THE Supreme Court has drastically cut the compensation that the Philippine Ports Authority must pay to the owners of 185 lots in Batangas City that were expropriated for a port expansion project in 2001.

The payment, working out to P1.08 billion or about P425 per square meter, was substantially lower than the P13.9 billion or P5,500 per square meter that the court’s First Division had told the port agency to pay in August 2007.

Acting on the port agency’s motion for reconsideration, the entire court said a review of the records and evidence showed that the just compensation for the full and fair equivalent of the 129.8 hectares was P425 per square meter, with a 12-percent interest going back to 2001.

In their decision, the justices also fined Judge Paterno Tac-an of the Batangas City Regional Trial Court P120,000 for indirect contempt when he ignored several resolutions of the Court of Appeals to stop him from carrying out his orders to the ports authority to pay P5,500.

Associate Justice Presbitero Velasco Jr., who wrote the decision, said recent compromise agreements between the ports authority and about 28 of the claimants pegged the price for their land at P500 per square meter.

‘‘These agreements represent clear and convincing evidence that was ignored by the trial court and the [appeals court], but should have been assigned strong weight and credit,’’ the Court said.

Chief Justice Reynato Puno, Senior Associate Justice Leonardo Quisumbing, and Associate Justices Consuelo Ynares-Santiago, Antonio Carpio, Renato Corona, Minita Chico-Nazario, Teresita Leonardo-De Castro, Arturo Brion, Diosdado Peralta, and Associate Justice Lucas Bersamin agreed with the ruling.

Associate Justice Conchita Carpio Morales was on official leave, while Associate Justice Antonio Eduardo Nachura took no part in the deliberations.

A review of the documents and evidence showed that the expropriated lots were clearly agricultural land, contrary to previous findings that classified them as commercial or industrial.

Because of those considerations, the court ruled that P425 a square meter was a reasonable and fair compensation for the expropriated lots, especially since the highest Bureau of Internal Revenue zonal valuation did not exceed P400 a square meter.

The justices also noted that the expropriated lots were undeveloped and vacant, except for those with fishponds.

In its August 2007 ruling, the Ssupreme Court’s First Division ordered the ports authority to compensate the lots owners P5,500 a square meter based on the zonal valuation of real properties in Batangas City made by Internal Revenue and past sales prices.

The First Division disregarded the port agency’s claim that just compensation should be lower because the land were agricultural.

The ruling would have cost the ports authority to pay P13.9 billion in compensation and interest.

Records show that on Oct. 14, 1999, the authority filed with the Batangas Regional Trial Court a complaint for expropriation of 185 lots against the 231 individuals.

The port agency said it needed the land to develop the second stage of the Batangas Port Zone, and recommended a market value of P336.83 per square meter.

The agency took over the properties on Sept. 11, 2001, after the lower court initially pegged the market value at P400 a square meter.

But the lower court later fixed the fair market value of the expropriated lots at P5,500 a square meter and subsequently ordered the agency to pay the respondents.