G.R. No. 194619. March 20, 2019.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, Petitioner, vs. OFFICE OF THE OMBUDSMAN, ROBERTO S. BENEDICTO, et al., Respondents.

FACTS

The Presidential Commission on Good Government (PCGG) filed a criminal complaint before the Office of the Ombudsman against former directors of the Philippine National Bank (PNB), former managers of its Dumaguete Branch, and former officers of the Tolong Sugar Milling Company, Inc. (TSMCI). The PCGG alleged that a 1968 loan granted by PNB to TSMCI, amounting to US$27.79 million, constituted a behest loan in violation of Sections 3(e) and (g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). The PCGG’s investigation concluded the loan was under-collateralized and extended to an undercapitalized corporation. The alleged securities for the loan, including parcels of land not registered to TSMCI and a surety from its officers, were found to be insufficient or non-existent.
The Ombudsman dismissed the complaint for lack of probable cause. It found that the PCGG failed to establish that the loan was granted with manifest partiality, evident bad faith, or gross inexcusable negligence, or that it caused undue injury to the government. The Ombudsman noted the loan was intended to finance a sugar central, a priority industry, and that the PNB Board exercised its business judgment. It also ruled that the PCGG’s reliance on a 1975 reappraisal to question a 1968 loan approval was misplaced, as the board could not have foreseen the future valuation. The PCGG’s motion for reconsideration was denied.

ISSUE

Whether the Office of the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the criminal complaint for lack of probable cause.

RULING

The Supreme Court dismissed the petition and upheld the Ombudsman’s ruling. The Court emphasized that a petition for certiorari under Rule 65 is not a remedy for correcting errors of judgment but for errors of jurisdiction. The Ombudsman is vested with constitutional independence and wide latitude in determining probable cause. Its findings will not be overturned absent a clear showing of grave abuse of discretion, which means a capricious, whimsical, or despotic exercise of power equivalent to an evasion of a positive duty or a virtual refusal to perform a duty.
The Court found no such abuse. The Ombudsman correctly applied the elements of the crimes under R.A. No. 3019. For a behest loan to be criminally culpable, there must be evidence of criminal intent or gross negligence. The Ombudsman rationally concluded that the loan approval was an exercise of business judgment by the PNB Board, considering the project’s economic potential, and that the alleged under-collateralization was not conclusively established at the time of approval. The PCGG’s arguments essentially questioned the Ombudsman’s appreciation of facts and evidence, which is not permissible in a certiorari proceeding. The petition failed to demonstrate that the dismissal was tainted with arbitrariness, passion, or hostility. Consequently, the Ombudsman did not act with grave abuse of discretion.