G.R. No.

186717 obligation, purpose or economic justification; nor

were they commensurate to the business or financial
REPUBLIC OF THE PHILIPPINES, represented by capacity of Molugan and AGS, which were both lowly
the ANTI-MONEY LAUNDERING capitalized at P50,000 each.9 In the case of Molugan,
COUNCIL, Petitioners Samuel S. Bombeo, who holds the position of
vs. president, secretary and treasurer, is the lone
JOCELYN I. BOLANTE, OWEN VINCENT D. signatory to the account. 10 In the case of AGS,
BOLANTE, MA. CAROL D. BOLANTE, ALEJO Samuel S. Bombeo shares this responsibility with
LAMERA, CARMEN LAMERA, EDNA Ariel Panganiban. 11
CONSTANTINO, ARIEL C. PANGANIBAN,
KATHERINE G. BOMBEO, SAMUEL S. BOMBEO, On 7 March 2006, the Senate furnished the AMLC a
MOLUGAN FOUNDATION, SAMUEL G. BOMBEO, copy of its Committee Report No. 54 12 prepared by
JR., and NATIONAL LIVELIHOOD the Committee on Agriculture and Food and the
DEVELOPMENT CORPORATION (Formerly Committee on Accountability of Public Officers and
Livelihood Corporation), Respondents Investigations. 13

x-----------------------x Committee Report No. 54 14 narrated that former

Undersecretary of Agriculture Jocelyn I. Bolante
G.R. No. 190357 (Bolante) requested the Department of Budget and
Management to release to the Department of
REPUBLIC OF THE PHILIPPINES, represented by Agriculture the amount of ₱728 million for the
the ANTI-MONEY LAUNDERING purchase of farm inputs under the Ginintuang
COUNCIL, Petitioner, Masaganang Ani Program. This amount was used to
vs. purchase liquid fertilizers from Freshan Philippines,
HON. WINLOVE M. DUMAYAS, Presiding Judge Inc., which were then distributed to local government
of Branch 59, Regional Trial Court in Makati City, units and congressional districts beginning January
JOCELYN I. BOLANTE, ARIEL C. PANGANIBAN, 2004. Based on the Audit Report prepared by the
DONNIE RAY G. PANGANIBAN, EARL WALTER Commission on Audit (COA), 15 the use of the funds
G. PANGANIBAN, DARRYL G. PANGANIBAN, was characterized by massive irregularities,
GAVINA G. PANGANIBAN, JAYPEE G. overpricing, violations of the procurement law and
PANGANIBAN, SAMUEL S. BOMBEO, KA wanton wastage of scarce government resources.
THERINE G. BOMBEO, SAMUEL G. BOMBEO,
JR., NATIONAL LIVELIHOOD DEVELOPMENT Committee Report No. 54 also stated that at the time
CORPORATION (FORMERLY LIVELIHOOD that he served as Undersecretary of Agriculture,
CORPORATION), MOLUGAN FOUNDATION, Bolante was also appointed by President Gloria
ASSEMBLY OF GRACIOUS SAMARITANS Macapagal Arroyo as acting Chairman of LIVECOR.
FOUNDATION, INC., ONE ACCORD CHRISTIAN
COMMUNITY ENDEAVOR FOR SALVATION & The AMLC issued Resolution No. 75 16 finding
SUCCESS THROUGH POVERTY ALLEVIATION, probable cause to believe that the accounts of
INC., SOCIETY'S MULTI-PURPOSE LIVECOR, Molugan and AGS - the subjects of the
FOUNDATION, INC., ALLIANCE FOR THE suspicious transaction reports submitted by PNB -
CONSERVATION OF ENVIRONMENT OF were related to what became known as the "fertilizer
PANGASINAN, INC., AND STA. LUCIA fund scam." The pertinent portion of Resolution No.
EDUCATIONAL ASSOCIATION OF BULACAN, 75 provides:
INC., Respondents.
Under the foregoing circumstances, there is probable
DECISION cause to believe that the accounts of the foundations
and its officers are related to the fertilizer fund scam.
SERENO, J.: The release of the amount of ₱728 million for the
purchase of farm inputs to the Department of
FACTS Agriculture was made by Undersecretary Bolante.
Undersecretary Bolante was the Acting Chairman of
LIVECOR. LIVECOR transferred huge amounts of
In April 2005, the Philippine National Bank (PNB)
money to Molugan and AGS, while the latter
submitted to the Anti-Money Laundering Council
foundations transferred money to each other. Mr.
(AMLC) a series of suspicious transaction reports
[Samuel S.] Bombeo was the President, Secretary,
involving the accounts of Livelihood Corporation
and Treasurer of Molugan. He, therefore, played a
(LIVECOR), Molugan Foundation (Molugan), and
key role in these transactions. On the other hand, Mr.
Assembly of Gracious Samaritans, Inc. (AGS).
[Ariel] Panganiban was the signatory to the account
According to the reports, LIVECOR transferred to
or AGS. Without his participation, these transactions
Molugan a total amount of' ₱172.6 million in a span
could not have been possible.
of 15 months from 2004 to 2005.6 On 30 April 2004,
LIVECOR transferred ₱40 million to AGS, which
received another P38 million from Molugan on the The acts involved in the "fertilizer scam" may
same day. 7 Curiously, AGS returned the P38 million constitute violation of Section 3(e) of Republic Act
to Molugan also on the same day.8 No. 3019, x x x as well as violation or Republic Act
No. 7080 (Plunder). 17
The transactions were reported '"suspicious"
because they had no underlying legal or trade
Thus, the AMLC authorized the filing of a petition for extended for a period of 30 days until 19 August
the issuance of an order allowing an inquiry into the 2008. 32
six accounts 18 of LIVECOR, Molugan, AGS, Samuel
S. Bombeo and Ariel Panganiban. The AMLC also Finding that there existed probable cause that the
required all covered institutions to submit reports of funds transferred to and juggled by LIVECOR,
covered transactions and/or suspicious transactions Molugan, and AGS formed part of the ₱728 million
of these entities and individuals, including all the fertilizer fund, the CA extended the effectivity of
related web of accounts. the freeze order for another four months, or until
20 December 2008. 33 The extension covered only 31
The petition was filed ex parte before the R TC and accounts, 34 which showed an existing balance based
docketed as AMLC SP Case No. 06-003. On 17 on the returns of the covered institutions.
November 2006, the trial court found probable cause
and issued the Order prayed for. 19 It allowed the In the meantime, the Republic filed an Ex
AMLC to inquire into and examine the six bank Parte Application 35 docketed as AMLC Case No. 07-
deposits or investments and the related web of 001 before the RTC. Drawing on the authority
accounts. provided by the AMLC through Resolution No. 90,
the ex parte application sought the issuance of an
Meanwhile, based on the investigation of the order allowing an inquiry into the 70 accounts.
Compliance and Investigation Group of the AMLC
Secretariat, a total of 70 bank accounts or The RTC found probable cause and issued the Order
investments were found to be part of the related web prayed for. 36 It allowed the AMLC to inquire into and
of accounts involved in the fertilizer fund scam.20 examine the 70 bank deposits or investments and the
related web of accounts.
Accordingly, the AMLC issued Resolution No.
9021 finding probable cause to believe that these 70 On 20 October 2008, this Court denied with finality
accounts were related to the fertilizer fund scam. It the motion for reconsideration filed by the
said that the scam may constitute violations of Republic in Eugenio. 37The Court reiterated that
Section 3(e)22 of Republic Act No. (R.A.) 3019 (Anti- Section 11 38 of R.A. 9160, as then worded, did not
Graft and Corrupt Practices Act) and R.A. 7080 (An allow a bank inquiry order to be issued ex
Act Defining and Penalizing the Crime of Plunder). parte; and that the concerns of the Republic
The AMLC therefore authorized the filing of a petition about the consequences of this ruling could be
for the issuance of an order allowing an inquiry into more properly lodged in the legislature.
these 70 accounts.23
Thus, in order to comply with the ruling
On 14 February 2008, this Court promulgated in Eugenio, the Republic filed an Amended and
Republic v. Eugenio.24 We ruled that when the Supplemental Application 39in AMLC Case No. 07-
legislature crafted Section 11 25 of R.A. 9160 (Anti 001 before the RTC. The Republic sought, after
Money Laundering Act of 2001), as amended, it did notice to the account holders, the issuance of an
not intend to authorize ex parte proceedings for the order allowing an inquiry into the original 70
issuance of a bank inquiry order by the CA. Thus, a accounts plus the six bank accounts that were the
bank inquiry order cannot be issued unless notice is subject of AMLC SP Case No. 06-003. A summary
given to the account holders.26 That notice would hearing thereon ensued.
allow them the opportunity to contest the issuance of
the order. On the belief that the finality
of Eugenio constituted a supervening event that
In view of this development, the AMLC issued might justify the filing of another petition for a
Resolution No. 40.27 It authorized the filing of a freeze order, the AMLC issued Resolution No.
petition for the issuance of a freeze order against 5.40 The resolution authorized the filing of a new
the 70 accounts found to be related to the fertilizer petition for the issuance of a freeze order against
fund scam. 24 41 of the 31 accounts previously frozen by the CA.

Hence, the Republic filed an Ex Hence, the Republic filed an Urgent Ex Parte
Parte Petition28 docketed as CA-G.R. AMLC No. Petition42 docketed as CA-G.R. AMLC No. 00024
00014 before the CA, seeking the issuance of a before the CA seeking the issuance of a freeze order
freeze order against the 70 accounts. against the 24 accounts.

The CA issued a freeze order effective for 20 In the Resolution dated 4 February 2009,43 the CA
days.29 The freeze order required the covered issued a freeze order effective for 20 days. The
institutions of the 70 accounts to desist from and freeze order required the covered institutions of the
not allow any transaction involving the identified 24 accounts to desist from and not allow any
monetary instruments. It also asked the covered transaction involving the identified monetary
institutions to submit a detailed written return to the instruments. It also asked the covered institutions to
CA within 24 hours from receipt of the freeze order. submit a detailed written return to the CA within 24
hours from receipt of the freeze order.
The CA conducted a summary hearing of the
application, 30 after which the parties were ordered to A summary hearing was conducted by the CA for the
submit their memoranda, manifestations and purpose of determining whether to modify, lift or
comments/oppositions. 31 The freeze order was later
extend the freeze order. 44 Thereafter, the parties merely on two pieces of evidence: Senate Committee
were required to submit memoranda. Report No. 54 and the court testimony of witness
Thelma Espina of the AMLC Secretariat. According
THE CHALLENGED RESOLUTIONS to the RTC, Senate Committee Report No. 54 cannot
be taken "hook, line and sinker, "55because the
The assailed CA Resolution dated 27 February Senate only conducts inquiries in aid of legislation.
200945 denied the application to extend the freeze
order issued on 4 February 2009. Citing Neri v. Senate Committee on Accountability of
Public Officers and Investigations, 56 the trial court
The CA found that the Republic had committed forum pronounced that the Senate cannot assume the
shopping.46 Specifically, the appellate court found that power reposed in prosecutorial bodies and the courts
the parties in CA-G.R. AMLC No. 00024 were the - the power to determine who are liable for a crime or
same as those in CA-G.R. AMLC No. 00014. The an illegal activity. 57 On the other hand, the trial court
petition in CA-G.R. AMLC No. 00024 sought the noted that the testimony of the witness merely relied
issuance of a freeze order against the same accounts on Senate Committee Report No. 54. The latter
covered by CA-G.R. AMLC No. 00014. Finally, the "admitted that the AMLC did not bother to confirm the
rights asserted and reliefs prayed for in both petitions veracity of the statements contained therein." 58
were substantially founded on the same facts,
thereby raising identical causes of action and issues. The RTC instead gave credence to the Audit Report
prepared by COA. While outlining the irregularities
The CA found no merit in the assertion of the that attended the use of the fertilizer fund, COA also
Republic that the ruling in Eugenio was a showed that none of the funds were channeled or
supervening event that prevented the latter from released to LIVECOR, Molugan or AGS.59 The trial
concluding its financial investigation into the court also took note of the evidence presented by
accounts covered by the freeze order in CA-G.R. Bolante that he had ceased to be a member of the
AMLC No. 00014.47 The CA noted that Eugenio was board of trustees of LIVECOR on 1 February 2003,
promulgated on 14 February 2008, or almost five or more than 14 months before the transfers were
months before the Republic filed CA-G.R. AMLC No. made by LIVECOR to Molugan as indicated in the
00014 before the CA and AMLC Case No. 07-001 suspicious transaction reports submitted by
before the RTC. According to the appellate court, PNB.60 Furthermore, the RTC found that the transfers
since the Republic was faced with the imminent made by LIVECOR to Molugan and AGS came from
finality of Eugenio, it should have taken steps to the P60 million Priority Development Assistance
expedite the conduct of the inquiry and the Fund of Senator Joker Arroyo.61
examination of the bank deposits or investments and
the related web of accounts. The Republic moved for reconsideration, but the
motion was denied by the RTC in the challenged
At any rate, the CA found that the petition in CA-G.R. Order dated 13 November 2009. 62
AMLC No. 00024 was effectively a prayer for the
further extension of the 5-month, 20- day freeze order Hence, the Republic filed the instant petition
already issued in CA-G.R. AMLC No. 00014.48 The for certiorari docketed as G.R. No. 190357.
extension sought is proscribed under Section 53 of
Administrative Circular No. 05-11-04-SC.49 According The Court resolved to consolidate G.R. No. 190357
to this provision, the effectivity of a freeze order may with G.R. No. 186717, considering that the issues
be extended for good cause shown for a period not raised in the petitions were closely intertwined and
exceeding six months. related.63 On 6 December 2010, these petitions were
given due course, and all parties were required to
Aggrieved, the Republic filed the instant petition for submit memoranda.64
review on certiorari with an urgent prayer for the
issuance of a temporary restraining order and/or writ Amid reports that the Office of the Ombudsman
of preliminary injunction docketed as G.R. No. (Ombudsman) had filed plunder cases against those
186717. involved in the fertilizer fund scam, the Court issued
the Resolution dated 16 November 2011.65 We
On 25 March 2009, this Court issued a Status Quo required the AMLC and the Ombudsman to move in
Ante Order50 enjoining the implementation of the the premises and jointly manifest whether the
assailed CA Resolution. accounts, subject of the instant petitions, were in any
way related to the plunder cases already filed.
At the time of the submission of respondents'
Comment 51 and petitioner's Consolidated Reply52 in In their compliance dated 14 March 2012,66 the AMLC
G.R. No. 186717, the RTC issued the challenged and the Ombudsman manifested that the plunder
Resolution dated 3 July 200953 in AMLC Case No. 07- case filed in connection with the fertilizer fund scam
001. The trial court denied the Republic's application included Bolante, but not the other persons and
for an order allowing an inquiry into the total of 76 entities whose bank accounts are now the subject of
bank deposits and investments of respondents. the instant petitions. That plunder case was docketed
as SB-l 1-CRM-0260 before the Second Division of
The RTC found no probable cause to believe that the the Sandiganbayan.
deposits and investments of respondents were
related to an unlawful activity. 54 It pointed out that the ISSUES
Republic, in support of the latter's application, relied
The following are the issues for our resolution: represent the same interests in both actions; (2)
identity of rights asserted and relief sought, with the
1. Whether the Republic committed forum relief founded on the same facts; and (3) identity of
shopping in filing CA-G.R. AMLC No. 00024 the two preceding particulars, such that any judgment
before the CA rendered in one proceeding will, regardless of which
party is successful, amount to res judicata in the
2. Whether the RTC committed grave other. The CA only discussed how these elements
abuse of discretion in ruling that there were present in CA-G.R. AMLC No. 00024 and CA-
exists no probable cause to ailow an G.R. AMLC No. 00014 in relation to each other.
inquiry into the total of 76 deposits and Nowhere did the CA make any categorical
investments of respondents pronouncement that the Republic had committed
forum shopping on the ground of litis pendentia.
OUR RULING
With this clarification, we discuss how all the
elements of litis pendentia are present in the two
I. The Republic committed forum shopping.
petitions for the issuance of a freeze order.
As we ruled in Chua v. Metropolitan Bank and Trust
First, there is identity of parties. In both petitions, the
Co., 67 forum shopping is committed in three ways: (1)
Republic is the petitioner seeking the issuance of a
filing multiple cases based on the same cause of
freeze order against the bank deposits and
action and with the same prayer, where the previous
investments. The 24 accounts sought to be frozen in
case has not yet been resolved (the ground for
CA-G.R. AMLC No. 00024 were part of the 31
dismissal is litis pendentia); (2) filing multiple cases
accounts previously frozen in CA-G.R. AMLC No.
based on the same cause of action and with the same
00014,72 and the holders of these accounts were once
prayer, where the previous case has finally been
again named as respondents.
resolved (the ground for dismissal is res
judicata); and (3) filing multiple cases based on the
same cause of action, but with different prayers Second, there is an identity of rights asserted and
(splitting of causes of action, where the ground for relief sought based on the same facts. The AMLC
dismissal is also either litis pendentia or res judicata). filed both petitions in pursuance of its function to
investigate suspicious transactions, money
laundering activities, and other violations of R.A.
In the instant petitions, the Republic focused its
9160 as amended. 73 The law also granted the AMLC
energies on discussing why it did not commit forum
the authority to make an ex parte application before
shopping on the ground of litis pendentia. In its
the CA for the freezing of any monetary instrument or
Memorandum, it argued:
property alleged to be the proceeds of any unlawful
activity, as defined in Section 3(i) thereof.74
While it is true that a previous freeze order was
issued in CA-G.R. AMLC No. 00014 covering some
Both petitions sought the issuance of a freeze order
of the accounts subject of CA-G.R. AMLC No. 00024,
against bank deposits and investments believed to be
CA-G.R. AAILC No. 00014 had already attained
related to the fertilizer fund scam. Notably, while the
finality when the second petition was filed, neither
petition in CA-G.R. AMLC No. 00014 narrated the
petitioner nor any of the respondents interposed an
facts smTounding the issuance of AMLC Resolution
appeal therefrom, pursuant to Section 57 of the Rule
Nos. 75 and 40,75 the petition in CA-G.R. AMLC No.
of Procedure in Cases of Civil F01feiture, etc .. The
00024 used as its foundation the previous grant of the
principle of lit is pendentia presupposes the
freeze order in CA-G.R. AMLC No. 00014 and the
pendency of at least one case when a second case
extensions of its effectivity.76 Nevertheless, both
is filed. Such situation does not exist in the present
petitions highlighted the role of Senate Committee
controversy since CA-G.R. AMLC No. 00014 was no
Report No. 54 in providing AMLC with the alleged link
longer pending but has attained finality when the
between the fertilizer fund scam and the bank
second petition was filed. 68
deposits and investments sought to be frozen. 77
In a clear illustration of the phrase, out of
Third, the judgment in CA-G.R. AMLC No. 00014
the frying pan and into the fire, the Republic
barred the proceedings in CA-G.R. AMLC No. 00024
vigorously resisted the application of forum shopping
by resjudicata.
on the ground of litis pendentia, only to unwittingly
admit that it had possibly committed forum shopping
on the ground of res judicata. Res judicata is defined as a matter adjudged, a thing
judicially acted upon or decided, or a thing or matter
settled by judgment. 78 It operates as a bar to
We are not even sure where the Republic got the
subsequent proceedings by prior judgment when the
notion that the CA found "that the filing of the second
following requisites concur: (1) the former judgment
petition for freeze order constitutes forum shopping
is final; (2) it is rendered by a court having jurisdiction
on the ground of litis pendentia."69 In its assailed
over the subject matter and the parties; (3) it is a
Resolution, the appellate court aptly cited Quinsay
judgment or an order on the merits; and (4) there is -
v. CA,70 stating that "forum shopping concurs not only
between the first and the second actions - identity of
when a final judgment in one case will amount to res
parties, subject matter, and causes of action. 79
judicata in another, but also where the elements
of litis pendentia are present."71 It then went on to
enumerate the aforecited elements of litis Clearly, the resolution in CA-G.R. AMLC No. 00014
pendentia, namely: (I) identity of parties, or those that extending the effectivity of the freeze order until 20
December 2008 attained finality upon the failure of In fact, it was because of Eugenio that CA-G.R.
the parties to assail it within 15 days from notice. The AMLC No. 00014 was filed in the first place.

Resolution was rendered by the CA, which had We have not painstakingly narrated all the relevant
jurisdiction over applications for the issuance of a facts of these cases for nothing. It should be noted
freeze order under Section 1080 of R.A. 9160 as that before the ruling in Eugenio, the AMLC
amended. It was a judgment on the merits by the commenced its investigations into the fertilizer fund
appellate court, which made a determination of the scam by filing petitions for bank inquiry orders. Thus,
rights and obligations of the parties with respect to it issued Resolutions No. 75 and 90, both authorizing
the causes of action and the subject matter. 81 The the filing of petitions for the issuance of orders
determination was based on the pleadings and allowing an inquiry into the pertinent bank deposits
evidence presented by the parties during the and investments.
summary hearing and their respective memoranda.
Finally, there was - between CAG. R. AMLC No. According to the Court in Eugenio, "a requirement
00014 and CA-G.R. AMLC No. 00024 - identity of that the application for a bank inquiry order be done
parties, subject matter and causes of action. with notice to the account holder will alert the latter
that there is a plan to inspect his bank account on the
The Republic's commission of forum shopping is belief that the funds therein are involved in an
further illustrated by its awareness that the effectivity unlawful activity or money laundering
of the freeze order in CA-G.R. AMLC No. 00014 had offense."86 Alarmed by the implications of this ruling,
already been extended to 5 months and 20 days. the AMLC changed tack and decided to pursue the
Under only other remedy within its power to obtain ex
parte at the time. Hence, it issued Resolution No. 40
Section 5382 of A.M. No. 05-11-04-SC,83 the original authorizing the filing of CA-G.R. AMLC No. 00014 for
20-day effectivity period of a freeze order may only the issuance of a freeze order to preserve the 70
be extended by the CA for good cause for a period bank deposits and investments and prevent the
not exceeding six months. Because of this account holders from withdrawing them. The
predicament, the Republic sought to avoid seeking a pertinent portion of AMLC Resolution No. 40
further extension that is clearly prohibited by the rules provides:
by allowing the extended freeze order in CA-G.R.
AMLC No. 00014 to lapse on 20 December 2008. In the Resolution No. 90, dated October 26, 2007, the
Instead, it filed the petition in CA-G.R. AMLC No. Council found probable cause that the accounts of
00024 alluding to the exact same facts and the subject individuals and entities are related to the
arguments but citing a special factual circumstance fertilizer fund scam and resolved to authorize the
that allegedly distinguished it from CA-G.R. AMLC tiling of a petition for the issuance of a freeze order
No. 00014. allowing inquiry into the following accounts:

The Republic argued that CA-G.R. AMLC No. 00024 xxxx

was filed at the advent of Eugenio. The ruling was a
supervening event that prevented the Republic from However, in Republic vs. Eugenio (G.R. No. 174629,
concluding its exhaustive financial investigation February 14, 2008), the Supreme Court ruled that
within the auspices of the bank inquiry order granted proceedings in applications for issuance of an order
by the RTC in AMLC Case No. 07-001 and the freeze allowing inquiry should be conducted after due notice
order granted by the CA in CA-G.R. AMLC No. to the respondents/account holders.
00014.84
In the light of the aforesaid ruling of the Supreme
We find no merit in this argument. The promulgation Court, the Council resolved to:
of Eugenio was not a supervening event under the
circumstances. "Supervening events refer to facts 1. Authorize the AMLC Secretariat to file with the
which transpire after judgment has become final and Court of Appeals, through the Office of the Solicitor
executory or to new circumstances which developed General, a petition for freeze order against the
after the judgment has acquired finality, including following bank accounts and all related web of
matters which the parties were not aware of prior to accounts wherever these may be found: 87
or during the trial as they were not yet in existence at
that time."85
Notably, it was only after the freeze order had been
issued that AMLC Case No. 07-001 was filed before
As aptly pointed out by the appellate the RTC to obtain a bank inquiry order covering the
court, Eugenio was promulgated five months before same 70 accounts.
the filing of the petition in CA-G .R. AMLC No. 00014.
Presently, while Eugenio still provides much needed
Indeed the Decision therein only attained finality upon guidance in the resolution of issues relating to the
the denial of the motion for reconsideration on 20 freeze and bank inquiry orders, the Decision in that
October 2008, or before the filing of the petition in case no longer applies insofar as it requires that
CA-G.R. AMLC No. 0002. The ruling, however, notice be given to the account holders before a bank
cannot be regarded as a matter that the parties were inquiry order may be issued. Upon the enactment of
not aware of prior to or during the trial of CA-G.R. R.A. 10167 on 18 June 2012, Section 11 of R.A. 9160
AMLC No. 00014. was further amended to allow the AMLC to file an ex
parte application for an order allowing an inquiry into
bank deposits and investments. Section 11 of R.A. apply ex parte for an inquiry into bank accounts, but
9160 now reads: only in pursuance of its investigative functions akin to
those of the National Bureau of Investigation.90 As the
Section 11. Authority to Inquire into Bank Deposits. - AMLC does not exercise quasi-judicial functions, its
Notwithstanding the provisions of Republic Act No. inquiry by court order into bank deposits or
1405, as amended, Republic Act No. 6426, as investments cannot be said to violate any person's
amended, Republic Act No. 8791, and other laws, the constitutional right to procedural due process.91
AMLC may inquire into or examine any particular
deposit or investment, including related accounts, As regards the purported violation of the right to
with any banking institution or non-bank financial privacy, the Court recalled the pronouncement
institution upon order of any competent court based in Eugenio that the source of the right to privacy
on an ex parte application in cases of violations of governing bank deposits is statutory, not
this Act, when it has been established that there is constitutional.92 The legislature may validly carve out
probable cause that the deposits or investments, exceptions to the rule on the secrecy of bank
including related accounts involved, are related to an deposits, and one such legislation is Section 11 of
unlawful activity as defined in Section 3(i) hereof or a R.A. 9160.93
money laundering offense under Section 4 hereof;
except that no court order shall be required in cases The Comi in Subido emphasized that the holder of a
involving activities defined in Section 3(i)(1 ), (2 ), and bank account that is the subject of a bank inquiry
(12) hereof and felonies or offenses of a nature order issued ex parte has the opportunity to question
similar to those mentioned in Section 3(i)(l ), (2), and the issuance of such an order after a freeze order has
(12), which are Punishable under the penal laws of been issued against the account. 94 The account
other countries, and terrorism and conspiracy to holder can then question not only the finding of
commit terrorism as defined and penalized under probable cause for the issuance of the freeze order,
Republic Act No. 9372. but also the finding of probable cause for the
issuance of the bank inquiry order. 95
The Court of Appeals shall act on the application to
inquire in lo or examine any depositor or investment II. The RTC's finding that there was no
with any banking institution or nonbank financial probable cause for the issuance of a
institution within twenty-four (24) hours from filing of bank inquiry order was not tainted
the application. with grave abuse of discretion.

To ensure compliance with this Act, the Bangko

Sentral ng Pilipinas may, in the course of a periodic Rule 10.2 of the Revised Rules and Regulations
or special examination, check the compliance of a Implementing Republic Act No. 9160, as Amended by
Covered institution with the requirements of the Republic Act No. 9194, defined probable cause as
AMLA and its implementing rules and regulations. "such facts and circumstances which would lead a
reasonably discreet, prudent or cautious man to
For purposes of this section, related accounts' shall believe that an unlawful activity and/or a money
refer to accounts, the funds and sources of which laundering offense is about to be, is being or has
originated from and/or are materially linked to the been committed and that the account or any
monetary instrument(s) or property(ies) subject of the monetary instrument or property subject thereof
freeze order(s). sought to be frozen is in any way related to said
unlawful activity and/or money laundering offense."
A court order ex parte must first be obtained before As we observed in Subido,96 this definition refers to
the AMLC can inquire into these related probable cause for the issuance of a freeze order
Accounts: Provided, That the procedure for the ex against an account or any monetary instrument or
parte application of the ex parte court order for the property subject thereof. Nevertheless, we shall
principal account shall be the same with that of the likewise be guided by the pronouncement in Ligot v.
related accounts. Republic97 that "probable cause refers to the
sufficiency of the relation between an unlawful activity
The authority to inquire into or examine the main and the property or monetary instrument."
account and the related accounts shall comply with
the requirements of Article III, Sections 2 and 3 of the In the issuance of a bank inquiry order, the power to
1987 Constitution, which are hereby incorporated by determine the existence of probable cause is lodged
reference. (Emphasis supplied) in the trial court. As we ruled in Eugenio:

The constitutionality of Section 11 of R.A. 9160, as Section 11 itself requires that it be established that
presently worded, was upheld by the Court En "there is probable cause that the deposits or
Banc in the recently promulgated Subido Pagente investments are related to unlawful activities," and it
Certeza Mendoza and Binay Law Offices v. obviously is the court which stands as arbiter whether
CA. 88 The Court therein ruled that the AMLC's ex there is indeed such probable cause. The process of
parte application for a bank inquiry, which is allowed inquiring into the existence of probable cause would
under Section 11 of R.A. 9160, does not violate involve the function of determination reposed on the
substantive due process. There is no such violation, trial court. Determination clearly implies a function of
because the physical seizure of the targeted adjudication on the part of the trial court, and not a
corporeal property is not contemplated in any form by mechanical application of a standard
the law.89 The AMLC may indeed be authorized to predetermination by some other body. The word
"determination'' implies deliberation and is, in normal In fact, at the time that he was Undersecretary,
legal contemplation, equivalent to ''the decision of a Jocelyn Bolante was concurrently appointed by the
court of justice." President in other powerful positions: as Acting
Chairman of the National Irrigation Administration,
The court receiving the application for inquiry order as Acting Chairman of the Livelihood
cannot simply take the AMLC's word that probable Corporation x x x. 103 (Emphasis supplied)
cause exists that the deposits or investments are
related to an unlawful activity. It will have to exercise It was this excerpt that led the AMLC to connect the
its own determinative function in order to be fertilizer fund scam to the suspicious transaction
convinced of such fact.98 reports earlier submitted to it by PNB.

For the trial court to issue a bank inquiry order, it is However, the R TC found during trial that
necessary for the AMLC to be able to show specific respondent Bolante had ceased to be a member
facts and circumstances that provide a link between of the board of trustees of LIVECOR for 14
an unlawful activity or a money laundering offense, months before the latter even made the initial
on the one hand, and the account or monetary transaction, which was the subject of the
instrument or property sought to be examined on the suspicious transaction reports. Furthermore, the
other hand. In this case, the R TC found the evidence RTC took note that according to the Audit Report
presented by the AMLC wanting. For its part, the submitted by the Commission on Audit, no part
latter insists that the RTC's determination was tainted of the P728 million fertilizer fund was ever
with grave abuse of discretion for ignoring the glaring released to LIVECOR.
existence of probable cause that the subject bank
deposits and investments were related to an unlawful We note that in the RTC Order dated 17 November
activity. 2006 in AMLC SP Case No. 06-003, the AMLC was
already allowed ex parte to inquire into and examine
Grave abuse of discretion is present where power is the six bank deposits or investments and the related
exercised in an arbitrary or despotic manner by web of accounts of LIVECOR, Molugan, AGS,
reason of passion, prejudice or personal hostility, that Samuel S. Bombeo and Ariel Panganiban. With the
is so patent and gross as to amount to an evasion of resources available to the AMLC, coupled with a
a positive duty or to a virtual refusal to perform a duty bank inquiry order granted 15 months
enjoined or to act at all in contemplation of before Eugenio was even pro mu I gated, the AMLC
law.99 For certiorari to lie, it must be shown that there should have been able to obtain more evidence
was a capricious, arbitrary and whimsical exercise of establishing a more substantive link tying Bolante
power - the very antithesis of the judicial and the fertilizer fund scam to LIVECOR. It did not
prerogative. 100 help that the AMLC failed to include in its application
for a bank inquiry order in AMLC SP Case No. 06-
We find no reason to conclude that the R TC 003 LIVECOR's PNB account as indicated in the
determined the existence of probable cause, or lack suspicious transaction reports. This PNB account
thereof, in an arbitrary and whimsical manner. 1âwphi 1
was included only in the application for a bank inquiry
order in AMLC Case No. 07-001.
To repeat, the application for the issuance of a
bank inquiry order was supported by only two As it stands, the evidence relied upon by the AMLC
pieces of evidence: Senate Committee Report No. in 2006 was still the same evidence it used to apply
54 and the testimony of witness Thelma Espina. for a bank inquiry order in 2008. Regrettably, this
evidence proved to be insufficient when weighed
We have had occasion to rule that reports of the against that presented by the respondents, who were
Senate stand on the same level as other pieces of given notice and the opportunity to contest the
evidence submitted by the parties, and that the facts issuance of the bank inquiry order pursuant
and arguments presented therein should undergo the to Eugenio. In fine, the RTC did not commit grave
same level of judicial scrutiny and analysis. 101 As abuse of discretion in denying the application.
courts have the discretion to accept or reject them,
102 no grave error can be ascribed to the RTC for WHEREFORE, the petition in G.R. No. 186717
rejecting and refusing to give probative value to is DENIED. The Court of Appeals Resolution dated
Senate Committee Report No. 54. 27 February 2009 in CA-G.R. AMLC No. 00024
is AFFIRMED.
At any rate, Senate Committee Report No. 54 only
provided the AMLC with a description of the alleged The petition in G.R. No. 190357 is DISMISSED. The
unlawful activity, which is the fertilizer fund scam. It Resolution dated 3 July 2009 and Order dated 13
also named the alleged mastermind of the scam, who November 2009 issued by the Regional Trial Court of
was respondent Bolante. The entire case of the Makati, Branch 59, in AMLC Case No. 07-001
AMLC, however, hinged on the following excerpt of are AFFIRMED.
Senate Committee Report No. 54:
The Status Quo Ante Order issued by this Court on
But Undersecretary Bolante's power over the 25 March 2009 is hereby LIFTED.
agriculture department was widely known. And it
encompasses more than what the Administrative SO ORDERED.
Code provided.