Associate Justice Jose Reyes Jr. penned the Supreme Court's 2nd Division 15-page ruling.
SC clears graft raps vs Enrile, other Marcos cronies
Kristine Joy Patag ( - June 25, 2019 - 9:30am

MANILA, Philippines — The Supreme Court has affirmed the junking of graft raps against cronies of the late dictator Ferdinand Marcos over a P108-million alleged behest loan granted by the Philippine National Bank to a sugar milling company.

The SC’s Second Division dismissed the Presidential Commission on Good Government’s petition for certiorari assailing the Office of the Ombudsman’s Dec. 29, 2006 ruling, which the ombudsman also upheld on April 21, 2009, due to lack of merit.

The PCGG is the agency created to recover Marcos ill-gotten wealth.

'Behest loan'

Central to the petition is the account of Tolong Sugar Milling Company with the Philippine National Bank. PCGG said its Technical Working Group found that the PNB granted the company “a stand-by irrevocable unconfirmed letter of credit in the amount of USD 27,793,123.45 to cover importation of sugar machinery and equipment.”

The TWG, said PCGG, reported that at the time of TSMCI’s incorporation:

  • it only subscribed capital stock amounting to P2 million but only P500,000 was paid up;
  • it only had P10 million as capitalization;
  • that the lands appraised by the PNB Dumaguete Branch was appraised at P22,350 only;
  • and that the two parcels of land were not titled or registered to the sugar milling company.

“The PCGG claimed that the TWG’s findings show that TSMCI’s account was a behest loan,” the ruling read.

The Office of the Ombudsman, however, cleared the respondents in the case due to lack of probable cause.

The following former PNB directors were named as respondents in the PCGG complaint:

  • Former Sen. Juan Ponce Enrile
  • Roberto Benedicto
  • Antonio Diaz
  • Ismael Reinoso
  • Simeon Miranda
  • Renato Tayag
  • Juan Trivinio
  • Cesar Virata
  • Jose Macario Laurel IV
  • Jose Leido

The Ombudsman also cleared the following from criminal liabilities:

  • Rafael Perez, former PNB Dumaguete branch manager
  • Felicisimo Gonzalo, former PNB Dumaguete branch manager
  • Ramon Escafio, executive of Tolong Sugar Milling Company Inc.
  • Herminio Teves, executive of TSMCI
  • Evelina Teves, executive of TSMCI
  • Lorenzo Teves, executive of TSMCI
  • Catalino Noel, executive of TSMCI
  • Lamberto Macias, executive of TSMCI

The SC ruling

The PCGG argued that “there was no dispute” that the former PNB directors took part in the approval of the questioned loan.

The agency stressed that the PNB Board should not have approved the loan as “the two tracts of land offered as security were not registered in the name of the borrower, thus, TSMCI could not have validly constituted the mortgage thereon.”

But the SC said the ombudsman did not commit grave abuse of discretion when it rejected the PCGG complaint.

The SC stressed that the public prosecutor has the power to determine the existence of probable cause in the complaint.

“A careful review of the subject complaint-affidavit would reveal that the PCGG failed to sufficiently allege the elements of... RA 3019 (Anti-Graft and Corrupt Practices Act),” the ruling read.

The high court also stressed: “The PCGG merely highlighted the alleged scandalous disproportion of the assets and collateral offered by TMSCI with the amount of the loan without even stating the alleged acts committed by the respondents which constituted or exhibited manifest partiality, evident bad faith or inexcusable negligence.”

Associate Justice Jose Reyes Jr. wrote the ruling. Concurring were Associate Justices Mariano del Castillo, Estela Perlas-Bernabe, Alfredo Benjamin Caguioa and Amy Lazaro-Javier.

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