AsiaFoundation70: Reforming Agricultural Land Titling in the Philippines

 In 1936, the Philippines gave traditional farmers formal title to the lands they had farmed for generations. The Public Land Act was expected to boost agriculture by encouraging landowners to invest in their property, yet for years it didn’t work. The puzzle was why, and what to do about it.

Joining us for this tale of “thinking and working politically” is Erwin Tiamson, former director of the Philippines Land Management Bureau and attorney with our partner, the Foundation for Economic Freedom, which worked to change the law. Also with us is Jaime Faustino of The Asia Foundation’s Coalitions for Change.

Read more about "thinking and working politically" in our latest issue of the InAsia blog. 

Transcript

Tracie Yang (00:00):

For seven decades, the Asia Foundation has partnered with changemakers from government, civil society, the private sector and academia, to tackle some of the greatest development challenges facing Asia and the Pacific. To mark our 70th anniversary this year, we're sharing a series of highlights that illustrate the scope and impact of our historical and current work. This first 70th anniversary podcast, a story from the Philippines, chronicles our unique approach to what we call thinking and working politically. Since [00:00:30] 2011, our Coalitions for Change program, a partnership with the Australian Department of Foreign Affairs and Trade, has sparked dozens of policy reforms in the Philippines that have brought better education and basic services, better roads and infrastructure, and other changes that improve the lives of citizens and advanced national development priorities. This podcast focuses on the Asia Foundation's support through Coalitions for Change, for milestone land reforms that have brought economic benefits to millions of Filipino landowners.

Jaime Faustino (01:00):

[00:01:00] Generally in development, most of the work is really trying to look at the technical dimension of the problem. The thinking and working politically approach takes much more recognition of incentives, self-interest and power. Who has an interest, and how do we rearrange the public policy so that people pursuing their self-interest will lead [00:01:30] to positive development outcomes?

John Rieger (01:31):

The principles and practice of thinking and working politically. Today on In Asia from the Asia Foundation, I'm John Rieger.

Tracie Yang (01:38):

And I'm Tracie Yang. In 1936, the Philippines gave traditional farmers formal title to the lands they had farmed for generations. The Public Land Act was expected to boost agriculture by encouraging landowners to invest in their property. Yet for years, it didn't work. The puzzle was why and what to do about it.

John Rieger (01:57):

Joining us today with a tale of thinking [00:02:00] and working politically is Erwin Tiamson, former director of the Philippines Land Management Bureau, and an attorney with our partner, the Foundation for Economic Freedom, which worked to change the law. Also with us is Jaime Faustino of the Asia Foundation's Coalitions for Change. Erwin and Jaime, welcome to In Asia.

Erwin Tiamson (02:18):

Hi, John. Hi, Tracie.

Jaime Faustino (02:20):

Thank you. Thank you for having me.

John Rieger (02:22):

Jaime, the Philippine system of land tenure is if several hundred years old. And by the mid-20th century, it was a certifiable mess. From farmers [00:02:30] to urban householders to public schools and government buildings, land titling had become a serious constraint on development. Give us an idea of the scope of the problem.

Jaime Faustino (02:40):

Yeah, well, in general, by the time we started looking at this issue in about 2006, 2007, we estimated that there were about 24 million parcels all over the country that were occupied, but only about half of those actually were titled. So you half the country [00:03:00] that was on occupied lands but didn't have a clean title to them, including government buildings, schools, as well as individual residents and farmers.

John Rieger (03:12):

So that is a mess.

Jaime Faustino (03:12):

Yes, absolutely.

John Rieger (03:14):

Meanwhile, what were the problems caused by these untitled parcels?

Jaime Faustino (03:18):

One main problem, of course, is that the land itself can't enter the kind of land market and be used as collateral. So here, you have the most valuable asset in many [00:03:30] cases of a family or a business, and it can't be used as collateral to expand the business, invest in a new building, et cetera. So with half the titles not on the land market, you're fighting with one hand behind your back.

John Rieger (03:45):

Erwin, the 1936 Public Land Act was supposed to give traditional farmers title to the lands that they had been farming. What happened?

Erwin Tiamson (03:54):

Unfortunately, our public land has a lot of restrictions on the title that it issues. If you receive a free patent, you cannot sell the land for the period of five years. Also, there is a restriction that says that [00:04:00] if a farmer sells his land, he can buy it back within the period of five years. I think the intention of the law then is to preserve the land to the farmers, but later on, it has a bad result.

John Rieger (04:21):

So the 1936 law says that farmers who receive formal title to the lands that they've traditionally occupied have to wait five years to sell those lands. And if they [00:04:30] do sell, they have five more years to change their minds. This sounds like an attempt to protect farmers from exploitation.

Erwin Tiamson (04:36):

I think that that is the intention by giving them the right to repurchase. But recently in the last 30 years, it became a hindrance to farmers accessing loans and credit.

John Rieger (04:48):

Why is that?

Erwin Tiamson (04:49):

Because of course, financial institutions wouldn't like to have the land tied for five years in case there will be foreclosure. So they always ask the farmers to secure the loans with other collaterals, other than of course, the free patent [00:05:00] land.

John Rieger (05:07):

So I'm a farmer and my only real collateral is my land. I've got title to the land. But the national law, the 1936 Public Land Act, gives me privileges with regard to my patent that make it impossible for me to borrow against it. Or presumably, for a buyer to do so.

Erwin Tiamson (05:25):

Yeah, exactly. So the land got stuck with you and with your family. And the problem is of course, the mobility. There are a lot of people who wouldn't like to farm anymore and would like to sell the land to [00:05:30] support their children's education because they're too old or something like that. But they got stuck.

John Rieger (05:48):

So what aspect of this problem first attracted your attention?

Erwin Tiamson (05:52):

The problem of Philippine agriculture is really big. And if you're going to look at it on a big scale, of course, you might lose [00:06:00] your will to move. So on my part, I came from the land administration side of the game. And the inability of the land to move in the market, of course, will hamper efficiency because people who are no longer interested will be forced to deal with the land that got stuck to them. And those people who wanted to enter into farming couldn't because access to land is problematic. Of course, there are informal transactions. And [00:06:30] previous to this liberalization of land transfers, most of the land market is underground. And these informal transfers, of course, depress the price of the land. The farmers get less for the value of the land that they informally sell. And of course, the buyer has a tenure problem because there is no formal transfer to him.

John Rieger (06:55):

No formal transfer, no title.

Erwin Tiamson (06:57):

Yep, no title. The problem here is [00:07:00] when you do informal transaction, the very essence of the land registration concept goes to the gutter. So if you go to the registry, the name of the person is for example, John. But when you go to the land, it is no longer with John. It's now with Michael. If you want to buy the land from Michael, that would be legally impossible. You have to look for John. It really hits the land market hard because buying land now becomes [00:07:30] like you got to really search for the owners. And of course, after 30 years, most of the owners are dead. And if they die now, the land legally are now owned by the heirs. And the heirs, of course, sometimes they want to recover the land because it's still in the name of their deceased parents. But now, it is under the beneficial use of another guy. So yeah, that is the situation. To be able to flatten it out, you [00:08:00] need a lot of legal and extra legal processes.

Tracie Yang (08:03):

So how does Coalitions for change CFC approach deeply entrenched problems like these? What is thinking and working politically and how does it differ from other development approaches?

Jaime Faustino (08:17):

Generally in development, most of the work is really trying to look at the technical dimension of the problem. And all of the difficult political issues [00:08:30] are handled by partner agencies. The thinking and working politically approach takes much more recognition of incentive, self-interest and power. So you're looking at that situation, you're trying to figure out who has an interest in introducing change. And how do we rearrange the rules, the public policy, so that people pursuing their self-interest will lead to positive development outcomes?

Tracie Yang (09:00):

[00:09:00] So let's focus on the successful campaign by the Foundation for Economic Freedom and Coalitions for Change, to reform agricultural land titling in the Philippines. How did that campaign unfold?

Jaime Faustino (09:11):

We figured out some of the technical barriers, which I think are frankly quite well known. The main problem is really the political dimension. So here, again, they're looking for people who have an interest in trying to unlock the potential of agricultural lands. So front [00:09:30] and center, the Rural Bankers Association. Because the bankers are interested in making loans, but they can't make a lot of loans precisely because the parcels are not titled properly. So their willingness to talk to congressmen, to talk to senators, and you build a coalition informing them of a solution to their problem, they actually know that there's a problem. The thing that they can't figure out is what's [00:10:00] the elegant, simple solution to try and solve that problem?

John Rieger (10:03):

Really? Where are all the arrows pointing? Where's the button you can push to get the process started?

Jaime Faustino (10:10):

That's correct. And a lot of that is ... So you're looking for what is essentially the formulation of a technically sound, but politically possible solution. And the CFC model, which we've coined as development entrepreneurship, you use the five principles of entrepreneurial practice.

John Rieger (10:29):

What are those [00:10:30] five principles?

Jaime Faustino (10:31):

The first principle is to just start with what you have, who you know. The second principle is to make small bets to learn by doing. The third principle is to expect and exploit surprises. So something like COVID would be a great example. We were able to introduce quite a number of reforms because of that specific [00:11:00] conjuncture. The fourth principle is to build networks and coalitions. That's essential [inaudible 00:11:09] entrepreneur works. They're always looking for other people to do things for free. And the fifth principle is the notion that the future does not have to be predicted, but it can be influenced through action. It's a general outlook that entrepreneurs have. Now, those five principles, we use in all of our policy reform work.

Tracie Yang (11:30):

[00:11:30] In a way, this land titling problem seems like it should have been easy to solve with legislation. What were the obstacles?

Jaime Faustino (11:38):

Well, in some cases, there's a little bit of opposition to having more land titles out. There are some groups that say, "Hey, look, we only want to promote the government to promote cooperatives." You'll have some groups who are saying, "Oh, well, we only want areas that are covered by agrarian reform." So you'll [00:12:00] get a bunch of different voices.

Erwin Tiamson (12:02):

The problem with how to address this becomes complicated because a lot of policy reformers would like to include this particular problem with a bigger effort to reform land administration in the Philippines. So it is always bundled with the massive revision of the entire public land act. Revising a whole code is very difficult. So [00:12:30] we decided to chop it, to focus on the aspect only of these restrictions on land. And we built a coalition based on that.

Tracie Yang (12:40):

So tell us a bit more about that coalition. I know that the Foundation for Economic Freedom reached out to bank associations, academics, business chambers, and government agencies connected to land management, in order to get to the bottom of this problem.

Erwin Tiamson (12:55):

So we started our advocacy by ... Of course, we wrote a paper, a [00:13:00] small policy paper just to put all the arguments and all the data together. And then we started to talk to banks. The Rural Bank Association is the most interested because they deal mostly with rural banks, which is mostly covered by agricultural patents. There are about four million agricultural patents, all in all. This is a huge portion of our land titles in the Philippines. And of course, the banks themselves supply us the information. And we [00:13:30] also use their connection with their congressmen to help us lobby in Congress.

John Rieger (13:36):

Did you encounter any setbacks in your campaign? What were the tense moments where you had to go back to the drawing board and say, "Well, this is not working. We're going to have to change course here"?

Erwin Tiamson (13:46):

The problem is the not so energetic committees in the house.

John Rieger (13:54):

Unenergetic committees.

Erwin Tiamson (13:54):

Yeah, uninterested committee. Because of course, there are a lot [00:14:00] of concerns in Congress.

John Rieger (14:02):

So you had a little trouble getting their attention?

Erwin Tiamson (14:03):

Yeah, you have really to look for the champion. The first problem always is to look for a lawmaker who will champion your cause. Then of course, another challenge is how to set Congress to really put their feet on the pedal. So the most tense moment really is we pass it on the last day of Congress.

John Rieger (14:24):

Wow.

Tracie Yang (14:24):

Oh, boy.

Erwin Tiamson (14:25):

Congress ends about five o'clock. It's-

John Rieger (14:28):

End of the day.

Erwin Tiamson (14:29):

Yeah, [00:14:30] it's end of the day of the last-

Tracie Yang (14:31):

The last session.

Erwin Tiamson (14:32):

Working day of Congress. If we fail to pass it on that day, that will go to the next Congress.

John Rieger (14:40):

So Jaime, is there a tension between this way of doing development and the traditional systems of assessment and accountability that have grown up in development practice?

Jaime Faustino (14:51):

Oh, very much so. I've discussed the five entrepreneurial principles. There are actually five principles of linear logic, which is what the majority [00:15:00] of development agencies use in their approach. The first thing that they'll do is instead of just starting, they will do analysis. So you're basically picking up this distinction between a bias for analysis versus a bias for action. So one says, "Okay, I need to study this thing more", and the other one says, "I need to act and learn and adjust as I go." Most development agencies do the first. They spend a lot of time on their analysis. [00:15:30] And that's why the bids, when they go out, they've already done their analysis. In our case, we start and then the analysis is going as we're moving forward to figure out what is possible.

Tracie Yang (15:42):

Is there certain development projects that you can really apply this practice to and some that it doesn't apply?

Jaime Faustino (15:50):

That's a good question. Well, if you have a development project that's going to build a road, you should use linear logic. So it's when you're delivering goods [00:16:00] and things, you should definitely use that. If you're doing things that are related to institutional change, things that are related to public policy, anything with a high level of uncertainty, where there are many factors that can come in, I would suggest it is much better to use entrepreneurial logic, so that you can adjust to the different situations that you're confronted with.

Tracie Yang (16:27):

Right. It's just way more flexible.

Jaime Faustino (16:29):

Yeah. Again, [00:16:30] the other more linear design is I do an analysis. Maybe a year later, I bid it out and then a few months later. A consulting team comes. Things have changed on the ground over that period. And now, you're constrained by following the analysis that's a year old. And even others that have tried to do, let's call it political economy analysis, where they're trying to uncover the power structures, [00:17:00] you can do them formally. But you're going to run into a couple of things. The first problem is as soon as you print it, it'll be out of date. Because power dynamics are changing all the time in the political alliances. The second thing is anything that really gets to the core of how power is structured in a specific sector or agency, cannot be written down. Because precisely, you'll reveal too much.

Tracie Yang (17:27):

So Erwin spoke a moment ago of [00:17:30] the importance of a legislative champion, to move these reforms through Congress. What makes a good legislative champion?

Jaime Faustino (17:39):

What makes a good champion is their willingness to spend their political capital, and their ability to shepherd it through. Some people may want to be champions of your issue, but they only come with a party of two people. So you need somebody with the political skills, gravitas and [00:18:00] network, as well as a willingness to spend their capital on that particular issue. Their main goal is to try and get reelected. So you have to figure out a way where in the 900 issues that somebody is going to push for, how this one helps them get reelected.

Tracie Yang (18:21):

How do you do that with land titling? Because I imagine to a general public that's not exactly a sexy issue.

Jaime Faustino (18:28):

Yes, exactly. Right. So [00:18:30] giving land titles are great photo ops.

Tracie Yang (18:35):

Oh, okay. Yeah.

John Rieger (18:35):

That's great.

Jaime Faustino (18:35):

And of course, you've talked to the farmer groups to explain to them. You got to ask the senator to ... So again, as you assemble your coalition, recognize and acknowledge self-interest. Do not deny it and say, "You need to do this for the good of the country." That's not going to work. You need to do this because you're 2026 re-election, this can be something on a poster.

John Rieger (18:59):

That sounds a [00:19:00] bit cynical, Jaime.

Jaime Faustino (19:02):

Is that the word, cynical?

John Rieger (19:04):

And practical.

Tracie Yang (19:04):

Yeah, it's practical.

Jaime Faustino (19:06):

We're interested in the public interest. That's our reform agenda.

Tracie Yang (19:11):

Of course.

Jaime Faustino (19:11):

But we need to understand the agenda of everyone else. So if you're talking to businessmen, very easy. They want to make money. You're talking to politicians, same thing. Very easy. It's either money or votes. I have to tell you who the most difficult one to deal with is, NGOs.

Tracie Yang (19:30):

[00:19:30] Coalitions for Change has been active in the Philippines for quite a few years now. What have been some of your other campaigns besides agricultural land reform?

Jaime Faustino (19:43):

Well, let's see. Let me just think of a couple. One is working with local partners. Coalitions for Change helped introduce a policy to liberalize satellite broadband in 2021. And that allowed [00:20:00] Starlink and three other satellite providers to provide service in many parts of the country that previously did not have any internet access.

John Rieger (20:10):

I'm sure the incumbent telecom providers were delighted with that campaign.

Jaime Faustino (20:14):

Yes, absolutely. There you go. That's exactly what the game was about. Now, of course, CFC itself has contributed to over a hundred different policy reforms that the Philippine government has issued.

John Rieger (20:27):

Jaime, the Asia Foundation has been a pioneer of thinking [00:20:30] and working politically, but I've always harbored a secret doubt. Is this really a methodology or is it just a special gift that certain people like you have for doing politics?

Jaime Faustino (20:41):

No, as I said ... That's a great question. This model, the development entrepreneurship model, really started in economic policy. And the real question was, do we have a method here that is applicable to other areas? So we've expanded it and tested [00:21:00] it to work in education, gender, disaster risk reduction. So we have a whole range of other examples now. So the next question now is it applicable to other countries? That's the next phase that we're going to try and test out. We obviously think so because the core of this is a set of committed leaders. There are Erwin Tiamsons, I am convinced, all over the world.

Tracie Yang (21:29):

So [00:21:30] in February 2019, President Duterte signed the Agricultural Free Patent Reform Act, marking the successful conclusion of your campaign that we're celebrating here today. How did the new legislation address the problem?

Erwin Tiamson (21:50):

The Agricultural Free Patent Reform simply removes the restrictions on the sale of the land. They remove the five years and they remove the five-year right of the purchase. And also, there's provisions there that [00:22:00] allows corporations to buy agricultural free patent land before that is another restriction. So that's it. So when it was removed, it's like opening the dam. The dam is open.

John Rieger (22:13):

So the 1936 Act was successfully reformed to open up the agricultural land marketplace and update the land titling system. And it's a happy ending. Do you have any final thoughts?

Erwin Tiamson (22:24):

Maybe thank the Asia Foundation for allowing us to really do reforms the way we are [00:22:30] doing it right now. Without this kind of flexibility, I doubt we were able to pass these three very important laws. So thank you,

John Rieger (22:39):

Attorney Erwin Tiamson of the Foundation for Economic Freedom and Jaime Faustino of the Asia Foundation's Coalitions for Change, thank you both for being with us.

Erwin Tiamson (22:48):

Oh, thank you for having me, John and Tracie.

Jaime Faustino (22:52):

And thank you very much to you, Tracie, and to you, John.

Tracie Yang (22:57):

That's our show for this week. You can read more about coalitions [00:23:00] for change and thinking and working politically in this week's In Asia blog.

John Rieger (23:04):

And be sure to join us again here and on our website for more stories from our anniversary celebration, Asia Foundation 70. Until then, I'm John Rieger.

Tracie Yang (23:13):

And I'm Tracie Yang.

John Rieger (23:15):

Thanks for listening.