CASE DIGEST : Bangko Sentral ng Pilipinas v. Office of the Ombudsman and Benjamin M. Jamorabo G.R. No. 201069, June 16, 2021 GAERLAN

 

FACTS

Benjamin M. Jamorabo was employed by the Bangko Sentral ng Pilipinas (BSP) as a Bank Examiner assigned to the Supervision and Examination Sector (SES). As part of his duties, he was tasked with examining and supervising banks and other financial institutions to ensure compliance with banking laws, rules, and regulations. Due to the sensitive nature of his position, BSP employees involved in bank supervision were subject to restrictions intended to prevent conflicts of interest and preserve the integrity of the banking system.

While still employed as a BSP bank examiner, Jamorabo obtained a loan from Rural Bank of Kawit, Inc. (RBKSI), a bank that was under BSP supervision and examination. The loan was obtained while RBKSI was subject to BSP’s regulatory authority. BSP later discovered that Jamorabo was the actual borrower despite the loan documents indicating that another person was the principal borrower and that Jamorabo merely signed as a co-maker.

BSP found that Jamorabo’s act of obtaining a loan from a bank under his supervision violated the restrictions imposed on BSP personnel. BSP initiated proceedings against him for violation of Section 27(d) of Republic Act No. 7653 (The New Central Bank Act) and for possible violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). The case was referred to the Office of the Ombudsman for investigation.

The Ombudsman dismissed the complaint against Jamorabo, ruling that the violation of Section 27(d) of R.A. No. 7653 only created administrative liability and did not constitute a criminal offense. The Ombudsman also found no basis for a violation of the Anti-Graft Law because the loan had already been fully paid and there was no showing of damage to the government. BSP challenged the Ombudsman’s ruling before the Supreme Court through a petition for certiorari under Rule 65 of the Rules of Court.

ISSUE

Whether or not the Ombudsman committed grave abuse of discretion in ruling that Jamorabo’s violation of Section 27(d) of Republic Act No. 7653 was merely administrative and did not constitute criminal liability.

Whether or not Jamorabo, as a BSP employee involved in bank supervision, violated the prohibition against borrowing from a bank under his supervision and whether such violation may be subject to criminal prosecution.

Whether or not Jamorabo may be held liable for violation of Section 3(e) of Republic Act No. 3019 despite the payment of the loan and the absence of proof of government injury or unwarranted benefit.

HELD

The Supreme Court granted the petition and ruled that the Ombudsman committed grave abuse of discretion in dismissing the complaint for violation of Section 27(d) of R.A. No. 7653. The Court held that the Ombudsman incorrectly interpreted the provision as creating only administrative liability. The Court explained that Section 27(d) of R.A. No. 7653, which prohibits officers and employees of the BSP from borrowing from banks under their supervision without authority, is a penal provision when read together with the penalty provisions of the law. Thus, violation of the prohibition may result in criminal liability and is not limited to administrative sanctions.

The Court emphasized that the restriction imposed by R.A. No. 7653 (New Central Bank Act) exists to protect the independence and credibility of the BSP’s supervisory functions. A BSP examiner exercises regulatory authority over banks; therefore, obtaining a loan from a bank under his supervision creates a conflict of interest and may affect the impartial performance of his official duties. The Court ruled that Jamorabo’s act of obtaining the loan from RBKSI while he was assigned as a bank examiner constituted a violation of the law, regardless of the fact that the loan was later paid.

The Court, however, sustained the dismissal of the complaint for violation of Section 3(e) of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act). The provision requires proof that a public officer acted with manifest partiality, evident bad faith, or gross negligence, and that such act caused undue injury to the government or gave an unwarranted benefit to a private party. The Court found that the elements of the offense were not sufficiently established because the loan was fully paid and there was no evidence showing that Jamorabo caused damage to the government or used his position to provide an unlawful benefit.

Accordingly, the Supreme Court ruled that the Ombudsman erred in dismissing the complaint insofar as the violation of R.A. No. 7653 was concerned. The case was remanded for proper proceedings regarding Jamorabo’s liability under the New Central Bank Act. However, the dismissal of the Anti-Graft charge was affirmed because the evidence failed to establish the required elements of Section 3(e) of R.A. No. 3019.