CARP just compensation: how your land is valued and why the Land Bank offer is only the start

By Jose Dante Almeda Jr., PRC Licensed Real Estate Appraiser No. 11261 & Licensed Real Estate Broker No. 33179 · Last updated July 2026

When your agricultural land is placed under the Comprehensive Agrarian Reform Program (CARP), the Land Bank of the Philippines computes an initial value and offers it to you. That offer is only a starting point, not the final word. Just compensation is governed by Section 17 of Republic Act No. 6657 and a DAR formula, but if you reject the Land Bank figure, the Special Agrarian Court has the final authority to decide what your land is truly worth, and there, independent appraisal and comparable-sales evidence carry real weight.

Who values my land under CARP?

The Land Bank of the Philippines. Under Executive Order 405 and RA 6657, the Land Bank is primarily responsible for the initial valuation of private agricultural land covered by CARP, whether through voluntary offer to sell or compulsory acquisition. The DAR uses that figure to make you a written offer. The crucial point, confirmed repeatedly by the Supreme Court, is that this valuation is only an initial, administrative determination. It is not conclusive, and it does not bind you or the courts.

How is CARP just compensation computed?

Through Section 17 of RA 6657, translated into a DAR formula. Section 17, as amended by RA 9700, requires that valuation consider the cost of acquisition, the value of the standing crop, the current value of like properties, the land\’s nature, actual use and income, the owner\’s sworn valuation, the tax declarations, government assessments, and seventy percent of the BIR zonal value. The DAR expresses these factors in a basic formula:

Here CNI is Capitalized Net Income, CS is Comparable Sales, and MV is Market Value per Tax Declaration. The exact weights are set by DAR administrative orders and have been adjusted over the years, so treat these as the standard structure rather than a fixed rule. What matters for you is that each input, especially income and comparable sales, is an evidence question where a proper valuation can move the number significantly.

Why is the Land Bank offer so low?

Because it leans on conservative administrative inputs. The formula often rests heavily on capitalized income using prescribed rates and on tax-declaration values that lag the real market, so the initial offer can fall well below what comparable land actually commands. This is the same pattern owners meet in road-widening and other government takings: the opening figure is a formula output, not the ceiling of what you are owed.

What happens if I reject the Land Bank valuation?

You move into a process designed to test the value. Within 30 days of the notice you tell the DAR whether you accept or reject. If you reject, a summary administrative proceeding is held before the DAR adjudicator (PARAD, RARAD, or DARAB depending on value), where both sides submit evidence of just compensation. If you are still unsatisfied, you may bring the matter to the Regional Trial Court sitting as a Special Agrarian Court, which has original and exclusive jurisdiction to fix just compensation. Many owners take the value fight straight to that court, because that is where it is genuinely decided.

Does the court have to follow the DAR formula?

It must start there, but it is not trapped by it. In Land Bank v. Alfonso, the Supreme Court held that courts are obliged to consider the Section 17 factors and the DAR formula when fixing just compensation, and cannot simply pick a market value out of the air. But courts may deviate from the formula where the evidence justifies it, provided they explain their reasons. In practice this means a landowner who brings strong, documented valuation evidence, comparable sales, income data, and an independent appraisal, gives the court exactly what it needs to justify a higher, fairer figure.

What is just compensation actually based on?

Fair market value at the time of taking, which for CARP is generally when title passes to the Republic or a Certificate of Land Ownership Award is issued to the beneficiaries. The value must reflect the land\’s real character and use, supported by evidence rather than assumption. Interest may also accrue from the time of taking to compensate for delay in payment. Our guide to zonal value versus fair market value explains why the government\’s reference figures and true market value diverge.

Where a licensed appraiser makes the difference

The value fight is won on evidence, and evidence is what a licensed appraiser produces. Before the Special Agrarian Court, a signed appraisal prepared under the Philippine Valuation Standards, built on real comparable sales and a defensible method, is the counterweight to a conservative Land Bank computation. The same expertise serves you as a court commissioner or an expert witness on land value. If you want to understand fees first, here is what a professional appraisal costs.

CARP just compensation: questions, answered

Almeda Realty and Appraisal Services is run by a PRC-licensed real estate appraiser in the Philippines, serving Cavite, Metro Manila, and the surrounding provinces. We prepare independent valuations for landowners contesting CARP compensation and can act as your appraiser, a court commissioner, or an expert witness. Read about our appraisal service, or book a free consultation to review your Land Bank offer.