ARROW Act targets faster infrastructure delivery

An arrow is only effective if it reaches its target. Likewise, infrastructure delivers its intended economic and social benefits only when projects are completed. Roads shorten travel time only when they are opened to motorists. Railways improve mobility only when trains begin operating. Airports stimulate trade and tourism only when passengers can use them. Until then, even the best budgeted infrastructure project remains little more than a blueprint.

In the Philippines, many infrastructure projects have been delayed by land disputes. Prolonged negotiations with property owners, disagreements over valuation and protracted expropriation proceedings have historically stalled projects for years. The delays have expectedly translated into higher financing costs, deferred revenues, escalating construction expenses and increased uncertainty over project completion. These risks have diminished the attractiveness of Philippine infrastructure opportunities for investors.

ARROW Act aligns land infrastructure

Recognising that infrastructure cannot move unless land acquisition moves with it, on 12 September 2025, the government enacted Republic Act (RA) No. 12289, or the Accelerated and Reformed Right-of-Way (ARROW) Act, amending RA No. 10752. The law seeks to reduce bottlenecks by providing clearer rules on acquisition, valuation, payment and possession.

The most significant reform introduced by the ARROW Act recognises that the delivery of public infrastructure is no longer the exclusive domain of government. Public-private partnerships (PPPs) have become a principal vehicle for developing transport, power, water, telecommunications and other essential infrastructure.

Consistent with the PPP Code of the Philippines, the ARROW Act extends the right-of-way acquisition framework to qualified private entities. The act, however, does not confer a blanket power of eminent domain on all private developers. It applies only to entities that have been granted such authority under their legislative franchise and that operate, manage or control specified public services identified by law.

ARROW Act limits eminent domain

However, the ARROW Act ensures that the delegated power of eminent domain remains tightly circumscribed. Private entities may acquire property for a right-of-way site or location of an infrastructure project only to the extent reasonably necessary for the efficient maintenance and operation of the public service pursuant to its franchise or authority to operate, and is always subject to the ownership restrictions imposed by the Constitution. Properties acquired through expropriation remain burdened with statutory restrictions annotated on the certificate of title. They cannot be transferred or used for purposes other than those for which they were acquired without court approval to preserve the public character of the acquisition. Should the government subsequently require the property for a national infrastructure project, it may reacquire it on reimbursement of the private entity’s acquisition cost. Any improvements introduced by the private entity must likewise be compensated at replacement cost, subject to depreciation.

The ARROW Act also seeks to introduce greater predictability into negotiated acquisitions. Valuation is based on the Schedule of Market Values (SMV) established under the Real Property Valuation and Assessment Reform Act. Where no SMV has yet been adopted, the Bureau of Internal Revenue’s zonal values serve as the benchmark. The law further prescribes timelines for acceptance of offers and payment milestones, requiring substantial upfront payments on the execution of the deed of sale while allocating transfer taxes and transaction costs to the acquiring entity, subject to limited exceptions.

ARROW Act keeps projects moving

Where negotiations fail, the ARROW Act prevents acquisition disputes from indefinitely stalling construction. On filing an expropriation case and depositing the amounts required by law, the acquiring entity becomes entitled to a writ of possession issued ex parte, without prior hearing. Construction may therefore proceed while the court determines the final amount of just compensation. In effect, the act allows infrastructure projects to move forward while acquisition disputes are resolved through the courts.

While right-of-way disputes may not be eliminated altogether, the ARROW Act is expected to make them more manageable by allowing infrastructure projects to proceed even as acquisition and compensation issues are resolved through the courts. This provides investors, lenders and developers greater certainty over project timelines and stronger confidence in committing long-term capital to Philippine infrastructure.

Infrastructure delivers value not when projects are announced but when they are completed and begin serving the public. By reducing one of the country’s most persistent implementation bottlenecks, the ARROW Act helps keep infrastructure projects on course, allowing plans to become operational assets more quickly and predictably.

Nilo T Divina is  a  founder and managing partner, Ciselie Marie T Gamo-Sisayan is a partner and Angel Isah M Romero is an associate at DivinaLaw in Metro Manila

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