. During the Japanese occupation, Hacienda Luisita continued to operate as the Japanese were bent on ensuring that commodities like sugar would never go scarce.

It was not till the post-war Philippine Republic, when the socialist Huk movement was on the rise that the Spanish owners of Hacienda Luisita thought of selling out. The Lopezes of Iloilo wanted in but the Magsaysay government (probably influenced by an adviser from Tarlac) looked askance at the thought of the Visayan oligarchs taking over Luzon. The technical assistant of Magsaysay, one Benigno S. Aquino, Jr. saw great possibility in the situation and suggested to his rich father-in-law, Don Jose “Pepe” Cojuangco, to maneuver in.
Don Pepe, like his son-in-law, was from Tarlac province and was more than rich enough in lands and banking assets and Philippine pesos but not in U.S. dollars. To acquire the Luisita in 1958, Jose Cojuangco, therefore, had to take a dollar loan from the Manufacturers Trust Company of New York, which was guaranteed by the Central Bank of the Philippines. He also took a loan from the Government Service Insurance System and had to reduce his stake in the Paniqui Sugar Mills. Additionally, the GSIS approved the loan of P5.9 million, and gave the conditionality that Hacienda Luisita would be “subdivided among the tenants who shall pay the cost thereof under reasonable terms and conditions.” Don Pepe agreed but with an amendment to the condition that would now read thusly: “…shall be sold at cost to tenants, should there be any.” Clearly, even then, he was bent on a direction towards estate management, not on landlord-tenant relationships. He wanted to advance from the feudal relations of production to a modern capitalist mode.

Despite Hacienda Luisita’s being the largest investment he ever made, Don Pepe, ironically, did not rake it in. He barely made any money from it. He appointed son-in-law Ninoy as first Administrator who forthwith transformed the hacienda into a social welfare state that made profit all right but did not maximize it.

Ninoy introduced free medicines and medical check-up, scholarships to colleges, free food and equitable shares in the harvest, free child care and nutrition, free burials, a village with housing earmarked for the farmers, free gasoline, the like. His incredible policy was to rehabilitate Filipinos who before were almost like slaves under the Spanish-owned Tabacalera. His social concern activities and modern estate management were written about in those years as a wonder and a model.

The truth seems to be also that whenever there were losses they were sustained in part by Don Pepe’s other (money-making) investments such as the Bank of Commerce, the First Manila Management and its Pantranco buses, the Mantrade group, and others – businesses that would be taken over by Kokoy Romualdez during the Marcos regime later.

During the Marcos years, needless to say, when Ninoy had become the main challenger to and the biggest headache of the regime, Marcos made sure that Don Pepe’s empire began to wane, fast. But Hacienda Luisita continued to exist and operate as such, despite the almost mandatory land acquisition and distribution program of those Marcos “land reform” years. Some have found the explanation in Danding Cojuangco. Nephew of Don Pepe, Danding was Marcos’ top crony. He would not want “land reform” (i.e. land subdivision) introduced into Luisita as it would mean sooner than later extending it to other (Aunt Ysidra) Cojuangco haciendas, which were under his supervision. Besides, Ninoy was now “silenced”, in jail or in exile. So, what for?

His wife’s (Cory) political challenge to Marcos was another matter. Only then – during the 1985-86 snap presidential campaign – did talk start anew about taking over, subdividing and distributing Luisita lands. Underscore “talk” because the almighty Marcos never actually did it, despite the election period order of the Manila Regional Trial Court that Luisita be surrendered to the Ministry of Agrarian Reform, an order immediately appealed by the Cojuangcos to a higher court.

Under Marcos, “land reform” was never introduced to the hacienda. Why? Was it because he knew that land distribution, to be real reform, would have to end up in land consolidation; otherwise one would only be distributing poverty with no possibility of modern wealth creation? Was it because he acknowledged that Luisita was already “consolidated” (precisely as an estate) and that it would be uneconomic not just for the private owners but for the nation to break it up back to primitive agriculture?

Under the Cory dictatorship, ruling under the “Freedom Constitution”, Presidential Proclamation 131 and Executive Order No. 229, outlined her agrarian reform program, which covered at last sugar (!!!) and coconut lands. Also acknowledging the value of estate management, like her predecessor and so many other countries did around the world, the outline included a provision for a Stock Distribution Option (SDO), a mode of land reform that did not require actual transfer of the land to the tiller while formally involving a transfer of ownership. A little more than a year later, under a democratic Cory presidency, R.A. No. 6657 or the Comprehensive Agrarian Reform Law would retain the SDO clause letting farmers obtain shares of stock in a corporation instead of land – very much akin to neighboring Malaysia’s successful FELDA-FELCRA scheme for estate farming in oil palm.

Cory did not want to exempt any one or any land from the CARP. But she wanted people’s participation –people power– respected and followed. Thus the majority of (Aunt Ysidra) Cojuangco lands “disappeared” into CARP ironically under a Cojuangco presidency. The perseverance of her siblings, however, “saved” the Luisita from being hocked into uneconomic pieces. They successfully argued that it was impractical and unfair to divide the hacienda’s 4,915.75 hectares of land among 6,296 farm workers because this would give farmers less than one hectare of land each (or 0.78 hectares of land per person). In May 1989, Luisita’s farm workers were asked to choose between stocks or land in a referendum. The SDO won 92.9% of the vote. A second referendum and information campaign were held five months later, and the SDO won again, getting 96.75% of the vote.

When the CARP was implemented in Hacienda Luisita in 1989, the farm workers’ ownership of the plantation was pegged at 33 percent, but the SDO agreement spelled out a 30-year schedule for transferring ALL the stocks eventually.

In sum, at the end of each fiscal year, for a period of 30 years, the Luisita was to arrange distribution to farm workers on the basis of number of days worked and at no cost to them one-thirtieth (1/30) of 118,391,976.85 shares of the capital stock of the Hacienda Luisita Inc. until such time as this entire block of 118,391,976.85 shares would have been completely acquired and distributed to the farm workers.

Philippine sugar had long ceased to become the most profitable commodity in the world market, not till 2009 in any case. The third generation Cojuangcos (PNoy’s group) who were tasked to manage Luisita and the sugar central aimed both to make the economic concern profitable and socially responsible in the tradition of their elders. Of course they did not have the charisma and savvy of the original administrator Ninoy or his brother-in-law Peping. Educated in management disciplines and the law, these younger Cojuangcos worried about fiscal balance and the bottom-line. But without the traditional subsidies from other Jose Cojuangco enterprises that had suffered greatly under Marcos, the younger Cojuangcos posted hundreds of millions in losses for both Luisita and the central. Well, the family made big bucks in the lands converted to industrial economic zones but that was another matter.

Cory was not quite fortunate in her relations with politicized elements of the organized peasantry and their even more militant allies. Eleven months into her presidency, thousands of frustrated farmers, no doubt inspired by ideological values, marched to Malacañang demanding land reform and the distribution of land at no cost to beneficiaries. In a violent dispersal, 13 protesters were killed in what has become known as the “Mendiola Massacre,” happening, as it did on Mendiola Street near the Palace.

In the united front protests against Luisita in 2004 violence erupted between the protesters, the police and military forces. At least seven people were killed, 121 were injured, 32 from gunshot wounds. The incident eventually became known as the “Luisita Massacre.” The protesters (very few of whom were from the hacienda itself) were pushing for fairer wages, greater benefits and national land reform. This was no ordinary labor union or farm workers’ strike, because the in-hacienda hands, for the record, had gone along fine with the SDO way of agrarian reform. Rather, it seemed the strike was one coming from ever-expanding sectors of Philippine society that was in quite a mood to tame, if not even tear up, the grand ole lady Louise.
Politically, Cory (and, by extension, son Noynoy) had become an oppositionist to Arroyo, even joining street demonstrations calling for her ouster. So it was not surprising when in 2005, Arroyo’s Department of Agrarian Reform canceled the stock distribution agreement, citing that it had failed to improve the lives of more than 5,000 farmer beneficiaries. A Macapagal would now do what Marcos never did.

Hacienda Luisita Incorporated appealed this decision, but in May 2006, the Presidential Agrarian Reform Council rejected with finality the motion of the Luisita to reconsider the revocation of the stock distribution agreement. However, the Supreme Court issued a temporary restraining order, stopping the Presidential Agrarian Reform Council from parceling out the land to the workers.

Noynoy Aquino has said it would be better for his family to give up their rights to Luisita, stating that as long as they were involved, the issue of land redistribution there would always be politically- colored. He also said at the kick-off of his presidential campaign that Hacienda Luisita’s land would be distributed to farm workers by 2014. He owns a little more than 280,000 shares of Luisita stock or barely 3% of the company.

In August 2010, Hacienda Luisita Inc. and the farmers’ organizations signed an amicable settlement- compromise agreement that gave the farmers the chance to remain as Luisita stockholders, or receive their share of Hacienda Luisita land. The broad majority voted to retain their stocks and receive cash. HLI then asked the Supreme Court to approve the settlement-compromise deal not, of course, without some farmer leaders objecting and a big howl from their “progressive” allies among church people and institutional protesters.

So, after 21 years, the Cojuangcos and the Hacienda Luisita farmers again entered into another agreement – for the farmers to have a choice between owning HLI shares or a piece of the hacienda. It was reported that the Cojuangco family was giving up 1,400 hectares to be divided among 12,000 beneficiaries. In addition, they were offering an additional P150 million in financial assistance.

Translated, the numbers would indicate the following: 1,400 hectares equals 14 million square meters (sq m) divided by 12,000 farmers equals 1,166.667 sq m each. And the P150-million financial assistance would give farmers a capital of P107, 142.86 per hectare.

The Supreme Court, however, wanted to continue deliberating on the legal and constitutional aspects of the cases before it. Then, on April 24th 2012 they released their decision. Voting 14-0, the Supreme Court (SC) ordered the total distribution of the Luisita to farmers (who, how many exactly, are questions the DAR would have to grapple with still).Then, voting 8 to 6, the justices said the Cojuangcos are entitled to compensation of only P40, 000 per hectare based on the valuation made more than 22 years earlier or last November 21, 1989, the date when the stock distribution option was approved by the Department of Agrarian Reform (DAR). And that, said the court spokesman, was final. Translation: the Luisita will only get P196 million using 1989 valuation rates, as opposed to the P5 billion being asked as just compensation by the Cojuangco family. Last they heard the Philippine constitution subscribed to just compensation and not confiscation even in matters of land reform. Ah, precisely, but what is just?

The distribution aspect may indeed have ceased to be an issue but the compensation aspect will fester on. Heretofore, it was the task of the Land Bank of the Philippines to determine the initial valuation for the hacienda in consideration of conditions set by the Supreme Court and of existing applicable guidelines. The landowners can always question the valuation with the DAR Adjudication Board and the Special Agrarian Court and even higher courts on the matter, The courts will not lack for activities in the coming months and years, Midas Marquez’ announcements to the contrary notwithstanding.
In a blogsite nearby (Get Real Post) it was reported that the Luisita had a P2 billion “capital deficiency” so that she was in real danger of descending “into insolvency oblivion” with all the trouble that this could spell for her extended network of business partners and close associates. Could one really credit or blame the much-maligned Chief Justice for this most recent explosion unleashed by his court? How would gardeners know?

The moralizing on the Luisita had intensified for many years before from all church quarters, Catholic and Protestant, that the gardener thought it best to just review quickly the moral philosophy of land ownership itself.

Almost two decades ago, the Vatican’s Pontifical Council on Justice and Peace issued a CST (Church’s Social Teaching) update entitled “Towards a Better Distribution of Land: the Challenge of Agrarian Reform.” The Council put it rather bluntly, making one believe that the document had the Philippine experience, among others, very much in mind: “Often,” it said, “the experience of agrarian reform, put into action by many governments and many countries, has failed miserably…because of a kind of ‘original sin’ which impeded their success.”

And what was this “original sin”, according to the Vatican? “That of being uniquely identified with the expropriation of land and its subsequent sub-division.”

Luckily for many Philippine church people – they may have never read the document from Rome. For if they had, in shock many may yet ask: “But isn’t that precisely what agrarian reform was all about – namely, about dividing up lands and distributing them to the landless in order for them to overcome their problem of poverty? Which is why we demanded the break up of Luisita so badly.”

In fact – no. The underlying philosophy of agrarian reform is more sophisticated than merely a land-to-the-landless slogan: land does not belong to the landowners alone – old or new – nor even to the tillers alone but to all the people. It is a limited resource for a growing number of humans, all of whom, to the very last one, are without question land-dependent. Land ownership must inescapably be regarded as stewardship – a mere means to attain the ends of land use which are: food security for all, decent habitats for all, and an ecologically harmonious economic regime for the common good.

The Pontifical Council document reiterated over and over again that “an agrarian reform program must certainly have short-term objectives so that it can have immediate results, given the serious nature of the social problems involved. It must therefore ensure that access to land fully meets these objectives. In the medium and long term, however, if agrarian reform is confined simply to land redistribution, the struggle against poverty and underdevelopment will not be won.”

It also said: “The social teaching of the Church [CST] does not consider individual property the only legitimate form of land ownership, but also holds common property…in particular consideration.” This may mean that we have to seriously consider declaring a moratorium on the scheme of land parceling and distribution as it is understood and practiced in today’s Philippines. To continue with business as usual in this aspect of the total program would evidence a national penchant for throwing good money after bad. Scarcity of land resource demands that the government conserves the same for the whole citizenry and for generations to come.

Applying CST intelligently, Philippine church leaders should rather urge government to help beneficiaries consolidate small farm holdings to correct the negative impact of land parceling. Consolidation may take the form of progressive integration of beneficiaries with farmers’ collectives and cooperatives. These farmers’ collectives and cooperatives shall carry on the management of the consolidated farms within their territory and pool available resources to insure sustained productivity and greater returns to owner-cultivators. As such, individual cultivators will enjoy psychological security, knowing that they are not alone in confronting the manifold problems related to farming – a notion expressly recognized in the current law, R.A.6657, Sec.39.

Next, they may want to encourage government to convert idle public lands suitable to agriculture into state farms under the management and operation of farmers’ cooperatives and associations. There should be no lack of willing landless farmers who will enter into “stewardship contracts” under terms and conditions that will insure maximum returns to them, sustained productivity and government revenues through lease rentals or in the form of a land value tax.

The Pontifical Council did say that while “it is not possible to determine a priori what the structure of farm life should be”, it suggests that family-owned and farmed enterprises should be actively promoted but again, preferably, in the context of cooperativism or consolidation. “Such farms should be large enough to allow [the participating families] sufficient earning, to retain possession of their farms, to have access to the land credit market, and to ensure sustainability of the rural environment also through appropriate use of inputs.”

The Philippine Constitution, in Article XIII (Social Justice and Human Rights) devotes several sections to Agrarian and Natural Resources Reform (Article XIII, Sections 4 to 8), in one section of which it would mandate the State to “undertake an agrarian reform program founded on the right of farmers and regular farm workers who are landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive a just share of the fruits thereof” (Article XIII, Section 4, underscoring supplied). Not a far cry from the Vatican document.

The Luisita has been quite a challenge. In that controversy, all the parties to the debate may be all not quite right – if one considers their different positions in the larger context of the moral philosophy of land ownership and the people’s welfare. It may not be accurate to say that they are all wrong. But we may need a new formula than just, say LAD (Land Acquisition and Distribution), which will most probably merely make the new owner-tillers even poorer than they are now.

The Philippine constitution quit subscribing to the Roman law notion of ownership long ago and came much closer to the alternative philosophy outline by patristic philosophers of the early church. This gardener seriously and humbly and sincerely suggests that Philippine church people go back to the drawing board. They are influential. They better be in tune with the Vatican, for starters, which they surely are not now on this issue and do more homework on the total complexity of a topic crying out for clarity and informed moral opinion.


Charles Avila -The Gardener
The Gardener’s Tales

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