Poro Exim Corporation vs. Office of the Ombudsman and Felix S. Racadio

The Ombudsman has jurisdiction over officials and employees of government-owned and controlled corporations, regardless of whether such corporations have original charters. This jurisdiction is derived from Article XI, Section 13(8) of the Constitution and Section 15(1) of RA 6770, in relation to the Sandiganbayan's expanded jurisdiction over "[p]residents, directors or trustees, or managers of government-owned or controlled corporations" under PD 1606, as amended by RA 7975, RA 8249, and RA 10660, which made no distinction as to the manner of the GOCC's creation.

Petitioner Poro Exim Corporation is an authorized importer within the Poro Point Freeport Zone (PPFZ), a freeport established under RA 7227, as amended by RA 9400. Respondent Felix S. Racadio is the Director, President, and Chief Executive Officer of the Poro Point Management Corporation (PPMC), a corporation incorporated under the Corporation Code that is fully owned by the Bases Conversion and Development Authority (BCDA). PPMC serves as the operating and implementing arm of the BCDA to manage the PPFZ. The dispute centers on the scope of the Ombudsman's jurisdiction under Article XI, Section 13 of the Constitution, particularly whether it covers officers of GOCCs without original charters, a question that implicates the relationship between the Ombudsman's constitutional and statutory powers and the Sandiganbayan's expanded jurisdiction.

Petitioner Poro Exim Corporation, an authorized importer within the Poro Point Freeport Zone (PPFZ) duly accredited by several government agencies, filed a Complaint before the Ombudsman criminally and administratively charging respondent Felix S. Racadio, in his capacity as PPMC Director, President, and CEO, with violation of Section 3(e) of RA 3019, abuse of authority, conduct prejudicial to the best interest of the service, grave misconduct, oppression, and violation of Section 5(c) of RA 6713. Petitioner alleged that respondent, under the guise of conducting a thorough and in-depth investigation of petitioner's past dealings, business transactions, and importations within the PPFZ, unduly delayed the approval of its various applications for import permits covering a shipment of more than 200 units of vehicles, equipment, and parts. Respondent also issued petitioner a show-cause order (SCO), claiming that based on his initial investigation report (IIR), the latter committed various violations which, if not controverted, would result in the automatic revocation and cancellation of its Certificate of Registration.

Petitioner claimed that respondent's arbitrary and capricious delay in the approval of such import permits may be evinced from the following circumstances: (a) all of petitioner's past applications for import permits were duly approved within two days; (b) the PPMC's Vice President for Regulatory Services already endorsed petitioner's applications to respondent; (c) no notice of any violation of law, rule, or regulation had been given to petitioner with respect to its shipments; (d) no criminal, civil, or administrative case had been filed against petitioner or any of its directors or officers for any such purported violations; (e) respondent was already implementing his new policy, although the same was neither published nor approved by the PPMC Board of Directors; (f) respondent did not cite any law, rule, or regulation as basis for considering petitioner's shipment as "big volume" or "large number"; (g) respondent refused to issue the import permits despite petitioner's repeated pleas for his immediate action on the applications for such permits, as well as his full awareness of the economic ramifications of such delay; (h) he defeated the PPMC's legal mandate of ensuring the free flow of goods within the PPFZ; and (i) the SCO and IIR, which he signed alone, do not cite any specific provision of law, rule, or regulation that petitioner purportedly violated. Petitioner further averred that due to respondent's undue delay, it was constrained to withdraw all its applications that it filed before the PPFZ and caused the importation of its shipment into regular customs territory through the Bureau of Customs, Port of San Fernando, and by other locators in the Subic Bay Freeport Zone.

In his defense, respondent denied the allegations against him. He maintained that since it was his first time to encounter applications for import permits involving a very large volume of vehicles, equipment, and parts, he chose to be prudent by referring such applications to the Board of Directors for approval, but without denying or approving the same. He further contended, inter alia, that applying for an import permit will not automatically result in its grant. Finally, respondent asserted that the Ombudsman has no jurisdiction over him, being an official of the PPMC, which is a GOCC without an original charter.

The Ombudsman dismissed the Complaint on the ground of lack of jurisdiction, primarily citing Article XI, Section 13(2) of the Constitution in relation to Khan vs. Office of the Ombudsman, holding that its jurisdiction over GOCCs is limited only to those with original charters. Since PPMC is a GOCC without an original charter, the Ombudsman concluded it had no jurisdiction over its officers, such as respondent. Petitioner moved for reconsideration, but the same was denied.

• Grave Abuse of Discretion: Petitioner argued that the Ombudsman gravely abused its discretion in dismissing the Complaint on the ground of lack of jurisdiction, as the Ombudsman's jurisdiction extends to officers of GOCCs regardless of whether such corporations have original charters.
• Expanded Jurisdiction: Petitioner maintained that the Ombudsman's jurisdiction over GOCCs without original charters is supported by the expanded jurisdiction of the Sandiganbayan under PD 1606, as amended by RA 7975, RA 8249, and RA 10660, which include presidents, directors, or trustees, or managers of GOCCs without distinction as to the manner of their creation.

• Lack of Jurisdiction: Respondent asserted that the Ombudsman has no jurisdiction over him, being an official of the PPMC, which is a GOCC without an original charter, citing Article XI, Section 13(2) of the Constitution and Khan vs. Office of the Ombudsman.
• Prudence in Approving Applications: Respondent maintained that since it was his first time to encounter applications for import permits involving a very large volume of vehicles, equipment, and parts, he chose to be prudent by referring such applications to the Board of Directors for approval, but without denying or approving the same.
• No Automatic Grant: Respondent contended that applying for an import permit will not automatically result in its grant.

• Jurisdiction of the Ombudsman: Whether the Ombudsman gravely abused its discretion in dismissing petitioner's Complaint on the ground of lack of jurisdiction over respondent, an officer of a GOCC without an original charter.

• Jurisdiction of the Ombudsman: Yes. The Ombudsman gravely abused its discretion in dismissing the Complaint on the ground of lack of jurisdiction. The Ombudsman has jurisdiction over officers of GOCCs regardless of whether such corporations have original charters, pursuant to Article XI, Section 13(8) of the Constitution and Section 15(1) of RA 6770, in relation to the Sandiganbayan's expanded jurisdiction under PD 1606, as amended.

• Jurisdiction of the Ombudsman: The Court ruled that the Ombudsman's finding of lack of jurisdiction was tainted with grave abuse of discretion. Article XI, Section 13 of the Constitution provides the Ombudsman with several powers, including the power to "investigate x x x any act or omission of any public official, employee, office[,] or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient" and to "perform such functions or duties as may be provided by law." To limit the Ombudsman's power over GOCCs only to those with original charters, purportedly pursuant to Article XI, Section 13(2), is myopic as it fails to consider the other powers given to the Ombudsman. Section 15(1) of RA 6770 explicitly provides that the Ombudsman has the power to investigate and prosecute any act or omission of any public officer, employee, office, or agency when such act or omission appears to be illegal, and it has primary jurisdiction over cases cognizable by the Sandiganbayan. The jurisdiction of the Sandiganbayan was first delineated in PD 1486 and expanded by PD 1606, RA 7975, RA 8249, and RA 10660 to include crimes committed by public officers or employees, including those employed in GOCCs, without distinction on whether such GOCCs have original charters or not. Section 4(c) of PD 1606, Section 2 of RA 7975, Section 4 of RA 8249, and Section 2 of RA 10660 all include "[p]residents, directors or trustees, or managers of government-owned or controlled corporations" within the Sandiganbayan's jurisdiction without any distinction as to the manner of their creation. Case law, including People vs. Sandiganbayan, Carandang vs. Desierto, Garcia vs. Sandiganbayan, and Maligalig vs. Sandiganbayan, has consistently recognized the Sandiganbayan's jurisdiction over such officers regardless of whether the GOCCs have original charters. Since the Sandiganbayan has jurisdiction over presidents, directors, trustees, or managers of GOCCs regardless of whether they were incorporated through original charters, then the Ombudsman, in accordance with Article XI, Section 13(8) of the Constitution and Section 15(1) of RA 6770, also has jurisdiction over them. The case relied upon by the Ombudsman, Khan, has no application in this case because the complaint subject of Khan was filed in February 1989, before the enactment of RA 6770, RA 7975, RA 8249, and RA 10660, whereas the Complaint filed by petitioner was filed on August 10, 2017, during the effectivity of RA 6770 and RA 10660. Since the Ombudsman merely dismissed the Complaint on the ground of lack of jurisdiction and did not traverse the merits thereof, the Court reinstated OMB-L-C-17-0487 and OMB-L-A-17-0532 and remanded the same to the Ombudsman for a resolution on the merits.

• Ubi lex non distinguit nec nos distinguere debemos — When the law does not distinguish, we should not distinguish. The Court applied this principle in holding that the Sandiganbayan's jurisdiction over "[p]residents, directors or trustees, or managers of government-owned or controlled corporations" under PD 1606, as amended, applies to both GOCCs with and without original charters, as the legislature consistently refrained from making any distinction with respect to the manner of their creation.
• Statutory Construction — Harmonious Interpretation — The whole and every part of the statute must be considered in fixing the meaning of any of its parts in order to produce a harmonious whole. The Court applied this rule in interpreting Article XI, Section 13 of the Constitution, holding that to limit the Ombudsman's power over GOCCs only to those with original charters fails to consider the other powers given to the Ombudsman, including the power to perform such functions or duties as may be provided by law.
• Jurisdiction Determined by Allegations in the Complaint — The jurisdiction of a court over a criminal case is determined by the allegations in the complaint or information, and once it is shown, the court may validly take cognizance of the case. The Court cited this principle from Maligalig vs. Sandiganbayan in recognizing the Sandiganbayan's jurisdiction over officials of GOCCs.

• "The deliberate omission, in our view, clearly reveals the intention of the legislature to include the presidents, directors or trustees, or managers of both types of corporations within the jurisdiction of the Sandiganbayan whenever they are involved in graft and corruption. Had it been otherwise, it could have simply made the necessary distinction. But it did not." — This passage from People vs. Sandiganbayan, quoted by the Court, articulates the principle that the Sandiganbayan's jurisdiction over GOCC officers applies regardless of whether the GOCC has an original charter, and forms the basis for the Court's ruling that the Ombudsman likewise has jurisdiction.
• "It is a basic principle of statutory construction that when the law does not distinguish, we should not distinguish. Ubi lex non distinguit nec nos distinguere debemos." — This excerpt states the controlling rule of statutory construction applied by the Court in interpreting the Sandiganbayan's jurisdiction over GOCC officers without distinction as to the manner of the GOCC's creation.
• "Since the Sandiganbayan has jurisdiction over presidents, directors, trustees, or managers of GOCCs, regardless of whether they were incorporated through original charters, then the Ombudsman, in accordance with Article XI, Section 13 (8) of the Constitution and Section 15 (1) of RA 6770, also has jurisdiction over them." — This passage states the ratio decidendi of the case, linking the Ombudsman's jurisdiction to the Sandiganbayan's expanded jurisdiction over GOCC officers.

• People vs. Sandiganbayan, 491 Phil. 591 (2005) — Controlling precedent. The Court relied on this case, which explicitly ruled that the Sandiganbayan has jurisdiction over presidents, directors, trustees, or managers of GOCCs, regardless of whether or not they have original charters, applying the principle that when the law does not distinguish, we should not distinguish.
• Carandang vs. Desierto, 654 Phil. 277 (2011) — Followed. The Court cited this case for the proposition that the Ombudsman has jurisdiction over administrative cases involving grave misconduct committed by officials and employees of GOCCs, and that the Sandiganbayan has jurisdiction to try and decide criminal actions involving violations of RA 3019 committed by public officials and employees, including presidents, directors, and managers of GOCCs.
• Garcia vs. Sandiganbayan, 842 Phil. 240 (2018) — Followed. The Court cited this case for its recognition, albeit in passing, of the Sandiganbayan's jurisdiction over criminal and civil cases involving graft and corrupt practices committed by public officers and employees, including those in GOCCs.
• Maligalig vs. Sandiganbayan, 867 Phil. 847 (2019) — Followed. The Court cited this case for the principle that the jurisdiction of the Sandiganbayan is provided in PD 1606, as amended by RA 10660, and that jurisdiction over a criminal case is determined by the allegations in the complaint or information.
• Khan vs. Office of the Ombudsman, 528 Phil. 32 (2006) — Distinguished. The Court held that this case, which held that the Ombudsman's jurisdiction over GOCCs is confined only to those with original charters, has no application because the complaint subject of Khan was filed in February 1989, before the enactment of RA 6770, RA 7975, RA 8249, and RA 10660.
• Yokohama Tire Philippines, Inc. vs. Reyes, 870 Phil. 292 (2020) — Cited for the definition of grave abuse of discretion as a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction.
• Eizmendi, Jr. vs. Fernandez, 866 Phil. 638 (2019) — Cited for the elementary rule in statutory construction that the whole and every part of the statute must be considered in fixing the meaning of any of its parts in order to produce a harmonious whole.

• Article XI, Section 13(1), 1987 Constitution — Provides the Ombudsman the power to investigate on its own, or on complaint by any person, any act or omission of any public official, employee, office, or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient. The Court applied this provision in holding that the Ombudsman's jurisdiction is not limited to GOCCs with original charters.
• Article XI, Section 13(2), 1987 Constitution — Provides the Ombudsman the power to direct any public official or employee of the Government, or any subdivision, agency, or instrumentality thereof, as well as of any government-owned or controlled corporation with original charter, to perform and expedite any act or duty required by law. The Ombudsman relied on this provision in dismissing the complaint, but the Court held that this interpretation was myopic as it fails to consider the other powers given to the Ombudsman.
• Article XI, Section 13(8), 1987 Constitution — Provides the Ombudsman the power to promulgate its rules of procedure and exercise such other powers or perform such functions or duties as may be provided by law. The Court applied this provision in holding that the Ombudsman has jurisdiction over GOCC officers regardless of original charter, in relation to Section 15(1) of RA 6770.
• Section 15(1), RA 6770 (The Ombudsman Act of 1989) — Provides the Ombudsman the power to investigate and prosecute any act or omission of any public officer, employee, office, or agency when such act or omission appears to be illegal, with primary jurisdiction over cases cognizable by the Sandiganbayan. The Court applied this provision in holding that the Ombudsman has jurisdiction over officers of GOCCs without original charters.
• Section 4(c), PD 1606 — Provides the Sandiganbayan jurisdiction over other crimes or offenses committed by public officers or employees, including those employed in government-owned or controlled corporations, in relation to their office. The Court cited this provision as the basis for the Sandiganbayan's expanded jurisdiction over GOCC officers.
• Section 2, RA 7975 — Amended Section 4 of PD 1606 to include presidents, directors or trustees, or managers of government-owned or controlled corporations within the Sandiganbayan's jurisdiction. The Court cited this provision to show the legislature's intent to include GOCC officers without distinction as to the manner of the GOCC's creation.
• Section 4, RA 8249 — Further amended Section 4 of PD 1606, retaining the Sandiganbayan's jurisdiction over presidents, directors or trustees, or managers of government-owned or controlled corporations. The Court cited this provision to show the continued recognition of the Sandiganbayan's jurisdiction over GOCC officers.
• Section 2, RA 10660 — Further amended Section 4 of PD 1606, retaining the same provision on the Sandiganbayan's jurisdiction over presidents, directors or trustees, or managers of government-owned or controlled corporations. The Court cited this provision as the prevailing law at the time the Complaint was filed.
• Section 3(e), RA 3019 (Anti-Graft and Corrupt Practices Act) — The provision under which respondent was criminally charged. The Court's ruling reinstated the complaint for resolution on the merits, including this charge.
• Section 5(c), RA 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees) — The provision under which respondent was administratively charged. The Court's ruling reinstated the complaint for resolution on the merits, including this charge.

Leonen, Acting C.J., Caguioa, Hernando, Lazaro-Javier, Inting, Zalameda, M. Lopez, Gaerlan, Rosario, J. Lopez, Dimaampao, Marquez, and Singh, JJ., concurred. Gesmundo, C.J., was on official leave.