HISTORY OF LANDBANK

The story of Land Bank of the Philippines is the story of the Filipino farmer and
Philippine countryside development. The journey began when President Diosdado Macapagal
provided the vision and leadership for the passage of Republic Act No. 3844 on August 8, 1963.
Known as the Agricultural Land Reform Code, it also created the Land Bank of the Philippines.
Under the intent of the law, hailed by President Macapagal as an act to emancipate the
Filipino farmer, Land Bank was to provide timely and adequate financial support to all phases
of Agrarian Reform. Its initial action was to finance the acquisition and distribution of
agricultural estates for division and resale to small landholders as well as the purchase of the
landholdings by the agricultural lessees. The creation of the Bank was significant not only
because of its purpose- to backstop the financial requirements of a government reform program
that was envisioned to respond to the centuries- old problem of social unrest. It also conveyed
the message that the Filipino farmer, given ample support, was bankable, someone who could be
trusted to fulfill his obligations as he realized his life- long dream of owning a piece of land that
would bring food on the table, send his children to school and provide him a better life.
LANDBANK came into being with great aspirations, as it gave meaning and direction to the
lives of its intended clientele, the Filipino farmer, while offering investment alternatives to
former landholders in their quest for a more progressive role in the countrys economic
development. Indeed, it was a journey that started with high hopes. Forty- five years later, these
hopes continue to be fulfilled, even as LANDBANK pursues its mission to serve the Filipino
people and help them realize their dreams. The story of LANDBANK is the story of an
institution that fulfills its special role as a catalyst for positive change, progress and growth.

SIMPLE BEGINNINGS
The first decade of its existence was crucial, as LANDBANK, like a sapling, dug deep
into earth to establish its roots. Appointed as its first President was Dr. Jose Katigbak, the
administrator of the Agricultural Credit Administration (ACA). The Bank had its first office at
the ground floor of the ACA annex building in its compound along Taft Avenue in Manila.
Working under Dr. Katigbak was a staff of 10, most of who were borrowed from the ACA
personnel. In 1965, the Bank formally adopted its by-laws, its first table of organization and its
first manual of operations.
With the assumption of President Ferdinand E. Marcos in 1969, a new Board of Trustees
was formed, and Benjamin del Rosario was designated as LANDBANK president. The staff
grew to 23 when it moved to the Ramon Magsaysay building on Roxas Boulevard in Manila.

LAND REFORM COUNTRY

After the declaration of Martial Law in 1972, three Presidential Decrees transformed the
Land Reform Program and and paved the way for the expansion of the responsibilities and
functions of LANDBANK. The first, Presidential Decree 2, issued on September 26, 1972
declared the entire country a Land Reform area. The Tenant Emancipation Act (PD 27, issued on
October 21, 1972, declared the emancipation of tenant- farmers of private agricultural lands
devoted to rice and corn under the lease- crop or lease tenancy system, whether classified as
landed estates or not. This made the tenants owners of the land they are tiling by operation of
law. It also allowed tenants to pay the landowners directly for farm lots transferred to them. To
ensure that the original landowners would be given fair compensation, the PD also authorized
LANDBANK to collect land amortization from the farmer-beneficiaries within the next 15 years.
The third decree, PD 85 issued on December 24, 1972 created the Agrarian Reform Fund
Commission (ARFC), tasked with reorganizing LANDBANK. Thus, began LANDBANKs
effective relationship with the Filipino farmer.

FIRST UNIVERSAL BANK

Through Presidential Decree 251, issued on July 21, 1973, LANDBANK was vested with
universal banking powers capitalized at P3 billion, a financial base essential in meeting the
requirements of an expanded agrarian reform program. It thus became the first universal bank in
the country, and the only commercial bank with a social mission of spurring countryside
development.
LANDBANKs expanded services included securities transactions, trust operations and
other banking and quasi- banking activities. PD 251 also allowed the Bank to borrow funds up to
10 times the paid up capital to finance various farmers assistance programs.

MEN OF UNPARALLELED INTEGRITY

With the strengthening of LANDBANK, President Marcos reconstituted the Board of
Directors. He appointed Cesar EA Virata, then Secretary of Finance, as Chairman, and Basilio
Estanislao as President. Virata was a young professor and Dean of the UP College of Business
Administration when he was tapped by President Marcos to serve as his secretary of Finance,
Not only was he a brilliant man who attended the Wharton School of Finance in the United
States, he was also a descendant of General Emilio Aguinalo, the first Presiden of the Republic
of the Philippines. He was also recognized by his peers as a principled man. He was the epitome
of an honest and uncompromising technocrat. He was a soft- spoken gentleman whose humility
stood out in the corridors of powers that he started walking at an early age. It was to the sharp-

minded and conscientious Virata that President Marcos gave the privilege of crafting the
reorganization plan of LANDBANK.
Estanislao, on the other hand, was a man of humble origins who rose through the ranks at
the Central Bank of the Philippines. Equally known for his integrity, he was fearless and
forthright as a Central Bank official ever mindful of his role as a bank regulator, although
relaxed and amiable in demeanor. Joining the two in the Board of Directors were then Secretary
Conrado Estrella of the Department of Agrarian Reform, and Secretary Blas Ople of the
Department of Labor Estrella was a former politician who became Governor of Pangasinan in his
mid- 20s. An ardent follower of President Ramon Magsaysay, he was at home in the company of
the common man. Ople was a labor leader who had the respect and confidence of workers as
well as the intellectuals and the well- bred of society. Ople, a philosopher in his own right, was a
pragmatic leader whose sense of service was only outweighed by his sense of compassion for the
needy. These two gentlemen, who had been with the Board even before Virata came in, were the
men who suggested that the Chairman be the Secretary of Finance, a departure from the original
code which assigned both the LANDBANK Chairmanship and Presidency to just one person.
Their suggestion was followed when the reorganization plan was drafted. The Board of
Directors, in implementing PD 251, approved the Banks Program for Medium and Long-Term
Project Assistance and Shot- Term Lending. Having launched its lending operations,
LANDBANK began to lend to agricultural, industrial and home- financing projects and other
enterprises.

TRANSFER TO INTRAMUROS
Following its conversion into a universal bank, LANDBANK pursued an aggressive
development and expansion program. In 1974, LANDBANK transferred to the sixth floor of the
BF Condominium Building in Intramuros, Manila. In response to the demands of its expanded
operations, the Bank management pursued a major reorganization program. Created were six
new departments and offices: Banking Department, Field Operations Department, Data Center,
Legal Department, Corporate Planning Department and Personnel Department. Established were
the first regional branches in Cabanatuan, Isabella, Iloilo, Naga, Pampanga, Tarlac and Makati
As early as 1974, Estanislao established the Banks first subsidiary, the Masaganang
Sakahan Inc. On May7, 1975, President Marcos issued Letter of Instruction No. 273 which
stipulated payment in cash equivalent to 20 percent of the cost of the land, and the balances in
25- year tax- free LANDBANK Bonds. This particularly covered landowners whose total
tenanted rice and/ or corn landholdings exceed seven hectares. A larger cash payment was
allowed if the landowner needed to use it for his childrens education, insurance and travel
provided the amount did not exceed more than 30 percent of the value of the land.

In 1977, LANDBANK formed three major sectors to strengthen its operations and ensure
long-term viability- Agrarian, Banking and Operations- each sector ensuring that LANDBANK
remain true to its mission even as it maintains its efficiency. In 1978, the Bank delineated the
functions of the Branches and Field Operations Department by dividing it into two offices- Field
Operations Department and Branch Banking Department.

HELPING THE NEW AND FORMER LANDOWNERS

Other than fulfilling its main responsibility of compensating former landowners, the
Bank, under Estanislaos leadership, instituted various programs meant to assist the farmerbeneficiary in his new role. To ensure the protection of farmers crops from unforeseen losses
caused by typhoons, floods and other calamities, the Philippine Crop Insurance Corporation was
created through the efforts of Estanislao. To develop investment projects for former landowners,
the Bank organized the Lumang Bayan Realty Development Corporation which eventually built
the Palacio del Gobernador in Intramuros. This was in partnership with the family of Bro.
Ermelo Gonzales of Pampanga, landowners whose vast landholdings were distributed among
their tenants.

HOLISTIC ENVIRONMENT
The Integrated Estate Development Program (IEDP), which LANDBANK initiated in the latter
half of the 1970s, aimed to provide necessary services and infrastructure for a large cluster of
CARPed lands. In the words of Estanislao, Everything needed for development was supposed to
be put in place. If we saw that there is a need for a road from one point to another, we put up the
road. In short, we consolidated our efforts so we can benefit as many farmers as possible who
live in a specific area. Also included in the package were processing facilities and financial and
technical support.
In the early 1980s, Estanislao established three new subsidiaries- LBP Insurance
Brokerage, LBP Leasing Corporation, and the LANDBANK Educational Foundation. We
thought of the leasing company so farmers do not have equipment like tractors can borrow from
the firm, explains Estanislao, while the educational foundation was set up so skills and
knowledge can be imparted to the farmers including their children.

True to its Mandate

In effect, the achievements of LANDBANK after the country was declared a Land
Reform area and after LANDBANK itself became a universal bank were in keeping with its

mandated role to provide timely and adequate support to the Agrarian Reform of the Philippine
government.
LANDBANKs major accomplishments merely reflected its commitment to support the
government in its efforts to bring about the desired socio-economic change in the country. On
one hand, the Bank helped the farmer maintain his new status as landowner through the
implementation of assistance programs to boost his productivity and income. On the other, it
gave equal support to the landowner in his efforts to redirect his resources to industry and other
business ventures. Through its various programs managed and coordinated by its competent,
dedicated and selfless men and women, LANDBANK led in the promotion of the value of free
enterprise and encouraged national self-reliance.
From its very beginnings LANDBANK, as a financial institution, had strong social
conscience.

AN HONEST FOR AN HONEST BANK

Basilio Estanislao, the man whom Cesar EA Virata recommended to be President of
LANBANK of the Philippines, was a Central Banker. Although not intimate with each other,
both had had the opportunity to work together. As Finance Secretary, Virata regularly met with
the staff of the Central Bank of the Philippines, later renamed Bangko Sentral ng Pilipinas.
Estanilao was the Superintendent of the Banks.

TWIN CHALLENGES
At the beginning, he faced two challenges. First, I thought about how the Bank should fulfill its
mission of assisting the farmers who were beneficiaries of Agrarian Reform, to ensure that they
would be able to make a go of their new status as owners who have to work independently of a
landlord who used to decide for them. Second, I thought about how LANDBANK could
survive financially, if it were to address its main concern, Estanislao points out. Tackling the
first meant giving the farmer everything that he needed, while ensuring the survival of
LANDBNK. It meant going into banking, which was our mandate as a universal bank. The
challenge lay in the organization. I didnt have an accounting system. I didnt have an operating
system. I didnt have a loan system, among others needed to get a universal bank functioning,
he relates.

A CARING MENTOR

Estanislao then mobilized his staff to undertake the development of the various aspects of
banking. The staff assigned had to conduct their own research to come out with their guidelines
setting procedures in motion. He recalls that many of them were in a quandary as to how to
approach the tasks assigned to them. Among those he remembers is Noli Bajada, whom he asked
to organize the deposit system. After two days, he came back to me and asked, what am I
going to do? Well, I gave you that assignment, so you better think of how you can do it, I told
him. When some of them pointed out they were not really bankers, Estanislao told them, To
run LANDBANK, ypu dont have to be a banker. What you need is a heart that has an honest
concern and affection for poor farmers. These words guided and inspired them to rise to the
challenge.

CULTURE OF INTEGRITY AND DEDICATION

As the Banks manpower grew, Estanislao endeavored to create a corporate culture
appropriate to the Bank and its mission. To me, money was not everything. I wanted the staff to
realize that money wont buy them happiness. And that money wont motivate them. What will
make them happy is achievement, he says. He was successful in this regard because when he
declared a moratorium on promotions and salary increases, the staff did not complain.
Primarily, because of him, a sense of personal integrity pervaded the LANDBANK
organization. I put emphasis on professionalism. I did not tolerate the staff getting around the
legal process to favor certain clients. Some borrowers would come straight to me and I would tell
them, You dont need to come to me. If your proposal is meritorious, it will be approved. But if
it does meet the requirements, it wont be approved.

NO Behest Loans
Under his stewardship, LANDBANK never granted any behest loan. President Marcos
never called me up to ask a favor on behalf of anybody, Estanislao shares. At a time when some
government banks served the personal needs of presidential cronies, LANDBANK, as records
would show, was never the source of any loan of such nature.
Remedios Macalincag, an alumna who began work at the Ramon Magsaysay Center
office of LANDBANK, attributes the clean record of the Bank to Estanislao whose dealings
were always above board. He was all the way. Since President Marcos never dipped into the
coffers of LANDBANK, he obviously had a high regard for Mr. Estanislao and Mr. Virata, and
the rest of the Board. Besides, President Marcos believed in the mission of the Bank. He truly
wanted Land Reform to succeed, so why should he want the Bank that finances it to fail?

Estanislao never imposed on his executives. For example, it took two years for him to
convince the concerned staff of the merits of establishing a field office in a particular area. I just
didnt tell them to put up one, he shares. To his staff, Estanislao was a gentleman. Marissa
Antero recalls, Sir would wait for the women to go in first before he himself entered the
elevator. The staff was very lucky. This was one self- made man who knew what it meant to rise
through the ranks. This man knew poverty. When he was a young man, he went to Quiapo
Church and asked the Lord to show him how to get out of poverty. After he said his prayers, his
situation in life improved. When he came into his own, he considered it his personal mission to
help the needy. After serving in the Army, he joined the Central Bankof the Philippines. He rose
through the ranks until he was asked to head LANDBANK.
When he was LANDBANK President, he attended a rural bankers convention where the
general sentiment was rural banks were no longer getting support from the government. He was
asked by a speaker, Do you need us rural banks? It happened that Estanislao was also seated
beside a farmer- leader who asked, Does the country still need us farmers? If you still need us,
what are you doing to help us? Estanislao shares that those questions left a deep impression on
me and were very instrumental in charting the course of action I took for LANDBANK during
my term as President.
Thus, the seeds of LANDBANKs strengthening relationship with the farmer were
planted. Estanislao is clear about his hopes for the Bank that he nurtured into an untainted
institution. I hope that LANDBANK is correctly perceived as what it truly is- an institution
performing a heavy, non-earning social function; and at the same time is into profit-oriented
commercial banking to assure its survival, he says. The vision is that its banking and the strong
support given by the government and partner rural banks will make LANDBANK the
appropriately structured bank in the country that will help attain the aspirations of our
marginalized brothers in the countryside. By doing so, the Bank will help release them from the
bondage of deprivation, misery and hopelessness into a life of dignity and equality. His is a
dream that he himself started realizing. His 13 years with LANDBANK had indeed planted the
seeds that his successors nurtured, turning them into reality in a manner that responded to the call
of the times.
What Estanislao brought to the Bank were his credibility as a banker, his honesty and
integrity, strong but compassionate leadership anchored on his personal humility, and an
unwavering commitment to the betterment of the lives of the Filipinos in the countryside. What
he possesses as a person, a leader, and a banker are the very traits essential to LANDBANK
President who would be equal to the task, honor and responsibility. Long after he retired,
Estanislaos exemplary leadership remains to be an inspiration to the institution that he served
and a model for its workforce. Today, as a member of the LANDBANK Countryside
Development Foundation, he continues to inspire Landbankers to give their best to the
institution.

Indeed, LANDBANK continues to live up to its principle of countryside development

being its lifes work- with 45 years to prove it.