THIRD DIVISION

BANGKO SENTRAL NG PILIPNAS AND PHILIPPINE NATIONAL BANK, Petitioners vs. SPOUSES
JUANITO AND VICTORIA LEDESMA
G.R. No. 211176, Feb. 6, 2019

and

PHILIPPINE NATIONAL BANK vs. SPOUSES JUANITO AND VICTORIA LEDESMA

G.R. No. 211583, Feb. 6, 2019
Ponente: Justice Marvic Leonen

Nature of the Action:

These are consolidated appeals on the Decision of the CA, reversing the Decision of the RTC dismissing
the complaint for Sum of Money filed by Spouses Ledesma against BSP and PNB.

Facts:
Spouses Juanito and Victoria Ledesma were engaged in sugar farming in Negros Occidental. They have
sugar productions in the years 1974 to 1975 and 1984 to 1985. Within this period, they were among those who
suffered losses in sugar farming operations due to the actions of government-owned and controlled agencies.
Among these agencies were the Bangko Sentral ng Pilipinas (BSP) and the Philippine National Bank (PNB). This
was due to the a loan obtained by the spouses from the PNB which they paid in excess. PNB admitted that the
overpayment amounted to some P353,529.67, which the Commission on Audit (COA) certified.

To recover this overpayment, the spouses instituted in the RTC an action for Sum of Money against the
PNB and the BSP. The Ledesma Spouses argued that under Republic Act No. 7202, the Bangko Sentral ng
Pilipinas and the Presidential Commission on Good Government should compensate them for their losses and
refund the excess payment from the sugar restitution fund.

The trial court dismissed the complaint for prematurity and lack of cause of action. The RTC held that
there was still no fund set up, and thus, no obligation arose from the provisions of RA 7202.
On appeal to the CA, the decision was reversed. The appellate court ratiocinated that RA7202 mandated
the BSP to promulgate the Implementing Rules and Regulations for the compensation of aggrieved sugar farmers.
Thus, its obligation existing, it must perform its obligation under the law. On the other hand, RA 7202 mandated
the lending banks to condone interests more than the 12% threshold. When the loan was recomputed, it was found
out that the spouses overpaid, such fact was even acknowledged by PNB. With these, the CA found BSP and
PNB liable under the law.

Both BSP and PNB filed their respective Petitions for Review on Certiorari which were later on
consolidated.

Issues:
Are BSP and PNB liable to the Spouses Ledesma under RA 7202?

Ruling:
 WHEREFORE, the Petitions for Review on Certiorari are GRANTED. The Court of Appeals May 29, 2013
Decision and January 29, 2014 Resolution in CA-G.R. CV No. 02904 are REVERSED AND SET ASIDE. The November
17, 2008 Decision of the Regional Trial Court Branch 46, Bacolod City in Civil Case No. 01-11591 for Sum of
Money/Refund of Excess Payments is AFFIRMED.

Both the BSP and the PNB cannot be held liable for the simple reason that the Sugar Restitution Fund has not been
set up. The money to be used to compensate these sugar producers should come from the sugar restitution fund. Without
the fund, there is no restitution to speak of at all. The fact that the COA acknowledged that the spouses are entitled to the
benefits of RA7202 and that they indeed have overpaid, does not give rise to the liability of BSP. The duty of BSP under
the law is to promulgate the Implementing Rules and Regulations of RA7202, which BSP did. It is also mandated to accept
and process applications for restitutions of sugar farmers. However, the funds shall be sourced from the fund, which is
unfortunately after 20 years, is still non-existent. The BSP is not obliged by law to pay the sugar farmers using its own
money. It cannot give what it does not have. Thus, the obligation of BSP to pay the farmers did not arise for failure of the
government to set up the Restitution fund.

On the other hand, PNB’s role was merely that of a lending bank. Under Republic Act No. 7202 and its
Implementing Rules and Regulations, lending banks are not obligated to compensate sugar producers for their losses.
Restitution falls under the Bangko Sentral ng Pilipinas, upon the establishment of a sugar restitution fund.