MANILA – The Supreme Court has cleared several cronies of the late dictator Ferdinand Marcos, including former Sen. Juan Ponce Enrile, from any liability for over more than P100 million in alleged behest loans obtained by a sugar milling company from the Philippine National Bank (PNB) in 1968.

In a 15-page decision dated March 20, 2019 penned by SC Associate Justice Jose Reyes, Jr., the SC Second Division affirmed the Ombudsman’s junking of graft complaints filed by the Presidential Commission on Good Government (PCGG) in 2002 against officers and directors of Tolong Sugar Milling Company, Inc. (TSMCI) and 1968 directors and branch managers of PNB, after finding that there was no grave abuse of discretion on the part of the Ombudsman.

“Simply stated, no grave of abuse of discretion may be attributed to the Ombudsman merely because of its alleged misappreciation of facts and evidence. The petitioner in a certiorari proceeding must clearly demonstrate that the court or tribunal blatantly abused its authority to a point so grave as to deprive it of its very power to dispense justice,” it said.



“[T]he instant petition is bereft of any statement or allegation purportedly showing that the Ombudsman exercised its power in an arbitrary or despotic manner by reason of passion or hostility. Consequently, the instant petition must be dismissed,” it added.

The PCGG had accused PNB of extending a $27.79-million or P108.91-million behest loan to TSMCI after PCGG’s technical working group found that the loan did not have sufficient collateral and TSMCI itself did not have sufficient capital.

PCGG claimed TSMCI’s total capital was only P10 million and its total assets pledged as security only amounted to P69.63 million, both insufficient to cover the loan amount. The technical working group also found that 2 of the parcels of land were not in fact registered in TSMCI’s name.



Named as respondents in the complaint for violation of section 3 of the Anti-Graft and Corrupt Practices Act (RA 3019) were TSMCI officers and directors Ramon Escaño, Herminio Teves, Evelina Teves, Lorenzo Teves, Catalino Noel, and Lamberto Macias.



Aside from Enrile, the PNB directors named in the complaint were Roberto Benedicto, Antonio Diaz, Ismael Reinoso, Simeon Miranda, Renato Tayag, Juan Trivinio, Cesar Virata, Jose Macario Laurel and Jose Leido, Jr. while former PNB-Dumaguete branch managers Rafael Perez and Felicisimo Gonzalo were also impleaded.

The Ombudsman, however, dismissed the criminal complaints for lack of probable cause in December 2006 and denied PCGG’s plea for reconsideration in April 2009.

The Ombudsman said there was a dearth of evidence on the actions on the part of the respondents that would warrant criminal prosecution.

It also pointed out that PNB directors required TSMCI to increase its paid-up capital as a condition for the grant of the loan and PNB-Dumaguete Branch itself had appraised the properties TSMCI offered as security at P111.17 million in 1967, or enough to cover the loan amount.

In siding with the Ombudsman, the SC Second Division cited a “long-standing policy of non-interference in the exercise by the Ombudsman of its plenary investigatory and prosecutorial powers.”

“The determination of the existence of probable cause lies within the discretion of the public prosecutor after conducting a preliminary investigation upon the complaint of an offended party,” the decision read.

The Court scored PCGG for its failure to allege that “respondents acted with manifest partiality, evident bad faith, or inexcusable negligence, causing undue injury or unwarranted benefit to any party,” one of the elements for a graft charge.

The Court also noted there was no allegation that the government officials conspired and colluded with the officers of TSMCI to defraud the government.

Ultimately however, the Court junked the petition because the Ombudsman’s dismissal of the complaint was not tainted with grave abuse of discretion, the basis for a certiorari petition.

SC Associate Justices Mariano del Castillo, Estela Perlas-Bernabe, Alfredo Benjamin Caguioa and Amy Lazaro-Javier concurred with Reyes.