G.R. No. 174629 ; February 14, 2008
REPUBLIC OF THE PHILIPPINES, Represented by THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), petitioner, vs. HON. ANTONIO M. EUGENIO, JR., AS PRESIDING JUDGE OF RTC, MANILA, BRANCH 34, PANTALEON ALVAREZ and LILIA CHENG, respondents.

FACTS

Following the Supreme Court’s nullification of the PIATCO concession for NAIA Terminal 3 in Agan v. PIATCO, the Anti-Money Laundering Council (AMLC) initiated investigations. Based on its own findings and a subsequent request from the Office of the Ombudsman, the AMLC issued resolutions to inquire into specific bank accounts, including those of respondents Pantaleon Alvarez and Lilia Cheng, allegedly used in corrupt activities related to the project. The AMLC first secured an ex parte order from the Makati RTC (Branch 138) to examine certain accounts. Later, acting on the Ombudsman’s request, it filed a separate ex parte application with the Manila RTC (Branch 24, presided by Judge Eugenio, Jr.) to examine additional accounts, including a DBS account of Alvarez and Metrobank accounts of Cheng. The Manila RTC granted this application on January 12, 2006.

ISSUE

Whether the Manila RTC committed grave abuse of discretion in granting the AMLC’s ex parte application for a bank inquiry order based solely on the request of the Ombudsman, without requiring the AMLC to independently establish probable cause.

RULING

Yes, the Manila RTC committed grave abuse of discretion. The Supreme Court ruled that while the AMLC can initiate inquiries motu proprio or upon request, the authority to apply for a bank inquiry order from a court is not automatic. The AMLC itself must be personally satisfied, based on its own factual findings, that probable cause exists to believe the deposits are related to an unlawful activity or a money laundering offense. The Court held that the AMLC cannot merely rely on the Ombudsman’s request and attached memorandum as a substitute for its own independent evaluation. The Manila RTC’s order was based on the Ombudsman’s finding of probable cause, not the AMLC’s. This violated the requirement under the Anti-Money Laundering Act (AMLA) that the AMLC, as the applicant, must establish before the court that its own inquiry is based on its own determination of probable cause. The grant of the application, under these circumstances, was a capricious and whimsical exercise of judgment amounting to grave abuse of discretion. The Court emphasized the careful balance between the state’s police power and the constitutional right to privacy, requiring strict adherence to the AMLA’s procedural safeguards.