Dear Atty. Maan,

My family owns a 1,000 m² lot in Metro Manila which our city government recently converted into a portion of a public road without going through formal expropriation proceedings or paying us anything.  The city now says they will pay compensation based on their assessor’s schedule from 1980 (which values similar land at P150/m²) and they want to apply that amount as full payment. I’m concerned that this amount is far too low given the current real estate market and the fact that my lot had improvements and commercial potential. Can we demand more compensation than what was offered?

Joshua

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Dear Joshua,

When a local government takes private property for public use, it must pay just compensation under the Constitution (Art III, Sec 9). In the recent Supreme Court decision in City Government of Pasay v. Arellano University (G.R. No. 260038, 7 May 2025), the Court reaffirmed that just compensation is not simply an administrative figure such as a fixed assessor’s value from decades ago; rather, it must reflect the “totality of the circumstances” affecting the property’s value at the time of taking. The Honorable court discussed that just compensation in expropriation cases must reflect the fair and full value of the property taken, determined by considering all relevant factors, and not merely by relying on outdated assessor’s valuations or market price alone.

The Court enumerated several factors that courts must consider in determining just compensation: the nature and character of the property at the time of taking, its actual use and location, size and shape, accessibility, improvements, neighborhood conditions, the Bureau of Internal Revenue (BIR) zonal valuation, and prices of comparable sales in the vicinity. These elements collectively provide a more accurate picture of the property’s fair value.

Moreover, the Supreme Court clarified that interest forms part of just compensation, not merely a penalty for delay. Since payment is often made long after the taking of the property, the imposition of legal interest compensates the owner for the loss of income and the use of money equivalent to the property’s value.

In your case, if the valuation used by the government is based on old assessor’s data or ignores the property’s true economic value, this ruling as discussed above supports the right to demand a fair reassessment. Just compensation must reflect the real, present worth of the property, to ensure that the owner’s rights are upheld.

Hope this helps.

Atty. Mary Antonnette Baudi