G.R. No. 232844 , July 07, 2020
HEIRS OF NELSON CABRERA BUENAFLOR, NAMELY, PURA R. BUENAFLOR, KAREVA R. BUENAFLOR, KENNETH R. BUENAFLOR, PAUL R. BUENAFLOR AND MARK R. BUENAFLOR, PETITIONERS, VS. FIELD INVESTIGATION OFFICE, OFFICE OF THE OMBUDSMAN, RESPONDENT.

FACTS

Nelson Cabrera Buenaflor, then President and CEO of Quedan and Rural Credit Guarantee Corporation (QUEDANCOR), issued Memorandum Circular No. 270 (Consolidated Guidelines on QUEDANCOR Swine Program or CG-QSP) on March 18, 2004. The program provided credit to swine raisers. Under it, QUEDANCOR would issue Purchase Orders (POs) to approved borrowers, who would then present these to an accredited Input Supplier (IS) like Metro Livestock Incorporated (MLI) for delivery of swine inputs. Upon receipt, borrowers would sign a Joint Acceptance and Delivery Receipt, enabling the IS to collect payment from QUEDANCOR, which amount would constitute the borrower’s loan.
The Field Investigation Office (FIO) of the Ombudsman filed a complaint alleging irregularities in the program’s implementation in Oriental Mindoro, specifically that QUEDANCOR awarded contracts to MLI totaling P48,606,750.00 without competitive bidding as required by Republic Act No. 9184 (Government Procurement Reform Act), and that MLI was accredited despite non-compliance with requirements and had poor performance. The Ombudsman found Buenaflor guilty of Grave Misconduct for issuing the CG-QSP, ordering his dismissal with forfeiture of benefits. The Court of Appeals sustained this ruling.
During the pendency of his appeal, Buenaflor died on June 11, 2016. His heirs filed the Petition for Review, asserting their interest in his retirement benefits which were ordered forfeited.

ISSUE

Whether the late Nelson Cabrera Buenaflor may be held administratively liable for issuing the CG-QSP.

RULING

No. The Supreme Court granted the petition, reversed the Court of Appeals, and dismissed the administrative case against Buenaflor.
The Court held that Buenaflor’s death did not preclude resolution of the case, as it was necessary to determine the heirs’ entitlement to his benefits. On the merits, the Court ruled that the CG-QSP did not involve procurement under R.A. No. 9184 . The program was a credit facility where QUEDANCOR provided loans to borrowers, who then procured inputs from accredited suppliers. QUEDANCOR’s payment to the supplier was merely a disbursement of the loan proceeds to ensure they were used for the intended purpose. The Court cited its prior ruling in People v. Sandiganbayan, First Division (G.R. No. 214068, July 22, 2019) involving the same facts, which held the CG-QSP was outside the scope of the procurement law as it established a lending mechanism, not a procurement activity. Furthermore, QUEDANCOR had sought and relied on an Opinion from the Office of the Government Corporate Counsel stating R.A. No. 9184 did not apply. With no substantial evidence of an unlawful act, the administrative liability could not stand.