Deputy Director General Augusto Santos of the National Economic and Development Authority said the total contribution of land to the national economy was at P320.5 billion or 5.9 percent of gross domestic product.
"But this could have been more had land-based economic activities such as land development, agriculture real property and others had been undertaken without much disruption from such conflicting claims from landowners and costly court litigations," he said.
Sen. Ralph Recto, who filed his revenue version on the proposed unified Land Administration Authority (LAA) said the government lost almost P100 billion in 2004 due to an outdated and flawed land valuation and taxation system that frustrates government’s efforts to increase tax revenues from real properties.
Citing data from the National Tax and Research Center (NTRC), Recto said the losses were due to decades-old loopholes in land tax administration which were exploited knowingly or unknowingly by the real property sector.
Among the factors that contributed to this revenue loss were: non-reporting or non-declaration of property; use of another address in area where zonal value is lower; misdeclaration of property value; weak enforcement; outdated property assessment; antiquated administrative tools; partial inventory of real property; multiple titles among property owners and boundary disputes.
Antonio Viray, director and special counsel of Metrobank (who spoke on behalf of the Bankers Association of the Philippines) cited four concerns of the current land administration system to the business sector, namely:
1) the (five-year redemption prescription on heirs of patent holders to redeem a foreclosed patent) has impaired the acceptability of homestead and free patents thus hampering bank lending and economic growth;
2) the unusual haste and convenience of getting temporary restraining orders from courts being abused by unscrupulous mortgagors to unjustifiably stop the foreclosure of real estate mortgages;
3) courts entertain and sometime sustain cases filed by unscrupulous claimants (who present Spanish titles or original certificates of title issued several decades ago on in 1900s); and
4) the common practice of seeking the cancellation of adverse claim on a title (which has been traditionally allowed for 30 days after which the registered owner can file a sworn petition with the Register of Deeds to cancel the adverse claim) "which is clearly unfair and burdensome to the registered owner and at the same hampering real estate transactions and contribute to the clogging of court dockets."
Environment and Natural Resources Secretary Angelo Reyes said "with a sound land administration system, the nation will have the basic infrastructure needed for better management of land resources. Such an infrastructure is essential for effective local government administration and allows a more equitable and wider base for land-related taxation."
"We can choose to continue with the current land administration system and all its accompanying problems of poor service delivery, inconsistencies in the records and information, increases in the proliferation of fake titles, increases in the number of informal transactions and more losses for investors (both local and foreign)," he said.
"Or we can have an efficient titling and registration system at par with what can be seen in our more progressive neighbors where we can have a nationwide integrated system for providing accurate land information and services that is affordable and convenient to all; increase revenues in land transactions with a more active land market and more people opting for formal transactions; increased confidence in land tenure and in the land registration system and fewer land conflicts," Reyes said.
The World Bank and Australian government provided $18.995 million and $19.26 million, respectively, for five years for the land administration reform agenda, now on its second phase but for the first year.
World Bank’ Keith Bell, chief for Rural Development, Natural Resources and Environment Sector Unit, said the benefits of secure property rights are: reduced risk of frauds and mistakes; titled lands have generally higher values; secured lands encourage investments in land; they improve access to credit; contribute to an overall better investment climate and secure rights foster environmental stewardship.
International studies, he said, confirm that security of land tenure can have dramatic benefits for rural and urban households in terms of higher productivity, greater access to credit; increased investment not only in physical assets but also in children’s education, Bell said, citing that in Thailand, land titling doubled investment and tripled access to credit in the late 1980s.
The World Bank has funded land administration projects in Africa, East Asia and the Pacific; Europe and Central Asia; Latin America and the Caribbean; Middle East and North Africa and South Asia, with projects increasing from 51 in 1995 to 174 in 2006.