The struggle between farmers and landowners of Hacienda Luisita is now being seen as the first real test of character of presidential candidate Noynoy Cojuangco Aquino, whose family has owned the land since 1958. Our research shows that the problem began when government lenders obliged the Cojuangcos to distribute the land to small farmers by1967, a deadline that came and went. Pressure for land reform on Luisita since then reached a bloody head in 2004 when seven protesters were killed near the gate of the sugar mill in what is now known as the Luisita massacre. This is the story of the hacienda and its farmers, an issue that is likely to haunt Aquino as he travels the campaign trail for the May 2010 elections.
First of a series
Senator Noynoy Cojuangco Aquino has said he only owns 1% of Hacienda Luisita. Why is he being dragged into the hacienda’s issues?
This is one of the most common questions asked in the 2010 elections.
To find the answer, GMANews.TV traveled to Tarlac and spoke to Luisita’s farm workers and union leaders. A separate interview and review of court documents was then conducted with the lawyers representing the workers’ union in court. GMANews.TV also examined the Cojuangcos’ court defense and past media and legislative records on the Luisita issue.
The investigation yielded illuminating insights into Senator Noynoy Aquino’s involvement in Hacienda Luisita that have not been openly discussed since his presidential bid. Details are gradually explored in this series of special reports.
A background on the troubled history of Hacienda Luisita is essential to understanding why the issue is forever haunting Senator Noynoy Aquino and his family.
Remnant of colonialism
Before the Cojuangco family acquired Hacienda Luisita in the 1950s, it belonged to the Spanish-owned Compaña General de Tabacos de Filipinas (Tabacalera). Tabacalera acquired the land in 1882 from the Spanish crown, which had a self-appointed claim on the lands as the Philippines’ colonial master. Luisita was named after Luisa, the wife of the top official of Tabacalera.
Tobacco used to be the main crop planted in Luisita, but in the 1920s, the Spaniards shifted to sugar. Sugar production had become more profitable because demand was guaranteed by the US quota. In 1927, the Spaniards built the sugar mill Central Azucarera de Tarlac to accompany their sugarcane plantation.
Around the same year, the wealthy Cojuangco brothers Jose, Juan, Antonio, and Eduardo also put up a small sugar mill in Paniqui, Tarlac. The eldest brother, Jose “Pepe” Cojuangco, Sr., was the father of former President Corazon “Cory” Cojuangco Aquino, and the grandfather of Senator Noynoy Aquino.
Ninoy brokers purchase of Luisita
In 1954, Corazon Cojuangco married Benigno “Ninoy” Aquino, Jr. with President Ramon Magsaysay as one of the ninongs (sponsor) at the wedding. In 1957, Magsaysay talked to Ninoy Aquino about the possibility of Ninoy’s father-in-law, Jose Cojuangco, Sr. acquiring Central Azucarera de Tarlac and Hacienda Luisita from the Spaniards. The Spaniards wanted to sell because of the Huk rebellion and chronic labor problems.
Ninoy Aquino wanted the azucarera and hacienda to stay only within the immediate family of his father-in-law, not to be shared with the other Cojuangcos, wrote American development studies expert James Putzel in his 1992 book A Captive Land: The Politics of Agrarian Reform in the Philippines.
(Dr. James Putzel did extensive research on agrarian reform in the Philippines between the late 1980s to the early 1990s. He is currently a Professor of Development Studies at the London School of Economics.)
The exclusion of Jose Cojuangco, Sr.’s brothers and their heirs from Luisita caused the first major rift in the Cojuangco family, Putzel wrote. This played out years later in the political rivalry of Jose’s son Peping and Eduardo’s son Danding. Today, this divide is seen between Noynoy Aquino (grandson of Jose Sr., nephew of Peping) and Gibo Teodoro (grandson of Eduardo Sr., nephew of Danding), who are both running in the 2010 presidential elections.
(Click here to view the the Cojuangco family tree)
Government loans given to Cojuangco
Jose Cojuangco, Sr. received significant preferential treatment and assistance from the government to facilitate his takeover of Hacienda Luisita and Central Azucarera de Tarlac in 1957.
To acquire a controlling interest in Central Azucarera de Tarlac, Cojuangco had to pay the Spaniards in dollars. He turned to the Manufacturer’s Trust Company in New York for a 10-year, $2.1 million loan. Dollars were tightly regulated in those times. To ease the flow of foreign exchange for Cojuangco’s loan, the Central Bank of the Philippines deposited part of the country’s international reserves with the Manufacturer’s Trust Company in New York.
The Central Bank did this on the condition that Cojuangco would simultaneously purchase the 6,443-hectare Hacienda Luisita, “with a view to distributing this hacienda to small farmers in line with the Administration’s social justice program.” (Central Bank Monetary Board Resolution No. 1240, August 27, 1957).
To finance the purchase of Hacienda Luisita, Cojuangco turned to the GSIS (Government Service Insurance System). His application for a P7 million loan said that 4,000 hectares of the hacienda would be made available to bonafide sugar planters, while the balance 2,453 hectares would be distributed to barrio residents who will pay for them on installment.
The GSIS approved a P5.9 million loan, on the condition that Hacienda Luisita would be “subdivided among the tenants who shall pay the cost thereof under reasonable terms and conditions”. (GSIS Resolution No. 1085, May 7, 1957; GSIS Resolution No. 3202, November 25, 1957)
Later, Jose Cojuangco, Sr. requested that the phrase be amended to “. . . shall be sold at cost to tenants, should there be any” (GSIS Resolution No. 356, February 5, 1958). This phrase would be cited later on as justification not to distribute the hacienda’s land.
On April 8, 1958, Jose Cojuangco, Sr.’s company, the Tarlac Development Corporation (TADECO), became the new owner of Hacienda Luisita and Central Azucarera de Tarlac. Ninoy Aquino was appointed the hacienda’s first administrator.
In his book, Putzel noted that the Central Bank Monetary Board resolution from 1957 required distribution of Hacienda Luisita’s land to small farmers within 10 years. The controversies that would hound the hacienda for decades can be traced to the Cojuangcos’ efforts to retain control of the land long after the deadline for land distribution passed in 1967.
Land not distributed to farmers
“Ang pagkakaintindi ng mga ninuno naming manggagawang-bukid ng Hacienda Luisita noon, within 10 years, babayaran na [ng mga Cojuangco] ang utang nila sa gubyerno. Pagdating ng 1967, ang lupa ay sa magsasaka na (The way our elders, the farm workers of Hacienda Luisita, understood things at that time, within 10 years, the Cojuangcos were going to pay back the money they borrowed from the government. By 1967, the land would belong to the farmers),” says Lito Bais, one of the present-day leaders of the United Luisita Workers Union (ULWU). Bais was born on the hacienda in 1957, the year before the Cojuangco family took over. His mother was also born on the hacienda.
When 1967 came and went with no land distribution taking place, the farm workers began to organize themselves to uphold their cause. That year, Ninoy Aquino also became the Philippines’ youngest senator. His entry into national politics marked the start of his bitter rivalry with President Ferdinand Marcos.
After Marcos declared Martial Law in 1972, his most voluble critic Aquino, who was planning to run for President, was one of the first people arrested.
Government files case vs. Cojuangcos
The Cojuangcos’ disputed hold over Hacienda Luisita had been tolerated by Marcos even at the height of his dictatorship. However, as Ninoy Aquino and his family were leaving for exile in the US, a case was filed on May 7, 1980 by the Marcos government against the Cojuangco company TADECO for the surrender of Hacienda Luisita to the Ministry of Agrarian Reform, so land could be distributed to the farmers at cost, in accordance with the terms of the government loans given in 1957-1958 to the late Jose Cojuangco, Sr., who died in 1976. (Republic of the Philippines vs. TADECO, Civil Case No. 131654, Manila Regional Trial Court, Branch XLIII)
The Marcos government filed this case after written follow-ups sent to the Cojuangcos over a period of eleven years did not result in land distribution. (The Cojuangcos always replied that the loan terms were unenforceable because there were no tenants on the hacienda.) The government’s first follow-up letter was written by Conrado Estrella of the Land Authority on March 2, 1967. Another letter was written by Central Bank Governor Gregorio Licaros on May 5, 1977. Another letter was written by Agrarian Reform Deputy Minister Ernesto Valdez on May 23, 1978.
The government’s lawsuit was portrayed by the anti-Marcos bloc as an act of harassment against Ninoy Aquino’s family. Inside Hacienda Luisita, however, the farmers thought the wheels of justice were finally turning and land distribution was coming.
Cojuangcos claim hacienda has no tenants
In their January 10, 1981 response to the government’s complaint, the Cojuangcos again said that the Central Bank and GSIS resolutions were unenforceable because there were no tenants on Hacienda Luisita.
“Inilaban ni Doña Metring, yung nanay nila Cory, na wala raw silang inabutan na tao [sa hacienda], kaya wala raw benipesyaryo, kaya ang lupang ito ay sa kanila (Doña Metring, the mother of Cory, said there were no tenants in the hacienda when they took over, therefore there were no beneficiaries, therefore the land belonged to them),” recalls Bais. “E, tignan mo naman ang lupang ito. Paano mapapatag ang lupang ito? Paano makapag-tanim kung walang taong inabutan? (But look at this land. How else could this land have been tamed? How could it have been cultivated if there were no people here when they took over?)”
(The distinction between a tenant farmer and seasonal farmers hired from outside was key to the Cojuangcos’ defense. A tenant farmer is one who is in possession of the land being tilled. In his book A Captive Land, James Putzel noted that the Central Bank resolution mentioned distribution not to tenants but to “small farmers.” Raising the issue of tenancy thus seemed ineffective in the defense.)
The Cojuangcos also said in their January 10, 1981 response that there was no agrarian unrest in Luisita, and existing Marcos land reform legislation exempted sugar lands. Further, they asserted that the government’s claim on Luisita had already expired since no litigation was undertaken since 1967.
Court orders Cojuangcos to surrender Luisita
In the meantime, vague rumors of a planned conversion of the hacienda into a residential subdivision or airport, or both, cropped up among the farm workers, causing anxiety that they would be left with no land to till. (This was likely due to the decline of the sugar industry in the Philippines after the US quota ended in the 1970s. Conversion became a buzzword among big landowners all over the country. The Cojuangcos formed Luisita Realty Corporation in 1977 as a first step to turning the hacienda into a residential and industrial complex.)
The government pursued its case against the Cojuangcos, and by December 2, 1985, the Manila Regional Trial Court ordered TADECO to surrender Hacienda Luisita to the Ministry of Agrarian Reform. According to Putzel, this decision was rendered with unusual speed and was decried by the Cojuangcos as another act of harassment, because Cory Aquino, now a widow after the assassination of Ninoy Aquino in 1983, was set to run for President against Marcos in the February 7, 1986 snap elections. The Cojuangcos elevated the case to the Court of Appeals (Court of Appeals G.R. 08634).
Cory promises to give “land to the tiller”
Cory Aquino officially announced her candidacy on December 3, 1985. Land reform was one of the pillars of her campaign.
A farmer GMANews.TV spoke to said they were told by Cojuangco family members managing the hacienda during this time that if Cory became president, Hacienda Luisita would once and for all be distributed to the farmers through her land reform program. He said this promise was made to motivate them to vote for Cory and join the jeepney-loads of people being sent to Manila from Tarlac to attend her rallies.
On January 6, 1986, Aquino delivered the first policy speech of her campaign in Makati and said, “We are determined to implement a genuine land reform program . . . to enable [beneficiaries] to become self-reliant and prosperous farmers.”
Ten days later, on January 16, 1986, Aquino delivered her second major speech in Davao and said, “Land-to-the-tiller must become a reality, instead of an empty slogan.”
In the same speech, Aquino also said, “You will probably ask me: Will I also apply it to my family’s Hacienda Luisita? My answer is yes.”
This campaign promise would haunt her for many years to come. To this day, it haunts her son.
Marcos flees, Aquino dissolves Constitution
The snap elections took place on February 7, 1986. Marcos was declared winner, but was ousted by the People Power revolution. Cory Aquino was sworn in as President on February 25, 1986. She named her running mate Salvador “Doy” Laurel Prime Minister through Presidential Proclamation No. 1.
A month later, Aquino issued Presidential Proclamation No. 3 declaring a revolutionary government and dissolving the 1973 Constitution. This nullified Laurel’s position as Prime Minister, and abolished the Batasang Pambansa (Parliament). Aquino announced that a new Constitution was going to be formed. Legislative powers were to reside with the President until elections were held.
To critics, Aquino’s abandonment of Laurel and her taking of legislative power were early signs that a web of advisers was influencing her decisions. The sway of these advisers would be felt later in the choices Aquino would make regarding Hacienda Luisita.
Juan Ponce Enrile’s link to Hacienda Luisita
On September 16, 1987, Laurel formally broke ties with Aquino. The New York Times reported that Laurel had confronted Aquino about her promise in 1985 to let him run the government as Prime Minister after Marcos was ousted, because she had no experience. This was the reason Laurel agreed to shelve his own plan to run for President and put his party’s resources behind Aquino during the snap elections. “I believed you,” the New York Times quoted Laurel saying he told Mrs. Aquino. Aquino just listened without response, Laurel said.
Laurel found an ally in Juan Ponce Enrile, another disenchanted EDSA veteran who now opposed Aquino.
Enrile also happened to be the lawyer of Tabacalera when Hacienda Luisita was taken over by the Cojuangcos in 1957. He was retained by the Cojuangcos after the sale. Enrile’s inside knowledge of the controversial transaction would be a big thorn in the side of the Cojuangco-Aquinos.
Mendiola, a portent of the Luisita massacre
On January 22, 1987, eleven months into the Aquino administration, the Mendiola massacre happened. Thousands of frustrated farmers marched to Malacañang demanding fulfillment of the promises made regarding land reform during the Aquino campaign, and distribution of lands at no cost to beneficiaries. At least a dozen protesters were killed in the violent dispersal. More were seriously injured.
In a protest march for land reform in January 1987, 13 protesters were killed near Malacañang in what has gone down in history as the Mendiola Massacre, a low point in the administration of former President Corazon C. Aquino. Photo by Mon Acasio
Under pressure after the bloodshed in Mendiola, Aquino fast-tracked the passage of the land reform law. The new 1987 Constitution took effect on February 11, 1987, and on July 22, 1987, Aquino issued Presidential Proclamation 131 and Executive Order No. 229 outlining her land reform program. She expanded its coverage to include sugar and coconut lands.
Her outline also included a provision for the Stock Distribution Option (SDO), a mode of complying with the land reform law that did not require actual transfer of land to the tiller.
(Aquino’s July 22, 1987 “midnight decree”, as Juan Ponce Enrile called it back then, raised eyebrows because it was issued just days before the legislative powers Aquino took in 1986 were going to revert back to Congress on July 28, 1987, the first regular session of the new Congress after the May 1987 elections. The timing insured the passage of the SDO.)
Land reform is linked to social justice. When Spain colonized the Philippines by force beginning 1521, its lands were claimed by the conquistadors in the name of Spain. The natives who were already there tilling the land were put under Spanish landlords, who were given royal grants to “own” the land and exact forced labor and taxes from the natives. After the Spaniards left, the Americans took over. When the Philippines became independent in 1946, history had to be set right by giving the lands back to the people whose ancestors have been tilling them for centuries. However, a new feudal system developed among the Filipinos themselves, and once again drove a wedge between the tillers and their land.
What is the SDO (Stock Distribution Option)?
The Stock Distribution Option (SDO) was a clause in the 1988 Comprehensive Agrarian Reform Program (CARP) that allowed landowners to give farmers shares of stock in a corporation instead of land. The landlords then arranged to own majority share in the corporations, to stay in control. This went against the spirit of land reform, which is to give “land to the tiller”. The SDO was abolished in the updated land reform law CARPER (CARP with Extensions and Revisions) that was passed in August 2009.