Calling a spade
Business World, 25 April 2012
Well, it is final. Or as final as a “final and executory” Supreme Court decision can be in this country, given the seemingly increasing predilection of that body to change its mind. And as final as the statement of Hacienda Luisita can be that it will abide by the SC decision (the last time it said that, it then filed a motion for reconsideration).
This latest “final” reiterates the earlier unanimous decision of the SC that the Hacienda Luisita land must be distributed to the qualified 1989 farmworker beneficiaries. And reiterates the earlier 8-6 decision that the original owners be given “just compensation” for their land, based on 1989 values, when the exchange took place (the beneficiaries having “chosen” a stock distribution plan rather than the land itself).
In effect, this latest “final” slaps down the original landowners’ request that a stock distribution option could still be chosen by the farmers, and/or that compensation to them be based on the 2006 values of the land. Why 2006? Because that was when the DAR decided that the stock distribution plan was null and void.
One would think that it would be relatively simple to determine what the 1989 values for the land of Hacienda Luisita were. But one would be mistaken. Because there are at least four different sets of valuations that were in play in 1989, three of which were estimates made by the Cojuangco-owned Tarlac Development Corp. (TADECO), the owner of Hacienda Luisita, and the fourth forwarded by the Land Bank of the Philippines fairly recently, supposedly representing what it paid in1989 for similar lands in Tarlac.
So the question is: What valuation would constitute “just compensation?” Let’s look at them in turn.
The lowest valuation would be the valuation given to the land for purposes of determining the share of the farmworkers in Hacienda Luisita, Inc. (HLI), the new corporation jointly owned by the farmworkers and TADECO as a result of the farmworkers choosing to own shares of stock rather than become direct owners of the land. The land contributed by the farmworkers to this scheme was valued at P40,000 per hectare, which was then multiplied by the 4,916 hectares of land considered to be the farmers’ contribution. And the resulting amount — P196 million, represented one-third of the total equity of HLI.
The second estimate, also used by TADECO, was P55,000 per hectare. This, according to James Putzel in his 1992 book A Captive Land: the Politics of Agrarian Reform in the Philippines, who said that this was the figure used by TADECO in its books in 1988.
The third estimate, also used by TADECO, was P500,000 a hectare. This was used to compute the value of the 121 hectares of residential land (the homelots it was going to “give” to farmer beneficiaries), which was considered part of TADECO’s contribution to HLI. Think of it, Reader. P40,000 per hectare was used to value farmworkers’ land, and P500,000 was used to value TADECO’s contribution of land — which of course had the effect of reducing the farmworkers’ share of the corporation, and bloating TADECO’s share.
And the fourth estimate — P170,000 per hectare — was supplied by the Land Bank when asked in some recent hearings what it paid in 1989 for land similarly situated in Tarlac.
Obviously, the first valuation of P40,000 is too low, and the third valuation of P500,000 is too high. But these were the figures used by TADECO itself to determine what the relative shares of the farmers and TADECO in the new corporation would be — the reduction-bloating procedure.
What about the P55,000 per hectare valuation that was used by TADECO in its books? Well, if that valuation had been applied to the farmers’ land contribution, it would have resulted in the farmers increasing its share of the corporation to almost 48%, instead of 33%. And if the Land Bank estimate of P170,000 had been used for purposes of determining farmworkers shares, there would have been no question that the farmworkers contributions would entitle them to control of the corporation — at least two-thirds.
Given the different valuations, what should constitute “just compensation” for the Cojuangcos? Justice would be served, I think, if they were compensated in the amount they themselves estimated as the value of the land that the farmworkers brought to the corporation in 1989. Which means they should be paid P40,000 per hectare.
Why not the P170,000 per hectare that the Land Bank said it paid to other landowners in the area? Frankly, I’d like to see the documentary evidence. But even assuming it were true, it would mean that a greater injustice was heaped on the farmworkers in 1989 than we already thought. TADECO valued the land at P40,000 in 1989 to ensure that it would be in total control of the new corporation — and the DAR and Land Bank looked the other way. In effect, they gave their imprimatur to that valuation in 1989, and should not change that valuation now.
Another way of looking at it: If the farmers land had been valued at P170,000 per hectare in the first place, there would have been no Stock Distribution Plan to speak of, because the farmers would have been in control of the corporation from the beginning. The land would have been distributed to the farmers then.
A P40,000 per hectare valuation is what TADECO gave in 1989. They made their bed. Let them lie in it.
