The Philippine Supreme Court ruled Tuesday to break up the sugar estate owned by the president's relatives and distribute it to thousands of farmers following decades of unrest and unfinished land reform.
The landmark ruling is politically charged because President Benigno Aquino III has called on the head of the Supreme Court to step down because of corruption allegations.
Chief Justice Renato Corona, fighting an impeachment trial to remove him, claims that the charges against him were instigated by Aquino because of the court's rulings favoring the farmers. Aquino has denied this, and divested his share of the estate before becoming president in 2010.
Dozens of Hacienda Luisita farmers greeted the court's ruling with cheers and loud applause. They traveled 100 kilometers (60 miles) from their homes in Tarlac province to northern Baguio city, where the 14 justices deliberated the issue.
Court spokesman Midas Marquez said Corona led the deliberation.
Aquino had no immediate comment, his spokeswoman Abigail Valte said.
The Philippines passed a land reform law in 1988 following the ouster of dictator Ferdinand Marcos. It contained a provision that gave large estates an option to distribute shares of stocks to farmers instead of land.
The Supreme Court last year scrapped the controversial provision because the stock distribution scheme did not improve the lives of plantation workers.
Other estates in the Philippines have been converted to commercial or residential use but not distributed to farmers.
For impoverished farmers, Hacienda Luisita stood as a symbol of injustice and unfulfilled promise of land reform in the country where the landed elite have translated their economic wealth into political influence.
Antonio Ligon, spokesman for Hacienda Luisita Inc., said that nearly 5,000 hectares (12,355 acres) of the estate will be distributed among about 6,300 beneficiaries.
He said that the compensation based on the value of the land in 1989 ordered by the court fell far short of the 2006 rates that the owners were seeking. Land prices in 2006 were about 25 times their value in 1989.
However, the final price will still have to be determined by a special agrarian court.