How Damages Are Calculated in Philippine Civil Cases

Short answer: A Philippine court builds a damages award item by item. Actual damages are the proven pecuniary loss, usually backed by receipts, and include lost profits or earnings (Civil Code, Arts. 2199 and 2200). For death or permanent incapacity, lost earning capacity is computed with the formula courts have used for decades: net earning capacity = life expectancy × (gross annual income − reasonable living expenses), with life expectancy taken as two-thirds of (80 − age at death). When a loss is real but cannot be proved exactly, the court may award temperate damages instead (Art. 2224). Moral, nominal and exemplary damages are not computed from receipts but fixed by the court within the limits of the law and jurisprudence. Legal interest of 6% a year is then added from demand or judgment, and the total is reduced for the claimant’s own negligence or failure to mitigate.

For the definitions of each kind of damages, see actual, moral, exemplary and other damages. This guide covers the arithmetic and the proof.

Step 1: Actual or compensatory damages

Only pecuniary loss that is duly proved is recoverable as actual damages (Art. 2199). They cover both the value of the loss suffered and profits that were not obtained (Art. 2200). Courts do not rely on estimates, lists prepared for the case or self-serving testimony; they want competent evidence for each peso claimed. See what must be proven for actual damages.

Item	Typical proof
Medical and hospital bills	Official receipts, statements of account, prescriptions with receipts
Repair or replacement cost	Repair receipts, shop estimates supported by testimony, replacement invoices
Funeral and burial expenses	Receipts from the funeral home, cemetery and church
Lost wages during recovery	Payslips, employer certification, income tax returns
Lost business profits	Financial statements, sales records, tax returns showing a reliable baseline

Start a running record from day one. The damages loss log is built for this.

Step 2: Lost earning capacity in death or permanent disability cases

When the victim dies or is permanently disabled, the heirs or the victim may recover the earnings that would have been made (Arts. 2205 and 2206). The Supreme Court uses this formula, restated in Heirs of Ochoa v. G & S Transport Corp. (G.R. No. 170071, March 9, 2011):

Net earning capacity = [2/3 × (80 − age at death)] × (gross annual income − living expenses)

Courts commonly fix reasonable living expenses at 50% of gross annual income when no better evidence is offered, as the Court did in Heirs of Ochoa. Income should ordinarily be proved by documents such as payslips, contracts or tax returns. The recognized exceptions are a victim who was self-employed earning less than the minimum wage, where judicial notice may be taken that no documents are available in that line of work, and a daily-wage worker earning less than the minimum wage; in those cases testimony may be enough.

Worked example	Figure
Age at death	40
Life expectancy: 2/3 × (80 − 40)	26.67 years
Gross annual income (proved by payslips): ₱30,000 × 12	₱360,000
Less living expenses at 50%	₱180,000
Net annual income	₱180,000
Net earning capacity: 26.67 × ₱180,000	about ₱4,800,000

For temporary disability, the claim is simpler: the actual income lost during the period of incapacity. See lost income after an injury.

Step 3: Temperate damages when the loss cannot be proved exactly

If the court is convinced that some pecuniary loss happened but its amount cannot be proved with certainty, it may award a reasonable amount as temperate or moderate damages (Arts. 2224 and 2225). This is common where receipts were lost or never issued. Temperate damages substitute for actual damages on the same loss; they are not added on top of a fully proved amount. See temperate damages.

Step 4: Moral, nominal and exemplary damages

Kind	How the amount is set	Key condition
Moral (Arts. 2217 to 2220)	Fixed by the court; no proof of pecuniary value is needed, but the suffering must be proved and the amount should not be a windfall	Available only in the cases the law lists, such as physical injuries from a quasi-delict, or a breach of contract in bad faith. See moral damages
Nominal (Arts. 2221 to 2223)	A modest amount to vindicate a violated right	A right was violated but no actual loss was proved
Exemplary (Arts. 2229 to 2235)	Fixed by the court as an example or correction	The claimant must first show entitlement to moral, temperate or compensatory damages (Art. 2234). In quasi-delicts the defendant must have acted with gross negligence (Art. 2231); in contracts, in a wanton, fraudulent, reckless, oppressive or malevolent manner (Art. 2232)
Liquidated (Arts. 2226 to 2228)	The amount agreed in the contract	May be reduced if iniquitous or unconscionable. See liquidated damages vs penalty clauses

In death cases, the Supreme Court also awards a fixed civil indemnity and standard amounts of moral and exemplary damages that it updates from time to time. Check the most recent decisions for the current figures rather than older amounts cited in the Civil Code.

Step 5: Attorney’s fees and interest

Without a stipulation, attorney’s fees and litigation expenses are recoverable only on one of the grounds listed in Article 2208, such as when exemplary damages are awarded or the defendant acted in gross and evident bad faith in refusing a plainly valid claim, and the amount must be reasonable. See recovering attorney’s fees.

Interest follows the guidelines in Nacar v. Gallery Frames (G.R. No. 189871, August 13, 2013), which adopted the 6% rate set by BSP-MB Circular No. 799 effective July 1, 2013. For an obligation that is not a loan or forbearance of money, such as damages for injury or breach, the court may, in its discretion, impose 6% a year from the time the claim is made judicially or extrajudicially if the amount can be established with reasonable certainty then (see also Art. 2213); otherwise from the date of the judgment that fixes the amount. Once the judgment becomes final, the total award earns 6% a year until fully paid. See legal interest.

Step 6: What reduces the award

Contributory negligence: the claimant’s own negligence reduces the damages (Arts. 2179 and 2214).
Failure to mitigate: the claimant cannot recover losses they could have avoided with ordinary care (Art. 2203). See duty to mitigate.
Good faith in contract cases: a debtor in good faith answers only for foreseeable damages (Art. 2201).
Equitable reduction: liquidated damages and penalties may be reduced if iniquitous (Arts. 1229 and 2227).

Putting it together: a sample injury claim

Component	Basis	Amount claimed
Hospital and medicine	Official receipts	₱185,000 (actual)
Lost wages, 3 months at ₱25,000	Payslips and employer certificate	₱75,000 (actual)
Transport and therapy without receipts	Testimony that the expense was incurred	A reasonable amount as temperate damages, set by the court
Pain, anxiety and scarring	Testimony and medical records	Moral damages, set by the court
Driver’s gross negligence	Evidence of reckless driving	Exemplary damages, set by the court
Attorney’s fees	Art. 2208 ground	A reasonable amount, if a ground is proved
Interest	Nacar guidelines	6% a year from demand or judgment, then 6% from finality until paid

If the claimant was partly at fault, for example by crossing outside a pedestrian lane, the court reduces the total in proportion to that fault. For accident claims, see car accident compensation and how to prove negligence.

Your options and what to do next

Knowing the formula is only useful if the claim is presented properly. Most damages claims move through the same sequence: document the loss, make a written demand, try settlement (at the barangay where it applies), and file in court only if that fails.

Option	When it fits	Where and what to bring
Written demand	Almost always the first step; it fixes the date from which interest may run (Art. 1169 and Nacar)	Send to the other party by a traceable method; attach a computation and copies of receipts
Barangay conciliation	Both parties are individuals living in the same city or municipality (Local Government Code, Secs. 408 and 412)	Lupon of the respondent’s barangay; bring your demand letter, receipts and computation
Small claims case	A purely money claim that falls within the coverage and amount limit of the small claims rules	First-level court; see the small claims filing guide
Ordinary civil action for damages	Injury, death or breach cases needing proof of moral, exemplary or earning-capacity damages	Court with jurisdiction over the amount; a lawyer, or the Public Attorney’s Office if you qualify

Barangay first. Where the Katarungang Pambarangay law covers the dispute, a court case filed without a prior barangay confrontation and a certification to file action can be dismissed (Sec. 412(a)). You may go directly to court if, among other exceptions, you need a provisional remedy such as attachment or injunction, or the claim is about to prescribe (Sec. 412(b)). Filing the barangay complaint interrupts prescription for up to 60 days (Sec. 410(c)).

Deadlines. An action based on a quasi-delict, such as a road accident, must be filed within four years (Art. 1146); one on a written contract within ten years (Art. 1144); and one on an oral contract within six years (Art. 1145). A written extrajudicial demand interrupts prescription (Art. 1155).

Evidence to gather now: official receipts and statements of account, payslips or tax returns for income, medical records and certificates of disability, police or incident reports, photographs, repair estimates, and a dated log of unreceipted expenses for a temperate-damages claim.

First action: total your provable losses using the tables above, then send a written demand with the computation attached. See when a demand letter is required.

Frequently asked questions

Can I recover damages without receipts?

Not as actual damages for the unreceipted amount, but the court may award temperate damages if it is satisfied that a loss occurred. Moral and nominal damages do not require receipts.

Can the court award more than I asked for?

Generally, a court will not award actual damages beyond what was alleged and proved. Moral, temperate and exemplary damages are left to the court’s discretion within the limits of the evidence and jurisprudence.

Primary legal sources

This guide provides general Philippine legal information and is not legal advice for a particular claim. Standard awards in death and injury cases are updated by the Supreme Court; check current decisions.

Sources rechecked as of: October 4, 2026

How Are Damages Calculated in a Philippine Civil Case? A Worked Guide