Section 2. Condonation of the Agrarian Reform Debt.- This Act shall cover the condonation of P57.557 billion principal debt of 610,054 Agrarian Reform Beneficiaries (ARBs), tilling a total of 1,173,101.57 hectares of agrarian reform lands.

The principal loan of P14.5 billion, including interests, penalties and surcharges, of the 263,622 ARBs, tilling 409,206.91 hectares of agrarian reform lands, whose names and other loan details were already submitted by the Land Bank of the Philippines (LBP) to Congress, shall be condoned outright under this Act. However, the inclusion of the remaining P43.057 billion in this section shall take effect only upon submission by the LBP and the Department of Agrarian Reform (DAR) of details of the indebtedness to Government of the 346,432 ARBs, tilling 763,894.66 hectares of agrarian reform lands, contained in a list, as provided for in the next paragraph of this section.

Upon the effectivity of this Act, the individual loans of ARBs, including interests, penalties and surcharges, secured under the Comprehensive Agrarian Reform Program (CARP) or from other agrarian reform programs or laws, are hereby condoned and written off by the Government, thereby relieving them from the burden of payment thereof: Provided, That these ARBs shall have been indebted to Government as of the effectivity of this Act: Provided, further, That the LBP and the DAR shall submit the detailed list of their actual loans subject to condonation, under the collective Certificate of Land Ownership Awards (CLOAs), together with the pertinent information such as name of ARBs; amount of loan plus penalties, interests, and surcharges; location; hectarage; and other relevant information, to the concerned committees of the Senate and House of Representatives, within three (3)-year period from the effectivity of this Act, which shall then make the submission part of the Congressional Records of this Act: Provided, furthermore, That the DAR shall thereafter issue, whenever necessary, a Certificate of Condonation which shall be annotated on the Emancipation Patent (EP), CLOA based on applicable agrarian reform law: Provided, finally, That condonation as provided herein shall lift all mortgage liens, attached to the land acquired, in favor of the National Government, as represented by the LBP.