Department of Agrarian Reform

The Capitalized Net Income (CNI) approach to land valuation assumes that there would be uniform streams of future income that would be realized in perpetuity from the seasonal/permanent crops planted to the land. In the case of commercial trees (hardwood and soft wood species), however, only a one-time income is realized when the trees are due for harvest. The regular CNI approach in the valuation of lands planted to commercial trees would therefore not apply. cCAIaD

Since commercial trees are considered as improvement/s on the land, they shall be valued using standard appraisal approach. The standing trees that are considered as "not yet harvestable" shall be valued using the "Cost Approach" while the "harvestable" trees shall be valued using the "Income Approach".

On the basis of the abovecited observations, the Department of Agrarian Reform (DAR) and the Land Bank of the Philippines (LBP), in collaboration with the Forest Management Bureau (FMB) of the Department of Environment and Natural Resources (DENR) conducted a study on the agronomic and economic aspects of commercial tree growing. This is in line with Item II.B.2 of DAR Administrative Order (A.O.) No. 05, Series of 1998, which provides that "DAR and LBP may conduct an industry study on specific crop which will be used in determining the production, cost and net income of the subject landholding.

In view of the foregoing, these valuation guidelines for lands planted to commercial trees are hereby issued.

II. COVERAGE

These guidelines shall cover all land transfer claims involving lands planted to commercial trees whose Memorandum of Valuation have not yet been forwarded to DAR as of the date of effectivity of this Joint Memorandum Circular (JMC).

III. DEFINITION OF TERMS

For the purpose of the these JMC, the following definitions shall be adopted:

A. COMMERCIAL TREES — trees that are naturally grown or planted which possess economic value.

B. "COST APPROACH" — is a valuation approach based on the Principle of Reimbursement where all the expenses incurred by the landowner (LO)/LESSEE in developing and maintaining commercial tree plantation is returned as compensation for the standing trees treated as improvement on the land.

C. CUMULATIVE DEVELOPMENT COST (CDC) — the total cost of development, maintenance and protection incurred by the LO/lessee reckoned from land preparation up to the date of Claim Folder (CF) receipt by LBP for processing.

D. DIPTEROCARP TREES — refers to those hardwood species such as apitong, tanguile, lauan, etc. belonging to family dipterocarpaceae.

E. ESTIMATED MERCHANTABLE HEIGHT (EMH) — refers to the length of the log reckoned from 0.5 meter above the ground up to the first major branch of the tree.

F. "HARVESTABLE TREES" — those trees that have reached their harvestable age for specific end use (e.g., sawlog, pole, fuel wood, etc.).

G. "INCOME APPROACH" — is a valuation approach where a value of a given commercial tree plantation is determined by the present worth of the anticipated net income that would be derived from the "harvestable trees".

H. LAND — refers to private agricultural lands voluntarily offered for sale or compulsorily acquired under Republic Act (R.A.) No. 6657

I. LESSEE — refers to a person, whether juridical or natural, other than the agrarian reform beneficiary, who leases the agricultural land belonging to or possessed by another with the latter's consent for purposes of establishing a commercial tree plantation for a certain amount of money or in produce, or both.

J. NATURALLY GROWN TREE — any naturally occurring or growing tree with woody stem, regardless of size and economic utility or end-use, including the parts thereof such as stumps, tops and branches.

K. NON-DIPTEROCARP TREES — those trees not belonging to the family dipterocarpaceae.

L. "NOT YET HARVESTABLE TREES" — those trees that have not yet reached their harvestable age for specific end use (e.g., sawlog, pole, fuel wood, etc.).

M. PLANTED TREE — any artificially grown/planted tree with a woody stem, regardless of age, size and economic utility or end-use.

N. PREVAILING SELLING PRICE (PSP) — the available prevailing farm gate selling prices of round and square logs, pole and fuel wood in the specific area where the property is located as of the date of CF receipt by LBP for processing.

O. ROUND LOG — a piece of wood produced after felling and bucking with an average diameter of at least 15 centimeters and a length of at least 1.5 meters.

P. SQUARE LOG — a piece of wood produced from one round log using any mechanical tools, the conversion of which was done without the benefit of scaling the said round timber.

Q. STUMPAGE VALUE — appraisal of timber in unprocessed form as it is found in the forest.

R. VALUE OF STANDING TREES (VST) — value of standing commercial trees arrived at using the standard "Income Approach" to valuation.

IV. VALUATION PROCEDURES

A. VALUATION OF "NOT YET HARVESTABLE"' TREES

1. The value of land with "not yet harvestable" commercial trees shall be computed in accordance with the formula prescribed under Item II.A.4 of DAR Administrative Order No. 5, Series of 1998, attached as appendix herein and shown below:

LV = (MV x 2) + CDC

Where:

LV = Land Value

MV      =       Market Value of the land which shall be based on
                     the applicable Unit Market Value (UMV)
                     classification of idle land

CDC    =       Cumulative Development Cost of "not yet
                     harvestable" trees incurred by the LO from land
                     preparation up to the date of receipt of CF by LBP
                     for processing.

The MV is computed using the formula:

MV = UMV x LAF x RCPI

Where:

UMV = Unit Market Value

LAF = Location Adjustment Factor

RCPI = applicable Regional Consumer Price Index

The CDC of "not yet harvestable" commercial trees is determined using the following formula:

CDC = CDC per Tree x Number of Not Yet Harvestable
Trees

2. The field personnel of the DAR and the LBP shall jointly secure the development, maintenance and protection records of the LO. The development cost data submitted by the LO shall be validated against his/her accounting records, (i.e., ledgers, receipts, etc.) and interview with farmworkers/laborers.

If the LO's records are not available or if they are available but could not be validated by the DARMO within fifteen (15) days upon receipt of notice thereof, the DAR and LBP shall secure the development, maintenance and protection cost data of each tree species from the Community Environment and Natural Resources Office (CENRO) or the Provincial Environment and Natural Resources Office (PENRO) of the Department Of Environment And Natural Resources (DENR). DEScaT

3. In the absence of LO and CENRO/PENRO data in Item IV.A.2 above, the schedule of development, maintenance and protection cost for each tree species (for planted trees) provided in Annex "A" shall be used in the determination of CDC.

In cases where the actual tree spacing (row and plant distances) or tree density per hectare of the property under consideration differs with that of the plant spacing and tree density per hectare provided in Annex "A", a schedule of development, maintenance and protection cost per hectare could be generated by following the procedures in Annex "B".

If the LO's actual number of trees per hectare exceeds that of the standard tree density of 1,667 trees/hectare (2m x 3m), the LO's CDC shall be computed based on the CDC of 1,667 trees/hectare.

The CDC shall be grossed-up from December 31, 2000 (the schedule of development, maintenance and protection cost shown in Annex "A" is based on 2000 prices) up to the date of LBP CF receipt for processing.

The process of computing CDC up to the nearest date of LBP CF receipt for processing is shown in Annex "C".

4. The tree inventory shall be conducted by a team composed of the LO, farmer-beneficiaries (FBs), lessee (if the property is covered by an existing lease contract) and the representative/s of DAR and LBP. The team, whenever necessary, shall request the assistance of CENRO/PENRO in the conduct of said inventory. A pro-forma Tree Inventory Summary Report is shown in Annex "D".

The age of trees as of the date of processing of CF shall be reckoned on the actual date when the commercial tree plantation is established as verified against the LO's farm records. If the exact date of establishment is not available and only the year when the trees are actually planted is available, the trees shall be assumed to be planted as of 31 December of said year.

If the exact date or year when the trees are planted is not available, the DAR/LBP shall request the assistance of CENRO/PENRO in the determination of the estimated age of the trees.

5. In case of naturally grown trees which are "not yet harvestable the LO is entitled to a share of about fifty percent (50%) of value of standing trees (as payment for protection and maintenance incurred by the LO) considering that the same are treated as government/state-owned resources. Expressed in equation form:

AMOUNT DUE LANDOWNER = 0.50 (RLV x PSP); or
= 0.50 (VST).

The procedures in determining the RLV and PSP are shown in Item IV.B.1.b of this JMC.

6. If the commercial trees planted are by the FBs or lessee and the same are "not yet harvestable", the value of the land shall be computed in accordance with Items II.A.5 and II.B.6 of DAR A.O. No. 5, Series of 1998, respectively.

If the land is covered by an existing lease contract, the LO shall be compensated for the land while the lessee shall be compensated for the value of standing commercial trees (VCST) treated as improvement on the land, as shown in the following equations:

AMOUNT DUE LANDOWNER:

LV(LAND) = MV X 2

AMOUNT DUE LESSEE:

VCST = CDC

7. In no case, however shall the resulting value of the land planted to "not yet harvestable" trees exceed the value of the land planted to "harvestable" trees similar in terms of species and density within the estate under consideration or within the same Barangay or Municipality (in that order) approved by LBP within one (1) year from receipt of CF.

B. VALUATION OF "HARVESTABLE" TREES

1. PLANTED BY LO

The value of land containing "harvestable" commercial trees shall be computed in accordance with the following formula:

LV = (MV x 2) + Value of Standing Trees (VST)

Where:

LV = Land Value

MV      =       Market Value of the land which shall be based on
                     the applicable Unit Market Value (UMV)
                     classification of idle land

VST = Value of Standing Trees

a. The "harvestable" age of the different tree species, depending on their intended end uses is shown in Annex "E".

For other tree species not included in Annex "E", the DAR/LBP shall request the CENRO/PENRO to determine the harvestable age of the tree under consideration based on known end use/s in the area.

b. The value of standing commercial tree/s shall be computed as follows:

i. If the commercial trees are sold as "round" log, the value of standing tree shall be determined using the formula:

VST = RLV x PSP

Where:

RLV = Round Log Volume (cubic-meters)

PSP = Prevailing Selling Price of Timber
(P/cubic-meter)

The RLV is determined using the following formula:

RLV = RRF x DBH2 x EMH

Where:

RRF = Round Log Recovery Factor

DBH = Diameter of tree measured at
breast height, in meters

EMH = Estimated merchantable height, in
meters

The DBH and EMH shall also be determined by the team composed of the LO, FBs, and the representative/s of DAR and LBP (see Annex "D"). If the property is covered by an existing lease contract, the lessee shall participate in the conduct of the said inventory.

DAR and LBP shall be given proper training in the measurement of DBH and EMH, and in the identification of tree species. ACTISD

The team, Whenever necessary, shall request the assistance of CENRO/PENRO in the determination of DBH and EMB.

The applicable RRF, depending on the location of the property and the type of tree species (non-dipterocarp or dipterocarp), is provided in Annex "F". The list of tree species belonging to the non-dipterocarp and dipterocarp group is shown in Annex "G".

ii. If the commercial trees are sold as "square" log, the value of standing tree/s shall be computed using the formula:

VST = SLV x PSP

Where:

SLV = Square Log Volume (cubic-meters)

PSP = Prevailing Selling Price of Square
Log (P/cubic-meter)

The SLV is determined using the following formula:

SLV = RLV x SRF

Where:

SRF = Square Log Recovery Factor or
70%

The 70% square log recovery factor refers to the net SLV that would be recovered from RLV after sawing or converting round log into square log.

Trees intended for pulp are commonly sold as round log, while trees that are intended for veneer are sold as round log or square log.

III. If the commercial trees are sold on a per tree, per cord, per linear measure or per unit weight basis, the value of standing trees shall be determined using the applicable formula as shown below:

VST = No. of Trees x PSP per Tree or;

VST = No. of Cords x PSP per Cord or;

VST    =       No. of Trees x Linear Measure
                     per Tree x PSP per Linear
                     Measure

VST = Total Weight of Trees in
kilograms X PSP per kilogram.

One cord is equivalent to a pile of one-meter length wood with a height of one (1) meter and a width of one (1) meter.

Commercial trees which are sold in other forms/measures shall be fully disclosed in the report on PSP of timber products to be prepared by DAR and LBP. (See Annex "H")

The PSP of the different timber products shall be secured by DAR/LBP from CENRO, duly conformed by the PENRO. In the absence of said PSP data, the DAR/LBP shall gather/monitor the PSP of timber, sawlog, pole, fuel wood and other known end uses in their area of coverage. A proforma table is shown in Annex "H".

If the PSPs of the different timber products are not available in the locality where the property is located, the PSP based on the stumpage value shall be used instead. The DAR/LBP shall seek assistance from the CENRO/PENRO in the determination of the stumpage value.

2. NATURALLY GROWN TREES

In the case of naturally grown trees which are already "harvestable" planted in a private agricultural land, the LO is entitled to a share of about fifty percent (50%) of VST (as payment for protection and maintenance incurred by the LO) considering that the same are treated as government/state-owned resources. Expressed in equation form:

AMOUNT DUE LANDOWNER = 0.50 (RLV x PSP); or
= 0.50 (VST).

Where:

RLV = Round Log Volume (cubic-meters)

PSP = Prevailing Selling Price of Timber (P/cubic-
meter)

The procedures in determining the RLV and PSP are shown in Item IV.B.1.b of this JMC.

3. PLANTED BY FBs

If the commercial trees are planted by the FBs and the same are already "harvestable", the value of the land shall be computed using the formula:

LV = (MV X 2) + 25% VST

4. PLANTED BY LESSEE

If the commercial trees are introduced by the lessee, the amount due to the LO and the lessee shall be determined as follows:

a) If the lease rental is a fixed amount paid annually:

i. In case the Comparable Sales (CS) is relevant or applicable, the amount due to the LO shall be computed in accordance with the formula provided under II.A of DAR A.O. No. 5, Series of 1998 as shown below:

AMOUNT DUE LANDOWNER       =      (CNI x 0.60) +
                                                                        (CS x 0.30) +
                                                                        (MV x 0.10)

Where:

CNI            =   LRI (lease rental income /hectare)
                   ————————————————
                                               0.12.

ii. If CS is not relevant or applicable, the amount due to the LO shall be computed in accordance with Item II.A.1 of DAR A.O. No. 5, Series of 1998 as shown by the following formula:

AMOUNT DUE LANDOWNER = (CNI x 0.90) +
(MV x 0.10)

Where:

CNI        =           LRI
                        ———
                           0.12.

iii. The amount due to the lessee, on the other hand, shall be equivalent to the VST. In equation form:

AMOUNT DUE LESSEE = VST.

b) If the lease rental is a fixed percentage of the gross income: STaHIC

AMOUNT DUE LANDOWNER       =      (MV X 2) + %
                                                                        Share on VST (as
                                                                        stipulated under
                                                                        the contract)

AMOUNT DUE LESSEE                   =      % Share on VST
                                                                        (as stipulated
                                                                        under the
                                                                        contract)

C. VALUATION OF TREES THAT ARE RANDOMLY PLANTED INSIDE OR ALONG THE PERIMETERS OF A PLANTATION

The "not yet harvestable" and "harvestable" trees that are randomly planted inside or along the perimeter of a given plantation or a given delineated area shall be valued in accordance with the applicable formula provided under Item Nos. IV.A and IV.B above. The value of these trees shall be added to the final value of the given plantation or given delineated area as additional improvements on the land.

D. CUTTING OF COMMERCIAL TREES WHILE THE LAND TRANSFER CLAIM IS IN PROCESS OR WHEN THE LANDHOLDING IS ALREADY AWARDED TO THE FBs

1. In cases where the LO had already cut and sold the commercial tree at the time of processing of CF or valuation of the subject property, the affected area of the property shall be considered as idle land. The value of the affected area shall be computed in accordance with the formula prescribed under Item II.A.3 of DAR A.O. No. 5, Series of 1998 as shown below:

LV = MV X 2

The MV to be used shall be the applicable Unit Market Value (UMV) classification of idle land.

2. The FBs, who have been installed on the subject property and would like to cut the trees, shall first secure a clearance from the LBP. The DAR/LBP shall inform CENRO/PENRO that only those FBs with LBP clearance shall be issued permit to cut/transport their timber products.

3. The DARMO shall monitor and immediately report to the LBP-Agrarian Operations Center (AOC) the following cases:

a) Cutting of trees by LO/lessee/FBs while the land transfer claim is still being processed; and

b) Cutting of trees by the installed FBs without the necessary permit from the CENRO/PENRO.

4. The DARMO shall conduct a field inspection of the land in the process of awarding to farmer-beneficiaries before the date of actual payment thereof. Any substantial changes in the number of recorded commercial trees shall be immediately reported to the filed personnel of LBP for the purpose of revaluation of the land value.

5. THE LBP-Agrarian Operations Center (AOC) shall secure an Affidavit of Compliance from the L.O./Lessee that no trees were cut/felled by him or he/she shall be rendered liable therein before actual payment thereof.

E. ILLUSTRATIVE EXAMPLE

Annex "C" illustrates the application of the valuation concepts/principles for "not yet harvestable" trees while Annex "I" illustrates the application of the valuation concepts/principles for "harvestable" trees.

V. REPEALING CLAUSE

All orders, circulars, rules and regulations inconsistent herewith are hereby revoked, amended, or modified as the case may be.

VI. EFFECTIVITY

This JMC shall take effect ten (10) days after its publication in two (2) national newspapers of general circulation, pursuant to Section 49 of Republic Act No. 6657.

Signed this 23rd day of May 2003.

(SGD.) ROBERTO M. PAGDANGANAN
Secretary
Department of Agrarian Reform

(SGD.) MARGARITO B. TEVES
President and CEO

Land Bank of the Philippines

ANNEX "A"

SCHEDULE OF DEVELOPMENT, MAINTENANCE AND PROTECTION COST PER HECTARE *

Cost Per Hectare

Year 2m x 3m 4m x 4m 5m x 2m

(1,667 T/Ha.) (625 T/Ha.) (1,000 T/Ha.)

1 22,377.00 10,234.00 16,136.00

2 10,410.00 5,502.00 8,629.00

3 2,833.00 1,417.00 2,267.00

4 1,416.50 708.50 1,133.50

5 1,416.50 708.50 1,133.50

6 1,416.50 708.50 1,133.50

7 1,416.50 708.50 1,133.50

8 1,416.50 708.50 1,133.50

9 1,416.50 708.50 1,133.50

10 1,416.50 708.50 1,133.50

11 1,416.50 708.50 1,133.50

12 1,416.50 708.50 1,133.50

13 1,416.50 708.50 1,133.50

14 1,416.50 708.50 1,133.50

15 1,416.50 708.50 1,133.50

16 1,416.50 708.50 1,133.50

17 1,416.50 708.50 1,133.50

18 1,416.50 708.50 1,133.50

19 1,416.50 708.50 1,133.50

20 1,416.50 708.50 1,133.50

21 1,416.50 708.50 1,133.50

22 1,416.50 708.50 1,133.50

23 1,416.50 708.50 1,133.50

24 1,416.50 708.50 1,133.50

* Applicable to all tree species

ANNEX "B"

PROCEDURES IN THE GENERATION OF THE SCHEDULE OF DEVELOPMENT, MAINTENANCE AND PROTECTION COST OF A ONE (1) HECTARE COMMERCIAL TREE PLANTATION

GIVEN:

Tree Species: Gmelina (Gmelina arborea)

Plant Spacing: 3m x 4m

PROCEDURES:

1. Determine the tree density per hectare based on the given spacing using the following formula:

10,000 square meters

Tree Density = ——————————

3m x 4m

10,000 square meters

= ——————————

12 square meters

= 833 trees per hectare

2. Compute the Development, Maintenance and Protection Cost (DMPC) per hectare using average cost per tree of P15.31, P7.89 and P2.08 for Year 1, Year 2 and Year 3, respectively. EIDATc

Year 1 = P15.31/tree x 833 trees/hectare

= P12,753/hectare

Year 2 = P7.89/tree x 833 trees/hectare

= P6,572/hectare

Year 3 = P2.08/tree x 833 trees/hectare

P1,733/hectare

Note: The tree density of 833 trees per hectare is assumed to be the same from Year 1 up to Year 3 considering that replanting is undertaken on mortality/ies.

2. Compute the Market Value (MV) per Tax Declaration

RCPI (February 2001)

MV = UMV x LAF x ——————————

RCPI (January 1999)

= P15,000 x 0.96 x (1.658/1.353)

P17,646/Hectare

3. Compute the Unit Land Value (ULV) of the property.

ULV = (MV x 2) + CDC

= (P17,646 x 2) + P37,406

= P35,292 + P37,406

= P72,698/Hectare

4. Determine the TLV of the property.

TLV = ULV x Area Planted

= P72,698/Hectare x 10.0000 Hectares

= P726,980.00

=========

ANNEX "C"

PROCESS IN THE COMPUTATION OF THE CUMULATIVE DEVELOPMENT COST

GIVEN:
Name of Land Owner	:	Ruperto B. Mangahas
Location of Property	:	Manjuyod, Negros Oriental
Tree Species	:	Gmelina Arborea (Gmelina)
Area Planted	:	10.0000 hectares
Date Planted	:	1-Jan-99
Plant Spacing	:	2m x 3m
Date of Field Investigation (FI)	:	26-May-00
Date of Claim Folder (CF) Receipt	:	9-Feb-01
Unit Market Value (UMV) of Idle Land	:	P15,000/hectare
Date of Effectivity of the Schedule of UMV	:	1-Jan-99
Location Adjustment Factor (LAF)	:	96%
Regional Consumer Price Index (RCPI)
January 1999	:	1.353
December 2000	:	1.467
Febraury 2001	:	1.658

REQUIRED: Determine the Total Land Value (TLV) of the property.

COMPUTATION:

1. Using the development, maintenance and protection cost data for 2m x 3m plant spacing in Annex "A" of DAR-LBP Joint Memorandum Circular (JMC) No. ____, Series of 2001, the grossed-up Cumulative Development Cost (CDC) from December 31, 1999 up to January 2001 is computed as follows:

CDC (January 1999 to February 09, 2001) = P22,377 + P10,410 + (40/365 x P2,833)

= P33,097

RCPI (February 2001)

Grossed-up CDC = P33,097 x ———————————

RCPI (December 2000)

= P33,097 x (1.658/1.467)

= P37,406/hectare

2. Compute the Market Value (MV) per Tax Declaration

RCPI (February 2001)

MV = UMV x LAF x ——————————

RCPI (January 1999)

= P15,000 x 0.96 x (1.658/1.353)

P17,646/Hectare

3. Compute the Unit Land Value (ULV) of the property.

ULV = (MV x 2) + CDC

= (P17,646 x 2) + P37,406

= P35,292 + P37,406

= P72,698/Hectare

4. Determine the TLV of the property.

TLV = ULV x Area Planted

= P72,698/Hectare x 10.0000 Hectares

= P726,980.00

=========

TREE INVENTORY SUMMARY REPORT

ANNEX E

HARVESTABLE AGE OF DIFFERENT TREE SPECIES

ANNEX F

ROUND LOG RECOVERY FACTOR (RRF), BY REGION AND SPECIES GROUP

ANNEX G

LIST OF DIPTEROCARP AND NON-DIPTEROCARP TREE SPECIES

ANNEX H

PREVAILING SELLING PRICES OF TIMBER PRODUCTS AT FARM GATE

ANNEX "I"

ILLUSTRATIVE EXAMPLE

GIVEN:
Name of Land Owner	:	Marcelo C. Santander
Location of Property	:	Alcala, Cagayan
Tree Species	:	Swietenia Macrophyla (Mahogany)
Area Planted	:	15.0000 hectares
Year Planted	:	1974
Plant Spacing	:	5m x 2m
Date of Field Investigation (FI)	:	April 1-23, 2000
Date of Claim Folder (CF) Receipt	:	15-Nov-00
Unit Market Value (UMV) of Idle Land	:	P10,000/hectare
Date of Effectivity of the Schedule of UMV	:	1-Jan-99
Location Adjustment Factor ((LAF)	:	97%
Regional Consumer Price Index (RCPT)
January 1999	:	1.410
November 2000	:	1.620

Summary of Inventory:

1. The Diameter at Breast Height (DBH) and the Estimated Merchantable Height (EMH) of the trees together with the total number of trees at different diameter classes are summarized as follows:

DBH EMH No. of Trees

34 cm 10 m 950

32 cm 10 m 1,000

30 cm 10 m 1,200

28 cm 9 m 1,400

26 cm 8 m 1,450

24 cm 8 m 1,450

22 cm 8 m 1,000

20 cm 8 m 1,200

18 cm 8 m 1,200

16 cm 7 m 1,250

14 cm 6 m 1,000

12 cm 5 m 900

10 cm 5 m 800

2. There are three (3) known end-uses of mahogany trees in the area, namely:

Square Log — DBH of 24 cm to 34 cm

Pole — DBH of 18 cm to 22 cm

Fuel Wood — DBH of 16 cm and below

3. The Prevailing Selling Prices (PSP) of square log, pole and fuel wood as determined jointly by the representative/s of DAR, LBP and CENRO-Alcala are as follows:

Square Log = P5.75/Board-Foot

Pole = P1,000/pole

Fuel Wood = P350/Cubic-meter

NOTE: The above PSPs are net to the LO. The cost of cutting, hauling and other incidental expenses are shouldered by the buyers/contractors. HICcSA

REQUIRED: Determine the Total Land Value (TLV) of the property.

COMPUTATION:

1. Determine the value of standing trees.

a. Compute the Square Log Volume (SLV) of harvestable trees to be sold as square log.

Using the applicable Round Log Recovery Factor (RRF) in Annex "E" and the Square Log Recovery Factor (SRF) of 70% prescribed under JMC No. ___, Series of 2001, the SLV of each tree diameter class is computed as follows:

SLV = RLV x SRF or

SLV = RRF x DBH2 x EMH x SRF x Number of Trees

= 0.00005109 x 34 cm x 34 cm x 10 m x 0.70 x 950 trees = 392.75 cu-m.

= 0.00005109 x 32 cm x 32 cm x 10 m x 0.70 x 1,000 trees = 366.21 cu-m.

= 0.00005109 x 30 cm x 30 cm x 10 m x 0.70 x 1,200 trees = 386.24 cu-m.

= 0.00005109 x 28 cm x 28 cm x 9 m x 0.70 x 1,400 trees = 353.28 cu-m.

= 0.00005109 x 26 cm x 26 cm x 8 m x 0.70 x 1,450 trees = 280.44 cu-m.

= 0.00005109 x 24 cm x 24 cm x 8 m x 0.70 x 1,450 trees = 238.95 cu-m.

———————

Total SLV 2,017.87 cu-m. or

855,576.88 Bd-Ft.

==============

b. Determine the total number of harvestable trees to be sold as pole:

Total Number of Trees = 1,000 (DBH of 22 cm) + 1,200 (DBH of 20 cm) +
1,200 (DBH of 18 cm)

= 3,400 trees

c. Determine the Round Log Volume (RLV) of harvestable trees to be sold as fuel wood.

RLV = RRF x DBH2 x EMH x Number of Trees

= 0.00005109 x 16 cm x 16 cm x 7 m x 1,250 trees = 114.44 cu-m.

= 0.00005109 x 14 cm x 14 cm x 6 m x 1,000 trees = 60.08 cu-m.

= 0.00005109 x 12 cm x 12 cm x 5 m x 900 trees = 33.11 cu-m.

= 0.00005109 x 10 cm x 10 cm x 5 m x 800 trees = 20.44 cu-m.

———————

Total RLV 228.07 cu-m.

==============

d. Compute the Value of Standing Trees (VST).

Square Log = SLV x PSP

= 855,576.88 Bd-Ft. x P5.75/Bd-Ft.

= P4,919,567

Pole = Number of Trees x PSP

= 3,400 trees x P1,000/tree

= P3,400,000

Fuel Wood = RLV x PSP

= 228.07 cu-m x P350/cu-m.

= P79,824

Total VST = P4,919,567 + P3,400,000 + P79,824

= P8,399,391.00

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2. Compute the Market Value (MV) per Tax Declaration

RCPI (November 2000)

MV = UMV x LAF x ———————————

RCPI (January 1999)

= P10,000/Hectare x 0.97 x (1.620/1.410)

= P11,145/Hectare

3. Determine the Total Land Value (TLV) of the property.

ULV = [(MV x 2) x Area] + VST

= [(P11,145/Hectare x 2) x 15.0000 Hectares] + P8,399,391

= P334,350 + P8,399,391

= P8,733,741.00

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HELP CENTER

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Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines

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HELP CENTER

CONTACT INFORMATION

Department of Agrarian Reform Elliptical Road, Diliman Quezon City, Philippines

Copyright Information

Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines