20 October 2025
The Honorable Supreme Court of the Philippines
Padre Faura Street, Ermita, Manila
Attention: Public Information Office
Subject: Clarification on the Phrase “Market Value” in the SC Post Titled “Just compensation in land expropriation must consider all relevant factors, not just market value” (Re: G.R. No. 260038, City Government of Pasay v. Arellano University)
Dear Honorable Justices,
With due respect and deep appreciation for the Supreme Court’s commitment to transparency and public education, I write to offer a professional clarification on the Court’s recent post titled “SC: Just compensation in land expropriation must consider all relevant factors, not just market value” relating to G.R. No. 260038 (City Government of Pasay v. Arellano University).
While the message of the post correctly captures the spirit of the Decision, the phrase “market value” may inadvertently be interpreted by the public to mean the property’s market value determined through actual market evidence. In the Decision, however, the PhP 200-per-square-meter figure cited by the trial court was derived from the 1978 Schedule of Market Values (SMV) prepared by the Pasay City Assessor’s Office for real property taxation—not from an open-market valuation consistent with professional or judicial standards.
As the Court aptly clarified, the Schedule of Market Values is an administrative tool, intended to promote uniformity in taxation under the Local Government Code of 1991, and is not determinative of just compensation under Article III, Section 9 of the Constitution. It provides generalized benchmark figures for fiscal purposes but does not represent the property’s actual market behavior or transactional worth.
In contrast, Market Value is the standard for property valuation in the Philippines, consistent with international principles. As defined under both the Philippine Valuation Standards (PVS 102) and International Valuation Standards (IVS 104), Market Value refers to: “the price which a willing buyer would pay to a willing seller for a property, both acting knowledgeably and without compulsion, after proper marketing.” This definition holds significant legal weight, particularly in expropriation cases. Jurisprudence, such as the Supreme Court ruling in Republic v. Court of Appeals (G.R. No. 146587, July 2, 2002), has long recognized that the constitutional limitation of “just compensation” is considered the sum equivalent to this Market Value. This is broadly described as the price fixed by the seller in the open market in the usual course of legal action and competition, or the fair value of the property as between one who receives and one who desires to sell it, fixed precisely at the time of the actual taking by the government.
This technical and jurisprudential definition reflects economic reality, not administrative estimation. The Court’s ruling in G.R. No. 260038 faithfully reaffirmed this by remanding the case for a judicial determination of just compensation based on a totality of circumstances—including BIR zonal valuation, location, shape, size, improvements, and comparable property sales.
I respectfully submit this clarification in the spirit of constructive engagement and shared purpose. Distinguishing administrative “market values” (SMV) from true market value is essential for maintaining technical accuracy and upholding the constitutional guarantee of real, full, and fair compensation to property owners.
With highest respect,
Respectfully yours,
AUGUSTO B. AGOSTO, DLVM, MAEcon, JD
Real Estate Appraiser & Consultant
President, Society of Litigation Valuation Experts, Inc.
Unit 302, Lyden Bldg., Cebu City
http://www.abagosto.com • 0917 4885555
Real LexEcon 