Land banking key to future restrictive policies


UNPRODUCTIVE, underutilized, idle lands can be transformed into zones of progressive housing and residential communities.

The proposed National Land Use Act (NLUA)—Senate Bill No. 3091 that seeks to forever ban the conversion of agricultural lands—has started an interesting trend among property developers: intensified land-banking activities in recent months.

Land banking is a term that refers to purchasing parcels of land and “banking” them for future sale or development.

“It requires planning and patience. This is no longer new as the big ones have been engaging for years, in accumulating raw lands around the Philippines for future projects. Most developers, particularly the small and medium players, would rather preoccupy themselves with the development, sale and lease of their existing projects,” explained Gaspar De Guzman, sales and marketing business development officer of PA Alvarez Properties Development Corp. (PAAPDC).

But the trend has changed in just a few months. A lot of developers became deeply concerned when House Bill No. 6545 or the proposed National Land Use and Management Act was approved on third and final reading last September, and when President Aquino early this month certified as urgent the NLUA, which is currently pending on third reading in the Senate.

For ratification?

Once the Senate passes the bill on third and final reading, both chambers of Congress will tackle the bill in a bicameral conference committee to settle conflicting provisions. It will then be sent back to plenary for ratification before it can be transmitted to the President.

The entries that concern developers include the definition of “agricultural” lands as “protected areas” and the proposed law’s intention to place them under the Department of Agrarian Reform’s jurisdiction and be protected from conversion.

Another entry states that such agricultural lands will be banned from conversion while they are in the hands of landowners, but may be converted once they are awarded to agrarian beneficiaries.

“While the importance of preserving the country’s agricultural land and critical watersheds is crucial (as what the bill seeks to protect), the proposed law, if no amendment will be made, will definitely slow down subdivision projects particularly the socialized-housing boom in the countryside (where most of the lands have been classified as agricultural). Land banking now is thus one of the few viable options left for us,” said De Guzman whose company is now on the lookout for available  and potentially promising idle lands in several parts of Bulacan in the north and Batangas in the south.

Other locations

Because there are few available lands left within Metro Manila (besides, vertical development projects are more suitable and very much encouraged), De Guzman said small  and middle-market developers like PAAPDC have learned to move away from its base of operation (in its case, Laguna province) and look for other locations where there are huge potentials for expansion.

Aside from acquiring lands for future developments, De Guzman added that there are also options available, like entering into joint venture with the landowner.

This convenient partnership also works out well for both as the developer gets the land easily and at much less capital requirements, while on the other hand, the landowner is able to get profit from the idle property.

He said San Jose del Monte City in Bulacan is one example of a formerly purely agricultural area that has become progressive, and benefited from land conversions and joint ventures.

“Though largely agricultural, it has many idle lands that soon gave way to commercial developments and progressive residential communities. Local economy grew and thanks to wide, multilane arterial thoroughfare that connected the city to Metro Manila, San Jose del Monte and outlying areas became very accessible and have become one of the favorite targets of developers, especially those doing land banking and joint ventures,” De Guzman explained.

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  • karlo cases arellano

    Its about time… Its not too late for adri lands on Cavite and Laguna as well as Rizal that are slowly being converted

  • Flipzi

    for the so called unutilized land (like what the photo depicts here) it is simply either because the land is already controlled and secured by the landgrabbing elites…

    or.. the needed agricultural technology has not been delivered the LGUs and concerned agencies.

    plain and simple.

  • Flipzi

    in fairness to the writer, there are lands that can be converted to other purposes but since land is a limited and  a non-renewable resource, it is best that we carefully implement maximizing the use of lands and not simply push for the usual horizontal developments for housing. vertical developments must be considered more. also, when you convert an agricultural, that would mean decreasing food supply in that sense. we are now 20% short of rice supply. the population will continue to surge and we cannot waste our land for GREED.

    careful, responsible and smart planning for developments should be pursued instead

  • Flipzi

    for more info on the value of Agriculture in eradicating poverty, please Google this:


  • Flipzi

    This legislation seems pro-agriculture and pro-poor.

    This will not totally eradicate conversion but control it to healthy levels.

    PNoy should ratify this as urgent too.

    Agriculture for food security is a vital concern.

    We cannot let the businessmen recklessly convert the lands suited for agriculture.

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