Facts:

The case involves the Presidential Commission on Good Government (PCGG), represented by Orlando L. Salvador, as the complainant against Hon. Aniano Desierto, the Office of the Ombudsman, and several concerned directors and officers of the Philippine National Bank (PNB) and Basay Mining Corporation (BMC). The events leading to this case began on October 8, 1992, when then-President Fidel V. Ramos issued Administrative Order No. 13, which established the Presidential Ad-Hoc Fact Finding Committee on Loans. This committee was tasked with identifying behest loans and recommending appropriate actions. Subsequently, on November 9, 1992, President Ramos expanded the committee's functions to include the review of all non-performing loans.

Among the loans reviewed was that of BMC, which had previously been known as CDCP Mining Corporation. The Technical Working Group (TWG) classified the loans from PNB and the Development Bank of the Philippines (DBP) as behest loans. The PCGG s...

Facts:

1. Creation of the Presidential Ad-Hoc Fact Finding Committee on Loans
   On 08 October 1992, President Fidel V. Ramos issued Administrative Order No. 13, creating the Presidential Ad-Hoc Fact Finding Committee on Loans. This committee was tasked with inventorying all behest loans, identifying the parties involved, and recommending appropriate actions. The committee's functions were later expanded by Memorandum Order No. 61, dated 09 November 1992, to include the review of all non-performing loans, whether behest or non-behest.

2. Basay Mining Corporation (BMC) Loans
   Among the accounts reviewed by the Technical Working Group (TWG) of the committee was the loan of Basay Mining Corporation (BMC), formerly CDCP Mining Corporation (CDCP), from the Philippine National Bank (PNB) and the Development Bank of the Philippines (DBP). The TWG classified these loans as behest loans, prompting the Presidential Commission on Good Government (PCGG) to file a complaint with the Office of the Ombudsman against the Board of Directors of PNB and DBP, as well as Rodolfo Cuenca of BMC, for violation of Section 3 (e and g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act).

3. Details of the Loans

   • In 1977, CDCP obtained a loan from PNB through Stand-By Letters of Credit amounting to US$60 million (P480 million at P8.00 per US$1), secured by a collateral of P350 million and a capital of P83,803,629.00.
   • By 31 December 1982, the loan had ballooned to P993,840,000.00, with a collateral value of only P424,240,000.00.
   • CDCP also obtained an additional loan of P20 million based on a marginal note from then President Ferdinand E. Marcos, following a letter from Rodolfo Cuenca requesting financial assistance.
   • DBP also released additional loans to CDCP, secured by the "joint and several" signature of Cuenca and the assignment of part of the sales proceeds of copper shipments.

4. Ombudsman's Resolution
   The respondents failed to submit any responsive pleading before the Ombudsman. Graft Investigation Officer Melinda S. Diaz-Salcedo recommended the dismissal of the case, which was approved by Ombudsman Aniano A. Desierto on 12 March 1999. The PCGG's motion for reconsideration was also denied on 23 July 1999, prompting the PCGG to file a petition for certiorari with the Supreme Court.

5. PCGG's Allegations
   The PCGG alleged that the Ombudsman committed grave abuse of discretion by:

   • Holding that the loan was not undercollateralized and that the borrower corporation was not undercapitalized.
   • Ignoring evidence of direct endorsements or marginal notes from high government officials.
   • Ruling that the offenses had prescribed, disregarding laws and jurisprudence on the issue.

6. Procedural Issues
   The petition was initially dismissed for late filing, but the Supreme Court later considered it timely due to the retroactive application of procedural laws.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Prescription of Offenses
   The Court ruled that the prescriptive period for offenses under Republic Act No. 3019 should be computed from the discovery of the commission of the offense, not from the day of its commission. This is because it was impossible for the State to have known about the violations at the time the transactions were made, given the alleged connivance or conspiracy between public officials and the beneficiaries of the loans.

2. Behest Loans Criteria
   The Court upheld the Ombudsman's finding that the loans did not qualify as behest loans. The loans were not undercollateralized, as the collateral value exceeded the real loan amount. Additionally, the purpose of the loan was to save CDCP from bankruptcy, which would have also prevented further losses to PNB. The presence of a marginal note from President Marcos did not, by itself, qualify the loan as behest, absent other criteria such as undercollateralization or undercapitalization.

3. Ombudsman's Discretion
   The Court reiterated its policy of non-interference with the Ombudsman's investigatory and prosecutory powers, absent compelling reasons. The Ombudsman's findings were thorough and supported by the evidence on record, and there was no grave abuse of discretion in dismissing the case.

4. Remand for Preliminary Investigation
   The Court declined to remand the case for further investigation, as the merits of the complaint had already been thoroughly examined by the Ombudsman. Subjecting the respondents to further proceedings would cause unnecessary and prolonged anguish.