[ GR NO.

135687, Jul 24, 2007 ]

PRESIDENTIAL AD HOC FACT-FINDING COMMITTEE ON BEHEST LOANS v.
OMBUDSMAN ANIANO DESIERTO
DECISION

AUSTRIA-MARTINEZ, J.:

FACTS:

President Fidel Ramos established the Presidential Ad Hoc Fact-Finding Committee

on Behest Loans, tasked with investigating behest loans made by the Development
Bank of the Philippines and the National Investment Development Corporation to
specific corporations.

Among the corporations under investigation were P.R. Garcia and Sons
Development and Investment Corporation (PRGS), Golden River Mining Corporation
(Golden River), and Filipinas Carbon and Mining Corporation (Filcarbon).

Orlando S. Salvador, a PCGG consultant, provided sworn statements indicating that

the loan accounts of these corporations were referred to the Committee for
investigation.

Based on the findings of the Committee, charges were brought against members of
the banks’ board of directors and the corporations’ officers and directors.

The Ombudsman dismissed the charges, citing prescription and insufficiency of

evidence.

The Ombudsman argued that the right of the State to recover properties unlawfully
acquired by public officials or employees, including the behest loans, is not barred by
prescription.

The Supreme Court found that the Ombudsman erred in dismissing the charges
based on prescription, as the right of the State to recover behest loans is not subject
to prescription under the Philippine constitution.

The Ombudsman contended that two Golden River Mining Corporation loans had
sufficient collateral based on the evidence presented by the complainant.

ISSUES:
Whether or not the Ombudsman erred in dismissing the complaints filed by the
petitioner. Specifically, the issue revolves around the Ombudsman's dismissal on the
grounds of prescription and insufficiency of evidence.

RULING:
The Supreme Court ruled that the Ombudsman erred in dismissing the charges
based on prescription, as the right of the state to recover properties unlawfully
acquired by public officials or employees (including the behest loans) is not barred
by prescription under the Philippine constitution. Additionally, the court found that the
Ombudsman did not err in ruling that two Golden River Mining Corporation loans had
sufficient collateral, and upheld the dismissal of the case with regard to these loans.