The Court of Appeals (CA) has ordered the government to pay P28.4 billion as just compensation to Hacienda Luisita, Inc. (HLI) owners whose 4,500.7 hectares of sugarcane plantation in Tarlac were distributed to farmers under the comprehensive agrarian reform program (CARP).

In a decision promulgated last April 25 on a case filed by HLI, the CA reversed the 2023 rulings of the Tarlac City regional trial court (RTC) which affirmed the P304 million just compensation, on top of P167.4 million in interests, fixed by the Land Bank of the Philippines (LBP) and adopted by the Department of Agrarian Reform (DAR).

The CA decision, written by Associate Justice Raymond Reynold R. Lauiagan, pointed out the constitutional provision that private property cannot be taken for public use without just compensation.

In the case of HLI, the CA said that the RTC, acting as special agrarian court (SAC), failed to follow the provisions of Section 17 of Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL), in the assessment of just compensation.

Section 17 of RA 6657 provides: “In determining just compensation, the cost of acquisition of the land, the current value of 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.”

Also to be considered under the law are the social and economic benefits contributed by the farmers and the farm workers and by the government to the property, as well as the non-payment of taxes or loans secured from any government financing institutions.

In its decision that granted HLI’s petition, the CA said that HLI is entitled to additional amounts as just compensation to the land given to farm worker beneficiaries (FWBs).

The dispositive portion of the CA decision:

“Wherefore, premises considered, the Petition for Review is granted. The decision dated 15 February 2023 and Resolution dated 11 August 2023 of the Regional Trial Court, acting as Special Agrarian Court (RTC-SAC) of Tarlac City, Branch 63 in Civil Case No. 417-2015 are reversed and set aside. Respondents (DAR and LBP) are ordered to pay petitioner (HLI) the total amount of P28,488,944,278.71 as just compensation as of 30 April 2025, without prejudice to the accrual of interest until fully paid.”

In April 2021, the Supreme Court (SC) ordered the gathering of documents which would pave the way for the payment of just compensation to HLI which is owned by the Cojuangco family of Tarlac.

Based on its July 5, 2011 decision, the SC directed HLI owners to turn over the land directly to the FWBs who will pay just compensation based on the 1989 land valuation of the property.

The 2011 decision became final and executory on April 24, 2012.

In its April 2021 resolution, the SC directed the Presidential Agrarian Reform Council (PARC), the DAR, and the register of deeds to create a task force to complete and collate the documentations required to validate the award to FWBs.

At the same time, the SC directed the DAR to determine the just compensation to HLI owners upon completion of the validation procedures.

In January 2015, the DAR’s Adjudication Board (DARAB) affirmed the valuations of LBP of P304.03 million as just compensation for HLI’s lands. The DARAB decision denied HLI’s claims for additional compensation since, it said HLI received and withdrew a total amount of P471,501,417.98 broken down as P304,033,138.26 as principal and P167,468,279.78 as interest.

With the DARAB’s decision, HLI filed a petition before the RTC-SAC which dismissed the case as it denied the claim for additional compensation and interests.

HLI elevated the issue before the CA.

Among other grounds, the HLI told the SC that the RTC-SAC erred in concluding that the actual production data could not be validated and failed to consider that non-submission of LBP’s computation using HLI’s actual production data yielded a lower land valuation is a willful suppression of evidence.

HLI also said that the RTC-SAC failed to evaluate, appreciate and rule on the evidence it presented; failed to consider and validate HLI’s evidence of use of actual production data will result in a just compensation for P1.029 billion; and that the trial court erred not imposing interest on the amounts due HLI as just compensation at the rate of 12 percent and six percent from the time of taking.

Granting HLI’s petition, the CA said that in determining just compensation, among those that should be considered are the nature and character of the land at the time of taking or at the time when the owner was deprived of the use and benefit of the property, such as when title is transferred in the name of the Republic of the Philippines.

The time of taking of the property determines the applicable DAR administrative order to serve as a guideline for the determination of just compensation, the CA also said.

It added that the RTC-SAC merely affirmed the LBP and DAR’s just compensation without validating the production data and other relevant documents the HLI submitted like audited financial statements and accounting records.

The CA said that HLI was able to prove that the land value of the property was P1,029,089,933.66 which is the base amount of just compensation without the interests and other amount due to the land owners.

Thus, the appellate court said that since the taking of the land was on Nov. 21, 1989 while payments were made only in 2013 and the payments were less than the P1,029,089,933.66 as adjudged just compensation, HLI should be paid P28,488,944,278.71 as of April 30, 2025, excluding the interests due.

CA Associate Justices Marie Christine Azcarraga-Jacob and Ferdinand C. Baylon concurred in the decision.