9160, as Amended"[23] (Rule in Civil Forfeiture Cases) took effect.
RET. LT. GEN. JACINTO C. LIGOT v. REPUBLIC, GR No. 176944, 2013-
03-06
Facts:
On June 27, 2005, the Republic of the Philippines (Republic),
represented by the Anti-Money Laundering Council (AMLC), filed an
Urgent Ex-Parte Application for the issuance of a freeze order with
the CA against certain monetary instruments and properties of... the
petitioners
This application was based on the February 1, 2005 letter of the
Office of the Ombudsman to the AMLC,... recommending that the
latter conduct an investigation on Lt. Gen. Ligot and his family for
possible violation of RA No. 9160.
Lt. Gen. Ligot declared in his Statement of Assets, Liabilities, and Net
Worth (SALN) that as of December 31, 2003, he had assets in the
total amount of Three Million Eight Hundred Forty-Eight Thousand
and Three Pesos (P3,848,003.00).[11] In... contrast, his declared
assets in his 1982 SALN amounted to only One Hundred Five
Thousand Pesos (P105,000.00).
Aside from these declared assets, the Ombudsman's investigation
revealed that Lt. Gen. Ligot and his family had other properties and
bank accounts, not declared in his SALN,... Bearing in mind that Lt.
Gen. Ligot's main source of income was his salary as an officer of the
AFP,[17] and given his wife and children's lack of any other
substantial sources of income,[18] the Ombudsman declared the
assets... registered in Lt. Gen. Ligot's name, as well as those in his
wife's and children's names, to be illegally obtained and unexplained
wealth, pursuant to the provisions of RA No. 1379 (An Act Declaring
Forfeiture in Favor of the State Any Property Found to Have Been
Unlawfully
Acquired by Any Public Officer or Employee and Providing for the
Proceedings Therefor).
the AMLC issued Resolution No. 52, Series of 2005, directing the
Executive Director of the AMLC Secretariat to file an application for a
freeze order against the properties of Lt. Gen. Ligot and the
members of his family with the CA.
The appellate court granted the application in its July 5, 2005
resolution, ruling that probable cause existed
Accordingly, the CA issued a freeze order against the Ligots' and
Yambao's various bank accounts, web accounts and vehicles, valid
for a period of 20 days from the date of issuance.
On July 26, 2005, the Republic filed an Urgent Motion for Extension
of Effectivity of Freeze Order, arguing that if the bank accounts, web
accounts and vehicles were not continuously frozen, they could be
placed beyond the reach of law enforcement authorities... the CA
granted the motion in its September 20, 2005 resolution, extending
the freeze order until after all the appropriate proceedings and/or
investigations have been terminated.
the Ligots filed a motion to lift the extended freeze order, principally
arguing that there was no evidence to support the extension of the
freeze order. They further argued that the extension not only
deprived them of their property without due process;... it also
punished them before their guilt could be proven.
The appellate court subsequently denied this motion
Meanwhile, on November 15, 2005,... Republic Act No.
Under this rule, a freeze order could be extended for a maximum
period of six months.
Ligots filed a motion for reconsideration of the CA's
When the CA denied this motion i
Ligots filed the present petition.
Lt. Gen. Ligot... maintains that the freeze order issued against them
ceased to be effective in view of the 6-month extension limit of
freeze orders provided under the Rule in Civil Forfeiture Cases.
the Republic claims that the CA can issue a freeze order upon a
determination that probable cause exists, showing that the
monetary instruments or properties subject of the freeze order are
related to the unlawful activity
CA's September 20, 2005 resolution, granting the Republic's motion
to extend the effectivity of the freeze order, had already become
final and executory, and could no longer be challenged.
Issues:
conflict between Section 10 of RA No. 9160, as amended, and
Section 53(b) of the Rule in Civil Forfeiture Cases,
Ruling:
We find merit in the petition.
Without challenging the validity of the fixed 6-month extension
period, the Republic nonetheless asserts that the Rule in Civil
Forfeiture Cases does not apply to the present case because the CA
had already resolved the issues regarding the extension of the
freeze order before... the Rule in Civil Forfeiture Cases came into
effect.
This reasoning fails to convince us.
Notably, the Rule in Civil Forfeiture Cases came into effect on
December 15, 2005. Section 59 provides that it shall "apply to all
pending civil forfeiture cases or petitions for freeze order" at the
time of its effectivity.
A review of the record reveals that after the CA issued its September
20, 2005 resolution extending the freeze order, the Ligots filed a
motion to lift the extended freeze order on September 28, 2005.
Significantly, the CA only acted upon this motion on January 4,
2006,... when it issued a resolution denying it.
While denominated as a Motion to Lift Extended Freeze Order, this
motion was actually a motion for reconsideration, as it sought the
reversal of the assailed CA resolution. Since the Ligots' motion for
reconsideration was still pending resolution at the time the Rule in
Civil Forfeiture Cases came into effect on December 15, 2005, the
Rule unquestionably applies to the present case.
Additionally, we would be giving premium to the government's
failure to file an appropriate case until only after six years (despite
the clear provision of the Rule in Civil Forfeiture Cases) were we to
dismiss the petition because of the filing of the forfeiture case...
during the pendency of the case before the Court.
Substantive aspect... there are only two requisites for the issuance
of a freeze order: (1) the application ex parte by the AMLC and (2)
the determination of probable cause by the CA.[33] The probable
cause required for the issuance... of a freeze order differs from the
probable cause required for the institution of a criminal action, and
the latter was not an issue before the CA nor is it an issue before us
in this case.
As defined in the law, the probable cause required for the issuance
of a freeze order refers to "such facts and circumstances which
would lead a reasonably discreet, prudent or cautious man to
believe that an unlawful activity and/or a money laundering offense
is about to be, is... being or has been committed and that the
account or any monetary instrument or property subject thereof
sought to be frozen is in any way related to said unlawful activity
and/or money laundering offense.
In other words, in resolving the issue of whether probable cause
exists, the CA's statutorily-guided determination's focus is not on the
probable commission of an unlawful activity (or money laundering)
that the Office of the Ombudsman has already determined to exist,
but on... whether the bank accounts, assets, or other monetary
instruments sought to be frozen are in any way related to any of the
illegal activities... a freeze order is not dependent on a separate
criminal charge, much less does it depend on a conviction.
As we previously noted in Republic v. Eugenio, Jr.,[36] "[t]o make
such freeze... order anteceded by a judicial proceeding with notice
to the account holder would allow for or lead to the dissipation of
such funds even before the order could be issued."
A freeze order, however, cannot be issued for an indefinite period
A freeze order is an extraordinary and interim relief
The primary objective of a freeze order is to temporarily preserve
monetary instruments or property that are in any way related to an
unlawful activity or money laundering, by preventing the owner
from utilizing them... during the duration of the freeze order.[39]
The relief is pre-emptive in character, meant to prevent the owner
from disposing his property and thwarting the State's effort in
building its case and eventually filing civil forfeiture proceedings...
and/or prosecuting the owner.
Our examination of the Anti-Money Laundering Act of 2001, as
amended, from the point of view of the freeze order that it
authorizes, shows that the law is silent on the maximum period of
time that the freeze order can be extended by the CA.
As correctly noted by the petitioners, a freeze order is meant to
have a temporary effect; it was never intended to supplant or
replace the actual forfeiture cases where the provisional remedy -
which means, the remedy is an adjunct of or an incident to the main
action of asking... for the issuance of an asset preservation order
from the court where the petition is filed is precisely available. For
emphasis, a freeze order is both a preservatory and preemptive
remedy.
To stress, the evils caused by the law's silence on the freeze order's
period of effectivity[46] compelled this Court to issue the Rule in
Civil Forfeiture Cases. Specifically, the Court fixed the maximum
allowable extension on the freeze order's... effectivity at six months.
In doing so, the Court sought to balance the State's interest in going
after suspected money launderers with an individual's
constitutionally-protected right not to be deprived of his property
without due process of law, as well as to be presumed... innocent
until proven guilty.
We are not unmindful that the State itself is entitled to due process.
As a due process concern, we do not say that the six-month period is
an inflexible rule that would result in the automatic lifting of the
freeze order upon its expiration in all instances. An... inflexible rule
may lend itself to abuse - to the prejudice of the State's legitimate
interests - where the property owner would simply file numerous
suits, questioning the freeze order during the six-month extension
period, to prevent the timely filing of a money laundering or... civil
forfeiture case within this period. With the limited resources that
our government prosecutors and investigators have at their
disposal, the end-result of an inflexible rule is not difficult to see.
Thus, as a rule, the effectivity of a freeze order may be extended by
the CA for a period not exceeding six months. Before or upon the
lapse of this period, ideally, the Republic should have already filed a
case for civil forfeiture against the property owner with the proper...
courts and accordingly secure an asset preservation order or it
should have filed the necessary information.[47] Otherwise, the
property owner should already be able to fully enjoy his property
without any legal process affecting it. However, should... it become
completely necessary for the Republic to further extend the
duration of the freeze order, it should file the necessary motion
before the expiration of the six-month period and explain the reason
or reasons for its failure to file an appropriate case and justify the...
period of extension sought. The freeze order should remain effective
prior to the resolution by the CA, which is hereby directed to resolve
this kind of motion for extension with reasonable dispatch.
In the present case, we note that the Republic has not offered any
explanation why it took six years (from the time it secured a freeze
order) before a civil forfeiture case was filed in court, despite the
clear tenor of the Rule in Civil Forfeiture Cases allowing the
extension... of a freeze order for only a period of six months. All the
Republic could proffer is its temporal argument on the inapplicability
of the Rule in Civil Forfeiture Cases; in effect, it glossed over the
squarely-raised issue of due process. Under these circumstances, we
cannot but... conclude that the continued ext... ension of the freeze
order beyond the six-month period violated the Ligots' right to due
process; thus, the CA decision should be reversed.
Principles:
Procedural aspect
Certiorari not proper remedy to assail freeze order; exception
Section 57 of the Rule in Civil Forfeiture Cases explicitly provides the
remedy available in cases involving freeze orders issued by the CA:
Section 57. Appeal. - Any party aggrieved by the decision or ruling of
the court may appeal to the Supreme Court by petition for review on
certiorari under Rule 45 of the Rules of Court. The appeal shall not
stay the enforcement of the subject decision... or final order unless
the Supreme Court directs otherwise.
From this provision, it is apparent that the petitioners should have
filed a petition for review on certiorari, and not a petition for
certiorari, to assail the CA resolution which extended the effectivity
period of the freeze order over their properties.
Even assuming that a petition for certiorari is available to the
petitioners, a review of their petition shows that the issues they
raise (i.e., existence of probable cause to support the freeze order;
the applicability of the 6-month limit to the extension of freeze...
orders embodied in the Rule of Procedure in Cases of Civil
Forfeiture) pertain to errors of judgment allegedly committed by the
CA, which fall outside the Court's limited jurisdiction when resolving
certiorari petitions.
Clearly, the Ligots should have filed a petition for review on
certiorari, and not what is effectively a second motion for
reconsideration
SEC. 28. Precedence of proceedings. - Any criminal case relating to before the Sandiganbayan. The CIS proceeded to inquire and
an unlawful activity shall be given precedence over the prosecution examine the deposits, investments and related web accounts of the
of any offense or violation under Republic Act No. 9160, as four.
amended, without prejudice to the filing of a separate... petition for
civil forfeiture or the issuance of an asset preservation order or a Meanwhile, the Special Prosecutor of the Office of the
freeze order. Such civil action shall proceed independently of the Ombudsman requested the AMLC to investigate the accounts of
criminal prosecution. [italics supplied; emphases ours] Alvarez, PIATCO, and several other entities involved in the nullified
contract adverting to probable cause to believe that the bank
Section 10 of RA No. 9160 (allowing the extension of the freeze accounts were used in the commission of unlawful activities that
order) and Section 28 (allowing a separate petition for the issuance were committed in relation to the criminal cases then pending
of a freeze order to proceed independently) of the Rule in Civil before the Sandiganbayan. In response, the AMLC authorized the
Forfeiture Cases are only consistent with the very purpose of the executive director of the AMLC to inquire into and examine the
freeze order,... which specifically is to give the government the accounts named in the letter, including one maintained by Alvarez
necessary time to prepare its case and to file the appropriate with DBS Bank and two other accounts in the name of Cheng Yong
charges without having to worry about the possible dissipation of with Metrobank.
the assets that are in any way related to the suspected illegal
activity. Following the AMLC Resolution, the Republic, through the
AMLC, filed an application before the Manila RTC to inquire into
and/or examine thirteen (13) accounts and two (2) related web of
accounts alleged as having been used to facilitate corruption in the
REPUBLIC OF THE PHILIPPINES vs. EUGENIO
NAIA 3 Project. Among said accounts were the DBS Bank account of
G.R. No. 174629 February 14, 2008
Alvarez and the Metrobank accounts of Cheng Yong.The Manila RTC
issued an Order granted the Ex Parte Application
Petitioner: REPUBLIC OF THE PHILIPPINES
Alvarez, through counsel, filed an Urgent Motion to Stay
represented by
Enforcement of the said Order arguing that nothing in R.A. No. 9160
THE ANTI-MONEY LAUNDERING
authorized the AMLC to seek the authority to inquire into bank
COUNCIL
accounts ex parte. The Manila RTC issued an Order staying the
Respondents: AUSTRIA MARTINEZ, CARPIO
enforcement of its bank inquiry order and giving the Republic five (5)
MORALES, TINGA, and HON. ANTONIO
days to respond to Alvarez’ motion.
M. EUGENIO, VELASCO, JR., AS
PRESIDING JUDGE OF RTC, MANILA,
The Republic filed an Omnibus Motion for Reconsideration
BRANCH 34, PANTALEON ALVAREZ
which was granted by the Manila RTC denying Alvarez’s motion to
and LILIA CHENG
dismiss and reinstating in full force and effect the stayed order.
Ponente: TINGA, J.
Acting on Alvarez’s latest motion, the Manila RTC
Statement of the Case:
issued an Order directing the AMLC to refrain from enforcing the
order until the expiration of the period to appeal, without any
This is a petition for certiorari and prohibition under Rule
appeal having been filed. On the same day, Alvarez filed a Notice of
65 assailing the orders and resolutions issued by the Regional Trial
Appeal. The Republic filed an Urgent Omnibus Motion for
Court of Manila and the Court of Appeals on two different cases
Reconsideration urging that it be allowed to immediately enforce
which arose as part of the aftermath of the ruling of the Supreme
the bank inquiry order against Alvarez and that Alvarezs notice of
Court in Agan v. PIATCO nullifying the concession agreement
appeal be expunged from the records since appeal from an order of
awarded to the Philippine International Airport Terminal
inquiry is disallowed under the Anti money Laundering Act (AMLA).
Corporation (PIATCO) over the Ninoy Aquino International Airport
International Passenger Terminal 3 (NAIA 3) Project.
Meanwhile, respondent Lilia Cheng filed with the Court
of Appeals a Petition for Certiorari, Prohibition and Mandamus with
Facts:
Application for TRO and/or Writ of Preliminary Injunction directed
against the Republic of the Philippines through the AMLC, Manila
In relation to the series of investigations concerning the
RTC Judge Eugenio, Jr. and Makati RTC Judge Marella, Jr.imputing
award of the NAIA 3 contracts to PIATCO undertaken by the
grave abuse of discretion on the part of the Makati and Manila RTCs
Ombudsman and the Compliance and Investigation Staff (CIS) of
in granting AMLCs ex parte applications for a bank inquiry order,
petitioner Anti-Money Laundering Council (AMLC), Pantaleon
arguing among others that the ex parte applications violated her
Alvarez (Alvarez) was charged with violation of RA No. 3019. The CIS
constitutional right to due process, that the bank inquiry order
conducted an intelligence database search on the financial
under the AMLA can only be granted in connection with violations of
transactions of certain individuals involved in the award, including
the AMLA and that the AMLA can not apply to bank accounts
Alvarez, which revealed that the latter maintained eight (8) bank
opened and transactions entered into prior to the effectivity of the
accounts with six (6) different banks.
AMLA or to bank accounts located outside the Philippines.
Under the authority granted by the Resolution, the AMLC
The Court of Appeals, acting on Lilia Chengs petition, issued
filed an application to inquire into or examine the deposits or
a Temporary Restraining Order. On even date, the Manila RTC issued
investments of Alvarez, Trinidad, Liongson and Cheng Yong before
an Orderresolving to hold in abeyance the resolution of the urgent
the RTC of Makati. The RTC grantedapplication being satisfied that
omnibus motion for reconsideration then pending before it until the
there existed probable cause to believe that the deposits in various
resolution of Lilia Cheng’s petition for certiorari with the Court of
bank accountsare related to the offense of violation of Anti-Graft
Appeals.
and Corrupt Practices Act now the subject of criminal prosecution

Issue:
Whether or not the bank inquiry orders issued are valid
and enforceable.
Ruling:
Because of the Bank Secrecy Act, the confidentiality of
bank deposits remains a basic state policy in the Philippines.
Subsequent laws, including the AMLA, may have added exceptions
to the Bank Secrecy Act, yet the secrecy of bank deposits still lies as
the general rule. It falls within the zones of privacy recognized by
our laws. The framers of the 1987 Constitution likewise recognized
that bank accounts are not covered by either the right to
information or under the requirement of full public disclosure.
Unless the Bank Secrecy Act is repealed oramended, the legal order
is obliged to conserve the absolutely confidential nature of
Philippine bank deposits.
Any exception to the rule of absolute confidentiality
must be specifically legislated. Section 2 of the Bank Secrecy Act
itself prescribes exceptions whereby these bank accounts may be
examined by any person, government official, bureau or office;
namely when: (1) upon written permission of the depositor; (2) in
cases of impeachment; (3) the examination of bank accounts is upon
order of a competent court in cases of bribery or dereliction of duty
of public officials; and (4) the money deposited or invested is the
subject matter of the litigation. Section 8 of R.A. Act No. 3019, the
Anti-Graft and Corrupt Practices Act, has been recognized by this
Court as constituting an additional exception to the rule of absolute
confidentiality and there have been other similar recognitions as
well.
would authorize unlimited discretion on the part of the government
or of any party seeking to enforce those exceptions and inquire into
bank deposits. If there are doubts in upholding the absolutely
confidential nature of bank deposits against affirming the authority
to inquire into such accounts, then such doubts must be resolved in
favor of the former. Such a stance would persist unless Congress
passes a law reversing the general state policy of preserving the
absolutely confidential nature of Philippine bank accounts.
While petitioner would premise that the inquiry into
Lilia Chengs accounts finds root in Section 11 of the AMLA, it cannot
be denied that the authority to inquire under Section 11 is only
exceptional in character, contrary as it is to the general rule
preserving the secrecy of bank deposits. Even though she may not
have been the subject of the inquiry orders, her bank accounts
nevertheless were, and she thus has the standing to vindicate the
right to secrecy that attaches to said accounts and their owners. This
statutory right to privacy will not prevent the courts from
authorizing the inquiry anyway upon the fulfillment of the
requirements set forth under Section 11 of the AMLA or Section 2 of
the Bank Secrecy Act; at the same time, the owner of the accounts
have the right to challenge whether the requirements were indeed
complied with.
Petition is dismissed.

The AMLA also provides exceptions to the Bank Secrecy

Act. Under Section 11, the AMLC may inquire into a bank account
upon order of any competent court in cases of violation of the
AMLA, it having been established that there is probable cause that
the deposits or investments are related to unlawful activities as
defined in Section 3(i) of the law, or a money laundering offense
under Section 4 thereof. Further, in instances where there is
probable cause that the deposits or investments are related to
kidnapping for ransomcertain violations of the Comprehensive
Dangerous Drugs Act of 2002hijacking and other violations under
R.A. No. 6235, destructive arson and murder, then there is no need
for the AMLC to obtain a court order before it could inquire into
such accounts.

It cannot be successfully argued the proceedings

relating to the bank inquiry order under Section 11 of the AMLA is a
litigation encompassed in one of the exceptions to the Bank Secrecy
Act which is when the money deposited or invested is the subject
matter of the litigation. The orientation of the bank inquiry order is
simply to serve as a provisional relief or remedy. As earlier stated,
the application for such does not entail a full-blown trial.

Nevertheless, just because the AMLA establishes

additional exceptions to the Bank Secrecy Act it does not mean that
the later law has dispensed with the general principle established in
the older law that all deposits of whatever nature with banks or
banking institutions in the Philippines are considered as of an
absolutely confidential nature. Indeed, by force of statute, all bank
deposits are absolutely confidential, and that nature is unaltered
even by the legislated exceptions referred to above. There is
disfavor towards construing these exceptions in such a manner that