Amending the Right-of-Way Act with ARROW

“On this note, the prevailing rule is that the courts will compel the establishment of a right of way only when absolutely necessary.”

– Mr. Justice Gaerlan, Ponente in Sps. Vargas v. Sta. Lucia Realty and Development, Inc.

By Realttorney^®

One of the most persistent challenges in the Philippines in terms of infrastructure development and projects has been the acquisition of land for right-of-way (ROW). This critical process has historically been beset by delays, inconsistencies, and legal hurdles, impeding the timely implementation of national and local development projects.

Republic Act No. 10752, or “The Right-of-Way Act,” was passed in 2016 to streamline the land acquisition process for government infrastructure. However, as infrastructure ambitions grow in scale and complexity – particularly under the Build, Build, Build and its successor programs – the need for further reform has become evident.

The proposed Senate Bill No. 2821, also known as the “Accelerated and Reformed Right-of-Way (ARROW) Act,” seeks to comprehensively amend Rep. Act No. 10752 to introduce more efficient, inclusive, and transparent processes concerning land acquisition for infrastructure projects by both the national government and public service providers. This blog explores the salient features of the ARROW Act, the motivations behind its reforms, and the implications for stakeholders in both the public and private sectors.

Let’s begin.

Rep. Act No. 10752 was enacted in 2016 to facilitate the acquisition of ROW for government infrastructure projects through streamlined procedures for negotiated sale and expropriation. Key features included payment of just compensation based on current market value, the inclusion of informal settlers in the compensation scheme, and a limited scope of coverage focusing primarily on government-led projects.

However, the law fell short in addressing delays caused by valuation disputes, overlapping land claims, inconsistent property assessments, and lack of integration with private-sector infrastructure initiatives. These gaps hindered the government’s ability to implement infrastructure projects on time and within budget.

Senate Bill No. 2821 is the committee report combining three Senate Bills, taking consideration House Bill No. 6571, and was filed on September 11, 2024. It proposes substantial amendments to Rep. Act No. 10752. It expands the law’s scope, introduces new mechanisms for planning and execution, and integrates the role of private entities providing public services.

These reforms aim to accelerate and streamline the process of acquiring the necessary right-of-way. One of the major reforms the ARROW Act seeks to introduce is the expansion of the coverage of the law.

Expanded Coverage. The ARROW Act explicitly broadens the application of the law to include all national government infrastructure projects undertaken through Public-Private Partnerships (PPP), referencing Republic Act No. 11966 or the “Public-Private Partnership (PPP) Code of the Philippines”.

The coverage of the law now includes private entities granted the power of eminent domain. It also provides a clearer definition of “private entity providing public service” in the realm of electricity distribution and transmission, petroleum pipelines, water and wastewater systems, internet and telecommunications, airports, seaports, and irrigation projects.

And, subject to ownership restrictions under the Constitution, a private entity may acquire private land or patrimonial property for the right-of-way site or location of an infrastructure project, as may be reasonably necessary for the efficient maintenance and operation of the public service pursuant to the private entity’s franchise or authority to operate.

Moreover, the expansion of the coverage of the law ensures uniform standards in compensation and procedure across both government and private-sector projects delivering public services. It closes the gap previously exploited by some projects that bypassed ROW safeguards through technicalities.

A significant addition introduced by the bill is the mandatory preparation of a Right-of-Way Action Plan (RAP) by the implementing agency before any property acquisition. This plan must include a census and profile of affected persons, an inventory of affected assets, estimated ROW costs (including compensation for land, structures, improvements, machinery considered as immovables, crops, and trees), a schedule of implementation, institutional arrangements, and proof of stakeholder consultations.

The RAP is a major leap forward in promoting transparency, accountability, and proper planning. It reduces disputes and strengthens social safeguards, especially for marginalized groups. Similar planning documents are standard in international best practices, such as those recommended by the World Bank and the Asian Development Bank.

By mandating transparency it builds public confidence, supports media oversight, and allows civil society to monitor compliance.

Specific Procedures for Ancestral Domains. The ARROW Act introduces a dedicated section addressing the “entry and use of property within ancestral domains”. It mandates securing a “Certification Precondition” from the National Commission on Indigenous Peoples (NCIP). An “Infrastructure Right-of-Way Easement Agreement” is to be executed between the implementing agency and the NCIP-certified indigenous political structure, granting the right to use the land while the ICCs/IPs retain ownership. For ICCs/IPs without an established political structure, the process of “Free and Prior Informed Consent (FPIC)” as per Rep. Act No. 8371 must be observed.

This harmonizes ROW acquisition with the Indigenous Peoples’ Rights Act (IPRA), balancing infrastructure development with cultural sensitivity. It is a significant improvement from previous vague and often adversarial processes.

Revised Rules on Negotiated Sale. The rules for negotiated sale will be amended for both government and private entities. The ARROW Act removes the reliance on inconsistent BIR zonal values. The basis for the price offer is now explicitly linked to the standardized property valuation system and schedule of market values established under Rep. Act No. 12001, or the “Real Property Valuation and Assessment Reform Act”.

This proposed change addresses one of the most common causes of ROW delays: contested compensation. Hence, the standards for assessing the value of property subject to negotiated sale are updated to explicitly include the “APPROVED SMV established under R.A. No. 12001”, or in its absence, the BIR Zonal Valuation. Therefore, a unified valuation framework improves predictability and ensures that compensation reflects true market value, thus reducing litigation and fostering trust.

The bill specifies the “payment terms” more clearly. Upon the execution of a deed of sale, the property owner shall be paid “seventy percent (70%)” of the negotiated price of the land (exclusive of certain taxes) and “seventy percent (70%)” of the negotiated price of structures, improvements, crops, and trees. The remaining “thirty percent (30%)” shall be paid upon the transfer of title (if wholly affected) or annotation of the deed of sale (if partially affected) and the land is completely cleared.

Prompt payments incentivize cooperation and reduce friction. Ensuring that informal landholders with decades of possession are recognized and reimbursed aligns with equitable land governance practices.

There is also a provision regarding the payment of “capital gains tax” by the implementing agency or private entity is now explicitly stated to apply only to the negotiated sale of property classified as “capital assets”. Negotiated sale of property classified as ordinary assets are subject to the existing rules and regulations of the BIR.

Meanwhile, the buyer of the property will pay for documentary stamp tax, transfer taxes, and registration fees at the Registry of Deeds, for titled lands. Finally, the ARROW Act clarifies the requirements for “untitled lands”, outlining specific documents the possessor shall submit to the implementing agency.

Modified Guidelines for Expropriation Proceedings. The guidelines for expropriation have also been revised in this manner:

1. The “initial deposit” to the court in favor of the property owner has been changed to “fifty percent (50%) of the market value of the land”, “seventy percent (70%) of the replacement cost of improvements and structures (including machinery considered as immovable)”, and “seventy percent (70%) of the current market value of crops and trees”. These amounts will be based on the “approved SMV under RA No. 12001”. In its absence, interim measures using BIR zonal valuation and assessed values are provided.
2. The court is mandated to “immediately issue a writ of possession ex parte” upon compliance with the deposit requirements.
3. The Act sets a timeframe of “sixty (60) days” from the filing of the expropriation case for the court to determine the just compensation if the owner contests the offered value.
4. Finally, Court-ordered demolition is now allowed for non-compliant informal settlers.

These revised guidelines speed up land acquisition while retaining fairness. Fast-tracking possession is critical in projects with firm deadlines, such as flood control or transportation hub corridors, i.e., railroad networks.

Relocation of Informal Settlers. The responsibility for establishing and developing resettlement sites for informal settlers will be primarily assigned to the Department of Human Settlements and Urban Development (DHSUD), through the appropriate key shelter agency.

Advance Appropriations. The importance of providing “adequate appropriations in advance” for ROW acquisition for national government infrastructure projects is emphasized by the ARROW Act. Specific expenses to be covered by these appropriations are listed. The Act also clarifies that appropriations for ROW in PPP projects shall follow the guidelines in Rep. Act No. 11966.

Regulation of Developments within the Declared ROW. The period during which no development contrary to the approved project plans is allowed within the defined right-of-way after the notice of taking is two (2) years. The implementing agency is required to provide the concerned national agencies and LGUs with a copy of the notice of taking.

Sanctions for Private Entities. The proposed ARROW Act explicitly includes “civil or criminal sanctions” for the president, manager, director, trustee, or responsible officers of a “private entity” who violate any provision of the Act.

Applicability of Rep. Act No. 8975. The Act explicitly states that the provisions of Republic Act No. 8975 on the prohibition and penal sanction on the issuance of temporary restraining orders, preliminary injunctions, or preliminary mandatory injunctions shall apply. This provision ensures deterrence against non-compliance while protecting the integrity of national priority projects.

Mandatory Public Disclosure. A new section mandates the “public disclosure of essential right-of-way information” such as the ROW Action Plan, the status of ROW claims, and the status of expropriation cases on the implementing agency or private entity’s website, subject to the Data Privacy Act of 2012.

Expansion of the IRR Committee. The composition of the committee responsible for preparing the Implementing Rules and Regulations (IRR) has been updated to include the Secretaries of the Departments of Information and Communications Technology, Environment and Natural Resources, Finance, Justice, Human Settlement and Urban Development, and Agrarian Reform, among other changes.

A multi-agency approach promotes policy coherence and addresses cross-sectoral challenges such as electrification, connectivity, and environmental safeguards. The participation of DHSUD also ensures the integration of resettlement concerns.

These reforms under the ARROW Act are intended to address bottlenecks and expedite the acquisition of right-of-way, which is often a critical factor in the timely implementation of infrastructure projects in the Philippines.

What then are the practical benefits of these proposed amendments? First is faster project execution. The ARROW Act provides clearer procedures, faster court action, and earlier payment schedules to reduce delays in the implementation of critical government infrastructure projects.

The second is enhanced investor confidence. The PPP proponents will gain from consistent rules and easier access to ROW, meeting important timelines that may lead to cost reductions. Third is fairer compensation. A unified valuation system and clear tax rules reduce conflicts and misunderstandings between all stakeholders in the project. Fourth is better community engagement. The mandatory public consultations and transparent planning process reduce resistance from affected sectors. And finally, inclusive development. Stronger protections for IPs and informal settlers align with constitutional social justice goals.

In conclusion, the proposed amendments to Rep. Act No. 10752 through the ARROW Act represent a bold and necessary leap toward infrastructure modernization in the Philippines. They reflect a sophisticated understanding of the legal, social, and economic intricacies of land acquisition and signal a commitment to making infrastructure delivery faster, fairer, and more accountable.

For legal professionals, developers, and policymakers, these amendments are not merely procedural updates – they are strategic enablers of national development. As the Philippines seeks to build resilient, inclusive, and sustainable infrastructure, the ARROW Act provides a sharper legal tool for achieving these goals.

Share your thoughts in the comments section so we will know if you support or oppose this amendment being pushed by our legislators.

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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is a Chartered Trust and Estate Planning (CTEP^®) professional who is committed to educating Filipinos about the value and importance of having an estate plan in their lives.