Roxas group collects P9.6-T land windfall

After a 30-year wait, Roxas and Co. Inc. (RCI) will receive, based on the Department of Agrarian Reform (DAR) adjudication board’s decision on 25 March, P9.6 trillion worth of cash and bonds, as payment of just compensation for 1,307 hectares expropriated land in Nasugbu, Batangas.

RCI is a publicly-listed firm with interests in real estate, sugar and agribusiness. It has historically owned significant landholdings, including the 1,307 hectares in Nasugbu, Batangas that the government ordered placed under the Comprehensive Agrarian Reform Law (CARL).

Enacted in 1988, CARL mandated the redistribution of agricultural lands to landless farmers to promote social justice and equitable land ownership.

The Department of Agrarian Reform (DAR) oversees this process, which includes expropriating private lands, compensating landowners and distributing land to agrarian reform beneficiaries (ARBs).

The DAR adjudication board (DARAB) placed a final amount on just compensation reflecting the fair market value of the 1,307 hectares, as determined by DAR’s valuation process, which considers factors like land productivity, location, and market conditions at the time of expropriation, adjusted for inflation or interest.

The use of cash and bonds is standard under CARP as monetization provides immediate liquidity, while agrarian reform bonds (often issued by the Land Bank of the Philippines are long-term, interest-bearing securities. These bonds can be traded or held to maturity, offering RCI flexibility in managing the proceeds.

Pending issues resolved

The DAR’s consolidated order likely resolved pending issues related to the valuation or legal disputes, paving the way for the DARAB’s final decision. This order may have addressed RCI’s objections to earlier valuations, a typical delay source in CARP cases.

RCI plans to use part of the funds to support its ongoing operations, likely in its real estate and agribusiness segments. It will augment the company’s working capital.

The influx of capital will enable RCI to pursue growth opportunities, such as developing new real estate projects or expanding its sugar or agricultural operations, according to the company in a statement.

Given RCI’s focus on real estate, this could involve residential, commercial, or industrial developments, possibly in Batangas or other regions.

RCI intends to settle debts or other liabilities, improving its balance sheet and creditworthiness. This deleveraging (reducing debt levels) is critical for financial stability and attracting investors.

RCI’s statement on “monetizing the estate” suggests RCI may convert non-liquid assets into cash or revenue-generating ventures. This could involve selling or developing portions of its remaining properties.

Investment in Growth Opportunities: Beyond existing projects, RCI may explore new business ventures, such as tourism, renewable energy, or mixed-use developments, leveraging Batangas’ proximity to Metro Manila and its growing economic potential.

RCI’s commitment to allocate part of the compensation for community projects in Nasugbu reflects a corporate social responsibility strategy that can include projects like infrastructure development.