September 13, 1996

DAR OPINION NO. 77-96

Mr. Patrick Umlano

Amballo North, Baretbet

Bagabag, Nueva Vizcaya

Dear Mr. Umlano:

This has reference to your letter seeking clarification with regard to the land valuation made by the Land Bank of the Philippines covering the landholding occupied by you within the Dumlao Estate. Amballo North, Bagabag, Nueva Vizcaya. The issues you sought to be clarified are the following, to wit:

1.         What is the existing basis and/or formula of land valuation?

2.         Are the necessary improvements introduced by the actual occupants not considered in the land valuation?

3.         When should amortization and interest payment commence?

4.         When should land valuation be made. Can it not be made even before the introduction of necessary and/or permanent land improvements?

Anent your first query, Section 17 of R.A. 6657 provides the formula on land valuation, thus

"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 the government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institutions on the said land shall be considered as additional factors to determine its valuation."

Pursuant to the aforecited provision of law, a governing guidelines is Administrative Order No. 6, Series of 1992 which provides for the basic formula for the valuation of lands covered by Voluntary Offer to Sale (VOS) and Compulsory Acquisition (CA) regardless of the date of offer or coverage of the claim. ( Please find attached copy of said AO 6 for your reference).

Anent your second query, the necessary improvements introduced by the actual occupants cannot be considered as factor in determining the land valuation. A.O. 6 states that the landowner shall not be compensated or paid for improvements made or contributed by the government and/or the farmer-beneficiaries. (emphasis supplied)

In your third query, you state that according to the MARO the valuation of your farmholding was approved in October 1993 but it was only made known to you in December 1994 and that you are being made to pay the interest effective 1993. In response, an agrarian reform beneficiary shall start paying the amortization one year after the land has been awarded to him, i.e., the date of registration of the CLOA.

Anent your fourth query, as can be inferred from the provision of Section 16 of R.A. 6657, land valuation is made after the DAR has identified the land, the landowners, the beneficiaries and has sent notice to acquire the land.

We hope to have clarified the matters with you.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-Undersecretary
LAFMA

Copy furnished:

OSEC

Doc. No. 9502590