MANILA, Philippines - The Department of Justice ruled that the Bangko Sentral ng Pilipinas is not covered by President Corazon Aquino's 1990 executive order directing all government instrumentalities to turn over its agricultural lands to the Department of Agrarian Reform, as part of the Comprehensive Agrarian Reform Program (CARP).
In a legal opinion, Justice Secretary Leila de Lima said the BSP's inclusion in the coverage of CARP, in relation to Executive Order No. 407 dated June 14, 1990, violates the central bank's mandate to "provide policy directions in the areas of money, banking and credit."
"The directive to transfer its agricultural lands to the DAR, therefore, may be considered as undue infringement on BSP's fiscal autonomy as it stifles the latter's discretion to allocate and utilize its resources in the pursuit of its primary objective," de Lima said.
Aquino issued EO 407 to implement the provisions of RA 6657 requiring the distribution of agricultural lands to farmer-beneficiaries "lands owned by the government devoted to or suitable for agriculture" including all lands foreclosed by government financial institutions.
The EO covered all government instrumentalities including the Development Bank of the Philippines, Philippine National Bank, Republic Planters Bank, Asset Privatization Trust, Presidential Commission on Good Government, Department of Agriculture, State Colleges and Universities, Department of National Defense.
BSP Deputy Governor and General Counsel Juan de Zuniga Jr. requested for a legal opinion from the DOJ. In his request, Zuniga said the BSP is not covered by the compulsory directive under EO 407 since it has unique characteristics as the central monetary authority.
The DOJ upheld the BSP's position, saying that it cannot be considered as among the government instrumentalities required to comply with EO 407. It also noted the Central Bank of thePhilippines, the BSP's predecessor, was not included in the EO's list of government-owned and-controlled corporations and government financing institutions.
"Its exclusion, therefore,is a clear indication that BSP falls outside the purview of EO 407," the Justice Secretary said.