THE Department of Justice (DoJ) has issued a legal opinion that compensation rules set by development partners for persons displaced by foreign-funded projects apply only if the loan agreement was signed prior to the effectivity of the Right-of-Way Act (Republic Act No. 10752).
The opinion was issued to clarify the compensation rules governing projects entered into by the Department of Transportation (DoTr) and entities like the Japan International Cooperation Agency (JICA).
JICA-funded projects must comply with a framework known as the Guidelines for Environmental and Social Consideration, which provides that: “people who must be resettled involuntarily and people whose means of livelihood will be hindered or lost must be sufficiently compensated and supported by project proponents etc. in a timely manner. Prior compensation, at full replacement cost, must be provided as much as possible.”
The DoJ said that the Right-of-Way Act has its own process for acquiring right-of-way for national infrastructure projects, including rules for negotiated sales and payment schedules for affected property owners.
The Philippine standard for compensating landowners displaced for government projects, according to the Constitution, is fair market value instead of full replacement cost.
“Faithful compliance to the Loan Agreement and the Environmental Guidelines prior to the date of effectivity of R.A. No. 10752 or before 25 March 2016, should be upheld as valid,” according to the DoJ opinion.
Major JICA-funded projects currently include the North-South Commuter Railway (NSCR), which is co-financed by the Asian Development Bank, the loan agreement for which was signed in 2023.
The P873-billion NSCR is a 147-kilometer NSCR that will connect Malolos, Bulacan with Clark International Airport, and Tutuban, Manila with Calamba, Laguna. It will have 35 stations and three depots.
The Department of Finance and JICA recently signed the third tranche of the loan agreement worth 150 billion yen (around P57 billion) for the first phase of the Metro Manila Subway Project.
The Department of Transportation was contacted for comment but would not speak for attribution. — Ashley Erika O. Jose
