GR 195962; (April, 2018) (Digest)
G.R. No. 195962. April 18, 2018
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, PETITIONER, VS. OFFICE OF THE OMBUDSMAN, PLACIDO L. MAPA, JR., RECIO M. GARCIA, LEON O. TY, JOSE R. TENGCO, JR., ALEJANDRO MELCHOR, VICENTE PATERNO, RUBEN ANCHETA, RAFAEL SISON, HILARION M. HENARES, JR., CARMELINO G. ALVENDIA AND GENEROSO F. TENSECO, RESPONDENTS.
FACTS
The Presidential Commission on Good Government (PCGG) filed a complaint before the Office of the Ombudsman against former officials of the Development Bank of the Philippines (DBP) and the Philippine Pigment and Resin Corporation (PPRC) for alleged violation of the Anti-Graft and Corrupt Practices Act. The complaint stemmed from two foreign currency loans granted by DBP to PPRC, which a Presidential Fact-Finding Committee had classified as potential “behest loans.” The PCGG alleged the loans were under-collateralized, as a significant portion of the mortgage involved assets yet to be acquired, and that PPRC was undercapitalized. It argued these acts constituted manifest partiality and caused undue injury to the government.
The Office of the Ombudsman dismissed the complaint for lack of probable cause. It ruled that the criteria for behest loans, established by Memorandum Order No. 61, could not be retroactively applied to loans granted prior to its issuance. Furthermore, it found that the loan approvals were based on sound business judgment, as the collateral package, including after-acquired properties and the joint signatures of PPRC’s principals, was legally permissible and sufficient. The PCGG filed a petition for certiorari before the Supreme Court, assailing the Ombudsman’s dismissal.
ISSUE
Whether the Office of the Ombudsman committed grave abuse of discretion in dismissing the complaint for lack of probable cause against the DBP and PPRC officials.
RULING
The Supreme Court dismissed the petition and affirmed the Ombudsman’s Resolution. The Court held that the Ombudsman did not commit grave abuse of discretion, which implies a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction. The determination of probable cause is primarily an executive function vested in the Ombudsman, and its findings are generally not subject to review unless such abuse is shown.
The Court agreed with the Ombudsman’s legal reasoning. First, the guidelines in Memorandum Order No. 61, which defined the characteristics of a behest loan, were promulgated in 1992 and could not govern the approval of the subject loans granted in the 1970s. Applying them retroactively would violate the constitutional prohibition against ex post facto laws. Second, on the merits, the loan approvals were not shown to be manifestly partial or grossly disadvantageous. The use of after-acquired property as collateral is legally sanctioned. The DBP officials were presumed to have exercised sound business judgment in approving the loans, which were secured by mortgages and the solidary signatures of PPRC’s principals. The subsequent non-payment of the loans, by itself, does not establish criminal intent or graft. Thus, the Ombudsman correctly found no probable cause for indicting the respondents.