2013 Annual Report Vol - 2

2013
THE JUDICIARY ANNUAL REPORT

VOL. II
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Judicial Affidavit Rule 1
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Republic of the Philippines

Supreme Court
Manila
A.M. No. 12-8-8-SC
JUDICIAL AFFIDAVIT RULE

EFFECTIVE JANUARY 1, 2013
MANILA, PHILIPPINES
SEPTEMBER 2012
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A.M. No. 12-8-8-SC

JUDICIAL AFFIDAVIT RULE
Whereas, case congestion and delays plague most courts
in cities, given the huge volume of cases filed each year and
the slow and cumbersome adversarial system that the judiciary
has in place;
Whereas, about 40% of criminal cases are dismissed annually
owing to the fact that complainants simply give up coming to
court after repeated postponements;
Whereas, few foreign businessmen make long-term
investments in the Philippines because its courts are unable to
provide ample and speedy protection to their investments,
keeping its people poor;
Whereas, in order to reduce the time needed for completing
the testimonies of witnesses in cases under litigation, on February
21, 2012 the Supreme Court approved for piloting by trial courts
in Quezon City the compulsory use of judicial affidavits in place
of the direct testimonies of witnesses;
Whereas, it is reported that such piloting has quickly resulted
in reducing by about two-thirds the time used for presenting
the testimonies of witnesses, thus speeding up the hearing and
adjudication of cases;
Whereas, the Supreme Court Committee on the Revision
of the Rules of Court, headed by Senior Associate Justice Antonio
T. Carpio, and the Sub-Committee on the Revision of the Rules
on Civil Procedure, headed by Associate Justice Roberto A. Abad,
have recommended for adoption a Judicial Affidavit Rule that
will replicate nationwide the success of the Quezon City
experience in the use of judicial affidavits; and
Whereas, the Supreme Court En Banc finds merit in the
recommendation;
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NOW, THEREFORE, the Supreme Court En Banc hereby

issues and promulgates the following:
S ECTION 1. Scope. – (a) This Rule shall apply to all actions,
proceedings, and incidents requiring the reception of evidence
before:
(1) The Metropolitan Trial Courts, the Municipal Trial
Courts in Cities, the Municipal Trial Courts, the Municipal
Circuit Trial Courts, and the Shari’a Circuit Courts but shall
not apply to small claims cases under A.M. 08-8-7-SC;
(2) The Regional Trial Courts and the Shari’a District
Courts;
(3) The Sandiganbayan, the Court of Tax Appeals, the
Court of Appeals, and the Shari’a Appellate Courts;
(4) The investigating officers and bodies authorized
by the Supreme Court to receive evidence, including the
Integrated Bar of the Philippine (IBP); and
(5) The special courts and quasi-judicial bodies, whose
rules of procedure are subject to disapproval of the Supreme
Court, insofar as their existing rules of procedure contravene
the provisions of this Rule. 1
(b) For the purpose of brevity, the above courts, quasi-
judicial bodies, or investigating officers shall be uniformly
referred to here as the “court.”
SEC . 2. Submission of Judicial Affidavits and Exhibits in lieu
of direct testimonies. – (a) The parties shall file with the court
and serve on the adverse party, personally or by licensed courier
service, not later than five days before pre-trial or preliminary
conference or the scheduled hearing with respect to motions
and incidents, the following:
1
By virtue of the Supreme Court ’s authority under Section 5
(5), Article VIII, of the 1987 Constitution to disapprove rules of
procedure of special courts and quasi judicial bodies.
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(1) The judicial affidavits of their witnesses, which shall

take the place of such witnesses’ direct testimonies; and
(2) The parties’ documentary or object evidence, if any,
which shall be attached to the judicial affidavits and marked
as Exhibits A, B, C, and so on in the case of the complainant
or the plaintiff, and as Exhibits 1, 2, 3, and so on in the
case of the respondent or the defendant.
(b) Should a party or a witness desire to keep the original
document or object evidence in his possession, he may, after
the same has been identified, marked as exhibit, and
authenticated, warrant in his judicial affidavit that the copy or
reproduction attached to such affidavit is a faithful copy or
reproduction of that original. In addition, the party or witness
shall bring the original document or object evidence for
comparison during the preliminary conference with the attached
copy, reproduction, or pictures, failing which the latter shall
not be admitted. This is without prejudice to the introduction
of secondary evidence in place of the original when allowed by
existing rules.
SEC . 3. Contents of Judicial Affidavit. – A judicial affidavit

shall be prepared in the language known to the witness and, if
not in English or Filipino, accompanied by a translation in English
or Filipino, and shall contain the following:
(a) The name, age, residence or business address, and
occupation of the witness;
(b) The name and address of the lawyer who conducts or
supervises the examination of the witness and the place where
the examination is being held;
(c) A statement that the witness is answering the questions
asked of him, fully conscious that he does so under oath, and
that he may face criminal liability for false testimony or perjury;
(d) Questions asked of the witness and his corresponding
answers, consecutively numbered, that:
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(1) Show the circumstances under which the witness

acquired the facts upon which he testifies;
(2) Elicit from him those facts which are relevant to
the issues that the case presents; and
(3) Identify the attached documentary and object
evidence and establish their authenticity in accordance with
the Rules of Court;
(e) The signature of the witness over his printed name;
and
(f) A jurat with the signature of the notary public who
administers the oath or an officer who is authorized by law to
administer the same.
SEC . 4. Sworn attestation of the lawyer. – (a) The judicial

affidavit shall contain a sworn attestation at the end, executed
by the lawyer who conducted or supervised the examination of
the witness, to the effect that:
(1) He faithfully recorded or caused to be recorded
the questions he asked and the corresponding answers that
the witness gave; and
(2) Neither he nor any other person then present or
assisting him coached the witness regarding the latter’s
answers.
(b) A false attestation shall subject the lawyer mentioned
to disciplinary action, including disbarment.
SEC . 5. Subpoena. – If the government employee or official,

or the requested witness, who is neither the witness of the adverse
party nor a hostile witness, unjustifiably declines to execute a
judicial affidavit or refuses without just cause to make the relevant
books, documents, or other things under his control available
for copying, authentication, and eventual production in court,
the requesting party may avail himself of the issuance of a
subpoena ad testificandum or duces tecum under Rule 21 of the
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Rules of Court. The rules governing the issuance of a subpoena

to the witness in this case shall be the same as when taking his
deposition except that the taking of a judicial affidavit shall be
understood to be ex parte.
SEC. 6. Offer of and objections to testimony in judicial affidavit.—

The party presenting the judicial affidavit of his witness in place
of direct testimony shall state the purpose of such testimony at
the start of the presentation of the witness. The adverse party
may move to disqualify the witness or to strike out his affidavit
or any of the answers found in it on ground of inadmissibility.
The court shall promptly rule on the motion and, if granted,
shall cause the marking of any excluded answer by placing it
in brackets under the initials of an authorized court personnel,
without prejudice to a tender of excluded evidence under Section
40 of Rule 132 of the Rules of Court.
SEC . 7. Examination of the witness on his judicial affidavit. –

The adverse party shall have the right to cross-examine the
witness on his judicial affidavit and on the exhibits attached to
the same. The party who presents the witness may also examine
him as on re-direct. In every case, the court shall take active
part in examining the witness to determine his credibility as
well as the truth of his testimony and to elicit the answers that
it needs for resolving the issues.
SEC . 8. Oral offer of and objections to exhibits. – (a) Upon the

termination of the testimony of his last witness, a party shall
immediately make an oral offer of evidence of his documentary
or object exhibits, piece by piece, in their chronological order,
stating the purpose or purposes for which he offers the particular
exhibit.
(b) After each piece of exhibit is offered, the adverse party
shall state the legal ground for his objection, if any, to its
admission, and the court shall immediately make its ruling
respecting that exhibit.
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(c) Since the documentary or object exhibits form part of

the judicial affidavits that describe and authenticate them, it is
sufficient that such exhibits are simply cited by their markings
during the offers, the objections, and the rulings, dispensing
with the description of each exhibit.
SEC . 9. Application of rule to criminal actions. – (a) This rule

shall apply to all criminal actions:
(1) Where the maximum of the imposable penalty does
not exceed six years;
(2) Where the accused agrees to the use of judicial
affidavits, irrespective of the penalty involved; or
(3) With respect to the civil aspect of the actions,
whatever the penalties involved are.
(b) The prosecution shall submit the judicial affidavits of
its witnesses not later than five days before the pre-trial, serving
copies of the same upon the accused. The complainant or public
prosecutor shall attach to the affidavits such documentary or
object evidence as he may have, marking them as Exhibits A, B,
C, and so on. No further judicial affidavit, documentary, or
object evidence shall be admitted at the trial.
(c) If the accused desires to be heard on his defense after
receipt of the judicial affidavits of the prosecution, he shall have
the option to submit his judicial affidavit as well as those of his
witnesses to the court within ten days from receipt of such
affidavits and serve a copy of each on the public and private
prosecutor, including his documentary and object evidence
previously marked as Exhibits 1, 2, 3, and so on. These affidavits
shall serve as direct testimonies of the accused and his witnesses
when they appear before the court to testify.
SEC . 10. Effect of non-compliance with the Judicial Affidavit

Rule. – (a) A party who fails to submit the required judicial
affidavits and exhibits on time shall be deemed to have waived
their submission. The court may, however, allow only once the
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late submission of the same provided, the delay is for a valid

reason, would not unduly prejudice the opposing party, and
the defaulting party pays a fine of not less than P1,000.00 nor
more than P5,000.00, at the discretion of the court.
(b) The court shall not consider the affidavit of any witness
who fails to appear at the scheduled hearing of the case as
required. Counsel who fails to appear without valid cause despite
notice shall be deemed to have waived his client’s right to confront
by cross-examination the witnesses there present.
(c) The court shall not admit as evidence judicial affidavits
that do not conform to the content requirements of Section 3
and the attestation requirement of Section 4 above. The court
may, however, allow only once the subsequent submission of
the compliant replacement affidavits before the hearing or trial
provided the delay is for a valid reason and would not unduly
prejudice the opposing party and provided further, that public
or private counsel responsible for their preparation and
submission pays a fine of not less than P1,000.00 nor more than
P5,000.00, at the discretion of the court.
SEC . 11. Repeal or modification of inconsistent rules. – The
provisions of the Rules of Court and the rules of procedure
governing investigating officers and bodies authorized by the
Supreme Court to receive evidence are repealed or modified
insofar as these are inconsistent with the provisions of this Rule.
The rules of procedure governing quasi-judicial bodies
inconsistent herewith are hereby disapproved.
SEC . 12. Effectivity.—This rule shall take effect on January
1, 2013 following its publication in two newspapers of general
circulation not later than September 15, 2012. It shall also apply
to existing cases.
Manila, September 4, 2012.
MARIA LOURDES P. A. SERENO

Chief Justice
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ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice
TERESITA J. LEONARDO- DE CASTRO ARTURO D. BRION

DIOSDADO M. PERALTA LUCAS P. BERSAMIN

MARIANO C. DEL CASTILLO ROBERTO A. ABAD

MARTIN S. VILLARAMA, JR. JOSE P. PEREZ

JOSE C. MENDOZA BIENVENIDO L. REYES

ESTELA M. PERLAS-BERNABE
Associate Justice
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Supreme Court
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A.M. No. 12-12-11-SC
FINANCIAL REHABILITATION
RULES OF PROCEDURE (2013)
Promulgated August 27, 2013
Published October 7, 2013 (Official Gazette)
Effectivity October 22, 2013
MANILA, PHILIPPINES
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(A.M. NO. 12-12-11-SC)
Table of Contents
Page
Resolution .................................................................................... 1
RULE 1
COVERAGE AND GENERAL PROVISIONS
Sec. 1.Title ................................................................................ 5

Sec. 2.Scope ............................................................................ 5
Sec. 3.Construction of Rules ..................................................... 5
Sec. 4.Nature of Proceedings .................................................... 6
Sec. 5.Definition of Terms ......................................................... 7
Sec. 6.Venue ........................................................................... 10
Sec. 7.Notification to Foreign Creditors of a Proceeding
under these Rules ......................................................... 11
Sec. 8. Substantive and Procedural Consolidation ..................... 11
Sec. 9. Decisions of Creditors .................................................. 12
Sec. 10. Creditors’ Representatives ............................................ 12
Sec. 11. Liability of Individual Debtor, Owner of a
Sole Proprietorship, Partners in a Partnership,
or Directors and Officers .............................................. 12
Sec. 12. Authorization to Exchange Debt for Equity ................... 13
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RULE 2
COURT-SUPERVISED REHABILITATION
(A) Initiation of Proceedings
1. Voluntary Proceedings
Sec. 1. Who May Petition ........................................................ 14
Sec. 2. Contents of the Petition ................................................ 14
Sec. 3. Verification by the Debtor ............................................. 17
2. Involuntary Proceedings
Sec. 4. Who May Petition ........................................................ 18

Sec. 5. Grounds to Initiate Involuntary Proceedings .................. 19
Sec. 6. Contents of the Petition for Involuntary Proceedings ..... 19
(B) Provisions Common to Voluntary and Involuntary

Proceedings/Action on Petition and Commencement of
Proceedings
Sec. 7. Action on the Petition ................................................... 20

Sec. 8. Commencement of Proceedings and Issuance of a
Commencement Order ................................................. 20
Sec. 9. Effects of the Commencement Order ............................ 23
Sec. 10. Exceptions to the Stay or Suspension Order ................ 24
Sec. 11. Effectivity and Duration of Commencement Order ........ 26
Sec. 12. Notice of Claim ............................................................ 26
Sec. 13. Compliance with Jurisdictional Requirements ................ 26
Sec. 14. Action at the Initial Hearing .......................................... 26
Sec. 15. Additional Hearings ...................................................... 27
Sec. 16. Report of the Rehabilitation Receiver ............................ 27
Sec. 17. Giving Due Course to or Dismissal of Petition,
or Conversion of Proceedings ...................................... 28
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Sec. 18. Petition Given Due Course ........................................... 29

Sec. 19. Dismissal of Petition ..................................................... 29
(C) The Rehabilitation Receiver, Management Committee, and

Creditor’s Committee
Sec. 20. Who May Serve as a Rehabilitation Receiver ............... 29

Sec. 21. Qualifications of a Rehabilitation Receiver ..................... 29
Sec. 22. Conflict of Interest ........................................................ 31
Sec. 23. Disclosure of Conflict of Interest .................................. 32
Sec. 24. Objection to Conflict of Interest ................................... 33
Sec. 25. Initial Appointment of the Rehabilitation Receiver .......... 33
Sec. 26. Powers, Duties and Functions of Rehabilitation
Receiver ....................................................................... 34
Sec. 27. Removal of the Rehabilitation Receiver ......................... 37
Sec. 28. Compensation and Terms of Service ............................ 38
Sec. 29. Oath and Bond ............................................................ 39
Sec. 30. Vacancy ....................................................................... 39
Sec. 31. Displacement of Existing Management by the
Rehabilitation Receiver or Management Committee ...... 39
Sec. 32. Role of the Rehabilitation Receiver upon
Assumption of Management of the Debtor ................... 40
Sec. 33. Role of the Management Committee ............................. 41
Sec. 34. Composition of the Management Committee ................ 43
Sec. 35. Action by Management Committee ............................... 44
Sec. 36. Qualifications of Members of the Management
Committee .................................................................... 44
Sec. 37. Employment or Use of Professionals ............................ 44
Sec. 38. Immunity from Suit ....................................................... 45
Sec. 39. Organization of the Creditors’ Committee ..................... 45
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Sec. 40. Election of Representatives to the Creditors’

Committee .................................................................... 46
Sec. 41. Election of Chairman of the Creditors’ Committee ........ 46
Sec. 42. Role of Creditors’ Committee ....................................... 46
Sec. 43. Determination of Class of Creditors .............................. 47
(D) Determination of Claims
Sec. 44. Registry of Claims ........................................................ 47

Sec. 45. Opposition or Challenge of Claims ............................... 48
Sec. 46. Appeal ....................................................................... 48
(E) Use, Preservation and Disposal of Assets and Treatment of

Assets and Claims after Commencement Date
Sec. 47. Use or Disposition of Assets ........................................ 48

Sec. 48. Sale of Assets .............................................................. 48
Sec. 49. Sale or Disposal of Encumbered Property of the
Debtor and Assets of Third Parties Held by Debtor ..... 49
Sec. 50. Assets of Debtor Held by Third Parties ........................ 51
Sec. 51. Rescission or Nullity of Sale, Payment,
Transfer or Conveyance of Assets ................................ 52
Sec. 52. Assets Subject to Rapid Obsolescence,
Depreciation and Diminution of Value ........................... 52
Sec. 53. Post-commencement Interest ........................................ 53
Sec. 54. Post-commencement Loans and Obligations ................. 54
Sec. 55. Treatment of Employees’ Claims ................................... 54
Sec. 56. Treatment of Contracts ................................................. 54
(F) Avoidance Proceedings
Sec. 57. Rescission or Nullity of Certain

Pre-commencement Transactions .................................. 55
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Sec. 58. Actions for Rescission or Nullity ................................... 56
(G) Treatment of Secured Creditors
Sec. 59. No Diminution of Secured Creditor Rights ................... 56

Sec. 60. Lack of Adequate Protection ........................................ 57
(H) Administration of Proceedings
Sec. 61. Contents of a Rehabilitation Plan. ................................. 58

Sec. 62. Creditor Approval of Rehabilitation Plan ....................... 61
Sec. 63. Submission of Rehabilitation Plan to the Court .............. 62
Sec. 64. Filing of Objections to Rehabilitation Plan ..................... 62
Sec. 65. Hearing on the Objections ............................................ 62
Sec. 66. Confirmation of the Rehabilitation Plan ......................... 63
Sec. 67. Effects of Confirmation of Rehabilitation Plan ............... 63
Sec. 68. Liability of General Partners of a Partnership
or for Unpaid Balances under an Approved Plan .......... 64
Sec. 69. Treatment of Amounts of Indebtedness or
Obligations Forgiven or Reduced ................................. 64
Sec. 70. Period for Confirmation of the Rehabilitation Plan ......... 65
Sec. 71. Discharge of Rehabilitation Receiver ............................. 65
Sec. 72. Amendments to the Approved Rehabilitation Plan ......... 65
(I) Termination of Proceedings
Sec. 73. Termination of Proceedings ........................................... 66

Sec. 74. Effects of Termination ................................................... 67
RULE 3
PRE-NEGOTIATED REHABILITATION
Sec. 1. Pre-negotiated Rehabilitation Plan ................................. 68

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Sec. 2. Issuance of Order ........................................................ 69

Sec. 3. Effectivity and Duration of Order .................................. 70
Sec. 4. Approval of Plan .......................................................... 71
Sec. 5. Objection to the Petition or Rehabilitation Plan ............. 71
Sec. 6. Comments .................................................................... 71
Sec. 7. Hearing on the Objections and Comments .................... 72
Sec. 8. Period for Approval of Rehabilitation Plan .................... 72
Sec. 9. Effects of Approval of Rehabilitation Plan ..................... 72
RULE 4
OUT-OF-COURT OR INFORMAL RESTRUCTURING
AGREEMENT OR REHABILITATION PLAN
Sec. 1. Out-of-Court or Informal Restructuring Agreements

or Rehabilitation Plan .................................................... 73
Sec. 2. Standstill Period ........................................................... 73
Sec. 3. Expiration of the Standstill Period ................................. 75
Sec. 4. Publication of the OCRA ............................................. 75
Sec. 5. Cram Down Effect ....................................................... 76
Sec. 6. Amendment or Modification ......................................... 76
Sec. 7. Effect of Court Action or Other Proceedings ................ 76
Sec. 8. Venue ........................................................................... 76
Sec. 9. Petition for Court Assistance ........................................ 77
Sec. 10. Forms of Assistance ..................................................... 77
Sec. 11. Petition for Annulment of an OCRA ............................. 78
Sec. 12. Service of Summons ..................................................... 78
Sec. 13. Comment or Opposition ............................................... 79
Sec. 14. Court Order on Petition ............................................... 80
Sec. 15. Summary Hearing ......................................................... 80
Sec. 16. Review of Decision or Order in OCRA ....................... 80
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RULE 5
CROSS-BORDER INSOLVENCY PROCEEDINGS
Sec. 1. Scope of Application .................................................... 81

Sec. 2. Authorization of a Rehabilitation Receiver
to Act in a Foreign State .............................................. 81
Sec. 3. Access of Foreign Creditors to a Proceeding
under these Rules ......................................................... 81
Sec. 4. Rules on Public Policy and Reciprocity ......................... 82
Sec. 5. Petition for Recognition of Foreign Proceeding ............. 82
Sec. 6. Notice of Filing of Petition for Recognition ................... 83
Sec. 7. Presumptions Concerning Recognition .......................... 83
Sec. 8. Recognition of Foreign Proceeding ............................... 84
Sec. 9. Period to Recognize Foreign Proceeding ...................... 84
Sec. 10. Notification to Court .................................................... 84
Sec. 11. Provisional Relief that may be Granted Upon
Application for Recognition of a Foreign Proceeding .... 84
Sec. 12. Effects of Recognition of Foreign Proceeding ............... 85
Sec. 13. Relief that may be Granted after Recognition
of Foreign Proceeding .................................................. 86
Sec. 14. Factors in Granting Relief ............................................. 87
Sec. 15. Protection of Creditors and other Interested Persons .... 88
Sec. 16. Actions to Avoid Acts Detrimental to Creditors ............ 88
Sec. 17. Intervention by Foreign Representative in
Philippine Proceedings .................................................. 88
Sec. 18. Cooperation and Direct Communication with
Foreign Courts ............................................................. 88
Sec. 19. Cooperation and Direct Communication between
the Rehabilitation Receiver or Liquidator and
Foreign Courts or Foreign Representatives ................... 88
Sec. 20. Forms of Cooperation .................................................. 89
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Sec. 21. Commencement of Local Proceeding after

Recognition of Foreign Proceeding ............................... 89
Sec. 22. Local and Foreign Proceedings .................................... 90
RULE 6
PROCEDURAL REMEDIES
Sec. 1. Motion for Reconsideration .......................................... 90

Sec. 2. Review of Decision or Order on Rehabilitation Plan ..... 90
RULE 7
MISCELLANEOUS AND FINAL PROVISIONS
Sec. 1. Applicability of Provisions ............................................ 91

Sec. 2. Effectivity ..................................................................... 91
Annex “A” Affidavit of General Financial Condition .................. 92

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Financial Rehabilitation Rules of Procedure (2013) 1
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Supreme Court
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EN BANC
A.M. NO. 12-12-11-SC
RESOLUTION
Whereas, under Republic Act No. 10142, otherwise known

as the Financial Rehabilitation and Insolvency (FRIA) Act of
2010, FRIA, the Supreme Court shall “promulgate the rules of
pleading, practice, and procedure to govern the proceedings brought
under [the] Act”1;
1
Section 6. Designation of Courts and Promulgation of Procedural Rules.–
The Supreme Court shall designate the court or courts that will hear and resolve
cases brought under this Act and shall promulgate the rules of pleading, practice
and procedure to govern the proceedings brought under this Act.
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Whereas, the Supreme Court, through Memorandum No.

46-2010 dated September 30, 2010 (as amended by Memorandum
Order No. 17-2013 dated May 9, 2013), tasked the Sub-Committee
on Commercial Courts to revise and/or amend A.M. No. 00-8-
10-SC or the Rules of Procedure on Corporate Rehabilitation
(2008) to incorporate the significant changes brought about by the
enactment of R.A. No. 10142, particularly on rehabilitation
proceedings;
NOW, THEREFORE, acting on the recommendation of the

Sub-Committee on Special Commercial Courts, the Court resolved
to APPROVE the Financial Rehabilitation Rules of Procedure
(2013), otherwise known as the FR Rules.
The FR Rules shall take effect fifteen (15) days following its
publication in the Official Gazette or in two (2) newspapers of
general circulation.
August 27, 2013.
MARIA LOURDES P. A. SERENO

Chief Justice
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

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DIOSDADO M. PERALTA LUCAS P. BERSAMIN

MARIANO C. DEL CASTILLO ROBERTO A. ABAD

MARTIN S. VILLARAMA, JR JOSE P. PEREZ

JOSE C. MENDOZA BIENVENIDO L. REYES

ESTELA M. PERLAS-BERNABE MARVIC MARIO VICTOR F. LEONEN

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Supreme Court
Manila
THE FINANCIAL REHABILITATION

RULE 1
COVERAGE AND GENERAL PROVISIONS
SEC . 1. TITLE.– These Rules shall be known and cited as the

“Financial Rehabilitation Rules of Procedure (2013).”
SEC . 2. SCOPE.– These Rules shall apply to petitions for
rehabilitation of corporations, partnerships, and sole proprietorships,
filed pursuant to Republic Act No. 10142, otherwise known as the
Financial Rehabilitation and Insolvency Act (FRIA) of 2010.
These Rules shall similarly govern all further proceedings in
suspension of payments and rehabilitation cases already pending,
except to the extent that, in the opinion of the court, its application
would not be feasible or would work injustice, in which event the
procedures originally applicable shall continue to govern.
SEC . 3. CONSTRUCTION OF RULES.– These Rules shall
be liberally construed to promote a timely, fair, transparent, effective,
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and efficient rehabilitation of debtors, in accordance with the declared

policy of the Act.
S EC . 4. NATURE OF PROCEEDINGS.– The proceedings
under these Rules shall be in rem. Jurisdiction over all persons
affected by the proceedings is acquired upon publication of the
notice of the commencement of the proceedings and the
commencement order or any similar order of the proceedings in one
(1) newspaper of general circulation in the Philippines for two (2)
consecutive weeks.
The proceedings shall be summary and non-adversarial in nature.
The following pleadings are prohibited:
(A) motion to dismiss;
(B) motion for a bill of particulars;
(C) petition for relief;
(D) motion for extension;
(E) motion for postponement and other motions of similar
intent;
(F) reply;
(G) rejoinder;
(H) intervention; and
(I) any pleading or motion that is similar to or of like effect
as any of the foregoing.
For stated and fully supported compelling reasons, the court
may allow the filing of motions for extension or postponement,
provided, the same shall be verified and under oath.
Any pleading, motion, or other submission submitted by any
interested party shall be supported by verified statements that the
affiant has read the submission and its factual allegations are true
and correct of his personal knowledge or based on authentic records,
and shall contain supporting annexes, which the submitting party
shall attest as faithful reproductions of the originals. An unverified
submission shall be considered as not filed. An improperly verified
submission may be considered as not filed, at the discretion of the
judge. Upon motion, the originals of the annexes to a submission
136
may be produced in court for examination or comparison by a party

to the proceedings.
All pleadings or motions shall be filed in three (3) printed and
two (2) digital copies in CD format. Annexes to the pleadings and
other submissions shall be in printed form.
The court may decide matters on the basis of affidavits, counter-
affidavits, and other documentary evidence, conducting clarificatory
hearings when necessary.
Any order issued by the court under these Rules is immediately
executory. Review of any order of the court shall be in accordance
with Rule 6 of these Rules. Provided, however, that the reliefs
ordered by the trial or appellate courts shall take into account the
need for resolution of the proceedings in a just, equitable, and speedy
manner.
SEC . 5. DEFINITION OF TERMS.– In addition to the terms
already defined in the Act, the following terms are hereunder defined
for purposes of rehabilitation:
(a) Administrative expenses shall refer to those reasonable
and necessary expenses
(1) incurred in connection with the filing of a petition
under these Rules, including filing and reasonable
and necessary professional fees in preparing the
petition;
(2) arising from, or in connection with the conduct of
the rehabilitation proceedings under these Rules;
(3) incurred in the ordinary course of business of the
debtor after the commencement date;
(4) for the payment of new obligations obtained after
the commencement date to finance the rehabilitation
of the debtor;
(5) incurred for the reasonable and necessary fees of
the rehabilitation receiver, the management committee,
and/or of the professionals they may engage; and
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(6) those otherwise authorized or mandated under the

Act or such other expenses authorized under these
Rules.
(b) Affidavit of General Financial Condition (Annex “A”
of these Rules) shall refer to a verified statement on the
general financial condition of the debtor, as required in
Section 2(B)(10), Rule 2 of these Rules.
(c) Asset is anything of value which may be either tangible
or intangible. Tangible assets can be current assets or
fixed assets. Current assets may include cash on hand,
money in banks or inventory, while fixed assets may include
plant, building, property and equipment. Intangible assets
may include intellectual property (such as copyrights,
patents, and trademarks) and financial assets (such as
accounts receivable, subscription receivables, and bonds
and stocks).
The value of these assets must appear in the latest
audited financial statements immediately preceding the
filing of the petition. In case the debtor is less than three
(3) years in operation, it is sufficient that the book value
is based on the audited financial statement/s for the two
(2) years or year immediately preceding the filing of the
petition, as the case may be.
(d) Business day shall refer to any day other than Saturday,
Sunday, or any non-working day.
(e) Commencement date shall refer to the date on which the
court issues a commencement order. The effects of the
commencement order shall retroact to the date of filing
of the petition for voluntary or involuntary proceedings.
(f) Foreign court means a judicial or other authority competent
to control or supervise a foreign proceeding.
(g) Foreign proceeding means a collective judicial or
administrative proceeding in a foreign State, including an
interim proceeding, pursuant to a law relating to insolvency,
in which proceeding, the assets and affairs of the debtor
are subject to control or supervision by a foreign court,
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for the purpose of rehabilitation, re-organization, or

liquidation.
(h) Foreign main proceeding means a foreign proceeding
taking place in the State where the debtor has the center
of its main interests.
(i) Foreign non-main proceeding means a foreign
proceeding, other than a foreign main proceeding, taking
place in a State where the debtor has an establishment,
or any place of operations where the debtor carries out
a non-transitory economic activity with human means
and goods or services.
(j) Foreign representative means a person or entity, including
one appointed on an interim basis, authorized in a foreign
proceeding to administer the reorganization or rehabilitation
of the debtor or to act as a representative of the foreign
proceeding.
(k) Insolvency shall refer to the financial incapacity of the
debtors to pay their liabilities as they fall due in the ordinary
course of business or whenever their liabilities are greater
than their assets.
(l) Liquidation shall refer to the proceedings under Chapter
V of the Act.
(m) Management committee is composed of persons, natural
or juridical, appointed by the court, pursuant to Section
32, Rule 2 of these Rules. It shall take the place of the
management and governing body of the debtor, and assume
their powers, rights and responsibilities under the law.
(n) Proceedings, unless the term is used in a different context,
shall refer to court-supervised rehabilitation proceedings
or pre-negotiated rehabilitation proceedings, which are
commenced by the court’s issuance of a commencement
order and which shall last until the court declares the
termination of the proceedings pursuant to Section 73,
Rule 2 of these Rules.
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(o) Publication notice shall refer to notice through publication

in a newspaper of general circulation in the Philippines
on a business day for two (2) consecutive weeks.
(p) Rehabilitation receiver shall refer to the person or persons,
natural or juridical, appointed as such by the court pursuant
to the Act and which shall be entrusted with such powers,
duties, and responsibilities as set forth herein. Where the
rehabilitation receiver is a juridical entity, the term includes
the juridical entity’s designated representative.
(q) Standstill period shall refer to the period agreed upon
by the debtor and its creditors to enable them to negotiate
and enter into an out-of-court or informal restructuring/
workout agreement or rehabilitation plan pursuant to Rule
4 of these Rules. The standstill agreement may include
provisions identical with or similar to the legal effects of
a commencement order under Section 9, Rule 2 of these
Rules.
(r) Stay or Suspension Order shall refer to an order issued
in conjunction with the commencement order that shall
suspend all actions or proceedings, in court or otherwise,
for the enforcement of claims against the debtor; suspend
all actions to enforce any judgment, attachment or other
provisional remedies against the debtor; prohibit the debtor
from selling, encumbering, transferring or disposing in
any manner any of its properties except in the ordinary
course of business; and prohibit the debtor from making
any payment of its liabilities outstanding as of the
commencement date except as may be provided herein.
(s) Working day shall have the same meaning as business
day.
SEC . 6. VENUE.– All petitions pursuant to these Rules shall
be filed in the Regional Trial Court which has jurisdiction over the
principal office of the debtor alleged to be insolvent as specified in
its articles of incorporation or partnership or in its registration papers
with the Department of Trade and Industry (DTI) in cases of sole
proprietorship, as the case may be. Where the principal office of
140
the corporation, partnership or association as registered in the

Securities and Exchange Commission (SEC) is in Metro Manila, the
action must be filed in the Regional Trial Court of the city or
municipality where the head office is located.
A petition for voluntary or involuntary rehabilitation involving
a group of debtors shall be filed in the Regional Trial Court which
has jurisdiction over the principal office of any of the debtors alleged
to be insolvent, as specified in its articles of incorporation or partnership,
or registration papers with the DTI in cases of sole proprietorship,
as the case may be.
SEC . 7. NOTIFICATION TO FOREIGN CREDITORS OF A
PROCEEDING UNDER THESE RULES.– Except when otherwise
indicated under a particular rule,
(A) whenever under these Rules notice is to be given to
creditors in the Philippines, such notice shall also be given
to the known foreign creditors with no addresses in the
Philippines. The court may order that appropriate steps
be taken with a view to notifying any foreign creditor
whose address is not yet known.
(B) such notice shall be made to the foreign creditors individually,
unless the court considers that, under the circumstances,
some other form of notice would be more appropriate.
(C) when a notice of commencement of a proceeding under
these Rules is to be given to foreign creditors, the notice
shall
(1) indicate a reasonable time period for filing claims and
specify the place for their filing;
(2) indicate whether secured creditors need to file their
secured claims; and
(3) contain any other information required to be included
in such notice to creditors pursuant to these Rules
and the orders of the court.
SEC . 8. SUBSTANTIVE AND PROCEDURAL CONSOLI-
DATION.– Each juridical entity shall be considered as a separate
entity under the proceedings in these Rules and its assets and liabilities
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12 A.M. No. 12-12-11-SC
may not be commingled or aggregated with those of another, unless

the latter is a related enterprise that is owned or controlled directly
or indirectly by the same interests. The commingling or aggregation
of assets and liabilities of the debtor with those of a related enterprise
may only be allowed where
(A) there was commingling in fact of assets and liabilities of
the debtor and the related enterprise prior to the
commencement of the proceedings;
(B) the debtor and the related enterprise have common creditors
and it will be more convenient to treat them together
rather than separately;
(C) the related enterprise voluntarily accedes to join the debtor
as party-petitioner and to commingle its assets and liabilities
with the debtor’s; and
(D) the consolidation of assets and liabilities of the debtor
and the related enterprise is beneficial to all concerned
and promotes the objectives of rehabilitation.
The court, upon proper motion, may join other entities affiliated
with the debtor as parties for a complete determination of the claims
in the proceedings.
SEC. 9. DECISIONS OF CREDITORS.– Decisions of creditors
shall be made according to the relevant provisions of the Corporation
Code in the case of stock or non-stock corporations or the Civil
Code in the case of partnerships that are not inconsistent with the
Act and these Rules.
SEC. 10. CREDITORS’ REPRESENTATIVES.– Creditors may
designate representatives to vote or otherwise act on their behalf
or on behalf of their class, by filing notice of such representation,
with supporting documents, with the court and serving a copy on the
rehabilitation receiver and the parties whose appearances have
been accepted by the court.
SEC . 11. LIABILITY OF INDIVIDUAL DEBTOR, OWNER
OF A SOLE PROPRIETORSHIP, PARTNERS IN A PARTNERSHIP,
OR DIRECTORS AND OFFICERS.– The owner of a sole
142
proprietorship, the partners in a partnership, or the directors and

officers of a corporate debtor shall be liable for double the value of
the property sold, embezzled or disposed of, or double the amount
of the transaction involved, whichever is higher, to be recovered for
the benefit of the debtor and the creditors, if they, having notice of
the commencement of the proceedings, or having reason to believe
that proceedings are about to be commenced, or in contemplation
of the proceedings, willfully commit the following acts:
(A) Dispose or cause to be disposed of any property of the
debtor other than in the ordinary course of business or
authorize or approve any transaction in fraud of creditors
or in a manner grossly disadvantageous to the debtor
and/or creditors; or
(B) Conceal, authorize or approve the concealment from the
creditors, or embezzle or misappropriate, any property of
the debtor.
The court shall determine the extent of the liability of an owner,
partner, director or officer under this Section. In this connection, in
case of partnerships and corporations, the court shall consider the
amount of the shareholding or partnership or equity interest of such
partner, director or officer, the degree of control of such partner,
director or officer over the debtor, and the extent of the involvement
of such partner, director or debtor in the actual management of the
operations of the debtor.
SEC . 12. AUTHORIZATION TO EXCHANGE DEBT FOR
EQUITY.– Any bank, whether universal or not, may acquire and
hold an equity interest or investment in a debtor or its subsidiaries
when conveyed to such bank in satisfaction of debts pursuant to a
Rehabilitation Plan approved by the court: Provided, That such
ownership shall be subject to the ownership limits applicable to
universal banks for equity investments; and Provided, further, that
any equity investment or interest acquired or held pursuant to this
section shall be disposed by the bank within a period of five (5)
years or as may be prescribed by the Monetary Board.
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RULE 2
COURT-SUPERVISED REHABILITATION
(A) INITIATION OF PROCEEDINGS

1. VOLUNTARY PROCEEDINGS
SEC . 1. WHO MAY PETITION.– When approved by
(a) the owner, in case of a sole proprietorship;
(b) a majority of the partners, in case of a partnership; or
(c) a majority vote of the board of directors or trustees and
authorized by the vote of the stockholders representing at
least two-thirds (2/3) of the outstanding capital stock or
at least two-thirds (2/3) of the members in a non-stock
corporation, in case of a corporation;
an insolvent debtor may initiate voluntary proceedings under this
Rule by filing a petition for rehabilitation with the court based on the
grounds hereinafter specifically provided.
A group of debtors may file a petition for rehabilitation under
this Rule when (1) one or more of its members foresee the impossibility
of meeting debts when they respectively fall due, and (2) the financial
distress would likely adversely affect the financial condition and/or
operations of the other members of the group or the participation of
the other members of the group is essential under the terms and
conditions of the proposed Rehabilitation Plan.
SEC. 2. CONTENTS OF THE PETITION.–
(A) The petition filed by the debtor must be verified and must
set forth with sufficient particularity all of the following
material facts:
(1) the name, business, and principal address and other
addresses of the debtor;
(2) the nature of the business and principal activities of
the debtor, and the addresses where these activities
are conducted;
144
(3) the history of the debtor;

(4) the fact and the cause of the debtor’s insolvency;
(5) the specific relief sought under this Rule;
(6) the grounds upon which the petition is based;
(7) all pending actions or proceedings by or against the
debtor/s and the courts or tribunals where they are
pending;
(8) the threats or demands to enforce claims or liens
against the debtor/s;
(9) the manner by which the debtor may be rehabilitated
and how such rehabilitation may benefit the general
body of creditors, employees and stockholders; and
(10) the exact address/es at which documents regarding
the debtor and the proceedings may be reviewed
and copied.
(B) The petition shall be accompanied by the following
documents:
(1) the income tax returns stamped as received by the
BIR for the past two (2) years prior to the year of
filing;
(2) an audited financial statement of the debtor at the
end of its last fiscal year;
(3) interim financial statements not earlier than thirty
(30) days prior to the filing of the petition and certified
under oath by the appropriate officer, except when
the petition is filed within thirty (30) days after the
end of the fiscal year;
(4) a Schedule of Debts and Liabilities which lists all
the creditors of the debtor, indicating the name and
last address of record of each creditor; the amount
of each claim as to principal, interest, or penalties
due thirty (30) days prior to the date of filing; the
nature of the claim; and any pledge, lien, mortgage,
judgment or other security given for the payment
thereof;
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(5) an Inventory of Assets which must list with reasonable

particularity all the assets of the debtor, whether in
the possession of the debtor or third parties, stating
the nature of each asset; the location and condition
thereof; the book value and market value of the
asset, and attaching the corresponding certified copy
of the certificate of title thereof in case of real
property, or the evidence of title or ownership in
case of movable property; the encumbrances, liens
or claims thereon, if any, and the identities and
addresses of the lien holders and claimants.
The Inventory shall include (i) a Schedule of
Accounts Receivable which must indicate the amount
of each, the persons from whom due and their correct
addresses, the dates of maturity, and the degrees of
collectability categorizing them as highly collectible
to remotely collectible, and (ii) a Schedule of Existing
Claims against third parties which must indicate the
name and last address of record of each third party
against whom the debtor has a claim, the nature and
amount of the claim, including the principal, interest,
or penalties due from each third party and any pledge,
lien, mortgage, judgment or other security or collateral
given for the payment of each claim, and a brief
statement of the facts which gave rise to the claim;
(6) a Rehabilitation Plan which conforms with the minimal
requirements set out in Section 61, Rule 2 of these
Rules;
(7) a Schedule of Payments and Disposition of Assets
which the debtor effected within one (1) year
immediately preceding the filing of the petition;
(8) a Schedule of Cash Flow of the debtor for three (3)
months immediately preceding the filing of the petition,
and a detailed schedule of the projected cash flow
for the succeeding three (3) months;
(9) a Statement of Possible Claims by or against the
debtor which must contain a brief statement of the
146
facts which might give rise to the claim and an estimate

of the probable amount thereof;
(10) an Affidavit of General Financial Condition which
shall contain answers to the questions or matters
prescribed in Annex “A” of these Rules; and
(11) a list containing at least three (3) nominees for the
position of rehabilitation receiver as well as their
qualifications and addresses, including but not limited
to their telephone numbers, fax numbers and e-mail
addresses.
All attachments to the petition shall be deemed part and parcel
of the verified petition.
SEC . 3. VERIFICATION BY THE DEBTOR.– The petition
filed by the debtor must be verified by an affidavit of a responsible
officer of the debtor, whose authority must be attached to the petition,
and shall be in a form substantially as follows:
“I, ______________, (position) of (name of petitioner), do
solemnly swear that:
(A) the petitioner has been duly authorized to file the petition
and that the stockholders (or members or partners) and
board of directors (or governing body) have approved
and/or consented to, in accordance with law, all actions
or matters necessary or desirable to rehabilitate the debtor,
including the conversion of the rehabilitation proceedings
to liquidation proceedings if so ordered by the court;
(B) the petition is being filed to protect the interests of the
debtor, the stockholders, the investors and the creditors
of the debtor, which warrants the appointment of a
rehabilitation receiver;
(C) there is no petition for insolvency filed with any other
body, court or tribunal affecting the petitioner;
(D) the Inventory of Assets and the Schedule of Debts and
Liabilities contain the full, correct and true description of
all debts and liabilities and of all goods, effects, estate
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18 A.M. No. 12-12-11-SC
and property of whatever kind or class belonging to the

petitioner;
(E) the Inventory of Assets also contains a full, correct and
true statement of all debts owing or due to the petitioner,
or to any person or persons in trust for the petitioner and
of all securities and contracts whereby any money may
hereafter become due or payable to the petitioner or by
or through which any benefit or advantage may accrue to
the petitioner;
(F) the petition contains a concise statement of the facts
giving rise, or which might give rise, to any cause of
action in favor of the petitioner;
(G) the petitioner has no land, money, stock, expectancy, or
property of any kind, except those set forth in the Inventory
of Assets;
(H) the petitioner has, in no instance, created or acknowledged
a debt for a greater sum than the true and correct amount;
(I) the petitioner, its officers, directors and stockholders have
not, directly or indirectly, concealed, fraudulently sold or
otherwise fraudulently disposed of any part of the
petitioner’s real or personal property, estate, effects or
rights of action, and the petitioner, its officers, directors
and stockholders have not in any way compounded with
any of its creditors in order to give preference to such
creditors, or to receive or to accept any profit or advantage
therefrom, or to defraud or deceive in any manner any
creditor to whom the petitioner is indebted; and
(J) the petitioner, its officers, directors, and stockholders have
been acting in good faith and with due diligence.”
2. INVOLUNTARY PROCEEDINGS
SEC . 4. WHO MAY PETITION.– Any creditor or group of
creditors with a claim of, or the aggregate of whose claims is at
least One Million Pesos (P1,000,000.00) or at least twenty-five
percent (25%) of the subscribed capital stock or partners’ contributions,
148
whichever is higher, may initiate involuntary proceedings under this

Rule by filing a petition for rehabilitation of a debtor with the court
and on the grounds hereinafter specifically provided.
S EC . 5. GROUNDS TO INITIATE INVOLUNTARY
PROCEEDINGS.– Involuntary proceedings may be initiated against
the debtor by filing a petition with the court if:
(A) there is no genuine issue of fact or law on the claim/s of
the petitioner/s, and that the due and demandable payments
thereon have not been made for at least sixty (60) days;
or
(B) the debtor has failed generally to meet its liabilities as
they fall due; or
(C) at least one creditor, other than the petitioner/s, has initiated
foreclosure proceedings against the debtor that will prevent
the debtor from paying its debts as they become due or
will render it insolvent.
S EC . 6. CONTENTS OF THE PETITION FOR
INVOLUNTARY PROCEEDINGS.– The petition for rehabilitation
shall be verified to establish the substantial likelihood that the debtor
may be rehabilitated. The petition shall include
(A) the name, business, and principal address and other known
addresses of the debtor;
(B) the nature of the business and the principal activities of
the debtor;
(C) the circumstances sufficient to support a petition to initiate
involuntary rehabilitation proceedings under this Rule;
(D) the specific relief sought under this Rule;
(E) a Rehabilitation Plan;
(F) the names of at least three (3) nominees to the position
of rehabilitation receiver, as well as their qualifications,
office and email addresses;
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(G) the exact address/es at which documents regarding the

debtor and the proceedings may be reviewed and copied,
if known to the petitioner/s; and
(H) documents showing that there is substantial likelihood
that the debtor may be rehabilitated.
(B) PROVISIONS COMMON TO VOLUNTARY AND

INVOLUNTARY PROCEEDINGS/ACTION ON
PETITION AND COMMENCEMENT OF
PROCEEDINGS
SEC . 7. ACTION ON THE PETITION.– If the court finds
the petition for rehabilitation to be sufficient in form and substance,
it shall, within five (5) working days from the filing of the petition,
issue a Commencement Order.
If, within the same period, the court finds the petition deficient
in form or substance, the court may, in its discretion, give the petitioner/
s not exceeding five (5) working days from receipt of notice of the
order of the court within which to amend or supplement the petition,
or to submit such documents as may be necessary or proper to put
the petition in proper order. In such case, the five (5) working days
provided above shall be reckoned from the date of the filing of the
amended or supplemental petition or the submission of such documents.
The court shall dismiss the petition if the deficiency is not complied
within the extended five (5)-day period.
S EC . 8. COMMENCEMENT OF PROCEEDINGS AND
ISSUANCE OF A COMMENCEMENT ORDER.– The
rehabilitation proceedings shall be deemed to have commenced from
the date of filing of the petition.
The Commencement Order shall:
(A) state the name, address, and business of the debtor;
(B) state the nature of the business and principal activities of
the debtor;
(C) summarize the ground/s for initiating the proceedings;
150
(D) state the relief sought and any requirement or procedure

particular to the relief sought;
(E) state the legal effects of the Commencement Order, in-
cluding those mentioned in Section 9 of this Rule;
(F) declare that the debtor is under rehabilitation;
(G) direct the petitioner/s to cause the publication of the notice
of the Commencement order and the Commencement
Order in a newspaper of general circulation in the Phil-
ippines once a week for at least two (2) consecutive
weeks, with the first publication to be made within seven
(7) days from the time of its issuance;
(H) if the petitioner is the debtor, direct the debtor to serve,
by personal delivery, a copy of the petition on (i) each
creditor holding at least ten percent (10%) of the total
liabilities of the debtor as determined from the schedule
attached to the petition, (ii) the Bureau of Internal Rev-
enue (BIR), and (iii) the appropriate or relevant regula-
tory agencies such as, but not limited to, the Securities
and Exchange Commission (SEC), the Bangko Sentral ng
Pilipinas (BSP), the Insurance Commission, the Housing
and Land Use Regulatory Board (HLURB), and the Energy
Regulatory Board, within five (5) days from the issuance
of the order;
(I) if the petitioner/s is/are creditor/s, direct the creditors to
serve by personal delivery a copy of the petition on the
debtor within five (5) days from the issuance of the or-
der;
(J) direct the petitioner to ensure that foreign creditors with
no known addresses in the Philippines be served a copy
of the Commencement Order at their foreign addresses
in such a manner that will ensure that the foreign creditor
will receive a copy of the order at least fifteen (15) days
before the initial hearing;
(K) appoint a rehabilitation receiver;
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(L) summarize the requirements and deadlines for creditors

to establish their claims against the debtor;
(M) direct creditors to file their verified notices of claims with
the court at least five (5) days before the initial hearing
date, with a warning that their failure to do so on time will
bar them from participating in the rehabilitation proceed-
ings but will not prejudice their right to receive distribu-
tions if recommended by the rehabilitation receiver and
approved by the court, in accordance with Section 12 of
this Rule;
(N) direct all creditors, the BIR, and all interested parties
(including the regulatory agencies concerned) to file and
serve on the debtor a verified comment on or opposition
to the petition, with supporting affidavits and documents,
not later than fifteen (15) days before the date of the first
initial hearing;
(O) prohibit the debtor’s suppliers of goods or services from
withholding the supply of goods and services in the ordi-
nary course of business for as long as the debtor makes
payments for the services or goods supplied after the
issuance of the Commencement Order;
(P) authorize the payment of administrative expenses as they
become due;
(Q) set the case for initial hearing at a date no later than forty
(40) days from the date of filing of the petition for the
purpose of determining whether there is substantial likelihood
for the debtor to be rehabilitated;
(R) make available copies of the petition and rehabilitation
plan for examination and copying by any interested party;
(S) indicate exact address/es at which documents regarding
the debtor and the proceedings may be reviewed and
copied;
(T) state that any creditor or debtor who is not the petitioner,
may submit the name or nominate any other qualified
152
person to the position of rehabilitation receiver at least

five (5) days before the initial hearing;
(U) state that all contracts not confirmed in writing by the
debtor within ninety (90) days following the issuance of
the commencement order shall be considered automatically
terminated; and
(V) include a Stay or Suspension Order, which shall
(i) suspend all actions or proceedings in court or otherwise,
for the enforcement of all claims against the debtor;
(ii) suspend all actions to enforce any judgment, attachment
or other provisional remedies against the debtor;
(iii) prohibit the debtor from selling, encumbering,
transferring or disposing in any manner any of its
properties except in the ordinary course of business;
and
(iv) prohibit the debtor from making any payment of its
liabilities outstanding as of the commencement date
except as may be provided herein.
The issuance of a stay order does not affect the right to
commence actions or proceedings in order to preserve ad
cautelam a claim against the debtor and to toll the running of
the prescriptive period to file the claim. For this purpose, the
plaintiff may file the appropriate court action or proceeding by
paying the amount of One Hundred Thousand Pesos
(P100,000.00) or one-tenth (1/10) of the prescribed filing fee,
whichever is lower. The payment of the balance of the filing
fee shall be a jurisdictional requirement for the reinstatement
or revival of the case.
SEC . 9. EFFECTS OF THE COMMENCEMENT ORDER.–
The effects of the court’s issuance of a Commencement Order
shall retroact to the date of the filing of the petition and, in addition
to the effects of a Stay or Suspension Order described in the foregoing
section, shall
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24 A.M. No. 12-12-11-SC
(A) vest the rehabilitation receiver with all the powers and
functions provided for under the Act, such as the right of
access, and the right to review and obtain records to
which the debtor’s management and directors have access,
including bank accounts of whatever nature of the debtor,
subject to the approval by the court of the performance
bond posted by the rehabilitation receiver;
(B) prohibit or otherwise serve as the legal basis for rendering
null and void the results of any extrajudicial activity or
process to seize property, sell encumbered property, or
otherwise attempt to collect on or enforce a claim against
the debtor after the commencement date unless otherwise
allowed under these Rules, subject to the provisions of
Section 49 of this Rule;
(C) serve as the legal basis for rendering null and void any
set-off after the commencement date of any debt owed
to the debtor by any of the debtor’s creditors;
(D) serve as the legal basis for rendering null and void the
perfection of any lien against the debtor’s property after
the commencement date;
(E) consolidate all legal proceedings by and against the debtor
to the court: Provided, however, That the court may allow
the continuation of cases in other courts where the debtor
had initiated the suit; and
(F) exempt the debtor from liability for taxes and fees, including
penalties, interests and charges thereof due to the national
government or the LGU as provided in Section 19 of the
Act.
Attempts to seek legal or other recourse against the debtor
outside of these proceedings shall be sufficient to support a finding
of indirect contempt of court.
SEC . 10. EXCEPTIONS TO THE STAY OR SUSPENSION
ORDER.– The Stay or Suspension Order shall not apply
(A) to cases already pending appeal in the Supreme Court as
of commencement date: Provided, that any final and
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executory judgment arising from such appeal shall be

referred to the rehabilitation court for appropriate action;
(B) subject to the discretion of the court, to cases pending or
filed with a specialized court or quasi-judicial agency
which, upon determination by the rehabilitation court upon
motion made, is capable of resolving the claim more quickly,
fairly and efficiently than the court: Provided, That any
final and executory judgment of such court or agency
shall be referred to the court and shall be treated as a
non-disputed claim;
(C) to the enforcement of claims against sureties and other
persons solidarily liable with the debtor, and third party or
accommodation mortgagors as well as issuers of letters
of credit, unless the property subject of the third party or
accommodation mortgage is necessary for the rehabilitation
of the debtor as determined by the court upon
recommendation by the rehabilitation receiver;
(D) to any form of action of customers or clients of a securities
market participant to recover or otherwise claim moneys
and securities entrusted to the latter in the ordinary course
of the latter’s business as well as any action of such
securities market participant or the appropriate regulatory
agency or self-regulatory organization to pay or settle
such claims or liabilities;
(E) to the actions of a licensed broker or dealer to sell pledged
securities of a debtor pursuant to a securities pledge or
margin agreement for the settlement of securities
transactions in accordance with the provisions of the
Securities Regulation Code and its implementing rules
and regulations;
(F) to the clearing and settlement of financial transactions
through the facilities of a clearing agency or similar entities
duly authorized, registered and/or recognized by the
appropriate regulatory agency like the BSP and the SEC,
as well as any form of actions of such agencies or entities
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to reimburse themselves for any transactions settled for

the debtor; and
(G) to any criminal action against individual debtor or owner,
partner, director or officer of a debtor. The enforcement
of the civil liability arising from the offense charged, deemed
instituted with the criminal action, shall be covered by the
Stay Order.
S EC . 11. EFFECTIVITY AND DURATION OF
COMMENCEMENT ORDER.– The Commencement Order shall
be effective for the duration of the rehabilitation proceedings, unless
(a) earlier lifted by the court, (b) the rehabilitation plan is seasonably
confirmed or approved, or (c) the rehabilitation proceedings are
ordered terminated by the court pursuant to Section 73 of this Rule.
SEC . 12. NOTICE OF CLAIM.– Every creditor of the debtor
or any interested party whose claim is not yet listed in the schedule
of debts and liabilities shall file his verified notice of claim not later
than five (5) days before the first initial hearing date fixed in the
Commencement Order.
If a creditor files a belated claim, he shall not be entitled to
participate in the proceedings but shall be entitled to receive distributions
arising therefrom if recommended and approved by the rehabilitation
receiver, and approved by the court.
S EC . 13. COMPLIANCE WITH JURISDICTIONAL
REQUIREMENTS.– On or before the first initial hearing set in
the Commencement Order, the petitioner shall file a publisher’s
affidavit showing that the publication requirements and a petitioner’s
affidavit showing that the service requirement for local creditors
and notification requirement for foreign creditors had been complied
with, as required in the Commencement Order.
Before proceeding with the initial hearing, the court shall determine
whether the jurisdictional requirements set forth above had been
complied with.
S EC . 14. ACTION AT THE INITIAL HEARING.– After
making a determination that the jurisdictional requirements have
been complied with, the court shall
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(A) determine the creditors who have made timely and proper
filing of their notice of claims and issue an order that the
creditors not named therein shall not be entitled to participate
in the proceedings but shall be entitled to receive
distributions arising from the proceedings;
(B) hear and determine any objection to the qualifications
and appointment of the rehabilitation receiver and, if
necessary, appoint a new one; and
(C) direct the creditors to discuss their comments on the
petition and the Rehabilitation Plan submitted pursuant to
Section 8(N) of this Rule;
(D) direct the rehabilitation receiver to evaluate the financial
condition of the debtor and to prepare and submit to the
court within forty (40) days from the last initial hearing
the report provided in Section 16 of this Rule; and
(E) determine the reasonableness of the rehabilitation receiver’s
fees stated in the Rehabilitation Plan, which shall be
presumed reasonable unless the creditors object to it.
SEC . 15. ADDITIONAL HEARINGS.– The court may hold
additional hearings as may be necessary to continue the initial hearing
process but these hearings must be concluded not later than ninety
(90) days from the first hearing date fixed in the Commencement
Order.
SEC. 16. REPORT OF THE REHABILITATION RECEIVER.–
Within forty (40) days from the termination of the initial hearing,
and with or without the comments from the creditors, the rehabilitation
receiver shall submit a report to the court stating his preliminary
findings and recommendations on whether
(A) the debtor is insolvent; the causes thereof; and any unlawful
or irregular act or acts committed by the owner/s of a
sole proprietorship, partners of a partnership, or directors
or officers of a corporation in contemplation of the
insolvency of the debtor or which may have contributed
to the insolvency of the debtor;
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(B) the underlying assumptions, the financial goals and the

procedures to accomplish such goals as stated in the
petitioner’s Rehabilitation Plan are realistic, feasible and
reasonable;
(C) there is a substantial likelihood that the debtor could be
successfully rehabilitated;
(D) the petition should be dismissed; and
(E) the debtor should be dissolved and/or liquidated.
SEC . 17. GIVING DUE COURSE TO OR DISMISSAL OF
PETITION, OR CONVERSION OF PROCEEDINGS.– Within
ten (10) days from receipt of the report of the rehabilitation receiver
mentioned in the immediately preceding section, the court may
(A) give due course to the petition upon a finding that
(1) the debtor is insolvent, and
(2) there is a substantial likelihood that the debtor could
be successfully rehabilitated;
(B) dismiss the petition upon a finding that
(1) the debtor is not insolvent,
(2) the petition is a sham filing intended only to delay
the enforcement of the rights of the creditor/s or of
any group of creditors,
(3) the petition, the Rehabilitation Plan, and the
attachments thereto contain any materially false or
misleading statements, or
(4) the debtor has committed acts of misrepresentation
or fraud to its creditor/s or a group of creditors;
(C) convert the proceedings into one for the liquidation of the
debtor upon a finding that
(1) the debtor is insolvent and there is no substantial
likelihood for the debtor to be successfully rehabilitated
as determined, and
(2) there is failure of rehabilitation.
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SEC . 18. PETITION GIVEN DUE COURSE.– If the petition

is given due course, the court shall direct the rehabilitation receiver
to confer with the debtor and all the classes of creditors to consider
their views and proposals in the review or revision of the Rehabilitation
Plan or the preparation of a new one. The Rehabilitation Plan must
be submitted to the court within a period of not more than ninety
(90) days from the date of the issuance of the order giving due
course to the petition.
The court may refer any dispute relating to the Rehabilitation
Plan or the rehabilitation proceedings pending before it to arbitration
or other modes of dispute resolution, as provided for under Republic
Act No. 9285, or the Alternative Dispute Resolution Act of 2004,
should it determine that such mode will resolve the dispute more
quickly, fairly, and efficiently than the court.
The referral to arbitration or other modes of dispute resolution
shall not be made if it will prejudice the one-year period for the
confirmation of the rehabilitation plan under Section 70 of the Act.
S EC . 19. DISMISSAL OF PETITION.– If the petition is
dismissed pursuant to Section 17(B) of this Rule, then the court
may, in its discretion, order the petitioner to pay damages to any
creditor or to the debtor, as the case may be, who may have been
injured by the filing of the petition, to the extent of any such injury.
(C) THE REHABILITATION RECEIVER, MANAGEMENT

COMMITTEE, AND CREDITOR’S COMMITTEE
S EC . 20. WHO MAY SERVE AS A REHABILITATION
RECEIVER.– Any qualified natural or juridical person may serve
as a rehabilitation receiver. A rehabilitation receiver who is a juridical
entity must designate, as its representative, a natural person who
possesses all the qualifications and none of the disqualifications
under this Rule. The juridical entity and the representative are
solidarily liable for all the obligations and responsibilities of a
rehabilitation receiver.
S EC . 21. QUALIFICATIONS OF A REHABILITATION
RECEIVER.–
(A) The rehabilitation receiver who is a natural person must
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comply with the following minimum qualifications and

requirements:
(1) He is a citizen of the Philippines or a resident of the
Philippines for at least six (6) months immediately
preceding his nomination;
(2) He is of good moral character and with acknowledged
integrity, impartiality and independence;
(3) As far as practicable, he has expertise and acumen
to manage and operate a business similar in size and
complexity to that of the debtor;
(4) He has an operating knowledge in management, finance
and rehabilitation of distressed companies;
(5) He has a general familiarity with the rights of creditors
subject to suspension of payments or rehabilitation
and a general understanding of the duties and
obligations of a rehabilitation receiver;
(6) He has not been earlier dismissed as a rehabilitation
receiver pursuant to Section 27 of this Rule;
(7) He has no conflict of interest as defined in this
Rule; and
(8) He is willing and able to file a bond in such amount
as may be determined by the court.
(B) The rehabilitation receiver, which is a juridical person,
must comply with the following qualifications and
requirements:
(1) It is duly authorized to do business in the Philippines
for at least six (6) years prior to its appointment;
(2) It is of good standing as certified by the appropriate
regulatory agency/ies;
(3) It has no conflict of interest as defined in this Rule;
(4) It has not been earlier dismissed as a rehabilitation
receiver pursuant to Section 27 of this Rule;
(5) It must submit the name of the person designated to
discharge the responsibilities and powers of a
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rehabilitation receiver and the names of the employees

and other persons authorized to assist the designated
representative, together with a sworn certification
that these persons possess the qualifications and
none of the disqualifications enumerated above;
(6) It must submit a sworn undertaking, duly approved
in accordance with law, binding itself to be solidarily
liable with the persons designated by it to discharge
the functions and responsibilities of a rehabilitation
receiver;
(7) It is willing and able to file a bond in such amount
as may be determined by the court;
(8) It is not disqualified to discharge the duties of a
rehabilitation receiver under the Constitution and
other relevant laws;
(C) In addition, the designated representative of the juridical
person must comply with the following requirements:
(1) The representative must be duly designated and
authorized to act for and on behalf of the juridical
entity;
(2) The designated representative must be a director,
officer, stockholder or partner of the juridical entity;
and
(3) The designated representative must submit a sworn
undertaking that he shall be solidarily liable with his
firm for all the obligations and responsibilities of a
S EC . 22. CONFLICT OF INTEREST.– No person may be
appointed as a rehabilitation receiver or as a member of a management
committee, or be engaged by the rehabilitation receiver or the
management committee if he has a conflict of interest.
An individual shall be deemed to have a conflict of interest if
he is so situated as to be materially influenced in the exercise of his
judgment for or against any party to the proceedings. A conflict of
interest of an individual employed or contracted by the rehabilitation
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receiver or the management committee or its members shall be

deemed to be a conflict of interest of the rehabilitation receiver or
the management committee.
Without limiting the generality of the following, a rehabilitation
receiver may be deemed to have a conflict of interest if:
(A) he is a creditor, owner, partner or stockholder of the
debtor;
(B) he is engaged in a line of business which competes with
the debtor;
(C) he is, or was within five (5) years from the filing of the
petition, a director, officer, owner, partner, or employee
or the auditor or accountant of the debtor;
(D) he is, or was within two (2) years from the filing of the
petition, an underwriter of the outstanding securities of
the debtor;
(E) he is related by consanguinity or affinity within the fourth
civil degree to any individual creditor, owner/s of a sole
proprietorship-debtor, partners of a partnership-debtor,
or to any stockholder, director, officer, employee, or
underwriter of the corporation-debtor; or
(F) he has any other direct or indirect material interest in the
debtor or any creditor.
S EC. 23. DISCLOSURE OF CONFLICT OF INTEREST.–
Conflict of interest as set forth in the preceding Section shall be
disclosed at all times throughout the proceedings to the court and
to the creditors. Further, disclosure of any conflict of interest must
be made
(A) by the nominees for the position of rehabilitation receiver
before their names are submitted for appointment;
(B) by the rehabilitation receiver and its designated
representative in case of juridical person, within fifteen
(15) days from the appointment as rehabilitation receiver
or as a member of the management committee; and
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(C) by the rehabilitation receiver and its designated

representative in case of juridical person, within ten (10)
days from the time the rehabilitation receiver and/or its
designated representative learns of any fact described in
the preceding section while the rehabilitation proceedings
are pending.
The same rule shall apply to persons who assist the rehabilitation
receiver or the management committee as professionals, experts or
employees. They shall file their disclosure within ten (10) days from
the date they are contracted or are employed.
S EC . 24. OBJECTION TO CONFLICT OF INTEREST.–
Within ten (10) days from receipt of the disclosure of conflict of
interest provided under the preceding Section, any party to the
proceedings adversely affected by the appointment of the persons
to the positions mentioned above may file his objection to the
appointment of the rehabilitation receiver or a member of the
management committee, or to the employment by them of professionals,
experts or employees. The court may disregard the conflict of
interest if it finds that it will not be detrimental to the general
interest of the stakeholders.
Failure to file a timely objection shall be deemed a waiver of
the conflict of interest rule.
Should the court decide that the objection has merit and that
the conflict of interest will be detrimental to the general interest of
the stakeholders, it shall dismiss the rehabilitation receiver having
conflict of interest and appoint a new one. Should the person concerned
be a member of the management committee or one employed by the
rehabilitation receiver or the management committee as a professional
or expert, the court shall dismiss the person having conflict of
interest and direct the rehabilitation receiver or management committee
to appoint or employ a new one in his place, as the case may be.
S EC . 25. INITIAL APPOINTMENT OF THE REHABILI-
TATION RECEIVER.– The court shall initially appoint the
rehabilitation receiver, who may or may not be from among the
nominees of the petitioner. At the initial hearing of the petition, the
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creditors and the debtor who are not petitioners may nominate other
persons to the position. The court may retain the rehabilitation
receiver initially appointed or appoint another who may or may not
be from among those nominated.
In case the debtor is a securities market participant, the court
shall give priority to the nominee of the appropriate securities or
investor protection fund.
If a qualified natural person or entity is nominated by more
than fifty percent (50%) of the secured creditors and the general
unsecured creditors, and satisfactory evidence of the creditors’
support is submitted, the court shall appoint the creditors’ nominee
as rehabilitation receiver.
S EC . 26. POWERS, DUTIES AND FUNCTIONS OF
REHABILITATION RECEIVER.– The rehabilitation receiver shall
be deemed an officer of the court with the principal duty of preserving
and maximizing the value of the assets of the debtor during the
rehabilitation proceedings, determining the viability of the rehabilitation
of the debtor, preparing and recommending a Rehabilitation Plan to
the court, and implementing the approved Rehabilitation Plan.
To this end, and without limiting the generality of the foregoing,
the rehabilitation receiver shall have the following powers, duties
and responsibilities:
(A) to verify the accuracy of the petition, and correct, if
necessary, the annexes such as the Schedule of Debts
and Liabilities and the Inventory of Assets submitted in
support to the petition;
(B) to accept and incorporate, when justified, amendments to
the Schedule of Debts and Liabilities;
(C) to evaluate the validity, genuineness and true amount of
all the claims against the debtor and to recommend to the
court the disallowance of claims and rejection of
amendments to the Schedule of Debts and Liabilities that
lack sufficient proof and justification;
164
(D) to submit to the court, and make available for the creditors’
review, a revised Schedule of Debts and Liabilities;
(E) to investigate the acts, conduct, properties, liabilities and
financial condition of the debtor, the operation of its business
and the desirability of the continuance thereof, and any
other matter relevant to the proceeding or to the formulation
of a Rehabilitation Plan;
(F) to sue and recover, with the approval of the court, all
amounts owed to, and all properties pertaining to the
debtor, including all property or money of the debtor paid,
transferred or disbursed in fraud of the debtor or its
creditors, or which constitute undue preference of
creditor/s;
(G) to examine under oath the directors and officers of the
debtor and any other witnesses that he may deem
appropriate;
(H) to make available to the creditors the documents and
notices necessary for them to follow and participate in
the proceedings;
(I) to report to the court any fact ascertained by him to
pertain to the causes of the debtor’s problems, fraud,
preferences, dispositions, encumbrances, misconduct,
mismanagement and irregularities committed by the
stockholders, directors, management, or any other person
against the debtor;
(J) to employ such specialized professionals and other experts
such as lawyers, accountants, auditors, appraisers and
staff, with the approval of the court, whose services are
necessary in assisting the rehabilitation receiver in
performing his duties and functions in accordance with
(K) to monitor the operations of the debtor and to immediately
report to the court any material adverse change in the
debtor’s business;
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(L) to evaluate the existing assets and liabilities, earnings and

operations of the debtor;
(M) to determine and recommend to the court the best way
to salvage and protect the interests of the creditors,
stockholders and the general public;
(N) to study the Rehabilitation Plan proposed by the debtor or
any Rehabilitation Plan submitted during the proceedings,
together with any comments made thereon;
(O) to prohibit and report to the court any encumbrance, transfer
or disposition of the debtor’s property outside of the ordinary
course of business or what is allowed by the court;
(P) to prohibit and report to the court any payments made by
the debtor outside of the ordinary course of business;
(Q) to have unlimited access to the debtor’s employees, premises,
books, records and financial documents during business
hours;
(R) to inspect, copy, photocopy or photograph any document,
paper, book, account or letter, whether in the possession
of the debtor or other persons, that pertain to the business
of the debtor;
(S) to gain entry into any property owned by the debtor for
the purpose of inspecting, measuring, surveying or
photographing it or any designated relevant object or
operation thereon;
(T) to take possession, control and custody, and to preserve
the value of all of the debtor’s assets;
(U) to notify counterparties and the court as to contracts that
the debtor has decided to confirm, pursuant to Section 56
of this Rule;
(V) to be notified of and to attend all meetings of the board
of directors and stockholders of the debtor;
(W) to recommend any modification of an approved Rehabilitation
Plan as he may deem appropriate;
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(X) to bring to the attention of the court any material change

affecting the debtor’s ability to meet the obligations under
the Rehabilitation Plan;
(Y) to recommend the appointment of a management committee
in the cases provided for under Section 31 of this Rule;
(Z) within the soonest possible time, to submit a report to the
management committee, if one has been constituted pursuant
to Section 31 of this Rule, on the status and condition of
the debtor and on the actions taken by the receiver with
regard to the proceedings;
(AA) to recommend the termination of the proceedings and
the dissolution of the debtor if he determines that the
debtor’s continuance in business is no longer feasible or
profitable or no longer works to the best interest of the
stockholders, parties-litigants, creditors or the general public;
(BB) to apply to the court for any order or directive that he
may deem necessary or desirable to aid him in the exercise
of his powers and performance of his duties and functions;
(CC) to make quarterly reports on the status and progress of
the rehabilitation, or as often as may be required by the
court; and
(DD) to exercise such other powers as may from time to time
be conferred upon him by the court.
The court may limit the powers and functions of the rehabilitation
receiver, as may be appropriate.
S EC . 27. REMOVAL OF THE REHABILITATION
RECEIVER.– The rehabilitation receiver may be removed at any
time by the court, either motu proprio or upon motion by the debtor
or any creditor/s holding more than fifty percent (50%) of the total
obligations of the debtor, on such grounds as these Rules may
provide, which shall include, but not limited to, the following:
(A) incompetence, gross negligence, failure to perform or
failure to exercise the proper degree of care in the
performance of his duties and powers;
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(B) lack of a particular or specialized competency required

by the specific case;
(C) illegal acts or conduct in the performance of his duties
and powers;
(D) lack of qualification or presence of any disqualification;
(E) conflict of interest that arises after his appointment;
(F) manifest lack of independence that is detrimental to the
general body of the stakeholders;
(G) failure, without just cause, to perform any of his powers
and functions under these Rules; or
(H) on any of the grounds for removing a trustee under the
general principles of trusts.
SEC . 28. COMPENSATION AND TERMS OF SERVICE.–
(A) The rehabilitation receiver and his direct employees or
independent contractors shall be entitled to compensation,
to be paid by the debtor, for reasonable fees and expenses
according to the terms approved by the court after notice
and hearing. Prior to such hearing, the rehabilitation receiver,
his direct employees and his independent contractors shall
be entitled to reasonable compensation based on quantum
meruit. Such costs shall be considered administrative
expenses.
In determining the amount of reasonable compensation,
the court shall consider the nature, extent and value of the
services provided, taking into account the following factors,
among others:
(1) the size of the debt under rehabilitation;
(2) the time to be spent on such services;
(3) the credentials, experience, skills and reputation of the
receiver, his direct employees or independent contractors;
(4) the benefits accruing to the debtor;
(5) the complexity, importance, urgency, and nature of the
problems, issues, or tasks addressed; and
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(6) the customary compensation charged by comparably skilled

practitioners in other rehabilitation cases.
(B) If any substantial or material change in the circumstances
intervenes affecting the compensation fixed, the court
may, upon motion of the debtor, rehabilitation receiver, or
the creditors, order a review or revision of the compensation
set by the court.
(C) The rehabilitation receiver and his direct employees or
independent contractors shall disclose in writing, at the
earliest opportunity, to the court, with notice to all the
parties, all forms of arrangements or agreements in the
handling of the receivership such as, but not limited to,
commissions, fees, fee-sharing arrangements, and payments
in kind. Failure to comply with this duty shall be a ground
for removal from office of the person concerned and for
forfeiture of the rehabilitation receiver’s bond.
S EC . 29. OATH AND BOND.– Prior to entering upon his
powers, duties and responsibilities, the rehabilitation receiver shall
take an oath and file a bond in the amount fixed by the court,
conditioned upon the faithful and proper discharge of his powers,
duties and responsibilities.
SEC . 30. VACANCY.– In case the position of rehabilitation
receiver is vacated for any reason whatsoever, the court shall direct
the debtor and the creditors to submit the name/s of their nominee/
s to the position. The court may appoint any of the qualified nominees,
or any other person qualified.
In case the rehabilitation receiver is a juridical person and its
designated representative resigns or is otherwise separated from it,
it must manifest to the court this fact and the reason/s for the
separation, within ten (10) days from its occurrence, together with
the name and other personal circumstances of the new representative.
The new representative must have the qualifications and none of
the disqualifications set forth in Section 21 of this Rule.
SEC . 31. DISPLACEMENT OF EXISTING MANAGEMENT
BY THE REHABILITATION RECEIVER OR MANAGEMENT
COMMITTEE.– Upon motion of any interested party and within
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the soonest possible time, the court may appoint and direct the
rehabilitation receiver to assume the powers of management of the
debtor, or appoint a management committee that will undertake the
management of the debtor, upon clear and convincing evidence of
any of the following circumstances:
(A) actual or imminent danger of dissipation, loss, wastage or
destruction of the debtor’s assets or other properties; or
(B) paralyzation of the business operations of the debtor; or
(C) gross mismanagement of the debtor, fraud or other wrongful
conduct on the part of, or gross or willful violation of the
Act by the existing management of the debtor or the
owner, partner, director, officer or representative/s in
management of the debtor.
In case the court appoints the rehabilitation receiver to assume
the management of the debtor, the court may:
(1) require the rehabilitation receiver to post an additional
bond;
(2) authorize him to engage the services or to employ persons
or entities to assist him in the discharge of his managerial
functions; and
(3) authorize a commensurate increase in his compensation.
In case the rehabilitation receiver is a juridical person, the acts
of its designated representative shall be presumed to be carried out
in accordance with the authority vested in him by the juridical entity
which he represents. In case of conflict, the decision of the governing
body of the juridical entity shall prevail. However, the rehabilitation
receiver and its representative/s shall remain solidarily liable for all
obligations and responsibilities, subject to the right of withdrawal
prior to the implementation of the disputed decision
S EC . 32. ROLE OF THE REHABILITATION RECEIVER
UPON ASSUMPTION OF MANAGEMENT OF THE DEBTOR.–
When directed by the court to assume management of the debtor
as provided in the foregoing section, the rehabilitation receiver shall
continue to exercise the same powers under Section 26 of this Rule
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in addition to those powers and duties expressly given to the

management committee as provided in the succeeding section or
those necessarily implied therefrom.
SEC . 33. ROLE OF THE MANAGEMENT COMMITTEE.–
When appointed pursuant to Section 31 of this Rule, the management
committee shall have the power to take custody of and control all
assets and properties owned or possessed by the debtor. It shall
take the place of the management and governing body of the debtor,
and assume their powers, rights and responsibilities.
The management committee may overrule or revoke the actions
of the previous management or the governing body of the debtor.
Without limiting the generality of the foregoing, the specific
powers and duties of the management committee, whose members
shall also be considered as officers of the court, are the following:
(A) to investigate the acts, conduct, properties, liabilities, and
financial condition of the corporation, association or
partnership under management;
(B) to examine under oath the directors and officers of the
entity and any other witnesses that the committee may
deem appropriate;
(C) to report to the court any ascertained fact pertaining to
the causes of the problems, fraud, misconduct,
mismanagement and irregularities committed by any other
person;
(D) to use the services of or employ such person or persons,
such as lawyers, accountants, auditors, appraisers and
staff as are necessary to perform its functions and duties
as management committee;
(E) to report to the court any material adverse change in the
business of the entity under management;
(F) to evaluate the existing equity, capital, assets and liabilities,
earnings and operations of the entity under management;
(G) to determine and recommend to the court the best way
to salvage and protect the interest of the creditors,
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stockholders and the general public, including the

rehabilitation of the entity under management;
(H) to prohibit and report to the court any encumbrance, transfer,
or disposition of the debtor’s property outside of the ordinary
course of business or beyond what is allowed by the
court;
(I) to prohibit and report to the court payments made outside
the ordinary course of business;
(J) to have unlimited access to the employees, premises,
books, records and financial documents of the entity under
management during business hours;
(K) to inspect, copy, photocopy or photograph any document,
paper, book, account or letter, whether in the possession
of the entity or other persons, that pertain to the business
of the debtor;
(L) to gain entry into any property owned by the entity under
management for the purposes of inspecting, measuring,
surveying, or taking photos or videos of any designated
relevant object or operation thereon;
(M) to bring to the attention of the court any material change
affecting the entity’s ability to meet its obligations;
(N) to take the appropriate steps to modify, nullify or revoke
transactions coming to its knowledge which it deems
detrimental or prejudicial to the interest of the entity under
management;
(O) to recommend the termination of the proceedings and the
dissolution of the entity if it determines that the continuance
in business of such entity will no longer work to the best
interest of the stakeholders and creditors, in accordance
with the purposes of the Act;
(P) to apply to the court for any order or directive that it may
deem necessary or desirable to aid it in the exercise of
its powers and performance of its duties and functions,
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including the power to examine parties and witnesses

under oath; and
(Q) to exercise such other powers as the court may, from
time to time, confer upon it.
The court may limit the powers and functions of the appointed
management committee, as may be appropriate.
S EC . 34. COMPOSITION OF THE MANAGEMENT
COMMITTEE.– Unless the court otherwise provides, the
management committee appointed pursuant to Section 31 of this
Rule shall be composed of three (3) qualified members appointed
by the court, as follows:
(A) the first member shall be nominated by the debtor; in
case the debtor fails, the court shall appoint the first
member;
(B) the second member shall be nominated by the creditor/s
holding more than fifty percent (50%) of the total obligations
of the debtor; in case the creditors fail, the court shall
appoint the second member; and
(C) the third member, who shall act as chairman of the
management committee, shall be nominated by the first
and second members within ten (10) days from the
appointment. In case of disagreement between the first
and second members, or failure to nominate, the court
shall appoint the third member.
In case the decision to appoint a management committee is
due to Section 31(c) of this Rule, the court shall appoint the first
member.
In all cases, the court may
(1) require the members of the management committee to
post a bond;
(2) authorize the management committee to employ or engage
the services or to employ or engage persons or entities to
assist it in the discharge of its duties and functions, pursuant
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to Section 37 of this Rule on the employment or use of

professionals; and
(3) authorize the setting of the compensation of the members
of the management committee, pursuant to Section 28 of
this Rule.
SEC . 35. ACTION BY MANAGEMENT COMMITTEE.– A
majority of all members shall be necessary for the management
committee to act or make a decision.
S EC . 36. QUALIFICATIONS OF MEMBERS OF THE
MANAGEMENT COMMITTEE.– The members of the management
committee shall have the same qualifications and none of the
disqualifications as those prescribed for the rehabilitation receiver
by this Rule.
In case a member of the management committee is a juridical
person, the relevant provisions governing juridical persons as
rehabilitation receivers shall apply.
SEC . 37. EMPLOYMENT OR USE OF PROFESSIONALS.–
The rehabilitation receiver or the management committee shall submit
the identities and other personal circumstances of the professionals
or experts they want to engage or to assist them in the exercise of
their powers and functions. Court approval shall be made after
notice and hearing, taking into account the following factors, among
others:
(A) reasons for the appointment;
(B) disclosure of conflict of interest;
(C) compensation, fees, or other arrangements;
(D) scope of work involved;
(E) the specific area of expertise of the person to be appointed;
(F) confidentiality;
(G) expected work time to be spent in relation to the engagement
and extent of services required; and
(H) other arrangements, as the court may deem appropriate.
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The persons engaged by the rehabilitation receiver or the

management committee may be considered either employees or
independent contractors, as the case may be.
SEC. 38. IMMUNITY FROM SUIT.– The rehabilitation receiver,
the members of the management committee, and all persons they
engage shall not be subject to any action, claim or demand for any
act or omission in good faith in the exercise of their powers and
functions under the Act, these Rules, or other actions approved by
the court.
S EC . 39. ORGANIZATION OF THE CREDITORS’
COMMITTEE.– After the petition is given due course, the court
shall issue an order directing the rehabilitation receiver to call a
meeting with the debtor and all classes of creditors, to take place
in not less than two (2) weeks nor more than four (4) weeks from
the date of the order, to consider the organization of a creditors’
committee. The order shall designate the day, hour and place of the
meeting, and shall be published as often as may be prescribed by
the court, but in no case less than two (2) consecutive weeks, in a
newspaper of general circulation in the Philippines, if there be one,
and if there be none, in a newspaper which, in the court’s judgment,
will best give notice to the creditors of the debtor. The debtor shall
be personally notified of this order.
After this meeting is called and held, the creditors belonging
to a class may formally organize a committee among themselves.
In addition, the creditors may, as a body, agree to form a creditors’
committee composed of a representative from each class of creditors,
such as the following:
(A) secured creditors;
(B) unsecured creditors;
(C) trade creditors and suppliers; and
(D) employees of the debtor.
A creditors’ committee may be organized if the creditors,
representing at least a majority of all the claims as reflected in the
registry of claims determined pursuant to Section 44 of this Rule,
cast their votes for its creation.
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S EC . 40. ELECTION OF REPRESENTATIVES TO THE

CREDITORS’ COMMITTEE.– The creditors from each class shall
be entitled to elect their representative to the creditors’ committee.
Each creditor shall vote in proportion to his interest vis-à-vis the
total claims of all the creditors within the same class as determined
by the rehabilitation receiver based on the registry of claims submitted
to the court under Section 44 of this Rule, provided, that such
determination shall only be for the purpose of voting under this
section and shall not be binding on any creditor as to the nature and
amount of its claim.
In case of a juridical creditor, the designated representative
bearing the necessary authority shall be entitled to vote.
Voting may be done personally, by mail or by proxy, provided
that if a vote is cast through mail or by proxy, the same should be
accompanied by the necessary authority to cast the vote for the
particular creditor. Voting by electronic mail or means shall be in
accordance with the Rules on Electronic Evidence.
SEC. 41. ELECTION OF CHAIRMAN OF THE CREDITORS’
COMMITTEE.– When the representatives of each class of creditors
to the creditors’ committee have been elected, the rehabilitation
receiver shall convene the chosen representatives to elect the chairman
of the creditors’ committee.
The representative of each class of creditors shall be entitled
to cast only one (1) vote in the election of the chairman of the
creditors’ committee. Any tie shall be resolved by drawing of lots.
The chairman shall then be responsible for convening the
creditors’ committee, whenever necessary, to discuss, deliberate,
and confer with the rehabilitation receiver, on any view or proposal
in the preparation, review or revision of a Rehabilitation Plan for
the debtor.
S EC . 42. ROLE OF CREDITORS’ COMMITTEE.– The
creditors’ committee, when constituted pursuant this Rule, shall be
the primary liaison between the rehabilitation receiver and the creditors.
The creditors’ committee cannot exercise or waive any right or give
any consent on behalf of any creditor unless specifically authorized
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in writing by such creditor. The creditors’ committee may be authorized

by the court or by the rehabilitation receiver to perform such other
tasks and functions to facilitate the rehabilitation process.
The creditors’ committee’s act shall be valid if a majority of
its members voted, and a majority of the members who have cast
their votes have voted in favor of the resolution.
The creditors’ committee, if already constituted, shall be notified
of all actions relative to the rehabilitation proceedings; otherwise,
the individual creditors shall be so notified by the rehabilitation
receiver.
The members of the creditors’ committee shall be entitled to
a reasonable fee as compensation, which shall be treated as an
administrative expense, subject to the prior determination and approval
by the court.
SEC . 43. DETERMINATION OF CLASS OF CREDITORS.–
The rehabilitation receiver shall determine within a reasonable time
the class to which each creditor belongs; provided that each creditor
shall be given the opportunity to challenge the rehabilitation receiver’s
determination of its classification by presenting evidence to prove
its claims. Such challenge shall first be brought before the rehabilitation
receiver for his reconsideration within five (5) days from notice of
such determination by the rehabilitation receiver. Any denial by the
rehabilitation receiver of such challenge may be brought to the
court within five (5) days from notice thereof. The decision of the
court on this matter shall be final and executory only insofar as the
classification of the said creditor for purposes of representation in
the creditors’ committee is concerned but not as to the determination
of the nature of its claim.
(D) DETERMINATION OF CLAIMS

SEC . 44. REGISTRY OF CLAIMS.– Within twenty (20) days
from his assumption into office, the rehabilitation receiver shall
establish a preliminary registry of claims based on the schedule of
debts and liabilities provided in the petition. The rehabilitation receiver
shall make the registry available for public inspection and give
notice to the debtor, creditors and stakeholders on where and when
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they may inspect it by causing the publication of the place/s and

date/s of inspection in a newspaper of general circulation in the
Philippines once every week for two (2) consecutive weeks. The
period of inspection shall not exceed fifteen (15) days from the last
publication. All claims included in the registry of claims must be
duly supported by sufficient evidence.
S EC. 45. OPPOSITION OR CHALLENGE OF CLAIMS.–
Within thirty (30) days from the expiration of the period to inspect
the registry of claims, the debtor, creditors, stakeholders and other
interested parties may submit to the court a challenge to the
claim/s, as listed in the registry of claims serving a certified copy
on the rehabilitation receiver and the creditor holding the challenged
claim/s.
Upon the expiration of the thirty (30)-day period, the rehabilitation
receiver shall submit to the court the registry of claims. The registry
of claims shall include the following lists of (1) claims that have not
been subject to challenge; (2) claims resolved by the rehabilitation
receiver after these have been challenged; and (3) disputed but
unresolved claims.
SEC . 46. APPEAL.– The aggrieved party may seek the review
of the decision of the rehabilitation receiver on a claim by filing a
motion with the rehabilitation court within five (5) days from receipt
of the rehabilitation receiver’s assailed decision, which shall be
decided by the court at the soonest possible time.
(E) USE, PRESERVATION AND DISPOSAL OF ASSETS AND

TREATMENT OF ASSETS AND CLAIMS AFTER
COMMENCEMENT DATE
SEC . 47. USE OR DISPOSITION OF ASSETS.– Except as
otherwise provided herein, no funds or property of the debtor shall
be used or disposed of except in the ordinary course of business of
the debtor, or unless necessary to finance the administrative expenses
of the rehabilitation proceedings.
SEC. 48. SALE OF ASSETS.– The court, upon the rehabilitation
receiver’s application, with notice to the debtor, creditors or creditors’
committee, if one has already been formed, may authorize the sale
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of the unencumbered property of the debtor outside the ordinary

course of business upon a showing that the property, by its nature
or because of any other circumstance, is (a) perishable; (b) costly
to maintain; (c) susceptible to devaluation; or (d) otherwise in jeopardy.
The application shall be through a motion which shall be served
on the debtor and the creditors in a manner that will ensure its
receipt at least three (3) days before the hearing, unless the court
for good reason sets the hearing on shorter notice. If the creditors’
committee had already been formed, the motion shall be served on
the creditors’ committee.
If the court grants the motion, the order shall specify the cause
for the necessity of the sale, which may either be through a public
auction or a private sale, determined to be in the best interest of all
parties.
Unless impracticable, an itemized statement of the property
sold, the name of each purchaser, and the price received for each
item or lot or for the property as a whole (if sold in bulk) shall be
filed with the court on completion of a sale.
After a sale is authorized under this Section, the rehabilitation
receiver shall execute any instrument necessary or ordered by the
court to transfer the property to the purchaser.
S EC . 49. SALE OR DISPOSAL OF ENCUMBERED
PROPERTY OF THE DEBTOR AND ASSETS OF THIRD
PARTIES HELD BY DEBTOR.–
(A) In cases of
(1) encumbered property belonging to the debtor, or
(2) property of third persons held by the debtor where
there is a security interest pertaining to third parties
under a financial, credit or other similar transactions,
the court may, upon the rehabilitation receiver’s application,
after due notice and hearing, authorize the sale, transfer,
conveyance or disposition of the property, upon a showing
that:
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(A) the affected owner or secured creditor/s have given

their consent;
(B) the sale, transfer, conveyance or disposal is necessary
for the continued operation of the debtor’s business;
and
(C) the debtor has made arrangements to provide a
substitute lien or ownership right that provides an
equal level of security for the counter-party’s claim
or right.
(B) In cases where the debtor has prior authority to sell the
property such as trust receipt or consignment arrangements,
the court may, upon the debtor’s application, authorize
the sale or disposal of the property, upon a showing that:
(1) the sale or disposal is necessary for the operation of
the debtor’s business, and
(2) the debtor has made arrangements to provide a
substitute lien or ownership right that provides an
equal level of security for the counter-party’s claim
or right.
(C) The application shall be through a motion which shall be
served on the debtor and the owner/s or concerned creditors
in a manner that will ensure its receipt at least three (3)
days before the hearing, unless the court for good reason
sets the hearing on shorter notice. If the creditors’ committee
has already been formed, the motion shall be served on
the creditors’ committee.
The affected party is given a non-extendible period
of three (3) days from receipt of the motion within which
to file his comment or opposition. The court shall resolve
the motion within five (5) days from the date of the
hearing.
(D) If the court grants the motion, the order shall specify the
manner by which the sale shall be conducted which may
either be a public auction or private sale and other terms
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and conditions that the court may, in its discretion, determine

to be in the best interest of all concerned parties.
(E) Unless impracticable, an itemized statement of the property
sold, the name of each purchaser, and the price received
for each item or lot or for the property as a whole if sold
in bulk shall be filed with the court on completion of a
sale.
(F) After a sale or disposition is authorized under this Section,
the rehabilitation receiver or debtor, as the case may be,
shall execute any instrument necessary or ordered by the
court to effectuate the transfer to the purchaser.
(G) The sale or disposal of property under this Section shall
not give rise to any criminal liability under applicable
laws.
SEC. 50. ASSETS OF DEBTOR HELD BY THIRD PARTIES.–
Third parties who have in their possession or control property of the
debtor that is subject of possessory pledges, mechanic’s liens or
similar claims shall not transfer, convey or otherwise dispose of the
property to persons other than to the debtor, except with prior
approval of the rehabilitation receiver.
The rehabilitation receiver may also
(A) demand the surrender or the transfer of the possession or
control of the property to the rehabilitation receiver or
another person, subject to payment of the claims secured
by any possessory lien/s thereon or the replacement of
the possessory lien, with the consent of the secured creditor;
(B) allow the third party to retain possession or control of the
property if such an arrangement would more likely preserve
or increase the value of the property in question or the
total value of the assets of the debtor; or
(C) otherwise dispose of the property as may be beneficial
for the rehabilitation of the debtor, after notice and hearing
and approval of the court, subject to payment of the
claims secured by any possessory lien/s thereon or
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replacement of the possessory lien with the consent of

the secured creditor.
SEC . 51. RESCISSION OR NULLITY OF SALE, PAYMENT,
TRANSFER OR CONVEYANCE OF ASSETS.– Upon motion,
after notice and hearing, the court may rescind or declare as null
and void any sale, payment, transfer or conveyance of the debtor’s
unencumbered property or any encumbering thereof by the debtor
or its agents or representatives after the commencement date which
are not in the ordinary course of the business of the debtor.
The following sales or dispositions, made outside of the ordinary
course of business of the debtor, upon order of the court, upon
motion and after notice and hearing, may not be nullified under this
Section if made for the following purposes:
(A) to administer the debtor and facilitate the preparation and
implementation of a Rehabilitation Plan;
(B) to provide a substitute lien, mortgage or pledge of property
under this Rule;
(C) to pay or meet administrative expenses as they arise;
(D) to pay victims of quasi-delicts upon a showing that the
claim is valid and the debtor has insurance to reimburse
the debtor for the payments made;
(E) to repurchase property of the debtor that is auctioned off
in a judicial or extrajudicial sale under these Rules; or
(F) to reclaim or redeem property of the debtor held pursuant
to a possessory lien.
SEC . 52. ASSETS SUBJECT TO RAPID OBSOLESCENCE,
DEPRECIATION AND DIMINUTION OF VALUE.– Upon the
application of a secured creditor holding a lien against or one holding
an ownership interest in property held by the debtor that is subject
to potentially rapid obsolescence, depreciation or diminution in value,
the court shall, after notice and hearing, order the debtor or rehabilitation
receiver to take reasonable steps necessary to prevent the
obsolescence, depreciation or diminution of the value of the property.
If such rapid obsolescence, depreciation and diminution cannot be
182
avoided to the prejudice of the security or property interest of the

secured creditor or owner, the court shall:
(A) allow the encumbered property to be foreclosed upon by
the secured creditor according to the relevant agreement
between the debtor and the secured creditor, applicable
rules of procedure, and relevant legislation: Provided, That
the proceeds of the sale will be distributed in accordance
with the order prescribed under the rules of concurrence
and preference of credits (including Civil Code provisions
thereon);
(B) upon motion or with the consent of the affected secured
creditor or interest owner, order the conveyance of a lien
against or ownership interest in substitute property of the
debtor to the secured creditor: Provided, That other
creditors holding liens on such property, if any, do not
object thereto, or, if such property is not available;
(C) order the conveyance to the secured creditor or holder of
an ownership interest of a lien on the residual funds from
the sale of encumbered property during the proceedings;
or
(D) allow the sale or disposition of the property: Provided,
That the sale or disposition will maximize the value of the
property for the benefit of the secured creditor and the
debtor, and the proceeds of the sale will be distributed in
accordance with the order prescribed under the rules of
concurrence and preference of credits (including Civil
Code provisions thereon).
The application of the secured creditor shall be made by motion
and shall be served on the debtor, the rehabilitation receiver, the
affected creditors, and the creditors’ committee (if one had already
been formed), in a manner that will ensure its receipt at least three
(3) days before the hearing, unless the court, for good reason shown,
sets the hearing on shorter notice.
SEC . 53. POST-COMMENCEMENT INTEREST.– The rate
and term of interest, if any, on secured and unsecured claims shall
be determined and provided for in the approved Rehabilitation Plan.
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S EC . 54. POST-COMMENCEMENT LOANS AND

OBLIGATIONS.– With the approval of the court, upon the duly
supported recommendation of the rehabilitation receiver, the debtor,
in order to enhance its rehabilitation, may
(A) enter into new credit arrangements, excluding restructured
obligations;
(B) enter into new credit arrangements (excluding restructured
obligations), secured by mortgages of its unencumbered
property or secondary mortgages of encumbered property
with the approval of the senior secured parties with regard
to the encumbered property; or
(C) incur other obligations as may be essential for its
rehabilitation.
The payment of the foregoing obligations shall be considered
administrative expenses under these Rules.
SEC . 55. TREATMENT OF EMPLOYEES’ CLAIMS.– The
claims for separation pay and salary of employees for months worked
prior to the commencement date shall be considered a pre-
commencement claims. The compensation of employees required
to carry on the business during the rehabilitation proceedings shall
be considered an administrative expense. Claims for salary and
separation pay for work actually performed after the commencement
date shall be an administrative expense.
SEC . 56. TREATMENT OF CONTRACTS.– Unless cancelled
by virtue of a final judgment of a court of competent jurisdiction
issued prior to the issuance of the Commencement Order, or at
anytime thereafter by the court before which the rehabilitation
proceedings are pending, all valid and subsisting contracts of the
debtor with creditors and other third parties as of the commencement
date shall continue to be in force; Provided, That within ninety (90)
days following the issuance of the Commencement Order, the debtor,
with the written consent of the rehabilitation receiver, shall send a
written notice to each contractual counter-party stating that it is
confirming the particular contract. Contractual obligations of the
debtor arising or performed during this period, and afterwards for
confirmed contracts, shall be considered administrative expenses.
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Contracts not confirmed within the 90-day deadline shall be

considered automatically terminated. Claims for actual damages, if
any, arising as a result of the election to terminate a contract shall
be considered pre-commencement claims against the debtor, to be
filed with the rehabilitation court as a separate claim. The claim
shall be considered in the rehabilitation plan together with the other
claims against the debtor.
Nothing contained herein shall prevent the cancellation or
termination of any contract of the debtor for any ground provided
by law.
(F) AVOIDANCE PROCEEDINGS

SEC . 57. RESCISSION OR NULLITY OF CERTAIN PRE-
COMMENCEMENT TRANSACTIONS.– Any transaction prior
to the commencement date entered into by the debtor or involving
its funds or assets may be rescinded or declared null and void on
the ground that it was executed with intent to defraud a creditor or
creditors or that it constitutes undue preference of creditors. Without
limiting the generality of the foregoing, a disputable presumption of
these designs shall arise if the transaction:
(A) provides unreasonably inadequate consideration to the
debtor and is executed within ninety (90) days prior to
the commencement date;
(B) involves an accelerated payment of a claim to a creditor
within ninety (90) days prior to the commencement date;
(C) provides security or additional security executed within
ninety (90) days prior to the commencement date;
(D) involves creditors who obtained or received more than
their pro rata share in the assets of the debtor, on a
transaction executed at a time when the debtor was
insolvent; or
(E) is intended to defeat, delay or hinder the ability of the
creditors to collect claims, where the effect of the transaction
is to put assets of the debtor beyond the reach of creditors
or to otherwise prejudice the interests of creditors.
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Nothing in this Section shall prevent the court from rescinding

or declaring as null and void a transaction on other grounds provided
by relevant legislation and jurisprudence, including the provisions of
the Civil Code on rescission.
SEC. 58. ACTIONS FOR RESCISSION OR NULLITY.–
(A) The rehabilitation receiver or, with his conformity, any creditor
may initiate and prosecute any action to rescind, or declare
null and void any transaction described in Section 57 of this
Rule.
If the rehabilitation receiver does not consent to the filing
or prosecution of such action, any creditor or the creditors’
committee may file and/or prosecute such action upon the
approval of the court and after a determination that the rights
of the creditors will be prejudiced if the action is not filed and/
or prosecuted.
(B) If leave of court is granted under subsection (A), the rehabilitation
receiver shall assign and transfer to the creditor or the creditors’
committee all rights, title and interest in the chose in action or
subject matter of the proceeding, including any document in
support thereof.
Any benefit derived from a proceeding instituted by the
creditor, to the extent of his claim and the costs, belongs
exclusively to him, and the surplus, if any, belongs to the estate.
Where, before an order is made under subsection (a), the
rehabilitation receiver (or liquidator) signifies to the court his
readiness to institute the proceeding for the benefit of the
creditors, the order shall fix the time within which he shall do
so and, in that case, the benefit derived from the proceeding,
if instituted within the time limits so fixed, belongs to the estate.
The action shall be filed in the court and shall be governed
by the rules on summary procedure.
(G) TREATMENT OF SECURED CREDITORS

S EC . 59. NO DIMINUTION OF SECURED CREDITOR
RIGHTS.– The issuance of the Commencement Order and the
186
Suspension or Stay Order, and any other provision of the Act, shall
not in any way diminish or impair the security or lien of a secured
creditor, or the value of his lien or security, except that his right to
enforce the security or lien may be suspended during the term of
the Stay Order.
The court, upon motion or recommendation of the rehabilitation
receiver, may allow a secured creditor to enforce his security or
lien, or foreclose upon property of the debtor securing his/its claim,
if the property is not necessary for the rehabilitation of the debtor.
The secured creditor and/or the other lien holders shall be admitted
to the rehabilitation proceedings only for the balance, if any, of his
claim.
SEC . 60. LACK OF ADEQUATE PROTECTION.– The court,
on motion or motu proprio, may terminate, modify or set conditions
for the continuance of suspension of payment, or relieve a claim
from the coverage thereof, upon showing that: (a) a creditor does
not have adequate protection over the property securing its claim;
or (b) the value of a claim secured by a lien on property which is
not necessary for rehabilitation of the debtor exceeds the fair market
value of the property.
For purposes of this Section, a creditor shall be deemed to lack
adequate protection if it can be shown that
(A) the debtor fails or refuses to honor a pre-existing agreement
with the creditor to keep the property insured;
(B) the debtor fails or refuses to take commercially reasonable
steps to maintain the property; or
(C) the property has depreciated to an extent that the creditor
is under-secured.
Upon showing of the creditor’s lack of protection, the court
shall order the debtor or the rehabilitation receiver to make
arrangements to provide for the insurance or maintenance of the
property, or to make payments or otherwise provide additional or
replacement security such that the obligation is fully secured. If
such arrangements are not feasible, the court may modify the Stay
Order to allow the secured creditor, lacking adequate protection, to
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enforce its security claim against the debtor: Provided, however,

That the court may deny the creditor the remedies in this paragraph
if the property subject of the enforcement is required for the
rehabilitation of the debtor.
If a motion is filed, it must be served on the debtor and the
rehabilitation receiver in a manner that will ensure its receipt at
least three (3) days before the hearing, unless the court, for good
reason shown, sets the hearing on shorter notice. If a creditors’
committee has been formed, the motion shall also be served on the
creditors’ committee.
(H) ADMINISTRATION OF PROCEEDINGS

S EC . 61. CONTENTS OF A REHABILITATION PLAN.–
The Rehabilitation Plan, as a minimum, shall
(A) specify the underlying assumptions, the financial goals
and procedures proposed to accomplish these goals,
including the duration and coverage of the rehabilitation;
(B) contain a liquidation analysis setting out for each creditor
or each class of creditor, as applicable, the amounts
they expect to receive under the Rehabilitation Plan and
those that they will receive if liquidation ensues within
one hundred twenty (120) days after the filing of the
petition;
(C) contain information sufficient to give the various classes
of creditors a reasonable basis for determining whether
supporting the Plan is in their financial interest when
compared to the immediate liquidation of the debtor,
including any reduction of principal interest and penalties
payable to the creditors;
(D) establish classes of voting creditors;
(E) establish subclasses of voting creditors if prior approval
has been granted by the court;
(F) indicate how the insolvent debtor will be rehabilitated,
among others, through: debt forgiveness; debt rescheduling;
reorganization or quasi-reorganization; dacion en pago;
debt-to-equity conversion; payment of unpaid subscriptions
188
by shareholders; sale of the business as a going concern;

setting-up of a new business entity or other similar
arrangements, to restore the financial well-being and
viability of the insolvent debtor;
(G) specify the treatment of each class or subclass described
in subsections (D) and (E);
(H) provide for equal treatment of all claims within the same
class or subclass, unless a particular creditor agrees to
a less favorable treatment;
(I) ensure that the payments made under the Rehabilitation
Plan (which shall include proposed dates of payment
and specific amounts on such dates to be paid to each
and every creditor) will follow the priority established
under the provisions of the Civil Code on concurrence
and preference of credits and other applicable laws;
(J) maintain the security interest of secured creditors and
preserve the liquidation value of the security unless this
has been waived or modified voluntarily;
(K) include relevant foreign ownership limits or information,
if any;
(L) disclose all payments to creditors for pre-commencement
debts made during the proceedings and the justifications
for these payments;
(M) describe the disputed claims and the provisioning of
funds to account for appropriate payments should the
claim be ruled valid or its amount adjusted;
(N) identify the debtor’s role in the implementation of the
Rehabilitation Plan;
(O) state any rehabilitation covenants of the debtor, whose
breach shall be considered a material breach of the
Rehabilitation Plan;
(P) identify those responsible for the future management of
the debtor and the supervision and implementation of
the Rehabilitation Plan, their affiliation with the debtor
and their remuneration;
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(Q) address the treatment of claims arising after the

confirmation of the Rehabilitation Plan;
(R) require the debtor and its counter-parties to adhere to
the terms of all contracts that the debtor has chosen to
confirm;
(S) arrange for the payment of all outstanding administrative
expenses as a condition to the Rehabilitation Plan’s
approval unless such condition has been waived in writing
by the creditors concerned;
(T) arrange for the payment of all outstanding taxes and
assessments, or an adjusted amount pursuant to a
compromise settlement with the BlR or other applicable
tax authorities;
(U) include a certified copy of a certificate of tax clearance
or evidence of a compromise settlement with the BIR;
(V) include a valid and binding resolution of a meeting of the
debtor’s stockholders to increase the shares by the required
amount in cases where the Rehabilitation Plan
contemplates an additional issuance of shares by the
debtor;
(W) state the compensation and status, if any, of the rehabilitation
receiver before and after the approval of the Rehabilitation
Plan;
(X) contain provisions for conciliation and mediation as a
prerequisite to court assistance or intervention;
(Y) include material financial undertakings or commitments
to support the Rehabilitation Plan;
(Z) contain provisions for monitoring the implementation
of the Rehabilitation Plan, including, requiring the
rehabilitation receiver and/or debtor to make reports
from time to time;
(AA) contain the manner of its implementation, giving due
regard to the interests of secured creditors such as the
non-impairment of their security liens or interests; and
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(BB) contain such other relevant information to enable a

reasonable investor to make an informed decision on
the feasibility of the Rehabilitation Plan.
The court may require such other information it may deem
necessary to determine the viability of the Rehabilitation Plan.
S EC . 62. CREDITOR APPROVAL OF REHABILITATION
PLAN.– The rehabilitation receiver shall notify the creditors and
stakeholders that the Rehabilitation Plan is ready for their examination.
Within twenty (20) days from the date of the notification, the
rehabilitation receiver shall convene the creditors, either as a whole
or per class, for purposes of voting on the approval of the Rehabilitation
Plan. Voting may be done in person, by a duly authorized representative,
or by mail, including secure electronic mail, received on or before
the meeting.
The Rehabilitation Plan shall be deemed rejected unless approved
by all classes of creditors whose rights are adversely modified or
affected by the Plan.
For purposes of this Section, the Rehabilitation Plan is deemed
to have been approved by a class of creditors if members of the
said class holding more than fifty percent (50%) of the total claims
of the said class vote in favor of the Plan. The votes of the creditors
shall be based solely on the amount of their respective claims based
on the registry of claims submitted by the rehabilitation receiver
pursuant to Section 44 of this Rule.
The rehabilitation receiver shall notify the court, the creditors
or creditors’ committee and the stakeholders of the approval or
rejection of the Rehabilitation Plan within five (5) days from the
date of such voting.
Notwithstanding the rejection of the Rehabilitation Plan, the
court may, motu proprio or upon motion of any interested party
within ten (10) days from notice of the rejection of the Rehabilitation
Plan, confirm the Plan if all of the following circumstances are
present:
(A) the Rehabilitation Plan complies with the requirements
specified in the Act and these Rules;
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(B) the rehabilitation receiver recommends the confirmation

of the Rehabilitation Plan;
(C) the shareholders, owners or partners of the juridical debtor
lose at least their controlling interest as a result of the
Rehabilitation Plan; and
(D) the Rehabilitation Plan would likely provide the objecting
class of creditors with compensation, which has a net
present value greater than that which they would have
received if the debtor were under liquidation.
SEC . 63. SUBMISSION OF REHABILITATION PLAN TO
THE COURT.– If the Rehabilitation Plan is approved, the
rehabilitation receiver shall submit the Plan to the court for confirmation.
Within five (5) days from receipt of the Rehabilitation Plan, the
court shall notify the creditors that the Rehabilitation Plan has been
submitted for confirmation; that any creditor may obtain copies of
the Rehabilitation Plan; and that any creditor may file an objection
thereto.
SEC . 64. FILING OF OBJECTIONS TO REHABILITATION
PLAN.– A creditor may file a verified opposition containing its
written objections to the Rehabilitation Plan accompanied by affidavits
and supporting documents within twenty (20) days from receipt of
notice from the court that the Rehabilitation Plan has been submitted
for confirmation.
Objections to a Rehabilitation Plan shall be limited to the following:
(A) the creditors’ support was induced by fraud;
(B) the documents or data relied upon in the Rehabilitation
Plan are materially false or misleading; or
(C) the Rehabilitation Plan is in fact not supported by the
voting creditors.
SEC . 65. HEARING ON THE OBJECTIONS.– If objections
have been submitted during the relevant period and the court finds
them sufficient in form and substance, it shall issue an order setting
the date and time for the hearing or hearings on the objections,
which shall not be later than ten (10) days from the expiration of
the period to file objections.
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After hearing, if the court finds merit in the objection, it shall

order the rehabilitation receiver or other party to cure the defect,
whenever feasible. If the court determines that the debtor acted in
bad faith, or that it is not feasible to cure the defect, the court shall
convert the proceedings into one for the liquidation of the debtor.
S EC . 66. CONFIRMATION OF THE REHABILITATION
PLAN.– The court shall issue an order confirming the Rehabilitation
Plan in any of the following instances:
(A) no objections are filed within the twenty (20)-day period
from receipt of notice from the court that a Rehabilitation
Plan has been submitted to court;
(B) the court finds the objections lacking in merit;
(C) the basis for the objection has been cured; or
(D) the debtor has complied with the order to cure the objection.
The court may confirm the Rehabilitation Plan notwithstanding
unresolved disputes over claims if the Rehabilitation Plan has made
adequate provisions for paying such claims.
Notwithstanding the first paragraph of this Section, if the court
finds that there is no substantial likelihood that the debtor can be
rehabilitated, it shall not confirm the Rehabilitation Plan and, instead,
declare a failure of rehabilitation in accordance with Section 73 of
this Rule.
The provisions of other laws to the contrary notwithstanding,
the court shall have the power to approve or implement the
Rehabilitation Plan despite the lack of approval, or objection from
the owners, partners or stockholders of the insolvent debtor: provided,
that the terms thereof are necessary to restore the financial well-
being and viability of the insolvent debtor.
The order confirming the Rehabilitation Plan shall specify the
portions approved by the court and the portions rejected during
consideration or cured by the rehabilitation receiver.
S EC . 67. EFFECTS OF CONFIRMATION OF REHABI-
LITATION PLAN.– The confirmation of the Rehabilitation Plan by
the court shall result in the following:
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(A) the Plan and its provisions shall bind the debtor and all
persons who may be affected thereby, including the
creditors, whether or not such persons have participated
in the proceedings or opposed the Plan or whether or not
their claims have been scheduled;
(B) the debtor shall comply with the provisions of the Plan
and shall take all actions necessary to carry them out;
(C) payments shall be made to the creditors in accordance
with the provisions of the Plan;
(D) contracts and other arrangements between the debtor
and its creditors shall remain valid and continue to apply
to the extent that they do not conflict with the provisions
of the Plan;
(E) any compromises on amounts or rescheduling of timing
of payments by the debtor shall be binding on the creditors
regardless of whether or not the Plan is successfully
implemented; and
(F) claims arising after the approval of the Plan that are
otherwise not treated by the Plan are not subject to any
Suspension Order.
The Order confirming the Plan shall comply with Rule 36 of
the Rules of Court: Provided, however, That the court may maintain
jurisdiction over the case in order to resolve claims against the
debtor that remain contested and allegations that the debtor has
breached the Plan.
S EC . 68. LIABILITY OF GENERAL PARTNERS OF A
PARTNERSHIP OR FOR UNPAID BALANCES UNDER AN
APPROVED PLAN.– The approval of the Rehabilitation Plan shall
not affect the rights of creditors to pursue separate actions against
general partners of a partnership to the extent they are liable under
relevant legislation for the debts thereof.
SEC. 69. TREATMENT OF AMOUNTS OF INDEBTEDNESS
OR OBLIGATIONS FORGIVEN OR REDUCED.– Amounts of
any indebtedness or obligations reduced or forgiven in connection
with a Plan’s approval shall not be subject to any tax in furtherance
of the purposes of the Act.
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S EC . 70. PERIOD FOR CONFIRMATION OF THE

REHABILITATION PLAN.– The court shall have a maximum
period of one (1) year from the date of the filing of the petition to
confirm a Rehabilitation Plan for the debtor.
If no Rehabilitation Plan is confirmed within this period, the
proceedings may, upon motion by any interested party, the rehabilitation
receiver, or motu proprio, be converted into one for the liquidation
of the debtor.
SEC. 71. DISCHARGE OF REHABILITATION RECEIVER.–
Upon the confirmation of the Rehabilitation Plan, the rehabilitation
receiver shall submit a report and accounting to the court within
thirty (30) days from such confirmation for the approval of the
court.
Upon approval of the report and accounting, the court shall
order the rehabilitation receiver’s discharge unless the Rehabilitation
Plan specifically describes the role of the rehabilitation receiver
and/or requires the rehabilitation receiver to assume certain duties
and responsibilities even after the confirmation of the Rehabilitation
Plan. In such case, the court shall order his discharge after the
termination of the rehabilitation proceedings and the approval of his
final report and accounting.
S EC . 72. AMENDMENTS TO THE APPROVED
REHABILITATION PLAN.– After the confirmation of the
Rehabilitation Plan, the debtor, rehabilitation receiver or any creditor
may file a verified motion for leave to amend the Plan. The motion
shall state the reasons warranting the amendment of the Rehabilitation
Plan and the proposed amendments, with a copy given to the
Within five days from filing of the motion, the court motu
proprio shall grant or deny the motion. If the court grants the
motion, it shall set the proposed amendments for hearing not later
than fifteen (15) days from date of the order. The order, which shall
include the proposed amendments, shall be published once in a
newspaper of general circulation in the Philippines not later than
five (5) days from date of the order.
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The proposed amendments shall be subject to the same

requirements set forth in Section 63 of this Rule.
The court shall act on the proposed amendments not later than
forty-five (45) days from the date of the filing of the motion for
leave to amend the Rehabilitation Plan.
(I) TERMINATION OF PROCEEDINGS

SEC . 73. TERMINATION OF PROCEEDINGS.– At any time
from the filing of the petition, any interested party or the rehabilitation
receiver may file a motion for the termination of the proceedings.
After hearing the motion, the court may order the proceedings
terminated by either declaring a successful implementation of the
Rehabilitation Plan or a failure of rehabilitation.
There is failure of rehabilitation in the following cases:
(A) Dismissal of the petition by the court;
(B) Failure to submit a Rehabilitation Plan;
(C) A Rehabilitation Plan is not confirmed by the court;
(D) Under the Rehabilitation Plan submitted by the debtor,
there is no substantial likelihood that the debtor can be
rehabilitated within a reasonable period based on the
requirements of Section 21 of the Act;
(E) The Rehabilitation Plan or its amendment is approved by
the court but in the implementation thereof, the debtor
fails to perform its obligations thereunder or there is a
failure to realize the objectives, targets or goals set forth
therein, including the timelines and conditions for the
settlement of the obligations due to the creditors and
other claimants;
(F) Determination that the Rehabilitation Plan may no longer
be implemented in accordance with its terms, conditions,
restrictions, or assumptions;
(G) There is a finding that fraud was committed in securing
the approval of the Rehabilitation Plan or its amendment;
(H) In cases falling under Section 65 of this Rule, where,
after finding merit in the objection/s raised against the
196
confirmation of the Rehabilitation Plan, the defect is not

cured within such time as the court may order, or if the
court determines that the debtor acted in bad faith, or
that it is not feasible to cure the defect; and
(I) Failure of the debtor to comply with these Rules, the
Rules of Court, or any order of the court.
Upon a breach of, or failure of the Rehabilitation Plan, the
court, upon motion by an affected party, and after hearing, may
(1) issue an order directing that the breach be cured within
a specified period of time, failing which the proceedings
may be converted to liquidation proceedings;
(2) issue an order converting the proceedings to liquidation
proceedings;
(3) allow the debtor or rehabilitation receiver to submit
amendments whose approval shall be governed by the
same requirements for creditor approval and court
confirmation of a Rehabilitation Plan under this Rule;
(4) issue any other order to remedy the breach consistent
with the Act and these Rules, other applicable law and
the best interests of the creditors; or
(5) enforce the applicable provisions of the Rehabilitation
Plan through a writ of execution.
S EC . 74. EFFECTS OF TERMINATION.– Termination of
the proceedings shall result in the following:
(A) the discharge of the rehabilitation receiver subject to his
submission of a final accounting; and
(B) the lifting of the Stay Order and any other court order
holding in abeyance any action for the enforcement of a
claim against the debtor.
If the termination of proceedings is due to failure of rehabilitation
or dismissal of the petition for reasons other than technical grounds,
the proceedings shall be immediately converted to liquidation as
provided in Section 92 of the Act.
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RULE 3
PRE-NEGOTIATED REHABILITATION
S EC . 1. PRE-NEGOTIATED REHABILITATION PLAN.–

An insolvent debtor, by itself or jointly with any of its creditors, may
file a verified petition with the court for the approval of a Pre-
Negotiated Rehabilitation Plan.
The petition shall comply with Section 2(A), Rule 2 of these
Rules, where applicable, and be supported by an affidavit showing
the written approval or endorsement of creditors holding at least
two-thirds (2/3) of the total liabilities of the debtor, including secured
creditors holding more than fifty percent (50%) of the total secured
claims of the debtor and unsecured creditors holding more than fifty
percent (50%) of the total unsecured claims of the debtor. Further,
the petition shall also include as a minimum the following:
(A) a Schedule of Debts and Liabilities which lists all the
creditors of the debtor, indicating the name and last address
of record of each creditor; the amount of each claim as
to principal, interest, or penalties due thirty (30) days
prior to the date of filing; the nature of the claim; and any
pledge, lien, mortgage, judgment or other security given
for the payment thereof;
(B) an Inventory of Assets which must list with reasonable
particularity all the assets of the debtor, whether in the
possession of the debtor or third parties, stating the nature
of each asset, its location and condition, its book value
and market value, and attaching the corresponding certified
copy of the certificate of title thereof in case of real
property, or the evidence of title or ownership in case of
movable property, the encumbrances, liens or claims thereon,
if any; and the identities and addresses of the lien holders
and claimants. The Inventory shall include
(1) a Schedule of Accounts Receivable which must
indicate the amount of each account, the persons
from whom due and their correct addresses, the
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dates of maturity, and the potential for collectability

categorizing them as highly collectible to remotely
collectible; and
(2) a Schedule of Existing Claims against third parties
which must indicate the name and last address of
record of each third party against whom the debtor
has a claim; the nature and amount of the claim,
including the principal, interest, or penalties due from
each third party and any pledge, lien, mortgage,
judgment or other security or collateral given for the
payment of each claim; and a brief statement of the
facts which gave rise to the claim;
(C) a summary of disputed claims against the debtor and a
report on the provisioning of funds to account for appropriate
payments should any such claims be ruled valid or their
amounts adjusted;
(D) an Affidavit of General Financial Condition which shall
contain answers to the questions or matters prescribed in
Annex “A” of these Rules; and
(E) the Pre-Negotiated Rehabilitation Plan, including the names
of at least three (3) qualified nominees for rehabilitation
receiver;
All attachments to the petition shall be deemed part and parcel
of the verified petition.
SEC . 2. ISSUANCE OF ORDER.– Within five (5) working
days from the date of filing the petition, if the court determines that
the petition is sufficient in form and substance, it shall issue an
Order which shall:
(A) identify the debtor, its principal business or activity/ies
and its principal place of business;
(B) declare that the debtor is under rehabilitation;
(C) summarize the ground/s for the filing of the petition;
(D) direct the publication of the Order in a newspaper of
general circulation in the Philippines once a week for at
least two (2) consecutive weeks, with the first publication
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to be made within seven (7) days from the time of its

issuance;
(E) direct the service by personal delivery of a copy of the
petition on each creditor who is not a petitioner holding
at least ten percent (10%) of the total liabilities of the
debtor, as determined in the schedule attached to the
petition, within three (3) days from the issuance of the
Order;
(F) state that copies of the petition and the Pre-Negotiated
Rehabilitation Plan are available for examination and copying
by any interested party;
(G) state that if no verified objection to the petition or the
Pre-Negotiated Rehabilitation Plan is submitted with the
court within eight (8) days from the date of the second
publication of the Order required under Subsection (D)
above, the court shall approve the Pre-Negotiated
Rehabilitation Plan within ten (10) days from the date of
the second publication of the Order, pursuant to Section
4 of this Rule;
(H) state that creditors and other interested parties may submit
their comments on the petition or the Pre-Negotiated
Rehabilitation Plan within a period of not later than twenty
(20) days from the second publication of the Order, under
(I) appoint a rehabilitation receiver, if not provided for in the
Pre-Negotiated Rehabilitation Plan; and
(J) impose a Suspension or Stay Order as described in these
Rules.
SEC . 3. EFFECTIVITY AND DURATION OF ORDER.– The
Order shall have the same effects as a Commencement Order
under Section 9, Rule 2 of these Rules. It shall retroact to the date
of the filing of the petition and shall be effective for one hundred
twenty (120) days from the filing of the petition unless earlier lifted
by the court on account of (a) the approval of the Pre-Negotiated
Rehabilitation Plan, or (b) the termination of the rehabilitation
proceedings.
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SEC . 4. APPROVAL OF PLAN.– If no verified objection to

the petition or the Rehabilitation Plan is filed within eight (8) days
from the date of the second publication of the Order provided in the
preceding section, the court shall approve the rehabilitation plan
within ten (10) days from the date of the second publication of such
order.
The approved rehabilitation plan shall not be implemented until
after the lapse of twenty (20) days from the date of the second
publication of the Order, unless the court conducts a hearing pursuant
to Section 7 of this Rule to consider the comments filed within
twenty (20) days from the date of the second publication of the
Order.
S EC . 5. OBJECTION TO THE PETITION OR
REHABILITATION PLAN.– Any creditor or other interested party
can only object on the following limited grounds:
(A) the allegations in the petition or the Pre-Negotiated
Rehabilitation Plan, or the attachments thereto, are materially
false or misleading;
(B) the majority of any class of creditors do not in fact support
the Pre-Negotiated Rehabilitation Plan;
(C) the support of the creditors or any of them was induced
by fraud; or
(D) the Pre-Negotiated Rehabilitation Plan fails to accurately
account for a claim against the debtor and the claim is
not categorically declared as a contested claim.
The objection must be submitted to and received by the court
not later than eight (8) days from the date of the second publication
of the Commencement Order. Copies of any objection to the petition
or the Pre-Negotiated Rehabilitation Plan shall be served on the
debtor, the rehabilitation receiver (if applicable), the secured creditor
with the largest claim and who supports the Pre-Negotiated
Rehabilitation Plan, and the unsecured creditor with the largest
claim and who supports the Pre-Negotiated Rehabilitation Plan.
SEC . 6. COMMENTS.– Any creditor or other interested party
may submit his comments on the petition or the Pre-Negotiated
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Rehabilitation Plan based on grounds other than those enumerated

in Section 5 of this Rule.
S EC . 7. HEARING ON THE OBJECTIONS AND
COMMENTS.– After receipt of objections under Section 5 and
comments under Section 6, both of this Rule, the court shall set the
case for hearing not earlier than twenty (20) days nor later than
thirty (30) days from the date of the second publication of the Order
issued pursuant to Section 2 of this Rule. If the court finds the
objection meritorious, it shall direct the debtor, when feasible, to
cure the defect within fifteen (15) days from receipt of the order.
If the court determines that the debtor or creditors supporting
the Pre-Negotiated Rehabilitation Plan acted in bad faith, or that
the objection is non-curable, the court may convert the rehabilitation
proceedings into liquidation.
A finding by the court that the objection has no substantial
merit or that the same has been cured shall be deemed an approval
of the Pre-Negotiated Rehabilitation Plan.
SEC . 8. PERIOD FOR APPROVAL OF REHABILITATION
PLAN.– The court shall have a maximum period of one hundred
twenty (120) days from the filing of the petition to approve or
disapprove the Pre-Negotiated Rehabilitation Plan filed under this
Rule.
If the court fails to so act within the said period, the Pre-
Negotiated Rehabilitation Plan shall be deemed approved. In such
a case, the court shall certify that no action has been made within
the one hundred twenty (120)-day period and the Pre-Negotiated
Plan is deemed approved pursuant to Section 81 of the Act.
SEC . 9. EFFECTS OF APPROVAL OF REHABILITATION
PLAN.– Approval of the Pre-Negotiated Rehabilitation Plan under
this Rule shall have the same legal effect as confirmation of a
rehabilitation plan under Section 66, Rule 2 of these Rules.
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RULE 4
OUT-OF-COURT OR INFORMAL
RESTRUCTURING AGREEMENT OR
REHABILITATION PLAN
S EC . 1. OUT-OF-COURT OR INFORMAL RESTRUCT-

URING AGREEMENTS OR REHABILITATION PLAN.– An out-
of-court or informal restructuring/workout agreement or rehabilitation
plan (OCRA) under the Act shall comply with both requirements:
(A) Approval by the
(1) debtor;
(2) creditors representing at least sixty-seven percent
(67%) of the secured obligations of the debtor;
(3) creditors representing at least seventy-five percent
(75%) of the unsecured obligations of the debtor;
and,
(4) creditors holding at least eighty-five percent (85%)
of the total liabilities, secured and unsecured, of the
debtor; and,
(B) Publication of the notice of the OCRA once a week for
at least three (3) consecutive weeks in a newspaper of
general circulation in the Philippines, as prescribed in
Section 4 of this Rule.
SEC . 2. STANDSTILL PERIOD.– A standstill period may be
agreed upon by the parties and shall be effective and enforceable
not only against the contracting parties but also against the other
creditors provided it complies with the following conditions:
(A) approval of the agreement for a standstill period by
creditors representing more than fifty percent (50%) of
the total liabilities of the debtor;
(B) publication of the notice of the agreement in a newspaper
of general circulation in the Philippines, once a week for
two (2) consecutive weeks; and
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(C) the standstill period shall not exceed one hundred twenty
(120) days from the date of effectivity.
The notice of the standstill agreement shall substantially state
the following minimum requirements:
(1) the identity of the debtor, its principal business or activity/
ies, and its principal place of business;
(2) the total amount of the liabilities of the debtor, classified
into secured and unsecured;
(3) that a contact person is identified, together with his contact
details, which should include existing office address, phone
numbers, and e-mail addresses;
(4) that creditors are invited to participate in the negotiations
for an OCRA and may do so by contacting the person
specified in the notice;
(5) that the creditors representing more than fifty percent
(50%) of the total liabilities of the debtor have agreed to
observe a standstill period which shall not exceed one
hundred twenty (120) days from its date of effectivity;
(6) that the terms and conditions agreed upon by the parties
shall be strictly observed during the standstill period;
(7) that the standstill period shall be effective after publication
of the notice once a week for two (2) consecutive weeks
in a newspaper of general circulation in the Philippines;
and
(8) that the OCRA shall be binding on the debtor and all
affected persons, including the creditors, whether or not
they will participate in the negotiations, if approved by all
of the following:
(a) the debtor;
(b) the creditors representing at least sixty-seven percent
(67%) of the secured obligations of the debtor;
(c) the creditors representing at least seventy-five percent
(75%) of the unsecured obligations of the debtor;
and
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(d) the creditors holding at least eighty-five percent (85%)

of the total liabilities, secured and unsecured, of the
debtor.
S EC . 3. EXPIRATION OF THE STANDSTILL PERIOD.–
The standstill period shall expire upon (1) the lapse of 120 days
from the effectivity of the standstill agreement, (2) the effectivity
of the OCRA, or (3) the termination of the negotiations for the
OCRA as declared by creditors representing more than fifty percent
(50%) of the total liabilities of the debtor, whichever comes first.
SEC . 4. PUBLICATION OF THE OCRA.– The notice of the
OCRA shall be published once a week for at least three (3) consecutive
weeks in a newspaper of general circulation in the Philippines.
The notice shall contain the following:
(A) the salient provisions of the OCRA;
(B) the OCRA is available for inspection or reproduction in
the offices of the debtor at the expense of the requesting
party;
(C) the number of secured creditors who approved the OCRA,
indicating how much they represent, in terms of percentage,
among the secured obligations of the debtor, which should
be at least sixty-seven percent (67%);
(D) the number of unsecured creditors who approved the
OCRA, indicating how much they represent, in terms of
percentage, among the unsecured obligations of the debtor,
which should be at least seventy-five percent (75%);
(E) the total number of creditors, secured or unsecured, who
approved the OCRA, indicating how much they represent,
in terms of percentage, among the total liabilities of the
debtor, which should be at least eighty-five percent (85%);
(F) upon its effectivity, the OCRA and its provisions shall be
binding upon the debtor and all affected persons, including
the creditors, whether or not they participated in the
proceedings or opposed the plan or whether or not their
claims have been scheduled;
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(G) payments shall be made to the creditors in accordance

with the provisions of the OCRA; and
(H) the manner and other requirements for the amendment or
modification of the OCRA.
The OCRA shall take effect upon the lapse of fifteen (15)
days from the date of the last publication of its notice.
SEC . 5. CRAM DOWN EFFECT.– An OCRA that is approved
pursuant to this Rule shall have the same legal effect as the
confirmation of a rehabilitation plan under a court-supervised
rehabilitation under Section 66, Rule 2 of these Rules.
S EC . 6. AMENDMENT OR MODIFICATION.– No
amendment or modification of the OCRA shall be valid unless it (a)
conforms to the manner and other requirements specified by the
parties for the amendment or modification of the OCRA, and (b)
complies with the requirements listed in Section 1 of this Rule.
The amended or modified OCRA shall take effect upon the
lapse of fifteen (15) days from the date of the last publication of the
required notice.
S EC . 7. EFFECT OF COURT ACTION OR OTHER
PROCEEDINGS.– The Regional Trial Courts, as courts of general
jurisdiction, shall have jurisdiction over the following:
(A) a petition for court assistance to execute or implement
the standstill agreement of the OCRA under Section 9 of
this Rule; and
(B) a petition for annulment of the standstill agreement or the
OCRA under Section 11 of this Rule.
Any court action or other proceedings arising from, or relating
to, the OCRA shall not stay its implementation, unless a temporary
restraining order or preliminary prohibitory injunction is issued by
the Court of Appeals in an original action under Rule 65 of the
Rules of Court.
SEC . 8. VENUE.– The petition for court assistance to execute
or implement, or for the annulment of either the standstill agreement
or the OCRA may be filed with the Regional Trial Court having
206
jurisdiction over the place in which the insolvent debtor resides or

has its principal place of business.
S EC . 9. PETITION FOR COURT ASSISTANCE.– An
application for court assistance to execute or implement a standstill
agreement or an OCRA may be filed by the insolvent debtor and/
or creditor, as the case may be, and shall be in the form of a petition
which contains, as a minimum, the following:
(A) the identity of the debtor, its principal business of activity/
ies, and its principal place of business;
(B) if the petition is filed by the creditor, the identity of the
creditor and its principal place of business;
(C) the identity and addresses of the party/ies against whom
the assistance is sought;
(D) a statement of the dates the standstill agreement or the
OCRA was executed and became effective;
(E) an allegation that the requisite creditor approval for a
standstill agreement or for an OCRA has been obtained,
in accordance with Section 2(A) or Section 1(A) of this
Rule, respectively;
(F) an allegation that the notice of the standstill agreement or
the OCRA has been duly published in accordance with
Section 2(B) or 1(C) of this Rule, respectively;
(G) The salient provisions of the standstill agreement or the
OCRA, including the provisions sought to be enforced;
and
(H) the specific form of assistance or relief sought.
A petition for court assistance shall be accompanied by a copy
of the standstill agreement or the OCRA.
SEC . 10. FORMS OF ASSISTANCE.– The court may assist
in the execution or implementation of the standstill agreement or the
OCRA by issuing a writ of execution to enforce its terms.
Nothing in this Rule limits the power of the court to provide
any other form of additional assistance as may be necessary to
execute or implement the standstill agreement or the OCRA, including
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the award of damages properly pleaded and proved, and to protect

the interests of the creditors, the debtor, and other interested parties.
SEC . 11. PETITION FOR ANNULMENT OF AN OCRA.–
The debtor or creditor may file a petition to annul (1) the standstill
agreement or (2) the OCRA based on the ground of non-compliance
with the requirements for a standstill agreement under Section 2 of
this Rule, or an OCRA under Section 1 of this Rule.
Vitiation of consent due to fraud, intimidation, or violence may
be raised as a ground to annul the standstill agreement or the OCRA
if committed against such number of creditors required for the
approval of the standstill agreement or OCRA, as the case may be.
The petition shall allege, as a minimum, the following:
(A) the identity of the debtor, its principal business or activity/
ies, and its principal place of business; and
(B) the ground for the petition.
The petition shall be accompanied by a copy of the standstill
agreement or the OCRA and the amendments/modifications, if any,
and shall be filed not later than thirty (30) days from the effectivity
thereof.
SEC . 12. SERVICE OF SUMMONS.– Upon the filing of the
petition, the court shall immediately issue and cause to be served
the corresponding summons to the respondents within five (5) days
from receipt of the petition.
The summons shall be accompanied with a copy of the petition,
with all its attachments, and shall be served on all the person(s)
indicated as respondents.
The summons shall direct the respondent to file a comment
and/or opposition to the petition within a non-extendible period of
five (5) days from receipt of the summons.
The summons, orders and other court processes may be served
by the sheriff, his deputy or other proper court officer or, for justifiable
reasons, by the counsel or representative of the petitioner, or any
suitable person authorized or deputized by the court issuing the
summons. Any private person who is authorized or deputized by the
208
court to serve summons, orders and other court processes shall, for
that purpose, be considered an officer of the court.
Service of summons to a respondent residing in the Philippines
shall be made in person or by substituted service, in accordance
with the Rules of Court.
Should either personal or substituted service fail, summons
may be served by publication in a manner the court deems appropriate
under the circumstances. In the case of juridical entities, summons
by publication shall be done by indicating the names of its officers
or its duly authorized representative.
Service of summons to a respondent not residing in the Philippines
shall be effected out of the Philippines through any of the following
means:
(a) By personal service coursed through the appropriate court
in the foreign country, with the assistance of the Department
of Foreign Affairs;
(b) By publication once in a newspaper of general circulation
in the country where the respondent may be found and by
serving a copy of the summons and the court order by
registered mail at the last known address of the respondent;
(c) By facsimile or any recognized electronic means that
could generate proof of service; or
(d) By such other means as the court may in its discretion
direct.
S EC . 13. COMMENT OR OPPOSITION.– The respondent
shall file a verified comment or opposition to the petition, together
with supporting affidavits and documents, within five (5) days from
receipt of the summons and ensuring receipt thereof by the petitioner
and the court not less than three (3) days before the date of the
summary hearing under Section 15 of this Rule.
In an action for court assistance, a respondent may raise the
defense that the standstill agreement or the OCRA is void for
failure to comply with the requirements under Section 2 or Section
1 of this Rule, respectively. A respondent may raise the invalidity of
the standstill agreement or the OCRA on the ground of vitiation of
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80 A.M. No. 12-12-11-SC
consent only if it affects such number of creditors required for the

approval of the standstill agreement of the OCRA, as the case may
be.
The failure to raise either defense shall constitute as waiver
and preclude the respondent from filing a separate petition to annul
the standstill agreement or the OCRA.
SEC . 14. COURT ORDER ON PETITION.– On the basis of
the allegations of the petition and the comment or opposition, and
their supporting documents, the court shall determine whether there
is a genuine issue of material facts. In case the respondent fails to
file a comment or opposition the petition, the court may conduct
clarificatory hearings.
If the court determines that there is no genuine issue of material
fact, the court shall rule whether the petition shall be granted. The
court shall issue the order within five (5) days from receipt of the
comment or opposition.
SEC . 15. SUMMARY HEARING.– If the court determines
that there exists a genuine issue of material facts, it shall conduct
a summary hearing not later than twenty (20) days from the filing
of the petition.
The 120-day standstill period shall continue to run during the
pendency of an action involving a standstill agreement. Upon the
finality of the decision, the parties shall have the remaining balance
of the period to enforce the decision, which in any case shall not be
less than sixty (60) days.
The court shall render judgment which shall be not later than
sixty (60) days from the filing of the petition.
SEC . 16. REVIEW OF DECISION OR ORDER IN OCRA.–
The judgment in an action to implement or enforce a standstill
agreement shall be final and immediately executory.
The judgment in any action involving the OCRA shall be final
within ten (10) days from receipt of the decision and is immediately
executory.
210
A judgment of the court under this Rule may be elevated to the

Court of Appeals under Rule 65 of the Rules of Court.
A final judgment shall be without prejudice to the parties availing
of the other modes of rehabilitation under Rule 2 or 3 of these
Rules.
RULE 5
CROSS-BORDER INSOLVENCY PROCEEDINGS
SEC. 1. SCOPE OF APPLICATION.– This Rule applies where

(A) assistance is sought in a Philippine court by a foreign
court or a foreign representative in connection with a
foreign proceeding;
(B) assistance is sought in a foreign State in connection with
a proceeding governed by the FRIA and these Rules; or
(C) a foreign proceeding and a proceeding governed by the
FRIA and these Rules are concurrently taking place; or
(D) Creditors in a foreign State have an interest in requesting
the commencement of, or participating in, a proceeding
under Rules 2, 3, and 4 of these Rules.
The sole fact that a petition is filed pursuant to this Rule does
not subject the foreign representative or the foreign assets and
affairs of the debtor to the jurisdiction of the local courts for any
purpose other than the petition for recognition and resulting related
proceedings.
S EC . 2. AUTHORIZATION OF A REHABILITATION
RECEIVER TO ACT IN A FOREIGN STATE.– A rehabilitation
receiver is authorized to act in a foreign State on behalf of a proceeding
under these Rules, as permitted by the applicable foreign law.
S EC . 3. ACCESS OF FOREIGN CREDITORS TO A
PROCEEDING UNDER THESE RULES.–
(A) Subject to Sections 1 and 4 of this Rule, to paragraph 2
of this Section, and to the rule of reciprocity, foreign
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82 A.M. No. 12-12-11-SC
creditors have the same rights regarding proceedings

commenced under Rules 2, 3 and 4 of these Rules as
creditors in the Philippines.
(B) Paragraph 1 above does not affect the ranking of claims
in a proceeding under the relevant laws.
S EC . 4. RULES ON PUBLIC POLICY AND
RECIPROCITY.– The court shall refuse to take any action in any
proceeding contemplated under Section 1 of this Rule if
(A) the action would be manifestly contrary to the public
policy of the Philippines; and
(B) the court finds that the country where the foreign
rehabilitation proceeding is taking place does not extend
recognition to a Philippine rehabilitation proceeding, or
that the country of which the petitioner-foreign creditor
is a national does not grant the same rights to a Philippine
creditor in a manner substantially in accordance with
these Rules.
S EC . 5. PETITION FOR RECOGNITION OF FOREIGN
PROCEEDING.–
(A) A foreign representative may apply with the Regional
Trial Court which has jurisdiction over the place where
the debtor resides or holds principal office for recognition
of the foreign proceeding in which the foreign representative
has been appointed.
(B) Whenever a petition for recognition of a foreign proceeding
is filed after a proceeding under these Rules has been
commenced, the petition for recognition of the foreign
proceeding shall be filed with the same court.
(C) A petition for recognition shall be accompanied by
(1) a certified copy of the order commencing the foreign
proceeding and appointing the foreign representative;
or
(2) a certificate from the foreign court affirming the
existence of the foreign proceeding and of the
appointment of the foreign representative; or
212
(3) in the absence of evidence referred to in

subparagraphs (1) and (2), any other evidence
acceptable to the court of the existence of the foreign
proceeding and of the appointment and identity of
the foreign representative; and
(4) any additional evidence that the court may deem
necessary, and allege how the petition is affected by
the factors in granting relief specified under Section
13 of this Rule.
(D) An application for recognition shall also be accompanied
by a statement identifying all foreign proceedings in respect
of the debtor that are known to the foreign representative.
(E) The court may require a translation of documents supplied
in support of the application for recognition into an official
language of this State.
S EC . 6. NOTICE OF FILING OF PETITION FOR
RECOGNITION.– Within three (3) days from the filing of the
petition for recognition of a foreign proceeding, the court shall
acknowledge the fact of filing and issue a Notice of filing of the
petition, which shall be published once in a newspaper of general
circulation within five (5) days from its issuance. The Notice shall
likewise state that any opposition to the petition should be filed
within five (5) days from publication.
SEC. 7. PRESUMPTIONS CONCERNING RECOGNITION.–
If the order or certificate referred to in paragraph (C), subparagraphs
(1) or (2), of Section 5 of this Rule is attached to the petition for
recognition, the court may disputably presume that
(A) a foreign proceeding is a proceeding as defined under
Section 5(g), Rule 1 of these Rules;
(B) the foreign representative is a person or body as defined
under Section 5(j), Rule 1 of these Rules and has established
its identity;
(C) the documents submitted in support of the petition for
recognition are authentic, whether or not they have been
legalized; and
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84 A.M. No. 12-12-11-SC
(D) the debtor’s registered office, or habitual residence in the

case of an individual, is the centre of the debtor’s main
interests.
S EC . 8. RECOGNITION OF FOREIGN PROCEEDING.–
Subject to Section 4 of this Rule, a foreign proceeding shall be
recognized if
(A) the proceeding is a foreign proceeding as defined under
these Rules;
(B) the person or body applying for recognition is a foreign
representative as defined under these Rules; and
(C) the petition meets the requirements of Section 5 of this
Rule.
The foreign proceeding may be recognized either as a foreign
main proceeding or a foreign non-main proceeding, as defined and
understood under Section 5(h) and (i), Rule 1 of these Rules.
The court may modify or terminate the Order granting recognition,
if it is shown that the grounds for granting it were fully or partially
lacking or have ceased to exist.
S EC . 9. PERIOD TO RECOGNIZE FOREIGN
PROCEEDING.– A petition for recognition of a foreign proceeding
shall be decided within thirty (30) days from its filing.
SEC . 10. NOTIFICATION TO COURT.– From the time of
filing the petition for recognition of the foreign proceeding, the
foreign representative shall inform the court promptly of:
(A) any substantial change in the status of the foreign proceeding
or the status of the foreign representative’s appointment;
and
(B) any other foreign proceeding regarding the same debtor
that becomes known to the foreign representative,
and how the changes or developments affect or have affected the
petition.
SEC. 11. PROVISIONAL RELIEF THAT MAY BE GRANTED
UPON APPLICATION FOR RECOGNITION OF A FOREIGN
214
PROCEEDING.– From the time of the complete publication of the

notice of the fact of filing under Section 6 of this Rule until the
same is decided upon, the court may, upon motion of the foreign
representative where relief is urgently needed to protect the assets
of the debtor or the interests of the creditors and there is prima
facie showing that the petition is meritorious, grant relief of a
provisional nature, including:
(A) staying execution against the debtor’s assets;
(B) entrusting the administration or realization of all or part
of the debtor’s assets located in the Philippines to the
foreign representative or another person designated by
the court in order to protect and preserve the value of
assets that, by their nature or because of other
circumstances, are perishable, susceptible to devaluation
or otherwise in jeopardy;
(C) any relief mentioned in Section 13 (A) (3), (4) and (6) of
this Rule.
Unless extended, the provisional relief granted under this section
terminates when the application for recognition is decided upon.
The court may refuse to grant the provisional relief under this
section if such relief would interfere with the administration of a
foreign main proceeding.
S EC . 12. EFFECTS OF RECOGNITION OF FOREIGN
PROCEEDING.–
(A) Upon recognition of a foreign main proceeding:
(1) commencement or continuation of individual actions
or individual proceedings concerning the debtor’s
assets, rights, obligations or liabilities is stayed, provided
that, such stay does not affect the right to commence
actions or proceedings to preserve ad cautelam a
claim against the debtor. For this purpose, the plaintiff
may file the appropriate court action or proceeding
against the debtor by paying the amount of One
Hundred Thousand Pesos (P100,000.00) or one-tenth
(1/10) of the prescribed filing fee, whichever is lower.
215
86 A.M. No. 12-12-11-SC
The payment of the balance of the filing fee shall be

a jurisdictional requirement for the continuation of
the proceedings in the ad cautelam claim;
(2) execution against the debtor’s assets is stayed in
accordance with Section 9, Rule 2 of these Rules;
and
(3) the right to transfer, encumber or otherwise dispose
of any assets of the debtor is suspended in accordance
with Section 9, Rule 2 of these Rules.
(B) Upon recognition of a foreign proceeding, the foreign
representative is entitled to participate, through counsel,
in any proceeding involving the debtor filed under these
Rules.
(C) The recognition of the foreign proceeding does not affect
the right of Philippine creditors to commence or continue
a rehabilitation or liquidation proceeding under these Rules
or the right to file or continue claims in these proceedings.
(D) The order granting recognition of the foreign proceeding
shall be published in two separate newspapers of general
circulation not later than five (5) days from its issuance.
S EC . 13. RELIEF THAT MAY BE GRANTED AFTER
RECOGNITION OF FOREIGN PROCEEDING.–
(A) Upon recognition of a foreign proceeding, where necessary
to protect the assets of the debtor or the interests of the
creditors, the court may, upon motion of the foreign
representative, grant any appropriate relief including:
(1) staying the commencement or continuation of individual
actions or individual proceedings concerning the
debtor’s assets, rights, obligations or liabilities to the
extent they have not been stayed under Section
12(A)(1) of this Rule;
(2) staying execution against the debtor’s assets to the
extent it has not been stayed under Section 12(A)(2)
of this Rule;
216
(3) suspending the right to transfer, encumber or otherwise

dispose of any assets of the debtor to the extent that
this right has not been suspended under Section
12(A)(3) of this Rule;
(4) providing for the examination of witnesses, the taking
of evidence or the delivery of information concerning
the debtor’s assets, affairs, rights, obligations or
liabilities;
(5) entrusting the administration or realization of all or
part of the debtor’s assets located in the Philippines
to the foreign representative or another person
designated by the court;
(6) granting any additional relief that may be available
to the rehabilitation receiver under the law or these
Rules.
(B) Upon recognition of a foreign proceeding, the court may,
at the request of the foreign representative, entrust the
distribution of all or part of the debtor’s assets located in
the Philippines to the foreign representative or another
person designated by the court: provided that the court is
satisfied that the interests of local creditors are adequately
protected.
SEC. 14. FACTORS IN GRANTING RELIEF.– In determining
whether to grant relief under this Rule, the court shall consider
(A) the protection of creditors in the Philippines and the
inconvenience in pursuing their claim in a foreign proceeding;
(B) the just treatment of all creditors through resort to a
unified insolvency or rehabilitation proceedings;
(C) whether other jurisdictions have given recognition to the
foreign proceeding;
(D) the extent that the foreign proceeding recognizes the rights
of creditors and other interested parties in a manner
substantially in accordance with the manner prescribed
in this Rule; and
217
88 A.M. No. 12-12-11-SC
(E) the extent that the foreign proceeding has recognized and
shown deference to proceedings under the Act and previous
legislation.
S EC . 15. PROTECTION OF CREDITORS AND OTHER
INTERESTED PERSONS.–
(A) The court may impose conditions in the grant of relief
under Sections 11 and 13 of this Rule, as it may deem
appropriate.
(B) The court may, motu proprio or upon motion of the foreign
representative, or of a person affected by the relief granted
under Sections 11 and 13 of this Rule, modify or terminate
such relief.
SEC . 16. ACTIONS TO AVOID ACTS DETRIMENTAL TO
CREDITORS.– Upon recognition of a foreign proceeding, the foreign
representative, through counsel, acquires the standing to initiate
actions to avoid or otherwise render ineffective acts detrimental to
creditors that are available under these Rules.
S EC . 17. INTERVENTION BY FOREIGN REPRESENT-
ATIVE IN PHILIPPINE PROCEEDINGS.– Upon recognition of
a foreign proceeding, the foreign representative may intervene,
through counsel, in any action or proceeding in the Philippines in
which the debtor is a party.
S EC . 18. COOPERATION AND DIRECT COMMUNI-
CATION WITH FOREIGN COURTS.– In matters covered by this
Rule, the court shall cooperate to the maximum extent possible in
all court-to-court communications for purposes of information or
assistance.
S EC . 19. COOPERATION AND DIRECT COMMUNI-
CATION BETWEEN THE REHABILITATION RECEIVER OR
LIQUIDATOR AND FOREIGN COURTS OR FOREIGN
REPRESENTATIVES.–
(A) In matters referred to in Section 1 of this Rule, a
rehabilitation receiver or liquidator shall, in the exercise
of its functions and subject to the supervision of the court,
218
cooperate to the maximum extent possible with foreign

courts or foreign representatives.
(B) The rehabilitation receiver or liquidator is entitled, in the
exercise of its functions and subject to the supervision of
the court, to communicate directly with foreign courts or
foreign representatives.
S EC . 20. FORMS OF COOPERATION.– Cooperation may
be implemented by any appropriate means, including but not limited
to the following:
(A) appointment of a person or body to act at the discretion
of the court;
(B) communication of information by any means considered
appropriate by the court;
(C) coordination of the administration and supervision of the
debtor’s assets and affairs;
(D) approval or implementation by courts of agreements
concerning the coordination of proceedings;
(E) coordination of concurrent proceedings regarding the same
debtor;
(F) suspension of proceedings against the debtor;
(G) limiting the relief to assets that should be administered in
a foreign proceeding pending in a jurisdiction other than
the place where the debtor has its principal place of
business (foreign non-main proceeding) or information
required in that proceeding; and
(H) implementation of rehabilitation or re-organization plan
for the debtor.
Nothing in this Rule limits the power of the court to provide
additional assistance to the foreign representative under other
applicable laws.
S EC. 21. COMMENCEMENT OF LOCAL PROCEEDING
AFTER RECOGNITION OF FOREIGN PROCEEDING.– After
the recognition of a foreign proceeding, a local proceeding under
these Rules may be commenced only if the debtor is doing business
219
90 A.M. No. 12-12-11-SC
in the Philippines. The effects of the proceedings shall be restricted

to the assets of the debtor located in the country and, to the extent
necessary to implement cooperation and coordination under Sections
19 and 20 of this Rule, to the other assets of the debtor that, under
local laws, must be administered in that proceeding.
SEC. 22. LOCAL AND FOREIGN PROCEEDINGS.– Where
a foreign proceeding and a local proceeding are taking place
concurrently regarding the same debtor, the court shall seek cooperation
and coordination under Sections 19 and 20 of this Rule. Any relief
granted to the foreign proceeding must be made consistent with the
relief granted in the local proceeding.
RULE 6
PROCEDURAL REMEDIES
SEC . 1. MOTION FOR RECONSIDERATION.– A party may

file a motion for reconsideration of any order issued by the court
prior to the approval of the Rehabilitation Plan. No relief can be
extended to the party aggrieved by the court’s order on the motion
through a special civil action for certiorari under Rule 65 of the
Rules of Court.
An order issued after the approval of the Rehabilitation Plan
can be reviewed only through a special civil action for certiorari
under Rule 65 of the Rules of Court.
S EC . 2. REVIEW OF DECISION OR ORDER ON
REHABILITATION PLAN.– An order approving or disapproving
a rehabilitation plan can only be reviewed through a petition for
certiorari to the Court of Appeals under Rule 65 of the Rules of
Court within fifteen (15) days from notice of the decision or order.
220
RULE 7
MISCELLANEOUS AND FINAL PROVISIONS
SEC . 1. APPLICABILITY OF PROVISIONS.– The provisions

in Rules 2 (Court-Supervised Rehabilitation), insofar as they are
applicable, shall likewise apply to proceedings in Rule 3 (Pre-Negotiated
Rehabilitation) and Rule 4 (Out-of-Court or Informal Restructuring
Agreements).
SEC . 2. EFFECTIVITY.– These Rules shall take effect fifteen
(15) days after their complete publication in the Official Gazette or
in at least two (2) newspapers of national circulation in the Philippines.
Published in the Official Gazette

(Vol. 109, No. 40, pages 6813-6863)
on October 7, 2013
Effective: October 22, 2013

221
92 A.M. No. 12-12-11-SC
ANNEX “A”
AFFIDAVIT OF GENERAL FINANCIAL CONDITION
(1) Are you an officer of the debtor referred to in these

proceedings?
(2) What is your full name and what position do you hold in
the debtor?
(3) What is the full name of the debtor and what is the
address of its head office?
(4) When was it formed or incorporated?
(5) When did the debtor commence business?
(6) What is the nature of its business? What is the market
share of the debtor in the industry in which it is engaged?
(7) Who are the parties, members, or stockholders? How
many employees?
(8) What is the capital of the debtor?
(9) What is the capital contribution and what is the amount
of the capital, paid and unpaid, of each of the partners or
shareholders?
(10) Do any of these people hold the shares in trust for others?
(11) Who are the directors and officers of the debtors?
(12) Does the debtor have any subsidiary corporation? If so,
give particulars?
(13) Has the debtor properly maintained its books and are
they updated?
(14) Were the books audited annually?
(15) If so, what is the name of the auditor and when was the
last audited statement drawn up?
222
(16) Were all the proper returns made to the various government
agencies which required them?
(17) When did the debtor first become aware of its problems?
(18) Has the debtor, within the twelve months preceding the
filing of the petition
(a) made any payments, returned any goods or delivered
any property to any of its creditors, except in the
normal course of business?
(b) executed any mortgage, pledge, or security over any
of its properties in favor of any creditor?
(c) transferred or disposed of any of its properties in
payment of any debt?
(d) sold, disposed of, or removed any of its property
except in the ordinary course of business?
(e) sold any merchandise at less than fair market value
or purchased merchandise or services at more than
fair market value?
(f) made or been a party to any settlement of property
in favor of any person? If yes, give particulars.
(19) Has the debtor recorded all sales or dispositions of assets?
(20) What were the sales for the last three years and what
percentage of the sales represented the profit or mark-
up?
(21) What were the profits or losses for the debtor for the last
three years?
(22) What are the causes of the problems of the debtor? Please
provide particulars?
(23) When did you first notice these problems and what actions
did the debtor take to rectify them?
(24) How much, in your estimate, is needed to rehabilitate the
debtor?
223
94 A.M. No. 12-12-11-SC
(25) Has any person expressed interest in investing new money

to the debtor?
(26) Are there any pending and threatened legal actions against
the debtor? If so, please provide particulars.
(27) Has the debtor discussed any restructuring or repayment
plan with any of the creditors? Please provide status and
details.
(28) Has any creditor expressed interest in restructuring the
debts of the debtor? If so, please give particulars.
(29) Have employees’ wages and salaries been kept current?
If not, how much are in arrears and what time period do
the arrears represent?
(30) Have obligation to the government and its agencies been
kept current? If not, how much are in arrears and what
time period do the arrears represent?
224
SUB-COMMITTEE ON COMMERCIAL COURTS
Chairperson
JUSTICE ARTURO D. B RION
Vice-Chairperson
JUSTICE ESTELA M. PERLAS-BERNABE
Members
JUSTICE J APAR B. DIMAAMPAO
COURT OF APPEALS
JUSTICE APOLINARIO D. B RUSELAS, J R.
COURT OF APPEALS
J UDGE REYNALDO B. D AWAY
REGIONAL TRIAL C OURT OF Q UEZON C ITY, BRANCH 90
DIRECTOR GENERAL R ICARDO R. B LANCAFLOR
INTELLECTUAL P ROPERTY O FFICE
ATTY . FRANCIS E D. LIM
ANGARA ABELLO CONCEPCION REGALA & CRUZ LAW O FFICES
ATTY. RENA M. RICO -PAMFILO
R OMULO M ABANTA BUENAVENTURA S AYOC &
DE LOS ANGELES LAW O FFICES
Secretary
ATTY. EVANGELINE M. CO, OAJ B RION
Assistant Secretary
ATTY. KAREN J. ADRIANO-PACPACO , OAJ BRION
Secretariat
ATTY. MARC ANTHONY M. PERALTA, OAJ BRION
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'sCupS
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242

Edi
ti
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243
Me
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urto
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bra
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ts9th Fo
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244

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245
246

TheCo
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i nba
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n20
13.
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ir
stwa
she
ldo
n
Aug
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oll
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ll
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r3,2013.I
nre
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247
ne
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248

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Annual Report for

Calendar Year 2013
The first year under Presiding Justice Roman G. Del Rosario
Statistical Summaries
The Court of Tax Appeals (CTA for brevity), under the term of
newly appointed Presiding Justice Roman G. Del Rosario, had the
following major accomplishments for calendar year 2013:
x The CTA maintained a good disposal rate of cases.
A substantial output of 335 disposed cases over a case input of

1,242 or a case disposal rate of twenty-seven percent (27%) was
achieved. Details are as follows:
CASE CASE PERCENTAGE

INPUT OUTPUT OF CASE
DISPOSAL
JUDICIAL
MATTERS 1,2421 335 27%
1
Breakdown of case input of 1242: Beginning balance-856+cases filed in 2013-355+remanded/reopened-31.
Note: Archived cases - 102
305
Output per Division
Division Case Output
First Division 51
Second Division 54
Third Division 35
En Banc 119
Through Resolutions 76
Total 335
In terms of the amount or peso value, the 335 cases disposed of

by the Court represent about P7.1 Billion in taxes and duties litigated
for the year.
The next table gives an overview of the age of cases pending

before the Court for the year 2013. Majority of the CTA caseload is
composed of relatively new cases, more than forty-three percent (43%) is
less than a year old, sixty-seven percent (67%) is less than two years
old, eighty-three percent (83%) is less than three (3) years, and no case
is more than ten (10) years old. This indicates a manageable caseload
with a good timeline of cases, even considering the fact that tax cases
are complicated, taxation being a highly specialized field of law.
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306
Aging of Pending Cases
Ordinary En
Period Criminal Total %
Civil Banc
Less than 1 year 35 186 130 351 43.6
1 year to less than 2 years 22 146 18 186 23.1

2 years to less than 3
31 100 2 133 16.5
years
15 43 1 59 7.3
years
10 20 0 30 3.7
years
2 18 0 20 2.5
years
1 9 0 10 1.2
years
1 6 0 7 0.9
years
0 8 0 8 1.1
years
0 1 0 1 0.1
years
10 years or more 0 0 0 0 0
Total Pending Cases 117 537 151 805 100.0%
Filed vs Disposed Cases

3|Page
307
450
400
350
300
250 Disposed
200 Filed
150
100
50
0
05
06
07
10
11
12
13
08
09
20
20
20
20
20
20
20
20
20
The chart above displays the trend in the cases filed before the
Court and those disposed of from year 2005 to 2013. It illustrates the
significant number of disposed cases vis-a-vis the filed cases since the
Court’s expansion in terms of jurisdiction and membership in the last
quarter of 2004. The average case output for the past three (3) years
is twenty-nine percent (29%).
The CTA caseload has remained manageable due to a good case

clearance rate. Cases filed in the past few years have remained above
the three hundred fifty (350) mark and the number of cases disposed
of is nearly the same, notwithstanding the passage of the tax amnesty
law, the abatement program of the BIR, and, the economic crisis
plaguing businesses or corporations, which comprise the majority of
the Court’s petitioners. This shows public confidence in the handling
of Court operations.
4|Page
308
Monetary Summary
CTA Decisions/Resolutions Awarded in Favor of the
Government and the Taxpayers for Fiscal Year 2013
Respondent Petitioner
Total
(Government) (Taxpayers)
Claim/Refund 3,134,251,664.42 954,677,402.06

4,088,929,066.48
Assessment 1,904,101,164.14 1,137,429,567.77

3,043,530,731.91
TOTAL (PhP) 5,038,652,828.56 2,092,106,969.83

7,132,459,798.39
• Contributed PhP5,038,652,828.56 to the Fiscal Effort of the

Government
The Court continued to contribute to the fiscal effort of the

Government in terms of taxes, duties and other revenues it adjudged
in favor thereof. For the year 2013, aside from the Bureau of Internal
Revenue (BIR) and Bureau of Customs (BOC) cases disposed of
through decisions and resolutions. The Court had adjudicated in
favor of the government a total of PhP5,038,652,828.56 in taxes and
duties due it and/or collectible by it, significantly higher than the
2012 amount of PhP3,882,761,526.10.
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309
• Significant decisions rendered by the Court for 2013 are

hereunder listed for the guidance of the public
Landmark Decisions
1. DNATA, Inc. vs. Commissioner of Internal Revenue; CTA EB. No.

842 (CTA Case No. 7780), March 18, 2013
The Court affirmed the dismissal by the Court in Division of

the Petition for Review due to petitioner’s failure to pay the full
amount of docket fees within the period for filing the appeal ---
partial payment of the docket fee was made on the date of the
filing of the petition and the payment of the full amount was
made seven (7) days thereafter. As a general rule, payment in full
of the docket fees within the prescribed period is mandatory. In
this case, there was no showing of any satisfactory reason to
justify the relaxation of the rules. Petitioner did not bother to
explain its delay and non-compliance with the rules.
2. I-REMIT, Inc. vs. Commissioner of Internal Revenue; CTA EB. No.

822 (CTA Case No. 7993), April 16, 2013
The Court concluded that the tax under Section 127(B) of

the 1997 NIRC, as amended, is computed separately for the
corporate issuer in a primary offering and the sellers in a
secondary offering. The Court, however, disagreed with the Court
in Division’s computation of the proportion of shares sold to the
total outstanding shares after the listing for the sales made in
secondary offering, by merely computing as lump sum the
number of shares sold in secondary offering. The computation
should be made individually per selling shareholder. Nonetheless,
the net effect would be the same as clearly, the proportion would
not exceed 25%, and thus, the applicable tax rate would still be
4%.
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310
3. St. Paul College of San Rafael vs. Commissioner of Internal

Revenue; CTA EB. No. 874 (CTA Case No. 8217), May 27, 2013
According to the Court, the power to decide or rule upon

the validity or constitutionality of a rule, regulation or ruling
issued by the CIR is not within the province of the CTA. Thus, the
dismissal of the case on the ground of lack of jurisdiction was
warranted.
Presiding Justice Roman G. Del Rosario concurred with the
opinion of the majority that the Petition for Review before the
Court in Division was properly dismissed for petitioner’s failure to
exhaust the available administrative remedy of appealing the
adverse ruling issued by the Bureau of Internal Revenue (BIR)
with the Secretary of Finance. He dissented, however, on the
opinion of the majority that the CTA has no authority to rule on
the validity of BIR Ruling No. 143-2010. Presiding Justice Del
Rosario is of the opinion that the CTA has jurisdiction to rule on
the validity of BIR Ruling No. 143-2010 as the appellate
jurisdiction of the CTA is not limited to cases which involve
decisions of the CIR relative to assessment or refunds but also
covers other matters arising under the NIRC or related laws
administered by the BIR.
4. Commissioner of Internal Revenue vs. Penn Philippines, Inc.; CTA

EB. No. 693 (CTA Case No. 7457), May 28, 2013
The Court stressed that as an exception to the general rule,

a taxpayer seeking judicial relief with the CTA on its claim for
refund or the issuance of a tax credit certificate who relied upon
BIR Ruling No. DA-489-03, during its period of effectivity from
December 10, 2003 until its abandonment in the Aichi case on
October 6, 2010, need not wait for the lapse of the 120-day period
for filing its judicial claim.
5. Jardine Lloyd Thompson Insurance Brokers, Inc. vs. Commissioner

of Internal Revenue; CTA EB. No. 861 (CTA Case No. 7916), June 5,
2013
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The Court reiterated the rule that the presentation of

quarterly income tax returns was necessary to determine whether
there was a carry-over of alleged excess and unutilized creditable
withholding taxes against the estimated quarterly income tax
liabilities for the taxable quarters of the successive taxable year,
as instructed by Section 76 of the 1997 NIRC.
In his Separate Concurring Opinion, Associate Justice
Juanito C. Castañeda,Jr. opined that the submission of income
tax returns, be it annual or quarterly, for the subsequent taxable
year is not required pursuant to law and jurisprudence.
Presiding Justice Roman G. Del Rosario, Associate Justice Caesar
A. Casanova and Associate Justice Esperanza R. Fabon-Victorino
joined the Separate Concurring Opinion of Associate Justice
Castañeda, Jr.
6. Phil. Gold Processing & Refining Corp. vs. Commissioner of Internal

Revenue; CTA EB. No. 866 (CTA Case No. 8168), July 29, 2013
The Court affirmed the Resolution of the Court in Division

dismissing the case for petitioner’s failure to prosecute, noting
petitioner’s proclivity to procrastinate and cause unreasonable
delay not only in the marking of exhibits but also in the initial
presentation of its evidence for a span of eight (8) months.
Clearly, petitioner was remiss in its duty to prosecute its case as
shown in the numerous postponements requested by its counsel.
The Court also pointed out that the dismissal of a case for failure
to prosecute has the effect of an adjudication on the merits and is
understood to be with prejudice to the filing of another action
unless otherwise provided in the order of dismissal.
7. One Hundred Services, Inc. vs. Commissioner of Internal Revenue;

CTA EB. No. 941 (CTA Case No. 8373), August 22, 2013
The Court found unmeritorious petitioner’s contention that

the one (1) day delay in filing the Petition for Review was
completely excusable, considering that great injustice and
prejudice on the part of the petitioner outweighs the policy on
strict implementation of the statutory period to appeal. The Court
emphasized that the 30-day period to appeal was mandatory and
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312
jurisdictional. Consequently, petitioner’s failure to comply with

the 30-day period to appeal effectively deprived the Court of
jurisdiction to entertain and determine the correctness of the
disputed assessments.
8. People of the Philippines vs. Joseph Typingco, Fiesta Pack, Inc.;

CTA EB Crim. Case No. 021 (CTA Crim. Case No. O-114),
September 27, 2013
When service of notice is an issue, the person alleging that

the notice was served must prove the fact of service. In this case,
petitioner was not able to prove that the PAN and the FAN were
sent and actually received by Fiesta Pack, Inc. and/or Joseph
Typingco. Hence, the assessments issued by the BIR cannot be
considered as final, executory and demandable.
9. National Grid Corporation of the Philippines vs. Ofelia M. Oliva, in

her capacity as the City Treasurer of Cebu City; CTA EB Case no.
849 (CBAA Case No. V-31), November 13, 2013
Pursuant to Section 9 of Republic Act no. 9511, the Court

held that petitioner was clearly liable to pay taxes on its real
estate, buildings and personal property. Petitioner was neither an
agency or an instrumentality of the national government, and
moreover, having the beneficial use of the properties in issue as a
taxable person, the Court agreed with the ruling of the CBAA that
petitioner was not exempt from real property tax; the same way
that Sections 216 and 218(d) of the Local Government Code could
not be made to apply to petitioner. Nevertheless, since NPC and
TRANSCO were the owners of the subject properties before the
year 2009, petitioner was only held liable for the year 2009, and
not before it was even transferred or conveyed to it, as covered by
the assessments.
Presiding Justice Roman G. Del Rosario, in his Separate
Concurring and Dissenting Opinion, concurred with the majority
opinion that since petitioner is not a government-owned or
controlled corporation, albeit it is engaged in the transmission of
electricity, its real properties cannot be classified as special under
Sections 216 and 218 (d) of the Local Government Code.
9|Page
313
Moreover, he joined the majority in their opinion that petitioner,

not being the owner or beneficial user of the buildings prior to
January 15, 2009, it cannot be made liable for real property taxes
imposed on said buildings for the years 2001 and 2008.
Presiding Justice Del Rosario, however, dissented on the
majority’s interpretation of Section 9 of Republic Act (RA) No.
9511. He is of the view that the franchise tax imposed under
Section 9 of RA No. 9511 is in lieu of all taxes, local or national,
including real property tax on grantee’s real properties used in
connection with its franchise. Associate Justice Ma. Belen M.
Ringpis-Liban concurred with the opinion of Presiding Justice Del
Rosario.
10. People of the Philippines vs. Wong Yan Tak; CTA EB Crim. Case
No. 024 (CTA Crim. Case No. O-090), December 18, 2013
The Court ruled that there was no need to pierce the

corporate veil of Pic N’ Pac Mart, Inc. since none of the requisites
are present. Those acts that are within the scope of function of
accused as President of Pic N’ Pac Mart, Inc. are properly
attributed to the corporation alone and no personal liability was
incurred by the accused. The amount of deficiency tax which the
prosecution sought to recover was a liability of Pic N’ Pac Mart,
Inc., being the statutory taxpayer. Hence, the Court exonerated
accused from payment of the deficiency tax. However, the Court
could not order Pic N’ Pac Mart, Inc. to pay the tax liability
because the corporation was not impleaded in the Petition for
Review.
In his Dissenting Opinion, Presiding Justice Roman G. Del
Rosario opined that as president and responsible officer of Pic N’
Pac Mart, Inc. who was found guilty beyond reasonable doubt of
violation of Section 255 of the National Internal Revenue Code
(NIRC) of 1997, as amended, respondent Wong Yan Tak should be
made liable for the payment of the deficiency value-added tax due
to the Bureau of Internal Revenue, in addition to the penalties
imposed for violation of Section 255 of the NIRC of 1997, as
amended. Associate Justice Esperanza R. Fabon-Victorino joined
the Dissenting Opinion of Presiding Justice Del Rosario.
10 | P a g e
314
• Received an unqualified audit opinion (no adverse findings)

from the Commission on Audit (COA) on the 2012 financial
operations of the CTA. The Court continues to faithfully utilize
and disburse its budget in accordance with approved
appropriations and strictly observes budgeting, accounting
and auditing rules and regulations
The total budget of the CTA for 2013 was PhP246,270,733.00,

broken down as follows:
CTA BUDGET FOR FY 2013

Pursuant to R.A. 10352
Regular Appropriation
Personal Services PhP 173,108,000.00
Maintenance & Other
Operating Expenses (MOOE) 61,364,000.00
Capital Outlay 0.00
-----------------------------
Total PhP 234,472,000.00
Automatic Appropriation
Retirement & Life Insurance Premiums 9,862,000.00
------------------------------
PhP 244,334,000.00
Add: Additional Special Allotment Release Order

(SARO) Funding for salary increases per E.O.40 &
E.O. 76, Retirement Gratuity,Terminal Leave
Benefits and PIB PhP 1,936,733.00
-----------------------------
Total FY 2013 Appropriations PhP 246,270,733.00
===============
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315
Collections from Court Operations
For the year 2013, the Court The Special Allowance for the
had a total collection of Judiciary (SAJ) was created under
PhP101,236,157.52 from legal fees Republic Act No. 9227. This shall
and copier services, among others, benefit: (1) Justices in the
broken down as follows: appellate courts; (2) Judges in the
JDF PhP 12,790,882.55 Regional Trial Courts; and (3) all

other positions in the Judiciary
SAJ PhP 86,770,879.08
LRF PhP 984,620.89 with the ranking of a RTC/MTC
VCF PhP 775.00 Judge and all other Judges from
Mediation Fee PhP 80,000.00
the lower courts. The funds
Sheriff’s Trust Fund PhP 239,000.00
Others (Bail Bond, etc.) PhP 370,000.00 necessary for the implementation
TOTAL COLLECTIONS PhP 101,236,157.52 of this allowance shall be sourced
The Judiciary Development from the legal fees originally
Fund was created and established prescribed, imposed and collected
under Presidential Decree No. under Rule 141 of the Rules of
1949 for the entire Judiciary Court prior to the promulgation of
under the administration of the the amendments under
Supreme Court. All collections Presidential Decree No. 1949,
representing the increase in its dated 18 July 1984; and increases
legal fees as prescribed under its in current fees and new fees which
Rules of Court (approved by the may be imposed and collected by
Supreme Court in its Resolution of the Supreme Court after the
January 15, 1991 in effectivity of Republic Act No.
Administrative Matter No. 85-3- 9227. Collections for this fund are
001-CTA) are deposited with the deposited with the Land Bank of
Land Bank of the Philippines for the Philippines under a separate
the account of the Supreme Court. Special Allowance for the Judiciary
(SAJ) account.
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316
On the other hand, collections started on August 2, 2005,

for the Legal Research Fund pursuant to paragraph b, Section
(created under R. A. No. 3870) are 9, Rule 141, of the Revised Rules
remitted to the Bureau of Treasury of Court in the Philippines. Daily
for the University of the collections of fees are deposited
Philippines Research Center, its with the Land Bank of the
main beneficiary. Philippines under a separate
The Victims Compensation Mediation Fund (MF) account for
Fund (VCF) is a fund drive initiated the benefit of the Philippine
by the Department of Justice (DOJ) Judicial Academy (PHILJA).
for the benefit of the victims of The Sheriff’s Trust Fund (STF)
injustice. The collection is directly fees are collected on all cases filed
remitted to the DOJ. with the CTA whether civil or
On December 9, 2003, the criminal, and whether filed with
Supreme Court through En Banc the CTA Division or En Banc level.
Resolution A.M. No. 03-12-04-SC, It is payable in a fixed amount of
approved the CTA proposal to PhP1,000.00 per petition filed by a
increase legal fees to implement private petitioner subject to
the special allowance under replenishment if already
Republic Act 9227 and to increase exhausted before the termination
the Judiciary Development Fund of the case, and to refund, if, after
collections. This resolution that the termination of the case there is
amended Section 1, Rule 17 of the a remaining balance in the fee/s
Rules of the Court of Tax Appeals paid. The STF fees are deposited
took effect on January 2, 2004. with the Land Bank of the
Mediation fees are collected Philippines under a separate STF
only from private petitioners filing account. Collection of these fees
En Banc cases with the CTA. The started in September 2005.
collection of the fixed amount of
PhP1,000.00 per petition filed
13 | P a g e
317
• Continuing efforts to improve human resource systems for

conferment of higher accreditation status with the Civil
Service Commission (CSC)
With full support from the Civil Service Commission the Court
continues to find ways and means to improve personnel services to
honor its commitment with the CSC under its Program to
Institutionalize Meritocracy and Excellence in Human Resource
Management (PRIME-HRM).
For 2013, the Court hired a total of twenty-two (22) employees,

with seventeen (17) thereof comprising original appointments and five
(5) transfers. Twenty-nine percent (29%) of personnel movements
consisted of promotions, thirty-three percent (33%) of which were
women.
2013 SUMMARY OF APPOINTMENTS
Personnel Movement Male Female Total

Original 6 30% 11 28% 17 29%
Promotion 4 20% 13 33% 17 29%
Re-appointment 6 30% 5 13% 11 19%
Re-employment 2 10% 3 8% 5 8%
Renewal 1 5% 1 3% 2 3%
Transfer 1 5% 4 10% 5 8%
Change of Status 0 0% 2 5% 2 3%
Total 20 100% 39 100% 59 100%
Filled/Vacant Position
The manpower complement
of the Court by the end of
Plantila year 2013 numbered two
position (335) hundred forty-seven (247) out
26% Filled position
(247) of three hundred thirty-five
74%
(335) authorized plantilla
positions or a filled-up rate of
74%.
14 | P a g e
318
Projects/Activities/Events
• Completed Bidding Projects for 2013 included the following:

o Purchase of Two (2) Motor Vehicles (Diesel) for the Office of
the newly appointed Presiding Justice.
• Committee Projects/Accomplishments
The Personnel Development Committee (PDC),

headed by Senior Associate Justice Juanito C.
Castañeda, Jr., screened and recommended select
court personnel to various trainings and seminars
throughout the country on topics that aimed to
enhance their knowledge and skills with respect to
the various jobs performed in the CTA. The
committee processed seventy-four (74) applications
for training and other personnel development courses and two (2)
requests for study leave.
The CTA Committee on Records Management and Information

Technology (CRMIT) chaired by Hon. Juanito C. Castañeda, Jr.,
facilitated the donation of a new touch screen CTA-CMIS Kiosk from
ABA-ROLI of the USAID and attendance of MISD personnel to the
Integrated Government Philippines (iGovPhil) and Government-Wide
Medium-Term Information and Communications Technology
Harmonization Initiative (MITHI) events and activities such as
trainings and conferences. The CMIS was showcased and presented to
various organizations, both local and foreign, namely
the Office of the Ombudsman on July 17, 2013,
Central Tax Court of Thailand on August 2, 2013, the
Sandiganbayan Justices and Court Personnel on
August 12, 2013; and Maldives Inland Revenue
Authority (MIRA) Senior Tax Officials and Guests on
September 13, 2013. The CTA-CMIS Users
Management Subcommittee together with the American
Bar Association and Ideyatech, Inc., conducted a
review on the features of the CTA-VMIS Version 2.0 for
enhancement of the system which will be called the
CTA-CMIS version 2.1. A Training for end-users before
the enhanced version is rolled-out for implementation was conducted
last November 25-26, 2013.
15 | P a g e
319
The Committee on Legal and Technical Services also chaired

by Hon. Juanito C. Castañeda, Jr. continues to closely monitor the
first-in-first-out rule in the drafting of decisions as well as the period
involved in resolving cases.
The PRAISE Committee, headed by Justice Lovell R.

Bautista, launched the Search for the CTA 2012
Model Employee and the awarding thereof was held
during the Court’s 59th anniversary celebration on
June 17, 2013. Ms. Ma. Imelda C. Samonte, CJSO,
Tax Specialist Division, won the Award. The
Committee nominated to the CSC 2013 Search for
Outstanding Public Officials and Employees Mr.
Adrian C. Concepcion, the 2011 Model Employee Awardee. The
retirement privileges of Ms. Susan M. Alvarez was also processed by
the Committee.
The CTA Health and Welfare Plan, chaired by

Justice Erlinda Piñera-Uy, processed in 2013,
reimbursement claims in the total amount of
PhP1,570,502.21 broken down as follows: dental
cases’ claims-PhP101,700.00; optical cases’ claims-
PhP309,965.50; Lasik-P15,000.00; minor
surgical/medical cases without complication claims-
PhP937,214.51; minor surgical/medical cases with
complication claims-PhP120,000.00; and major surgical/medical case
claims amounted to PhP86,622.20. From the time the Plan took effect
on October 1, 2007, the total amount of health benefit assistance
extended to members amounts to PhP7,616,904.40, as of December
31, 2013.
The Committee on Building, Grounds, Security

and Safety chaired by Justice Caesar A. Casanova,
closely supervised the repairs, improvements and
maintenance of the CTA buildings and grounds.
More organized parking zones were identified and
implemented. Security measures were strictly
enforced.
16 | P a g e
320
The Gender and Development

(GAD) Focal Point System formerly
chaired by Justice Esperanza R.
Fabon-Victorino and Justice Cielito
N. Mindaro-Grulla, now chaired by
Justice Ma. Belen M. Ringpis-Liban
and co-chaired by Justice Amelia R.
Cotangco-Manalastas, conducted
several major activities/events,
namely: (1) 2014 GAD Planning and Budgeting Workshop; (2)
Women’s Month Celebration with the theme: “Babae: Gabay sa
Pagtahak ng Tuwid na Daan,” a film showing on Philadelphia, an
exhibit/bazaar, a Walkathon, and Women Empowerment Talk thru
Personality Development by Ms. Fanny Serrano; (3) Re-Orientation
Seminar for all CTA Employees, an out-of-town activity of the whole
Court; (4) quarterly assessment and monitoring; (5) Executive
Briefing for the new Chair and members; (6)Senior Citizens and PWD
Talk; (7) Arts and Play activities for children of the Day Care Center;
and (8) GAD pre-planning and budgeting for 2015.
The Executive Committee-2, now chaired by Justice

Cielito N. Mindaro-Grulla, facilitated the purchase by
the CTA of an additional lot for the expansion of the
right-of-way/access road from the National Housing
Authority (NHA); the committee is the process of
redrafting the Terms of Reference (TOR) for the
Construction, Supervision Management and Related
Services (CSMRS) for Building III and covered
parking/pathwalk along the access road.
The Raffle Committee, from January 19 to July 18,

2013, under Chairperson Amelia R. Cotangco-
Manalastas with Justice Caesar A. Casanova and
Justice Esperanza R. Fabon-Victorino as members,
raffled off a total of 257 cases for completion of
records, and, 129 cases for study and report. From
July 19, 2013 to January 18, 2014, the Raffle
Committee chaired by Justice Ma. Belen M. Ringpis-
Liban with Justice Erlinda P. Uy and Justice Caesar A. Casanova as
members, raffled off a total of 146 cases for completion of records
and 156 cases for study and report.
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The CTA Subcommittee on Mediation chaired by Hon. Amelia R.

Cotangco-Manalastas, oversees the implementation of Mediation in
the CTA with support from the Philippine Judicial Academy and
American Bar Association-Rule of Law Initiative. A Round Table
Discussion with the Justices of the CTA, officials from SC, PHILJA,
USAID/ABA-ROLI, Department of Finance, Bureau of Customs,
Bureau of Internal Revenue, Department of Agriculture, Office of the
Solicitor-General, Tax Management Association of the Philippines
and prospective CTA Mediators was held on October 18, 2013. More
activities are scheduled for the coming year on suggested
amendments to the Interim Guidelines.
• Conferences, seminars and workshops/trainings
Annual Strategic Planning Workshop

The Court held its annual strategic planning
workshop at the Baguio Country Club in Baguio
City on May 20-21, 2013, with newly appointed
Presiding Justice Roman G. Del Rosario.
Court personnel, as in previous years and as part of management

efforts to enhance court services, attended in-house
seminars/orientations, a number of which were sent to trainings offered
by various government employees’ and professional organizations like
the National Archives of the Philippines, Philippine Records
Management Association Inc., Association of Government Internal
Auditors (AGIA), Personnel Association of the Philippines (POAP),
PAGBA, PICPA, as well as those offered by the Supreme Court’s
Philippine Judicial Academy and ETDD-Office of Administrative
Services.
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Lecture on National Guidelines on Internal Control System by Atty.

Alberto A. Bernardo, Deputy Executive Secretary, Office of the President,
on September 12, 2013
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Talk on the benefits and privileges of Senior Citizens
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Two (2) Justices, namely Associate Justice Esperanza R. Fabon-

Victorino and Associate Justice Cielito N. Mindaro-Grulla, represented
the Tax Court in the 4th Annual ASEAN Tax Conference 2013 conducted
and sponsored by the Central Tax Court of Thailand. This is the third
time the CTA was invited to send representatives to this annual
conference.
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GAD Focal Point System

Gender and Development Re-Orientation
(April 11-12, 2013)
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• Special Events
Appointment of Presiding Justice Roman G.Del Rosario on March 14,

2013, vice Hon. Ernesto D. Acosta who retired on December 21, 2012.
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Appointment of Associate Justice Ma. Belen M. Ringpis-Liban on May 29,

2013 vice Associate Justice Olga Palanca Enriquez who retired on
December 14, 2012.
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Court Personnel Appointments/Oath-taking
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The CTA celebrated its 59th Anniversary on June 17, 2013, a

day after the actual founding anniversary of the Court, at the
Multi-Purpose Hall (MPH), 5th floor of CTA Building II. Employees
showcased their folk dancing talents in full color.
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Office of the
Ombudsman’s
Observation Tour of
the CTA Case
Management
Information System
(CMIS)
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More CMIS Observation Tours
USAID
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Bilateral Meeting: Central Tax Court of Thailand and

Philippine Court of Tax Appeals
Towards a Closer Judicial Cooperation in Taxation.....for
the ASEAN Economic Community, August 2, 2013
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Signing of Conditional Contract to Sell

with National Housing Authority (NHA), 541 sq. m. lot for parking
area and covered walk, September 25, 2013
Fire Prevention and Earthquake

Seminar and Drill
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The Model Employee for 2012, Ms. Ma. Imelda C. Samonte,

Chief Judicial Staff Officer of the Tax Specialist Division, Office of
Legal and Technical Services (OLTS), poses for a picture with no less
than the Honorable Chief Justice Maria Lourdes P. A. Sereno and
Presiding Justice Roman G. Del Rosario during the awarding
ceremony on June 17, 2013.
Day Care Play &

Educational Activities for
CTA kids
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Retirement of Ms.
Susan M. Alvarez,
SJSO, Property and Supply Division (August 11, 2013)
CTA
supported the Team Judiciary in winning the Championship of the 1st
UNTV Cup (inter-government agency basketball tournament) in 2013,
through two employees, Mr. Celedon Camaso and Mr.Frederick Salamat.
Wellness Activities
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Issues
and
Concerns
Some of the pressing problems of the Court were addressed with

the appointment of the two new Justices, Presiding Justice Roman G.
Del Rosario and Associate Justice Ma. Belen M. Ringpis-Liban, paving
the way for a complete membership of the Court of Tax Appeals. The
following, however, are still major concerns for the year 2013:
1. a significant number of the newly created divisions

and offices approved by the Supreme Court in
response to the expansion of the jurisdiction of the
CTA pursuant to Republic Act Numbers 9282 and
9503, were disapproved by the Department of Budget
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and Management, leading to inequitable distribution of

workload in affected offices;
2. lack of storage space for the voluminous Court

records/exhibits that came with the higher number of
cases filed before the Court and additional office
spaces for the increasing manpower complement; and
3. the need to expedite the construction of CTA Building

III to address some of the most pressing problems of
the Court, such as office and storage spaces.
THE TAX COURT
Creation, Elevation and Expansion
The Court of Tax Appeals (CTA) was created on June 16, 1954,
through the enactment of Republic Act No. 1125 (R.A. 1125).
Considering its limited jurisdiction then, it had only three (3) Judges,
which at present is equivalent to one (1) Division.
With the passage of Republic Act Number 9282 (R.A. 9282) on

April 23, 2004, the CTA became an appellate Court, equal in rank to the
Court of Appeals. The composition of the Court increased to six (6)
Justices with one (1) Presiding Justice and five (5) Associate Justices. It
shall sit En Banc, or in two (2) Divisions with three (3) Justices each. A
decision of a division of the CTA may be appealed to the CTA En Banc,
and the latter’s decision may further be appealed by verified petition for
certiorari to the Supreme Court.
Expanded Jurisdiction
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Under R.A. 9282, the CTA retains the following exclusive appellate
jurisdiction to review by appeal vested in R.A. 1125 and other laws:
1. Decisions of the Commissioner of Internal Revenue in cases involving

disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties imposed in relation thereto, or other matters arising
under the National Internal Revenue Code or other law or part of law
administered by the Bureau of Internal Revenue;
2. Decisions of the Commissioner of Customs in cases involving liability for

customs duties, fees or other money charges; seizure, detention or release
of property affected; fines, forfeitures or other penalties imposed in relation
thereto; or other matters arising under the Customs Law or other law or
part of law administered by the Bureau of Customs [Rep. Act. No. 1125,
(1954), Sec. 7];
3. In automatic review cases where such decisions of the Commission of

Customs favorable to the taxpayer is elevated to the Secretary of Finance
(Sec. 2315, TCC); and
4. Decisions of the Secretary of Trade and Industry, in the case of non-

agricultural product, commodity or article, or the Secretary of Agriculture,
in the case of agricultural product, commodity or article, in connection with
the imposition of the Anti-Dumping Duty, Countervailing and Safeguard
Duty [Republic Act Nos. 8751 and 8752, (1999) Sec. 301 (a) and (p), and
Republic Act 8800].
The expanded appellate jurisdiction of the CTA pursuant to R.A. 9282 now
includes review by appeal inaction by the Commissioner of Internal Revenue in
cases involving disputed assessments, refunds of internal revenue taxes, fees or
other charges, penalties imposed in relation thereto, or other matters arising under
the National Internal Revenue Code or other law or part of law administered by the
Bureau of Internal Revenue, where the National Internal Revenue Code provides for
a specific period for action, in which case the inaction shall be deemed a denial. In
addition, the CTA shall exercise exclusive appellate jurisdiction over:
1. Criminal offenses arising from violations of the National Internal Revenue

Code or the Tariff and Customs Code and other laws administered by the
Bureau of Internal Revenue or the Bureau of Customs decided by the
proper regular courts, where the principal amount of taxes and fees
involved exclusive of charges and penalties is less than One Million Pesos
or where there is no specified amount claimed;
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2. Criminal offenses over appeals from the judgments, resolutions or orders of

the Regional Trial Courts in tax cases originally decided by them, in the
respective territorial jurisdiction and over petitions for review of the
judgments, resolutions or orders of the Regional Trial Courts in the exercise
of their appellate jurisdiction over tax cases originally decided by the
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in their respective jurisdiction;
3. Decisions, orders, resolutions of the Regional Trial Courts in local tax cases
original decided or resolved by them in the exercise of their original or
appellate jurisdiction;
4. Tax collection cases involving final and executory assessments for taxes,
fees, charges and penalties decided by the proper regular courts, where
the principal amount of taxes and fees, exclusive of charges and
penalties, claimed is less than One Million Pesos;
5. Judgments, resolutions or orders of the Regional Trial Courts in tax

collection cases originally decided by them, in the respective territorial
jurisdiction and over petitions for review of the judgments, resolutions or
orders of the Regional Trial Courts in the exercise of their appellate
jurisdiction over tax cases originally decided by the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their
respective jurisdiction;
6. Decisions of the Central Board of Assessment Appeals in the exercise of its

appellate jurisdiction over cases involving the assessment and taxation of
real property originally decided by the provincial or city board of
assessment appeals.
Further, with the passage of R.A. 9282, the expanded jurisdiction of the CTA
encompasses exclusive original jurisdiction over:
1. Criminal offenses arising from violations of the National Internal Revenue

Code or the Tariff and Customs Code and other laws administered by the
Bureau of Internal Revenue or the Bureau of Customs, where the principal
amount of taxes and fees involved exclusive of charges and penalties is
not less than One Million Pesos; and
2. Tax collection cases involving final and executory assessments for taxes,
fees, charges and penalties where the principal amount of taxes and fees,
exclusive of charges and penalties, claimed is not less than One Million
Pesos.
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The structure of the CTA was further enlarged by the enactment on June 12,
2008 of Republic Act Number 9503 (R.A. 9503), otherwise known as “An Act Enlarging
the Organizational Structure of the Court of Tax Appeals, Amending for the Purpose
Certain Sections of the Law Creating the Court of Tax Appeals, and For Other
Purposes”. A Third Division was created and three (3) Justices are added to the
composition of the Court. Hence, beginning July 5, 2008, the CTA is now composed
of one (1) Presiding Justice and eight (8) Associate Justices. It may sit En Banc or in
three (3) divisions with each division consisting of three (3) Justices.
Organization
COURT OF TAX APPEALS
ORGANIZATIONAL CHART
PresidingJustice
Presiding Justice
AssociateJustices
Associate Justices
ECCIV
ECC IV
ClerkofofCourt
Clerk Court
ECCIIIIII
ECC
AssistantClerk
Assistant ClerkofofCourt
Court
Executive Clerk of Court III
Executive Clerk of Court III
2 Division Clerks of Court
2 Division Clerks of Court
ECC II
ECC II
Assistant Division Clerk of Court
Assistant Division Clerk of Court INTERNALAUDIT
AUDIT
INTERNAL MISDIVISION
DIVISION
SERVICE
SERVICE MIS
Officeofof Legal
Office Legal&&Technical
Technical OfficeofofAdministrative
Office Administrative
Services
Services &&Finance
FinanceServices
Services
JudicialRecords
Judicial RecordsDivision
Division (CTAChief
(CTA Office) )
ChiefofofOffice (CTAChief
(CTA ChiefofofOffice)
Office)
Civil/CriminalRecords
Civil/Criminal Records
Tax Specialist Division Human Resource Division Budget Division

Tax Specialist Division Human Resource Division Budget Division
ReceivingUnit
Unit Appointment&&Recruitment
Recruitment Leave&&Records
Records Budget&&Fiscal
Fiscal AllotmentControl
Control
Receiving LibraryServices
Library ServicesUnit
Unit Appointment Leave Budget Allotment
Section
Section Section
Section PlanningSection
Planning Section Section
Section
MedicalUnit
Medical Unit
Accounting Division
Accounting Division
Property & Supply Division

Property & Supply Division
BookkeepingSection
Bookkeeping Section DisbursementSection
Disbursement Section
Cash Division
General Services Division Cash Division
General Services Division
SecurityServices
Services Checks&&Warrant
Checks Warrant
Security CollectionSection
Collection Section
Section
Section
The organizational set-up of the CTA is made up of the Office of the

Presiding Justice, Offices of the Associate Justices, Office of the Clerks of Court,
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the Legal and Technical Services Office, and the Office of Administrative and
Finance Services.
The Presiding Justice is the Head of the Court. He has the same salary
grade and enjoys the same privileges as that of the Presiding Justice of the
Court of Appeals. He exercises managerial and administrative supervision over
all the heads of offices and oversees the Court’s operations.
Assisting the Presiding Justice in his adjudicative and administrative

functions are eight (8) Associate Justices, who have the same salary grade and
enjoy the same privileges as those of the Associate Justices of the Court of
Appeals.
Vision/Mission
To remain worthy of public trust and confidence, the CTA maintains its
impartiality, competency, transparency, and faithful compliance with tax laws.
To achieve its vision, the Court is guided by the following principles:
1. fair and speedy collection of taxes by the Government;
2. adequate judicial remedies to taxpayers against

unreasonable/unjust tax assessments and refund of
excessive/erroneous taxes collected;
3. proper interpretation of tax statutes;
4. adherence to the independence of the judiciary; and
5. utmost deference for public trust and confidence in the judiciary.
Goals and Objectives

The Court’s goals and objectives are:
A. To increase its output in the disposition of tax and customs cases,

both civil and criminal in nature;
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B. To improve the quality of promulgated decisions/resolutions;
C. To enhance efficiency of its general administration and support

services;
D. To strengthen the efficiency and effectiveness of court personnel;
E. To give full support to the judiciary-wide reform programs; and
F. To acquire additional facilities to accommodate the increasing

number of cases and Court personnel.
The Officials of the Tax Court
The Honorable Presiding Justice of the Tax Court
Hon. Roman G. Del Rosario was appointed

by President Benigno S. Aquino III on March 13,
2013 as the new Presiding Justice of the Court
of Tax Appeals, replacing Ernesto D. Acosta who
compulsorily retired last December 21, 2012.
Presiding Justice Del Rosario obtained his law
degree from the University of the Philippines
College of Law in 1981. He took and passed the
Philippine Bar Examinations in the same year
with a rating of 85.55%. He earned his
undergraduate degree in AB Economics from the
University of Santo Tomas. In 1998 and 2000,
Presiding Justice Del Rosario attended and
completed the Harvard Law School Program of
Instruction for lawyers.
After a brief stint with the Bureau of Internal Revenue as Technical Assistant
to the Planning and Policy Service Chief, Justice Del Rosario joined the office of
the Solicitor General (OSG) in 1983. He started as a Trial Attorney I and, after
successive promotions, was appointed as Assistant Solicitor General in 1994.
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Presiding Justice Del Rosario headed the team representing the Anti-Money
Laundering Council (AMLC) since its creation in 2001 until 2010. AMLC
prosecutes civil forfeiture cases, freezing of bank accounts and other properties,
and bank inquiry proceedings. He attended various fora, both locally and
abroad, as speaker and participant particularly on the role of the OSG in the
litigation of anti-money laundering matters.
From June 2006 until March 2013, he also served as the Executive Director
of the Special Committee on Naturalization tasked to process and approve
applications for administrative naturalization of aliens.
Presiding Justice Del Rosario is married to Ma. Lourdes Filler. Their union is
blessed with three children namely: Benedetto, Lamara and Laselina.
The Associate Justices
Hon. Juanito C. Castañeda, Jr., Senior

Associate Justice, is Chairperson of the Second
Division of the Court of Tax Appeals. He was
originally appointed as Associate Judge of the Court
on October 1, 2001. He took his Oath as Associate
Justice on April 26, 2004.
His Honor finished his elementary (GS ‘65 Semi-

Honors Section), high school (HS ‘69 Honors
Section) and undergraduate studies (A.B.
Economics ’73) at the Ateneo de Manila, Loyola
Heights, Quezon City. He obtained his Bachelor of
Laws Degree in 1977 from the University of the
Philippines, Diliman, Quezon City, where he ranked
9th in his class. He passed the 1977 Philippine Bar
Exams with a rating of 85.5875% and was admitted
to the Philippine Bar on April 19, 1978.
His first employment was with the law firm of

Romero, Lagman, Pasamba & Associates as an
Associate for the period January 1, 1978 to August 31, 1978. He then worked for SGV,
the country’s largest professional firm, from September 1, 1978 to April 30, 1983, first
as Senior Associate, then as Supervisor and finally as Manager of its Tax Division.
From May 1, 1983 to September 30, 1995, he worked with the multinational firm,
Jardine Davies, Inc., as Tax Manager, Head of Tax Department and Assistant Vice-
President, Legal Tax and Corporate Division. Immediately prior to joining the judiciary,
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he worked as partner of the law firm, Baga and Associates, from October 1, 1995 to
September 28, 2001.
Justice Castañeda, Jr. composed the lyrics of the CTA Hymn. He was a student
editor of the Philippine Law Journal at the University of the Philippines College of Law.
He also won first prize in the First Albino Z. Sycip–Portia Legal Essay Competition.
He chairs the CTA Committees on Records Management & Information Technology,

the Promotion and Selection Board for third level positions, the Personnel Development
Committee and the Committee on Legal and Technical Services and serves a consultant
of the CTA Executive Committee (Execom) II.
Justice Castañeda, Jr. is married to Catherine Quimpo Castañeda, who is employed

with the Commission on Higher Education (CHED) as Director IV. The couple has one
child, Juanito III, who is married with two children.
Before his appointment to the Court of

Tax Appeals on January 2, 2003, Hon.
Lovell R. Bautista was a Senior Partner
from 1993 to 2002 at the Balmeo, Bautista
and Peñasales Law Office, which specializes
in tax advisory and advocacy. A CPA-
Lawyer, he was also a Managing Partner at
the accounting firm Bautista, De Vera &
Co. and a Tax Partner at the auditing firm
KPMG Fernandez, Santos and Lopez from
1991 to 1992.
A native of Cagayan de Oro, Justice

Bautista finished his Bachelor of Science in
Accountancy at the Liceo de Cagayan
University and his Bachelor of Laws at the
Ateneo School of Law. In 1984, he finished
his Masters of Laws at the University of
Pennsylvania. Thereafter, he took and
passed the New York Bar on December 10,
1985. He is a member of the American Bar
Association. On May 12, 1986, he was
admitted to practice before the US Tax
Court.
He has been recognized by the Ateneo Law School as a distinguished

alumnus for his inspiring dedication and outstanding achievements in the
government service and in the affairs of the Ateneo Law Alumni Foundation Inc.
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where he served as President in 2006 and 2007. He has also been honored by
the Liceo de Cagayan University as an Outstanding Alumnus for his exemplary
accomplishments, dedication and leadership in the field of the Judiciary.
He was a Professor at the San Sebastian College of Law from 1988 to 2002.
In addition to being Chairperson of the Third Division, he also chairs the

Personnel Selection Board (1st & 2nd Level), Bids and Awards Committee-2, and
the Programs on Awards for Service Excellence (PRAISE) Committee.
Justice Bautista is married to Angeles Carbonell of Mangaldan, Pangasinan.

They are the proud parents of Filbert Lovell, Angelo Lovell, Agridan Lovell,
Deodar Lovell and Angelique Lovelle.
Hon. Erlinda Piñera Uy is the first lady justice

appointed to the CTA. She was born in Binalonan,
Pangasinan, on May 28, 1953 and is married to
businessman Michael D. Uy with whom she has two
children, Maynard Gregory & Mylene Gertrude.
Justice Uy finished her elementary education at the
Sienna College, her high school education from Grace
Christian High School (with Honors), her Liberal Arts
Degree (major in Communication Arts) from the University
of Sto. Tomas, and her Bachelor of Laws from the Ateneo
School of Law (Silver Medalist for 2nd Honor). She has
completed the academic requirements of her LLM Course in
San Beda College-Graduate School of Law.
Prior to assuming her post as Associate Justice of the
CTA on October 5, 2004, she held the following positions:
Presiding Judge of Branch 162 of the Regional Trial Court
(RTC) of Pasig City from July 1, 1999 to October 4, 2004;
Presiding Judge of Branch 30 of the Metropolitan Trial
Court (MTC) of Manila from May 20, 1993 until June 30,
1999, where she was appointed the Executive Judge of the
Metropolitan Trial Courts of Manila on June 15, 1999;
Senior Partner of Piñera Uy & Associates from June 1, 1990
to May 1993; Court Attorney II from November 16, 1987 to
June 30, 1988; and Technical Assistant from October 1, 1987 to November 15, 1987 both in the
Office of Associate Justice Marcelo B. Fernan; Legal Assistant at the Dela Cruz, Rocamora &
Associates, Supreme Law Center (1986-1987); Vice-President for Administration, World Marine
Development Corporation (1978-1981); and Executive Assistant, Super Island Timber
Development Corporation (1972-1975).
Justice Uy attended various trainings and seminars conducted by the Supreme Court. She
also underwent courses on Basic Evidence, National Judicial College, University of Reno,
Nevada, U.S.A.; the Role of the Judge in a Juvenile and Family Court as a UNICEF Scholar;
Family Justice System in Singapore; Corporate Taxation, International Aspects of US Income
Taxation, Copyright & International Human Rights and Humanitarian Law at the Harvard Law
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School, U.S.A. She likewise attended international seminars and trainings such as:
Improvement of Judicial Fairness & Efficient Judicial Administration in South Korea; the 3rd
ASEAN Tax Conference 2012 “ASEAN Economic Community 2015: Emerging Tax Issues” in
Bangkok, Thailand; and the Executive Forum of Judges and Prosecutors “Prosecution of
Terrorism and Organized Crime in the Philippines” in Washington, D.C., USA.
Among the citations Justice Uy has received are: the Plaque of Merit as “Regional Trial Court
Judge of the Year” in Pasig City on June 27, 2003; Outstanding Alumni Award from Grace
Christian High School, Grace Alumni Grand Homecoming on July 9, 2000; and a Special Award
of Distinction from the Integrated Bar of the Philippines, Manila II Chapter, on August 12, 1993.
Justice Uy is member of the First Division and is the chairperson of the CTA Health and
Welfare Plan and a member of the CTA Execom II.
Among the citations Justice Uy has received are: the Plaque of Merit as “Regional Trial Court
Judge of the Year” in Pasig City on June 27, 2003; Outstanding Alumni Award from Grace
Christian High School, Grace Alumni Grand Homecoming on July 9, 2000; and a Special Award
of Distinction from the Integrated Bar of the Philippines, Manila II Chapter, on August 12, 1993.
Hon. Caesar A. Casanova, a native of

Pulilan, Bulacan, was born to Dr. Francisco
R. Casanova and Dra. Felicidad D. Aguirre
on September 9, 1948. He has six brothers
and three sisters, namely: (in order of birth):
Francisco, Jr., a Doctor of Medicine; Manuel,
a Doctor of Medicine; Virgilio, a Civil
Engineer; Zenaida, a Doctor of Medicine;
Renato, a Commerce graduate and law
student before migrating to the U.S.A.;
Concepcion, a Registered Nurse; Efren, a
Doctor of Medicine; Robert (adopted), a
Computer Engineer; and Susan (adopted), a
Registered Nurse.
He is married to Amelia G. Eusebio, who

also hails from Pulilan, and the couple has
three children: the eldest is Caesar, Jr., a
Doctor of Medicine; followed by Caesar III, a
Mechanical Engineer, and Marie Celine, a
Lawyer.
Justice Casanova finished his elementary education at the Pulilan
Elementary School in 1961, his high school at Letran College in 1965, and both
his Bachelor of Science in Commerce (major in Accounting) in 1969 and his
Bachelor of Laws in 1975 from the University of Sto. Tomas. This qualified him
to be a CPA-Lawyer. Right after passing the Bar, he was employed as Trial
Attorney at the Citizen’s Legal Assistance Office (now PAO) of the Department of
Justice in Padre Faura St., Manila. In 1982 he resigned and practiced law
privately; then in 1990, he was appointed Assistant Prosecutor of Manila.
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After more than four years of being a Public Prosecutor, he was appointed as
Judge of the Regional Trial Court in Malolos, Bulacan, on January 23, 1995.
On October 29, 2004, he was appointed as Associate Justice of the Court of Tax
Appeals.
Justice Casanova authored a book entitled “Cross Examination Mirror”

wherein he is recognized as the first Filipino to ever single out and write a book
about Cross Examination alone.
Justice Casanova is a member of the Second Division and chairs the

Committee on Building, Grounds, Security and Safety. He is also a member of
the Execom II.
Hon. Esperanza R. Fabon-Victorino was

appointed as justice of the Court of Tax Appeals on
December 8, 2009. Before entering the legal
profession, she was in the radio broadcast industry,
having graduated with a Liberal Arts Degree in
Communication Arts from the University of Santo
Tomas.
As a broadcaster, she earned a Catholic Mass

Media Award in 1986 for Best Public Service Program
for giving free legal aid to the poor in her radio
program Espie Espesyal over DZBB. She also
received a plaque of recognition for her program
participation during the EDSA Revolution.
With the encouragement of her late husband, she

pursued further studies in law from the University of
Santo Tomas and was admitted to the bar in 1982.
She also took masters in Business Administration
from the Ateneo Professional Schools and later on
took graduate studies in law from the San Beda
College.
In 1987, she joined the Office of the Solicitor General and after serving in the OSG
for more than a decade, she became the Presiding Judge of the Regional Trial Court,
Branch 157 in Pasig City.
Her commendable work ethics and consummate skills in the disposition of cases
during her 12-year service in the RTC earned recognition of respectable award-giving
bodies. She was awarded Outstanding Government Service Award by the Guillermo
Mendoza Memorial Scholarship Foundation, Inc. and National Maagap Award – Women
Sector by the Organized Response for the Advancement of Society, Inc., among others.
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With her sterling reputation and track record in the judiciary, Justice Fabon-Victorino
has been a consistent finalist to the Judicial Excellence Award since 2005 until her
appointment to the CTA.
She was married to former Major Jaime C. Victorino with whom she has three
children: Margarita Eugenia, a lawyer, now at Metrobank; Magnolia Eugenia, an Italian
trained chef; and Eugenia, an economist, based in Singapore. Her single-handed
parenting to her children, an epitome of self-denial for the sake of family, earned her
the Alay Kay Inay Award from the Gintong Ina-Ama Foundation, Inc. She is also a
recipient of Ulirang Ina Award for Law and Judiciary given by the National Mother’s Day
and Father’s Day Foundation of the Philippines, Inc.
Justice Fabon-Victorino is a member of the Third Division and a member of the

Execom II.
Hon. Cielito N. Mindaro-Grulla was appointed

as an Associate Justice of the CTA on November 27,
2009, and she took her oath of office on December 9,
2009. She is a member of the First Division and is
currently the Chairperson of the CTA 2nd Executive
Committee.
She finished her elementary (as Salutatorian) and
high school (as Second Honorable Mention) education
in 1962 and 1966, respectively, both from St.
Ferdinand College, Ilagan, Isabela; her Bachelor of Arts,
major in Political Science (after 3 ½ years of
coursework) in 1969-70, and Bachelor of Laws in 1974,
both from the University of the Philippines, Diliman,
Quezon City.
Everything happens for a reason and for the last
thirty-five (35) years, she has been in government
service.
While waiting for the bar results in 1975, she served
as Commodity Specialist in the Department of Trade.
After passing the Bar, she served as Legal Officer in the Board of Investments; as an
Attorney-Researcher in the Court of Appeals; as State Counsel in the Department of
Justice; and as 2nd Assistant City Fiscal or Prosecutor III of Quezon City with part-time
detail to the Office of the Undersecretary/Secretary of Justice.
For thirteen (13) years, she was the Presiding Judge of Branch 29, Regional Trial
Court of Manila. On the occasion of the 437th Founding Anniversary of the City of
Manila (2008), she was among the awardees as an Outstanding RTC Judge. Soon after,
she was designated as Executive Judge of the Regional Trial Court of Manila.
Alongside her judicial career, she joined the academe in 2003, as Instructor at the
New Era University and later at the Pamantasan ng Lungsod ng Maynila (PLM) and the
Polytechnic University of the Philippines (PUP).
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She has two (2) published articles, entitled “The Prosecutor: His Mission” (which
was First Prize Winner on the occasion of the Quezon City Prosecutors’ Annual Service
Accountability Report in 1989) and “Update & Upbeat on a Manila Hall of Justice in
2009”.
She was born on June 17, 1950 in Cauayan, Isabela, to the deceased spouses
Bienvenido Gammad Noriega, Sr. and Socorro Gabriel Muñoz. She is the oldest among
nine (9) siblings, namely (in order of birth): Cielito (Baby), Bienvenido, Jr. (Boy)
(deceased), James (Butch), Maribel (Bel), Rosalinda (Bubut), Socorro Victoria (Bibic)
(deceased), Judith (Bongbong), Charles (Boyet) and Lalaine (Babette).
She and her deceased spouse, Judge Cesar Jose Mindaro, are blessed with five
children: Clare (married to Christian Panlasiqui Medina), Catherine, Caroline, Cesar
Augustine and Cecilia. She has a granddaughter named Corinne Teresa M. Medina and
a grandson named Abe Jose M. Villanueva.
She is now married to Mr. Gil Gatchalian Grulla.
Before her appointment to the Court of Tax Appeals

on December 15, 2009, Hon. Amelia R. Cotangco-
Manalastas was the Presiding Judge of Branch 268,
Pasig City and the Executive Judge for the second term
of the Pasig Regional Trial Court, in charge of the
Regional Trial Courts in Pasig, Taguig, San Juan and
Pateros.
Justice Cotangco-Manalastas worked at the National
Steel Corporation as Assistant Corporate Counsel for
around thirteen years prior to her appointment to the
judiciary in October 1994. Before that, she worked as
Associate Lawyer in the law office of Santiago, Sison and
Associates from 1978 to 1980. In 1976 to 1977, she
lived in Philadelphia, U.S.A while her husband was
taking up his Masters of Law Degree at the University of
Pennsylvania. She likewise worked as lawyer at the Legal
Department of the Social Security System for one year.
A native of Marikina City, she studied at the
Crusader’s Academy in Manila for her elementary
schooling. She then took her high school education at
the Roosevelt Memorial High School (Quirino Branch) where she graduated 1st Honorable
Mention. She entered the University of the Philippines as an entrance scholar in 1964 and
was subsequently awarded a Salonga Scholarship for the following semester. She finished
her Bachelor of Arts major in Political Science at the University of the Philippines after three
and a half years in October 1967. She then went on to study law at the UP College of Law
and graduated with a Bachelor of Laws Degree in 1972. She took the bar on the same year
and was admitted to the practice of law in 1973.
She has received the following citations in the course of her career: Plaque of
Recognition from the UP Women Lawyer’s Circle, Plaque of Recognition from the UP Law
Class of ‘72, Plaque of Recognition from the Sigma Alpha Sorority, Outstanding Clan
Member Award from the City of Marikina, Distinguished Service Award in Law from
Roosevelt College, the Dangal ng Pasig Award as Outstanding Regional Trial Court Judge in
2008 and the Gawad Galing Marikeño in 2013.
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She is married to Jesus Manalastas, a Senior Partner of the law firm Ponce Enrile Reyes
& Manalastas Law Office. They have three children, Joselito who is a graduate of the UP
College of Fine Arts major in Visual Communication and is now married to Raquel Torres,
the couple has a son named Tadeo. Jemaila, the second child, is a graduate of Medicine at
St. Luke’s Medical School and is married to Christopher Santos. And Joanna, a graduate of
the UP College of Mass Communication, the youngest, is still single.
Justice Cotangco-Manalastas was born in Marikina City to loving parents Amando
Cotangco and Angelina Reyes. She has six siblings, namely: Juanito, who is a
businessman, Jose, who was a former councilor of Marikina, Remedios, a medical doctor,
Teofilo, an architect, and Edilberto and Hernando, both engineers. The last three are now
living in California with their respective families.
She was Secretary of the Philippine Women Judges Association (PWJA) for the years
2007-2009, Vice-President for Appellate Courts from 2009-2013 and Executive Vice-
President from 2013 up to the present.
A member of the Second Division, Justice Cotangco-Manalastas co-chairs the CTA
Gender and Development (GAD) Focal Point System and the Execom II. She also serves as
the Chairperson of the CTA Subcommittee on Mediation.
Before her appointment as Associate Justice of

the Court of Tax Appeals, Hon. Ma. Belen M.
Ringpis- Liban was a Regional Trial Court Judge
in Malolos for 17 years. She was a Solicitor at the
Office of the Solicitor General, a Confidential
Attorney at the Court of Appeals, a Legal Assistant
at the Philippine National Construction
Corporation, and a Legal Associate at the
Puruganan, Ongkiko & Chato Law Offices.
Justice Ringpis-Liban is a graduate of the

University of the Philippines College of Law. She
finished her Bachelor of Arts in Economics at the
University of Santo Tomas and is a product of the
public school system, having graduated from
Project 6 Elementary School and Ramon
Magsaysay (Cubao) High School.
She was an active member both of the

Philippine Women Judges Association and the Philippine Judges Association
(PJA), where she last held the position of Senior Vice President. She was also the
Secretary General, Vice President for External Affairs, and Director for Region 3
of PJA. She held the positions of Secretary and Auditor of the Philippine Women
Judges Association, and was a Liaison Officer of the International Association of
Women Judges.
Justice Ringpis-Liban had attended various international and local

conferences sponsored by the World Jurist Association and the PJA, and had
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participated in the Sta. Clara University Seminars on International Business

Transactions. She was also a delegate at the Consultative Commission on
Conference on the Law of the Sea.
Justice Ringpis-Liban is married to Atty. Luisito V. Liban, a senior partner at

Sycip Salazar Hernandez & Gatmaitan Law Offices, with whom she has five (5)
children: Paolo Luis, Juan Rafael, Andrea Marie, Leo Fidel, and Jose Miguel. She
is an active member of the Couples for Christ Foundation for Family and Life.
A member of the Third Division, Justice Ringpis-Liban also serves as the

Chairperson of the CTA GAD Focal Point System.
Other Officials and Officers of the Court
Office of the Clerk of Court (OCC)
The Office of the Clerk of Court is

headed by the Clerk of Court (Clerk of
Court IV) and assisted by the Assistant
Clerk of Court (Executive Clerk of Court
III). Its main function is to assist the
Court En Banc in its adjudicative
function. Under the direct supervision of
the Presiding Justice, it performs support
functions in the Court En Banc sessions
and in some administrative or non-
adjudicative functions of the Court En Banc. It exercises
general supervision over subordinate officials and employees of the CTA unless the
Presiding Justice takes direct supervision. Further, it directs and supervises the staff of
the Court En Banc.
The CTA has three (3) Division Clerks of Court (Executive Clerks of Court III) who
are assisted by their respective Assistant Division Clerk of Court (Executive Clerk of
Court II). The Division Clerks of Court are under the direct control of the Chairperson
of their respective Division and perform adjudicatory support functions in their
respective Division. They likewise perform some non-adjudicative or administrative
support functions.
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Judicial Records Division
As the custodian of the all the judicial records, the Judicial Records
Division is under the Office of the Clerk of Court. It handles activities
relating to the adjudicatory functions of the CTA. Its support functions
include, among others, review of all cases processed, preparation and
review of all rollos and pleadings before forwarding the same to the
offices of the Clerk of Court and Division Clerk of Court; and preparation
of records, reporting of pleadings and statistics of cases.
Management Information Systems Division (MISD)
The MISD, under the supervision of the current Chairperson of the

Committee on Records Management & Information Technology, Senior
Associate Justice, Hon. Juanito C. Castañeda, Jr., takes charge of the
computerization projects/concerns in the Court pursuant to the
judiciary-wide computerization initiatives. Its functions include
maintenance of the information technology infrastructure of the CTA.
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Internal Audit Service (IAS)
The Internal Audit Service (IAS) role in the governance framework of

the CTA encompasses, but is not limited to, the examination and
evaluation of the adequacy and effectiveness of the internal control
processes in relation to its vision and mission. It is tasked to ensure
that the established control systems and procedures are implemented
and observed by the CTA and determines and evaluates cost
effectiveness, value for money and benefits from the Court’s
expenditures.
Office of Legal and Technical Services (OLTS)
The Office of the Legal and Technical Services,

headed by its Chief of Office, and assisted by
the Assistant Chief of Office, is primarily
responsible in overseeing the research and
study of significant, complex or diverse parts
of law and interpretation of legal opinions. It
reviews and evaluates memoranda and
reports on researches of the members of the
staff on multifarious legal questions referred
to them by the Justices before they are finally
submitted to the same Justices for their
consideration.
Tax Specialists Division
Directly under the supervision of the Office of Legal and

Technical Services, the Tax Specialist Division conducts
independent examination and investigation of accounting records
and/or financial documents submitted in evidence by taxpayers.
It assists the Court in the appreciation and interpretation of
taxpayer’s accounting records/system and reports of examination
of the Commissioner of Internal Revenue and Commissioner of
Customs and other factual and technical questions or issues
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involving internal revenue taxes, customs duties and other charges.
Library
The CTA Library is likewise under the supervision of the Office of

Legal and Technical Services. Being the custodian of the books and
other library materials, it keeps control of the record holding of all
books as well as the accessioning of newly acquired books. It is also
in charged of the classification, simple cataloguing and inventory of
books and other library materials, indexing of periodicals and
keeping duplicate copies of decisions and resolutions of the CTA as
well as Court of Appeals and Supreme Court decisions.
Office of Administrative and Finance Services (OAFS)
The Office of Administrative and Finance

Services (OAFS) headed by Chief of Office
(Director IV) and assisted by an Assistant
Chief of Office (Director II), primarily provides
support services to the CTA in its non-
adjudicative functions. It is composed of the
Accounting Division, Budget Division, Cash
Division, General Services Division, Human
Resource Division, and Property and Supply
Division.
Accounting Division
The Accounting Division is in-charge with the computation of approved expenses

and preparation of general payroll and disbursement voucher and is responsible in
keeping accounting records and in preparing various report required by different
government agencies. Its functions encompass the process of analyzing, recording,
classifying, summarizing and communicating all transactions involving the receipt and
disposition of government funds and property, and interpreting the results thereof.
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Budget Division
The Budget Division is responsible for proposing and securing

sufficient funds from the National Government to finance the
operations of the CTA. It is tasked to ensure that funds, once
appropriated or released, are monitored, utilized, and accounted and
reported in accordance with the provision of the General
Appropriations Law and budgeting , accounting, and auditing rules
and regulations.
Cash Division
The Cash Division is in-charge of the collection and disbursement

of the funds of the CTA. It complements the work of the divisions in
the OAFS. Further, it acts as the custodian of surety bonds, bid
securities, and performance bonds posted by litigants or interested
bidders, as the case may be. It also safeguards legal fees collected by
the CTA.
General Services Division
The General Services Division handles vital tasks and mundane

services to sustain the Court’s operations; ensuring the delivery of
effective, efficient and economical general services for the CTA. It
addresses the concerns on acquisition, fire safty, security, repairs
and maintenance of equipment, vehicles and real properties of the
Court. It also provides planning, improvement and development on
facilities and resources in furtherance of the Court’s operations and
manages contracted oursourced services such as janitorial, pest
control, supplemental security, communications, technical and other
immediate and necessary services.
Security Services Unit
Under the supervision of the General Services Division, the

Security Services Unit secures and safeguards the physical facilities,
properties, and records of the CTA. Its main function is to provide
adequate security and protection to ensure the safety of the justices,
officials and employees of the Court.
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Human Resource Division
The Human Resource Division provides support services to the

Court. Its primary function is to hire, classify, and determine the
appropriate number of employees necessary for the agency to
accomplish its statutory mission. In addition, it administers various
programs related to the CTA’s workforce such as training and
development and statutory benefits. It also assists in the
management of the workforce in the CTA. Moreover, the Human
Resource Division is responsible for the implementation of human
resource-related policies as well as other initiatives vital in ensuring
that the Court has competent, diverse, and viable complement of
people.
Medical Services Unit
The Medical Unit, under the superivision of the Human Resource Division, provides
support services to the CTA primarily by rendering health services
to its justices, officials and employees. It plays an important role
in the hiring of applicants by conducting pre-employment medical
examination. It also holds consultations and assists in the
administrative programs implemented in the Court such as annual
laboratory examination, mandatory drug testing, bloodletting,
immunization, nutrition, sports activities and day-care programs.
The Unit also aids in the evaluation of claims for workmen’s
compensation, CTA Health and Welfare Plan benefits, financial
assistance, and death and retirement benefits.
Property and Supply Division
The Property and Supply Division is mainly responsible for the

management, implementation of effective internal control system
and the procurement of the court’s property, equipment, supplies
and materials in cases of alternative modes of procurement like
shopping and small value procurement.
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The Sandiganbayan
HISTORY:
To maintain honesty and efficiency in the bureaucracy, weed out misfits and
undesirable employees in government service, and eventually stamp out graft and
corruption, the 1973 Constitution, particularly Section 5, Article XIII thereof, mandated
the creation of a special court known as the Sandiganbayan with jurisdiction over “xxx
criminal and civil cases involving graft and corrupt practices and such other offenses
committed by public officers and employees, including those in government-owned or
controlled corporations, in relation to their office as may be determined by law.”
Responding to this mandate, the late President Ferdinand E. Marcos, issued

Presidential Decree No. 1486 creating the Sandiganbayan and placed it on the same level
as Courts of First Instance, now called the Regional Trial Courts. Later, the status of the
Sandiganbayan was elevated to the level of the Court of Appeals by virtue of Presidential
Decree No. 1606.
At the start of its operation on February 12, 1979, the Sandiganbayan had only
one (1) division, composed of a Presiding Justice and two (2) Associate Justices, and a
skeleton force of fifteen (15) employees. The third year of the Court's operation in 1981
marked the activation of the Second Division. And, on August 4, 1982, the Third
Division was added to complete the full membership of the Court under P.D. No. 1606.
The historic EDSA Revolution in February 1986 caused substantial changes in the
entire government machinery, including the judiciary. However, the special status of the
Sandiganbayan as one of the principal instruments for public accountability was retained
in both the “Freedom Constitution” and the 1987 Constitution. Consequently, the
jurisdiction of the Sandiganbayan was broadened to include the so-called “ill-gotten
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wealth” cases investigated by the Presidential Commission on Good Government through

Executive Orders No. 14 and No. 14-A.
To further strengthen the functional and structural organization of the

Sandiganbayan, several amendments were introduced to the original law creating it, the
latest of which are Republic Act Nos. 7975 and 8249. As restructured, the
Sandiganbayan is currently composed of a Presiding Justice and fourteen (14) Associate
Justices who sit in five (5) Divisions of three (3) Justices each in the trial and
determination of cases.
Under Republic Act No. 8249, “the Sandiganbayan shall have its principal office
in the Metro Manila area and shall hold sessions thereat for the trial and determination
of cases filed with it.” The new law, however, adds that “that cases originating from the
principal geographical regions of the country, that is, from Luzon, Visayas or Mindanao,
shall be heard in their respective regions of origin except only when the greater
convenience of the accused and of the witnesses, or other compelling considerations
require the contrary, in which instance a case originating from one geographical region
may be heard in another geographical region.”
THE JUSTICES:
As of the end of December 2013, there is a vacancy in the Sandiganbayan for the
Junior Member of the Fifth Division. Thus, the composition of the Sandiganbayan as of
December 31, 2013 stood as follows:
FIRST DIVISION
Hon. Efren N. De la Cruz - Chairperson

Hon. Rodolfo A. Ponferrada - Senior Member
Hon. Rafael R. Lagos - Junior Member
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SECOND DIVISION
Hon. Teresita V. Diaz-Baldos - Chairperson

Hon. Napoleon E. Inoturan - Senior Member
Hon. Oscar C. Herrera, Jr. - Junior Member
THIRD DIVISION
Hon. Amparo M. Cabotaje-Tang - Chairperson

Hon. Samuel R. Martires - Senior Member
Hon. Alex D. Quiroz - Junior Member
FOURTH DIVISION
Hon. Gregory S. Ong - Chairperson

Hon. Jose R. Hernandez - Senior Member
Hon. Maria Cristina J. Cornejo - Junior Member
FIFTH DIVISION
Hon. Roland B. Jurado - Chairperson

Hon. Alexander G. Gesmundo - Senior Member
Vacant - Junior Member
Since the establishment of the Sandiganbayan in 1978, there have been ten (10)
Presiding Justices and forty-five (45) Associate Justices.
The Presiding Justices:
Hon. Manuel R. Pamaran…………………... served from 1978-1986

Hon. Francis E. Garchitorena……………... served from1986-2002
Hon. Minita V. Chico-Nazario ……………. appointed Associate Justice in 1993.
Served as Presiding Justice from
2002-2004
Hon. Teresita J. Leonardo-de Castro ……… appointed Associate Justice in 1997.
2004-2007
Hon. Diosdado M. Peralta ………………… appointed Associate Justice in 2002.
2008-2009
Hon. Ma. Cristina G. Cortez-Estrada……… appointed Associate Justice in 1998.
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June – November 2009

Hon. Norberto Y. Geraldez ……………... appointed Associate Justice in 2003.
March 10, 2010 to April 4, 2010
Hon. Edilberto G. Sandoval ……………... appointed as Associate Justice in
1996. Served as Presiding Justice
from September 24, 2010 until his
retirement from the Court on June
20, 2011
Hon. Francisco H. Villaruz, Jr. ………….. appointed as Associate Justice in
2001. Served as Presiding Justice
from October 5, 2011 until his
retirement on June 8, 2013.
Hon. Amparo M. Cabotaje-Tang ………… appointed as Associate Justice on

June 11, 2012. Serves as incumbent
Presiding Justice following her
appointment on October 1, 2013.
The Associate Justices:
Hon. Bernardo P. Fernandez 1978-1981

Hon. Romeo M. Escareal 1978-1996
Hon. Buenaventura J. Guerrero 1980-1986
Hon. Conrado M. Molina 1980-1992
Hon. Moises C. Kallos 1980-1983
Hon. Ramon V. Jabson 1981-1988
Hon. Fidel P. Purisima 1982-1984
Hon. Francisco Z. Consolacion 1982-1984
Hon. Romulo S. Quimbo 1982-1986
Hon. Augusto M. Amores 1984-1995
Hon. Amante Q. Alconcel 1984-1986
Hon. Bienvenido C. Vera Cruz 1984-1986
Hon. Regino C. Hermosisima, Jr. 1986-1995
Hon. Jose S. Balajadia 1986-1998
Hon. Luciano A. Joson 1986-1990
Hon. Cipriano A. del Rosario 1986-2001
Hon. Nathanael M. Grospe 1988-1993
Hon. Sabino R. de Leon, Jr. 1990-1999
Hon. Narciso T. Atienza 1992-1993
Hon. Roberto S. Lagman 1994-1998
Hon. Harriet O. Demetriou 1995-1998
Hon. Leonardo I. Cruz 1996-1997
Hon. Narciso S. Nario 1997-2002
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Hon. Anacleto D. Badoy, Jr. 1997-2002

Hon. Catalino R. Castañeda, Jr. 1997-2002
Hon. German G. Lee 1997-1998
Hon. Godofredo L. Legaspi 1997-2007
Hon. Gregory S. Ong 1998-
Hon. Alfredo J. Gustilo 1998-1999
Hon. Ricardo M. Ilarde 1998-2001
Hon. Rodolfo G. Palattao 1998-2003
Hon. Raoul V. Victorino 2000-2005
Hon. Nicodemo T. Ferrer 2000-2002
Hon. Roland B. Jurado 2003-
Hon. Efren N. De la Cruz 2003-
Hon. Teresita V. Diaz-Baldos 2003-
Hon. Jose R. Hernandez 2004-
Hon. Rodolfo A. Ponferrada 2004-
Hon. Alexander G. Gesmundo 2006-
Hon. Samuel R. Martires 2006-
Hon. Napoleon E. Inoturan 2008-
Hon. Alex D. Quiroz 2008-
Hon. Maria Cristina J. Cornejo 2010-
Hon. Rafael R. Lagos 2010-
Hon. Oscar C. Herrera, Jr. 2011-
JURISDICTION:
Proceedings in the Sandiganbayan are governed by the Rules of Court

promulgated by the Supreme Court, although the conduct of its internal operations is
controlled by the Supreme Court approved Revised Internal Rules of the Sandiganbayan
that were adopted and promulgated by the Court pursuant to Section 9 of Presidential
Decree No. 1606, as amended.
Exclusive Original Jurisdiction:
The Sandiganbayan exercises exclusive original jurisdiction over the following

cases:
A. Violations of Republic Act No. 3019, as amended, other known as
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the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II,
Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the
accused are officials occupying the following positions in the government,
whether in a permanent, acting or interim capacity, at the time of the commission
of the offense:
(1) Officials of the executive branch occupying the positions of

regional director and higher, otherwise classified as Grade '27' and
higher, of the Compensation and Position Classification Act of
1989 (Republic Act No. 6758), specifically including:
(a) Provincial governors, vice-governors, members of the

sangguniang panlalawigan, and provincial treasurers,
assessors, engineers, and other city department heads;
(b) City mayors, vice-mayors, members of the sangguniang

panlungsod, city treasurers, assessors, engineers, and other
city department heads;
(c ) Officials of the diplomatic service occupying the position

of consul and higher;
(d) Philippine army and air force colonels, naval captains, and
all officers of higher rank;
(e) Officers of the Philippine National Police while occupying

the position of provincial director and those holding the
rank of senior superintendent or higher;
(f) City and provincial prosecutors and their assistants, and

officials and prosecutors in the Office of the Ombudsman
and special prosecutor;
(g) Presidents, directors or trustees, or managers of

government-owned or -controlled corporations, state
universities or educational institutions or foundations.
(2) Members of Congress and officials thereof classified as Grade '27'

and up under the Compensation and Position Classification Act of
1989;
(3) Members of the judiciary without prejudice to the provisions of the

Constitution;
(4) Chairmen and members of Constitutional Commission, without

prejudice to the provisions of the Constitution; and
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(5) All other national and local officials classified as Grade '27' and
higher under the Compensation and Position Classification Act of
1989.
B. Other offenses of felonies whether simple or complexed with other

crimes committed by the public officials and employees mentioned in subsection
a of this section in relation to their office.
C. Civil and criminal cases filed pursuant to and in connection with

Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986.
Exclusive Appellate Jurisdiction:
The Sandiganbayan exercises exclusive appellate jurisdiction over final

judgments, resolutions or orders of regional trial courts whether in the exercise of their
own original jurisdiction or of their appellate jurisdiction as herein provided.
In addition, the Sandiganbayan has exclusive original jurisdiction over petitions

for the issuance of the writs of mandamus, prohibition, certiorari, habeas corpus,
injunctions, and other ancillary writs and processes in aid of its appellate jurisdiction and
over petitions of similar nature, including quo warranto, arising or that may arise in cases
filed or which may be filed under Executive Order Nos. 1, 2, 14 and 14-A, issued in
1986; provided, that the jurisdiction over these petitions shall not be exclusive of the
Supreme Court.
SUPPORT SERVICES:
In the performance of its functions, the following offices provide support and
adjudicative services to the Sandiganbayan: Office of the Clerk of Court, Offices of the
Division Clerks of Court, Legal Research and Technical Staff, Administrative Division,
Judicial Records Division, Finance and Budget Division, Internal Audit Service,
Management Information Systems Division, and Sheriff and Security Services Division.
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THE YEAR IN BRIEF
For calendar year (CY) 2013, the Sandiganbayan disposed a total of 480 cases
from a total workload of 3,342 cases, indicating a disposal rate of 14.36%. These 480
cases disposed in 2013 were higher by 117 cases over the 363 cases disposed in 2012, or
a marked increase by 32%.
There were 969 new cases filed during the year, which translated to an increase of
574 cases or 145.32% more than the 395 cases filed in 2012. Additionally, with 2,299
cases still in the docket at the beginning of the year, 75 cases revived, and an adjustment
of one (1) case, the Court accumulated a total workload of 3,342 cases in 2013, higher by
680 cases over the 2,662 case load in 2012. At the end of the year, with 480 cases
disposed, a total of 2,862 cases remain pending at the Sandiganbayan.
Of the 969 cases filed in 2013, 377 cases or 38.91% involved violations of
Republic Act (R.A.) No. 3019 or the Anti-Graft and Corrupt Practices Act. The other
cases filed were malversation cases with 176 cases filed or 18.16% of the total cases
filed, while 172 cases or 17.75% accounted for estafa cases. Collectively, 96 cases or
9.90% of the cases filed involved violations of various Presidential Decrees (PD), broken
down as follows: 79 cases for violations of PD No. 1445 or the Government Auditing
Code, 15 cases for violations of PD No. 1752 or the Home Development Mutual Fund
Act, one (1) case for violation of PD No. 1829 or the law penalizing obstruction of
apprehension and prosecution of criminal offenders, and one (1) case for violation of PD
No. 449 or the Cockfighting Law of 1974.
Violations of other special laws comprise 109 cases or 11.25% of the total number
of cases filed in 2013, to wit: 99 cases were for violations of R.A. No. 8291 or the
Revised Government Service Insurance Act, four (4) cases were for violations of R.A.
No. 9184 or the Government Procurement Reform Act, two (2) cases for violations of
R.A. No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and
Employees, and one (1) case each for illegal discharge of firearms, unlawful
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appointments, violation of R.A. No. 7787 or the Anti-Sexual Harassment Law, and
violation of R.A. No. 8041 or the National Water Crisis Act of 1999. Fifteen (15) perjury
cases were also filed in 2013 comprising 1.54% of the total cases filed. The other cases
filed involve falsification of public documents (4 cases), bribery (4 cases), assault (1
case), homicide (1 case) physical injuries (1 case), grave threat (1 case), robbery (1 case),
special civil actions (6 cases), three (3) civil cases, and two (2) appealed cases.
As to geographical origin, 798 cases or 82.35% of the total newly-filed cases

originated from Luzon, while 142 cases or 14.65% came from the Visayas and 29 or
2.99% originated from Mindanao. In Luzon, most of the cases filed originated from the
National Capital Region, accounting for 481 cases or 49.64% of the total number of cases
filed in 2013.
The 469 cases filed in 2013 involve 491 accused persons, of which 378 or 76.99%
are male, while 113 or 23.01% are female.
WORKLOAD AND ACCOMPLISHMENTS
A. WORKLOAD
1. Number of Cases Filed
A total of 969 cases were filed in CY 2013 consisting of 958 criminal cases, six
(6) special civil actions, three (3) civil cases, and two (2) appealed cases. The newly-filed
cases in 2013 show an increase by 145% or a total of 574 cases more than the 395 cases
filed in CY 2012.
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A comparative summary of cases filed since 1979 is shown in Figure 1 below.
Annual Summary of Cases Filed

Figure 1
2800
2600
2400
2200
2000
1800
No. of Cases
1600
1400
1200
1000
800
600
400
200
0
79 80 81 82 83 84 85
86 87 88 89 90 91 92
93 94 95 96 97 98 99
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Year
The total workload of 3,342 cases for CY 2013 was 25.542% higher than the
preceding year’s workload of 2,662 cases or an increase by 680 cases.
The following table shows the comparative summary of the Court’s workload
from 1979 to 2013.
Page 10
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Annual Summary of Total Workload
Year No. of Cases Total Increase Percentage

Filed Workload (Decrease)
1979 760 760
1980 1557 2102 1342 176.57%
1981 2661 4216 2114 100.57%
1982 2224 5291 1075 25.49%
1983 1553 4717 (574) (10.84%)
1984 1059 4030 (687) (14.56%)
1985 1235 4010 (20) (0.49%)
1986 1051 3836 (174) (4.33%)
1987 675 3342 (494) (12.87%)
1988 595 3222 (120) (3.59%)
1989 931 3438 216 6.70%
1990 2333 5043 1605 46.68%
1991 896 4169 (874) (17.33%)
1992 1015 4037 (132) (3.17%)
1993 1663 5144 1107 27.42%
1994 1736 5549 405 7.87%
1995 1329 5192 (357) (6.43%)
1996 448 3011 (2181) (42.01%)
1997 884 3539 528 17.54%
1998 698 3908 369 10.43 %
1999 697 4074 166 4.25 %
2000 660 4322 248 6.09 %
2001 517 3963 (359) (8.31 %)
2002 585 3265 (698) (17.61 %)
2003 140 2788 (477) (14.61 %)
2004 134 2462 (326) (11.69 %)
2005 277 2552 90 3.66 %
2006 520 3152 600 23.51%
2007 93 2627 (525) (16.66%)
2008 433 2805 178 6.78 %
2009 211 2419 (386) (13.78%)
2010 297 2405 (14) (0.58%)
2011 482 2658 253 10.52%
2012 395 2662 4 0.15%
2013 969 3342 680 25.54%
2. Nature of Offenses Charged
The various classes of offenses and cases docketed with the Court in CY 2013 (as
reflected in Table 1 (actual figures) and Table 1a (percentages) show that the highest
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number of cases filed involved violations of R.A. No. 3019, otherwise known as the Anti-
Graft And Corrupt Practices Act, with 377 cases, thus accounting for 38.91% of the total
number of cases filed. The other cases filed were malversation cases with 176 cases
filed or 18.16% of the total cases filed, while 172 cases or 17.75% accounted for estafa
cases. Collectively, 96 cases or 9.90% of the cases filed involved violations of various
PDs, broken down as follows: 79 cases for violations of PD No. 1445 or the Government
Auditing Code, 15 cases for violations of PD No. 1752 or the Home Development Mutual
Fund Act, one (1) case for violation of PD No. 1829 or the law penalizing obstruction of
apprehension and prosecution of criminal offenders, and one (1) case for violation of PD
No. 449 of the Cockfighting Law of 1974.
Violations of other special laws comprise 109 cases or 11.25% of the total number
of cases filed in 2013, to wit: 99 cases were for violations of R.A. (RA) No. 8291 or the
Revised Government Service Insurance Act, four (4) cases were for violations of R.A.
No. 9184 or the Government Procurement Reform Act, two (2) cases for violations of
R.A. No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and
Employees, and one (1) case each for illegal discharge of firearms, unlawful
appointments, violation of R.A. No. 7787 or the Anti-Sexual Harassment Law, and
violation of R.A. No. 8041 or the National Water Crisis Act of 1999. Fifteen perjury
cases were also filed in 2013 comprising 1.54% of the total cases filed. The other cases
filed involved falsification of public documents (4 cases), bribery (4 cases), assault (1
case), homicide (1 case) physical injuries (1 case), grave threat (1 case), robbery (1 case),
special civil actions (6 cases), three (3) civil cases, and two (2) appealed cases.
Figure 2 below shows the workload according to the nature of offense charged
and how each fared at year’s end.
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2013 Workload, Disposal & Pending
Figure 2
Figure 2
220 0
200 0
180 0
160 0
140 0
120 0 WORKLOAD
No. of
100 0 DISPOSAL
Cases 800
PENDING
600
400
200
0
A V L F F D Y Y E S R A E S
R L A O T P B J D H D C S E
V M F O S V B P A T L S A S
O P C A
L
I C
V
I D
C E
L
A
E
P
P
A
Offense
3. Revived Cases
There were 75 cases revived in 2013, compared to 39 cases during the previous
year, or a difference of 36 cases. Revived cases for CY 2013 mostly consisted of
violations of tax laws (40 cases), falsification cases (16 cases) and violations of R.A. No.
3019 (15 cases), and one (1) violation of R.A. No. 9003 or the law on the ecological solid
waste management program. These four (4) types of cases accounted for 96% of the total
revived cases.
4. Amount Involved
The various cases filed in 2013 involved sums of money amounting to

P1,623,551,121.74, indicating an increase by 31.47% or P388,716,210.60 more than the
preceding year’s P1,235,228,241.14. Of the said amount, 0.092% belonged to private
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individuals, while 99.908% involved government funds or properties. Table 6 shows the
breakdown and distribution of the amounts involved in the various offenses tried by the
Court.
5. Number of Accused
There were 386 persons accused before this Court in CY 2013. Of this number,
278 or 72.02% are male, while 108 or 27.98% are female.
6. Annual Rate of Increase or Decrease of Cases Filed
Based on the annual figures of cases filed, the year under review showed a
marked increase in percentage ratings with respect to the number of cases filed.
Compared to 2011-2012 figures, there was a marked increase in the number of cases filed
in 2012-2013 rated at 145.32%.
The following table shows the number of cases filed annually and the rate of
changes therein:
Year Number of Year Rate of

Increase
Cases filed ( Decrease )
1979 760 - -
1980 1557 1979-1980 104.87%
1981 2661 1980-1981 70.91%
1982 2224 1981-1982 (16.42%)
1983 1553 1982-1983 (30.17%)
1984 1059 1983-1984 (31.81%)
1985 1235 1984-1985 16.62%
1986 1051 1985-1986 (14.90%)
1987 675 1986-1987 (35.78%)
1988 595 1987-1988 (11.85%)
1989 931 1988-1989 56.48%
1990 2333 1989-1990 150.59%
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374
1991 896 1990-1991 (61.59%)

1992 1015 1991-1992 13.28%
1993 1663 1992-1993 63.84%
1994 1736 1993-1994 4.39%
1995 1329 1994-1995 (23.44%)
1996 448 1995-1996 (66.29%)
1997 884 1996-1997 97.32%
1998 698 1997-1998 (21.04 %)
1999 697 1998-1999 ( 0.14 % )
2000 660 1999-2000 (5.31 % )
2001 517 2000-2001 (21.67%)
2002 585 2001-2002 13.15 %
2003 140 2002-2003 (76.07 %)
2004 134 2003-2004 (4.28 %)
2005 277 2004-2005 106.72 %
2006 520 2005-2006 87.73%
2007 93 2006-2007 (82.12%)
2008 433 2007-2008 365.59 %
2009 211 2008-2009 (51.27%)
2010 297 2009-2010 40.76%
2011 482 2010-2011 62.29%
2012 395 2011-2012 (18.05%)
2013 969 2012-2013 145.32%
7. Number of Cases Filed Per Region
Of the total number of cases filed in CY 2013, 798 cases or 82.35% originated
from Luzon, 142 cases or 14.66% came from the Visayas, and 29 cases or 2.99% were
from Mindanao. Among the regions of the country, the National Capital Region posted
the highest number of cases filed in 2013 with 418 cases or 49.64% of the total number of
cases filed, while Region XIII had the lowest number with one (1) case filed or 0.10% of
the total number of cases filed.
The table below shows the regional sources of cases filed and their corresponding
percentages.
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375
Region No. of Cases Filed Percentage
(LUZON) 798 82.35%

NCR 481 49.64%
I 95 9.80%
II 166 17.14%
III 42 4.33%
IV 4 0.41%
V 10 1.03%
(VISAYAS) 142 14.65%
VI 120 12.39%
VII 18 1.86%
VIII 4 0.41%
(MINDANAO) 29 2.99%
IX 6 0.62%
X 2 0.21%
XI 16 1.65%
XII 4 0.417%
XIII 1 0.10%
TOTAL 969 969 100.00% 100.00%
B. ACCOMPLISHMENTS
1. Number of Cases Disposed
The Sandiganbayan posted a disposal of 480 cases for CY 2013, or 117 cases
more than the 363 cases disposed in 2012, thus indicating a percentage increase by
32.23%. The disposed cases are composed of 468 criminal cases, two (2) civil cases,
nine (9) appealed cases, and one (1) special civil action case. The disposition rate in
2012, or the ratio of outflow of cases – referring to 480 cases decided and
archived/terminated – against the inflow of cases – referring to 969 newly-filed cases, 75
revived cases and one deducted adjustment – remained high at 46%.
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376
Presented in the graph below is the annual summary of cases disposed since the
Court started its operation in 1979.
ANNUAL SUMMARY OF CASES DISPOSED

Figure 3
3000
2500
2000
1500
Series1
1000
500
0
7980818283848586878889909192939495969798990001020304050607080910111213
Year
2. Nature of Cases Disposed
Most of the cases disposed in CY 2013 involved malversation cases with 125
cases decided/terminated, thus comprising 26.04% of the total number of cases disposed.
Placing second on the list were violations of R.A. No. 3019 with 100 cases disposed or
20.83% of the total number of cases terminated. Almost 20% of the cases disposed in
2013 involved violations of PD No. 1445 (Government Auditing Code of the
Philippines) with 80 cases disposed and PD No. 1752 (An Act Creating the Home
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377
Development Mutual Fund) with 15 cases disposed. Further, 27% of the cases disposed
in 2013 were composed of other offenses such as: violations of R.A. No. 8291 or the
Philippine Government Service Insurance System Act with 72 cases disposed or 15% of
the total cases disposed; violations of Section 272 of the Tax Reform Act of 1997 with 40
cases disposed or 8.33% of the total cases disposed; violations of Section 8 of R.A. No.
6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees
with 9 cases disposed (1.87%); violations of R.A. No. 7877 or the Anti-Sexual
Harassment Law of 1995 with four (4) cases disposed (1.87%); and one (1) case disposed
each for violation of R.A. No. 6675 (The Generics Law), R.A. No. 8981 (The
Professional Regulation Commission Modernization Law), the Philippine Mining Act of
1995, and illegal discharge of firearms under Article 254 of the Revised Penal Code.
3. Number of Accused in Cases Disposed
There were 269 persons accused in the 480 cases disposed in CY 2013.
Compared to CY 2012’s record of 331 accused, the number of accused in 2013 was 42
persons less than the previous year’s record, thus representing a 13.50% decrease in the
total number of persons accused before the Court. The table below shows the manner of
disposal of cases involving the 269 persons accused before the Court in 2013.
Manner of Disposal No. of Accused Percentage
Convicted 46 17.10%
On plea of guilt 3 1.12%
after trial on the merits 43 15.99%
Acquitted 61 22.68%
Dismissed 85 31.60%
without trial 79 29.37%
after trial on the merits 6 2.23%
Accused whose cases were:
withdrawn by the Prosecution 51 18.96%
Accused who turned state witness 1 0.37%
Accused whose cases were archived 25 9.29%
TOTAL 269 100.00%
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4. Disposal Rates
This year’s disposal rate of 14.36%, derived by dividing the number of the cases
disposed (480) by the actual workload (3,342), and multiplying the result by 100,
represents an increase of 0.72% compared to CY 2012’s figure of 13.64%10.27%. The
disposal rates according to the nature of offenses charged are found in Table 14.
The table below shows the disposal rates of the Court from 1979 to 2010.
YEAR DISPOSAL RATE
1979 28.55 %
1980 27.54 %
1981 29.55 %
1982 42.14 %
1983 43.57 %
1984 32.38 %
1985 31.72 %
1986 31.98 %
1987 22.86 %
1988 23.40 %
1989 23.10 %
1990 38.67 %
1991 30.13 %
1992 21.67 %
1993 28.40 %
1994 34.80 %
1995 51.08 %
1996 12.89 %
1997 12.15 %
1998 16.27 %
1999 13.77 %
2000 22.35 %
2001 19.35 %
2002 19.36 %
2003 17.36 %
2004 27.53 %
2005 10.78 %
2006 20.24 %
2007 11.72 %
2008 22.85 %
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379
2009 14.76 %
2010 10.26 %
2011 16.18 %
2012 13.64%
2013 14.36%
5. Manner of Disposal
Of the 480 cases disposed in 2013, 94 criminal cases (19.58%) were terminated
after trial, while 53 criminal cases (11.04%) were dismissed without trial. There were
four (4) criminal cases (0.83%) that were disposed because the accused entered pleas of
guilt, 148 criminal cases (30.83%) that were withdrawn by the Office of the Ombudsman,
while 167 criminal cases or 34.79% of the total number of cases disposed were archived
without prejudice. Also decided/terminated in 2013 were two (2) civil cases (0.21%), and
9 appealed cases (1.88%). One special civil action case (1.16%) was dismissed in 2013.
The breakdown of the 480 cases disposed in 2013 is depicted in the table below.
A more detailed schedule of the number of cases disposed by the nature of offenses
according to manner of disposal is found in Table 12a.
Manner of Disposal No. of Cases Percentage
CRIMINAL CASES
Dismissed without trial 53 11.04%
Dismissed/Archived 2 0.42%
Pleaded Guilty 4 0.83%
Terminated After Trial 94 19.58%
Convicted 24 5.00%
Acquitted 23 4.79%
Convicted/Archived 3 0.63%
Convicted/Acquitted/Dismissed/Archived 1 0.21%
Convicted/Acquitted/Dismissed 10 2.08%
Convicted/Dismissed/Archived 1 0.21%
Convicted/State Witness 2 0.42%
Acquitted/Dismissed 17 3.53%
Acquitted/Archived 5 1.04%
Acquitted/Dismissed/Archived 1 0.21%
Dismissed with trial 2 0.42%
Dismissed with trial/Dismissed without trial 5 1.04%
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380
Withdrawn by Prosecution/OSP 148 30.83%

Archived without Prejudice 167 34.79%
CIVIL CASES 2 0.42%
Dismissed 1 0.21%
Petition Granted 1 .0.21%
APPEALED CASES 9 1.88%
Convicted 6 1.25%
Dismissed 3 0.63%
SPECIAL CIVIL ACTION CASE 1 0.21%
Dismissed 1 0.21%
TOTAL 480 100.00%
PERFORMANCE AND ACCOMPLISHMENTS OF

SANDIGANBAYAN SUPPORT SERVICES:
THE ADMINISTRATIVE DIVISION
A. COURT PROPERTY AND SUPPLY
For CY 2013, the Sandiganbayan spent the total amount of P7,354,44523 for the
purchase of two (2) motor vehicles, 64 office equipment, 46 furniture and fixture, 96
information technology (IT) software and equipment, three (3) books, 16 fire
extinguishers, and 20 water heaters.
The further sum of P2,322,294.07 was spent for various office supplies consisting
of bond papers, pens, toners, cleaning materials, and other supplies necessary for the day
to day operations of the court.
B. CASHIER’S UNIT
For calendar year 2013, the Sandiganbayan issued and released one thousand
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seven hundred sixteen (1,716) checks under the Modified Disbursement System (MDS)
with a total amount of P386,227,369.10, three hundred twenty-one (321) checks under
the Sandiganbayan Trust Fund with a total amount of P15,320,240.46, seventy-two (72)
checks under the Fiscal Autonomy fund with a total amount of P68,610,774.55, and five
(5) checks for Sandiganbayan terminal leave/retirement gratuity amounting to
P12,434,254.71.
Collections in 2013 were divided into: Regular Agency Book (remitted to the
Bureau of Treasury) amounting to P1,259,627.83, Special Allowances for Justices and
Judges Fund (deposited with the Land Bank account of the Supreme Court) amounting to
P1,021,049.61, Judiciary Development Fund (deposited with the Land Bank account of
the Supreme Court) amounting to P888,268.09, and Trust Fund (deposited with Land
Bank of the Philippines) amounting to P36,882,282.80.
C. PERSONNEL SECTION
For calendar year 2013, the Personnel Section processed six (6) appointments of
employees of the Sandiganbayan – four (4) original appointments and two (2) re-
employment. There were fifteen (15) incidents of separation from service arising from
six (6) retirements, two (2) resignations, and four (4) transfers to other agencies, and five
(5) expiration of term. The Personnel Section also nine (9) promotions, and one (1) re-
employment.
Notices with respect to salary adjustments, step increments, longevity pay

increases, adjustment of Special Allowances and Special Distortion Allowances were
also processed by the Personnel Section. In 2013, it issued 58 notices of step increment,
128 certificates of employment, 128 service records, and 62 other certifications.
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382
D. GENERAL SERVICES
For Calendar Year 2013, the total output in pages of the Court’s reproduction
machines are as follows:
a. Konica 7272 - 2,643, 906 copies

b. INEO 421 (machine A) - 389,649 copies
c. INEO 421 (machine B) - 436,077 copies
d. Mimeograph Machine - 674,375 copies
E. ENGINEERING SECTION
The engineering section replaced 294 various electrical materials in 2013

consisting of fluorescent lamps, starters, tube holders, downlight housing, and ballasts. It
also repaired Intercom and telephone lines and reported unserviceable lines to the
Philippine Long Distance Telephone Co., Inc. (PLDT).
A total of 25 mechanical parts were replaced in 2013 involving the air

conditioning units, fire alarm system, power supply, elevators, and the generator set. A
total of 25 plumbing fixtures, fittings, and filters were also repaired and/or replaced. The
Sandiganbayan engineers likewise conducted daily routine inspections of the fire alarm
system and checked the conditions of the fire and jockey pumps, fire extinguishers and
fire hydrant hoses. A total of 16 air conditioning parts were also replaced by the
engineering section.
Sanitary works of the engineering section in 2013 included the repair of leaks of
plumbing fixtures and fittings and regulating flush valves to minimize water
consumption, monthly cleaning of trenches, grease trap, and elevated water tanks, and
monthly backwashing of the absorption field (wastewater treatment facility). It replaced
a total of 57 plumbing parts and fixtures and the repiping of the water supply line at the
sixth floor of the building. The engineering section likewise supervised the bi-monthly
general pest control and quarterly termite control, the annual emission testing of the
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generator set, the application of waterproofing materials in certain offices, and requested
the annual cleaning of the reverse osmosis membrane of the water purification system.
It also submitted quarterly monitoring reports of hazardous wastes and pollution control
to the Environment Management Bureau (EMB) of the Bureau Department of
Environment and Natural Resources (DENR). Lastly, to ensure safe water utilization of
the employees, the engineering section submitted for laboratory analysis the monthly
purified and alkaline water samples and quarterly effluent samples from the absorption
field.
Carpentry works in 2013 included the fabrication and installation of partitions in

the chambers of some justices, replacement of wooden doors, fabrication of steel door at
the detention cell, open shelves at the cashier, and security tables, and the initial
repainting of the piping system at the basement. The engineering section supervised the
following: construction of the detention cell at the basement and the replacement of old
and stained carpet tiles and the installation of laminated flooring; the repair of the deep
well pump motor; replacement of facial mirrors at the comfort rooms; and the putting up
of solid waste management signages.
F. MEDICAL SECTION
Providing primary health care to all Justices and employees of the Court and their
dependents, the medical section coordinated with the health maintenance organization
(HMO) for the conduct of annual physical examinations in 2013. It interpreted and
cascaded the results to all employees. First aid and emergency treatment were likewise
provided to Justices and employees of the Sandiganbayan.
In 2013, the medical section conducted the Basic Life Support and First Aid
Training Course to the newly-formed Sandiganbayan Emergency and Disaster Team in
coordination with the Quezon City chapter of the Philippine National Red Cross. It also
administered the annual anti-flu vaccine to employees of the Court and their dependents.
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384
THE LEGAL RESEARCH AND TECHNICAL STAFF
The Legal Research and Technical Staff is the repository of all original decisions
and extended resolutions of the Sandiganbayan. In its continuing project of compiling all
decisions and extended resolutions promulgated by the Court, the Legal Research and
Technical Staff produced in 2013 eight (8) volumes of Sandiganbayan Reports in book
bound form. Patterned after the Philippine Reports of the Supreme Court, the
Sandiganbayan Reports also contain a total of seventy-two (72) syllabi of the compiled
decisions and extended resolutions, as well as individual tables of cases reported and full
alphabetical indexes of subject matters. Also in 2013, seven (7) volumes of compiled
decisions and resolutions penned by Presiding Justice Francisco H. Villaruz, Jr. were
produced as token for his mandatory retirement in June. The office also issued copies of
decisions and resolutions based on forty-eight (48) requests of parties and/or authorized
representatives.
In 2013, the Legal Research and Technical Staff provided legal representation and
assistance to the Offices of the Justices through the preparation of pleadings filed with the
Supreme Court, particularly in “Jaime C. Dichaves vs. Office of the Ombudsman and
Special Division of the Sandiganbayan” docketed as G.R. Nos. 206310-206311, “Re:
Complaint of Mr. Antonio J. Baltazar against Hon. Edilberto G. Sandoval, et al.”
docketed as OCA IPI No. 10-25-SB-J, and in “Republic of the Philippines vs.
Sandiganbayan Special Second Division, Office of the Ombudsman and Major Gen.
Carlos F. Garcia” docketed as G.R Nos. 207340 and 207439. It also facilitated the filing
of pleadings prepared by the Justices in response to various administrative matters.
Six (6) administrative investigations were referred to the Legal Research and
Technical Staff in 2013 involving: (1) the break-in at the 2nd floor; (2) the reported unruly
behavior of a clerk at the Office of Presiding Justice (PJ) Francisco H. Villaruz, Jr.; (3)
unauthorized absences of a clerk at the Supply Section of the Administrative Division;
(4) the incident report involving the staff of PJ Villaruz at the Sandiganbayan living
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385
quarters in Baguio City; (5) the use of disrespectful language on the internet by
employees of the First Division Office of the Clerk of Court; and (6) the reported loss of
a handheld radio at the Sheriff and Security Division.
In 2013, the Legal Research and Technical Staff also reviewed various contracts
entered into by the Court, particularly, the Memorandum of Agreement (MOA) for the
Automated Teller Machine (ATM) payroll system and the MOA for the installation of an
offsite ATM within the premises of the Sandiganbayan, the health maintenance contract
for Justices and employees, the maintenance contracts for the closed-circuit television
(CCTV) cameras and handheld radios, the bus contract for the annual capability-building
seminar and the lease of venues for seminars. This office also reviewed and edited
several bid documents covering, among other things, the procurement of motor vehicles
for the Justices and various information technology (IT) equipment, as well as the
construction of detention facilities
THE SANDIGANBAYAN LIBRARY
In view of its research functions, the Sandiganbayan Library was transferred from
the Administrative Division to the Legal Research and Technical Staff Office in 2009.
For calendar year 2013, the Sandiganbayan library prepared the purchase request for the
acquisition of 96 various reading materials consisting of several volumes of Supreme
Court Reports Annotated (SCRA), SCRA Quick Index, and law books, journals, and
reference materials for the use of the Justices and their legal staff, as well as the other
library users. The library also attended to 123 visitors in 2013.
JUDICIAL RECORDS DIVISION
The Judicial Records Division is the central receiving office of the

Sandiganbayan. Pleadings and other legal documents are processed by this office daily,
both manually and electronically using the Court’s Case Management Information
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386
System (CMIS). The latter was designed primarily to enhance records management that
will eventually give rise to a “paperless” court.
Using the CMIS, the Judicial Records Division was able to encode a total of 9,287
pleadings in 2013 that were sent electronically to the various divisions of the Court.
Alongside the CMIS, there were 5,785 pleadings that were personally filed with the
Docket Section in 2013 while a total of 3,502 were received by mail. The total number of
criminal informations received and uploaded into the system reached 958 in 2013. In the
same year, the Judicial Records Division received and dispatched 576 mail matters.
The Judicial Records Division also issued a total of 4,488 clearances in 2013
using the docket MS-Access database. This system, created in 2004, was designed to fast
track the issuance of clearances by filtering data such as the name of the accused, the case
number, the division to which the case is pending, how the case was disposed, etc. The
system generates a report thereon which serves as basis for the issuance of the clearance.
THE SECURITY AND SHERIFF SERVICES
During the year under review, a total of 18,700 court processes were served
personally and/or by substituted service by the sheriffs and process servers to parties in
different parts of Metro Manila and in other towns and cities. Ten (10) writs of execution
were issued by the different divisions of the Court, four (4) of which were duly served
and fully satisfied with a total amount of P204,000.00 recovered in the process.
The inventory of attached properties in connection with the writs of

execution/attachment issued during the year under review is compiled as follows:
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387
AMOUNT OF
CASE WRIT OF DATE EXECUTION/ EXECUTING
DIVISION REMARKS
NUMBER EXECUTION ISSUED FORFEITURE SHERIFF
ASSETS
Cancellatio
of (property) Implementation
28293 First bond 1/25/13 40,000.00 in progress
Cancellation
SB-08- of (cash) Recalled/set
CRM-0283 Fifth bond 4/16/13 15,000.00 aside
Cancellation
28259- of (cash)
28260 First bond 5/2/13 80,000.00 Fully satisfied H. Tejada
Money Implementation
19558 Fifth judgment 5/28/13 183,805,291.25 in progress R. Barrozo
1. Nine (9)
residential
lots,
Tagaytay
City
2. Residential
Lot,
Greenhills,
San Juan
3. Residential
Lot, Capitol
District,
Quezon City
4. Residential
lot, Valle
Verde, Pasig
City
5. Residential
House, Valle
Verde, Pasig
City
6. Residential
Lot,
Calapan,
Oriental
Mindoro
7. Orchard and
Cocoland,
Puerto
Galera,
Oriental
Mindoro Turned over to R. Barrozo
8. Residential the plaintiff, A. Valencia
House, Republic of the H. Tejada
Greenhills, Philippines, H.
0039 First Forfeiture 6/21/13 San Juan thru the PCGG Villanueva
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388
AMOUNT OF
CASE WRIT OF DATE EXECUTION/ EXECUTING
DIVISION REMARKS
NUMBER EXECUTION ISSUED FORFEITURE SHERIFF
ASSETS
1. Makati Sports
Club
membership
shares
(Certificate
No. A-2271)
2. Manila Polo
Club
membership
shares
(Certificate Implementation
No. 0125) in progress
SB-10- Cancellation
CRM- of (cash)
0216-0217 Fifth bond 8/6/13 30,000.00 Fully satisfied
SB-11- Cancellation
CRM- of (cash)
0458-0459 First bond 8/8/13 70,000.00 Fully satisfied
Money Implementation
27583 First judgment 10/10/13 518,654.01 in progress H. Tejada
Cancellation
of (travel)
28349 Fifth bond 12/9/13 24,000.00 Fully satisfied R. Barrozo
SB-08- Writ of
CRM- Preliminary Implementation
0260-0261 Second Attachment 12/10/13 14,999,980.00 in progress A. Valencia
In 2013, the Sheriff and Security Services secured a total of seventy-two (72)
accused individuals placed under its custody on the following grounds: two (2) accused
were detained due to guilty verdict; six (6) were turned over by law enforcers from the
Philippine National Police (PNP), sixty-two (62) accused individuals surrendered
voluntarily to the jurisdiction of the court, one (1) was arrested by the sheriff in the
premises of the Court, and one (1) arrest was made while the accused was in hospital
confinement. In the latter case, the sheriffs, process servers and security personnel took
turns to secure the accused in the hospital up until the court’s directive for the PNP to
take custody of the person of the said accused was fully effected. The sheriffs also
managed to safely transport all convicted accused to the detention facilities for service of
sentence. The rest of the detainees were eventually released after posting bail or the
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389
required additional cash bond for their provisional liberty.
The Security force, on the other hand, screened a total of 18,273 visitors in 2013.
In thirty-three (33) instances, in the course of roving inspections, the security personnel
noted rooms/offices that were left open and which they consequently checked and locked
for protection. Security personnel also extended assistance to co-employees and officials
involved in three (3) vehicular accidents. They also promptly reported about ten (10)
technical hitches involving water overflow, malfunctioning electrical/building fixtures,
and other problems to Engineering Section for troubleshooting. For about twenty-five
(25) instances, the security guards responded and reported to superior officers the cause
that activated the building’s fire alarm.
Notably, the security personnel were able to prevent a kidnaping incident and
about three (3) robbery/hold-up incidents by assisting PNP operatives in the apprehension
of the suspects operating within the immediate vicinity of the Sandiganbayan. They also
ably monitored and secured the accused in high profile cases involving, among others,
former President Gloria Macapagal Arroyo, former First Gentleman Mike Arroyo,
Commissioner Grace Padaca, and Ret. Gen. Avelino Razon, Jr.
THE MANAGEMENT INFORMATION SYSTEMS DIVISION
As the office solely responsible for the information technology (IT) needs of the
Sandiganbayan, the Management Information Systems Division (MISD) attended to a
daily minimum average of three (3) computer maintenance work and repair in 2013 or
an estimated 748 incidents of IT work and/or repair. The daily help-desk services
included computer troubleshooting and repair, peripheral tinkering, and user assistance.
The MISD likewise serviced a total of 240 computers/peripherals for reformatting and
installation of applications, anti-virus and for newly-acquired computers, printers and
peripherals.
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390
In 2013, MISD reconfigured 160 computers/peripherals for internet and Lex

Libris connections and network connectivity (printer sharing). After the installation of
the Case Management Information System (CMIS) in the court, the MISD has
continuously monitored and managed its operations. It also managed the official website
of the Sandiganbayan and ensured that it is updated periodically.
To enhance their skills to meet the IT needs of the Sandiganbayan, MISD

personnel underwent in 2013 an orientation seminar/training on Case Management
Information System (CMIS) and the iGovPhil Projects, including a Cyberoam Firewall
UTM User Training.
INTERNAL AUDIT SERVICE
The Internal Audit Service assists the management of the Sandiganbayan in

achieving the most efficient operation and fiscal administration by ensuring that all
financial transactions are in accordance with duly established accounting and auditing
procedures and policies. Relative thereto, in 2013, the Internal Audit Service reviewed
a total of 2,149 disbursement vouchers and payrolls of the Court to ascertain the
completeness and validity of the supporting documents and the availability of funds for
the payment of all claims. This was done to ensure that all transactions were approved by
the proper authority. The Internal Audit Service also made appropriate recommendations
based on the results of its audit and made follow-ups to determine if the same had been
carried out.
A total of 774 purchase requests passed through the Internal Audit Service in
2013 as it monitored that all acquisition of supplies, equipment, motor vehicles, and other
properties of the Court are included in its Annual Procurement Plan (APP). It observed
and witnessed the bidding procedures conducted by the Bids and Awards Committee
(BAC) of the Court. It made appropriate recommendations based on the results of audit
Page 31
391
and followed-up actions to determine if audit recommendations has been carried out.
Additionally, the Internal Audit Service inspected all purchased properties of the Court.
To ensure that all service vehicles were used for official business purposes, the
Internal Audit Service controlled the issuance of 467 trip tickets in 2013.
FINANCIAL OPERATIONS (FINANCE AND BUDGET DIVISION)
For Calendar Year (CY) 2013, the Department of Budget and Management
(DBM) released to the Sandiganbayan a total allotment of P406,513,989.00 for
operational expenses, which was higher by 1.96% or P7,827,572.00 more than the CY
2012 budget which stood at P398,686,417.00. The 2013 budget was composed of
P392,440,000.00 for regular appropriations and P14,073,989.00 released through Special
Allotment Release Order (SARO). In addition thereto, Sandiganbayan had a continuing
appropriation of P63,002,034.35, giving it an aggregate allotment in the amount of
P469,516,023.35.
The year under review showed total expenditures of P419,098,213.67, denoting a

5.38% or P21,383,424.06 increase from the previous year’s amount of P397,714,789.61.
The increase in operational costs in 2013 was attributed to the following: (a) full
implementation of the 4th tranche salary schedule as per Executive Order No. 76; (b)
filling-up of unfilled/vacant positions in the court; (c) continuously rising procurement
cost of supplies, materials and services; (d) procurement of vehicles for official use of the
Justices; and (e) procurement of equipmen5t for the newly-constructed courthouse and
living quarters in and the implementation of the 3rd tranche salary adjustment pursuant to
Executive Order No. 40.
In 2013, the amount of P281,238,979.17 was spent for Personal Services (PS) in
the form of salaries, allowances, and other compensation including terminal leave
benefits, retirement gratuity benefits and life insurance premium. The sum of
P45,659,591.86 represented Maintenance and Other Operating Expenses (MOOE). The
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392
remaining sum of P92,199,642.64 was used for the amortization of Sandiganbayan

Centennial Building, as well as the amortization of furniture, fixture and equipment.
The following Schedule shows the comparison of actual expenditures in CY 2012

and CY 2013. Total expenditures were based on the total actual obligation incurred from
regular allotment, continuing appropriations and special allotment releases.
Expenditures CY 2013 CY 2012

Personal Services
(Salaries, Allowances, Retirement P281,238,979.17 P196,965,454.93
Gratuity and Terminal Leave Benefits,
Retirement & Life Insurance Premiums
and Other Compensation)
Maintenance & Other Operating
Expenses 45,659,591.86 110,358,901.47
Capital Outlay
Equipment, Books & Furniture and
Fixtures 7,096,324.48 5,287,115.05
Amortization of SB Centennial
Building 82,492,514.88 82,492,514.88
Amortization of SB Equipment,
Furniture & Fixtures 2,610,803.28 2,610,803.28
TOTAL P419,098,213.67 P397,714,789.61
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393
Sandiganbayan
Detailed Statement of Income and Expenses
For the Year Ended December 31, 2013
(In Philippine Peso)
2013
Income
Subsidy Income
Subsidy Income from National Government P 421,776,329.27
Subsidy Income from Other Funds 6,602,931.90
Less: Reversion of Unused NCA 679,628.36
Subsidy Income Net 427,699,632.81
Other Fines and Penalties 5,057.94
Total Income P 427,704,690.75
Less: Expenses
Personal Services
Salaries and Wages - Regular 112,966,404.79
Personnel Economic Relief Allowance 8,067,968.28
Representation Allowance 5,129,088.21
Transportation Allowance 5,129,088.15
Clothing/Uniform Allowance 1,705,000.00
Subsistence, Laundry and Quarter Allowance 37,950.00
Productivity Incentive Benefits 636,000.00
Other Bonuses and Allowances 1,600,570.80
Hazard Pay 134,986.21
Longevity Pay 2,273,069.37
Overtime and Night Pay -
Cash Gift 1,731,742.94
Year-End Bonus 9,638,378.35
Life and Retirement Insurance Contributions 11,527,927.54
Pag-IBIG Contributions 405,570.18
PhilHealth Contributions 1,092,278.66
ECC Contributions 400,978.90
Pension Benefits - Civilian 21,973,689.07
Retirement Benefits - Civilian 8,010,000.00
Terminal Leave Benefits 5,422,652.26
Other Personnel Benefits 76,892,300.97
Total Personal Services P 274,775,644.68
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394
Maintenance and Other Operating Expenses

Traveling Expense - Local P 1,191,772.15
Traveling Expense - Foreign 375,282.51
Training Expense 1,986,695.88
Office Supplies Expense 2,871,287.98
Accountable Forms -
Drugs and Medicine Expenses 271,298.70
Gasoline, Oil and Lubricants Expense 2,353,210.05
Other Supplies Expense 457,443.13
Water Expense 1,495,368.07
Electricity Expense 7,388,535.43
Postage and Delivery 290.00
Telephone Expense - Landline 1,432,821.59
Telephone Expense - Mobile 767,176.13
Internet Expenses 826,272.00
Cable, Satellite, Telegraph and Radio 17,790.00
Awards and Indemnities 551,056.04
Advertising Expense 9,408.00
Printing and Binding 30,810.00
Rent Expense -
Transportation and Delivery 8,695.00
Subscription Expense 213,375.00
Legal Services -
General Services -
Janitorial Services 2,277,996.86
Other Professional Services 1,835,644.80
Repairs and Maintenance - Office Building 2,632,351.46
Repairs and Maintenance - Office
Equipment 674,786.19
Repairs and Maintenance - Furniture and
Fixtures 13,900.00
Repairs and Maintenance – IT Equipment
and Software 25,549.00
Repairs and Maintenance – Communication
Equipment 30,890.10
Repairs and Maintenance – Other
Machinery and Equipment -
Repairs and Maintenance - Motor Vehicles 1,132,843.16
Repairs and Maintenance – Other Property,
Plant and Equipment 7,000.00
Extraordinary Expense 1,789,249.79
Miscellaneous Expense 5,694,436.42
Page 35
395
Taxes, Duties and Licenses -

Fidelity Bond Premium 138,015.00
Insurance Expenses 2,157,676.02
Depreciation Expense - Office Building 17,829,134.98
Depreciation Expense - Office Equipment 592,214.94
Depreciation Expense - Furniture and
Fixtures 1,154,885.25
Depreciation Expense - IT Equipment 1,549,382.70
Depreciation Expense - Communication
Equipment 34,693.44
Depreciation Expense – Medical, Dental
and Laboratory Equipment 19,056.20
Depreciation Expense - Sports Equipment 15,477.30
Depreciation Expense- Other Machinery
and Equipment 149,020.11
Depreciation Expense - Motor Vehicles 2,415,394.81
Depreciation Expense - Other PPE 2,662.61
Other Maintenance and Operating Expenses 4,699,141.26
Total MOOE P 69,119,990.06
Financial Expenses
Interest Expense 12,806,112.36
Total Expenses P 356,701,747.10
Excess of Income over Expenses 71,002,943.65

Less: Loss on Sale of Disposed Asset 240,900.00
Net Income P70,762,043.65
Certified Correct:
RODITO C. LAGGUI JR.

Accountant III
Noted by:
GEMMA A. POSADAS
Acting Chief JSO, Budget and Finance Division
Page 36
396
Sandiganbayan
Balance Sheet
As of December 31, 2013
ASSETS
Current Assets
Cash P 694,027,848.42
Cash - Collecting Officer 103,820.81
Petty Cash Fund 103,035.14

Cash in Bank - Local Currency,
Current 244,253,590.75
Cash in Bank - Local Currency,
Savings 1,326,638.95
Cash in Bank - Local Currency, Time
Dep. 448,240,762.77
Total Cash 694,027,848.42
Receivables 54,606,536.25
Due from NGAs 54,003,819.85
Advances to Officers and Employees 289,800.00
Other Receivables 312,916.40
Total Receivables 54,606,536.25
Inventories 1,407,501.40
Office Supplies Inventory 1,106,869.71
Drugs and Medicines Inventory 43,974.05
Other Supplies Inventory 256,657.64
Total Inventories 1,407,501.40

Prepayments
Prepaid Insurance 404,290.77
Page 37
397
Property, Plant and Equipment 370,678,046.92
Land 3,966,004.80
Office Buildings 588,949,964.68
Office Equipment 7,491,503.89
Furniture and Fixtures 21,202,353.22
IT Equipment and Software 18,483,928.22
Library Books 8,100,664.38
Communication Equipment 394,830.75

Medical, Dental, and Laboratory
Equipment 411,597.00
Sports Equipment 183,491.25
Other Machinery and Equipment 2,672,743.10
Motor Vehicles 36,275,404.08
Other Property, Plant & Equipment 29,584.50

Total Property, Plant and
Equipment 688,162,069.87
(317,484,022.95
Less: Total Accumulated Depreciation )
Property, Plant and Equipment-
Net 370,678,046.92
Other Assets 199,386.23
Total Assets P 1,121,323,609.99
LIABILITIES AND EQUITY
Liabilities
P
Current Liabilities 684,571,745.18
Accounts Payable 1,519,047.81
Page 38
398
Due to Officers and Employees 4,726,267.91
Due to National Treasury 57,698.83
Due to BIR 1,704,759.22
Due to GSIS 92,962.58
Due to PAG-IBIG 107,431.57
Due to PHILHEALTH 5,982.72

Performance/Bidders/Bail Bonds
Payable 112,800,103.67
Other Payables 563,557,490.87
Total Current Liabilities 684,571,745.18
Long-Term Liabilities
Loans Payable - Domestic 48,127,018.28
P
Total Liabilities 732,698,763.46
Equity
P
Government Equity, beginning January 1 318,540,549.36
Retained Operating Surplus
Current Operations 70,762,043.65
Prior Years' Adjustments (677,746.48) 70,084,297.17
Government Equity, Ending December 31 388,624,846.53
P
Total Liabilities and Equity 1,121,323,609.99
Page 39
399
Certified Correct:

Accountant III
Noted by:
GEMMA A. POSADAS
Sandiganbayan
Statement of Government Equity
Government Equity, Beginning January 1 P318,540,549.36

Retained Operating Surplus
Current Operations 70,762,043.65
Prior Years' Adjustments (677,746.48) 70,084,297.17
Government Equity, Ending December 31 P388,624,846.53
Certified
Correct:

Accountant III
Noted by:
GEMMA A. POSADAS
Page 40
400
SANDIGANBAYAN
Statement of Cash Flows
2013
Cash Flows from Operating Activities:

Cash Inflows:
Receipts of Notices of Cash Allocation P 401,652,790.00
Funds received from Supreme Court 6,602,931.90
Collection of other income 5,507.94
Cash deposit on bonds, escrow account,
remunerations and other miscellaneous item 36,882,442.85
Other Funds 130,792,599.38
Total Cash Inflows 575,936,272.07
Less: Cash Outflows:

Reversion of unused NCA 679,628.36
Cash payment of operating expenses 287,975,316.64
Cash payment of supplies 11,214,629.75
Cash payment of retirement benefits 13,432,652.26
Remittance of Interest Income to BTr 242,682.18
Cash payment on Bonds and
other miscellaneous item 15,077,738.28
Cash payment/Withdrawal of Escrow Account -
Total Cash Outflows 328,622,647.47
Cash Provided by Operating Activities 247,313,624.60
Cash Flows from Investing Activities:

Cash Outflows:
Cash payment of property, plant and equipment 4,781,560.23
Cash Used by Investing Activities (4,781,560.23)
Cash Flows from Financing Activities:

Cash Outflows:
Cash payment on domestic loans (principal) 72,297,205.80
Cash payment on domestic loans (interest) 12,806,112.36
Cash Used by Financing Activities (85,103,318.16)
Page 41
401
Total Cash Provided by Operating, Investing and

Financing Activities 157,428,746.21
Add: Cash Balance, January 1 536,599,102.21
Cash Balance, December 31 P 694,027,848.42
Certified Correct:

Accountant III
Noted by:
GEMMA A. POSADAS
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2013 Annual Report Vol - 2

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2013 Annual Report Vol - 2

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2013

THE JUDICIARY ANNUAL REPORT

Judicial Affidavit Rule 1

Republic of the Philippines

A.M. No. 12-8-8-SC

JUDICIAL AFFIDAVIT RULE

2 A.M. No. 12-8-8-SC

A.M. No. 12-8-8-SC

Judicial Affidavit Rule 3

NOW, THEREFORE, the Supreme Court En Banc hereby

4 A.M. No. 12-8-8-SC

(1) The judicial affidavits of their witnesses, which shall

SEC . 3. Contents of Judicial Affidavit. – A judicial affidavit

Judicial Affidavit Rule 5

(1) Show the circumstances under which the witness

SEC . 4. Sworn attestation of the lawyer. – (a) The judicial

SEC . 5. Subpoena. – If the government employee or official,

6 A.M. No. 12-8-8-SC

Rules of Court. The rules governing the issuance of a subpoena

SEC. 6. Offer of and objections to testimony in judicial affidavit.—

SEC . 7. Examination of the witness on his judicial affidavit. –

SEC . 8. Oral offer of and objections to exhibits. – (a) Upon the

Judicial Affidavit Rule 7

(c) Since the documentary or object exhibits form part of

SEC . 9. Application of rule to criminal actions. – (a) This rule

SEC . 10. Effect of non-compliance with the Judicial Affidavit

8 A.M. No. 12-8-8-SC

late submission of the same provided, the delay is for a valid

MARIA LOURDES P. A. SERENO

Judicial Affidavit Rule 9

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

TERESITA J. LEONARDO- DE CASTRO ARTURO D. BRION

DIOSDADO M. PERALTA LUCAS P. BERSAMIN

MARIANO C. DEL CASTILLO ROBERTO A. ABAD

MARTIN S. VILLARAMA, JR. JOSE P. PEREZ

JOSE C. MENDOZA BIENVENIDO L. REYES

Republic of the Philippines

A.M. No. 12-12-11-SC

Effectivity October 22, 2013

Sec. 1.Title ................................................................................ 5

Sec. 4. Who May Petition ........................................................ 18

(B) Provisions Common to Voluntary and Involuntary

Sec. 7. Action on the Petition ................................................... 20

Table of Contents iii

Sec. 18. Petition Given Due Course ........................................... 29

(C) The Rehabilitation Receiver, Management Committee, and

Sec. 20. Who May Serve as a Rehabilitation Receiver ............... 29

Sec. 40. Election of Representatives to the Creditors’

(D) Determination of Claims

Sec. 44. Registry of Claims ........................................................ 47

(E) Use, Preservation and Disposal of Assets and Treatment of

Sec. 47. Use or Disposition of Assets ........................................ 48

(F) Avoidance Proceedings

Sec. 57. Rescission or Nullity of Certain

Sec. 58. Actions for Rescission or Nullity ................................... 56

(G) Treatment of Secured Creditors

Sec. 59. No Diminution of Secured Creditor Rights ................... 56

(H) Administration of Proceedings

Sec. 61. Contents of a Rehabilitation Plan. ................................. 58

(I) Termination of Proceedings

Sec. 73. Termination of Proceedings ........................................... 66

Sec. 1. Pre-negotiated Rehabilitation Plan ................................. 68

Sec. 2. Issuance of Order ........................................................ 69