LAND BANK OF THE PHILIPPINES vs EMILIANO R.

SANTIAGO

Pursuant to PD 27 which took effect on 1972, DAR acquired the property of X. In determining the just
compensation, DAR used the formula under PD 27 and EO 228: Land Value = Average Gross Production x 2.5
Hectares x Government Support Price. Land Bank, as the financial intermediary of the agrarian reform program, and
DAR's computation arrived at P135,482.12 using P35 as the GSP per cavan of palay for the year 1972 under E.O.
228. X filed a petition before the Special Agrarian Court(RTC) contending that the 1998 GSP per cavan, P400,
should be used in the computation and not P35 because the payment for preliminary compensation was made only in
1998. The amount of P400 is based on RA 6657 which took effect on 1988.

Q:What formula should LBP and DAR use in computing the just compensation? The formula under PD 27 (when
the property was taken) and EO 228 or RA 6657 (already in effect when the payment for preliminary compensation
was made)?

A: RA 6657.

In the case of Land Bank vs Natividad, the Court ruled "the seizure of the landholding did not take place on the date
of effectivity of P.D. No. 27 but would take effect on the payment of just compensation." It further ruled that under
the factual circumstances of this case, the agrarian reform process is still incomplete as the just compensation to be
paid private respondents has yet to be settled. Considering the passage of RA 6657 before the completion of this
process, the just compensation should be determined and the process concluded under the said law. Indeed, RA 6657
is the applicable law, with PD 27 and EO 228 having only suppletory effect

Therefore, since payment of just compensation is made at the time RA 6657 came into effect, the formula under RA
6657 should be used to determine the just compensation X is entitled to.