SECOND DIVISION

[G.R. No. 206162. December 10, 2014.]

ALEX M. VALENCERINA, petitioner, vs. PEOPLE OF THE

PHILIPPINES, respondent.

DECISION

MENDOZA, J : p

This appeal by certiorari under Rule 45 of the Rules of Court 1 assails the
October 11, 2012 Decision 2 and the March 1, 2013 Resolution 3 of the
Sandiganbayan in Criminal Case No. 27474, finding petitioner Alex M.
Valencerina ( Valencerina), together with Amalio A. Mallari (Mallari), guilty
beyond reasonable doubt of violating Section 3 (e) of Republic Act (R.A.) No.
3019, which provides as follows:
Sec. 3. Corrupt practices of public officers . — In addition to
acts or omissions of public officers already penalized by existing law,
the following shall constitute corrupt practices of any public officer and
are hereby declared to be unlawful:
xxx xxx xxx

(e) Causing any undue injury to any party, including the

Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official administrative
or judicial functions through manifest partiality, evident bad faith or
gross inexcusable negligence. This provision shall apply to officers and
employees of offices or government corporations charged with the
grant of licenses or permits or other concessions.

The Sandiganbayan found Valencerina, a high-ranking officer of the

Government Service Insurance System (GSIS), guilty of giving unwarranted
benefits to Ecobel Land Incorporated (Ecobel) on account of his participation in
the unjustified issuance of GSIS Surety Bond GIF No. 029132 (subject bond)
covering the amount of Ten Million US Dollars (US$10,000,000.00).
The Facts
As culled from the findings of the Sandiganbayan, it appears that
sometime in October 1997, Ecobel, represented by its Chairman and accused
Josephine E. Boright (Boright), applied for the issuance of a bond with GSIS to
guarantee the repayment of a loan in the amount of US$10,000,000.00,
supposedly obtained from the Philippine Veterans Bank ( PVB ) and allegedly for
the construction of a 26-storey commercial/residential Ecobel Condominium
Tower Building.

Boright approached accused Leticia G. Bernardo (Bernardo), the manager

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 of the Suretyship Department of GSIS for said purpose. Bernardo gave Boright
the checklist of requirements. Thereafter, Ecobel submitted the listed
documents, except the loan agreement.
In a meeting held on December 10, 1997, the GSIS Underwriting
Committee, chaired by Bernardo, "approved in principle" the surety bond
application, but subject to "analysis and evaluation of the project and the
offered collaterals." It was noted in the same meeting that the collaterals
offered were the project sites in Malate, Manila, under Transfer Certificate of
Title (TCT) No. 227727 and in Lipa City under TCT No. 66289.4

On January 16, 1998, the Underwriting Committee refused TCT No.

227727 as collateral on the ground that it was already the subject of another
mortgage. Under the GSIS policy, second mortgages were not allowed. Ecobel
then presented TCT No. 66289 as its collateral.
On January 27, 1998, a memorandum was prepared by Valencerina upon
the instructions of accused Mallari, who was then the Senior Vice-President of
the GSIS General Insurance Group. It was addressed to the President and
General Manager of GSIS (PGM) and contained an endorsement of Ecobel's
bond for evaluation of the GSIS Investment Committee. It also included
Mallari's strong recommendation through a marginal note with the words
"Strong reco. Based on info & collateral herein stated." 5
On March 10, 1998, the GSIS Investment Committee approved the subject
bond. The following day, or on March 11, 1998, Surety Bond GIF No. 029132, a
high-risk bond, was signed by Boright for Ecobel and by Mallari for the GSIS.
On March 30, 1998, Valencerina certified that the subject bond could be
redeemed if Ecobel would default in paying the loan. The letter reads: TEIHDa

30 March 1998

To Whom It May Concern:

Re: GSIS G(16) GIF Bond No. 029132

Bond Amount: US10,000,000
Issuing Date: 11 March 1998
Maturing Date: 11 March 2000
Bond Principal: Ecobel Land Incorporated
Project Bonded: 26-Storey Commercial/Residential
Condominium Ecobel Tower
Building

––––––––––––––––––––––––––––––––––––––––––––––––––––––––

This is to advise that the above-captioned surety bond may be

redeemed following a default by the Bond Principal under the
procedures set out below (the "DRAWING CONDITIONS"):

1. presentation of original surety bond to GSIS at its office in

either Manila or London; together with

2. presentation of demand for payment stating non-payment in

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 full or in part by the Bond Principal; and

3. notification of assignment to GSIS of US Dollar loan obligations

of the Bond Principal.

Upon receipt of the above documentation via courier, GSIS will

confirm the default by the Bond Principal and will make full payment
under the surety bond within ten (10) New York and London Banking
days.

(Sgd.)

ALEX M. VALENCERINA

Cc: SVP A. Mallari

xxx xxx xxx

In another certification, dated January 14, 1999, it was made to appear

that the bond was a genuine, valid and binding obligation of GSIS, to wit:
14 January 1999
To Whom It May Concern: aECSHI

Re: GSIS G(16) GIF Bond No. 029132

Bond Amount: US10,000,000
Issuing Date: 11 March 1998
Maturing Date: 11 March 2000
Bond Principal: Ecobel Land Incorporated
Project Bonded: 26-Storey Commercial/Residential
Condominium Ecobel Tower
Building

––––––––––––––––––––––––––––––––––––––––––––––––––––––––

This is to advise that the captioned surety bond is genuine, authentic,

valid and binding obligation of GSIS, and may be transferred to Bear,
Sterns (sic) International Ltd. and any of its assignees and Aon
Financial Products, Inc. and any of its assignees within the period
commencing at the date above. GSIS has no counterclaim, defense or
right of set-off with respect to the surety bond provided that
DRAWING CONDITIONS have been satisfied.
We confirm that any such transfer requires only written or facsimile
notification to GSIS by the then current obligee and confirmation or
approval from GSIS is not required.

(Sgd.)
ALEX M. VALENCERINA
Cc: SVP J. Navarette

xxx xxx xxx

Eventually, accused Estela J. Edralin (Edralin), as a representative of

Ecobel, signed on February 4, 1999 a Term Loan Agreement with Bear, Stearns
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 International, Ltd. (BSIL). The following month, Ecobel made a drawdown from
the loan in the amount of US$9,307,000.00.
On February 9, 1999, Valencerina approved the Suretyship Department's
request for a facultative reinsurance of the subject bond. On February 12, and
24, 1999, however, he wrote cancellation notices after he was informed by
Atty. Norma M. Saludares ( Atty. Saludares ) that TCT No. 66289 was spurious.
Meanwhile, Ecobel issued two post-dated checks both dated February 26, 1999,
for PhP12,731,520.00 and US$330,000.00. The peso check was signed by
Boright and paid in the Philippines, while the dollar check was signed by Edralin
and paid in London.

On May 6, 1999, GSIS received a letter from Atty. Fernando U. Campaña

(Atty. Campaña ) of the GSIS-London Representative Office regarding Escobel's
premium payment in the amount of US$200,625.00 remitted to the Philippine
National Bank (PNB)-London. Finally, on June 20, 1999, the Bond Cancellation
Advice was issued for the reversal of the said premium payment of Escobel.

In a letter, dated March 7, 2000, URSA Minor Limited, the assignee of

BSIL, demanded payment from Ecobel. A notice of failure was sent by Banker's
Trust, informing GSIS of Ecobel's failure to pay the obligation which became due
on March 9, 2001.
On April 5, 2000, Aon Financial Products, Inc., also a subsequent assignee
of BSIL, sent a Notice of Demand to the then Secretary of Finance, Pardo de
Tavera, calling on the guarantee of the Republic of the Philippines under the
subject bond.

Thus, for having participated in, or contributed to the release or issuance

of the subject surety bond, an Information was filed before the Sandiganbayan,
against Valencerina, along with Campaña, Mallari, Leticia G. Bernardo,
Josephine Edralin Boright, and Estela J. Edralin for violation of Sec. 3 (e) of R.A.
No. 3019. As per the Amended Information, 6 the allegations were as follows: TSIEAD

That on or about March 11, 1998, or sometime prior or

subsequent thereto, in Metro Manila, Philippines, and within the
jurisdiction of this Honorable Court, the abovenamed accused ALEX M.
VALENCERINA, being then the Vice-President, Technical Services
Group (TSG) Marketing and Support Services, General Insurance Group
(GIG) of the Government Service Insurance System (GSIS), and
therefore a high-ranking official, FERNANDO U. CAMPAÑA , Vice-
President for International Operations (IO), London Representative
Office (LRO), General Insurance Group, GSIS, and therefore also a high-
ranking official, AMALIO A. MALLARI, then Senior Vice President of
the General Insurance Group (GIG), GSIS and Member of the GSIS-GIG
Investment Committee, and likewise a high ranking official and
LETICIA G. BERNARDO, then Department Manager III of the
Suretyship Department of the GSIS, and Chairman of the GSIS
Underwriting Committee, Bond Reinsurance Treaty, likewise a high-
ranking official, while performing their respective official functions and
taking advantage of the same and/or using such official offices and
functions, conspiring and confederating with private parties
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 JOSEPHINE EDRALIN BORIGHT a n d ESTELA J. EDRALIN,
Incorporators of, and who acted as Chairperson at different periods, of
Escobel Land Incorporated, did then and there wilfully, unlawfully and
criminally, with evident bad faith and manifest partiality, participate, or
contribute to, the release or issuance of Surety Bond GIF NO. 029132 in
the amount of Ten Million US Dollars (US$10,000,000.00), with Escobel
Land, Incorporated then chaired and represented by Josephine
Edralin Boright, as the Principal, and Philippine Veterans Bank (PVB)
as the supposed Obligee, notwithstanding the legal infirmities and
irregularities, as provided by GSIS laws, guidelines, and policies, that
attended its release or issuance, which accused public officials are
duty-bound to know and therefore comply, viz.: (1) Absence of counter-
bond prior to issuance as underwriting requirement to protect the
interest of GSIS; 2) Absence of sufficient collateral as underwriting
safety requirement, as in fact TCT NO. 227727 had an existing
encumbrance; 3) Non-payment of the premium prior to issuance and
approval of the Surety Bond as a mandatory legal and safety
requirement; (4) Issuance of Surety Bond without the prior approval of
the GSIS Board of Trustees required for high-risk bonds regardless of
the amount; 5) Absence of a Loan Agreement between the bond
principal Ecobel Land Incorporated and the supposed Obligee,
Philippine Veterans Bank (PVB); 6) Issuance of the said Surety Bond
without prior approval from the Central Bank being a foreign-
denominated bond; 7) Non-verification of the collateral/s submitted to
ensure non-exposure to risks; AND 8) Insufficient and highly irregular
evaluation of the bond application and its supporting documents, or of
the character, capacity and capital of the applicant, Ecobel Land
Incorporated, and subsequently, or almost a year after the issuance of
said Surety Bond, it was discovered that one of two titles submitted as
supposed collateral, or TCT No. 66289, was spurious, which discovery
came after an acknowledgment was made relative to the supposed
premium payment of Ecobel Land Incorporated, which premium
payment was made almost a year after the issuance of the Surety
Bond, and despite being advised of the cancellation of said Surety
Bond, Ecobel Land Incorporated, then already represented by Estela J.
Edralin, with the assistance of herein accused public officials, was able
to obtain an actual drawdown of Ten Million US Dollars
(US$10,000,000.00) from Bear and Stearns International Ltd., and
subsequent thereto, despite knowledge of the cancellation of the
Surety Bond and return or disregard of the premium payment earlier
made, Fernando U. Campaña of the GSIS London Representative
Office, received from Estela J. Edralin of Escobel Land Incorporated, the
premium payment previously disregarded at the GSIS Manila Office,
without the authority or official duty to do so, or even the consent of
GSIS, and despite knowledge that Surety Bond No. 029132 was issued
with PVB as Obligee and not Bears and Stearns International, Ltd.,
thereby affording unwarranted benefit, advantage or preference to
Ecobel Land Incorporated and/or herein private accused, resulting [in]
extreme prejudice to the interest of the government and to exposure to
injury in the amount of the actual drawdown of Ten Million US Dollars
(US$10,000,000.00) CcADHI

CONTRARY TO LAW.

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 The People, through the Office of the Ombudsman, claimed that all the
accused caused the Government injury and/or gave unwarranted benefits to
Ecobel when they participated in the issuance of the subject surety bond,
despite the obvious legal infirmities and irregularities which attended the same.

These infirmities include the following:

1) Absence of counter-bond prior to issuance as underwriting
requirement to protect the interest of GSIS;
2) Absence of sufficient collateral as underwriting safety
requirement, as in fact TCT NO. 227727 had an existing
encumbrance;

3) Non-payment of the premium prior to issuance and approval of

the Surety Bond as a mandatory and legal requirement;

4) Issuance of the Surety Bond without the prior approval of the

GSIS Board of Trustees required for high-risk bonds
regardless of the amount;

5) Absence of a loan agreement between the bond principal Ecobel

and the supposed obligee, Philippine Veterans Bank (PVB);

6) Issuance of the said Surety bond without prior approval from the
Central Bank being a foreign-denominated bond;

7) Non-verification of the collateral/s submitted to ensure non-

exposure to risks;

8) Insufficient and highly irregular evaluation of the bond

application and its supporting documents, or of the
character, capacity and capital of the applicant, Ecobel Land
Incorporated; and
9) TCT No. 66289, being one of the collaterals, was found to be
spurious.

All of those charged pleaded not guilty, except for Boright, who since
then, had remained at large. Eventually, the case against Campaña was
dismissed in the Sandiganbayan Resolution, dated August 3, 2003.
After the trial, the Sandiganbayan rendered the assailed decision, finding
Valencerina and Mallari guilty beyond reasonable doubt and sentencing them
to suffer the indeterminate penalty of imprisonment of six (6) years and one (1)
month as minimum, up to ten (10) years as maximum, with perpetual
disqualification from holding public office. Bernardo and Edralin were acquitted
for failure of the prosecution to prove their guilt beyond reasonable doubt.
Then, a warrant of arrest for accused Boright was issued.

The Sandiganbayan found that from the GSIS Underwriting Committee,

the application for the issuance of the subject bond moved to the office of
Valencerina, who then endorsed it for assessment of the GSIS Investment
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 Committee. It stated that Valencerina must have known that Ecobel could not
be given such bond to guarantee payment of a loan obtained from foreign
entities because his position entailed knowledge of the fact that GSIS could only
issue a guarantee payment bond if the government had an interest therein.
Yet, despite this rule and his knowledge that the obligee was not actually PVB,
as misrepresented by Ecobel, but a foreign funder, Valencerina still submitted
the application to the PGM for the evaluation of the Investment Committee. The
Sandiganbayan took this as proof of the presence of the element of the offense:
that Valencerina acted with manifest partiality, evident bad faith or gross
inexcusable negligence in giving unwarranted benefits in favor of Ecobel.
Moreover, the Sandiganbayan took note of the significant role Valencerina
played for Ecobel even after the bond had been issued. It pointed out his
participation in the loan negotiation between Ecobel and BSIL, with the
certifications he himself issued which effectively made the transfer of the bond
to an obligee, other than PVB, possible. It appeared that Boright requested
Valencerina and Mallari to issue the certifications which were needed to
facilitate the foreign loan.
Lastly, Valencerina's declaration that the bond was fully secured by
collaterals was taken by the Sandiganbayan against him as he already knew
that the said collaterals were defective.
With respect to Mallari, his conviction was premised on the findings by the
Sandiganbayan that he strongly recommended the Ecobel bond application for
evaluation notwithstanding its infirmities; that he approved and subsequently
signed the subject bond on behalf of GSIS; and that he knew beforehand that
PVB was not the obligee of the loan as manifested in the correspondence he
had with accused Boright, thus, highlighting his active participation in the
negotiation with Bear and Stearns International, Ltd. on the subject bond.
Thus, the Sandiganbayan disposed: TIEHSA

IN LIGHT OF ALL THE FOREGOING , the Court hereby renders

judgment as follows:
1. Accused ALEX M. VALENCERINA and AMALIO A. MALLARI are
found GUILTY beyond reasonable doubt of violation of Section 3 (e) of
RA 3019 and, pursuant to Section 9 thereof, are hereby sentenced to
suffer the indeterminate penalty of imprisonment of six (6) years and
one (1) month as minimum, up to ten (10) years as maximum, with
perpetual disqualification from holding office;
2. Accused LETICIA G. BERNARDO and ESTELA J. EDRALIN are
hereby ACQUITTED for failure of the prosecution to prove their guilt
beyond reasonable doubt.

Considering that the act or omission from which the civil liability
might arise did not exist, no civil liability may be assessed against
accused Bernardo and Edralin.
Let the hold-departure order against accused Bernardo and
Edralin by reason of this case be lifted and set aside, and their bonds
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 released, subject to the usual accounting and auditing procedure.
Let a warrant for the arrest of accused Josephine Edralin Boright
be issued. Pending her arrest, let this case be archived.
SO ORDERED. 7

Valencerina and Mallari separately moved for reconsideration, but their

motions were subsequently denied by the Sandiganbayan in its March 1, 2013
Resolution.
Hence, this petition.

GROUNDS
1. The Sandiganbayan (First Division) has decided
questions of substance not heretofore determined by
the Supreme Court; or has decided in a way probably
not in accord with law or with applicable decisions of
the Supreme Court; or has so far departed from the
accepted and usual course of judicial proceedings
(Rules of Court, Rule 45, Section 6 ), as shown by the
grounds invoked and discussed hereunder,
2. The conclusions, findings and judgment of the
Sandiganbayan (First Division) are speculative,
surmises or conjectures; or based on misapprehension
of facts; or the inferences made are manifestly
mistaken, absurd or impossible and rendered in grave
abuse of discretion or are beyond the issues of the
case at bench (Office of the President, et al. vs.
Calixto R. Cataquiz, G.R. No. 183445, Sept. 14, 2011),
n ATHCac

3. The Court a quo admitted and relied on xerox copies of

documentary exhibits, which were not authenticated
by the persons who executed them, and whose
originals were not presented in court by respondent,
who failed to provide any valid reason for not
presenting them, in flagrant violation of the best
evidence and other rules of evidence.
4. The court a quo gravely erred in considering and relying
on the hearsay testimonies of witnesses who had no
personal knowledge of the contents or due execution
and genuineness of the respondent's xerox
documentary exhibits or of the facts in issue that they
testified on.

5. The records are bereft of any evidence, and the court a

quo did not find any, that Bear Stearns International,
Ltd., granted a loan of US$10 million to Ecobel Land,
Inc. in London.
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 5.1. There being no such loan, as corpus delicti of the
second mode of committing the offense, there
was no crime of graft or corrupt practice under
Section 3 (e) of RA 3019, by petitioner giving
Ecobel unwarranted benefit, preference or
advantage, with manifest partiality, evident bad
faith or gross inexcusable negligence,
5.2. There being no evidence that Estela J. Edralin
obtained loan from Bear Stearns, the court a quo
grievously erred when It convicted petitioner for
facilitating the inexistent loan with the use of his
alleged two (2) certifications, Exhibits "D-14"
dated March 30, 1998 and "D-17," dated January
14, 1999, that Estela J. Edralin did not receive as
unwarranted benefit, preference or advantage.
6. Even assuming in arguendo that petitioner's alleged two
certifications, exhibits "D-14" dated March 30, 1998
and "D-17," dated January 14, 1999, are admissible
evidence, their issuance alone did not constitute the
crime of graft or corrupt practice committed by way of
the second mode of violating Section 3 (e) of RA 3019.
6.1. The certifications, which are not even attempted
or frustrated acts to commit the crime, were not
valid documents to transfer GSIS Surety Bond No.
G (16) GIF 029132 to Bear Stearns International,
Ltd.,AHacIS

6.2. Absent any evidence that the drawing conditions

provided in the two (2) certifications, Exhibits "D-
14" and "D-17", were fulfilled or complied
therewith, GSIS Surety Bond No. G (16) GIF
29132 was not validly transferred to Bear Stearns
International, Ltd.
6.3. Furthermore, petitioner cancelled and rendered
unenforceable GSIS Surety Bond No. G (16) GIF
029132, thereby rendering the two (2)
certifications also legally inoperative and
ineffective.
7. Petitioner's Memorandum dated January 27, 1998,
Exhibit "10-Valencerina," was done in the performance
of his duty as Vice-President for Marketing and
Support Services, following the approval in principle
of Ecobel's bond application by the Underwriting
Committee headed by Leticia G. Bernardo, who was
acquitted by the court a quo, and not because he was
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 already "resigned to Ecobel's side,"
8. It was PGM Cesar Sarino, not petitioner, who "advanced"
Ecobel's bond application to INCOM in performance of
duties and not because petitioner was "already
resigned to Ecobel side" to give Ecobel unwarranted
benefit, preference or advantage, who was the lone
bond applicant.
9. The court a quo violated petitioner's constitutional rights
to be informed of the charge against him and to due
processes of law by finding him guilty of violating
Section 3 (E) of RA 3019 under the second mode, that
is, for allegedly giving Ecobel unwarranted benefit,
preference or advantage, with manifest partiality
considering that the Amended Information accused
him of committing the offense under the first mode,
which is for participating and contributing to the
issuance of the questioned surety bond and causing
undue injury to the government.

9.1. Petitioner was not validly accused or charged for

violation of Section 3 of RA 3019.

9.2. Violation of petitioner's constitutional rights to be

informed of the accusation against him and to
due process of law. EICSTa

10. The court a quo erred when it assumed jurisdiction

over, in violation of the doctrine of territoriality of
criminal laws, and considered incidents and term loan
agreement relative to the loan for US 10 Million
Dollars that Ecobel Land, Inc. would have obtained in
London from Bear Stearns International, Ltd.
11. Respondent failed to prove beyond reasonable doubt
all elements of the crime of giving to Ecobel
unwarranted benefit, preference or advantage, with
manifest partiality, evident bad faith or gross
inexcusable negligence, which is punishable under
Section 3 (e) of RA 3019. 8
Valencerina insists that the complained act of giving unwarranted benefit,
preference or advantage in favor of Ecobel with manifest impartiality, evident
bad faith or gross negligence was not proved beyond reasonable doubt. He
posits that the pieces of evidence, both documentary and testimonial,
supporting the Sandiganbayan's judgment of conviction, were hearsay and
incompetent, thus, without probative value and that the Sandiganbayan relied
merely on the prosecution's "xerox" exhibits (referring to the two certifications),
which were not properly identified and authenticated, and, therefore, were not
the best evidence to prove his guilt. He adds that the prosecution witnesses
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 had no personal knowledge of the contents and due execution of the
documents which were relied upon by the Sandiganbayan, including the
incidents, transactions and events on which they testified on.
Valencerina further argues that the memorandum containing his
endorsement of the bond application was issued in the performance of his
functions and that the alleged act of giving unwarranted benefits in favor of
Ecobel was not sufficiently proved as he was the one who cancelled the bond
upon learning of the deficiencies in its issuance.
In its Comment, 9 the prosecution counters, among others, that when the
Sandiganbayan considered and gave value to the faxed and photocopied
documents claimed by Valencerina as hearsay and incompetent, no mistake
was committed inasmuch as all objections raised were duly considered and that
no objection was made during the formal offer of evidence. It cites as reference
the ruling of this Court in Interpacific Transit, Inc. v. Rufo Aviles and Josephine
Aviles, 10 where it was held that when secondary or incompetent evidence is
presented and accepted without any objection on the part of the other party,
the latter is bound thereby and the court is obliged to grant it the probative
value it deserves. Moreover, the prosecution was of the view that even if the
documents were inadmissible in evidence, conviction would still be inevitable
as regards the act of giving undue advantage in favor of Ecobel because
testimonial and documentary evidence overwhelmingly established his
participation and [guilt]. As to his claim that the witnesses the prosecution
presented in court had no personal knowledge of the matters testified upon,
the prosecution argued that the testimonies procured were based on the
authentic documents these witnesses themselves issued, seen, collated,
gathered, reviewed, evaluated, investigated, and audited by reason of their
office.

In his Reply, 11 Valencerina reiterates his submissions.

The Court is, thus, called to determine whether the Sandiganbayan erred
in finding Valencerina guilty of violation of Section 3 (e) of the Anti-Graft and
Corrupt Practices Act.

Central to the proper determination of the correctness of the

Sandiganbayan's judgment is the question on whether the fact of giving undue
preference with bad faith or evident partiality to Ecobel was proved beyond
reasonable doubt by the testimonies of the witnesses and the documents
presented by the prosecution.

The Court's Ruling

First, it must be emphasized that irregularities did occur in the issuance of

the subject bond. These irregularities were adequately proved by the
testimonies of both the prosecution and the defense, together with the
documentary evidence presented before the Sandiganbayan — that the
security bond was issued without the adequate collaterals; that it was used to
guarantee a high-risk foreign loan which was disqualified for lack of
government interest in it; that it was issued without the approval of the Board
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 of Trustees as required by GSIS for high-risk bonds; that it was issued without
the premium for reinsurance being paid; and that Ecobel received undue
benefits as it was able to make a drawdown from the loan by reason of the
guarantee under the subject bond. All these were clearly established by the
evidentiary records. It is also quite clear that the issues surrounding the Ecobel
bond had exposed the government to unwarranted risks, which could have
been avoided had steps been taken to consciously follow the policies of GSIS.

It is in this light that Valencerina was tried. His participation in the

issuance of the subject bond was put to test to determine whether he violated
Section 3 (e) of R.A. No. 3019. The question, therefore, that remains is whether
he, as found by the Sandiganbayan, had a hand in the act of giving
unwarranted benefits to Ecobel with the issuance of the subject bond. Stated
otherwise, did he participate in the giving of undue benefits to Ecobel with
evident bad faith, or manifest partiality, as punishable under Sec. 3 (e) of R.A.
No. 3019, when the bond was issued and used by Ecobel to secure a foreign
denominated loan?

The Court agrees with the Sandiganbayan in finding Valencerina guilty of

violating Section 3 (e) of R.A. No. 3019 based upon the pieces of evidence
presented by the prosecution. ADEaHT

In all criminal cases, the prosecution is burdened with the duty of

establishing with proof beyond reasonable doubt the guilt of an accused. 12 The
determination of whether the prosecution has fulfilled such a heavy burden is
left to the trial court, which, in turn, must be satisfied with moral certainty that
an accused has indeed committed the crime on the basis of facts and
circumstances to warrant a judgment of conviction. 13 Otherwise, where there
is reasonable doubt, acquittal must then follow. 14 The premise is that an
accused is presumed innocent until the contrary is proved. 15

In finding Valencerina guilty of giving undue advantage or preference to

Ecobel, in violation of Section 3 (e) of the Anti Graft and Corrupt Practices Act,
the Sandiganbayan was convinced that the elements of the crime were duly
established. These elements, as enumerated by the Court in Bautista v.
Sandiganbayan, 16 are as follows:
(1) the offender is a public officer;

(2) the act was done in the discharge of the public officer's official,
administrative or judicial functions;
(3) the act was done through manifest partiality, evident bad faith,
or gross inexcusable negligence; and

(4) the public officer caused any undue injury to any party,
including the Government, or gave any unwarranted
benefits, advantage or preference.
Being the Vice-President for Marketing and Support Services of GSIS,
Valencerina was no doubt a public officer, and the alleged acts complained of
were done while he was in office.
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 The Court also believes that the third and last constitutive elements were
established. The Sandiganbayan correctly relied on the testimonies of the
witnesses, which were based primarily on the January 27, 1998 Memorandum,
and the Certifications, dated March 30, 1998 and January 14, 1999, issued by
Valencerina himself. These documents purportedly showed his resignation to
favor Ecobel in the issuance of the subject bond as well as his alleged
participation in the negotiation of the loan sought to be guaranteed under the
bond, thus, making him guilty of the offense charged.

The third element of the crime of violation of Section 3 (e) of R.A. No.
3019 may be committed in three ways, that is, through manifest partiality,
evident bad faith or gross inexcusable negligence. Proof of any of these three in
connection with the prohibited acts mentioned in Section 3 (e) of R.A. No. 3019
is enough to convict. 17 The Court expounds:
[As defined], "[p]artiality" is synonymous with "bias" which
"excites a disposition to see and report matters as they are wished for
rather than as they are." "Bad faith does not simply connote bad
judgment or negligence; it imputes a dishonest purpose or some moral
obliquity and conscious doing of a wrong; a breach of sworn duty
through some motive or intent or ill will; it partakes of the nature of
fraud." "Gross negligence has been so defined as negligence
characterized by the want of even slight care, acting or omitting to act
in a situation where there is a duty to act, not inadvertently but wilfully
and intentionally with a conscious indifference to consequences in so
far as other persons may be affected. It is the omission of that care
which even inattentive and thoughtless men never fail to take on their
own property." 18

In this case, Valencerina clearly extended, with evident bad faith, undue
advantage to Ecobel in the process of issuing and negotiating the subject bond.
His act of endorsing Ecobel's application to the PGM despite his knowledge that
the obligee of the loan was not PVB but a foreign lender, clearly shows his
disregard for the policy of GSIS requiring the existence of governmental interest
in the transaction. In the observation of the GSIS audit team, as it appeared in a
report before the Sandiganbayan, PVB was merely used to show that GSIS has
an insurable interest in the loan. The truth, however, is that BSIL was the
funder and obligee of the credit sought to be guaranteed by the bond.

Valencerina admitted that he knew Ecobel would have a foreign funder at

the time that he prepared the memorandum, despite knowing that to
guarantee a loan obtained from a foreign funder was contrary to the policies of
GSIS since no government interest was involved in it. The transcript reveals
these statements as follows:
Q And on that basis you have made that statement in this
memorandum and you are telling that to the Court?
A Yes, I did, sir.

Q You are also alleged to have knowledge even at that time that the
Ecobel who applied for payment guarantee bond would have
foreign funder, do you confirm that?
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 A Yes, sir, I was informed by Mr. Mallari about it, sir.

Q You know for a fact that an official of the GSIS, one requirement in
the issuance of surety bond, you would see to it that there is a
government interest in the transaction, do you remember that?

A Yes, sir. DcSEHT

Q And yet in spite of your knowledge that eventually this bond would
have a foreign funder, you made the endorsement to the
President and General manager of the GSIS?

A My information from Mr. Mallari is that the funds would have to be

coursed to the Veterans Bank since the Philippine Veterans Bank
is a government bank, it carries with it insurable interest of the
government. 19

In addition, Valencerina's declaration in the same memorandum to the

PGM that the bond was fully secured by collaterals, strengthens the conclusion
that he was in bad faith. As correctly observed by the Sandiganbayan, the
collaterals presented by Ecobel appeared to be questionable. TCT No. 227727
had an existing mortgage while TCT No. 66289 was found to be spurious since
it was different from what was on file with the Registry of Deeds of Lipa City.
These circumstances clearly show that Valencerina failed to thoroughly review
Ecobel's compliance with GSIS policies before endorsing the application to the
PGM. Thus, his endorsement of Ecobel's application was nothing but a
conscious doing of a wrong and a breach of his duty to uphold not only the
interest of the GSIS but also of the Republic. It is clearly an indication of bad
faith on his part as he should have realized that his position required the
utmost prudence knowing that to guarantee a high-risk loan was, as the name
implied, highly risky on the part of GSIS and could very well affect the entire
membership of the system.

Valencerina's defense that the memorandum was prepared and issued

pursuant to the instructions of Mallari, who was higher in rank, cannot
exculpate him from liability. As Vice-President, his duties were not mere
perfunctory in the greater scheme of the process. He knew that GSIS could only
issue a guarantee payment bond if it had an interest in the transaction, and
that the bond must be secured by adequate collaterals. Yet, he still endorsed
the Ecobel application which he could have denied at sight. He could have at
least made some remarks as to the propriety of the application in light of his
information that a foreign funder was the obligee of the loan which would
violate GSIS policies in the issuance of a high-risk bond, but he did not.

The Court, moreover, notes the finding of the Sandiganbayan that

Valencerina also participated in the negotiations of the loan using the
guarantees available under the bond. It appears from the records that BSIL
required Ecobel to verify the authenticity of the signatures in the subject bond.
Boright then requested Mallari to issue certifications containing declarations
that he was authorized to sign the subject bond, including a certification that
he was authorized to sign certain letters that were requested apparently
referring to the certifications that Valencerina himself issued on January 14,
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 1999, together with the first one he issued on March 30, 1998, both directed to
an unnamed addressee. The certifications read as follows:
30 March 1998

To Whom It May Concern:

Re: GSIS G(16) GIF Bond No. 029132
Bond Amount: US10,000,000
Issuing Date: 11 March 1998
Maturing Date: 11 March 2000
Bond Principal: Ecobel Land Incorporated
Project Bonded: 26-Storey Commercial/Residential
Condominium Ecobel Tower
Building

––––––––––––––––––––––––––––––––––––––––––––––––––––––––
This is to advise that the above-captioned surety bond may be
redeemed following a default by the Bond Principal under the
procedures set out below (the "DRAWING CONDITIONS"):

1. presentation of original surety bond to GSIS at its office in

either Manila or London; together with
2. presentation of demand for payment stating non-payment in
full or in part by the Bond Principal; and

3. notification of assignment to GSIS of US Dollar loan obligations

of the Bond Principal.
Upon receipt of the above documentation via courier, GSIS will
confirm the default by the Bond Principal and will make full payment
under the surety bond within ten (10) New York and London Banking
days.
(Sgd.)

ALEX M. VALENCERINA

Cc: SVP A. Mallari

xxx xxx xxx

14 January 1999
To Whom It May Concern:

Re: GSIS G(16) GIF Bond No. 029132

Bond Amount: US10,000,000
Issuing Date: 11 March 1998
Maturing Date: 11 March 2000
Bond Principal: Ecobel Land Incorporated
Project Bonded: 26-Storey Commercial/Residential
Condominium Ecobel Tower
Building

––––––––––––––––––––––––––––––––––––––––––––––––––––––––
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 This is to advise that the captioned surety bond is genuine, authentic,
valid and binding obligation of GSIS, and may be transferred to Bear,
Sterns (sic) International Ltd. and any of its assignees and Aon
Financial Products, Inc. and any of its assignees within the period
commencing at the date above. GSIS has no counterclaim, defense or
right of set-off with respect to the surety bond provided that
DRAWING CONDITIONS have been satisfied.

We confirm that any such transfer requires only written or

facsimile notification to GSIS by the then current oblige and
confirmation or approval from GSIS is not required.

(Sgd.)
ALEX M. VALENCERINA

Cc: SVP J. Navarette

xxx xxx xxx

It appears now that without these letters, BSIL would not have approved
and granted the loan to Ecobel. It was even affirmed therein the validity of the
obligation of GSIS under the subject bond, despite Valencerina knowing at that
time that the bond had not been secured by adequate collaterals, and that the
premium payment for reinsurance had not been paid. Records show that the
said premium was paid only on February 26, 1999, or almost a year after the
issuance of the bond. This would necessarily render the bond void because an
insurance policy is valid only if the actual premium is paid. 20

Worse, these certifications made the transfer of the bond effective as it

was specifically mentioned by Valencerina that the bond may be transferred to
BSIL and any of its assignees. This he did despite knowing that the obligee
should have been PVB and not any other creditor with which GSIS had no
interest in. CTDHSE

All these demonstrate Valencerina's conscious doing of a wrong. It was,

thus, proven beyond reasonable doubt that he acted in bad faith by making
significant and unjustified contributions to the issuance of an irregular bond and
giving undue advantage to Ecobel which could have cost millions of dollars to
GSIS and the government.
In a last ditch attempt to save himself, Valencerina argues that the
documents, especially the above certifications from which the testimonies of
the witnesses and eventually his conviction were based, could not be used as
evidence against him for being incompetent and hearsay as they were mere
photocopies that were not properly authenticated.
Indeed, these documents serve as the bedrock of the prosecution's
position that he violated Sec. 3 (e) of the Anti-Graft and Corrupt Practices Act. It
is true that these were mere photocopies and, as a general rule, if the original
copy cannot be produced, a photocopy, can only be admitted in evidence if it is
shown that the original is unavailable 21 by proving (1) the existence or due
execution of the original; (2) the loss and destruction of the original or the
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 reason for its non-production in court; and (3) on the part of the offeror, the
absence of bad faith to which the unavailability of the original can be
attributed. 22 The correct order of proof is as follows: existence, execution, loss,
and contents. 23

Here, Valencerina claims that the prosecution failed to even attempt to

prove the authenticity and due execution of the memorandum and the
certifications it presented and, thus should be enough reason to conclude that
the Sandiganbayan based its conviction on mere conjectures.
The Court finds the argument untenable.

Valencerina cannot now say that the certifications were not properly
authenticated and their existence not properly proved because the records
would show that, during the trial, he himself adopted their contents and
admitted that he indeed issued the same certifications. For instance, he
testified as follows:
Q The prosecution offered a document purportedly a Certification by
one Alex Valencerina dated March 30, 1998 which the
prosecution marked as Exhibit D-14 which I am now showing you.
Could you please go over this document and inform the
Honorable Court if you are aware of such a document?

A Yes, sir, I am aware of this document, sir.

Q Now, this is a certification prepared by one Alex Valencerina.
Are you the same Alex Valencerina who prepared this
particular document?

A Yes, sir. It is me, sir.

Q Why did you prepare this document?

A This document was prepared upon the request of Senior

Vice-President Amalio Mallari to simply draft a statement
of facts and procedures in relation to the bond itself,
Ecobel bond.
Q We noticed, Mr. Valencerina, that this document was addressed to
"To Whom It May Concern". Could you inform the Honorable
Court why you addressed it to "To whom it may concern"?
A It is actually a generic statement, simply a statement of facts and
procedures and it is basically a GSIS policy, for information only.

Q And what are the facts and procedures that you are referring to
which you mentioned in this particular memorandum?
A These are actually referring to the drawing conditions which actually
refer to the event in which case there is a default in the bond. So
are the documents that must be presented by the obligee.

Q Are you referring to this bond which is mentioned in this

memorandum, Bond No. 092132, issued on March 11, 1998 and
maturing on 11 March 2000?
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 A Yes, sir, I am referring to that particular transaction, sir.
Q The prosecution also marked Exhibit "D-17". It was testified to by a
witness and offered in evidence by the prosecution which is a
memorandum by one Alex M. Valencerina dated 14 January
1999. Could you please go over this memorandum and inform
the Honorable Court if you are aware of that memorandum?
A Yes, sir, I am aware of this letter.

Q Why did you prepare this memorandum?

A Again, this letter or this memorandum actually is requested upon by
my Senior Vice-President Amalio Mallari, sir.

Q Again, this is addressed only "To whom it may concern" and not to
anybody in particular. Why did you address it only to "To whom it
may concern"? ADHCSE

A Again, it is a statement of facts and procedures which practically

govern the policies of the GSIS, sir. 24 (Emphases supplied)

By testifying as to the contents of the certifications he himself signed,

Valencerina, in effect, admitted that the said documents exist and that the
same were duly executed by him. He himself built upon the said documents to
draw his defense that the certifications were mere statements of facts and
procedures. He did not contradict their existence but even went further to
elaborate as to the reasons behind their issuance. As such, the Court cannot
give merit to his position that, being mere photocopies, the certifications could
not be relied on in determining his culpability. Conversely, the testimonies of
the prosecution witnesses, assuming they had no personal knowledge of the
contents and due execution of the said documents, would now be a superfluity
as he himself used the certifications to forward his defense.

The Court finds no value either to Valencerina's submission that no crime

was proven to have been committed because no evidence had been presented
showing that BSIL actually granted a loan of US$10 million to Ecobel, it being
the corpus delicti of the second mode of committing the offense under Sec. 3
(e) of R.A. No. 3019. The reason is simple. The corpus delicti of the crime is not
dependent upon whether a loan had been granted to Ecobel, but more on
proving the fact of giving unwarranted preference or benefit to another with
evident bad faith, manifest partiality or gross inexcusable negligence. It is
sufficient that such fact has been established, as the prosecution did in this
case.

Besides, the Court gives credence to the report and findings of the audit
investigation team, affirmed by the Sandiganbayan, that Ecobel failed to pay
the loan from BSIL, which then gave rise to a notice making known the decision
of the assignee under the loan to collect on the surety bond subject of this
case. This by itself cemented the fact that, indeed, Ecobel received benefit by
reason of the unjustified actions committed by no less than the high-ranking
officers of GSIS.

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 Furthermore, Valencerina's contention that his constitutional right was
violated because he was not validly charged with violation of Sec. 3 (e) of R.A.
No. 3019 deserves no consideration. It is his theory that his right to be
informed of the crime he committed was violated as the Sandiganbayan
convicted him for giving undue advantage to Ecobel (second mode), which was
contrary to the crime as alleged in the information — that he caused undue
injury to the government by participating in the issuance of the subject bond
(first mode).
The Court cannot agree. There are two ways by which Section 3 (e) of
R.A. No. 3019 may be violated — first by causing undue injury to any party,
including the government and second, by giving any private party any
unwarranted benefit, advantage or preference. Although neither mode
constitutes a distinct offense, an accused may be charged under either mode
or both. In the amended information, the prosecution charged him for both. A
perusal of the same simply yields no other conclusion that Valencerina,
together with the other accused, was charged with violation of Section 3 (e) of
R.A. No. 3019 for " [w]ilfully, unlawfully and criminally, with evident bad faith
and manifest partiality, participat[ing], or contribut[ing] to, the release or
issuance of Surety Bond GIF NO. 029132 . . . hereby affording unwarranted
benefit, advantage or preference to Ecobel Land Incorporated."
In the same breath, the Court dismisses or cannot allow the petitioner's
defense that no action, criminal or civil, arises because the bond in itself was
null and void. The subject bond's nullity was precisely brought about by his
actions and had he not acted the way he did, this would not even have existed.
Suffice it to state that to exculpate him from liability just because the bond
cannot be made effective is to justify his wrongdoings, which the Court cannot
allow.

Finally, Valencerina's act of cancelling the bond upon information that the
collateral submitted was spurious does not negate the fact that at the time that
the bond was issued as well as during the process of negotiating for the loan
using the same bond, the act of giving undue preference to Ecobel already
existed. Indeed, the cancellation was merely an afterthought as he did the
same only when the irregularities had become too apparent that they could no
longer be overlooked.

WHEREFORE, the petition is DENIED.

SO ORDERED.
Carpio, Velasco, Jr., * Villarama, Jr. ** and Leonen, JJ., concur.

Footnotes

* Designated Additional Member in lieu of Associate Justice Mariano C. Del Castillo

who inhibited himself due to prior action in a related case, per Raffle dated
December 9, 2014.

** Designated Acting Member in lieu of Associate Justice Arturo D. Brion, per

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 Special Order No. 1888, dated November 28, 2014.

1. Rollo, pp. 8-66.

2. Id. at 68-126. Penned by Associate Justice Efren N. De La Cruz, with Associate

Justices Rodolfo A. Ponferrada and Rafael R. Lagos, concurring.

3. Id. at 128-139. Penned by Associate Justice Efren N. De La Cruz, with Associate

Justices Rodolfo A. Ponferrada and Rafael R. Lagos, concurring.

4. Id. at 100.
5. Id. at 101.

6. Sandiganbayan Decision, id. at 68-70.

7. Id. at 125-126.

8. Rollo , pp. 17-18, 20-22, 28, 34-38, 40, 44-45, 47, 50, 52, 56. (Emphasis in the
original)
9. Id. at 256-306.

10. G.R. No. 86062, June 6, 1990, 186 SCRA 385.

11. Rollo, pp. 312-334.

12. Batulanon v. People, 533 Phil. 336, 352 (2006).

13. People v. Caliso , G.R. No. 183830, October 19, 2011, 659 SCRA 666, 677.
14. People v. Maraorao , G.R. No. 174369, June 20, 2012, 674 SCRA 151, 160.

15. 1987 Constitution, Sec. 14 (2), Article III.

16. 387 Phil. 872 (2000).

17. Alvarez v. People, G.R. No. 192591, June 29, 2011.
http://sc.judiciary.gov.ph/jurisprudence/2011/june2011/192591.htm. Last
visited November 14, 2014.

18. Fonacier v. Sandiganbayan, G.R. No. 50691, December 5, 1994, 238 SCRA 655,
687-688. (Internal citations omitted)

19. Sandiganbayan Records, TSN, March 22, 2001, p. 32.

20. UCPB General Insurance, Co., Inc. v. Masagana Telemart, Inc., 408 Phil. 423,
433 (2001).
21. Section 5, Rule 130 of the Rules of Court states:

SEC. 5. When original document is unavailable. — When the original document

has been lost or destroyed, or cannot be produced in court, the offeror, upon
proof of its execution or existence and the cause of its unavailability without
bad faith on his part, may prove its contents by a copy, or by a recital of its
contents in some authentic document, or by the testimony of witnesses in
the order stated.

22. Santos v. Court of Appeals, 420 Phil. 110, 120 (2001), citing Francisco,
Evidence: Rules of Court in the Philippines (3rd ed., 1996), Rules 128-134.
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 23. De Vera v. Aguilar, G.R. No. 83377, February 9, 1993, 218 SCRA 602, 606.
24. Sandiganbayan Records, TSN, March 21, 2011, pp. 23-26.

n Note from the Publisher: Written as "Office of the President, et al. vs. Calimxto R.
Cataquiz, G.R. No. 183445, Sept. 14, 2011" in the original document.

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