Title
Bangko Sentral ng Pilipinas vs. Office of the Ombudsman
Case
G.R. No. 201069
Decision Date
Jun 16, 2021
BSP filed a complaint against Jamorabo for obtaining an unsecured loan from a bank he examined, violating Section 27(d) of R.A. No. 7653. Despite retirement, he remains liable; criminal charges were ordered.
unsecured loan
bank examination
lack of evidence

Case Summary (G.R. No. 201069)

Factual Background

The respondent Jamorabo was a Bank Officer I assigned to the BSP’s Supervision and Examination Sector and was part of the examination team that inspected the Rural Bank of Kiamba, Sarangani, Inc. (RBKSI) in July 2006. On July 17, 2006, during the period in which RBKSI was under examination, Jamorabo obtained an unsecured P200,000 loan from RBKSI. He executed the loan documents using his wife’s name as principal borrower and signed as co-maker; his wife did not appear at the bank or sign the documents. The loan was deposited into Jamorabo’s PNB account and was to be amortized quarterly by post-dated checks. Only the first and second amortizations were paid; subsequent checks were dishonored, and the account was later closed. RBKSI’s officers later reported the loan during a subsequent BSP examination in April 2009.

Complaint and Preliminary Investigation

On August 11, 2009, the BSP filed a complaint with the Office of the Ombudsman against Jamorabo for violation of Section 27(d) of R.A. No. 7653 and BSP Office Order No. 423, series of 2002, alleging that he borrowed from an institution under BSP supervision while examining it. The Ombudsman conducted a preliminary investigation, ordered a counter-affidavit, and received Jamorabo’s affidavits and supporting witness statements. The case was docketed as a criminal matter.

Ombudsman’s Resolution and Order

The Ombudsman issued a February 9, 2011 Resolution dismissing the complaint for lack of probable cause and ruled that violation of Section 27(d) and BSP Office Orders entailed administrative, not criminal, liability; since Jamorabo had retired effective December 31, 2008, he could not be administratively sanctioned. The Ombudsman also found no violation of Section 3(e) of R.A. No. 3019 because the BSP failed to prove actual injury or loss, observing that the loan was ultimately paid in full. The Ombudsman noted fault on the part of RBKSI’s officers for irregular approval procedures and for reporting the loan only in 2009. The Ombudsman denied BSP’s motion for reconsideration by Order dated July 28, 2011.

Issues Presented to the Court

The Supreme Court framed three principal questions: (1) what liabilities arise from a violation of R.A. No. 7653, Section 27(d); (2) whether Jamorabo could still be held administratively liable although the complaint was filed after his retirement; and (3) whether there was a prima facie case under Section 3(e) of R.A. No. 3019.

The Court’s Holding on Liability Under Section 27(d)

The Court held that violation of Section 27(d) gives rise to both criminal liability and administrative liability, because the statutory scheme, when read with Section 36 of R.A. No. 7653, prescribes penal sanctions. The Court determined that the Ombudsman gravely abused its discretion when it concluded that Section 27(d) entailed only administrative consequences. The Court explained that Section 27(d) as originally enacted absolutely prohibited borrowings by supervision and examination personnel from banks under their supervision and that R.A. No. 11211 later relaxed the prohibition by allowing borrowings only if transacted on an arm’s-length basis, fully disclosed to the Monetary Board, and subject to Monetary Board rules. Because Section 27(d) is penal in nature, the Court applied Article 22 of the Revised Penal Code to give the 2019 amendment retroactive effect in favor of Jamorabo, thereby requiring inquiry into whether his loan met the amended requisites rather than treating it as a per se crime.

The Court’s Analysis of the Merits Under the Amended Standard

Applying the amended standard, the Court found that Jamorabo’s transaction failed to satisfy the requisites of Section 27(d), as amended. The Court explained the meaning of an arm’s-length transaction and concluded that prima facie evidence showed that Jamorabo used his position as examiner to obtain preferential treatment: he initiated the loan during the RBKSI examination; RBKSI’s manager and president conceded that approval was irregular and motivated by fear of offending Jamorabo; the loan avoided the bank’s ordinary collateral and credit-investigation requirements and was hastily approved; Jamorabo disguised the borrowing by naming his wife as principal borrower and did not disclose the loan to the BSP. The Court found his affidavit silent on disclosure to superiors and viewed that silence as probative of nondisclosure. On those factual grounds, the Court concluded there was a prima facie criminal case under Section 27(d) in relation to Section 36.

Administrative Liability After Retirement

The Court addressed whether administrative proceedings could proceed despite Jamorabo’s retirement. The Court reviewed controlling precedents, notably Office of the Ombudsman v. Andutan, Pagano v. Nazarro, Jr., and Baquerfo v. Sanchez, and distilled the governing principle: separation from service does not automatically bar administrative charges when resignation or separation was voluntarily timed to pre-empt accountability or when the administrative proceedings were initiated prior to separation. The Court found that Jamorabo voluntarily retired on December 31, 2008, shortly before the RBKSI examination that revealed the loan, and that his retirement and subsequent migration to Canada evidenced an intent to pre-empt detection and sanction. The Court therefore concluded that the Ombudsman committed grave abuse of discretion by refusing to pursue administrative charges and by treating the matter exclusively as a criminal investigation. The Court ordered the Ombudsman to initiate administrative proceedings against Jamorabo.

The Court’s Ruling on R.A. No. 3019, Section 3(e)

The Court held that there was no prima facie case under Section 3(e) of R.A. No. 3019 against Jamorabo. It reiterated the settled rule that to establish liability under the provision’s first mode — causing any undue injury to any party — proof of actual injury or damage is required, and such injury cannot be presumed. Because the BSP failed to show actual damage to the government or to RBKSI and the loan was ultimately paid in full, the Court agreed with the Ombudsman that the first mode of Section 3(e) was unproved. As to the second mode — giving any private party unwarranted benefits, advantage or preference — the Court adopted the Ombudsman’s finding that RBKSI did not obtain a demonstrable concrete benefit from the transaction; rather, its officers’ silence or inaction constituted bank irregularity, not the conferral of an unwarranted benefit that would satisfy Section 3(e).

Disposition

The Court granted the petition in part. It reversed and set aside the Ombudsman’s February 9, 2011 Resolution and July 28, 2011 Order insofar as they absolved Jamorabo of criminal and administrative liability for violation of Section 27(d) in relation to Se

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