G.R. Nos. 171746-48, 171770-72 & 185290. March 29, 2023.
MAY CATHERINE C. CIRIACO; ERLINA O. DEL ROSARIO, MA. LUZ C. GENEROSO, AURORA E.L. ORTEGA, AND ANTONETTE L. FERNANDEZ, PETITIONERS, VS. LILIA S. MARQUEZ, EDGAR B. SOLILAPSI, AND HORACIO T. TEMPLO, RESPONDENTS.

[G.R. Nos. 171770-72]
OFFICE OF THE OMBUDSMAN, PETITIONER, VS. LILIA S. MARQUEZ, EDGAR B. SOLILAPSI, AND THE HONORABLE COURT OF APPEALS [FORMER FOURTEENTH DIVISION], RESPONDENTS.
[G.R. No. 185290]
MARISSU G. BUGANTE, PETITIONER, VS. HORACIO TEMPLO, LEOPOLDO S. VEROY, EDGAR B. SOLILAPSI, AMADOR M. MONTEIRO, LILIA S. MARQUEZ, CARLOS A. ARELLANO, RAFAEL. G. ESTRADA, MIGUEL B. VARELA, MARIANITA O. MENDOZA, JUAN C. TAN, CECILIO T. SENO, BIENVENIDO LAGUESMA, AND AURORA ARNAEZ, RESPONDENTS.

FACTS

The Social Security System (SSS), governed by the SSS Law (RA 1161 as amended by RA 8282), is tasked to invest its Investment Reserve Fund (IRF). The Social Security Commission (Commission) directs and controls the SSS. During the period material, respondents held key positions: Edgar B. Solilapsi was Senior Vice President for Investments; Horacio T. Templo was Chief Actuary and Executive Vice President for the Investments and Finance Sector and a member of the Executive Management Committee (EMC); and Lilia S. Marquez was Department Manager of the Loans and Investments Department.
On January 12, 1999, the Commission directed management to submit a list of stocks for investment. On January 18, 1999, the STMD Head, with Solilapsi’s approval, submitted a proposal including Philippine Commercial International Bank (PCIB) shares, subject to completion of financial projections and economic analysis. The Commission approved the inclusion subject to conditions (economic and security analyses). On February 10, 1999, Capulong, with Solilapsi’s approval, recommended inclusion after finding compliance with the conditions. The EMC approved this on March 10, 1999. On April 19, 1999, Capulong recommended a P11 Billion investment in three banks including PCIB. The Commission approved this on May 4, 1999.
In early May 1999, Templo was informed of a meeting regarding a possible purchase of a block of PCIB shares (72% of outstanding stock) being sold by a sellers group. The sellers imposed a deadline for the Sale and Purchase Agreement by May 12, 1999. Templo asked Solilapsi to attend initial meetings. After contract details were agreed on May 10, Solilapsi, unable to locate Capulong, requested Marquez to prepare the recommendation in terms of form, with substance provided by Solilapsi and STMD staff. A Memorandum dated May 10, 1999, prepared by Marquez with Solilapsi’s approval, recommended SSS participation in the purchase of PCIB shares for P7.5 Billion at P290.075 per share. The EMC approved and endorsed it. The Legal Department reviewed and found the terms in order. On May 11, 1999, the Commission approved the recommendation. The Sale and Purchase Agreement was executed on May 12, 1999.
Subsequently, complainants (SSS officers and members) filed an Affidavit-Complaint with the Office of the Ombudsman against the respondents, alleging the purchase was made at an overprice, without proper study, and in violation of investment guidelines. The Ombudsman found respondents Templo, Solilapsi, and Marquez guilty of Conduct Prejudicial to the Best Interest of the Service and suspended them for six months. The Court of Appeals reversed the Ombudsman’s ruling. These consolidated petitions seek to reverse the CA’s decisions.

ISSUE

Whether the Court of Appeals erred in reversing the Office of the Ombudsman’s finding that respondents Templo, Solilapsi, and Marquez are guilty of Conduct Prejudicial to the Best Interest of the Service for their participation in the purchase of PCIB shares.

RULING

The Supreme Court DENIED the petitions and AFFIRMED the assailed Court of Appeals Decisions and Resolutions. The Court held that the Ombudsman’s finding of guilt was not supported by substantial evidence. The respondents acted within their authority and in accordance with established procedures. The investment was approved by the Commission after deliberation. The speed of the transaction was necessitated by market conditions and the sellers’ deadline, and does not by itself indicate negligence or lack of diligence. The SSS Law grants the Commission broad discretion in investment decisions. The Court emphasized that in equity investments, career service professionals must be empowered to make timely decisions without superfluous bureaucracy to maintain the viability of the social security system. The charges of overpricing and lack of study were not substantiated. The Court also noted that the Ombudsman’s factual findings are not conclusive when not supported by substantial evidence, as in this case.