LAND VALUATION

- The process of determining the just compensation for the land owners, the modes of
payment, and the review/appeal process in case the value is deemed too low.

P.D. 27​ - ​Emancipation of Tenants (OCT. 27, 1972)

- Retention Area: 7 hectares if he is cultivating
(Superseded by th 5 hectare retention under CARL)
- Cost of the land to be transferred to the tenant farmer:
2 ½ x the average harvest of three normal crop years
- Such then shall be paid by the tenant in ​15 years of 15 equal installments​ at the interest
rate of ​6 percent per annum​.
- In case of default: it shall be paid by the farmer’s cooperative which he is a member of
and the former shall have the right of recourse against the latter
- Payment of Just Compensation
1. Direct Payment to the landowner by the farmer-beneficiary in terms to be
mutually agreed by both and ​subject to the approval of the DAR
2. Payment by the LBP with 10% payable immediately in cash and the balance in
LBP Bonds over a period of 10 years with 1/10th maturing every year.
3. Other modes prescribed or approved by PARAC

E.O. 228 - Full Land Ownership to Qualified Farmer Beneficiaries (RICE/CORN)

- Valuation of rice and corn lands:
(​ A
​ verage Gross Production​ x 2.5 ) x government price for 1 cavan
Hectare of 50 kilos of palay
- Lease rentals paid to the landowner after ​OCTOBER 21, 1972​ shall be considered as
advance payment for the land.
- SEC. 3 ​Compensation Modes
a. Bond payment over ​10 years​, with 10% the value of the land payable
immediately in cash, and the balance in form of LBP bonds bearing
market rates of interest that are aligned with 90-day treasury bills rates,
net of applicable final withholding tax. One-tenth of the face value of the
bonds shall mature every year from the date of issuance until the tenth
year.
b. Direct payment in cash or in kind by the farmer-beneficiary with the terms
to be mutually agreed upon by the beneficiaries and the landowners and
subject to the approval of the DAR
c. Other modes of payment as may be prescribed by the Presidential
Agrarian Reform Council.
- In the event of non-acceptance by the landowner, the LBP Trust Department shall hold
in trust for him the compensation paid and the cash portion of such shall mature yearly
and shall be invested in government securities. All dividends shall be for the benefit of
the landowner.
 - The total cost of the land plus 6% interest per annum minus 2% timely-payment rebate
shall be paid to the LBP for ​20 years in 20 equal annual amortizations.
- The landowner may pay in full before the 20th year or request restructure the payment of
be lower than 20 years
- Failure ​to pay ​3 annual amortizations​ ​shall be sufficient cause for ​foreclosure​ which will
be effected ​30 days a​ fter the final notice for payment
- Foreclosure, necessary documents to be attached:
- A copy of the final notice (served to the tenant-farmer or, in event of failure of
service, posted in conspicuous places by the LBP)
- Proof of service to the tenant-farmer
- Certification of the non payment
Such documents are then registered with the city or province’s Registry of Deeds to
effect the foreclosure.
- The foreclosure may be lifted within a period of ​2 years​ from registration by paying ​all
unpaid amortizations plus interest.
-
R.A. 6657 (JUNE 10, 1988)
- Sec. 16 ​Acquisition Procedure
- After identification, the DAR shall send notice to the landowners and post the
same on conspicuous places.
- Within ​30 days​ from receipt, the landowner shall inform the DAR of his decision
- The LBP shall pay the landowner the purchase price within 30 days from
acceptance ​and execution and delivery of deed of transfer + OCT/TCT
- In case of ​rejection​ or failure to reply, the DAR shall conduct summary
administrative proceeding to determine the compensation for the land requiring
the landowner, the LBP, and other interested parties to submit evidence as to the
just compensation within ​15 days from receipt of notice.
- The DAR shall then deposit the compensation in cash or LBP bonds to the
designated accessible bank and shall then take immediate possession of the
land.
A request from the RD to issue a TCT shall then follow in the name of the
Republic of the Philippines and thereafter shall commence on the redistribution

- Determination of Just Compensation

- Main factors:
- the cost of acquisition of the land,
- the current value of the like properties,
- its nature,
- actual use and income,
- the sworn valuation by the owner,
- the tax declarations,
- and the assessment made by government assessors shall be considered.
- Additional factors:
 - Social and economic benefits contributed by the farmers and farmworkers
- Non-payment of taxes or loans secured from any government financing
institution

- Modes of Payment
- Cash payment
a. Above 50 hectares - ​25% cash, rest nego instruments
b. Above 24 but below 50 ​- 30% cash
c. 24 and below ​- 35% cash
- Shares of stock in GOCCs, LBP preferred shares, physical assets or other
qualified investments
- Usable tax credits
- LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten
percent (10%) of the face value of the bonds shall mature every year from the
date of issuance until the tenth (10th) year: provided, that should the landowner
choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability 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:
(i) Acquisition of land or other real properties of the government,
including assets under the Asset 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;
(ii) Acquisition of shares of stock of government-owned or
-controlled corporations or shares of stocks owned by the government in
private corporations;
(iii) Substitution for surety or bail bonds for the provisional release
of accused persons, or performance bonds;
(iv) 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;
(v) Payment for various taxes and fees to government; provided,
that the use 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;
(vi) Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools, and other
institutions;
 (vii) Payment for fees of the immediate family of the original
bondholder in government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.

Formula by the DAR through Administrative Order No. 05, S. 1998:

Land Value (LV) = (Capitalized Net Income x 0.6) + (Comparable Sales x 0.3) + (Market
Value per Tax Declaration x 0.1)

LBP vs Natividad

DAR’s authority to determine just compensation

There is nothing contradictory between the DARs primary jurisdiction to determine and
adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving
the implementation of agrarian reform, which includes the determination of questions of just
compensation, and the original and exclusive jurisdiction of regional trial courts over all petitions
for the determination of just compensation. The first refers to administrative proceedings, while
the second refers to judicial proceedings.

In accordance with settled principles of administrative law, primary jurisdiction is vested

in the DAR to determine in a preliminary manner the just compensation for the lands taken
under the agrarian reform program, but such determination is subject to challenge before the
courts. The resolution of just compensation cases for the taking of lands under agrarian reform
is, after all, essentially a judicial function.

Basis for the valuation of just compensation

In ​Office of the President, Malacanang, Manila v. Court of Appeals, ​we ruled that the
seizure of the landholding did not take place on the date of effectivity of PD 27 but would take
effect on the payment of just compensation.

Lubrica vs LBP

When is ownership transferred to the Government

In the instant case, petitioners were deprived of their properties in 1972 but have yet to
receive the just compensation therefor. The parcels of land were already subdivided and
distributed to the farmer-beneficiaries thereby immediately depriving petitioners of their use.
Under the circumstances, it would be highly inequitable on the part of the petitioners to compute
the just compensation using the values at the time of the taking in 1972, and not at the time of
the payment, considering that the government and the farmer-beneficiaries have already
benefited from the land although ownership thereof have not yet been transferred in their
names. ​Petitioners were deprived of their properties without payment of just
compensation which, under the law, is a prerequisite before the property can be taken
away from its owners. ​The transfer of possession and ownership of the land to the
government are conditioned upon the receipt by the landowner of the corresponding payment or
deposit by the DAR of the compensation with an accessible bank. Until then, title remains with
the landowner.

LBP vs CA and Yap

Forms of payment under CARL

Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands —
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or
no response from the landowner, upon the deposit with an accessible bank designated by the
DAR of the compensation i​ n cash or in LBP bonds in accordance with this Act, the DAR shall
take immediate possession of the land and shall request the proper Register of Deeds to issue
a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. . . .

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP
bonds". Nowhere does it appear nor can it be inferred that the deposit can be made in any other
form. If it were the intention to include a "trust account" among the valid modes of deposit, that
should have been made express, or at least, qualifying words ought to have appeared from
which it can be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity in
Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".

LAND REDISTRIBUTION

- The awarding of lands to qualified beneficiaries once the land has been “expropriated”
by the government, the payment by the beneficiaries to the government, and the
subsequent transfer or sale of the distributed lands to third persons after distribution

R.A. 6657 -
A. Beneficiaries​ [Section 22]

Beneficiaries, in their order of priority, are:

1. Agricultural lessees and share tenants;

 2. Regular Farmworkers: a natural person who is employed on a permanent basis by
an agricultural enterprise or farm [Section 3(h)];

a. Farmer refers to a natural person whose primary livelihood ​is cultivation of land
or the production of agricultural crops, livestock and/or fisheries ​either by
himself/herself, or primarily with the assistance of his/her immediate farm
household, whether the land is owned by him/her, or by another person under a
leasehold or share tenancy agreement or arrangement with the owner thereof
[Section 3(f)].
b. Farmworker is a natural person who renders service for value as an employee or
laborer in an agricultural enterprise or farm regardless of whether his
compensation is paid on a daily, weekly, monthly or "pakyaw" basis. It includes
an individual whose work has ceased as a consequence of, or in connection with,
a pending agrarian dispute and who has not obtained a substantially equivalent
and regular farm employment [Section 3(g)].

3. Seasonal farmworkers: a natural person who is ​employed on a recurrent, periodic or

intermittent basis by an agricultural enterprise or farm, whether as a permanent or an
non-permanent laborer, such as "dumaan", "sacada", and the like [Section 3(i)];

4. Other farmworkers: a farmworker who is not a regular nor a seasonal farmworker

[Section 3(j)];

5. Actual tillers or occupants of ​public​ lands;

6. Collective or cooperatives of the above beneficiaries; and

● Cooperatives shall refer to organizations composed primarily of small agricultural

producers, farmers, farmworkers, or other agrarian reform beneficiaries who
voluntarily organize themselves for the purpose of pooling land, human,
technological, financial or other economic resources, and operated on the
principle of one member, one vote. A juridical person may be a member of a
cooperative, with the same rights and duties as a natural person [Section 3(k)].

7. Others directly working on the land.

Before any award is given to a farmer, the qualified children of the landowner must
receive their three hectare award.

Rural women refer to women who are engaged directly or indirectly in farming and/or
fishing as their source of livelihood, whether paid or unpaid, regular or seasonal, or in
food preparation, managing the household, caring for the children, and other similar
activities [Section 3(l)].

B. Disqualifications of Beneficiaries​ [Section 22]

1. Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed of,
 or abandoned their land;

2. Beneficiaries guilty of negligence or misuse of the land or any support extended to

them;

* The mere fact that the expected quantity of harvest, as visualized and calculated
by agricultural experts, is not actually realized, or that the harvest did not
increase, is not a sufficient basis for concluding that the tenants failed to follow
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proven farm practices. [Belmi v. CAR ]

3. Beneficiaries with at least three (3) hectares of agricultural land; and

* Under the CARL, ​a beneficiary is landless if he owns less than three (3)
hectares of agricultural land​. [Section 25]

4. Beneficiaries whose land have been the subject of foreclosure by the Land Bank of
the Philippines. [Section 26]

* Under the CARL, the LBP may foreclose on the mortgage for non-payment of the
beneficiary of an aggregate of three (3) annual amortizations. [Section 26] (EO
228)

C. Awards

1. Emancipation Patents (EPs) are issued for lands covered under Operation Land
Transfer (OLT) of Presidential Decree No. 27.

2. Certificates of Land Ownership Award (CLOAs) are issued for private agricultural
lands and resettlement areas covered under Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988.

3. Free Patents​ are issued for public agricultural lands.

* Under Section 15 of EO 229 (1987), all alienable and disposable lands of the
public domain suitable for agriculture and outside proclaimed settlements shall be
redistributed by the Department of Environment and Natural Resources (DENR).

4. Certificates of Stewardship Contracts are issued for ​forest areas under the
Integrated Social Forestry Program.

D. Manner of Payment​ [Section 26]

1. Lands awarded shall be paid by the beneficiaries to the LBP in thirty (30) annual
amortizations at six percent (6%) interest per annum. The payments for the first

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7 SCRA 812.
 three (3) years after the awards may be at reduced amounts as established by the
PARC: Provided, That the first five (5) annual payments may not be more than five
percent (5%) of the value of the annual gross production as established by the DAR.
Should the scheduwled annual payments after the fifth year exceed ten percent
(10%) of the annual gross production and the failure to produce accordingly is not
due to the beneficiary's fault, the LBP may reduce the interest rate or reduce the
principal obligation to make the repayment affordable.

2. Payment shall be:

a. Thirty (30) annual amortizations (First 3 years may be at reduced amounts);

b. Six percent (6%) interest per annum; and
c. First five (5) annual payments may not be more than five percent (5%) of the
value of the annual gross production.

E. Ownership Limitations on the Awarded Lands

1. Transferability of Awarded Lands​. - Lands acquired by beneficiaries may not be

sold, transferred or conveyed except through hereditary succession, or to the
government, or to the Land Bank of the Philippines, or to other qualified beneficiaries
for a ​period of ten (10) years.​ [Section 27]

* If the land is sold to the government or to the LBP, the children or the spouse of
the transferee shall have ​a right to repurchase within a period of two (2) years.

2. Conversions of Lands​. - ​An application for conversion may be entertained only

after the lapse of f​ ive (5) years from the award, when the land ceases to be
economically feasible and sound for agricultural purposes or the locality has become
urbanized and the land will have a greater economic value for residential,
commercial or industrial purpose. [Section 66]

ESTRIBILLO VS CA

Indefeasibility of Administrative Title

Ybañez v. Intermediate Appellate Court, provides that certificates of title issued in administrative
proceedings are as indefeasible as certificates of title issued in judicial proceedings:

It must be emphasized that a certificate of title issued under an administrative proceeding

pursuant to a homestead patent, as in the instant case, is as indefeasible as a certificate of title
issued under a judicial registration proceeding, provided the land covered by said certificate is a
disposable public land within the contemplation of the Public Land Law.

The rule in this jurisdiction, regarding public land patents and the character of the certificate of
title that may be issued by virtue thereof, is that where land is granted by the government to a
private individual, the corresponding patent therefor is recorded, and the certificate of title is
issued to the grantee; thereafter, the land is automatically brought within the operation of the
Land Registration Act, the title issued to the grantee becoming entitled to all the safeguards
provided in Section 38 of the said Act. ​In other words, upon expiration of one year from its
issuance, the certificate of title shall become irrevocable and indefeasible like a certificate
issued in a registration proceeding.

LAND TENURE IMPROVEMENT

- The improvement of tenurial and socio economic status of the farmers short of
transferring the ownership of the land.

CHAPTER III
Improvement of Tenurial and Labor Relations

Section 12. Determination of Lease Rentals. — In order to protect and improve the tenurial and
economic status of the farmers in tenanted lands under the retention limit and lands not yet
acquired under this Act, the DAR is mandated to determine and fix immediately the lease
rentals thereof in accordance with Section 34 of Republic Act No. 3844, as amended: provided,
that the DAR shall immediately and periodically review and adjust the rental structure for
different crops, including rice and corn, or different regions in order to improve progressively the
conditions of the farmer, tenant or lessee.

Section 13. Production-Sharing Plan. — Any enterprise adopting the scheme provided for in
Section 32 or operating under a production venture, lease, management contract or other
similar arrangement and any farm covered by Sections 8 and 11 hereof is hereby mandated to
execute within ninety (90) days from the effectivity of this Act, a production-sharing plan, under
guidelines prescribed by the appropriate government agency.

Nothing herein shall be construed to sanction the diminution of any benefits such as salaries,
bonuses, leaves and working conditions granted to the employee-beneficiaries under existing
laws, agreements, and voluntary practice by the enterprise, nor shall the enterprise and its
employee-beneficiaries be prevented from entering into any agreement with terms more
favorable to the latter.

The essential requisites of a tenancy relationship are:

1. The parties are the landowner and the tenant;

2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.

All these requisites must concur in order to create a tenancy relationship between the parties.
The absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a
planter thereon, a de jure tenant. This is so because unless a person has established his status
as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform
Program of the Government under existing tenancy laws.

In order that leasehold tenancy under the Agricultural Tenancy Act may exist, the following
requisites must concur.

1. That the land worked by the tenant is an agricultural land;

2. That the land is susceptible of cultivation by a single person together with members of his
immediate farm household;
3. That the land must be cultivated by the tenant either personally or with the aid of labor
available from members of his immediate farm household;
4. That the land belongs to another; and
5. That the use of the land by the tenant is for a consideration of a fixed amount in money or in
produce or in both

tenancy relationship is distinguished from farm employer-farm worker relationship in that: "In
farm employer-farm worker relationship, the lease is one of labor with the agricultural laborer as
the lessor of his services and the farm employer as the lessee) thereof. In tenancy relationship,
it is the landowner who is the lessor, and the tenant the lessee of agricultural land. The
agricultural worker works for the farm employer and for his labor be receives a salary or wage
regardless of whether the employer makes a profit. On the other hand, the tenant derives his
income from the agricultural

The subject matter of leasehold tenancy is limited to agricultural land; that of civil law lease may
be either rural or urban property. As to attention and cultivation, the law requires the leasehold
tenant to personally attend to, and cultivate the agricultural land, whereas the civil law lessee
need not personally cultivate or work the thing leased. As to purpose, the landholding in
leasehold tenancy is devoted to agriculture, whereas in civil law lease, the purpose may be for
any other lawful pursuits. As to the law that governs, the civil law lease is governed by the Civil
Code, whereas leasehold tenancy is governed by special laws.