Just Compensation

The second phase of the eminent domain action is concerned with the determination by the Court of "the
just compensation for the property sought to be taken." This is done by the Court with the assistance of
not more than three (3) commissioners. The order fixing the just compensation on the basis of the
evidence before, and findings of, the commissioners would be final, too. 1

Just compensation has been defined as the fair and full equivalent of the loss. 2 Notably, just compensation
in expropriation cases is defined "as the full and fair equivalent of the property taken from its owner by
the expropriator. The Court repeatedly stressed that the true measure is not the taker's gain but the owner's
loss. The word 'just' is used to modify the meaning of the word 'compensation' to convey the idea that the
equivalent to be given for the property to be taken shall be real, substantial, full and ample." 3

The determination of just compensation in· expropriation proceedings is essentially a judicial

According to the Supreme Court, a zonal valuation of the commercial lots cannot be made as the sole
basis for the fair market value of the land. Zonal valuation, although one of the indices of the fair market
value of real estate, cannot by itself be the sole basis of just compensation in expropriation cases. 5

Just compensation must be the value of the property at the time of the taking. While documentary
evidence is indeed important to support the finding of the value of the expropriated property, the
commissioners are given leeway to consider other factors to determine just compensation for the property
to be expropriated. If the only documents to support the finding of just compensation are from a year
which is not the year when the taking of the expropriation took place, then it would be plainly inaccurate.
In National Power Corporation v. Spouses Asoque 6, the Court took cognizance of the fact that the
commissioner may avail or consider certain factors in determining the fair market value of the property
apart from the proffered documentary evidences.

Fair Market Value

Fair market value is the price that may be agreed by the parties who are willing but not compelled to enter
into a contract of sale. For the purpose of appraisal, the fair market value of the property is taken into
account and such value refers to the highest price in terms of money which a property will bring if
exposed for sale in the public market.7

The Court have recognized the difficulty of valuation to provide accurate value for properties.
Nevertheless, there are existing standards which are observed to ensure the competence and integrity of
valuation practice. At present, we have the Philippine Valuation Standards (PVS), or the reference
standards for local government assessors and other agencies undertaking property valuations.

1
National Corporation, G.R. No. 191945.
2
Evergreen Manufacturing Corp. v. Republic, G.R. No. 218628, 16 Sept. 2017.
3
Republic v. Mupas, G.R. No. 181892, 19 April 2016
4
Evergreen Manufacturing, G.R. No. 218628.
5
Id.
6
G.R. No. 172507, 14 September 2016.
7
Republic v. Ker and Company Limited, G.R. No. L-21609, 2 July 2002.
The valuation process involves, among others, utilizing one or more valuation approaches, with each
individual approach producing a particular value indication, and then, reconciling the different value
indications to arrive at “a supported opinion of defined value.” The valuation process is applied to
develop a well-supported opinion of a defined value based on an analysis of pertinent general and specific
data. Appraisers develop an opinion of property value with specific appraisal procedures that reflect the
different approaches to data analysis.8

The PVS and IVS list three market-based valuation approaches: the sales comparison approach, the
income capitalization approach and the cost approach. These approaches are used in all estimations
of value. Depending on the circumstances attendant to each particular case, one or more of these
approaches may be used.9

The final analytical step in the valuation process is the reconciliation of the value indications derived into
a single peso figure or a range into which the value will most likely fall. Reconciliation requires appraisal
judgment and a careful, logical analysis of the procedures that lead to each value indication.
Appropriateness, accuracy and quantity of evidence are the criteria with which an appraiser forms a
meaningful, defensible and credible final opinion of value. 10

For a well-supported opinion of a defined value, however, there must be an analysis of pertinent general
and specific data using an accepted and systematic valuation process. The Philippines has kept abreast
with the internationally-recognized and accepted standards for valuation practice. 11

Consequential Damages

With respect to Consequential Damages, Section 6 of Rule 67 of the Rules of Court states that:

SEC. 6. Proceedings by commissioners.- Before entering upon the  performance  of  their 
duties,  the  commissioners   shall  take  and subscribe an oath that they will faithfully perform
their duties as commissioners,  which  oath  shall  be  filed  in  court  with  the  other
proceedings in  the  case. Evidence may  be introduced  by  either  party before the
commissioners who are authorized to administer oaths on hearings before them, and the
commissioners shall, unless the parties consent to the contrary, after due notice to the parties to
attend, view and examine the property sought to be expropriated and its surroundings, and may
measure the same, after which either party may, by himself or counsel, argue the case.

The commissioners shall assess the consequential damages to the property not taken and
deduct from such consequential damages the consequential benefits to be derived by the
owner from the public use or purpose of the property taken, the operation of its
franchise by the corporation or the carrying on of the business of the corporation or person
taking the property. But in no case shall the consequential benefits assessed exceed the
consequential damages assessed, or the owner be deprived of the actual value of his property so
taken. (Emphasis supplied)

Consequential damages are awarded if as a result of the expropriation, the remaining property of the
owner suffers from an impairment or decrease in value. 12

8
Secretary of DPWH v. Spouses Tecson, G.R. No. 179334, 21 April 2015.
9
Secretary of DPWH, G.R. No. 179334.
10
Id.
11
Id.
12
National Transmission Corporation v. De Leon, G.R. No. 221624, 4 July 2018.
As a general rule, just compensation, to which the owner of the property to be expropriated is entitled, is
equivalent to the market value, the rule is modified where only a part of a certain property is expropriated.
In such a case, the owner is not restricted to compensation for the portion actually taken, he is also
entitled to recover the consequential damage, if any, to the remaining part of the property. 13

In NAPOCOR v. Marasigan14, the Court agreed that if as a result of expropriation, the remaining portion
of the property suffers from impairment or decreases in value, the award of consequential damages is
proper.

On the other hand, if the expropriation resulted in benefits to the remaining lot, such consequential
benefits may be deducted from the consequential damages or from the value of the expropriated property.
However, such consequential benefits refer to the actual benefits derived by the landowner which are the
direct and proximate results of the improvements as a consequence of the expropriation and not to the
general benefits which the landowner may receive in common with the community. 15

It bears pointing out that consequential damages, being a component of just compensation, should be
determined based on the value of the properties "as of the date of the taking x x x or the filing of the
complaint for expropriation, whichever came first. 16

13
Republic of the Philippines v. Cebuan, G.R. No. 206702, 7 June 2017.
14
G.R. No. 220367, 20 November 2017.
15

16
NTC v. De Leon, G.R. No. 221624.