Privileges and Salary

Republic v. Sandiganbayan

FACTS:

This is the Republic Act No. 1379 of the Philippines, which declares forfeiture in favor of the state
any property found to have been unlawfully acquired by any public officer or employee. This section 2
of RA 1379 states that whenever a public officer or employee acquires property during his
incumbency that is manifestly out of proportion to his salary and other lawful income, that property is
presumed to have been unlawfully acquired.

The Republic filed a petition for forfeiture against Ferdinand E. Marcos and his family, seeking to
declare an amount of over US$658 million, held in escrow in the Philippine National Bank, as ill-gotten
wealth. The funds were previously held in various foreign foundations in Swiss banks.

The Sandiganbayan initially ruled in favor of the Republic on September 19, 2000, ordering the
forfeiture of the amount in favor of the Republic. However, on January 31, 2002, the Sandiganbayan
reversed its decision and set the case for further proceedings
.
The Republic then filed a petition for certiorari under Rule 65 of the Rules of Court, seeking to set
aside the Sandiganbayan’s resolution and reinstate its earlier decision.

ISSUE: Whether or not an aggregate amount of over US$658 million, held in escrow in the Philippine
National Bank, could be declared as ill-gotten wealth?

HELD: WHEREFORE, the petition is hereby GRANTED. The assailed Resolution of the Sandiganbayan
dated January 31, 2002 is SET ASIDE. The Swiss deposits which were transferred to and are now
deposited in escrow at the Philippine National Bank in the estimated aggregate amount of
US$658,175,373.60 as of January 31, 2002, plus interest, are hereby forfeited in favor of petitioner
Republic of the Philippines.

Ferdinand Marcos's official salary as Senate President in 1965 was P15,935.00 and as President of
the Philippines from 1966 to 1984 was P1,420,000.00. Imelda Marcos reported salaries and
allowances only for the years 1979 to 1984 amounting to P1,191,646.00.
Of the P11,109,836.00 in reported income from legal practice, 96% represents "receivables from
prior years" during the period 1967 up to 1984. Ferdinand Marcos reported a total of P2,521,325.00
as Other Income for the years 1972 up to 1976 which he referred to in his return as "Miscellaneous
Items" and "Various Corporations." It points out discrepancies and lack of transparency in the
income reporting, suggesting that the Marcoses had more wealth than what was officially reported.
This includes the absence of any payor of the dividends or earnings, and the lack of any records
showing any known Marcos client as he has no known law office.

Ferdinand and Imelda Marcos, former public officers, undeniably acquired and owned properties
during their term of office, including five groups of Swiss accounts. The Marcoses had dollar deposits
amounting to US $356 million, which is significantly disproportionate to their aggregate legitimate
income of only US$304,372.43 during their incumbency as government officials. The Republic was
able to establish a prima facie presumption that the assets and properties acquired by the Marcoses
were manifestly and patently disproportionate to their aggregate salaries as public officials, indicating
that these were unlawfully acquired.

The law raises the prima facie presumption that a property is unlawfully acquired, hence subject to
forfeiture, if its amount or value is manifestly disproportionate to the official salary and other
lawful income of the public officer who owns it. Hence, Sections 2 and 6 of RA 137976 provide:

Section 2 of RA 1379 explicitly states that "whenever any public officer or employee has acquired
during his incumbency an amount of property which is manifestly out of proportion to his salary as
such public officer or employee and to his other lawful income and the income from legitimately
acquired property, said property shall be presumed prima facie to have been unlawfully acquired.
The elements which must concur for this prima facie presumption to apply are:

(1) the offender is a public officer or employee;

(2) he must have acquired a considerable amount of money or property during his incumbency; and

(3) said amount is manifestly out of proportion to his salary as such public officer or employee and
to his other lawful income and the income from legitimately acquired property.

Sec. 6. Judgment – If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property in question,
forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall become
the property of the State. Provided, That no judgment shall be rendered within six months before any
general election or within three months before any special election. The Court may, in addition, refer
this case to the corresponding Executive Department for administrative or criminal action, or both.

From the above-quoted provisions of the law, the following facts must be established in order that
forfeiture or seizure of the Swiss deposits may be effected:

(1) ownership by the public officer of money or property acquired during his incumbency, whether it
be in his name or otherwise, and
(2) the extent to which the amount of that money or property exceeds, i. e., is grossly
disproportionate to, the legitimate income of the public officer.

Thus, the very first Executive Order (EO) issued by then President Corazon Aquino upon her
assumption to office after the ouster of the Marcoses was EO No. 1, issued on February 28, 1986. It
created the Presidential Commission on Good Government (PCGG) and charged it with the task of
assisting the President in the "recovery of all ill-gotten wealth accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates, whether
located in the Philippines or abroad, including the takeover or sequestration of all business
enterprises and entities owned or controlled by them during his administration, directly or through
nominees, by taking undue advantage of their public office and/or using their powers, authority,
influence, connections or relationship."

Section 9 of the PCGG Rules and Regulations provides that, in determining prima facie evidence of
ill-gotten wealth, the value of the accumulated assets, properties and other material possessions of
those covered by Executive Order Nos. 1 and 2 must be out of proportion to the known lawful
income of such persons. The respondent Marcos couple did not file any Statement of Assets and
Liabilities (SAL) from which their net worth could be determined. Their failure to file their SAL was in
itself a violation of law and to allow them to successfully assail the Republic for not presenting their
SAL would reward them for their violation of the law.

The President of the Philippines, as the highest elected official, is entitled to several privileges and a
salary: The President of the Philippines is the only government official under Salary Grade 33,
equivalent to a monthly pay of P411,382. This is roughly around P5 million per year. The Malacañan
Palace is designated as the official residence of the president during the six-year term, while The
Mansion in Baguio City is the official summer residence. The Presidential Security Group is assigned
as the close-in security detail of the president, vice president, and their immediate families. The
president is given a presidential car for land travel, the BRP Ang Pangulo yacht for water travel, and
a plane and helicopter (Kalayaan) for air transport. While presidential immunity from suit is not
expressly granted in the 1987 Constitution, it is a privilege enjoyed by the president based on the
decisions of the Supreme Court to ensure that the chief executive can carry out his duties during his
tenure of office. These privileges and benefits are designed to enable the President to effectively
fulfill the responsibilities of the office.