March 7, 2003
DAR OPINION NO. 2-A-03
Atty. Mario S.A. Diaz
Diaz Law Office
Suites 8 and 9, LD Centre
Cor. Lacson 7th Streets
P.O. Box 118, Bacolod City
Dear Atty. Diaz:
This refers to your letter dated 14 November 2002, requesting for a legal opinion regarding the valuation of sugarcane lands. Said letter inquires, quote: cSICHD
"We write to you in behalf of our clients who are landowners and respectfully request for an official ruling on whether the valuation of sugarcane lands still is, or is no longer subject, to the "whichever is lower" provision of Administrative Order No. 06, series of 1992 in view of the transitory provision, coverage, and repealing clauses of DAR-LBP Joint Memorandum Circular No. 15, series of 1999."
Anent your query, the following are the pertinent provisions of DAR Administrative Order No. 06, series of 1992 (Rules and Regulations Amending the Valuation of Lands Voluntarily Offered and Compulsorily Acquired as Provided for Under Administrative Order No. 17, series of 1989, as Amended Issued Pursuant to Republic Act No. 6657) and as later amended by DAR Administrative Order No. 05, series of 1998 (Revised Rules and Regulations Governing the Valuation of Lands Voluntarily Offered or Compulsorily Acquired Pursuant to Republic Act No. 6657), to wit:
Item II of DAR A.O. No. 6, series of 1992:
"A. There shall be one basic formula for the valuation of lands covered by VOS or CA regardless of the date of offer or coverage of the claim:
LV = (CNI x 0.6) + (CS x 0.3) + (MV X 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant, and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be:
LV = MV x2
A.4 In all the above, the computed value using the applicable formula or the Declared Value by Landowner (DV), whichever is lower, shall be adopted as the Land Value.
DV shall refer to the amount indicated in the Landowner's offer or the Listasaka declaration, whichever is lower, in case of VOS. In case of CA, this shall refer to the amount indicated in the
Listasaka. Both LO's offer and Listasaka shall be grossed-up using the immediately preceding semestral Regional Consumer Price Index (RCPI), from the date of the offer or the date of
Listasaka up to the date of receipt of claimfolders by LBP from DAR for processing." (emphasis supplied)
Item II of DAR A.O. No. 5, series of 1998:
"xxx xxx xxx
A.7 In all of the above, the computed value using the applicable formula shall in no case exceed the LO's offer in case of VOS.
The LO's offer shall be grossed up from the date of the offer up to the date of receipt of CF by LBP from DAR for processing. (emphasis supplied)
May we likewise invite your attention to the following provisions of Joint DAR-LBP Memorandum Circular No. 15, series of 1999 (Valuation Guidelines for Lands Planted to Sugarcane):
Item II. COVERAGE
"These guidelines shall cover all lands planted to sugarcane whose valuations are in process and not yet covered by Memorandum of Valuation (MOV) as of the date of signing of this Joint Memorandum Circular (JMC). Specific procedures are herein prescribed for uniform application in the computation of the Capitalized Net Income (CNI) factor." (emphasis supplied) cSIADH
Item III. VALUATION PROCEDURES
"xxx xxx xxx
A. STATEMENT OF NET INCOME SUBMITTED BY LANDOWNER
xxx xxx xxx
g. Apply the computed CNI of the property in the applicable Land Value (LV) formula under DAR A.O. No. 5, series of 1998." (emphasis supplied)
B. LO's STATEMENT OF NET INCOME NOT AVAILABLE OR PRODUCTION AND COST DATA COULD NOT BE VERIFIED/VALIDATED
xxx xxx xxx
5. Apply the computed CNI of the property in the applicable Land Value formula under DAR A.O. No. 5, series of 1998." (emphasis supplied)
Given the foregoing provisions, we could infer that the valuation of lands planted to sugarcane is still based on the same basic formula as established in DAR Administrative Order No. 6, series of 1992 and as amended under DAR Administrative Order No. 5, series of 1998. Said basic formula and the attendant provisions of the aforementioned guidelines were not repealed by Joint DAR-LBP Memorandum Circular No. 15, series of 1999. The coverage of the latter guideline focuses on the specific procedures prescribed therein for the uniform application in the computation of the Capitalized Net Income (CNI) factor, which is just one of a number of factors to be considered in land valuation, and, where the computed CNI shall still be applied in the applicable land value formula under DAR Administrative Order No. 5, series of 1998.
Moreover, basic is the principle in statutory construction that where two or more acts/rules cover the same subject matter, the latter act or guideline will not operate as a repeal of the earlier one if by any reasonable construction they can be reconciled. The language of the statute/guideline must be construed in relation to the subject matter with which it deals. While DAR Administrative Order No. 6, series of 1992, as amended by DAR Administrative Order No. 05, series of 1998, covers the basic formula for the valuation of lands covered by voluntary offer to sell and compulsory acquisition, Joint DAR-LBP Memorandum Circular No. 15, series of 1999 merely included the effect of ratooning in the valuation of sugar lands.
Accordingly, the "whichever is lower" provision of DAR Administrative Order No. 6, series of 1992, which was later reworded as "shall in no case exceed" in case of VOS under DAR Administrative Order No. 5, series of 1998, remains.
In conclusion, we quote Item I.D of DAR Administrative Order No. 5, series of 1998:
". . . . land valuation is not an exact science but an exercise fraught with inexact estimates requiring integrity, conscientiousness and prudence on the part of those responsible for it. What is important ultimately is that the land value approximates, as closely as possible, what is broadly considered to be just." (emphasis supplied)
Thank you for communicating with us and we hope to have clarified the matter.
Very truly yours,
(SGD.) AUGUSTO P. QUIJANO
OIC-Undersecretary for Policy, Planning\
and Legal Affairs Office