CHAPTER SIX Just Compensation Section 17. Determination of Just Compensation Factors considered: 1.) cost of acquisition 2.

) the value of standing crop 3.) current value of like properties 4.) its nature, actual use and income 5.) sworn valuation by the owner 6.) tax declaration 7.) assessment by the government assessors 8.) 70% of the zonal valuation by the BIR -translated into a basic formula by the PARC Section 18. Valuation and Mode of Compensation The LBP shall compensate the owner MODES (at the option of the owner): 1.) Cash payment Lands above 50 hectares 25% cash Lands above 24 hectares and upto 50 hectares 30% cash Lands 24 hectares and below 35% cash -balance to be paid in government financial instruments negotiable at any time 2.) Shares of stock in government owned or controlled corporation, LBP shares, physicsl assets or other qualified investments 3.) Tax credits 4.) LBP bonds a) market interest rates aligned with 91-day treasury bill rates. 10% of the face value shall mature every year up to the 10th year b) may be used by the landowner, his successor in interest or his assigns for: i) acquisition of land or real properties of the government ii) acquisition of shares of stock iii) substitution for surety or bail bonds iv) security for loans v) payment for various taxes and fees to the government vi) payment for tuition fees

vii) payment for hospital fees viii) such other uses as the PARC may from time to time allow BASIC FORMULA FOR THE VALUATION OF LANDS COVERED BY VOS OR CA:

Three factors present: LV= (CNI x 0.60) + ( CS x 0.30) + (MV x 0.10) Two factors only: LV= (CNI x 0.90) + (MV x 0.10) Or LV= ( CS x 0.90) + (MV x 0.10) Only one factor: LV= MV x 2 COMPONENTS OF THE FORMULA I. Comparable Sales (CS) - 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 -cost of acquisition or mortgage value is used if CS can not be obtained II. Capitalized Net Income -production factor - CNI= [(Gross Revenues) - (Cos of Operations)] x 5 Gross revenues= multiplying production by the average selling price during the last 12 months III. Market Value per Tax Determination EPZA vs Dulay : tax values can serve merely as guides but not as an absolute substitute for just compensation NEW FACTORS UNDER RA 9700 A. 70% of the zonal valuation of the BIR -basis of taxation when one sells the property or when estate taxes are imposed B. value of the standing crop CASE DOCTRINES Land Bank v. CA -there must be full payment of just compensation before hte title to the expropriated property is transferred

LBP v. CA and Pedro Yap - LOs may file cases for the return of their properties taken without just compensation and for the cancellation of the EPs and CLOAs illegally distributed by DAR Land Bank v. Lubrica - expropriation did not take place on the effectivity of PD 27 or RA 6657 but on the date of the payment of just compensation; that transfer and ownership and possession of the land is conditioned on receipt by the LO of just compensation; and that it would be highly inequitable to compute just compensation using the values at the time of the taking in 1972 not at the time of the payment LBP v. Natividad - seizure or the land did not take place on the date of the PD 27 but on the date of payment of just compensation; that the agrarian process is still incomplete as the JC is has not yet been paid; that considering passage of RA 6657 before the completion process, the just compensation should be determined under the same which is the applicable law while PD 27 is merely suppletory SOCIAL JUSTICE IN JUST COMPENSATION -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 MEANING OF JUST COMPENSATION -fair and just market value of the property taking into account its present and potential use - the power of expropriation is by no means absolute -the full and fair equivalent of the property taken independently of what the government or tenant an afford, payable promptly and determined at the time of payment and not at the time of the taking of the property -JC according to its traditional definition - the measure is not the taker's gain but the owner's loss -the word "just" is used to intensify the word "compensation" to convey the idea that the equivalent value to be rendered for the proper to be taken should be real, substantial, full and ample CASE DOCTRINES Association of Small Landownders vs Secretary of Agrarian Reform -It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big

landowners, who can afford a bigger balance in bonds and other things of value Republic vs Lichauco - the ability to pay of the tenant or the farmer beneficiary shall not be considered a factor determining JC. Neither should the capacity of the government be taken into account LBP v. CA and Jose Pascual -the consent of the FB or tenant is not ncessary in establishing the proper compensation of the LO (Sec.18) LBP v. CA and Pedro Yap - without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer e 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.