The Supreme Court decided that the Sandiganbayan, the Philippines’ anti-graft court, has jurisdiction over presidents, directors, trustees, or managers of government-owned or controlled corporations (GOCCs), even if those corporations were organized under the Corporation Code rather than a special law. This ruling reinforces the government’s ability to combat corruption by ensuring that officials in GOCCs are held accountable for graft and corrupt practices, regardless of how the corporation was created.

Navigating Corporate Waters: Does the Sandiganbayan’s Net Catch All GOCC Officials?

This case arose from charges against Efren L. Alas, President and Chief Operating Officer of the Philippine Postal Savings Bank (PPSB), for alleged anomalous advertising contracts. The Sandiganbayan initially dismissed the case, arguing that PPSB was a private corporation and its officers did not fall under its jurisdiction. The court based its decision on the premise that PPSB was incorporated under the Corporation Code, not created by a special law. This prompted the People of the Philippines, through the Office of the Special Prosecutor (OSP), to file a petition challenging this ruling, arguing that RA 8249 defines the jurisdiction of Sandiganbayan and does not distinguish the manner of creation of GOCCs.

The core legal question centered on whether the Sandiganbayan’s jurisdiction extended to officers of GOCCs organized under the Corporation Code, or only those created by special law. The Supreme Court emphasized the broad definition of government-owned or controlled corporations as defined in Section 2(13) of Executive Order 292, also known as the Administrative Code of 1987. This definition includes any agency organized as a stock or non-stock corporation vested with functions relating to public needs, whether governmental or proprietary in nature, and owned by the government directly or indirectly. PPSB clearly fit this definition, being a subsidiary of the Philippine Postal Corporation (PHILPOST) with over 99% of its authorized capital stock belonging to the government.

The Court also addressed the argument that the Civil Service only covers GOCCs with original charters, referencing Article IX-B, Section 2(1) of the 1987 Constitution. It clarified that the Sandiganbayan’s jurisdiction is separate and distinct from the Civil Service Commission. Article XI, Section 4 of the 1987 Constitution provides that the Sandiganbayan “shall continue to function and exercise its jurisdiction as now or hereafter may be provided by law.”

To further clarify this issue, the Supreme Court highlighted that Congress, through Republic Acts 7975 and 8249, consistently maintained the jurisdiction of the Sandiganbayan over presidents, directors, trustees, or managers of government-owned or controlled corporations without any distinction regarding their creation. In particular, RA 8249 states that the Sandiganbayan has exclusive original jurisdiction over cases involving:

Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section, 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… Presidents, directors or trustees, or managers of government-owned or controlled corporations, state universities or educational institutions or foundations.

The absence of a distinction regarding the manner of creation implies that the legislature intended to include officers of both types of corporations within the Sandiganbayan’s jurisdiction when involved in graft and corruption. The Court invoked the principle of statutory construction: Ubi lex non distinguit nec nos distinguere debemos – when the law does not distinguish, we should not distinguish.

The Court also cited its previous ruling in Quimpo v. Tanodbayan, emphasizing the importance of ensuring that officers of GOCCs, whether created by special law or under the Corporation Code, are subject to the Sandiganbayan’s jurisdiction for purposes of the Anti-Graft and Corrupt Practices Act. Allowing otherwise would undermine the government’s policy to minimize graft and corruption. Therefore, the Supreme Court concluded that the Sandiganbayan has jurisdiction over presidents, directors, or managers of GOCCs regardless of whether they were created by special law or incorporated under the Corporation Code.

FAQs

What was the key issue in this case?	The central issue was whether the Sandiganbayan has jurisdiction over officers of government-owned or controlled corporations (GOCCs) that were organized under the Corporation Code, not by a special law.
What is a government-owned or controlled corporation (GOCC)?	According to the Administrative Code of 1987, a GOCC is an agency organized as a stock or non-stock corporation with public functions, owned directly or indirectly by the government.
Why did the Sandiganbayan initially dismiss the case?	The Sandiganbayan initially dismissed the case because it believed that the Philippine Postal Savings Bank (PPSB) was a private corporation created under the Corporation Code, and its officers were thus not under their jurisdiction.
What was the Supreme Court’s reasoning in overturning the Sandiganbayan’s decision?	The Supreme Court reasoned that RA 8249 does not distinguish between GOCCs created by special law and those incorporated under the Corporation Code, implying that the Sandiganbayan’s jurisdiction extends to both.
What is the significance of the legal principle Ubi lex non distinguit nec nos distinguere debemos?	This principle means that when the law does not distinguish, we should not distinguish. The Supreme Court applied this to RA 8249, noting that it did not differentiate between types of GOCCs.
How does this ruling affect the fight against corruption?	This ruling strengthens the fight against corruption by ensuring that officers of GOCCs cannot evade prosecution simply because their corporation was created under the Corporation Code rather than a special law.
Does this ruling change the Civil Service coverage of GOCC employees?	No, the Court clarified that the Sandiganbayan’s jurisdiction is separate from the Civil Service Commission’s coverage.
What was the outcome of the case?	The Supreme Court granted the petition and reversed the Sandiganbayan’s resolution, meaning the case against Efren L. Alas could proceed in the Sandiganbayan.

In conclusion, this decision confirms the broad reach of the Sandiganbayan’s jurisdiction over government-owned and controlled corporations. By refusing to distinguish between GOCCs based on their manner of creation, the Supreme Court has reinforced the government’s ability to prosecute graft and corruption among public officials in GOCCs. This promotes accountability and helps maintain public trust in government institutions.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: People vs. Sandiganbayan and Alas, G.R. NOS. 147706-07, February 16, 2005