Court cuts interest on Piatco award to just 6%
MANILA, Philippines—The Court of Appeals has amended its ruling ordering the government to pay the Philippine International Air Terminals Co. Inc. (Piatco) $371.4 million as “just compensation” for the expropriation of the Ninoy Aquino International Airport Terminal 3.
In an “amended decision” dated Aug. 22, the appellate court said the annual interest on the $371,426,688.24 compensation amount should be 6 percent annually until it is fully paid and once the decision becomes final.
The court earlier set the interest rate at 12 percent.
“Upon finality of judgment, interest on the sum due by then shall be at 6 percent per annum until fully paid pursuant to Bangko Sentral ng Pilipinas (BSP) Circular No. 799,” the court said.
The appellate court explained the BSP circular modified the interest rates set in a Supreme Court ruling which was the basis used by the court when it first set the interest rate at 12 percent.
The BSP circular, which took effect on July 1, said the rate of interest “for the loan or forbearance of any money, goods, or credits and the rate allowed in judgments, in the absence of an express contract as to such rate of interest,” should be 6 percent annually.
In its Aug. 7 ruling, the appellate court defined just compensation as “the full and fair equivalent of the property sought to be expropriated” and explained that “the measure is not the taker’s gain but the owner’s loss.”
“To arrive at just compensation, we simply put in the figure determined as replacement cost, which is $300,206,693… Law and equity, however, dictate that interest should be imposed on the amount due Piatco,” the court said.
Noting that the Pasig court did not award interest as part of the just compensation for Piatco, the court said it would be unfair not to do so because “evidently the republic has been enjoying the income or fruits from the operation of the structures it has expropriated.”