Just Compensation- the full and fair equivalent of the property taken independently of what the government or tenant

can afford payable promptly and determined at the time of payment and not at the time of the taking of the property. Concept of social Justice It falls within the concept of social justice, as stated by Justice Ynares-Santiago on one of her rulings; Laws which have for their object the preservation and maintenance of social justice are not only meant to favor the poor and the underprivileged, but they apply with equal fore to those who, notwithstanding their more comfortable position in life, are equally deserving of protection from the courts. As held in Land Bank supra; The duty of the court to protect the weak and underprivileged should not be carried out to such extent as to deny justice to the landowner whenever truth and justice happen to be on his side. As movingly state by Justice Cruz, Never is it justified to prefer the poor simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law.

Under sec. 18 of RA 6657: The Land Bank of the Philippines shall compensate the landowner in such amounts as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Secs. 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court. The compensation shall be paid on one of the following modes, at the option of the landowner: 1. Cash payment, under the following terms and conditions: For lands above fifty hectares, insofar as Twenty-five percent cash, the balance to the excess hectarage is concerned. be pain in government financial instruments negotiable at any time. For lands above twenty four hectares and Thirty percent cash, the balance to be pain up to fifty hectares. in government financial instruments negotiable at anytime. For lands twenty four hectares and below Thirty five percent cash, the balance to be paid in government financial instruments negotiable at anytime. 2. Shares of stock in government-owned or controlled corporation, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by PARC; 3. Tax credits which can be used against any tax liability; 4. LBP bonds, which shall have the following features: a. Market interest rates aligned with 91-day Treasury bill rates. Ten percent of the face value of the bonds shall mature every year from the date of issuance until the tenth year. Provided, that should the land owner choose to forego the cash portion, whether in full or in part, he shall be paid correspondingly in LBP bonds.

b. Transferrability and negotiability. Such LBP bonds may be used by the landowner, his successors in interest or his assigns, up to the amount of their face value, for any of the following: Acquisition of land or other real properties of the government, including assets under the Assets privatization program and other assets foreclosed by government financial institutions in the same province or region where the lands for which the bonds were paid are situated. Acquisition of shares of stock of government-owned or controlled corporations or shares of stocks owned by the government in private corporations. Substitution for surety or bail bonds for the provisional release of accused persons, or performance bonds. Security for loans with any government financial institution, provided the proceeds of the loans shall be invested in an economic enterprise, preferably in a small-and medium scale industry, in the same province or region as the land for which the bonds are paid. Payment for various taxes and fees to government: Provided, that the uses of these bonds for these purposes will be limited to a certain percentage of the outstanding balance of the financial instruments: Provided, further, that the PARC shall determine the percentage mentioned above. Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools, and other institutions, Payment for fees of the immediate family of the original bondholder in government hospitals, and Such other uses as the PARC may from time to time allow. Determination of valuation and landowners compensation 1. The compensation of lands covered under RA 9700 shall be: a) The amount determined in accordance with the criteria provided for in Section 7 of the said law and existing guidelines on land valuation; b) The value based on the order of the DAR adjudication board or the regular court, which has become final and executory. 2. All previously acquired lands wherein valuation is subject to challenge by landowners shall be completed and finally resolved pursuant to section 17 of R.A no. 6657, as amended. Claims under PD 27 and EO 228 whether submitted or not to the LBP and not yet approved for payment shall be valued under RA 6657, as amended. Landholdings covered by PD 27 and falling under Phase I of RA 9700 shall be valued under RA 9700 3. In cases of rejection landowners may withdraw the original value of the landholding as determined by the DAR and LBP per Memorandum of Valuation and subsequently deposited in their names, subject to their submission of the requirements for payment. When the Lon later accepts the original value or as recomputed by the LBP based on existing valuation guidelines, mere filing of a manifestation by the LO as regards the acceptance of the original

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6.

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value or a joint manifestation by the LO and the LBP on the recomputed value with the DAR adjudication board shall automatically terminate the just compensation cases pending thereat. LOs, other than banks and financial institutions, who voluntarily offer their lands for sale, shall be entitled to an additional five percent cash payment. For landholdings which were conveyed after the effectivity of RA 6657, the LBP shall consider the transferor as the payee. However, payment must be released t the LOtransferee if the LO-transferor issues SPA or Deed of Assignment in favor of the former. In the determination of the Annual Gross Production, Selling price and Cost of Operation to be used in the land valuation, the audited financial statement filed with the BIR shall be obtained by the DARMO from the LO 15 days prior to the date of field investigation. IF the landowner fails to submit the same, the DAR and LBP may adopt applicable industry data or, in the absence thereof, conduct an industry study on the specific crop. Small portions or patches within the covered landholdings which are determined to be less productive than the bigger portion during the conduct of joint field investigation shall be valued based on the current use of the adjacent portions, provided that small portions or patches shall not exceed 10% of the covered landholding.

In the case of Land Bank of the Philippines v. CA and Jose Pascual, the SC stated that the consent of the tenant is not necessary to the valuation or just compensation of lands expropriated under the Agrarian Reform Program.

The basic formula for the valuation of lands covered by the VOS or CA shall be: Land value= LV Capitalized Net Income (based on the land use and productivity) = CNI o Used only if there are three land sales transactions in the same general area where one of these was for an area no less than 10% of the land now being covered,

Comparable sales (based on fair market value equivalent to 70% of BIR zonal value) = CS Market Value per Tax Declaration (based on Government assessment) MV

If three factors are present: LV= (CNI x. 0.60) + (CS x 0.30) + (MV x 0.10) If two factors are present: When the CS is not present: LV= (CNI x 0.90) + (MV x. 0.10) When the CNI is not present, and CS and MV are applicable: (CS x 0.90) + (MV x0.10)

If only one factor is present When MV is only applicable, the formula shall be: LV= MV x 2 In no case shall the value of idle land using the formula (MV x 2) exceed the lowest value of land within the same estate under consideration or within the same barangay, municipality or province (in that order) approved by LBP within one year from receipt of claim folder. Payment of just compensation Just compensation, as provided by the Constitution, laws and jurisprudence on expropriation, must be paid promptly. Without prompt payment, compensation cannot be considered just for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. Owners of expropriated land are entitled to recover the interest from the date the condemnor takes possession of the lands and the amount granted by the court shall cease to earn interest only from the moment they are paid to the owners or deposited in Court.

Just compensation as of the time of taking and Just compensation as of the time of payment Time of taking Time of payment The price or market value of the land and its The determination of just compensation is at the character at the time of payment by the time of the payment, and until full payment, Government was the criteria for determining just ownership remains with the landowner. compensation. Rationale: it took several years or even decades for DAR and Land Bank to pay after the taking of the Land.

Landowners are entitled to recover interest from the date the condemnor takes possession of the lands and the amount granted by the court shall cease to earn interest only from the moment they are paid to the owners or deposited in Court.

The factors that should be considered and factors that should not be considered in the evaluation of the property expropriated, as stated in Republic v. Lichauco: Factors to be considered The prices of similar lands in adjacent Factors not to be considered The value of other properties which in

their nature are not similar to or are located far away from the property taken; The buying power of the tenants in whose favor the expropriation is made or the fact that the transaction would be exempt from income tax; The price offered by the owners for the property by way of compromise to avoid protracted and expensive litigation and subject to the condition that the owners be allowed to retain a certain portion for their use, which offer was not accepted. The value to the condemner must not be considered in the expropriation proceedings. In any event, it is the courts determination of just compensation that is final because they are vested with exclusive and original jurisdiction to determine the same.

areas as shown by sales made in the neighborhood of the year of expropriation; The soil condition of the lands taken, together with their accessibility, improvements and climate; The deeds of sale and the testimonial evidence submitted by both parties. The value to the owner, or the loss caused to him must be considered in an expropriation proceedings. 70%of the zonal valuation of the lad and the value of the standing crop must also be considered.

Formulas followed by the DAR and LBP in determining just compensation a.) The traditional PD 27 mathematical formula plus 6% compounded interest (The current government support price of palay per cavan is P300.00 under the Pascual case.) b.) The traditional PD 27 mathematical formula as modified in the Pascual case by applying the current prices of palay/corn. c.) As expressly stated by the SC in Lubrica case and other cases, Rice/corn lands and as specifically provided by RA 9700, PD 27 should no longer be applied except on a suppletory basis. Instead section 18 of RA 6657 should apply even to PD 27 lands. PD 27 lands are the rice and corn lands covered under agrarian reform and the taking of which was completed through payment for just compensation under PD 27. All agricultural lands that are not yet paid, or the taking of which were not completed under PD 27, the payment of which shall be made under RA 6657. All previously acquired lands wherein valuation is subject to challenge by LOs shall be completed and finally resolved pursuant to section 17 of RA 6657. The compensable value of land acquired under PD 27 is the average gross production multiplied by the factor 2.5. In the case of Lubrica, the SC ruled that the just compensation should be determined as of the time of payment even if the land had already been taken and distributed earlier because the expropriation of the land did not take place when PD 27 was promulgated. Distinction between P.D 27 and R.A 6657 P.D 27 R.A 6657

Covers all public and private agricultural lands including other lands of the public domain suitable for agriculture. Did not repeal or supersede PD 27 and whatever provisions of PD 27 that are consistent with RA 6657 shall be suppletory to the latter. The valuation includes the value of standing crops in addition to seventy percent of the zonal valuation of the land. However, there is no longer any distinction between rice or corn lands insofar as just compensation is concerned. RA 9700 specifically provides that all previously acquired lands wherein valuation is subject to challenge by landowners shall be completed and finally resolved pursuant to section 17 of RA 6657.

Covers rice and corn lands. Shall continue to operate with respect to rice and corn lands. The valuation of rice and corn lands covered shall be based on the average gross production determined by the Barangay Committee on Land Production.