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Government Right of Way Acquisition and Compensation (Quick Facts)

What is the law applicable on right-of-way acquisition and compensation in the Philippines?

  • Republic Act No. 10752 and its implementing rules and regulations, among others.

Where should I file my claim for right-of-way compensation?

  • First, determine which government agency or local government unit is implementing the project and then reach out to that office to check which division is in charge of the right-of-way claim processing.

How much should I get paid for my property?

  • You get compensated for the affected portion, which does not necessarily mean the entire property. The price offer for negotiated sale is based on the sum of the following:

    • the current market value of the land

    • the replacement cost for structures and improvements

    • the current market value of the crops and trees

When is the time of taking and why is it important?

  • Time of taking is at the time of filing of expropriation complaint by the government or at the time of actual taking/possession of the property by the government, whichever comes first. It is important because the amount of just compensation is based on the price computation at the time of taking.

Can I stop the government infrastructure project?

  • No. Republic Act No. 8975 prohibits this to ensure the expeditious and efficient implementation and completion of government infrastructure projects thus avoiding unnecessary increase in construction, maintenance and/or repair costs. No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any person or entity, whether public or private, acting under the government’s direction, to restrain, prohibit or compel the following acts:

    • Acquisition, clearance and development of the right-of-way and/or site or location of any national government project;

    • Bidding or awarding of contract/project of the national government as defined under Section 2 hereof;

    • Commencement, prosecution, execution, implementation, operation of any such contract or project;

    • Termination or rescission of any such contract/project; and

    • The undertaking or authorization of any other lawful activity necessary for such contract/project

Can the government take my property without compensation?

  • No private property shall be taken for public use without just compensation as provided in the Philippine Constitution, unless duly agreed to by the owner.

Why was I offered the BIR zonal value in the letter offer instead of the market value of the affected property?

  • In the previous right-of-way law, price offer in cases of negotiated sale is based on BIR zonal value and not on market value. Take note that as a general rule, the effective law at the time of government taking is applicable.

Why an expropriation case has been filed against me without letter offer?

  • Although a letter offer is usually required before filing an expropriation case, the government may immediately resort to expropriation in the following cases:

    • Failure to provide proof of ownership or submit any requirement

    • Property owners are unknown, unidentifiable or cannot be located

    • Two or more opposing parties are claiming compensation

    • Such other instances when negotiated sale is impracticable

What shall I do when the government has filed an expropriation case for my property?

  • If there are no opposing claimants, you can go to court for the release of the amount deposited by the government agency and/or proceed with the determination of just compensation by the court.

The project has already been completed but I was not compensated. Can I file a case in court?

  • For completed projects, an inverse or reverse expropriation case in court may be instituted. However, as a general rule, demand for payment from the government agency concerned is required under the principle of exhaustion of administrative remedies.

I have submitted all the requirements for my right of way claim but the government is unable to settle immediately.

  • Lack of government funding is one of the reasons why property owners are not paid on time. Also, belated submission of requirements may require a different budgeting procedure, especially when the funds have already expired and are not utilized within the period set by law. Congressional approval of the budget may still be necessary. Also, note that proper verification and validation of claims must be conducted by concerned government units.

 

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How to Claim Road Right of Way or Just Compensation from the Government (Without Going to Court)

When the government acquires private property to be used as right of way for infrastructure projects, it is required under the Philippine Constitution that property owners be paid just compensation.

 

However, some property owners find it hard to claim compensation from the government, and worse, few owners end up not receiving compensation due to lack of legal guidance.

 

Republic Act No. 10752 requires offer to pay based on market value.

Property owners should know that the new law on right of way or Republic Act No. 10752 was enacted to make it easier for them to be compensated. A court proceeding is not always necessary. In fact, it is required under the new law that concerned government agencies submit an offer to the property owner and informing him of the amount of compensation that will be paid. This compensation offered shall be based on market value.

 

 

Negotiated sale is the preferred mode of right of way acquisition over expropriation as this would avoid filing a case in court.

If donation is not feasible, negotiated sale for the acquisition of the property shall be pursued based on the provisions of RA 10752 and its implementing rules.

 

Here are the relevant steps that must be undertaken by the government in acquiring titled private properties via negotiated sale:

 

  1. Prepare and send the notice of taking to each property owner, which shall state the following:

 

    • The property will be acquired for a government infrastructure project

    • The property may be acquired through negotiated sale

    • No government agency or local government unit shall allow any development or construction within the right of way within two years from the date of the notice of taking

 

    • If the owner refuses or fails to submit proofs of ownership i.e. property title and two (2)valid identification cards, the implementing office shall initiate expropriation proceedings

2. Once the owner submits proof of ownership, the implementing office shall formally send a letter offer of compensation price based on the sum of the following:

 

    • the current market value of the land

    • the replacement cost for structures and improvements

    • the current market value of the crops and trees

3. To determine the appropriate price offer for the right of way via negotiated sale, the implementing office may engage Landbank or Development Bank of the Philippines, or independent property appraisers accredited by the Bangko Sentral ng Pilipinas

 

4. If the owner does not accept the price in the letter offer within thirty (30) days, the implementing office will initiate expropriation proceedings with the appropriate court.

 

5. If the owner accepts the price in the letter offer within thirty (30) days, the implementing office shall secure from the owner all appropriate documentary requirements for the right of way claim.

 

6. After verification, Deed of Absolute Sale will be executed and first payment shall be made.

 

7. Second and final payment will be made at the time of the transfer of the title in the name of the Republic of the Philippines, in case the land is wholly affected, or at the time of the annotation of this Deed on the title, in case the land is partially affected, provided that the land is certified to be completely cleared of structures, improvements, crops and trees.

 

Complete documentary requirements shall be submitted by the property owner. The following are the usual documentary requirements for just compensation or right of way claims:

 

    • Owner’s duplicate of the Original/Transfer Certificate of Title

    • Tax Declaration of the parcel of land

    • Tax Declaration of the improvements (except for informal settler-owners)

    • Subdivision Plan of the parcel of land

    • Tax Clearance or, if the landowner requests the implementing office to advance the payment of Real Property Taxes to be deducted from the payment, a Statement of Tax Account from the Treasurer of the LGU concerned

    • Copies of two (2) valid identification cards

    • Owner’s Taxpayer Identification Number (TIN)

    • If applicable, where the improvement owner is different from lot owner and is authorized to build on the land, a certification from the lot owner that the improvement built therein is owned by the improvement owner

    • If applicable, where the improvement owner is an informal settler, any document showing that he is a Filipino citizen; a certification from the Land Registration Authority that there is no property registered under his name, whether in an urban or rural area; a certification from the Local Inter-Agency Committee (LIAC) that he is not a professional squatter or a member of a squatting syndicate, as defined in Republic Act No. 7279, otherwise known as the “Urban Development and Housing Act of 1992” and does not occupy an existing government right of way.

    • If applicable, Special Power of Attorney

    • Other documents that may be found necessary by the implementing office to ensure transfer of the property to the Republic of the Philippines

 

 

Note that prior to payment, right of way claims shall be screened, fully verified and validated. There are also instances when the government is constrained to resort to expropriation despite owner’s acceptance of the price offer due to incomplete documentary requirements or fraudulent submissions.

It is also important to understand that the above process applies to right of way claims with ongoing right of way activities and pertains to titled or registered properties. Moreover, if the government is already in possession of the property, a court proceeding may be more appropriate.

 

Source: RA 10752 & DPWH Right of Way Manual

New Supreme Court Ruling: Philippine Contractors Accreditation Board v. Manila Water Company, Inc.

Foreign Firms May Now Undertake Infrastructure Projects in the Philippines under the Same Regular License as Filipinos

“While the Constitution mandates bias in favor of Filipino goods, services, labor and enterprises, at the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of Filipino enterprise only against foreign competition and trade practices that are unfair. The Constitution did not intend to pursue an isolationist policy.”

These are the words of the Supreme Court when it declared certain provisions of the IRR of RA 4566 otherwise known as the Contractors License Law as void in Philippine Contractors Accreditation Board v. Manila Water Company, Inc., G.R. No. 217590, 10 March 2020. 


In effect, foreign firms may now undertake infrastructure projects in the Philippines under the same regular license as Filipinos. This is in line with Executive Order No. 65, series of 2018, which affirmed the importance of foreign participation in locally funded infrastructure projects by expressly allowing up to 40% foreign equity.


In PCAB v. MWC, the Supreme held that “PCAB went beyond the prescribed classifications under Section 16 of RA 4566 when it created a nationality-based license under Section 3.1 of the IRR. While Section 5 of RA 4566 authorizes PCAB to issue, suspend, and revoke licenses of contractors, this general authority to issue licenses must be read in conjunction with Sections 16 and 17 of RA 4566 as PCAB can not create substantial classifications between certain types of contractors.  Also, while RA 4566 allows PCAB to effect classifications, the same should be reasonable.”


“A contractor under RA 4566 does not refer to a specific practice of profession. The licensing of contractors is not to engage in the practice of a specific profession, but rather to engage in the business of contracting/construction. If RA 4566 and its IRR indeed viewed the construction industry as a profession and contractors as professionals whose practice may be limited to Filipino citizens, then the challenged provision runs contrary to such policy, as it would allow foreigners to operate with a regular license through a construction firm as long as their equity therein does not exceed forty percent (40%).”


Supreme Court also mentioned the case of Tañada v. Angara, 338 Phil 546 (1997), which emphasized that “the constitutional policy of a self-reliant and independent national economy does not necessarily rule out the entry of foreign investments, goods and services. It contemplates neither economic seclusion nor mendicancy in the international community.” 

You can read the full text of PCAB v. MWC here.


Prior this ruling, foreign contractors are required to secure a special PCAB license before they can participate in the public bidding of locally-funded infrastructure projects. As pointed out in PCAB v. MWC, securing a special license is way more challenging as compared to a regular license. In fact, this is one of the major issues faced by the Department of Public Works and Highways in the Bonifacio Global City – Ortigas Center Link Project. 

In May 2017, PCAB initially refused to issue special licenses to joint ventures or corporations with foreign ownership that can participate in the public bidding, which in turn may result to a bidding failure due to lack of qualified contractors for the said project.


DPWH addressed the issue by identifying relevant provisions of RA 9184, otherwise known as the Government Procurement Reform Act, and RA 4566, and their respective implementing rules. Back then, prior EO 65, foreign equity participation is only up to twenty-five percent (25%), save in cases where the structures to be built require the application of techniques or technologies which are not adequately possessed by a person or entity meeting the seventy-five percent (75%) Filipino ownership requirement.


Foreign investment undoubtedly plays an important role in the financing of the global economy and can be particularly vital to developing countries like the Philippines. And now that foreign firms may undertake infrastructure projects in the Philippines under the same regular license as Filipinos with EO 65 and this new Supreme Court ruling, more corporations, including those with foreign equity, may participate in public bidding and undertake locally-funded government infrastructure projects.

Bonifacio Global City - Ortigas Link as of 28 August 2020 https://www.facebook.com/SecMarkVillar