A lower court ruling was overturned by the Court of Appeals that significantly undervalued the landholdings of Hacienda Luisita Inc. (HLI), and ordered the government to pay the sugar estate’s owners more than P1 billion in just compensation.

In a 35-page decision dated 25 April 2025 but only made public on Tuesday, the CA Special Twelfth Division ruled that the Regional Trial Court of Tarlac, sitting as a Special Agrarian Court, erred when it affirmed the Land Bank of the Philippines and Department of Agrarian Reform’s (DAR) valuation of 4,500 hectares of land at only P304 million.

The CA found that HLI had submitted verified audited financial statements as early as 2013 and that government agencies had validated these figures. Despite this, the DAR and LBP opted to compute compensation based on industry standard data, resulting in a lower valuation.

“The respondents were not justified in ignoring actual production records, especially when such data had been properly submitted and verified,” the court said. It stressed that under agrarian reform laws, compensation must reflect “a real, substantial, and fair equivalent of the property taken.”

Using HLI’s verified income and production figures, a certified public accounting firm calculated that the correct land valuation should be P1.029 billion. The CA adopted this figure, rejecting claims that the documents were unverifiable.

It also noted that both the DAR and LBP failed to provide computations proving their claim that HLI’s data yielded a lower value, calling this a suppression of evidence.

It also ordered the trial court to recalculate the final compensation, factoring in the revised valuation and applicable interests.

The ruling is the latest development in the decades-long legal battle over Hacienda Luisita, a vast sugar estate in Tarlac subject to land redistribution under the Comprehensive Agrarian Reform Program.