Republic Act No. 12001, the Real Property Valuation and Assessment Reform Act (RPVARA), was hailed as a legislative milestone when it was signed by President Marcos in June 2024. The priority measure aimed to modernize the country’s outdated and inefficient property valuation and assessment system and help local government units (LGUs) generate more revenues to bankroll their development programs.
But after two years, Mr. Marcos—who had pushed hard for the measure when he was still a senator and listed the reform as one of his priority measures during his first State of the Nation Address—has changed his tune.
Following a meeting with the Legislative-Executive Development Advisory Council last week, he asked Congress to defer its implementation, to spare property owners and business from “additional burdens” and ensure a “smooth and reasonable” transition to the new valuation system that should be easier to follow and aligned with international standards.
The Chamber of Real Estate and Builders’ Associations Inc. (Creba) cheered Mr. Marcos’ move to suspend the implementation of RPVARA that was supposed to take effect in 2028, describing it as “timely opportunity to ensure that the landmark reform is implemented in a fair, transparent, and well-calibrated manner.”
Losing momentum
Given the government’s more urgent and pressing priorities, from bringing down the prices of basic goods and services to accelerating economic growth that is fast losing momentum and generating job-generating investments, there is wisdom in seeking more time to shift to the new property evaluation system as envisioned under the law.
However, the commitment to make that radical shift should not waver, lest the ills that the law is supposed to cure become even more grave.
Pampanga 2nd District Rep. Gloria Macapagal Arroyo pointed out back in 2018 that the current property valuation system was “hounded by discrepancies and conflicting land values,” resulting in unrealized government units, lengthy court litigation involving property disputes, and right-of-way compensation problems as there is no single basis for valuing property.
Then Finance Secretary Ralph Recto stressed in 2024 that there were at least 20 government agencies involved in land valuation, thus adopting a single basis for valuation–the market-based schedule of market value (SMV)–will lead to “one hundred percent transparency and accuracy” in the computation of real property tax.
This is especially important for LGUs that derive a significant portion of their income from property taxes.
Political backlash
With land to be assessed under the law solely on actual market value–as opposed to the usually lower assessed or zonal value–they stand to potentially collect more taxes which can then be used to finance their own programs and augment what they receive from the national government through the internal revenue allotment.
LGUs, however, have been unable to correctly update their SMVs due to potential political backlash as higher values will mean higher property taxes to be paid by constituents.
The new law is supposed to correct these deficiencies with the technical aspect of property valuation now to be removed from the LGUs but handled by a strengthened Bureau of Local Government Finance (BLGF), which will be tasked with the development, adoption, maintenance, regulation, and specification of property values.
Even then, backlash will indeed be inevitable since an increase in property taxes cannot be avoided with the adoption of the market values as basis.
This partly explains the Marcos administration’s reluctance to implement the law as originally scheduled, even if any increase in property taxes during the first year of using updated market values is capped at 6 percent and the two-year amnesty on interests and penalties for taxpayers with unpaid real property tax.
Education campaign
There will likewise be implications on the pricing of housing developments, thus Creba’s plea for the government to take this time to undertake a broader impact assessment of the law.
At the same time, the government should ensure that the agencies that will implement the overhaul, from the BLGF to the Bureau of Internal Revenue and the LGUs themselves are armed with the right equipment and capabilities to consistently enforce taxation using the updated, market-value based schedule.
Not to be forgotten is an adequate public information and education campaign to ensure acceptance and understanding of the new valuation system that will have implications not just on the property taxes but on other property-related fees as well, such as those involved in buying and selling property.
The government should use the extended time wisely and prepare both the bureaucracy and the public for the inevitable implementation of the valuation system.
It may cause some pain, but it is necessary nonetheless, and certainly easier to accept with the assurance that revenues to be generated will not go to corruption but real services for the people.
Facts Only
* Republic Act No. 12001, the Real Property Valuation and Assessment Reform Act (RPVARA), was signed by President Marcos in June 2024.
* The priority measure aimed to modernize property valuation and assessment systems and help LGUs generate revenue for development programs.
* President Marcos asked Congress to defer the implementation of RPVARA to spare property owners from "additional burdens" and ensure a smooth transition.
* The Chamber of Real Estate and Builders’ Associations Inc. (Creba) cheered the suspension, calling it an opportunity for fair and transparent implementation.
* Prior concerns included discrepancies and conflicting land values in the previous system, leading to litigation and compensation problems.
* Finance Secretary Ralph Recto stressed that adopting a single basis, the market-based schedule of market value (SMV), would lead to "one hundred percent transparency and accuracy" in real property tax computation.
* The law shifts the technical aspect of property valuation from LGUs to the Bureau of Local Government Finance (BLGF).
* Potential increased taxes based on actual market value could cause political backlash among LGUs who rely on property tax revenue.
* Implementation includes a plan for a 6 percent tax increase cap and a two-year amnesty on interests and penalties.
* The government plans an information and education campaign to ensure public acceptance of the new valuation system.
Executive Summary
President Marcos requested Congress defer the implementation of Republic Act No. 12001, the Real Property Valuation and Assessment Reform Act (RPVARA), to spare property owners from potential burdens during a transition to a new valuation system. This request followed a meeting with the Legislative-Executive Development Advisory Council. The Chamber of Real Estate and Builders’ Associations Inc. (Creba) supported this deferral, viewing it as an opportunity to ensure a fair implementation.
The impetus for the reform stems from concerns regarding outdated property valuation systems that led to discrepancies, litigation, and compensation issues, as highlighted by concerns raised in 2018 regarding conflicting land values. Finance Secretary Ralph Recto emphasized the need for a single basis for valuation—the market-based schedule of market value (SMV)—to achieve transparency, particularly given the involvement of multiple government agencies in land valuation.
The potential shift to basing assessments solely on actual market value could lead to increased property taxes, which raises concerns among Local Government Units (LGUs) regarding political backlash and their ability to finance development programs. The law aims to remove the technical aspect of valuation from LGUs by centralizing it under a strengthened Bureau of Local Government Finance (BLGF). Furthermore, the implementation requires public education to ensure acceptance of the new system, as it impacts property taxes and related fees.
Full Take
The narrative presents a tension between systemic necessity and political feasibility. The core conflict lies between the long-term goal of achieving transparent, accurate property taxation based on market values and the short-term political resistance stemming from perceived increases in tax burdens for LGUs and constituents. This pattern suggests that reforms designed to enhance administrative efficiency—like standardizing valuation—inevitably clash with established power dynamics centered around revenue allocation.
The focus on deferral by the executive signals an acknowledgment of this political friction, suggesting that implementation speed is secondary to managing stakeholder acceptance during a transformative shift. The persistence of the need for reform (driven by historical flaws like land value discrepancies) alongside the acknowledged difficulty of enforcing it points toward a structural gap where technical accuracy competes with political will and institutional capacity.
The pattern also involves framing the outcome as a trade-off: necessary systemic correction versus immediate, localized pain. The push for transparency is framed as a moral good (preventing corruption), yet the mechanism for achieving that good introduces tangible costs to specific groups. The implied question is whether institutional changes can successfully decouple economic necessity from political sentiment when the cost of change is localized and felt acutely by those whose status quo is challenged.
Bridge Questions: If the goal of eliminating litigation and ensuring transparent revenue collection is prioritized, what mechanisms could be established to guarantee that any perceived tax increase is demonstrably channeled into the promised public services rather than creating new avenues for political dispute? How can the public education campaign be structured to shift perception from viewing increased taxation as a punitive measure to viewing it as an investment in systemic fairness? What specific institutional safeguards can ensure the BLGF and other agencies are sufficiently empowered to resist localized political pressure while enforcing market-based standards?
Sentinel — Human
The text presents a nuanced discussion about the delayed implementation of a property valuation reform, balancing stated policy goals with political and administrative resistance.