Facts:

The case involves a special civil action for certiorari filed by the Presidential Ad-Hoc Fact Finding Committee on Behest Loans and the Presidential Commission on Good Government (PCGG) against Ombudsman Aniano Desierto and several directors of the Philippine National Bank (PNB) and the Bukidnon Sugar Milling Co., Inc. (BUSCO). The events leading to this case began on October 8, 1992, when then-President Fidel V. Ramos issued Administrative Order No. 13, establishing the Fact Finding Committee to investigate alleged behest loans. The Committee's mandate was later expanded to include all non-performing loans. Among the loans investigated was that of BUSCO, which had been transferred to the Asset Privatization Trust (APT) by PNB.

The Committee concluded that the loan transaction between PNB and BUSCO exhibited characteristics of a behest loan due to insufficient collateral and undue haste in approval. Specifically, BUSCO's collateral was valued at approximately P373....

Facts:

Creation of the Fact-Finding Committee

• On October 8, 1992, President Fidel V. Ramos issued Administrative Order No. 13, creating the Presidential Ad-Hoc Fact Finding Committee on Behest Loans (Fact Finding Committee). Its mandate was to inventory alleged behest loans, identify involved parties, and recommend actions for the government.
• The Committee's scope was expanded on November 9, 1992, via Memorandum No. 61, to include the investigation of all non-performing loans, both behest and non-behest.

Investigation of BUSCO's Loan

• The Technical Working Group (TWG) of the Fact Finding Committee investigated the loan account of Bukidnon Sugar Milling Co., Inc. (BUSCO), which had been transferred to the Asset Privatization Trust (APT) by the Philippine National Bank (PNB).
• The Fact Finding Committee concluded that the loan transaction between PNB and BUSCO bore characteristics of a behest loan. Specifically:
  • The loan was not secured with sufficient collateral.
  • The loan approval was unduly hasty.
  • BUSCO had a paid-up capital of only P1,500,000.00 when the loan was approved, but the loan amount was $60,043,855.00 (equivalent to P424,840,296.00 at the time).
  • The collateral offered by BUSCO was valued at P373,779,453.00, significantly lower than the loan amount.
  • The loan application was approved by the PNB Board of Directors on November 20, 1974, just over a month after the application was filed on October 15, 1974.

Filing of the Complaint

• Atty. Orlando L. Salvador, representing the Presidential Commission on Good Government (PCGG), filed a complaint with the Office of the Ombudsman against the directors and officials of BUSCO and PNB for violating Section 3, paragraphs (e) and (g), of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act).

Respondents' Defenses

• Respondents argued:
  • The PCGG was estopped from filing the complaint after it cleared the APT for the extrajudicial foreclosure of the mortgage/collateral.
  • The APT waived its right to any deficiency claim.
  • The complaint was barred by prescription, having been filed more than 20 years after the loan approval.
  • The loan was secured by sufficient collateral and followed standard PNB loan processing procedures.

Ombudsman's Dismissal

• The Ombudsman dismissed the complaint on August 20, 1998, citing insufficient evidence to establish probable cause for criminal prosecution under the Anti-Graft Law.
• The PCGG's motion for reconsideration was denied on January 4, 1999.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Prescription of the Offense:

   • The Court reiterated that the prescriptive period for offenses involving behest loans should be computed from the discovery of the offense, not from the date of commission. This is consistent with the "discovery rule" under Article 91 of the Revised Penal Code.
   • However, the Ombudsman dismissed the complaint not on the ground of prescription but due to insufficient evidence. The PCGG failed to challenge this basis in its petition.

2. Ombudsman's Discretion:

   • The Ombudsman has broad discretion in determining whether probable cause exists for criminal prosecution. The Court consistently refrains from interfering with this discretion unless there is clear grave abuse of discretion.
   • In this case, the Ombudsman's findings were supported by the following:
     • The loan was secured by sufficient collateral, including the plant site, machineries, and waivers from BUSCO's stockholders.
     • The collateral ratio and capitalization requirements were consistent with acceptable banking practices at the time.
     • There was no evidence of undue influence by the private respondents over the PNB Board of Directors.
     • No overt acts by the private respondents were shown to violate the Anti-Graft Law.

3. No Grave Abuse of Discretion:

   • The Court found no compelling reason to overturn the Ombudsman's decision, as the findings were based on the evidence and applicable legal standards.

Conclusion:

The Supreme Court upheld the Ombudsman's dismissal of the complaint, ruling that there was no grave abuse of discretion in finding insufficient evidence to establish probable cause for criminal prosecution under the Anti-Graft Law. The petition for certiorari was dismissed.