01/07/2026
ππππ πππ§πππ£ ππππ§ππ£π€ππ₯πͺ ππ ππ πΉππ£ πΌπ©ππππππ₯ππ ππ€
As an alumnus of Xavier University School of Law, our law office will provide suggested answers for the 2026 XU Law Mock Bar Examination.
We chose to begin with this first question because we found it particularly interesting and, in many respects, deceptively tricky.
In ALAC Format:
Anne is partially correct. It is inaccurate for Anne to directly consider the inflation rate and the depreciation of the peso as factors in determining just compensation per se, rather the unpaid compensation should instead earn legal interest from the time of taking.
Jurisprudence provides that when a property is taken for public use before payment of just compensation, the unpaid compensation is taken as an effective forbearance of money. As a forbearance of money, the unpaid amount earns legal interest from time of taking until full payment [City Government of Pasay v. Arellano University (G.R. No. 260038, May 7, 2025)]
Anneβs argument seeks to have inflation and peso depreciation directly factored into the computation of the principal just compensation due to delay. Under prevailing jurisprudence, however, the Court keeps the valuation anchored to the time of taking, and the proper mechanism to keep compensation βjustβ despite long delay is the imposition of legal interest on the unpaid amount from taking to payment.
Hence, Anne is only correct that there must be adjustment due to the delay in the payment of just compensation but such adjustment should be effected through the imposition of legal interest.
Explanation on why this is interesting:
There is a distinction between the use of inflation rate and depreciated value as a consideration in the computation of just compensation in comparison to the imposition of legal interest.
If you directly use inflation rate and depreciated value as consideration, you have to factor in market value, assessed value, and other environmental circumstances over the past 10 years.
However, if you take the delay of payment of unjust compensation as forbearance of money, the losses caused by inflation or depreciation can be easily computed through imposition of a fix legal interest either 12% or 6% depending on the Central Bank's memorandum.
Hence, this is the slight distinction between the concept of using the inflation rate as direct factor for computation in comparison to imposition of legal interest.
