Civil forfeiture bill filed

House leaders filed a bill on Thursday, November 7, that seeks to transfer ownership of illegally acquired land and properties by foreign nationals to the government. 

Members of the House Quad Committee proposed House Bill 11403, or the Civil Forfeiture Act, in light of their suspicions that foreign nationals have unlawfully acquired several hectares of Philippine land by obtaining Filipino citizenship through fraudulent means.

Rep. Robert Ace Barbers (Surigao del Norte, 2nd District), overall chairman of the joint committee, said in an ambush interview that the bill is necessary to emphasize that foreign nationals are prohibited by the 1987 Constitution from having full ownership of Philippine land.

“When we discovered this, we found that they had also purchased a lot of questionable land because they are not Filipinos.… It should be clear that [foreign nationals] cannot acquire 100% of properties here,” he said in Filipino.

This aligns with Section 2 of Article XII, which stipulates that foreign ownership of corporations in certain industries is limited to a maximum of 40%.

It is also necessary to prevent seized land and properties from being sold while they are still under investigation, Barbers added.

The mega panel has been investigating the illegal operations of offshore scam hubs, or POGOs, in the country. Criminal activities, such as human trafficking and the illegal drug trade, have allegedly been uncovered in these establishments.

On October 21, the House Quad Comm handed over the documents it gathered related to the land ownership of Chinese nationals to the Office of the Solicitor General (OSG), urging the latter to probe these land titles.

Where will forfeited properties go?

Section 10 of the proposed legislation required agricultural land acquired through civil forfeiture proceedings to be distributed to qualified farmers.

Meanwhile, seized non-agricultural land must be allocated for use in schools, hospitals and other social welfare establishments.

Alternatively, non-agricultural land may be donated to the local government unit where it is located for the development of social service facilities.

The bill also cites Sections 7 and 8 of Article XII, which outlines that private lands can only be transferred to qualified individuals or entities, particularly Filipino citizens. 

Should Filipinos born in the country lose their citizenship, they may still acquire private lands within the limitations set by the law.  

Section 3 of the proposed Civil Forfeiture Act clarifies that any transfer of real estate property to a foreign national who is not legally qualified to own land in the Philippines is considered “null and void,” making the transfer legally invalid. 

Section 4 further establishes the presumption that any real estate acquired by a foreign national in the country is unlawfully acquired unless the foreign national can prove a legal exception.

According to the bill’s explanatory note, reinforcing existing laws prohibiting foreign land ownership strengthens their enforcement in addressing and eliminating corrupt practices, such as using late birth registration to circumvent the constitution.

This is the third bill filed by the House Quad Committee in response to its inquiry findings, following the first two bills that criminalize extrajudicial killings and ban POGOs in the country.

Source: Philstar

Cancellation of Annotation in Title: Legal Procedures and Grounds in the Philippines

Introduction

In the Philippines, the Torrens system of land registration ensures the protection and stability of property ownership. However, the Certificate of Title of a property can be subject to various annotations, which indicate claims, encumbrances, liens, or other legal notices attached to the property. These annotations may arise from mortgages, liens, adverse claims, notices of lis pendens, or other legal actions. An annotation does not nullify the title itself but serves to notify the public of existing legal interests in the property.

There are instances when an annotation may no longer serve its purpose, become irrelevant, or be declared void, necessitating its cancellation. This article discusses the legal basis, procedures, and grounds for the cancellation of an annotation in a title in the Philippines.

Common Types of Annotations in Titles

Annotations on a land title generally include:

1. Notice of Lis Pendens: A notice indicating that the property is involved in ongoing litigation.

2. Adverse Claims: Claims of interest by third parties who assert ownership or other legal rights over the property.

3. Mortgage Annotations: Entries showing that the property is subject to a mortgage.

4. Encumbrances: Other legal burdens on the property, such as liens, easements, or usufructs.

5. Restrictions or Conditions: Special conditions, such as restrictions on alienation, imposed by law or contract.

Legal Basis for Annotation and Cancellation

Annotations on a land title are made pursuant to Presidential Decree No. 1529 or the Property Registration Decree, which governs land registration in the Philippines. The cancellation of annotations follows both the provisions of this decree and the Rules of Court.

Section 108 of Presidential Decree No. 1529 allows any person interested in the cancellation of an entry in the title to file a petition for the cancellation or amendment of any annotation on the title. However, the cancellation is not automatic and requires a proper judicial process if the parties involved do not voluntarily agree to it.

Grounds for Cancellation of Annotation

1. Fulfillment or Termination of Obligation: Annotations are typically created to secure obligations, such as a mortgage or lien. Once the obligation has been fully satisfied, the party entitled to the obligation may petition to cancel the annotation. For example, if a mortgage has been paid in full, the mortgagee (creditor) can execute a document releasing the mortgage, and the mortgagor can file a petition to have the mortgage annotation cancelled.

2. Expiration of Legal Interest: Certain annotations may have a limited lifespan or may become irrelevant after the passage of time. For example, a lis pendens, which is recorded when there is a pending court case involving the property, may be cancelled once the case has been resolved in favor of the titleholder or dismissed. Similarly, adverse claims may lapse after a specific period unless renewed.

3. Void or Improper Annotation: Annotations that were improperly placed on the title, such as those made through fraud, mistake, or error, may be cancelled. For instance, an adverse claim that is groundless or not based on legitimate legal interest can be petitioned for cancellation by the registered owner.

4. Mutual Agreement of Parties: If both parties involved in an annotation mutually agree to its cancellation, they may execute an appropriate deed or agreement that will serve as the basis for its removal from the title. For instance, if a lienholder agrees to release a lien after negotiations, the parties can file for cancellation.

5. Court Order: The cancellation of certain annotations, such as adverse claims and lis pendens, may require a court order. A court may direct the cancellation of the annotation if it determines that the claim is baseless or if the registered owner’s rights should prevail.

Procedures for Cancellation of Annotation

The process of cancelling an annotation varies depending on whether the cancellation is voluntary or requires judicial intervention.

1. Voluntary Cancellation:

   - When the cancellation is by mutual agreement (e.g., mortgage fully paid), the parties involved will execute a Deed of Cancellation or a similar instrument.

   - The property owner must then file the Deed of Cancellation, along with supporting documents such as proof of payment or release, with the Registry of Deeds.

   - The Registry of Deeds will verify the documents and, if everything is in order, will cancel the annotation in the property’s title.

2. Judicial Cancellation:

   - If the annotation cannot be cancelled voluntarily (e.g., in cases of disputed adverse claims or lis pendens), the registered owner or interested party must file a Petition for Cancellation of Annotation in the Regional Trial Court (RTC) where the property is located.

   - The petition should detail the grounds for cancellation, supported by evidence such as proof of payment, termination of obligation, or court judgment.

   - The court will then set a hearing, during which interested parties can present their claims or defenses.

   - After the hearing, if the court finds merit in the petition, it will issue an order directing the cancellation of the annotation.

   - Once the court order becomes final and executory, the petitioner will present it to the Registry of Deeds, which will cancel the annotation.

Key Jurisprudence on Cancellation of Annotations

Philippine courts have repeatedly ruled on cases concerning the cancellation of annotations. A few notable rulings include:

- Spouses Ong v. Court of Appeals (2003): The Supreme Court emphasized that for a valid adverse claim to remain annotated, the claimant must renew it after 30 days unless there is a pending case involving the property. Failure to renew or pursue the claim may result in cancellation of the annotation.

- Register of Deeds of Roxas City v. Municipality of Ivisan (2016): The Court ruled that annotations based on notices of lis pendens may be cancelled once the case involving the property has been resolved with finality, especially if the litigation has no more bearing on the registered title.

Effects of Cancellation of Annotations

Once an annotation is cancelled, it is effectively removed from the Certificate of Title, and the titleholder is no longer burdened by the claim or encumbrance previously annotated. This clears the property’s title, making it free from legal complications that could hinder the owner's ability to sell, mortgage, or otherwise deal with the property.

Conclusion

The cancellation of annotations in titles is an important legal process in protecting the interests of property owners in the Philippines. While voluntary cancellations can be straightforward, judicial cancellation may be necessary for contested annotations. Whether dealing with a lis pendens, adverse claim, or mortgage, property owners must carefully follow legal procedures to successfully cancel annotations and ensure the clear and unencumbered status of their titles. Proper legal advice and compliance with the requirements under the Property Registration Decree and relevant jurisprudence are essential in navigating this process effectively.

Source: Ziggurat Real Estate

Philippine Q3 growth slows to its weakest in more than a year

This year's economic growth target will likely be missed after a slower-than-expected third quarter that has also put pressure on monetary authorities to keep lowering interest rates, analysts said.

Subdued household and government spending limited gross domestic product (GDP) growth to just 5.2 percent in July-September, markedly down from the second quarter's 6.4 percent and below the 5.7-percent median in a Manila Times poll of economists.

This brought year-to-date growth to 5.8 percent, below the 2024 goal of 6.0-7.0 percent.

Source: Business World

Household consumption — the top contributor to GDP growth — edged up to 5.11 percent from 4.7 percent in the prior quarter but remained below levels seen in the last two years, while government spending slowed by more than half to 5.0 percent from 11.9 percent.

"While the worst is probably over for private consumption in the Philippines, we doubt this pace of consumption growth is sustainable," Capital Economics said as it retained a full-year GDP growth forecast of 5.5 percent.

It added that a continued boost from lower inflation and looser monetary policy should support consumption, but "expect growth in remittances to slow amid weaker global growth which will act as a headwind."

Capital Economics also noted that investment growth remained muted and that "the level of fixed investment remains below pre-pandemic levels."

The sharp slowdown in government spending, it continued, would lead to further fiscal tightening next year.

Rate cut justification

Bank of the Philippine Islands senior economist Emilio Neri, meanwhile, said the prospect of slower growth could warrant the Bangko Sentral ng Pilipinas (BSP) continuing with an easing cycle despite a weakening peso.

"The BSP may use the recent GDP data as justification for a rate cut in December," he added. "However, external developments may also prevent them from cutting."

Neri noted that uncertainties abroad had intensified following the election victory of Donald Trump, causing more peso volatility. The central bank, he said, "may find it more appropriate to keep rates steady if the peso weakens sharply in the coming weeks."

The currency, which has weakened to the P58-to-the-dollar level in recent weeks as the dollar strengthened in anticipation of a Trump win, fell by 6.9 centavos on Thursday to P58.73 against the greenback.

ANZ Research, meanwhile, also said that slower economic growth would likely prompt the central bank to keep cutting interest rates.

"Given the benign inflation outlook over the near term and the softer GDP growth in Q3 2024, we think the BSP will cut rates by another 25 bps (basis points) in December 2024," it said.

Bank of America (BofA), for its part, said that it had expected the pickup in private consumption and the slowdown in government spending but "underestimated the export slowdown and import pickup."

Exports contracted by 1.0 percent in the third quarter, reversing from a 4.2-percent expansion three months earlier, while imports growth improved to 6.4 percent from 5.3 percent.

BofA maintained its 2024 Philippine growth forecast at 5.9 percent, forecasting a fourth-quarter improvement in private spending and still-subdued government consumption.

The third-quarter slowdown will reinforce the possibility of a 25-basis-point cut in December, BofA continued.

"However, our expectation of a further 100-bp cut in the policy rate ... [next year] may be challenged by the fluid conditions in the US that point to a stronger US dollar, increased tariffs on trade, more restrictions on immigration — some of which complicate monetary policy."

The central bank's policy rate currently stands at 6.0 percent following two 25-basis-point cuts in August and October.

The BSP's policymaking Monetary Board has only one meeting left this year in December. Another 25-basis-point cut will bring the benchmark rate to 5.75 percent.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said that BSP rate cuts and expected reductions by the US Federal Reserve would help sustain economic activity and buoy growth.

Philippine growth, he added, will still be among the fastest growing in the region.

Biz group upbeat

The Philippine Chamber of Commerce and Industry (PCCI), for its part, said it was optimistic that growth would pick up in the last three months of the year due to holiday spending.

"Primarily it's the seasonality of [the] last quarter," PCCI Chairman George Barcelon told reporters, "definitely there will be more economic activities."

"Definitely in the last quarter, moving forward, it's (GDP growth) going to be beyond 6 percent," he claimed.

The Makati Business Club (MBC), meanwhile, called on the government to increase its support for the agriculture sector, which continued to contract in the third quarter.

The 2.8-percent decline, worse than the -2.3 percent posted in April-June, was blamed on strong typhoons that had caused billions of pesos in farm damage and the lingering effects of the El Niño weather pattern.

Ahead of the release of the GDP data, the Philippine Statistics Authority reported that the value of farm output had fallen by 3.7 percent in the third quarter, worsening from the April-June's -3.2 percent and -0.2 percent recorded a year ago.

The MBC noted the Philippines was among the world's most climate-vulnerable countries with the agriculture sector often affected by typhoons, droughts and floods.

"This makes sustainable farming practices and climate adaptation crucial for food security," it said.

Source: Manila Times