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Supreme Court orders PEZA to pay owners of expropriated lot in Cebu P52.2 million

By Edu Punay Updated February 23, 2009 12:00 AM [ ]

MANILA, Philippines - The Supreme Court (SC) has ordered the Philippine Economic Zone Authority (PEZA) to pay the amount of P52.2 million in zonal value to the private owners of a 4.7-hectare land in Cebu that is being expropriated by government.

In a decision written by Associate Justice Renato Corona, the high court ruled that PEZA erred in invoking Administrative Order No. 50 that spelled out the guidelines for the acquisition of private property for public use when it limited the deposit to only 10 percent of the proposed valuation in the expropriation of the land of Agustin and Imelda Cancio.

The SC said PEZA should follow rules on appropriation under R.A. 8974 and pay immediately the amount equivalent to100 percent of the current zonal valuation of their property prior to the determination of just compensation.

R.A. 8974, which was enacted on Nov. 7, 2000, states that upon the filing of an expropriation petition, the government “shall immediately pay the owner of the property an amount equivalent to 100 percent of the current zonal valuation for purposes of the issuance of a writ of possession.”

It pointed out that PEZA, which had offered to buy the 4.7-hectare land for P52.2 million in 2001, was wrong in limiting the deposit to only 10 percent of the proposed valuation in line with the A.O. No. 50 issued in 1999 that spelled out the guidelines for the acquisition of private property for public use.

“R.A. 8974 applies to instances when the National Government expropriates property for National Government projects and undeniably, the economic zone is a National Government project,” it said.

“Also, the complaint for expropriation was filed (by PEZA) only on Aug. 27, 2001 or almost one year after the law (RA 8974) was approved on Nov. 7, 2000. Thus, there is no doubt about its (R.A. 8974’s) applicability to this case,” the Court added.

In resolving the issue, the SC distinguished zonal value from actual compensation: “The payment of the provisional value as a condition for the issuance of a writ of possession is different from the payment of just compensation for the expropriated property. While the provisional value is based on the current relevant zonal valuation, just compensation is based on the prevailing fair market value of the property.”

The high tribunal added that there is no need yet to determine the final amount of just compensation in resolving the issue of a writ of possession.

“In fact, it is the ministerial duty of the trial court to issue the writ upon compliance with the requirements of Section 4 of the law (RA 8974). No hearing is required and the court cannot exercise its discretion in order to arrive at the amount of the provisional value of the property to be expropriated as the legislature has already fixed the amount under the aforementioned provision of the law.

“It is only after the trial court ascertains the provisional amount to be paid that just compensation will be determined,” the Court explained, adding that the lower court is given 60 days from finality of decision on the expropriation case to determine value of just compensation.

The SC also directed the Lapu-Lapu City trial court to expedite the proceedings on the expropriation case.

With the ruling, the SC affirmed the decision of the Court of Appeals (CA) that upheld the order of the Lapu-Lapu City regional trial court (RTC) directing PEZA to pay 100 percent of the current zonal valuation for the property owned by the Cancios.


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