THE Supreme Court has denied the bid of the Presidential Commission on Good Government (PCGG) to prosecute former officials of the Development Bank of the Philippines (DBP) and executives of Pioneer Glass Manufacturing Corp. (Pioneer Glass) for their involvement in a multimillion behest loans during the Marcos years.
In a 22-page decision penned by Associate Justice Marvic F. Leonen, the SC’s Third Division affirmed the decision of the Office of the Ombudsman’s issued on May 16, 2008, which dismissed the graft complaint filed against former DBP officials and Pioneer Glass, a company engaged in the business of mining silica and producing glass products from silica.
The PCGG, in its complaint, alleged that “the undue and underserved accommodation as shown by DBP’s grant and approval of loan was grossly disadvantageous,” thus, warrants the filing of graft charges against them.
However, the Ombudsman found nothing questionable with DBP’s approval of Pioneer Glass’s loan applications or its guarantees in favor of the company because the loans and guarantees were backed by numerous properties as collateral.
It also noted that the guarantees and transactions between Pioneer Glass and DBP were audited by then Central Bank of the Philippines, now Bangko Sentral ng Pilipinas, which found them to be aboveboard.
Furthermore, the Ombudsman held that the PCGG petitioner failed to prove the existence of bad faith on the part of respondent bank officials when they approved the loans and guarantees in favor of Pioneer Glass and that the government suffered undue injury due to the transactions.
Cleared were Luis S. Hofilefia Sr., Alberto A. Yaptinchay, Jose G. Cuaycong, Simplicio Ciocon, Carolina Yaptinchay-Hofilefia, Luis Hofilefia Jr., Eva Yaptinchay-Lichauco, Lerry Padlan, Thelmo Solivan, Alfonso Casas Quirino Apacible, Horacio Yaptinchay Col. Cesar Pio de Roda, G.S. Licaros, Alicia LL Reyes, Julio V. Macuja, Leonides S. Virata, Rafael A. Sison, Placido Mapa Jr., Jose Tengco Jr., Alejandro A. Melchor, Leon O. Ty, Vicente Paterno and Ruben Ancheta.
Reyes was the department manager of the DBP’s Industrial Projects Department, while Tengco served as part-time governor of the DBP Board of governors from February 7, 1967, until he retired in February 1987. Mapa and Paterno were former members of DBP’s Board of Governors.
In upholding the Ombudsman’s dismissal of the case, the SC agreed that the PCGG erred in its findings that the loan was under-collateralized or that a grossly disadvantageous contract to the government.
It noted that the DBP’s total exposure of P63,202,884.44 was secured by personal and real properties amounting to P46,822,362; assignment to DBP of sales contracts worth P13,413,000; personal undertakings by members of the Hofilefia and Yaptinchay families and other Pioneer Glass stockholders; and the assignment to DBP of Luis’s mining claims.
“The records corroborate the assertions of respondent bank officials and support the findings of public respondent that the release of loans to Pioneer Glass was preceded by a careful study and evaluation of the loan application,” the Court said.
“Clearly, the loans were suitably secured when they were taken out,” it added.
Concurring with the ruling were Associate Justices Mariano del Castillo, Francis Jardeleza, Jose Reyes Jr. and Ramon Paul Hernando.