G.R. No. 192591 - EFREN L. ALVAREZ, Petitioner v.

PEOPLE OF
THE PHILIPPINES, Respondent.
x-----------------------------------------------------------------------------------------x

DISSENTING OPINION

BERSAMIN, J.:

The Majority have voted to deny the motion for reconsideration of the
Decision promulgated on June 29, 2011 filed by the petitioner. However, I
respectfully dissent and strongly urge that we review and reverse the
Decision of June 29, 2011. My re-examination of the records convinces me
to conclude and hold that the acts and actuations of the petitioner did not
amount to a violation of the letter and spirit of Section 3(e) of Republic Act
No. 3019.

Accordingly, I vote to acquit the petitioner for failure of the State to

establish his guilt beyond reasonable doubt.

Antecedents

The petitioner was the Mayor of the then Municipality of Muoz (now
Science City of Muoz) when the transaction subject of this case transpired
in September 1996.

On July 7, 1995, the Sangguniang Bayan of Muoz (SB) adopted

Resolution No. 136, S-951 to invite Jess Garcia, President of the Australian
Professional, Inc. (API), to participate in the planned construction of a four-
storey shopping mall (Wag-Wag Shopping Mall).

On February 9, 1996, the tabloid Pinoy published the invitation2 for

proposals for the Wag-Wag Shopping Mall project, giving interested bidders

1
Rollo, pp. 153-154.
2
Id. at 152.
Dissenting Opinion 2 G.R. No. 192591

30 days within which to submit their offers. On April 12, 1996, the Pre-
qualification, Bids and Awards Committee (PBAC) recommended3 the
approval of the proposal submitted by API, the lone interested bidder. On
April 15, 1996, the SB passed a resolution authorizing the petitioner to enter
into a Memorandum of Agreement (MOA) with API regarding the Wag-
Wag Shopping Mall project.4 Then, on September 12, 1996, Alvarez
(representing the Municipality) and API entered into and executed the
MOA.5

On February 14, 1997, the groundbreaking ceremony was held on site,

where the old Motor Pool, the old Health Center, and a semi-concrete one-
storey building (then housing the Department of Agriculture, the BIR, the
Office of the Assessor, the old Post Office, the Commission on Elections,
and the Department of Social Welfare and Development) were all situated.
API later started the excavation, and a billboard informing the public about
the project and its contractor was placed on the site.

On August 10, 2006, the petitioner was indicted in the Sandiganbayan

for violation of Section 3(e) of Republic Act No. 3019 under the information
that alleged:

That on or about 12 September 1996, and sometime prior or

subsequent thereto, in the then Municipality (now Science City) of Muoz,
Nueva Ecija, and within the jurisdiction of this Honorable Court, the
above-named accused EFREN L. ALVAREZ, a high ranking public
official, being then the Mayor of Muoz, Nueva Ecija, taking advantage of
his official position and while in the discharge of his official or
administrative functions, and committing the offense in relation to his
office, acting with evident bad faith or gross inexcusable negligence or
manifest partiality did then and there willfully, unlawfully and criminally
give the Australian-Professional Incorporated (API) unwarranted benefits,
advantage or preference, by awarding to the latter the contract for the
construction of Wag-Wag Shopping Mall in the amount of Two Hundred
Forty Million Pesos (Php 240,000,000.00) under a Buil[d]-Operate-
Transfer Agreement, notwithstanding the fact that API was and is not a
duly-licensed construction company as per records of the Philippine
Construction Accreditation Board (PCAB), which construction license is a
pre-requisite for API to engage in construction of works for the said
3
Id. at 64.
4
Id. at 196.
5
Id. at 147-151.
Dissenting Opinion 3 G.R. No. 192591

municipal government and that API does not have the experience and
financial qualifications to undertake such costly project among others, to
the damage and prejudice of the public service.

CONTRARY TO LAW.6

On September 22, 2006, the petitioner pleaded not guilty. Trial then
ensued. The State presented several witnesses to prove that Alvarez
approved the MOA with API, knowing that API had no capacity to
undertake such a big project. Aaron C. Tablazon of the Philippine
Construction Accreditation Board (PCAB) testified that PCAB issued the
two certifications to the effect that API had not been issued a Contractors
License.7 Ma. Chona A. Caacbay of the Securities and Exchange
Commission (SEC) stated that APIs application for registration was
approved on July 28, 1995; and that its capital stock was P40,000,000.00
and its paid-up capital P2,500,000.00.8 Romeo A. Ruiz, the Vice Mayor of
Muoz in 1992-1998, recalled that the petitioner had requested the SB to
pass a resolution granting him authority to enter into the MOA with API on
the construction of Wag-Wag Shopping Mall under the Build-Operate-
Transfer (BOT) scheme; and that the petitioner made such request because
the PBAC, headed by the petitioner, had recommended the acceptance of the
proposal of API.

On the other hand, the Defense countered that the petitioner had
substantially complied with the provisions of the BOT law. He testified that
when he was its Mayor, the Municipality of Muoz borrowed money from
the Government Service Insurance System (GSIS) to finance the proposed
four-storey Wag-Wag Shopping Mall project; that then Vice Mayor Ruiz
and the other members of the SB showed him the Manila Bulletin and
Business Bulletin publications of the BOT projects of the Australian
Professional Realty Incorporated (APRI);9 that on September 16, 1996, the
Municipality issued a notice of award to API; that prior to the start of the

6
Id. at 53-54.
7
Id. at 54-55.
8
Id. at 55.
9
Id. at 58.
Dissenting Opinion 4 G.R. No. 192591

project he required API to submit the necessary documents and to post

notices; that API did not submit the necessary documents, claiming that the
BOT law did not require such documents; that the project was not completed
because of the 1997 financial crisis; that then Vice Mayor Ruiz sent a letter
to API complaining about the slow pace of the project; and that the letter
remained unheeded at that time because the president of API was then
vacationing in Europe.10

The petitioner emphasized that the Municipality suffered no actual

damage because the local treasury did not spend a single centavo for the
project; that the project was an unsolicited proposal under the BOT law; that
API paid a disturbance fee of P500,000.00; that the SB passed a resolution
authorizing him to file cases against API with the objective of mutually
terminating the agreement; that he, as the representative of the Municipality,
and Atty. Lydia Y. Marciano, as the representative of API, mutually
terminated the agreement; and that he could not present a copy of the
compromise agreement because fire had meanwhile razed the premises of
the Regional Trial Court in Balok, Sto. Domingo, Nueva Ecija, where the
compromise settlement had been filed.11

The petitioner declared that an annual net income of P5,000,000.00

had been forecast out of the loan of P40,000,000.00 from the GSIS; that he
had conducted a study relative to the capability of API, but APRI had not yet
completed any project as of that time; that API and APRI were one and the
same, although he admittedly did not inquire from the SEC about the status
of the two companies; and that he did not determine whether API was a
licensed contractor.12

On November 16, 2009, the Sandiganbayan rendered its decision,

convicting the petitioner based on the following findings: (a) the project had
no prior confirmation or approval by the Investment Coordination Council
10
Id. at 59.
11
Id.
12
Id. at 60.
Dissenting Opinion 5 G.R. No. 192591

of NEDA; (b) a shorter period was given for comparative or competitive

proposals; (c) there was failure to meet the conditions for the approval of the
contract, including the posting of a performance security; (d) there was no
in-depth negotiations with proponent; (e) API did not submit a complete
proposal; (f) no clear plan was presented; (g) API was not a licensed
contractor according to the PCAB; and (h) the petitioner was totally remiss
in his duties under the Local Government Code of 1991. The Sandiganbayan
further found that the Government suffered actual damages due to the acts of
the petitioner, resulting from the loss of several public buildings as well as
the resources from the demolition of such structures, which was quantified at
P4,800,000.00, or 2% of the total project cost of P240,000,000.00.13 The
dispositive portion reads:

ACCORDINGLY, accused Efren L. Alvarez is found guilty beyond

reasonable doubt for [sic] violation of Section 3 (e) of Republic Act No.
3019 and is sentenced to suffer in prison the penalty of 6 years and 1
month to 10 years. He also has to suffer perpetual disqualification from
holding any public office and to indemnify the City Government of
Muoz (now Science), Nueva Ecija the amount of Four Million Eight
Hundred Thousand Pesos (Php4,800,000.00) less the Five Hundred
Thousand Pesos (Php500,000.00) API earlier paid the municipality as
damages.

Costs against the accused.

SO ORDERED.14

On June 9, 2010, the Sandiganbayan denied the petitioners motion

for reconsideration for its lack of merit.15

Ruling of the Court

Thus, the petitioner appealed, raising the following issues:

1. Whether or not the Sandiganbayan failed to observe the

requirement of proof beyond reasonable doubt in convicting
him;

13
Id. at 80-81.
14
Id. at 84.
15
Id. at 111.
Dissenting Opinion 6 G.R. No. 192591

2. Whether or not the Sandiganbayan failed to appreciate the

legal intent of the BOT project;

3. Whether or not the Sandiganbayan utterly failed to

appreciate that the BOT was a lawful project of the SB and
not his project; and

4. Whether or not the Sandiganbayan utterly failed to

appreciate that there was no damage as contemplated by law
caused to the Municipality of Muoz to warrant his
conviction.16

On June 29, 2011, the Court affirmed the conviction of the petitioner.
It rejected his argument that he could not be held liable for violating Section
3(e) of Republic Act No. 3019 because there had been no disbursement of
public funds involved. The Court explained that there were two modes of
violating Section 3(e) of Republic Act No. 3019, namely: (a) causing any
undue injury to any party, including the Government; and (b) giving any
private party any unwarranted benefits, advantage or preference. The Court
discoursed that under the second mode, it was sufficient that the accused
gave unjustified favor or benefit to another, in the exercise of his official,
administrative, or judicial functions; and held that the State successfully
demonstrated that the petitioner acted with manifest partiality and gross
inexcusable negligence in awarding the BOT contract to an unlicensed and
financially unqualified private entity.

Hence, the petitioner filed a motion for reconsideration, contending:

I
THE HONORABLE COURT FAILED TO CONSIDER THAT THE
SANDIGANBAYAN COMMITTED MANIFEST ERROR, VIOLATED
PETITIONERS CONSTITUTIONAL RIGHT TO THE PRESUMPTION
OF INNOCENCE, AND BLATANTLY DISREGARDED THE
PRINCIPLE OF REGULARITY IN THE PERFORMANCE OF
OFFICIAL FUNCTIONS WHEN IT CONVICTED MAYOR ALVAREZ
OF VIOLATING R.A. 3019 ON THE BASIS OF HIS FAILURE TO
COMPLY WITH THE REQUIREMENTS OF R.A. 7718 ON
SOLICITED PROPOSALS WHEN IT WAS CLEAR THAT THE
CONSTRUCTION OF THE WAG WAG SHOPPING MALL WAS AN
UNSOLICITED AND UNCHALLENGED PROPOSAL.

16
Id. at 20.
Dissenting Opinion 7 G.R. No. 192591

II
THE HONORABLE COURT FAILED TO CONSIDER THE SERIOUS
AND MANIFEST ERROR COMMITTED BY THE
SANDIGANBAYAN WHEN THE LATTER DISREGARDED MAYOR
ALVAREZS SUBSTANTIAL COMPLIANCE WITH THE
REQUIREMENTS OF R.A. 7718.

III
THE HONORABLE COURT FAILED TO CONSIDER THAT THE
SANDIGANBAYAN DISREGARDED THE RIGHT OF MAYOR
ALVAREZ TO THE EQUAL PROTECTION OF THE LAWS WHEN
HE ALONE AMONG THE NUMEROUS PERSONS WHO APPROVED
AND IMPLEMENTED THE UNSOLICITED PROPOSAL WAS
CHARGED, TRIED AND CONVICTED.

IV
THE HONORABLE COURT FAILED TO CONSIDER THAT THE
SANDIGANBAYAN CONVICTED PETITIONER DESPITE THE
CLEAR FACT THAT THE PROSECUTION FAILED TO ESTABLISH
HIS GUILT BEYOND REASONABLE DOUBT, AS SHOWN BY THE
FOLLOWING CIRCUMSTANCES:

(A) THE PROSECUTION FAILED TO ESTABLISH

ALLEGED GROSS INEXCUSABLE NEGLIGENCE, EVIDENT
BAD FAITH OR MANIFEST PARTIALITY OF PETITIONER

(B) THE PROSECUTION FAILED TO ESTABLISH THE

ALLEGED DAMAGE OR INJURY PURPORTEDLY
SUFFERED BY THE GOVERNMENT.

V
THE HONORABLE COURT FAILED TO CONSIDER THE
ESTABLISHED FACTS SHOWING THAT PETITIONER:

(A) NEVER ACTED WITH GROSS INEXCUSABLE

NEGLIGENCE AND/OR MANIFEST PARTIALITY.

(B) NEVER GAVE ANY UNWARRANTED BENEFIT,

ADVANTAGE OR PREFERENCE TO API.

VI
THE HONORABLE COURT FAILED TO CONSIDER THAT
PETITIONER IS AN OUTSTANDING LOCAL EXECUTIVE WITH
UNIMPEACHABLE CHARACTER AND UNQUESTIONED
ACCOMPLISHMENT. PETITIONER IS NOT THE KIND OF
INDIVIDUAL WHO WOULD ENTER INTO CONTRACT THAT
WOULD PREJUDICE THE GOVERNMENT AND HIS
CONSTITUENTS.

Submissions

I find and consider the motion for reconsideration to be meritorious.

Dissenting Opinion 8 G.R. No. 192591

I.
Preliminary Considerations

In Sistoza v. Sandiganbayan,17 Sistoza stood charged with a violation

of Section 3(e) of Republic Act No. 3019, the same offense for which the
petitioner herein was indicted and convicted. At the very first sight of lack of
probable cause, the Court did not hesitate to spare Sistoza from being
subjected to a trial, and in the process uttered the following wise words to
caution against insensitive prosecution of supposed official wrongdoings in
routine government procurement, stating:

There is no question on the need to ferret out and expel public

officers whose acts make bureaucracy synonymous with graft in the public
eye, and to eliminate systems of government acquisition procedures which
covertly ease corrupt practices. But the remedy is not to indict and jail
every person who happens to have signed a piece of document or had a
hand in implementing routine government procurement, nor does the
solution fester in the indiscriminate use of the conspiracy theory which
may sweep into jail even the most innocent ones. To say the least, this
response is excessive and would simply engender catastrophic
consequences since prosecution will likely not end with just one civil
servant but must, logically, include like an unsteady streak of dominoes
the department secretary, bureau chief, commission chairman, agency
head, and all chief auditors who, if the flawed reasoning were followed,
are equally culpable for every crime arising from disbursements they
sanction.

Stretching the argument further, if a public officer were to personally

examine every single detail, painstakingly trace every step from inception,
and investigate the motives of every person involved in a transaction
before affixing his signature as the final approving authority, if only to
avoid prosecution, our bureaucracy would end up with public managers
doing nothing else but superintending minute details in the acts of their
subordinates. It is worth noting that while no charges of violation of Sec.
3, par. (e), of RA 3019 otherwise known as the Anti-Graft and Corrupt
Practices Act, as amended, were filed against the responsible officials of
the Department of Justice and officers of other government agencies who
similarly approved the procurement subject of the instant petition and
authorized the disbursement of funds to pay for it, all the blame
unfortunately fell upon petitioner Pedro G. Sistoza as then Director of the
Bureau of Corrections who merely acted pursuant to representations made
by three (3) office divisions thereof, in the same manner that the other
officials who were not charged but who nonetheless authorized the
transaction in their respective capacities, relied upon the assurance of
regularity made by their individual subordinates.

In truth, it is sheer speculation to perceive and ascribe corrupt intent

and conspiracy of wrongdoing for violation of Sec. 3, par. (e), of the Anti-

17
G.R. No. 144784, September 3, 2002, 388 SCRA 307, 315-316.
Dissenting Opinion 9 G.R. No. 192591

Graft and Corrupt Practices Act, as amended, solely from a mere

signature on a purchase order, although coupled with repeated
endorsements of its approval to the proper authority, without more, where
supporting documents along with transactions reflected therein passed the
unanimous approval of equally accountable public officers and appeared
regular and customary on their face.

These words uttered by the Sistoza Court have served as my

illuminating guidepost in taking a hard look at our Decision of June 29, 2011
affirming the petitioners conviction.

In our Decision, we observed that (a)s to the allegation of

conspiracy, the Sandiganbayan held that such was adequately shown by
the evidence, noting that this is one case where the Ombudsman should
have included the entire Municipal Council in the information for the
latter had conspired if not abetted all the actions of the petitioner in his
dealings with API to the damage and prejudice of the municipality.

We should disown such observation because we would thereby be

passing an unwarranted judgment of guilt against persons who were never
heard, thereby circumventing their constitutional guarantee of due process
that all democratic systems, including ours, have held dear and in the
highest esteem. Still, the observation only firmed up the logical
conclusion that, at the very least, the petitioner should not alone be faulted
for the supposedly illegal acts.

I want to make it clear that I do not subscribe to the petitioners

proposition that the non-inclusion of the members of the SB in the
information constituted a grave violation of his constitutional right to
equal protection. The proposition neither shielded him from criminal
prosecution nor rendered him innocent. But it is my humble opinion that
his individual participation in the awarding of the assailed contract to API
did not call for his criminal conviction, considering that the acts the State
established to have been proof of his involvement were only his signing
Dissenting Opinion 10 G.R. No. 192591

of the Invitation for BOT Project; his causing of the publication of the
invitation; his signing of the PBAC Resolution recommending the award
of the contract to API; his signing of the MOA covering the project; and
his entering into the compromise with API after he instituted a civil action
against it. Even assuming that all his acts constituted significant and
integral components of some fiasco, which I cannot concede, the Court
should not close its discerning eyes to the fact that the Wag-Wag
Shopping Mall project had originated as the brainchild of the SB.
Specifically, it had been the SB that had invited API to present a proposal;
it had been the SB that had resolved to adopt the BOT scheme in the
construction of the Wag-Wag Shopping Mall; it had been the SB that had
authorized the petitioner to enter into a MOA with API; it had been the SB
that had authorized him to file a case against API; and it had been the SB
that had authorized him to enter into a compromise with API.

Contrary to the stance taken by the Sandiganbayan, what the Court

should reckon from the totality of the established circumstances was not a
criminal conspiracy among the municipal officials, the petitioner included,
but, rather, a conscious effort to faithfully observe the checks and
balances within the realm of local governance. The affirmance of the
conviction of the petitioner would then be an exaggerated chastisement of
his having affixed his signature on the MOA, the very kind of prosecution
of a public official that the Sistoza Court eloquently denounced.

II.
Unsolicited Proposal

In our challenged Decision, we initially positioned API against the

tapestry that was Republic Act No. 6957,18 as amended by Republic Act No.
771819 (collectively, BOT Law). The Decision began by highlighting that a
BOT project could only be awarded to the bidder who met the standards set

18
An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure
Projects by the Private Sector, and for Other Purposes (approved on July 9, 1990).
19
An Act Amending Certain Sections of Republic Act No. 6957.
Dissenting Opinion 11 G.R. No. 192591

by the BOT Law; and then went on to find that the undeniable
disqualification of API for being an unlicensed contractor required us to rule
that API could not properly be the awardee of the BOT project for the
construction of the Wag-Wag Shopping Mall because it was not qualified to
participate in the bidding.

Yet, API was not a bidder because there would be no bidding in which
it would participate. Rather, API had been invited by the SB to submit its
proposal, and API had accepted the invitation and submitted its proposal. On
account of this reality, a review of the Decision is in order.

The Municipality of Muoz viewed the project from its inception

under the rules on unsolicited proposals. Several circumstances buttress this
conclusion, namely: (a) the SBs classification of the project as non-
priority in Resolution No. 230, S-9520 because the Municipality lacked
adequate resources to finance the project and because priority projects were
ineligible for unsolicited proposals;21 (b) the PBACs explicit
recommendation of the acceptance of the unsolicited proposal and the
awarding of the contract to API pursuant to SB Resolution No. 01, S-96;22
and (c), the Invitation for BOT Project,23 which was an earnest and sincere
attempt to give to the interested public a chance to defeat APIs unsolicited
proposal.

The Court has repeatedly enforced its power to brush aside erroneous
legal impressions, however sincerely they might have been made, where the
correct understanding of the pertinent laws indubitably painted a different
picture of intention on the part of the parties. Consistent with this laudable
zeal, we should immediately deem the Wag-Wag Shopping Mall project to
be the unsolicited proposal that it really was simply because that was the

20
Rollo, p. 162.
21
Section 10.3, Implementing Rules and Regulations.
22
Rollo, p. 64.
23
Id. at 152.
Dissenting Opinion 12 G.R. No. 192591

nomenclature adopted by the SB for the project. Indeed, I cannot yet find
any indicators that varied at all from the unsolicited nature of the proposal.

We have regarded the SBs invitation to API as a symbol of

solicitation. That view may be justified because API did not originate the
idea for the project. However, the proposal was still unsolicited. To be all
too literal about the meaning of the term unsolicited might be
misapprehended hereafter as forbidding the Government, in effect, from
giving even the slightest hint on its pursuits to any potential investor. That
misapprehension would be most unfortunate and unjustified, considering
that the avowed intent of the BOT Law of promoting private sector
participation in development projects did not prohibit any proponent of a
worthwhile BOT project from knocking on the Governments door
uninvited. That unwarranted interpretation would have the private sector act
like a wandering caroler, moving from one house to the next, uncertain
whether his caroling would even be listened to; or would have the private
sector simply distance itself from any collaboration with the Government
because of the uncertainty of partnering with the Government in pursuing
development projects, no matter how worthy, thereby preventing rather than
forging the partnerships that the law has desired and envisioned.

In fact, that the Government first communicates with a prospective

investor who then submits an unsolicited proposal has not been
unprecedented. The Court actually took note of one such situation in Agan,
Jr. v. Philippine International Air Terminal Co., Inc.,24 as the following
excerpt indicates:

In August 1989, the DOTC engaged the services of Aeroport de

Paris (ADP) to conduct a comprehensive study of the Ninoy Aquino
International Airport (NAIA) and determine whether the present airport
can cope with the traffic development up to the year 2010. The study
consisted of two parts: first, traffic forecasts, capacity of existing
facilities, NAIA future requirements, proposed master plans and
development plans; and second, presentation of the preliminary design of

24
G.R. No. 155001, May 5, 2003, 402 SCRA 612, 631-632.
Dissenting Opinion 13 G.R. No. 192591

the passenger terminal building. The ADP submitted a Draft Final Report
to the DOTC in December 1989.

Sometime in 1993, six business leaders consisting of John

Gokongwei, Andrew Gotianun, Henry Sy, Sr., Lucio Tan, George Ty
and Alfonso Yuchengco met with then President Fidel V. Ramos to
explore the possibility of investing in the construction and operation
of a new international airport terminal. To signify their commitment
to pursue the project, they formed the Asias Emerging Dragon Corp.
(AEDC) which was registered with the Securities and Exchange
Commission (SEC) on September 15, 1993.

On October 5, 1994, AEDC submitted an unsolicited proposal to

the Government through the DOTC/MIAA for the development of NAIA
International Passenger Terminal III (NAIA IPT III) under a build-
operate-and-transfer arrangement pursuant to RA 6957 as amended by RA
7718 (BOT Law). (Emphases and underscoring supplied.)

Agan, Jr. adverted to the six business leaders approaching President

Ramos to explore the possibility of investing in the construction and
operation of a new international airport terminal. Ostensibly, they proposed
to build the NAIA International Passenger Terminal III without prior
solicitation by the Government. Here, however, it was slightly different,
with the SB inviting API. But the making of that invitation alone did not
make APIs eventual proposal a solicited one. Both Agan, Jr. and this
case shared one common circumstance that preliminary
communications transpired prior to the submission of the proposal.

Unsolicited proposals for projects may be accepted by any

government agency or local government unit on a negotiated basis, provided
that the following conditions are all met, namely: (a) such projects involved
a new concept or technology and/or are not part of the list of priority
projects; (b) no direct government guarantee, subsidy or equity is required;
(c) the government agency or local government unit has invited comparative
or competitive proposals by publication for three consecutive weeks in a
newspaper of general circulation, and no other proposal is received for a
period of 60 working days; and (d) in the event another proponent submits a
Dissenting Opinion 14 G.R. No. 192591

lower price proposal, the original proponent shall have the right to match
that price within 30 working days.25

I take the view, therefore, that the Government is not legally

precluded from consulting a private entity that possesses the requisite
expertise, skills and know-how on a particular undertaking, even if the
consultation is pursued with the end of ultimately engaging the private
entity for the undertaking. My reason for taking the view is that the
giving of undue favors that our policies consistently condemn will be
thwarted by the laws several protective measures in place to still afford
the public an opportunity for fair competition.

The BOT Law provides two ways on how the private sector may take
on a project, to wit: (a) through public bidding; and (b) through unsolicited
proposals.26 In the first way, an identified project is immediately thrown
open to the public for competition, while in the second, a proposal is first
submitted before the public is given the chance to compete. If the
Government chooses to transact indiscriminately with the public through
regular bidding, the pertinent rules on unsolicited proposals find no
application. Conversely, if at the outset and to the exclusion of the public,
negotiations take place between the Government and a specific person, the
ordinary bidding procedures are not at play.

Rule 9 of the Implementing Rules and Regulations (IRR) of the BOT

Law has the following significant provisions on direct negotiations and
unsolicited proposals, to wit:

Sec. 9.1. Direct Negotiation. - Direct negotiation shall be resorted to

when there is only one complying bidder left as defined hereunder:

a. If, after advertisement, only one project proponent applies for

pre-qualification and it meets the pre-qualification requirements,
after which it is required to submit a bid/proposal which is
subsequently found by the Agency/LGU to be complying;
25
Section 4-a of R.A. No. 6957, as amended by R.A. No. 7718.
26
Section 2.6 of the Implementing Rules and Regulations (IRR) of the BOT Law states:
Sec. 2.6. Allowable Modes of Implementation. - Projects may be implemented through public bidding
or direct negotiation. The direct negotiation mode is subject to conditions specified in Rules 9 and 10
hereof.
Dissenting Opinion 15 G.R. No. 192591

b. If, after advertisement, more than one project proponent

applied for pre-qualification but only one meets the pre-
qualification requirements, after which it submits a bid proposal
that is found by the Agency/LGU to be complying;

c. If, after pre-qualification of more than one project proponent,

only one submits a bid which is found by the Agency/LGU to be
complying;

d. If, after pre-qualification, more than one project proponent

submit bids but only one is found by the Agency/LGU to be
complying;

In such events however, any disqualified bidder may appeal the

decision of the concerned Agency/LGU to the Head of Agency
in case of national projects, or to the Department of Interior and
Local Government (DILG) in case of local projects within fifteen
(15) working days from receipt of the notice of disqualification.
The Agency/LGU concerned shall act on the appeal within forty-
five (45) working days from receipt thereof. The decision of the
Agency concerned or the DILG, as the case may be, shall be
final and immediately executory.

Sec. 9.2. Unsolicited Proposals.- Unsolicited proposals may

likewise, subject to the conditions provided under Rule 10, be accepted by
an Agency/LGU on a negotiated basis.

Section 9.1, supra, actually envisages an ordinary public bidding in

which only a lone bidder ends up to be compliant. The offer to the public
and the opportunity for competition, two of the three principles in public
bidding,27 precede the negotiation. Under the BOT Law, therefore, the
private sector may become a partner of the Government in its infrastructure
projects only either by participating in a regular bidding or by presenting an
unsolicited proposal, where there is likewise a subsequent bidding.

The mere fact that the SB invited API did not put APIs proposal
outside the purview of an unsolicited proposal. Any private corporation, on
whose expertise, skills and know-how the Government relies, if asked by the
Government to conduct a study for a project, should not be later on
disqualified from making a proposal for the project. Nor should its proposal
after the study be immediately considered as outside the scope of an
unsolicited proposal only because the initiative has not originated from it.

27
Power Sector Assets and Liabilities Management Corporation v. Pozzolanic Philippines, Inc., G.R.
No. 183789, August 24, 2011, 656 SCRA 214, 229.
Dissenting Opinion 16 G.R. No. 192591

Should that be the case, the procedure for ordinary bidding will apply, and
the corporation will just have to find itself on the same footing as its
competitors despite having expended so much time, effort and resources on
the study, wondering in uncertainty about whether its substantial
expenditures will ultimately blossom into a solid investment. Such innate
unfairness is precisely what the lawmakers sought to avoid, as can be
gleaned from the Minutes of the Senate deliberations,28 to wit:

Senator Macapagal: In the Medium-Term Philippine Development Plan

and the Cagayan de Oro-Iligan Corridor, the anchor project of the
Cagayan de Oro-Iligan Corridor is the Lagindingan International Airport.
However, it was very sad to note that in the DOTC public investment
program, it was not there. xxx

So, the people of Cagayan de Oro-Iligan Corridor were really

flabbergasted that a national government agency should completely ignore
a particular anchor project. xxx

The people in the area started selling the idea to everybody who might be
interested and, of course, one very obvious party that should be interested
is Ayala Corporation because it owns the land that was identified in the
planning as the ideal place for the airport. xxx

As time went on, Ayala got more and more interested because everybody
in the Cagayan de Oro-Iligan Corridor was telling them that that airport is
so crucial in the development of the Cagayan de Oro-Iligan Corridor. So,
Ayala Corporation started toying with the idea; it started some preliminary
casual talks, and then more serious talks with possible Japanese investors.
Then they got into the conclusion that there are some things they cannot
undertake even in that consortium of two. They got into that some aspects
should really be funded by the Government and that therefore, the project
should be divided into two parts, one part should be Government and one
part should be BOT. All of this conceptualization to be transformed into
project specifications would undertake time and, in fact, millions of
investment on the part of, let us say, Ayala corporation.

If, after spending millions for the project specification, it is simply bidded
out in a purely competitive tender, then that is thoroughly unfair to Ayala
Corporation. If that is the case provided by law, Ayala Corporation will
not even go into the feasibility study. Unfortunately, DOTC does not have
the money to go into that feasibility study instead. If that happens, we will
have the money to go into that feasibility study instead. If that happens,
we will have a Cagayande Oro-Iligan Corridor project that will again be a
political wish because the anchor project will not be there.

So, Mr. President, it is a situation such as this where we feel that there is
certainly merit for the common good in a negotiated contract. This
example is what we mean by an unsolicited proposal.

28
Record of the Senate, Tuesday, February 1, 1994, p. 477.
Dissenting Opinion 17 G.R. No. 192591

Accordingly, any proposal, invited or not, that is introduced where the

Government has no prior intention of conducting a public bidding must still
be categorized as unsolicited. This interpretation will not prove disastrous
inasmuch as the law itself has provided adequate safeguards. Moreover, the
abhorred capricious awarding of a project to a preferred party is effectively
hindered by the mandate for a subsequent invitation for comparative
proposals.

III.
Deviations from the BOT Law

Having shown that APIs proposal was really an unsolicited proposal,

let me next carefully show that the petitioner complied with the BOT Law.

In our Decision, we held:

The IRR specified the requirement of publication of the invitation

for submission of proposals, as follows:

SEC. 10.11. Invitation for Comparative Proposals. - The

Agency/LGU shall publish the invitation for comparative or
competitive proposals only after ICC/Local Sanggunian issues
a no objection clearance of the draft contract. The invitation
for comparative or competitive proposals should be published at
least once every week for three (3) weeks in at least one (1)
newspaper of general circulation. It shall indicate the time,
which should not be earlier than the last date of publication,
and place where tender/bidding documents could be
obtained. It shall likewise explicitly specify a time of sixty (60)
working days reckoned from the date of issuance of the
tender/bidding documents upon which proposals shall be
received. Beyond said deadline, no proposals shall be accepted.
A pre-bid conference shall be conducted ten (10) working days
after the issuance of the tender/bidding documents. (Emphasis
supplied.)

The above provision highlighted other violations in the bidding

procedure for the subject BOT project. First, there was no prior approval
by the Investment Coordinating Committee of the National Economic
Development Authority (ICC-NEDA) of the Wag-Wag Shopping Mall
project. Under the BOT Law, local projects to be implemented by the
local government units concerned costing above P200 million shall be
submitted for confirmation to the ICC-NEDA. Such requisite
approval shall be applied for and should be secured by the head of the
LGU prior to the call for bids for the project. Second, the law requires
publication in a newspaper of general circulation. To be a newspaper of
Dissenting Opinion 18 G.R. No. 192591

general circulation, it is enough that it is published for the dissemination

of local news and general information, that it has a bona fide subscription
list of paying subscribers, and that it is published at regular intervals. Over
and above all these, the newspaper must be available to the public in
general, and not just to a select few chosen by the publisher. Petitioner
did not submit in evidence the affidavit of the publisher attesting
to Pinoy tabloid as such newspaper of general circulation.
And third, even assuming that Pinoy was indeed a newspaper of general
circulation, the invitation published indicated a shorter period of
submission of comparative proposals, only thirty (30) days instead of the
prescribed sixty (60) days counted from the date of issuance of tender
documents. (Emphasis supplied)

I believe that we must thoroughly revisit our finding about the lack of
prior approval by the ICC and about the failure of the petitioner to submit
the affidavit of the publisher of Pinoy tabloid that would confirm its being a
newspaper of general circulation. There was no basis for the finding.

Firstly, the finding was unfortunate because it was not for the
petitioner to prove that he had complied with such requirements, but
rather for the Prosecution to establish the fact of non-compliance with
the requirements in a degree that would justify the presence of the
elements of the crime charged. We apparently thereby brushed aside the
well-settled rule in criminal cases that it was the Prosecution, not the
accused, who has the burden of proof to establish guilt beyond reasonable
doubt.29

Secondly, we have thereby ignored that the vigorous objection

raised herein had been only about the publication of the invitation being
for a period shorter than the law required, and about Pinoy being a
mere tabloid.

29
Section 1(a), Rule 115, Rules of Court, which states that the accused has the right: To be presumed
innocent until the contrary is proved beyond reasonable doubt; Section 2, Rule 133, Rules of Court, which
provides that: In a criminal case, the accused is entitled to an acquittal, unless his guilt is shown beyond
reasonable doubt. Proof beyond reasonable doubt does not mean such a degree of proof as, excluding
possibility of error, produces absolute certainty. Moral certainty only is required, or that degree of proof
which produces conviction in an unprejudiced mind.; Boac v. People, G.R. No. 180597, November 7,
2008, 570 SCRA 533, 548.
Dissenting Opinion 19 G.R. No. 192591

Anent the requirement for ICC approval, the Decision, citing Section
4 of Republic Act No. 6957, as amended by Republic Act No. 7718,30 and
Section 2.3 of the IRR,31 held that projects costing over P200 million should
be submitted for confirmation by the ICC-NEDA, and the approval should
be applied for and secured prior to the bidding by the petitioner as the head
of the local government unit.

Yet, a closer look readily shows that cited provisions related to

priority projects, of which the Wag-Wag Shopping Mall project was not.
The records indicate that the project was classified by the SB as non-
priority through its Resolution No. 230, S-95 owing to the large
amount of investment therein that the Municipality could not shoulder.
The inapplicability of the provisions was bolstered by Section 2.8 of the
IRR, which states:

2.8. ICC Approval of Projects. - The review and approval of projects

by ICC, as indicated above, including those proposed for BOO
implementation, shall be in accordance with the guidelines of the ICC,
attached hereto as Annex B.

For publicly-bid projects, the ICC approval of the project should

be secured prior to bidding and for unsolicited proposals prior to
negotiation with the original proponent.

Considering that priority projects were not eligible for unsolicited

proposals,32 Section 2.8 should be construed to pertain only to projects
other than priority ones.

30
SEC. 4. Priority Projects. x x x
The list of local projects to be implemented by the local government units concerned shall be
submitted for confirmation to the municipal development council for projects costing up to Twenty million
pesos; those costing above Twenty up to Fifty million pesos to the provincial development council; those
costing up to Fifty Million pesos to the city development council; above Fifty Million up to Two hundred
million pesos to the regional development councils; and those above Two hundred million pesos to the ICC
of the NEDA.
31
Sec. 2.3. List of Priority Projects. - Concerned Agencies/LGUs are tasked to prepare their
infrastructure/development programs and to identify specific priority projects that may be financed,
constructed, operated and maintained by the private sector through the contractual arrangements or
schemes authorized under these IRR.
The projects require the approval of either the NEDA Board, ICC or Local Development Councils
(LDCs) and respective Sanggunians as specified in Section 2.7. Such requisite approval shall be applied for
and should be secured by the Head of Agency/LGU prior to the call for bids for the project. For this
purpose, the Head of Agency/LGU may submit projects for inclusion in the list, for approval by the
appropriate approving authority, as often as is necessary. Approved projects shall constitute the List of
Priority Projects.
32
Section 10.3, IRR.
Dissenting Opinion 20 G.R. No. 192591

With the Wag-Wag Shopping Mall being a non-priority project, and

APIs proposal being unsolicited, what then applied was the requirement of
ICC approval prior to the negotiation with API as the proponent. There
being no evidence on record that proved non-compliance with the
requirements, the Court thus had no real and proper factual bases to
find and hold that Alvarez had failed to prove compliance.

In its Comment on the petition for review, the Office of the Solicitor
General (OSG) tendered a sweeping statement that there was no showing
that Petitioner [Alvarez] sought the prior approval or confirmation by the
ICC of NEDA of the said undertaking. The trial records show, on the other
hand, that the Prosecution and the Sandiganbayan heavily banked on the
supposed violations of the regular bidding procedures or, in the alternative,
on the irregularities in the publication of the Invitation for BOT Project,
without showing that the violations had been actual, or that the publication
had been grossly defective and deficient.

Anent Pinoy, the petitioners failure to present the affidavit of the

publisher attesting to Pinoys being a newspaper of general circulation was
fatal to the cause of the Prosecution, but not to the cause of the Defense.
There was in favor of the petitioner the presumption of regularity in the
performance of official duty from his availing of the publication services of
Pinoy as a newspaper of general circulation.33 The presumption could be
rebutted only by the Prosecution adducing clear and convincing affirmative
evidence of irregularity or failure to perform a duty.34 Towards that end,
every reasonable intendment was to be made in support of the presumption;
in case of any doubt as to an officers act being lawful or unlawful, the
construction should be in favor of its lawfulness. Without the Prosecution
adducing such rebutting evidence, the presumption became conclusive
herein.

33
Section 3(j), Rule 131, Rules of Court.
34
Bustillo v. People, G.R. No. 160718, May 12, 2010, 620 SCRA 483, 492.
Dissenting Opinion 21 G.R. No. 192591

Thirdly, the period of only 30 days for the submission of comparative

proposals provided in the Invitation for BOT Project that the petitioner
signed being shorter than required should not be a factor of any irregularity.

Although an unsolicited proposal for projects may be accepted if,

after the publication, no other proposal is received for a period of 60
working days, the BOT Law does not actually provide the time when
the 60-day period is to commence. On the other hand, Section 10.11 of the
IRR contains the following relevant instructions:

1. The invitation for comparative or competitive proposals

shall indicate the time, which should not be earlier than
the last date of publication, and the place where
tender/bidding documents can be obtained;

2. The invitation shall likewise explicitly specify a time

of 60 working days reckoned from the date of issuance
of the tender/bidding documents upon which proposals
shall be received; beyond said deadline, no proposals shall
be accepted.

3. A pre-bid conference shall be conducted 10 working

days after the issuance of the tender/bidding documents.

The Invitation for BOT Project did not state the time when and the
place where the tender/bidding documents could be obtained; did not
indicate a specific time of 60 working days reckoned from the date of
issuance of the tender/bidding documents within which proposals would be
received; and directed the submission of proposals within only 30 days from
the date of its first publication.

Yet, the failure to literally comply with the BOT Law and the IRR
was not enough justification to conclude adversely against the petitioner.
Let me explain why.
Dissenting Opinion 22 G.R. No. 192591

Upon being invited to bid, any prospective bidder could not just
quickly present himself to the Government with a proposal ready at
hand. This is because every knowledgeable bidder was expected to know
that it would only be through the bid/tender documents that he would
determine how to formulate the bid. Thus, any party interested in the
Wag-Wag Shopping Mall project had to secure first the bid/tender
documents from the Office of the Mayor. The period of 30 days stated in
the invitation, instead of being considered as the period for a
prospective bidder to submit a proposal, should be understood as
referring to the period within which a comparative bidder should obtain
the bid/tender documents. In this context, the obtention of the bid/tender
documents was, after the publication of the invitation, the next
unavoidable step for the bidding process to start rolling. The next step
thereafter would be the pre-bid conference, to be conducted 10 working
days from the issuance of the tender/bidding documents.35

For the Wag-Wag Shopping Mall project, counting the 30 days

from the date of first publication (February 9, 1996), the interested
public had until March 10, 1996 to obtain the bid/tender documents.
That was 16 days from the date of last publication (February 23, 1996).
A time frame of 16 days was reasonable, and was in fact even more
beneficial to prospective bidders by virtue of their not being limited to
one particular day. The time frame was also in full accord with the IRR,
whose only parameter being that the time to obtain the bid/tender
documents not be earlier than the last date of publication.

Another requirement under Section 10.11 of the IRR, was the

indication of the place where the bid/tender documents would be obtained.
Considering that any interested party could easily infer from the Invitation
that any response to the invitation had to be coursed through the Office of
the Mayor, that requirement was met in this case, and the place was the
Office of the Mayor. But no one went to obtain the bid/tender
35
Section 10.11, IRR.
Dissenting Opinion 23 G.R. No. 192591

documents, or even to inquire about the subject of the published

invitation. As a result, with the Municipality having no other
comparative proposal to consider and pass upon, no pre-bid conference
was conducted.

Underscoring the other violations attributed to the petitioner, the

Decision said the following:

There is likewise no showing that API complied with the submission

of a complete proposal required under the IRR:

SEC. 10.5 Submission of a Complete Proposal. - For a

proposal to be considered by the Agency/LGU, the proponent
has to submit a complete proposal which shall include a
feasibility study, company profile as outlined in Annex A, and
the basic contractual terms and conditions on the obligations of
the proponent and the government. The Agency/LGU shall
acknowledge receipt of the proposal and advice the proponent
whether the proposal is complete or incomplete. If incomplete, it
shall indicate what information is lacking or necessary.
(Emphasis supplied.)

As correctly pointed out by the Sandiganbayan, APIs proposal

showed that it lacked the above requirements as it did not include a
company profile and the basic contractual terms and conditions on the
obligations of the proponent/contractor and the government. Had such
company profile been required of API, the municipal government could
have been apprised of the fact that said contractor/proponent had been in
existence for only three months at that time and had not yet completed a
project, although APRI, which actually undertook the Calamba and
Lemery shopping centers also under BOT scheme, is allegedly the same
entity as API which have the same set of incorporators and directors. But
more important, the municipality could have realized earlier, on the basis
of financial statements and experience in construction included in the
company profile, that API could not possibly comply with the huge
financial outlay for the Wag-Wag Shopping Mall project. It could have
also noted the fact that the aforesaid BOT shopping centers in Lemery and
Calamba being implemented by APRI at that time were not yet finished or
completed. In any event, such existing BOT contract of APRI with
another LGU neither justified non-compliance by API with the submission
of a complete proposal for the Wag-Wag Shopping Mall project for a
competent evaluation by the PBAC.

The findings on the other violations were unfair. It is noteworthy that

the petitioners first direct participation in the Wag-Wag Shopping Mall
project was his signing of the Invitation for BOT Project. Still, we should
deduce that by that time, API would have been pre-qualified, its company
Dissenting Opinion 24 G.R. No. 192591

profile assessed, and its proposal evaluated by the Municipality. We should

presume that the SB had undertaken the evaluation because it was the SB,
after all, that had invited API pursuant to its Resolution No. 136, S-95,36
adopted the BOT scheme for the Wag-Wag Shopping Mall project through
its Resolution No. 230, S-95,37 and created a Special Committee on Build
Operate and Transfer through Resolution No. 262, S-95 shortly after API
had submitted its proposal.38 The function of evaluation appropriately fell
on the shoulders of the SB, not on the petitioners, because the project would
entail the disbursement of municipal funds.

In short, whatever the petitioner had to do with the project prior to his
signing of the Invitation for BOT Project should not be left to guesswork.

It is true that the IRR contained a directive for the head of the local
government unit to secure the ICC clearance for the unsolicited proposal
prior to any negotiations with the original proponent.39 But there was no
proof adduced by the Prosecution showing the non-compliance with this
requirement. Hence, we should resolve the issue in favor of compliance. The
consequence of so resolving is to accept that the petitioner was charged with
actual knowledge of the proposal and of the qualifications of API.
Nonetheless, despite such actual knowledge, the responsibility for securing
the approval should not be thrown exclusively in his direction, for securing
the approval was a purely ministerial duty. In this regard, the petitioner had
to endorse the proposal to the ICC without yet needing to exercise his
discretion. He was under no mandate to review the proposal at that stage.
The only time that he, as the head of a local government unit, would use his
discretion was after the submission by the PBAC of the recommendation to
award, upon which he, as the head of the local government unit, would then
decide.40

36
Rollo, p. 153.
37
Id. at 155.
38
Id. at 156.
39
Section 10.8, Section 2.8, IRR.
40
Section 11.2, IRR.
Dissenting Opinion 25 G.R. No. 192591

Fourthly, we further agree with the Sandiganbayan that there was no

in-depth negotiation as to the project scope, implementation and
arrangements and concession agreement, which are supposed to be used in
the Terms of Reference (TOR). Such TOR would have provided the
interested competitors the basis for their proposed cost, and its absence in
this case is an indication that any possible competing proposal was
intentionally avoided or altogether eliminated.

I am apprehensive that we have thereby allowed ourselves to

draw a decisive conclusion even without proper factual support. I have
carefully perused the decision of the Sandiganbayan under review and
have not come across any portion of it that might have contained the
factual basis from which the Sandiganbayan derived its conclusory
pronouncement. The absence of the factual basis necessitates a reversal
of our affirmance of the Sandiganbayan, for, indeed, the People did not
even attempt to make these matters a point of contention.

Fifthly, another established act of the petitioner was his signing of the
Resolution whereby the PBAC recommended both the acceptance of APIs
unsolicited proposal and the awarding of the contract to API. Upon careful
analysis, however, I find that his signature on the PBAC Resolution was by
virtue of his capacity as the PBAC Chairman, a capacity that he had not
arrogated unto himself due to its having been conferred by law.41 As the
PBAC Chairman, he could participate in the recommendation in two ways,
namely: by signing the Resolution, and, by voting in case of a tie.42 The
PBAC Resolution showed six members under the chairmanship of the
petitioner. A member, Angelo C. Abellera, had no signature on the
Resolution; hence, he did not have any involvement in its passage. Only five
members remained, rendering a tie impossible. Based on such
circumstances, the petitioner could not have voted for the recommendation
in favor of API.

41
Section 3.1, IRR; Section 37, R.A. No. 7160.
42
Section 3.3, IRR.
Dissenting Opinion 26 G.R. No. 192591

Sixthly, the Sandiganbayan further found that the petitioner had

requested the SB to authorize him to enter into a MOA with API, for which
the SB had then passed the resolution for that purpose.

The finding was of no material consequence.

The request and the Resolution were unnecessary and superfluous due
to the fact that no other proposal had been submitted to outdo the proposal of
API. Under the law, awarding the contract to API was a matter of course. As
to this, the Court observed in Asias Emerging Dragon Corporation v.
Department of Transportation and Communications,43 to wit:

xxx In the 18 April 2008 Decision, we have already exhaustively

scrutinized Section 4-A of the BOT Law, as amended, in relation to its
IRR, and in consideration of the intent of the legislators who crafted the
BOT Law. We find no reason to disturb our conclusion therein that:

The special rights or privileges of an original proponent thus

come into play only when there are other proposals submitted
during the public bidding of the infrastructure project. As can be
gleaned from the plain language of the statutes and the IRR, the
original proponent has: (1) the right to match the lowest or most
advantageous proposal within 30 working days from notice
thereof, and (2) in the event that the original proponent is able to
match the lowest or most advantageous proposal submitted, then
it has the right to be awarded the project. The second right or
privilege is contingent upon the actual exercise by the original
proponent of the first right or privilege. Before the project could
be awarded to the original proponent, he must have been able to
match the lowest or most advantageous proposal within the
prescribed period. Hence, when the original proponent is able to
timely match the lowest or most advantageous proposal, with all
things being equal, it shall enjoy preference in the awarding of
the infrastructure project.

It is without question that in a situation where there is no other

competitive bid submitted for the BOT project that the project would be
awarded to the original proponent thereof. However, when there are
competitive bids submitted, the original proponent must be able to match
the most advantageous or lowest bid; only when it is able to do so, will the
original proponent enjoy the preferential right to the award of the project
over the other bidder. These are the general circumstances covered by
Section 4-A of Republic Act No. 6957, as amended. (Underscoring
supplied)

43
G.R. Nos. 169914 and 1714166, April 7, 2009, 584 SCRA 355.
Dissenting Opinion 27 G.R. No. 192591

IV
Alvarez did not violate Section 3(e)

The Decision declared that the petitioner had failed to ensure that API
would meet the conditions prescribed by Section 11.7 and Section 12.7 of
the IRR, namely: (a) performance security; (b) proof of sufficient equity;
and (c) ICC clearance of the contract on a no-objection basis.

The petitioner argues that these requirements did not apply because
they were not enumerated in Rule 10 of the IRR, the issuance governing
unsolicited proposals.

The argument of the petitioner cannot be sustained.

Rule 10 provided the procedure in the handling of an unsolicited

proposal. Its last three sections related to submission of proposal,
evaluation of proposals and disclosure of the price proposal. If the
petitioners argument was followed, nothing could come out of unsolicited
proposals because Rule 10 did not provide the mechanism for the awarding
of the contract. To answer the hanging question of whether Alvarez
observed the IRR in awarding the contract, resort must necessarily be had to
Rule 11, entitled Award and Signing of Contract and Rule 12, entitled
Contract Approval and Recommendation. The separate processes for
unsolicited proposals and for publicly-bidded projects find their confluence
in both Rules.

In view of the foregoing, we should determine if the petitioner

deliberately disregarded the BOT Law and its IRR as to warrant his
prosecution for and conviction of a violation of Section 3(e) of Republic Act
No. 3019.

Section 3(e) of Republic Act No. 3019 states:

Dissenting Opinion 28 G.R. No. 192591

Section 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.
xxxx
(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 or
licenses or permits or other concessions.
xxxx

The State must prove the following essential elements of Section 3(e)
offense, as follows:

1. The accused is a public officer discharging administrative,

judicial, or official functions;

2. The accused must have acted with manifest partiality,

evident bad faith, or gross inexcusable negligence; and

3. The action of the accused caused undue injury to any party,

including the Government, or gave any private party
unwarranted benefits, advantage or preference in the
discharge of his functions.44

That the petitioner, being then the incumbent Mayor of his

Municipality, was a public official on the date in question showed the
attendance of the first element.

As to the second element (that the accused must have acted with
manifest partiality, evident bad faith, or gross inexcusable negligence),
which involve the three modes of committing the crime, we have enunciated
in Fonacier v. Sandiganbayan45 that the three modes are distinct and
different from each other, to wit:

The second element enumerates the different modes by which means

the offense penalized in Section 3 (e) may be committed. Partiality is
synonymous with bias which excites a disposition to see and report

44
People v. Romualdez, G.R. No. 166510, July 23, 2008, 559 SCRA 492, 509-510; Cabrera v.
Sandiganbayan, G.R. Nos. 162314-17, October 25, 2004, 441 SCRA 377, 386.
45
G.R. Nos. 50691, 52263, 52766, 52821, 53350, 53397, 53415 & 53520, December 5, 1994, 238 SCRA
655, 687-688.
Dissenting Opinion 29 G.R. No. 192591

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 willfully 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.
These definitions prove all too well that the three modes are distinct and
different from each other. Proof of the existence of any of these modes in
connection with the prohibited acts under Section 3 (e) should suffice to
warrant conviction.

IV.a.
Manifest partiality and gross inexcusable negligence
were not competently established

In our Decision, we held that the prosecution was able to

successfully demonstrate that [Alvarez] acted with manifest partiality and
gross inexcusable negligence in awarding the BOT contract to an unlicensed
and financially unqualified private entity. As basis thereof, the Decision
cited the petitioners non-compliance with the BOT Law and its IRR, and
made the following pronouncement:

Under the facts established, it is clear that petitioner gave

unwarranted benefits, advantage or preference to API considering that said
proponent/contractor was not financially and technically qualified for the
BOT project awarded to it, and without complying with the requirements
of bidding and contract approval for BOT projects under existing laws,
rules and regulations.

The word unwarranted means lacking adequate or official support;

unjustified; unauthorized or without justification or adequate reason.
Advantage means a more favorable or improved position or condition;
benefit, profit or gain of any kind; benefit from some course of
action. Preference signifies priority or higher evaluation or desirability;
choice or estimation above another. As to partiality, bad faith, and
gross inexcusable negligence, we have explained the meaning of these
terms, as follows:

Partiality 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
Dissenting Opinion 30 G.R. No. 192591

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.

We sustain and affirm the Sandiganbayan in holding that petitioner

violated Section 3(e) of R.A. No. 3019, and that he cannot shield himself
from criminal liability simply because the SB passed the necessary
resolutions adopting the BOT project and authorizing him to enter into the
MOA. We find no error or grave abuse in its ruling, which we herein
quote:

It is apparent that the unwarranted benefit in this case lies in

the very fact that API was allowed to present its proposal without
compliance of[sic] the requirements provided under the relevant
laws and rules. To begin with, the municipal government never
conducted a public bidding prior to the execution of the
contract. The project was immediately awarded to the API
without delay and without any rival proponents, when it was not
qualified to participate in the first place. The legality and
propriety of the agreement executed with the contractor is totally
absent based on the testimonies of both the prosecution and the
defense.

This Court also considers these particular acts

significant. First. From the testimony of then Vice-Mayor Ruiz,
Jesus V. Garcia, the president of API, attended the SB session
after paying a courtesy call to the Accused who was then the
Mayor. Second. It was the Accused who signed and posted the
Invitation to Bid (Exhibit N) giving proponents 30 days to
submit their proposals. Third. The Accused is the head of the
Pre-Qualification Bids and Awards Committee which according
to him recommended the approval of APIs proposal. This was
the reason he used in requesting authority from the SB to grant
him the authority to contract with API. Fourth. The Accused
requested the SB to give him authority to enter into an agreement
with API through a resolution (Exhibit S)[.] Fifth. It was the
Accused who invited the SB members to go to the Mayors
office to witness the signing of the Memorandum of Agreement
between the municipality and API.

I submit that the Sandiganbayan gravely erred and that we

should not affirm its error. The established facts showed that the
petitioner neither extended any favors to nor manifested partiality
towards API. He also did not give any unwarranted benefits to API.

As I previously pointed out, the only significant acts of the

petitioner proved by the Prosecution were his signing of the Invitation
for BOT Project; his causing of the publication thereof; his signing of
Dissenting Opinion 31 G.R. No. 192591

the PBAC Resolution recommending the award to API of the

contract; and his signing of the MOA for the project all of which
had mitigating, if not justifying, factors that I already stated in my
foregoing discussions. But none of such acts could be read as
manifesting partiality or giving unwarranted benefits to API.

For one, the Decision declared that (t)he project was

immediately awarded to the API without delay and without any rival
proponents. However, the declaration was belied by the fact that the
petitioner had to invite investors to finance, construct and operate46
the Wag-Wag Shopping Mall project. The Invitation, despite its faults,
was still an invitation, and it unquestionably demonstrated the intention
of the petitioner to give the interested public the reasonable opportunity
for competition. In the end, because no other company except API
showed any interest in the project, no comparative offer was made to
surpass APIs proposal.

Anent the alleged fault in the Invitation, in that it gave a period of

only 30 days from the date of first publication within which the
prospective bidders would submit their proposals, the fact that the
period was shorter than what the law required should not be seen as a
sign of bias or partiality towards API or of giving unwarranted benefits
to API. The Invitation was first published on February 9, 1996. Were it
true that the petitioner had been biased towards API, would he not have
moved at lightning speed, in a manner of speaking, in order to award
the contract by March 10, 1996, the end of the 30-day period? The
records show that he did not. Instead, he first sought and obtained the
recommendation of the PBAC, which recommendation came about on
April 12, 1996, or a month after the accrual to API of the right to be
awarded the contract. Equally noteworthy was that, despite APIs
proposal being uncontested and the contract could have already been

46
Rollo, p. 152.
Dissenting Opinion 32 G.R. No. 192591

awarded to API for that reason, the petitioner still first secured the
express authorization of the SB for him to enter into a MOA with API.
He awarded the contract only on September 12, 1996, five long months
after the PBAC had made its recommendation on the matter.

Moreover, the petitioner himself did not initiate dealings with

API. That was done by the SB itself. The SB got him to be interested by
showing to him the newspapers advertising the projects undertaken by
API in the Provinces of Laguna and Batangas. It was the SB, not
Alvarez, that invited API (represented by Garcia) to attend one of its
sessions for the purpose of having API share with the SB its knowledge
on the proposed project to be pursued under the BOT Law.47

On the other hand, the petitioner deserved credit for two things
that indicated he did not extend any unwarranted benefits to API in
connection with the project. The first was that he required API to pay to
the Municipality the substantial sum of P500,000.00 as a relocation or
disturbance fee to compensate for the demolition of the already-
condemned structures standing on the project site. There was no
question about the structures being already without economic value to
the Municipality after they had been declared as a nuisance and duly
condemned for demolition. The other was that he prosecuted API by
bringing a civil action for rescission and damages when API defaulted
on its contractual obligation.

Section 3(e) of Republic Act No. 3019 requires that partiality must be
manifest. But the petitioners actuations could not be categorized as
manifestly partial. His minimal participation in the transaction could not be
characterized by bias. His seeking the intervention of both the SB and the
PBAC before taking action in favor of API belied any partiality towards
API. He opted to share with the members of the SB and the PBAC the
responsibility for making any decision on the project. All these showed that
47
Id. at 63.
Dissenting Opinion 33 G.R. No. 192591

he himself sought and put in place stumbling blocks that did not at all make
it easy and simple for API to get the project.

In the Notice of Award, the petitioner directed API to submit its

performance security, proof of sufficient equity, and ICC clearance of
the contract on a no-objection basis. But the requirements were not
submitted. The reason for this was that APIs counsel, Atty. Lydia Y.
Marciano, insisted that such requirements did not apply because the
project did not involve any government undertaking. Apparently, the
petitioner relied on Atty. Marcianos representation.

Even assuming that the representations of APIs counsel were

erroneous, the petitioners reliance upon them was justifiable under the
circumstances. Firstly, he was only a layman as compared to Atty. Marciano
who was presumed to be possessed of a satisfactory knowledge of the
pertinent law. Secondly, he knew that the Municipality would not be
releasing any funds from its coffers intended for the project. I am sure that
the impression left by Atty. Marcianos representations was that there was
nothing to lose on the part of the Municipality should API fail to perform its
obligations. And, thirdly, both the SB and the PBAC previously found API
to be qualified for the project. In addition, there were the news reports
indicating APIs capacity to undertake the BOT project.

Anent negligence, any omissions that the petitioner committed along

the way were due only to either mere inadvertence, or simple over-eagerness
to proceed with a worthwhile project, or placing too much confidence in the
declarations of subordinates and Atty. Marciano. I submit that the
omissions would amount, at worst, only to gross negligence, which is
want or absence of reasonable care and skill.

Section 3(e) of Republic Act No. 3019 required that the gross
negligence must also be inexcusable. In other words, the gross negligence
Dissenting Opinion 34 G.R. No. 192591

should have no excuse. But that was not so herein, for, according to
Sistoza,48 gross inexcusable negligence

xxx does not signify mere omission of duties nor plainly the exercise
of less than the standard degree of prudence. Rather, it refers to negligence
characterized by the want of even the slightest care, acting or omitting to
act in a situation where there is a duty to act, not inadvertently but
willfully and intentionally, with conscious indifference to consequences
insofar as other persons may be affected. It entails the omission of care
that even inattentive and thoughtless men never fail to take on their own
property, and in cases involving public officials it takes place only when
breach of duty is flagrant and devious.49

In the same case of Sistoza, the Court took the occasion to lengthily
discuss why a prosecution for Section 3(e) of Republic Act No. 3019 did not
lie against Siztoza, viz:

Clearly, the issue of petitioner Sistoza's criminal liability does not

depend solely upon the allegedly scandalous irregularity of the bidding
procedure for which prosecution may perhaps be proper. For even if it
were true and proved beyond reasonable doubt that the bidding had been
rigged, an issue that we do not confront and decide in the instant case, this
pronouncement alone does not automatically result in finding the act of
petitioner similarly culpable. It is presumed that he acted in good faith
in relying upon the documents he signed and thereafter endorsed. To
establish a prima facie case against petitioner for violation of Sec. 3,
par. (e), RA 3019, the prosecution must show not only the defects in
the bidding procedure, xxx but also the alleged evident bad faith,
gross inexcusable negligence or manifest partiality of petitioner in
affixing his signature on the purchase order and repeatedly endorsing the
award earlier made by his subordinates despite his knowledge that the
winning bidder did not offer the lowest price. Absent a well-grounded
and reasonable belief that petitioner perpetrated these acts in the
criminal manner he is accused of, there is no basis for declaring the
existence of probable cause.

As defined above, the acts charged against petitioner do not amount

to manifest partiality, evident bad faith nor gross inexcusable negligence
which should otherwise merit a prosecution for violation of Sec. 3, par.
(e), RA 3019. It is not disputed that petitioner relied upon supporting
documents apparently dependable as well as certifications of regularity
made by responsible public officers of three (3) office divisions of the
Bureau of Corrections before affixing his signature on the purchase
order. xxx

48
G.R. No. 144784, September 3, 2002, 388 SCRA 307, 326.
49
Id., citing De la Victoria v. Mongaya, A.M. No. P-00-1436, February 19, 2001, 352 SCRA 12, 20.
Dissenting Opinion 35 G.R. No. 192591

The fact that petitioner had knowledge of the status of Elias

General Merchandising as being only the second lowest bidder does
not ipso facto characterize petitioner's act of reliance as recklessly
imprudent without which the crime could not have been
accomplished. Albeit misplaced, reliance in good faith by a head of
office on a subordinate upon whom the primary responsibility rests
negates an imputation of conspiracy by gross inexcusable negligence
to commit graft and corruption. As things stand, petitioner is
presumed to have acted honestly and sincerely when he depended
upon responsible assurances that everything was aboveboard xxx

Verily, even if petitioner erred in his assessment of the extrinsic and

intrinsic validity of the documents presented to him for endorsement, his
act is all the same imbued with good faith because the otherwise faulty
reliance upon his subordinates, who were primarily in charge of the task,
falls within parameters of tolerable judgment and permissible margins of
error. Stated differently, granting that there were flaws in the bidding
procedures, xxx there was no cause for petitioner Sistoza to complain nor
dispute the choice nor even investigate further since neither the defects in
the process nor the unfairness or injustice in the actions of his subalterns
are definite, certain, patent and palpable from a perusal of the supporting
documents. xxx [w]hen x x x we speak of the law as settled, though, no
matter how great the apparent settlement, the possibility of error in the
prediction is always present." Given that the acts herein charged failed to
demonstrate a well-grounded belief that petitioner had prima facie
foreknowledge of irregularity in the selection of the winning bid other
than the alleged fact that such bid was not the lowest, we cannot conclude
that he was involved in any conspiracy to rig the bidding in favor of Elias
General Merchandising.

The instant case brings to the fore the importance of clearly

differentiating between acts simply negligent and deeds grossly and
inexcusably negligent punishable under Sec. 3, par. (e), of the Anti-
Graft and Corrupt Practices Act. While we do not excuse petitioner's
manner of reviewing the award of the supply of tomato paste in favor
of Elias General Merchandising, whereby he cursorily perused the
purchase order and readily affixed his signature upon it, since he
could have checked the supporting documents more lengthily, it is our
considered opinion that his actions were not of such nature and
degree as to be considered brazen, flagrant and palpable to merit a
criminal prosecution for violation of Sec. 3, par. (e), of RA 3019. To
paraphrase Magsuci v. Sandiganbayan, petitioner might have indeed been
lax and administratively remiss in placing too much reliance on the
official documents and assessments of his subordinates, but for
conspiracy of silence and inaction to exist it is essential that there
must be patent and conscious criminal design, not merely
inadvertence, under circumstances that would have pricked curiosity
and prompted inquiries into the transaction because of obvious and
definite defects in its execution and substance. To stress, there were no
such patent and established flaws in the award made to Elias General
Merchandising that would have made his silence tantamount to tacit
approval of the irregularity. (Emphases supplied)
Dissenting Opinion 36 G.R. No. 192591

IV.b.
Dearth of evidence to prove actual injury to
any party or to the Government

My next submission is that the finding of the Sandiganbayan that

the Municipality of Muoz suffered undue injury from the non-
performance of the contractual obligations of API was speculative and
unwarranted.

The injury that Section 3(e) of Republic Act No. 3019 contemplates is
actual damage as the term is understood under the Civil Code. In Llorente,
Jr. v. Sandiganbayan,50 the Court made this concept of undue injury very
clear, saying:

Unlike in actions for torts, undue injury in Sec. 3 (e) cannot be

presumed even after a wrong or a violation of right has been established.
Its existence must be proven as one of the elements of the crime. In fact,
the causing of undue injury, or the giving of any unwarranted benefits,
advantage or preference through manifest partiality, evident bad faith, or
gross inexcusable negligence constitutes the very act punished under this
section. Thus, it is required that the undue injury be specified,
quantified and proven to the point of moral certainty.

In jurisprudence, undue injury is consistently interpreted as

actual damage. Undue has been defined as more than necessary,
not proper, [or] illegal; and injury as any wrong or damage done to
another, either in his person, rights, reputation or property[;] [that is,
the] invasion of any legally protected interest of another. Actual
damage, in the context of these definitions, is akin to that in civil law.

In turn, actual or compensatory damages of a person is defined

by Art. 2199, Civil Code, as such pecuniary loss suffered by him as he
has duly proved. xxx

Fundamental in the law on damages is that one injured by a

breach of contract, or by a wrongful or negligent act or omission shall
have a fair and just compensation commensurate to the loss sustained
as a consequence of the defendants act. Actual pecuniary
compensation is awarded as a general rule, except where the
circumstances warrant the allowance of other kinds of damages.
Actual damages are primarily intended to simply make good or
replace the loss caused by the wrong.

Furthermore, damages must not only be capable of proof, but

must actually be proven with a reasonable degree of certainty. They
cannot be based on flimsy and non-substantial evidence or upon

50
G.R. No. 122166, March 11, 1998, 287 SCRA 382, 399-400.
Dissenting Opinion 37 G.R. No. 192591

speculation, conjecture or guesswork. They cannot include speculative

damages which are too remote to be included in an accurate estimate
of the loss or injury.

In its decision, the Sandiganbayan pertinently held:

As a defense, accused claims that there was no undue injury in this

case. He said that there was no wastage considering that the demolished
buildings were already condemned. The demolition will give way to a
dreamed edifice. Disturbance compensation was advance by API to the
municipality.

This Court finds these defenses bereft of merit. There is no doubt

that the Government suffered actual damage due to the acts of the
Accused. The damage suffered is visibly demonstrable. The alleged
prejudice and damage to the municipal government has been proven by
the prosecution with moral certainty. His acts unmistakably resulted in the
Governments unlawful loss of several of its buildings or offices. The
municipal government likewise deployed its resources including
equipments, personnel and financial outlay for fuel and repairs in the
demolition of the buildings. Had accused been unfaltering in performing
his duties under the law, the government would have not suffered such
loss and undue injury and it could have been avoided and prevented early
on. Had accused followed the BOT law, API would have been required to
post a performance security to guarantee its faithful performance of the
obligations under the contract. When API failed to complete the work
within the construction period prescribed, the performance security would
have been forfeited to answer for any liquidated damages due to the
Municipality of Muoz. At the very least, the municipality is entitled to
two percent (2%) of the project cost of Two Hundred Forty Million Pesos
(Php 240,000,000.00) or an equivalent of Four Million Eight Hundred
Thousand Pesos (Php 4,800,000.00).51
xxxx
ACCORDINGLY, accused Efren L. Alvarez is found guilty
beyond reasonable doubt for violation of Section 3 (e) of Republic Act
No. 3019 and is sentenced to suffer in prison the penalty of 6 years and 1
month to 10 years. He also has to suffer perpetual disqualification from
holding any public office and to indemnify the City Government of
Muoz (now Science), Nueva Ecija the amount of Four Million Eight
Hundred Thousand Pesos (Php 4,800,000.00) less the Five Hundred
Thousand Pesos (Php 500,000.00) API earlier paid the municipality as
damages.

Costs against the accused.

SO ORDERED.52

The Decision of June 29, 2011 upheld the Sandiganbayan, as follows:

51
Rollo, pp. 80-81.
52
Id. at 84.
Dissenting Opinion 38 G.R. No. 192591

As to the propriety of damages awarded by the Sandiganbayan, we

find that the same is proper and justified. The term undue injury in the
context of Section 3(e) of the Anti-Graft and Corrupt Practices Act
punishing the act of causing undue injury to any party, has a meaning
akin to that civil law concept of actual damage. Actual damage, in the
context of these definitions, is akin to that in civil law.

Article 2199 of the Civil Code provides that except as provided by

law or by stipulation, one is entitled to an adequate compensation only for
such pecuniary loss suffered by a party as he has duly proved. Liquidated
damages, on the other hand, are those agreed upon by the parties to a
contract, to be paid in case of a breach thereof.

For approved BOT contracts, it is mandatory that a performance

security be posted by the contractor/proponent in favor of the LGU in the
form of cash, managers check, cashiers check, irrevocable letter of credit
or bank draft in the minimum amount of 2% of the total project cost. In
case the default occurred during the project construction stage, the LGU
shall likewise forfeit the performance security of the erring project
proponent/contractor. The IRR thus provides:

SEC. 12.13. Liquidated Damages. Where the project

proponent of a project fails to satisfactorily complete the work
within the construction period prescribed in the contract,
including any extension or grace period duly granted, and is
thereby in default under the contract, the project proponent shall
pay the Agency/LGU concerned liquidated damages, as may be
agreed upon under the contract by the parties. The parties shall
agree on the amount and schedule of payment of the liquidated
damages. The performance security may be forfeited to answer
for any liquidated damages due to the Agency/LGU. The amount
of liquidated damages due for every calendar day of delay will be
determined by the Agency/LGU. In no case however shall the
delay exceed twenty percent (20%) of the approved construction
time stipulated in the contract plus any time extension duly
granted. In such an event the Agency/LGU concerned shall
rescind the contract, forfeit the proponents performance security
and proceed with the procedures prescribed under Section
12.19.b.

Had the requirement of performance security been complied with,

there is no dispute that the Municipality of Muoz would have been
entitled to the forfeiture of performance security when API defaulted on
its obligation to execute the construction contract, at the very least in an
amount equivalent to 2% of the total project cost. Hence, said LGU is
entitled to such damages which the law mandates to be incorporated in the
BOT contract, the parties being at liberty only to stipulate the extent and
amount thereof. To rule otherwise would mean a condonation of blatant
disregard and violation of the provisions of the BOT law and its
implementing rules and regulations which are designed to protect the
public interest in transactions between government and private business
entities. While petitioner claims to have entered into a compromise
agreement as authorized by the SB and approved by the trial court, no
evidence of such judicial compromise was submitted before the
Sandiganbayan.
Dissenting Opinion 39 G.R. No. 192591

WHEREFORE, the petition is DENIED. The Decision dated

November 16, 2009 and Resolution dated June 9, 2010 of the
Sandiganbayan in Criminal Case No. SB-06-CRM-0389 are AFFIRMED.

With costs against the petitioner.53

I observe that the Sandiganbayan rendered no factual finding of

any actual damage suffered by the Municipality. What the decision
contained on the requirement of actual damage were mere conclusions
of both fact and law. But such conclusions did not satisfactorily meet the
standard set in Llorente, Jr. to the effect that:

xxx damages must not only be capable of proof, but must

actually be proven with a reasonable degree of certainty. They cannot
be based on flimsy and non-substantial evidence or upon speculation,
conjecture or guesswork. They cannot include speculative damages
which are too remote to be included in an accurate estimate of the loss
or injury.54

Speculative damages are too remote to be included in an accurate

estimate of damages.55 In determining actual damages, the Court cannot
rely on speculation, conjecture or guesswork as to the amount. Without
the actual proof of loss, the award of actual damages becomes
erroneous.56 To be recoverable, actual damages must not only be
capable of proof, but must actually be proved with reasonable degree of
certainty. The Court cannot simply rely on speculation, conjecture, or
guesswork in determining the amount of damages. Without any factual
basis, it cannot be granted.57

It is true that the petitioner should have required API to post a

performance bond of P4,800,000.00, which bond would have been forfeited
in favor of the Municipality upon APIs default. But the failure to post the
bond could not be the proof of actual injury because its face amount did
not per se establish the actual loss of the Municipality. For one, would

53
Id. at 318-320.
54
Supra at Note 50, p. 400.
55
Coca Cola Bottlers, Phils., Inc. v. Roque, G.R. No. 118985. June 14, 1999, 308 SCRA 215, 223.
56
Lucas v. Royo, G.R. No. 136185, October 30, 2000, 344 SCRA 481, 489.
57
Magdala Multipurpose & Livelihood Cooperative v. Kilusang Manggagawa Ng Lgs, Magdala
Multipurpose & Livelihood Corperative (KMLMS), G.R. Nos. 191138-39, October 19, 2011.
Dissenting Opinion 40 G.R. No. 192591

undue injury still be deemed established had the bond been posted but the
awarding of the contract had nonetheless suffered from other omissions? In
that instance, if the Sandiganbayans ratiocination against the petitioner was
sustained, a prosecution for violation of Section 3(e) committed by causing
undue injury to any party or the Government would be futile because the
element of undue injury could then be difficult to prove.

At most, therefore, the failure of API to post the bond would subject
the petitioner to some administrative liability for non-compliance with
certain requirements prescribed by other laws in relation to procurement, but
not criminal liability under Section 3(e).

Even worse was to have the petitioner be liable for the

P4,800,000.00 performance bond. The Sandiganbayan apparently did
not appreciate the fact that the petitioner, upon the express authority
granted by the SB, and API entered into a compromise agreement that
finally settled the issues between them and terminated the civil suit
brought by the Municipality against API. As such, the Municipality
became barred from asserting undue injury under the principle of res
judicata,58 and could no longer recover any further from API. A
compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced.59
The entering into the compromise agreement served the public policy
announced in the Civil Code for the courts in civil actions to endeavor to
persuade the litigants in a civil case to agree upon some fair compromise.60

In truth, the Municipality did not lose anything of value at all.

API paid P500,000.00 as reimbursement for the value of the condemned
properties demolished to give way to the Wag-Wag Shopping Mall

58
The Civil Code provides:
Article 2037. A compromise has upon the parties the effect and authority of res judicata; but there
shall be no execution except in compliance with a judicial compromise. (1816)
59
Article 2028, Civil Code.
60
Article 2029. The court shall endeavor to persuade the litigants in a civil case to agree upon some fair
compromise. (n)
Dissenting Opinion 41 G.R. No. 192591

project. Hence, for the Municipality to be still paid the further amount
of P4,800,000.00, less P500,000.00, would be unjust enrichment.

V.
Lack of evidence to prove
the giving of unwarranted benefits

There was no factual basis for the Sandiganbayan to find that the
petitioner gave unwarranted benefits to API. The fact is that the petitioner
sought better offers from the public, as borne out by his causing the
publication of the Invitation for BOT Project. It was further shown that he
signed the MOA with API only after it was clear that no other proposals
were presented for the Municipality to consider, and that the signing
occurred on September 12, 1996, five long months after the PBAC had made
its recommendation on the matter. The regularity of the signing was
buttressed by the authority given to him by the SB.

Did API derive any benefits from the project?

Before giving the answer, I remind that in a BOT scheme, the

proponent undertakes to build and operate the project, and to transfer the
project to the Government after a certain period of time without need of
payment to the proponent. The scheme benefits the proponent only after the
finished project starts to operate, and during the operation the proponent
earns and recoups its investments. Senator Tatad explained during the Senate
deliberations on Republic Act No. 7718 how a project proponent would
derive benefit or advantage from the BOT scheme, to wit:

Under the build-and-transfer scheme, a project proponent that is the new

term used here will undertake the construction of a project, raising its
own financing, and upon completion turns over the project to a
government agency or to a local government unit which is the party to the
contract, according to an agreed schedule of payments.

In the build-operate-transfer scheme, someone builds a facility, operates

the facility, and then at the end of a given period of time, say 25 years,
Dissenting Opinion 42 G.R. No. 192591

not more than 50 years, the facility is transferred to the government.

. 61
It does not cost the government anything.

Yet, API did not get any benefit from the project because it did not get
to finish building the Wag-Wag Shopping Mall, let alone to operate it.
Rather to the contrary, API was even compelled to shell out ~500,000.00 to
the Municipality for the demolition of the dilapidated buildings.

The word unwarranted means lacking adequate or official support;

unjustified; unauthorized or without justification or adequate reason. In that
regard, it is significant that the SB and the PBAC gave its official support to
the project. Advantage means a more favorable or improved position or
condition; benefit, profit or gain of any kind; benefit from some course of
action. Preference signifies priority or higher evaluation or desirability;
choice or estimation above another. 62

WHEREFORE, I VOTE to grant the motion for reconsideration of

the petitioner and to vacate his conviction on the ground of failure of the
State to prove his guilt beyond reasonable doubt.

61
Records of the Senate, 2"d Regular Session 1993-1994, Vol. Ill, Nos. 40-52, Interpellation of Sen.
Tatad, p. 471.
6
' Sison v. Peoph:, G.R. Nos. 170339, 170398-403, March 9, 2010,614 SCRA 670.