ConCom Digest

10. Ifurung v. Ombudsman

PETITIONER: REY NATHANIEL C. IFURUNG

RESPONDENT: HON. CONCHITA C. CARPIO MORALES IN HER CAPACITY AS THE
OMBUDSMAN, et al.
PONENTE: MARTIRES, J.
EN BANC

Doctine/Summary:

Pertinent to Sec. 10, Art. XI of the 1987 Constitution, it is only as to the rank and salary that
the Ombudsman and the deputies shall be the same with the chairman and members,
respectively, of the constitutional commissions.

Harmonizing Sec. 11, Art. XI of the 1987 Constitution with Sec. 8(3) of R.A. No. 6770, in any
vacancy for the positions of Ombudsman and the deputies, whether as a result of the
expiration of the term or death, resignation, removal, or permanent disability of the
predecessor, the successor shall always be appointed for a full term of seven years.

Unlike the constitutional commissions in Art. IX of the 1987 Constitution, the seven-year term
of office of the first appointees for Ombudsman and the deputies is not reckoned from 2
February 1987, but shall be reckoned from their date of appointment. Accordingly, the present
Ombudsman and deputies shall serve a full term of seven years from their date of
appointment unless their term is cut short by death, resignation, removal, or permanent
disability.

Facts:

This Petition for Certiorari and Prohibition, petitioner Rey Nathaniel C. Ifurung (petitioner), in
propria persona, seeks a declaration from the Court that:
(a) Sec. 8(3) in relation to Sec. 7 of RA No. 6770, also known as the Ombudsman Act of
1989, is unconstitutional for being an outright transgression of Sec. 11, in relation to Secs. 8
and 10 of Art. XI of the 1987 Constitution;

and (b) all individual respondents as de facto Ombudsman and Deputies Ombudsman,
respectively, and all these positions are vacant.

Respondents are the incumbent officials of the Office of the Ombudsman, viz:
Conchita Carpio Morales, Ombudsman (Ombudsman Morales); xx Overall Deputy Ombudsman,
xx Deputy Ombudsman for Luzon, xx Deputy Ombudsman for Visayas, xx Deputy Ombudsman
for Mindanao, and Deputy Ombudsman for the Military.

Issues:
● Whether Section 8(3) of R.A. No. 6770 is unconstitutional for being violative of Section
11 in relation to Sections 8 and 10, Article XI of the 1987 Philippine constitution and
 applicable jurisprudence
Petitioner’s Arguments:
1) Sec. 8(3), in relation to Sec. 7 of
R.A. No. 6770, which provides that in
case of a vacancy at the Office of the
Ombudsman due to death,
resignation, removal or permanent
disability of the incumbent
Ombudsman and his deputies, the
newly appointed Ombudsman and his
deputies shall be appointed to a full
term of seven (7) years, is
constitutionally infirm as it
contravenes Sec. 11 in relation to
Secs. 8 and 10 of Art. XI of the 1987
Constitution.
He avers that like all constitutionally
created positions, i.e., President, Vice-
President, Senators, Members of the
House of Representatives and
Members of CSC, COMELEC, and
COA, the successor to the positions of
the Ombudsman and deputies should
serve only the unexpired term of the
predecessor.
Hence, petitioner insists that the
incumbent Ombudsman and deputies
have been overstaying in their
present positions for more than two
years considering that their terms
have expired on 1 February 2015.
"To allow them to stay in the said
positions one day longer constitutes a
continuing affront to the 1987
Constitution, unduly clips presidential
prerogatives, and deprives the nation
of the services of legitimate
Ombudsman and Deputies
Ombudsman."
2) Intent of framers was to
constitutionalize the Office of the
Respondents’ Arguments:
1) Respondents aver that Sec. 11, Art. XI
of the 1987 Constitution is clear that
the term of the Ombudsman and the
Deputies shall be seven years
without reappointment without
distinction on the cause of filling the
vacancy.
- to follow petitioner's interpretation
would lead to a distinction not found in
the law
- Respondents state that unlike Sec.
11, Art. XI of the 1987 Constitution,
the term of office of the
constitutionally created offices
provides that a successor who is
appointed to any vacancy shall only
serve the unexpired term of the
successor.
2) Respondents allege that the
deliberations of the framers of the
Constitution reveal their intent to grant
the Ombudsman and his deputies the
same rank and salary as the Chair
and members of the Constitutional
Commissions but not by the
staggered term.
3) ruling in Gaminde does not apply to
the Office of the Ombudsman where
there are no seven-five-three-year
rotational intervals for the
appointment.
The Office of the Ombudsman is not
a commission composed of a
chairperson and several
commissioners; thus, whether the
term of the first Ombudsman began
on 2 February 1987 would be
immaterial because the succeeding
Ombudsman shall have a fresh
 Ombudsman, i.e., by granting it seven-year term.
autonomy and independence the
same as and equal to those of the
other constitutionally created offices
and positions.

The intent of the framers of the

Constitution was that the position of
the Ombudsman and the deputies
shall have the same status as the
three constitutional commissions,
the limitations as to the latter's term of
office shall likewise apply to the
Ombudsman and the deputies.

Hence, petitioner maintains that the

grant of a full term to an
Ombudsman's successor, when the
vacancy in the office is for a cause
other than the expiration of term, is an
outright non-observance of the
intent of the framers

3) Petitioner insists that in Gaminde v.

COA (Gaminde), the Court en banc
has determined that the starting point
of the terms of office of the first
appointees to the constitutional
commissions is uniformly set on 2
February 1987.
- He maintains that this was not
compiled with. Asserting that
from the first appointee to the
present– Conchita Carpio
Morales’ term should have
ended on Feb 2015. Hence
overstayed na raw siya by 2
years.

4) The Office of the Ombudsman is not

sui generis; thus, what applies and
holds true for all the other
constitutionally created offices and
positions should also apply to this
office.

The Ombudsman cannot be an

exception, to the rule set by the 1987
Constitution, i.e., to serve for the
unexpired term, so much so that each
 uncompleted term creates a fresh
term for the appointed Ombudsman

Rationale:
Sec. 8(3) of R.A. No. 6770 is not
unconstitutional.

Petitioner anchors his challenge on the constitutionality of Sec. 8(3) of R.A. No. 6770 in the
belief that because the Ombudsman and the deputies have the same rank and salary as the
chairman and the members of the constitutional commissions, their term of office, following the
Court's disquisition in Gaminde, shall always be seven years counted from 2 February 1987 and
seven years thereafter, and not the full term of seven years.

a. The Office of the Ombudsman is

not a constitutional commission.

It must be stressed that the Office of the Ombudsman is not a constitutional commission.

Sec. 1, Art. IX of the 1987 Constitution specifically enumerates the independent constitutional
commissions in the Philippines, viz: the CSC, the COMELEC, and the COA.

A commission is defined as "a board or committee officially appointed and empowered to

perform certain acts or exercise certain jurisdiction of a public nature or relation."
- Noteworthy, the Constitutional Commissions are composed of a chairman and X
commissioners.

The commissions are collegial bodies whose manner of working is characterized by a

sharing of responsibility among the chairman and the commissioners of the commission.

In contrast, the present Office of the Ombudsman, albeit composed of the Ombudsman to be
known as Tanodbayan, the Overall Deputy, the Deputy for Luzon, the Deputy for the Visayas,
the Deputy for Mindanao, the Deputy for the Military and Other Law Enforcement Office
(MOLEO), and the Special Prosecutor, is not a collegial body.

The Ombudsman and the deputies do not resolve cases by a majority of all its members
but rather are confined within the sphere of their respective jurisdiction, i.e., the Deputy
Ombudsman for Luzon, for cases involving public officials and employees assigned in Luzon;
the Deputy Ombudsman for Visayas, for those assigned in Visayas; the Deputy Ombudsman for
Mindanao, for those assigned in Mindanao; the Deputy Ombudsman for MOLEO, for those
assigned in the military and the police; and the Special Prosecutor, in the conduct preliminary
investigation and prosecution of criminal cases within the jurisdiction of the Sandiganbayan.82

The Overall Deputy, on the one hand, oversees and administers the operations of the different
offices under the Office of Ombudsman while the Ombudsman is the final approving
authority on the disposition of cases before the sectoral offices, i.e., Luzon, Visayas, Mindanao,
MOLEO, and the Office of the Special Prosecutor.

b) The undeniable intent of the framers of the 1987 Constitution in Sec. 10, Art. XI was to
provide that the rank and salary of the Ombudsman and his deputies shall be the same
as that of the chairman and members, respectively, of the constitutional commissions
Sec. 10, Art. XI of the 1987 Constitution reads:

SECTION 10. The Ombudsman and his Deputies shall have the rank of Chairman
and Members, respectively, of the Constitutional Commissions, and they shall
receive the same salary, which shall not be decreased during their term of office

During the 1987 Consti Deliberation:

MR. ROMULO. Xxx the Ombudsman in this provision is a rank in itself really. That is how
we look at it. But for purposes of government classification and salary, we thought we
have to give him a recognizable or an existing rank as a point of reference more than
anything else

- The discussion confirms that the intent of the framers of the Constitution in qualifying
that the salary and rank of the Ombudsman and the deputies shall be the same as that
of the chairman and the members of the constitutional commissions, was for the
purpose of having a government classification as to salary and a point of
reference as to rank.

The word "salary" is defined as "a reward or recompense for services performed. In a more
limited sense, a fixed periodical compensation paid for services rendered."

The word "rank," on the other hand, "is often used to express something different from office. It
then becomes a designation or title of honor, dignity or distinction conferred upon an officer in
order to fix his relative position in reference to other officers in matters of privilege, precedence,
and sometimes of command, or by which to determine his pay and emoluments."

It is obvious that neither the words "salary" nor "rank" even remotely includes the "term of
office," which is the time during which the officer may claim to hold the office as of right, and
fixes the interval after which the several incumbents shall succeed one another.

It must be underscored that the framers of the Constitution in Sec. 10, Art. XI limited to rank
and salary the similarity between the Ombudsman and the deputies on one hand, and the
chairman and the members of the constitutional commission on the other.

c) Sec 8(3) of R.A. No. 6770 is

consistent with Sec. 11, Art. XI of
the 1987 Constitution.

The Constitution is clear and explicit: (a) the Ombudsman and the deputies shall serve the term
of seven years; (b) that the Ombudsman and the deputies shall not be reappointed; and (c) the
Ombudsman and the deputies shall not run for any office in the election immediately succeeding
their cessation from office.

Notably, the framers plainly provided for a seven-year term of the Ombudsman and the
deputies.

Nowhere in the Constitution can it be gathered that the appointment to any vacancy for the
position of Ombudsman and the deputies shall be only for the unexpired term of the
predecessor.
This can only mean that it was the intent of the framers that the appointment to the positions
of the Ombudsman and the deputies, whether it be for the expired or unexpired term of the
predecessor, shall always be for a full term of seven years.

More importantly, it can be easily deduced from the decrees issued by President Marcos
preceding the creation of the Office of the Ombudsman under the 1987 Constitution that the
appointment of the Tanodbayan and the deputies shall be for a full term of seven years
regardless of the reason for the vacancy in the position.

In our review of Sec. 8(3) of R.A. No. 6770, we note that in case of death, resignation, removal,
or permanent disability of the Ombudsman, the new Ombudsman shall be appointed for a full
term. Undoubtedly, Sec. 8(3), R.A. No. 6770 is consistent with Sec. 11, Art. XI of the 1987
Constitution in so far as it provides that the Ombudsman and the deputies shall serve for a term
of seven years.

Ruling:
The Gaminde ruling applies to the constitutional commissions and not to the Office of the
Ombudsman.

WHEREFORE, the petition is DISMISSED

11. Mansue Lukban v. Ombudsman

PETITIONER:
RESPONDENT:
PONENTE:
-

Doctrine/Summary:
The duty of the Ombudsman as the "protector of the people" should not be marred by
overzealousness at the expense of public officers. This is especially true in instances where the
supreme penalty of dismissal from service may be imposed.

Facts:
Before the Court is a petition for review on certiorari assailing the Decision and Resolutions
issued by CA. The CA Decision affirmed the Joint Resolution of the Office of the Ombudsman
(Ombudsman), which found herein petitioner P/SSupt. Mansue Nery Lukban (Lukban)
administratively liable with several others for Serious Dishonesty and Conduct Prejudicial to the
Best Interest of the Service.
—--------------------------------------------

This case arose from the so-called "chopper scam" that involved the procurement of second-
hand light police operational helicopters (LPOHs) for use of the PNP. During the time material to
this case, petitioner Lukban was the Chief of the Management Division of the PNP Directorate
for Comptrollership.

Pursuant to the modernization program of the [PNP], procurement of three (3) [LPOHs] were
included in its Annual Procurement Plan (APP) for Calendar Year 2008. Relative thereto, the
National Police Commission (NAPOLCOM) thereafter issued Resolution which prescribed the
following minimum standard specifications for the purchase of the LPOHs: xxxxxxxxxx

A negotiation conference was conducted which were attended by BEELINE and Manila
Aerospace Products and Trading (MAPTRA) Sole Proprietorship. Eventually, the Negotiation
Committee awarded the contract to MAPTRA for the purchase and delivery of one fully
equipped and two standard LPOHs, all brand new, amounting to P104,985,000.00 which was
also confirmed by the National Headquarters-Bids and Awards Committee (NHQ-BAC).

After the concluded Supply Contract, a Notice to Proceed was issued to MAPTRA and the
LPOHs were delivered.

It was the PNP Inspection and Acceptance Committee (ICA), which vouched for the LPOHs'
conformity to the NAPOLCOM specifications and that these LPOHs had passed the
acceptance criteria and ICA further recommended the acceptance of the two standard LPOHs.

The subject Inspection Report Form was thereafter prepared which declared that the LPOHs
were in good condition and conformed with NAPOLCOM specifications.

Yet, an investigation of the subject transactions later revealed that the LPOHs did not meet
specifications by the NAPOLCOM. Further, during the course of the inquisition, it was
discovered that the LPOHs were hardly brand new and the choppers were actually pre-owned
by then First Gentleman Mike Arroyo.

As a result of the investigation, the Ombudsman-Field Investigation Office (FIO) filed a

Complaint charging several public and private respondents, including petitioner Lukban, with
various criminal and administrative offenses.

OMB found Lukban GUILTY of Serious Dishonesty and Conduct Prejudicial to the Best
Interest of the Service, and are thus meted the penalty of DISMISSAL FROM THE SERVICE.

CA affirmed the decision of OMB.

Hence, this case.

Issues:
Whether or not the CA erred in (2) upholding the Ombudsman's finding of administrative liability
against Lukban.

Petitioner’s Arguments: Respondents’ Argument:

1) He was not a member of the Bids 1) As Chief of the Management Division

and Awards Committee (BAC), the of the PNP Directorate for
Negotiation Committee, the Technical Comptrollership, he is presumed to
Inspection Team, the Inspection and know all existing policies, guidelines
Acceptance Committee (IAC), or any and procedures in carrying out the
other committee created in agency's mandate from the
connection with the procurement of Negotiation Committee.
the subject helicopters.
By practically expressing petitioner's
 He claimed that his inclusion in the
case was based on the fact that in the
Inspection Report Form, he affixed his
signature on the "NOTED" portion
thereof. According to him, the form
was prepared by his co-respondent
PO3 Dy, the designated Property
Inspector of the Management Division,
and was further initialed by his
immediate superior, PSupt. Madrid,
who verified the completeness,
correctness, and authenticity of the
report and that of the documentary
requirements attached to it, before it
was forwarded to Lukban for his
notation. Thus, he claimed that he
validated the truthfulness of the report
of his personnel based on the
attached supporting documents prior
to affixing his signature thereon.
acquiescence to the Inspection Report
Form, without verifying the accuracy
and truthfulness thereof, he committed
a serious lapse of judgment sufficient
to pin him for dishonesty and conduct
prejudicial to the best interest of the
service, especially so when his
participation thereon was vital to, and
it facilitated the release of funds for,
the full payment of two "brand new"
helicopters which turned out to be
second-hand units.

2) Lukban explained that the function of

the Management Division of the
Directorate for Comptrollership,
relative to the procurement process,
was limited to ensuring that there was
an available fund for said procurement
and that the allocated fund was
properly released to the winning
bidder after the delivery of the
procured item and upon the approval
of the procuring head. Once the
documentary requirements were
complied with, he claimed that it
became the ministerial function of the
Directorate for Comptrollership to
issue a clearance for the release of
the fund for the payment of the
procured items

Rationale:
In administrative proceedings, the complainant carries the burden of proving the allegations with
substantial evidence or "such relevant evidence as a reasonable mind will accept as adequate
to support a conclusion, even if other minds equally reasonable might conceivably opine
differently."

Here, the Ombudsman and the CA found substantial evidence to hold Lukban administratively
liable for serious dishonesty and conduct prejudicial to the best interest of the service. However,
after a careful review of the records of this case, the Court finds that there is no substantial
evidence to hold Lukban administratively liable for gross dishonesty and conduct prejudicial to
the service. Consequently, his dismissal was improper.

As for what specific acts constitute conduct prejudicial to the best interest of the service,
there is no concrete description of such under the Civil Service law and rules. However,
jurisprudence instructs that for an act to constitute such an administrative offense, it need not
be related to or connected with the public officer's official functions. What is essential is
that the questioned conduct tarnishes the image and integrity of his public office.

—-------------------------------------------
Here, Lukban was found to have committed serious dishonesty and conduct prejudicial to the
best interest of the service by his having signed the "Noted by" portion of the Inspection Report
Form without verifying the accuracy and truthfulness thereof, thereby facilitating the release of
funds for the payment of supposedly brand-new helicopters which turned out to be secondhand
units.However, a review of the functions and duties of his office leads the Court to
conclude otherwise.

At the time material to this case, Lukban was the Chief of the Management Division of the PNP
Directorate for Comptrollership. Lukban explained the functions of his office in this wise:
At the outset, it must be em phasized that Petitioner is the Chief of the Management
Division - a division under the umbrella of the Directorate for Comptrollership of the
PNP, the office principally concerned with the management of the financial
resources of the agency. The Management Division assists the latter in the
formulation of policies on resource management of the PNP, internal auditing and
control, and liquidation of funds and property acco untability of PNP personnel. This
is in line with the mandates of its parent department, the Directorate for
Comptrollership, whose main function - as the term 'comptrollership' denotes -
relates to budgetary matters, accounting, financial reporting, internal auditing and
management improvement.

30. Accordingly, as Chief of the Management Division, Petitioner's responsibilities

were therefore geared towards fund/resource management - and not the
technicalities involved in the inspection and verifying compliance with the standards
set by the NAPOLCOM.

31. Indeed, as indicated in the PNP's Comptrollership Handbook, the Management

Division's competence relates to resource management xxx.

Petitioner, as Chief of the Management Division, could only be held responsible for
these areas, and he could not be charged with the functions that fall outside the
ambit of the Management Division's assigned mandate.

Based on the foregoing, which has not been disputed, Lukban's official duties revolve only
around accounting and fund or resource management. To be sure, his claim that the
function of verifying the LPOH specifications belonged to different departments of the
PNP is, in fact, already recognized by jurisprudence. In Field Investigation Office v. Piano,
which involved the exact same factual milieu as the instant case, the Court, through
Justice Peralta, now the Chief Justice, zeroed in on the IAC as the ultimate entity in the
PNP responsible for verifying the LPOH specifications, to wit:
Respondent is the Chairman of the PNP Inspection and Acceptance Committee
(IAC). The IAC plays a very important role in the procurement process of the
agency, since it has the responsibility of inspecting the deliveries to make
 sure they conform to the quantity and the approved technical specifications
in the supply contract and the purchase order and to accept or reject the
same. Notably, only after the IAC's final acceptance o[the items delivered can
the supplier be paid by the PNP.

Thus, the Court gives credence to Lukban's claim that he merely relied on the IAC
Resolution as regards the compliance of the LPOHs with the NAPOLCOM specifications
when he affixed his signature on the Inspection Report Form under the portion of"Noted
by." Borrowing the language of the Court in Field Investigation Office v. Piano , it is the
IAC that has the responsibility of inspecting the deliveries to make sure they conform to
the quantity and the approved technical specifications in the supply contract and the
purchase order and to accept or reject the same, and it is only after the IAC's final
acceptance of the items delivered can the supplier be paid by the PNP , so that it is
the IAC Resolution that constitutes "the final act for the acceptance of these
helicopters for the use of the PNP, and which was the basis for the PNP to pay the
price of brand new helicopters for the delivered second-hand items."

Considering the foregoing, it is the considered view of the Court that Lukban cannot be
held liable for serious dishonesty or conduct prejudicial to the best interest of the service.
To reiterate, dishonesty - like bad faith - is not simply bad judgment or negligence, but a
question of intention. Lukban's acts do not show any disposition to defraud, cheat,
deceive, or betray, nor any intent to violate the truth. Moreover, Lukban's reliance on the
findings of the IAC and the propmiy inspectors within his division negates any dishonest
intent.

—------------------------------------------
Final note in relation to Ombudsman’s function as the “protector of the people”

In order to protect this Constitutional mandate, the Ombudsman is empowered to investigate

and prosecute, for and in behalf of the people, criminal and administrative offenses committed
by government officers and employees, as well as private persons in conspiracy with the former.
Specifically for administrative cases, it is empowered to impose penalties in the exercise of its
administrative disciplinary authority.

Nevertheless, the duty of the Ombudsman as the "protector of the people" should not be marred
by overzealousness at the expense of public officers. This is especially true in instances where
the supreme penalty of dismissal from service may be imposed.

Here, records show that Lukban has been a public servant for 33 years with an unblemished
service record. In his more than three decades of service, he has never been charged or
accused of any misconduct nor has he been found guilty of any administrative or criminal
offense. That the penalty of dismissal would not only mean his separation from service but
would also entail the forfeiture of his retirement benefits and perpetual disqualification from
holding public office should have impelled the Ombudsman to be more judicious in imputing
liability.

This case is one of those instances where the Ombudsman was called upon to be more
circumspect in assessing the liability of public officers and more prudent in exercising its
administrative disciplinary authority. The Ombudsman failed in this regard by simply doing a
"shot-gun" approach - at the expense of Lukban. This the Court is now called upon to rectify as
a matter of justice.

Ruling:
WHEREFORE, premises considered, the petition is GRANTED. The Decision dated August 20,
2015, as well as the Resolutions dated January 18, 2016 and October 10, 2016 issued by the
Court of Appeals Fourth Division, and Resolution dated March 27, 2018 issued by the Court of
Appeals Special Fourteenth Division in CA-G.R. SP No. 127992 are REVERSED AND SET
ASIDE.

Petitioner Mansue Nery Lukban is hereby REINSTATED to his former rank as Police Senior
Superintendent without loss of seniority rights and with payment of back salaries and all benefits
which would have accrued as if he had not been illegally dismissed.

12. Lynna Chung v. Ombudsman

PETITIONER: LYNNA G. CHUNG
RESPONDENT: OFFICE OF THE OMBUDSMAN AND OFFICE OF THE OMBUDSMAN-
FIELD INVESTIGATION OFFICE
PONENTE: CAGUIOA, J.
FIRST DIVISION

Doctrine/Summary:

Facts:
This is a Petition for Certiorari assailing Joint Resolution and Order found probable cause to
indict petitioner (Chung), former Manager of the Administrative and Finance Department of
PNR, along with five other PNR officials, for violation of Section 3(e) of Republic Act No. (RA)
3019 in connection with the PNR's procurement of rail fastenings, clips and insulators from
Pandrol Korea Limited (Pandrol Korea).

The PNR-Bids and Awards Committee (BAC) passed Resolution recommending Direct
Contracting with Pandrol Korea in the procurement of x sets of rail fastenings and x pieces of
clips and insulators for the repair of rail tracks and replacement of parts in the Quezon Province
and in the Bicol Region.

In justifying the recommended mode of procurement, the PNR-BAC relied on the fact that
Pandrol Korea owns the patents of the certain types of rail fastenings needed and that it does
not have a sub-dealer in the Philippines. The prices indicated in the BAC Resolution were based
on the quotation from K.B. Hong of Pandrol Korea that former PNR General Manager Andal had
requested.

Petitioner was among the members of the PNR-BAC. She, however, inhibited from the PNR-
BAC proceedings of the subject procurement because she is the adoptive mother of
Jaewoo Chung, the Manila Liaison Officer of Pandrol Korea.

It was also through Andal that the PNR entered into a contract with Pandrol Korea for the supply
of X sets of rail fastening system at X per piece or an aggregate price of US$6,545,000.00; X
pieces of rail clips at X per piece or an aggregate price of US$175,000.00; and X pieces of rail
nylon insulators at X apiece or an aggregate price of US$50,000.00. The contract stipulated that
the PNR had to open an irrevocable letter of credit (LC) in favor of and acceptable to Pandrol
Korea for the amount of the items to be delivered.

Payment Schedule
Xxx

b) For each scheduled payment, an advance payment equivalent to fifteen percent (15%)
of the Price of the delivery shall be paid to the SUPPLIER within ten (10) calendar days
from receipt of the SUPPLIER of a Purchase Order from the PURCHASER, subject to
the provision of Item 5(c) below.
Xxx

d) The payment of the remaining eighty-five percent (85%) of the amount for each delivery
shall be paid to the SUPPLIER upon presentation to the advisory bank of the following
shipment documents:
xxx

Andal issued a Memorandum to petitioner as the Department Manager of Administrative and

Finance, directing her to effect the payment of the peso equivalent of US$1,155,000.00 to be
charged to the Philippine Veterans Bank (PVB) to cover the payment to Pandrol Korea for the
importation of Pandrol rail fastening assembly. In compliance, petitioner sent a letter to the
manager of PVB, Gagalangin Branch, Tondo, Manila, with the exact tenor. Later, she also sent
another letter to the manager of PVB requesting that the amount of P345,352.96 be debited
from PVB for payment of additional charges for the importation of the rail fastening assembly. In
another letter, petitioner requested PVB to debit from the same account the amount of
P1,561,293.26 to cover payment of customs duties and taxes.

Subsequently, Andal issued another Memorandum to petitioner, directing her to effect the
payment of 110% of US$225,000.00 upon opening an LC to cover payment to Pandrol Korea
for the purchase of 50,000 rail clips and 50,000 nylon insulators. It was to be charged against
PNB. Once again, in compliance, petitioner sent a letter to the manager of the PNB, Tutuban
Branch with the exact tenor of the directive in Andal's Memorandum.

On January 12, 2016, the OMB-Field Investigation Office (FIO) filed a Complaint against the
members of the PNR-BAC, the PNR Board of Directors, and Jaewoo Chung for violation of
Section 3(e), (g),(h),and (i)of RA 3019 and Section 7(a) of RA 6713.

After preliminary investigation, the OMB issued the assailed Joint Resolution finding petitioner
and five other PNR officials liable for violation of Section 3(e) of RA 3019.

Issues:
Whether the Ombudsman gravely abused its discretion in finding probable cause against
petitioner for violation of Section 3(e) of RA 3019.

Petitioner’s Argument: Respondent’s Argument:

1) There were no irregularities in the

payments to Pandrol Korea.
 That the absence of a notice of
disallowance by the Commission on
Audit against the payments made to
Pandrol Korea indicates that the
payments were, in fact, regular,
necessary and lawful.

Rationale:
The assailed Joint Resolution brushed aside the explanation of petitioner concerning her
compliance with the instructions of Andal as flimsy, but it never addressed nor contested her
other explanation with regard to the opening of the LCs. Petitioner explains that the actual
disbursement of the funds would still depend on fulfillment of the terms of said LCs and the
contract, specifically on submission of documents, between PNR and Pandrol Korea. In other
words, payments were not effected by the mere authorization to open said LCs.

In other words, the assailed Joint Resolution totally fails in demonstrating how petitioner acted
with evident bad faith, manifest partiality, or gross inexcusable negligence. As well, there is also
no clear and positive showing how any injury was caused to the government, or how any
unwarranted benefit, advantage or preference was given to another with the criminal or corrupt
motives required by Section 3(e) of RA 3019.

Additionally, the inference sought to be drawn by the Ombudsman with petitioner's relationship
with Jaewoo Chung is even unavailing given its own finding, in the very same Joint Resolution,
that there was no evidence that petitioner exerted any undue influence in awarding the contract
to Pandrol Korea. Thus:

Respondent Lynna Chung and private respondent Jaewoo Chung's failure to disclose their
relationship does not result in any liability since the subject procurement was not made through
public bidding. Section 47 of R.A. No. 9184 requires that "all bids shall be accompanied by a
sworn affidavit of the bidder that it is not related to the head of the procuring entity by
consanguinity or affinity up to the third civil degree." This provision, which also covers such a
relationship between a BAC member and an officer of a bidder-corporation, does not apply to
procurements by Direct Contracting — as in the instant case, albeit wrongly resorted to since no
bidding is involved therein. Moreover, even if there appears to be a conflict of interest on
the part of respondent Lynna Chung, it was not shown that she exerted influence in
ensuring the award of the contract to Pandrol Korea, which her adopted son — private
respondent Jaewoo Chung — represented as Manila Liaison Officer of Pandrol Limited.

Ruling:

WHEREFORE, the Petition is GRANTED. The Joint Resolution dated March 14, 2018 of the
Office of the Ombudsman in OMB-C-C-16-0055 and OMB-C-A-16-0046, and its Order dated
May 8, 2018 in OMB-C- C-16-005 5 are REVERSED and SET ASIDE.