Aub-Ibauha/Z Au: Republic of The Philippines Quezon City

REPUBLIC OF THE PHILIPPINES
~aub-iBauha\Z au
QUEZON CITY
FOURTH DIVISION
PEOPLE OF THE PHILIPPINES, SB-10-CRM-0032

Plaintiff,
FOR: Violation of Section 3 (e),
- versus- Republic Act No. 3019
LEO G. MERIDA,
NONITO S. MALLEN,
MELBEN M. MESANA,
GERRY M. MIJARES, PRESENT:
MARIANO M. MATEO, Quiroz, J, Chairperson
FRANCISCO G. MAYOR, JR. Cruz, J
CHRIS G. MAZO, Econg, J*
RAMON M. MAGALLON,
EDLER M. ROBIS,
RAFAEL R. RIANO
BRYANT R. RIANO, Promulgation:
Accused. "i
F e,b (\) CI 1.3 , 20 I g ~
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
QUIROZ, J.:
This is an indictment against the Mayor, Vice-Mayor, and members of the

Sangguniang Bayan of Romblon, Romblon for violation of Section 3 (e) of
Republic Act No. 3019, in connection with the award of the contract for the
acquisition of a backhoe by the Municipality of Romblon in the amount of
Thirteen Million Nine Hundred Fifty Thousand Pesos (Php13,950,OOO.00).
Chronological Antecedents
On April 15, 2010, the prosecution filed the Information against Mayor Leo
G. Merida, Vice Mayor Nonito S. Mallen, and Sangguniang Bayan members
Melben M. Mesana, Gerry M. Mijares, Mariano M. Mateo, Francisco G. Mayor,
Jr., Chris G. Mazo, Ramon M. Magallon, Edler M. Robis, Rafael R. Riano, and
Bryant R. Riano, all of the Municipality of Romblon, Rornblon.'
The Court issued a Hold Departure Order against the accused on April 23,
2
2010.
For their provisional liberty, the accused separately posted bail on April 20,
2012,3 April 23, 2012,4 April 25, 2012,5 April 30, 2012,6 and May 2, 2012.7
Records, Volume I, pp. 1 - 4.

2
Records, Volume I, p. 114.
3
4
5
6
DECISION
People v. Merida, et.a!.
S8-10-CRM-0032
Page 2 of 39
Shortly thereafter, on May 17, 2012, the accused were arraigned and entered a
plea of Not Guilty."
Subsequent to the issuance by the Court of the Pre-Trial Order on August

2,2012,9 trial commenced.
The prosecution presented its testimonial evidence from August 22, 2012
until Au~ust 14, 2013. In the meantime, the Court granted on March 27,2013 the
motion 1 of the prosecution and ordered for the suspension pendente lite of
accused Mesana." Mijares, Mateo, Robis, R. Riano, and Maze." Accused
Mayor, Jr. was belatedly suspended on June 20,2014.13
Meanwhile, on September 26, 2013, the prosecution rested its case and
filed its Formal Offer of Exhibits. 14 On January 17, 2014, over the objection of the
accused." the Court admitted all the exhibits of the prosecution."
The accused sought leave of court to demur from the prosecution evidence,
through its Respectful Motion: (A) For Leave of Court to File Demurrer to
Evidence & (8) To Cancel Hearing on January 21, 2014.17 The Court, however,
denied accused's motion." Thus, on May 5, 2014, the defense commenced
presentation of its evidence with the testimony of accused Mayor, Jr. It also
presented the testimony of accused Merida on May 6, 2014.19 On July 23, 2014,
the defense formally rested its case and filed its Formal Offer of Exhibits. 20
On November 17, 2016, the Court admitted into evidence Exhibits "1," "2,"
"3" "4" "5" "8" "9" "10" "11" to "11-c" "12" to "12-b" "13" "14" "17" "20" "21"
"22 " "27 "'''28 an'd "29'" but denied ~dmission of E~hibit~ "13 ,; "16 ,: and '"19" 21
I »1
'II
, " •
The Court noted, however, that Exhibits "11" to "11-c" only refer to four (4)
deposit slips dated February 6, 2006 (Exhibit "11"), March 6, 2006 (Exhibit "11_
a"), April 4, 2006 (Exhibit "11-b"), and May 4, 2006 (Exhibit "11-c"); that Pages 2
- 10, 15, and 21 to 25 of Exhibit "20", consisting of 26 pages, are missing in the
offer; that Pages 2 to 19,21, and 22 of Exhibit "21", consisting of 23 pages, are
missing in the offer; and that Pages 5 and 6 of the document marked as Exhibit
"22", consisting of 23 pages, are missing in the offer. Also, the Court admitted
Exhibits "6" and "7" only as part of the testimonies of the witnesses who identified
them and testified about them. 22
The prosecution and the defense filed their respective memoranda on

February 16, 201723 and February 24,2017.24
7
6
9
10
11
12
13
Records, Volume II, pp. 7 - 10.
14
15
16
17
16
19
20
21
22
ibid.
23
24
Records, Volume II, pp. 191 -208.
DECISION
People v. Merida, et.al.
8B-10-CRM-0032
Page 3 of 39
Factual Antecedents
Accused's predicament began when the Department of Environment and

Natural Resources - Environmental Management Bureau, MIMAROPA Region
(UDENR-EMB MIMAROPA") informed the Municipality of Romblon, through a
letter dated September 15, 2005 addressed to Municipal Mayor Leo G. Merida
that it was in violation of Section 37 of Republic Act No. 9003, otherwise known
as the Ecological Solid Waste Management Act of 2000, due to its continued use
of open dumps for its solid waste disposal." In the same letter, it was stated that
the Municipality of Romblon has yet to submit the documents required for the
conversion of its open dumps to controlled dumps, and that beginning January
2006, only sanitary landfills would be allowed to operate."
The notice from the DENR was brought to the attention of the Municipal
Development Council during its meeting held on October 7, 2005, by Engineer
Wenceslao J. Caldit, the Municipal General Services Officer of the Municipality of
Rornblon."
On October 24, 2005, the Sangguniang Bayan of Romblon took up the

Minutes of the meeting of the Municipal Development Council. 28 GSO Caldit who
appeared at the session informed the body that immediate action on the notice
sent by the DENR is necessary considering the threat of closure of the
municipality's dumpsite and the daily penalty of Fifty Thousand (P50,OOO.OO).He
then proposed that a loan be taken out from the Philippine National Bank (UPNB")
for the procurement of a brand new backhoe and requested the Sangguniang
Bayan to give due course to his recommendation. The Sangguniang Bayan then
referred Engineer Wenceslao J. Caldit's recommendation for further study to the
Committee on Social Services; Agriculture, Industry and Natural Resources; and
Health and Sanitation.
In the meantime, the Municipal Development Council Executive Committee

convened on November 3, 2005 to discuss, among others, the notice from the
DENR. Several guest were in attendance, including Raul M. Sitjar, a
representative of Compressed Air Machineries & Equipment Corporation
("CAMEC"), who was called to present the JCB Backhoe before the body.
Sitjar informed the Municipal Development Council Executive Committee

that the JCB Backhoe costs Thirteen Million Pesos and that several
municipalities had purchased the same unit through a loan with the PNB. He also
told them that with the assistance of CAMEC, the loan could be released in just
two (2) months and that after a year of repayment, the loan could be restructured
to extend the period of amortization. Sitjar further told them that the purchase
does not require the conduct of public bidding in view of Commission on Audit
Circular No. 92-386.
After Sitjar's presentation and clarifications, the MDC Executive Committee

unanimously approved Resolution No. 04-2005, requesting the Sangguniang
Bayan of Romblon to pass a resolution authorizing the Municipal Mayor to enter
into a loan with PNB and to execute the necessary loan agreement for the
25
Exhibit "A".
26
ibid.
27
Part of Exhibit "20".
28
Exhibit "20".
DECISION
S8-10-CRM-0032
Page 4 of 39
purchase of the JCB Backhoe and resolved to forward copies of the Resolution
to the Sangguniang Bayan of Rornblon."
The Municipal Development Council Executive Committee Resolution No.

04-2005 was presented to the Sangguniang Bayan of Romblon on November 7,
2005 during its 43rd Regular Session and was referred to the Committee on
Finance, Budget and Appropriations."
Two days later, on November 9, 2005, during the 15th Special Session of
the Sangguniang Bayan of Romblon, PNB Manager Roberto Madera appeared
before the body to elaborate on the terms of the proposed loan that will be taken
out by the Municipality of Romblon from PNB.31 The Sangguniang Bayan of
Romblon then deliberated and decided to adopt and pass Resolution No. 137-
2005 entitled "A Resolution Authorizing the Municipal Mayor to Represent the
Municipal Government of Romblon to Apply For, Negotiate With, Arrange
Repayment, Enter Into and Obtain a Loan From Philippine National Bank (PNB)
in the Amount of Thirteen Million Nine Hundred Fifty Thousand Pesos
(P13,950,OOO.OO)- Net of 1% & 4% Withholding Tax and EVAT Inclusive of
Payment of Duties, Taxes, Delivery Charges, Training Costs,
Purchase/Acquisition of One (1) Unit Brand New JCB 4CX 4x4x4 Backhoe
Loader from (CAMEC); And To Sign For and In BehalF of the Municipality the
Loan Agreement/s, Promissory Note/s, Deed of Chattel Mortgage, Payment
Instructions and Other Documents Related Thereto and Contemplated
Thereby. ,,32
Shortly thereafter, Mayor Merida wrote several letters dated November 11,
2005, addressed to the Municipality of Romblon's Municipal Budget Officer Oscar
M. Mendez, Municipal Accountant Ricardo F. Rodeo, and Municipal General
Services Officer Wenceslao J. Caldit, directing them to comply without delay to
the Checklist of Requirement for Loans to Local Government Units.
On December 9, 2005, the Finance Committee decided to intervene and

wrote Municipal Mayor Leo G. Merida advising him of the possible repercussions
to the finances of the Municipality of Romblon should the purchase of the JCB
Backhoe Loader push through and recommending that the same be held in
abeyance pending submission by Municipal General Services Officer Wenceslao
J. Caldit of the result of his price canvass.P
Meanwhile, on November 21, 2005, the DENR sent another letter directing
he immediate closure of the open dumpsite of the Municipality of Romblon and
requiring the submission of a rehabilitation plan within seven (7) days from
receipt of notice. It also reminded that there are corresponding penalties for
violations of R.A. No. 9003.34
On December 12, 2005, during the 47'h Regular Session of the

Sangguniang Bayan of Romblon, the letter of the Finance Committee to Mayor
Merida was taken Up,35and despite the debate that ensued among its members,
it passed Resolution No. 147-2005 entitled, "A Resolution Approving and
Ratifying the Loan Agreement The Deed of Assignment Real Estate/Chattel
29
Exhibit "E"
30
Exhibit "21".
31
Exhibit "22".
32
Exhibit "G".
33
Exhibit "I".
34
Exhibit "2".
35
Exhibit "s".
DECISION
SB-10-CRM-0032
Page 5 of 39
Mortgage and Other Documents Contemplated Thereby Between the

Municipality of Romblon and the Philippine National Bank (PNB) With All The
Terms and Conditions Thereof,,36
Merida signed the Deed of Assignment on December 22,2005 (Exhibit "L').

The Loan Agreement (Exhibit UK') and the Chattel Mortgage (Exhibit "M') were
signed by Merida and the PNB on December 28,2005.
On September 13, 2006, CAMEC delivered the JCB Backhoe Loader

(Exhibit "R').
The Evidence
Prosecution Evidence
The prosecution presented sixteen (16) witnesses, namely, Lyndon M.

Molino, Salvacio M. Duco, Ibarra M. Silverio, Rosalie D. De Guzman, Ester A.
Olavides, Gil Augustus A. Balmadrid, Herman Rollon, Jerry Mallorca, Roberto
Moral, Monica M. Malay, Ricardo F. Rodeo, Gerard Montojo, Wenceslao J.
Caldit, Leonardo M. Mendez, Edgardo M. Mortos, and Ernesto S. Gregorio, Jr.
The respective testimonies of Herman Rollon, Jerry Mallorca, Roberto

Moral, and Edgardo M. Mortos were, however, dispensed with as the
prosecution and the defense agreed to stipulate that (1) witnesses Rollon,
Mallorca and Moral are signatories to the Association of Barangay Captains'
(ABC) Resolution No. 1-2006 dated April 4, 2006;37 and, (2) witness Mortos is the
person who actually received the subject JCB Backhoe on September 13, 2006
as evidenced by Delivery Receipt No. 4393 signed by said witness himself."
LYNDON M. MOLlN039 was a former public official in the Municipality of

Romblon. He served as Municipal Councilor and Vice-Mayor of the Municipality
of Romblon from 1988 to 1995 and from 1995 to 2004, respectively. In 2004,
after losing to Leo G. Merida for the position of Municipal Mayor, he retired from
public service and became a part-time print media practitioner at Romblon Sun, a
provincial newspaper. Sometime January 2006, when he learned that the
Municipality of Romblon purchased a backhoe, he conducted a probe. Through
the help of Sangguniang Bayan member Salvacion Duco, he was able to secure
records containing information as to the circumstances surrounding the subject
purchase. As a result of his investigation, he discovered the following: that the
Sangguniang Bayan of Romblon passed a Resolution authorizing Municipal
Mayor Leo G. Merida to obtain a loan from the Philippine National Bank in the
amount of Thirteen Million Nine Hundred Fifty Thousand Pesos (P13,950,000.00)
and to purchase a backhoe from CAMEC (Compressed Air Machineries &
Equipment Corporation) Philippines; that the backhoe is for the establishment of
a sanitary landfill; that the mode of procurement used was negotiated purchase;"
that allegedly there was an urgent need to establish a sanitary landfill, thus the
mode of procurement used; that it was on December 28, 2005 when the
Municipality procured a loan from the Philippine National Bank; that the check
36
Exhibit "J".
37
38
Exhibit "R"; Records, Volume I, pp. 527 - 528.
39
TSN dated August 22, 2012, PP. 8 - 32.
40
TSN dated August 22,2012, p. 14.
DECISION
S8-10-CRM-0032
Page 6 of 39
was released by the Philippine National Bank to CAMEC Philippines on even

date; that the Municipality's loan to the Philippine National Bank will be paid
through automatic deduction from their Internal Revenue Allotment, particularly
from the 20% Economic Development Fund, and that the backhoe was delivered
by CAMEC to the Municipality on September 13, 2006 and received by Edgardo
M. Mortos, the Municipal Storekeeper. This led him, together with Ibarra Silverio
and Municipality of Romblon Sangguniang Bayan member Salvacion Duco, to file
a case against the accused before the Office of the Ombudsman.
SALVACION M. MAESTRO-DUC041 was a member of the Sangguniang Bayan

of Romblon from 1998 to 2007. She was one of the complainants against the
accused before the Office of the Ombudsman. She testified that:
The controversy began at the regular session of the Sangguniang Bayan of

Romblon on October 24, 2005 when Municipal General Services Officer
Wenceslao J. Caldit appeared before them and informed the body that the
Department of Environment and Natural Resources issued a directive to
•
the Municipality of Romblon for the construction of a sanitary landfill.
Caldit told the Sangguniang Bayan of Romblon that a backhoe would be

needed for the construction of the sanitary landfill'" and that, in case they
are interested, he knows someone selling a backhoe for Seven Million."
She found the price exorbitant and told Caldit that, as a businesswoman,
she knows where to purchase backhoes of the same quality for only One
Million and Five Hundred Thousand."
She is familiar with the price of a backhoe because she is engaged in the
business of extracting marble, but she clarified that she does not own a
backhoe, but is only renting one." One of the member of the Sangguniang
Bayan of Romblon, Robis, who owns a backhoe, told the body that he
acquired a slightly used backhoe at Seven Hundred Fifty Thousand
Pesos." From there, she assumed that a brand new backhoe can be
purchased at, more or less, double the prlce." Sangguniang Bayan of
Romblon member Chris G. Mazo then moved that the proposed purchase
be referred to the proper committee for further study."
The referral to the proper committee, notwithstanding, during the November

7, 2005 session of the Sangguniang Bayan of Romblon, the body tackled
the Resolutions issued by the Municipal Development Council Executive
Committee requesting the Sangguniang Bayan of Romblon to pass a
Resolution authorizing the Municipal Mayor to obtain a loan from the
Philippine National Bank" and to enter into a contract for the purchase of a
backhoe?".
The Municipal Development Council Executive Committee is composed of

the General Services Officer, the Municipal Treasurer, Budget Officer, and
41
TSN dated August 22,2012, pp. 33 - 100.
42
43
TSN dated August 22, 2012, pp. 43 - 44.
44
ibid.
45
TSN dated August 22,2012, pp. 88 -89.
46
47
ibid.
48
49
50
DECISION
Peoplev. Merida,et.al.
S8-10-CRM-0032
Page7 of 39
the Accountant, among others." Its purpose is to assure that the

municipality functions in a manner advantageous to the people. 52
Subsequently, on November 9, 2005·,the Sangguniang Bayan of Romblon

issued a Resolution authorizing the Municipal Mayor to obtain a loan from
Philippine National Bank.53 .
On November 14, 2005, even before the Sangguniang Bayan of Romblon

could issue a Resolution authorizing the Municipal Mayor to purchase a
backhoe, Mayor Leo Merida appeared before the body and furnished it with
a copy of the documents in preparation for the purchase of a backhoe."
On the next session of the Sangguniang Bayan of Romblon on December

12, 2005, Sangguniang Bayan member Chris G. Mazo sponsored a
Resolution ratifying the loan between the Philippine National Bank and
CAMEC (Compressed Air Machineries & Equipment Corporation) for the
purchase of a backhoe in the amount of Thirteen Million Nine Hundred Fifty
Thousand Pesos (P13,950,000.00).55 This was when she made an
objection as she found the amount of the backhoe to be excessive:" that
the purchase did not pass through competitive public bidding;57 that the the
procurement was made through negotiated purchase;" that the local
Finance Committee consisting of the Municipal Treasurer, the Budget
Officer, and the Municipal Planning and Development Coordinator
furnished the Sangguniang Bayan of Romblon with a copy of its letter
addressed to the Municipal Mayor indicating that obtaining a loan in the
amount of Thirteen Million Nine Hundred Fifty Thousand Pesos, together
with the payment of the loan interest, will adversely affect the financial
condition of the Municipality;59 and that the loan will be automatically
deducted from the Municipality's 20% Internal Revenue Allotment (IRA),
particularly from the Economic Development Fund intended for delivering
basic services to the Municipality and which more than 50% of it is now
allotted for the loan amortization."
Despite her objection, however, the Sangguniang Bayan of Romblon

ratified the proposed Resolution of Sangguniang Bayan member Chris
Mazo." She was, however, confused to learn later on that the loan
agreement, the chattel mort~age, and the deed of assignment were signed
only on December 28, 2005. 2
Despite the check for the payment of the backhoe having been issued
December 28, 2005,53 the backhoe was delivered to the Municipality and
received by its storekeeper, Edgar Mortos, only on September 13, 2006.54
Up to the time of her testimony, however, the Municipality is yet to operate
a sanitary landfill. It is still operating a garbage dumpsite and the backhoe
was never used for the purpose for which it was purchased."

54
55
TSN dated August 22, 2012, p. 59.
56
57
58
Ibid.
59
60
61
62
63
TN dated August 22,2012, p. 76.
64
65
DECISION
S8-10-CRM-0032
Page 8 of 39
She stressed that neither Resolution No. 137-2005 not 147-2005

authorized the Municipal Mayor to purchase the subject backhoe through
negotiated purchase."
She did not include MGSO Caldit in her complaint because he did not
participate in the purchase of the backhoe."
IBARRA M. SILVERI068 is a businessman who has been engaged in the marble

industry for almost thirty years. Unlike his co-complainants Lyndon M. Molino and
Salvacion M. Duco, he has never held public office. He explained that he filed the
case against his town mates because the purchase made by the Municipality of
Romblon was anomalous and highly irregular as it was made without any
competitive bidding having been conducted. The rest of his testimony is as
follows:
He knows that there are surplus units of backhoe with brands like Hiloman
and Hitachi which costs cheaper, ranging from Seven Hundred Thousand
Pesos to One Million and Five Hundred Thousand Pesos." If the backhoe
is brand new, based on his research and from what he had read in
newspapers, there are units available for less than Thirteen Million Pesos."
The backhoe purchased by the Municipality of Romblon costs Thirteen

Million Nine Hundred Fifty Thousand Pesos and ballooned to Eighteen
Million Pesos because of interest." It was delivered by CAMEC
(Compressed Air Machineries & Equipment Corporation) to the Municipality
of Romblon on September 13, 2006.72
The backhoe was needed for the construction of the sanitary landfill." Until
the present, however, there has been no sanitary landfill constructed."
WENCESLAO J. CALDIT,75 the Municipal General Services Officer of the

Municipality of Romblon since 2000,76 proposed for the procurement of the
backhoe by the Municipality of Romblon, in view of the letters sent by the DENR-
EMS MIMAROPA. The following are his recollection of what transpired from the
receipt of the letters to the purchase of the backhoe:
He received the letters of the DENR-EMB MIMAROPA on September 27,

2005 and December 6, 2005. He considers the matter indicated therein as
urqent."
It was the Municipal Development Council" who approved on October 7,

200579 his proposal to purchase a backhoe. so The Municipal Development
Council is composed of the Finance Officer, the Accountant, the Budget
66
67
68
TSN dated October 10, 2012, pp. 9 - 37.
69
TSN dated October 10, 2012, pp. 16 -17.
70
71
TSN dated October 10, 2012, p. 24.
72
73
74
75
TSN dated May 22, 2013, pp. 5 - 32.
76
TSN dated May 22,2013, p. 7.
77
TSN dated May 22, 2013, p. 16.
78
TSN dated May 22,2013, pp. 15 -16.
79
TSN dated May 22,2013, pp. 21 - 22.
80
TSN dated May 22,2013, pp. 19 - 21.
DECISION
S8-10-CRM-0032
Page 9 of 39
Officer, one member of the Sangguniang Bayan, and all Barangay

Captains."
As it was his office that is responsible in looking for a backhoe unit,82 he

conducted a canvass. He recommended the JCB Backhoe because it has a
9-in-1 function, i.e. backhoe, loader, dozer, bulldozer, forklift, crane, etc.,
and is therefore economical and more advantageous to the local
government.83 As a matter of fact, the Municipality of Romblon was able to
use the backhoe after the typhoon. Also, during constructions, clearing had
been made easier." Other than CAMEC (Compressed Air Machineries &
Equipment Corporation), however, there is no other distributor of the JCB
Backhoe".
The purchase of the backhoe did not pass through the Bids and Awards
Committee and there was no public bidding conducted." He is a member
of the Bids and Awards Committee from 2000 to 2006.87 The purchase of
the backhoe did not pass through the General Services Office either88 and
there was no purchase request therefor" that he could have endorsed to
the Bids and Awards Committee".
Despite the purchase of the backhoe, the Municipality of Romblon was not
able to construct a sanitary landfill for several reasons. First, the area that
the Municipality was using was not suitable for dumping area." They
discovered that the lower portion of the area where the sanitary landfill was
supposed to be constructed had two (2) sources of drinking water.92
Second, the Municipality of Romblon did not apply for an Environmental
Compliance Certificate." To operate a sanitary landfill, there must be an
application for an Environmental Compliance Certificate from the
Department of Environment and Natural Resources - Environmental
Management Bureau." Lastly, there were oppositions regarding its
implementation and operation.
Up to the present, the Municipality of Romblon remains to have no sanitary

landfill. 95
MONICA M. MALA y96 is the Municipal Treasurer of the Municipality of Romblon

since February 2001. Among her functions is providing advice to key public
officials of the Municipality of Romblon, including its Municipal Mayor and
Sangguniang Bayan members, regarding the disposition of the local government
nds and on matters concerning taxation and fiscal matters. She is also in-
charge of the Treasury Office of the Municipality and has custody of the local
funds, as well as other funds that may be entrusted to him by a competent
authority or higher authority.
81
TSN dated May 22, 2013, P. 16.
82
83
TSN dated May 22, 2013, pp. 25 - 26.
84
85
TSN dated May 22, 2013, pp. 24 - 25.
86
87
88
89
TSN dated May 22,2013, pp. 30 - 31.
90
91
TSN dated May 22, 2013, pp. 29 - 30.
92
93
94
95
96
TSN dated March 11,2013, pp. 9 - 88.
DECISION
S8-10-CRM-0032
Page 10 of 39
On December 9, 2005, along with Municipal Planning and Development

Coordinator Ernest B. Thornton and Municipal Budget Officer Oscar M. Mendez,
he wrote Municipal Mayor Leo G. Merida, recommending that the purchase of the
backhoe be momentarily put off. She testified in this wise:
As Municipal Treasurer, she is also a member of the Finance Committee, of

the School Board of the Municipality, and the Executive Committee of the
Municipal Development Council.
The Municipal Development Council is composed of the Municipal Mayor,

as the Chairman, and the Punong Barangays of the Municipality." Its
Executive Committee, on the other hand, is composed of the Municipal
Mayor, as the Chairman; the Sangguniang Bayan members of the
Appropriation and Finance Committee; and the Association of Barangay
Captains (ABC) President; the Municipal Treasurer; and the NGO
representative."
The Municipal Development Council Executive Committee ensures that all

decisions of the Municipal Development Council are implemented and that
immediate action is taken by the Council whenever necessary. It also
formulates policies, plans and programs that the Municipal Development
Council may prescribe or authorize."
In 2005, the Municipal Mayor of the Municipality of Romblon is Leo G.

Merida, while the ABC President is Edler M. Robis.100
The Finance Committee, on the other hand, determines the projected

income due for the collection in the issuing year; recommends other tax
and revenue measures, as well as borrowings, to support the annual
budget; and recommends allocations of expenses and ceilings of
expenditures that will be earmarked for the current operations, capital
outlay and other projects to be implemented by the municipal
government.101 Together with him in the Finance Committee are Oscar
Mendez, the Municipal Budget Officer, and Ernest B. Thornton, the
Municipal Planning and Development Coordinator; 102
She first learned that the Municipality of Romblon is going to acquire a

backhoe 103 on November 3, 2005 during the meeting of the Municipal
Development Council Executive Committee.'?" Present in the meeting are
Municipal Mayor Leo G. Merida; ABC President Edler Robis; Chairman of
the Committee on Appropriation and Finance Melben Mesana; NGO
Representative Mr. Talbe, as well as other guests, namely, Francis Mayor,
Jr., Chris Mazo, Engineer Wenceslao Calbit, Engineer Leandro Mendez,
and a representative from a heavy equipment company, Raul Mortel
Sitjar.105
It was Merida, Mesana, and other guests at the time that made a
suggestion of buying a backhoe.l'" It was then that Raul Sitjar was
introduced .107
97
TSN dated March 11,2013, p. 17.
98
ibid.
99
TSN dated March 11, 2013, p. 15.
100
TSN dated March 11, 2013.
101
102
103
TSN dated March 11, 2013, pp. 19 - 20.
104
105
106
107
DECISION
SB-10-CRM-0032
Page 11 of 39
Sitjar addressed the body and offered help considering that he is connected
with a heavy equipment company 108and which company was the sole
distributor of the JCB Backhoe.l'" Sitjar also offered the help of the
company in obtaining a loan from the Philippine National Bank and that
since theirs was the sole distributor of the heavy equipment, it is no longer
required to pass through public bidding as required under the law.110
When Sitjar suggested procurement from sole distributorship, she objected

because it was not the proper forum to determine the mode to be used in
the procurernent.l" The committee in charge of such determination is the
Bids and Awards Comrnittee.!" After she raised her objection, the body
oeuberateo.!" The consensus, however, was that the municipal
government should procure the heavy equipment in order to solve the
problern.!" The Municipal Development Council Executive Committee then
passed a Resolution addressed to the local sanggunian recommending the
issuance of a Resolution authorizing the Municipal Mayor to represent the
municipal government in obtaining a loan from the Philippine National Bank
for the acquisition of the backhoe.!"
The mode of procurement of the equipment was not indicated in the

Minutes of the Meeting.116 During the meeting it was not clear as well, but,
impliedly, the consensus was a direct procurement from CAMEC, it being
the sole distributor of the JCB Backhoe Loader.!"
Also, she was expecting that her objection would be included in the Minutes
of the Meeting.118 However, when she came across the Minutes of the
Meeting, she found out that her objection was not included therein.!"
Subsequent to the Municipal Development Council Executive Committee

meeting, Resolution No. 137 dated November 9, 2005 was passed by the
Sangguniang Bayan of Romblon authorizing the Municipal Mayor to obtain
a loan from PNB in payment for the acquisition of the heavy equipment.'?"
When the Finance Committee learned of the passage of the Resolution,
they had a meeting to study the acquisition of the heavy equipment.':" It
was during the said meeting when they agreed to write Municipal Mayor
Leo Merida,122 copy furnished the Sangguniang Bayan of Romblon, to
recommend that careful and thorough consideration must be made
regarding the acquisition of the heavy equipment because at the time, 50%
of the 20% annual development fund will be utilized as payment for the
monthly amortization of the backhoe.V' Their 20% annual development
fund at the time is only Six Million Pesos, while the projected amortization
for one (1) year, as per schedule, will cost Three Million Pesos.!" It will
108
109
110
111 TSN dated March 11, 2013, p. 21.
112 TSN dated March 11, 2013, pp. 27 - 28.
113
114 TSN dated March 11, 2013, p. 30.
115
116
117
118
119
120
121
122
123
124 TSN dated March 11, 2013, p. 39.
DECISION
S8-10-CRM-0032
Page 12 of 39
affect the other projects of the Municipality, some of which may not push
through.125
She clarified that the Finance Committee is not objecting to the purchase of
the heavy equipment. Rather, it is the mode of its procurement and the
purchase price that they are not amenable to. The amount to be spent on
the proposed acquisition will eat up fifty percent of the municipality's annual
development fund.126 The recommendation of the Finance Committee is to
hold off the purchase of the heavy equipment until such time that Municipal
General Services Officer Caldit had already reported on the result of the
canvas on other backhoe loader he is conductinq.!" If the municipality
could purchase a less expensive backhoe loader, it could also solve the
problem.?" If this is the case, then the procurement of the backhoe should
be held in abeyance."? .
When the letter of the Finance Committee was sent to Municipal Mayor Leo
Merida and the Sangguniang Bayan of Romblon, neither replied.130 They
later learned, through a copy of the Resolution furnished to their office, that
the Sangguniang Bayan of Romblon executed a Resolution ratifying the
loan agreement of the municipal government with the PNB and the Chattel
Mortgage and Deed of Assiqnrnents.!" Next to the receipt of said
Resolution, he received a travel order for him to go to Metro Manila on
December 26, 2005 to witness the signing of the Memorandum of
Agreement with the Philippine National Bank in his capacity as Municipal
Treasurer. 132
The signing of the Memorandum of Agreement was held in a hotel along

Roxas Boulevard133 and attended by Mayor Merida, the two other officials
of the Philippine National Bank, and staff. Originally, the signing was
scheduled on December 27, 2005, but for some unknown reasons, it was
moved to December 28, 2005.134 During the signing of the Memorandum of
Agreement, the contract was presented and Mayor Merida signed it.135
When it was his turn to sign, he attempted to read the document, but he
was prevented from doing so as one of the officials of the Philippine
National Bank told him that there is no problem with the document because
loan agreements are embodied in a standard form.!" The document was
about the loan agreement between the municipal government and the
Philippine National 8ank.137 He was also asked to sign the Chattel
Mortgage and the Deed of Assiqnrnent.!" After the signing of the
Memorandum of Agreement, they returned to their official stations in the
Municipality.!"
As far as he knows, the loan agreement pushed throuqh.!" The first

monthly amortization in the amount of P69,750.00 was paid by the
Municipality on January 11, 2006, as evidenced by Official Receipt and
125
126
127
128
129
130
131
132
TSN dated March 11, 2013, pp.
133
134
135
136
137
138
139
140
DECISION
88-10-CRM-0032
Page 13 of 39
Debit Memo from the Philippine National Bank.141This initial payment is for
the payment of mterest.!" The succeeding obligation of the Municipality is
in the amount of P130,327.40, as evidenced by the receipt dated February
15, 2006.143 The amount covers the principal loan and the 11% loan
interest. 144 The Official Receipts and Debit Memo are forwarded to
Municipal Accountant Ricardo F. Rodeo.!" As a matter of procedure, he
wrote a letter addressed to the Accounting Department and attached the
same to these documents.I'" The final payment of the loan to the Philippine
National Bank was made on January 2011.147
The Loan Agreement was executed on December 28, 2005, while the
Resolution 147-2005 ratifying the loan agreement of the Municipality of
Romblon with the Philippine National Bank, together with the Deed of
Assignment and Chattel Mortgage, was passed on December 12, 2005.148
The other projects of the Municipality were not affected by the purchase of
the backhoe.l'"
The prosecution and the defense stipulated that RICARDO F. RODE0150 is the
Municipal Accountant of the Municipality of Romblon; that the Municipality of
Romblon religiously paid the monthly amortizations of its loan to Philippine
National Bank from January 2006 to January 2011; that the Municipality of
Romblon did not, at any point, defaulted in its obligation; and that the loan with
the Philippine National Bank was fully paid.151
Rodeo's testimony is as follows:
He is in charge of the accounting and internal audit, particularly, installing

and maintaining an internal audit system. He prepares and submits
financial statements to the Municipal Mayor and the Sangguniang Bayan of
Romblon; certifies as to the availability of budgetary allotments against
which expenditures and obligations are charged; apprises the Sangguniang
Bayan of Romblon on the financial condition and operations pertaining to
the local government; verifies supporting documents before preparation of
vouchers to determine completeness of requirements; prepares statements
of cash advances pertaining to the local government unit; prepares
statements of journal vouchers and liquidations, as well as other
adjustments related thereto; posts individual disbursements to the
subsidiary ledger and index cards; maintains individual ledgers for officials
and employees pertaining to the local government unit for payrolls and
deductions; prepares journals and obligations of expenditures; keeps all
records and reports related thereto; and exercises such other powers and
performs other duties and functions as may be prescribed by law or
ordinance.152
141
142
143 TSN dated March 11,2013, p. 63.
144
145
146
TSN dated March t t , 2013, pp. 67 - 68.
147 TSN dated March 11, 2013, pp. 84 - 85.
148
TSN dated March 11. 2013, p. 69.
149
150
TSN dated March tt, 2013, pp. 95 - 143.
151
152
DECISION
S6-10-CRM-0032
Page 14 of 39
He is the Chairman of the Technical Working Group (TWG) of the Bids and
Awards Committee since 2005.153 The TWG evaluates the eligibility
requirements of the participating bidders and suppliers; provides technical
assistance; assists the Bids and Awards Committee in the procurement, as
well as recommends to the Bids and Awards Committee what mode of
procurement is to be used.!"
The modes of procurement that the Municipality may resort to are

competitive public bidding, emergency purchase, negotiated procurement,
shopping, and direct purchase.l'" If the procurement involves the amount of
at least Fifty Thousand Pesos, it must be through public bidding.156 If there
is an urgent need to procure goods and services and which purchase
affects lives and properties, the procurement would be through emergency
purchase.l'" It is the Bids and Awards Committee, through the TWG, that
determines what mode of procurement for a particular purchase will be
resorted to by the municipal government.158
In case of procurement, there must first be an Obligation Request and

Purchase Request.'?" With respect to the backhoe, there was neither an
Obligation Request nor a Purchase Request submitted because the
procurement did not pass through the Technical Working Group."?
Although it is the Mayor who determines if there is an urgency to purchase
the backhoe, as far as he is concerned, it should have passed through his
office. 161 He only came across the purchase during the third quarter of
2005162 when the backhoe was delivered.163 The delivery was made after
the Municipality had been paying the monthly arnortizatton.!"
Internal Audit is an independent operation activity within the organization

aimed to prevent the wastage of public funds and properties as well as the
incurrence of liabilities.165 Thus, all transactions must undergo this process;
otherwise, there will be no checks and balances and the municipal
government may experience financial difficulties, as in the instant case.!"
There was no internal audit of the purchase of the backhoe because the
transaction did not pass through his office 167 and he had to write the
Municipal Mayor in April 2007 to remind him of the financial condition of the
Municipality of Romblon .168 He also furnished the Office of the Budget and
the Office of the Sangguniang Bayan of Romblon with a copy of the
letter. 169
After learning of such transaction, he did conduct an internal audit, but the
Municipality was already paying then the monthly arnortization.V'' His audit
showed that the purchase of the backhoe did not pass through the proper
153
154
155
156
157
158
159
160
161
162
163
164
TSN dated March 11, 2013, pp. 124 - 125; 126.
165
TSN dated March 11, 2013, pp.110-111.
166
167
168
Exhibit "V"; TSN dated March 11, 2013, pp. 112; 118 - 121.
169
170
DECISION
People v, Merida, et.al.
S8-10-CRM-0032
Page 15 of 39
procedure.:" He then verbally informed Mayor Leo Merida of his

findings,172 but the Mayor did nothing afterwards.:"
He is not aware if the Municipality was reimbursed by CAMEC

(Compressed Air Machineries & Equipment Corporation) of the payments it
made before the backhoe was deuvered.!"
He learned that there was an emergency or urgency for the purchase of the
backhoe because Mayor Merida told him SO.175The supposed urgency that
existed in the purchase of the backhoe is that there was a letter from the
Department of Environment and Natural Resources informing of the
urgency of the purchase of the backhoe.?"
Emergency Purchase may be resorted to when the delay in the delivery of

goods and services will endanger lives and propertles.!" As far as he
knows, the purchase of the backhoe is not an emergency purchase, but a
direct purchase.!"
At present, the landfill still exists.':"
LEONARDO M. MENDEZ,180 the Municipal Engineer of the Municipality of

Romblon, Romblon since 1992, is a member of the Bids and Awards Committee
since 2003.181 He gave the following testimony:
The Municipality owns a JCB 4CX 4x4x4 Backhoe Loader, which backhoe
was acquired on September 2006.182 The backhoe was purchased without
the benefit of public bidding. It was purchased because of the
communication coming from the Department of Environment and Natural
Resources regarding the conversion of the open dumpsite to controlled
dumpsite for purposes of garbage disposal.
As member of the Bids and Awards Committee, he is aware that

competitive bidding may be disregarded in cases of emergency and
urgency purchases.l'" It is the Bids and Awards Committee that determines
what mode of procurement will be used.184
Witness ESTER B. OLAVIDES185 is presently the Officer-in-Charge (OIC)

Regional Director of the Department of Environment and Natural Resources -
Environment Management Bureau, Region XI, Davao City (DENR - EMB Region
XI) since 2003. Included among her functions are issuing environmental
compliance certificates and providing technical assistance to local government
units by conducting monitoring and validating the compliance of the local
171
172
173
TSN dated March 11,2013, pp. 116 -117.
174
175
176
TSN dated March 11, 2013, pp.141-142.
177
178 TSN dated March 11, 2013, p. 139.
179 TSN dated March 11,2013, p. 142.
180
TSN dated May 22,2013, pp. 33 - 39.
181
182
183
184
185 TSN dated January 21, 2013, pp. 34 - 54.
DECISION
S8-10-CRM-0032
Page 16 of 39
government units (LGUs) vis-a-vis the provisions under Republic Act No. 9003,186
or the Ecological Solid Waste Management Act of 2000. Monitoring involves
conducting verification and validation the concerned LGU's solid waste
management and preparing the report afterwards.I'" If there is no compliance,
they write the concerned LGU to inform them of their violations under R.A. No.
9003.188
At the time relevant to the case, she was assigned at the DENR-EMB
MIMAROPA. 189 Her recollection of the case of the Municipality of Romblon,
Romblon is as follows:
MIMAROPA consists of Mindoro Occidental and Mindoro Oriental,

Marinduque, Romblon and Palawan."? Romblon has five (5) provinces,
namely, Romblon, Odiongan, Calatrava, San Andres and Ferror.
During her term from 2005 - 2007 as the OIC Regional Director of DENR -
EMB MIMAROPA, she found out that the Municipality of Romblon has
committed violations of the provisions of R.A. No. 9003, particularly
Sections 37 and 38 thereof191 which pertains to the prohibition against the
use of open dams for solid waste and in relation to the directive to construct
of a sanitary landfill.192
Before the construction of a sanitary landfill may be undertaken, there

should be an Environmental Compliance Certificate (ECC) issued by the
EMB.193 The Municipality of Romblon has not applied for such certificate,
which means if they start constructing or operating a sanitary landfill, they
would commit a violation for operating without an ECC and would be
penaiized!" with a fine of Fifty Thousand Pesos.l'" Romblon was never
penalized, however, because after the DENR - EMB MIMAROPA wrote a
letter to the Municipality, addressed to Municipal Mayor Leo G. Merida,196
the EMB - MIMAROPA has never heard from thern.!" which means there
has been no construction of a sanitary landfill without an ECC.198 The letter
was received by Mayor Leo Merida.199
Romblon operates an open dumpsite located along the shoreline of the sea
and it was where they dumped solid waste.200 In an open dumpsite, the
solid waste is segregated either as biodegradable or non-biodegradable
before it is dumped, while in a controlled dumpsite, the solid wastes that
are dumped are covered with soil and there is a sanitary landfill wherein
certain engineering designs allows non-biodegradable solid wastes to be
dumped.""
The September 15, 2005 letter that the DENR - EMB MIMAROPA sent to
the Municipal Mayor of Romblon was written, after she had conducted a
186 TSN dated January 21, 2013, pp. 35 - 36.

167
TSN dated January 21, 2013, p. 36.
166
TSN dated January 21,2013, p. 37.
169
190
191
TSN dated January 21,2013, pp. 37 - 39.
192
193
TSN dated January 21, 2013, pp. 40 - 41.
194
195
196
197
19B
199
200
201
DECISION
88-10-CRM-0032
Page 17 of 39
site visie02 and had found out that the dumpsite of the Municipality of
Romblon was along the shoreline and may possibly contaminate the
water.203 When they have not received any reply, they wrote a letter and
waited for any action, but there was none204
As far as she can recall, until she left the DENR - EMS MIMAROPA on
January 2007, there had been no compliance by the Municipality of
Romblon.205
The other prosecution witnesses who testified are Ernesto S. Gregorio,

Jr., the Officer-in-Charge of the Bureau of Equipment; Engineer Gil Augustus
A. Balmadrid; former Barangay Captain Luisa F. Molo; Rosalie B. De
Guzman, the Secretary of the Sangguniang Bayan of Romblon, Romblon; and
Atty. Gerard S. Montojo, the incumbent Municipal Mayor of the Municipality of
Romblon.
Their respective testimonies are as follows:
ERNESTO S. GREGORIO, JR.206
He is the Officer-in-Charge of the Bureau of Equipment.207 He has been

assigned at the Bureau of Equipment on June 1, 2012,208but has been with
the Department of Public Works and Highways (DPWH) for the last 28
years.209
As the OIC of the Bureau of Equipment, he formulates policies, provides

technical services on the management and construction and maintenance
equipment and ancillary facilities of the DPWH, maintains a capable and
adequate need of plan and water-based equipment to support the
infrastructure programs of the DPWH?10 Their office reviews and evaluates
cost estimates, prepares specifications, and tender documents from their
procurement program.211
Based on their research, the JCB Loader/Backhoe subject of this case

would presently cost P6 to P7.5 Million, 212same as the cost in 2005.213The
exact current market price of the backhoelloader is P7.5Miliion.
His research as to the price of the backhoe in 2005 was made in 2013
when the Office of the Special Prosecutor sent a subpoena to him.214Also,
the research was made through the use of the internet. He referred to the
price indicated in the website of a particular supplter."" He did not go
directly to JCB to inquire.216 It was another employee of the Bureau of
202
203
204
205
206
207
208
TSN dated August 14, 2013, P 10.
209
210
211
212
213
214
215
216
DECISION
S8-10-CRM-0032
Page 18 of 39
Equipment who inquired from JCB. JCB, however, did not entertain their
query unless they divulged the details of their inquiry.217
In their computation, they included the customs duty, in case the unit will be
lmported.i" the value-added tax, and the supplier add-on profie19 In
Australia, the current market price of the said JCB Backhoe is
USD100,456, equivalent to P4.361799 Million. When they added all the
duties and taxes, they arrived at P7.5 Million.220
In 2005, the price range is from P6 Million to P7.5 Million,221 with a

difference of about 15% as maximum profit for the supplier.222 Based on
their computation, however, they only factored in 6% of the said 15%
profit.223The present price of the backhoe and in 2005 are, more or less,
the same possibly because of the exchanqe rate where in 2006 it was at
P51.3 pesos to a dollar, today, it is only P43.3 to a dollar.224The freight
charge for the JCB equipment in 2006 is USD1,992.48 (Php46,255.68)
and, presently, USD2,288.73 (P44,959.12).225 In 2006, the landed cost of
the JCB Backhoe is P6.821 Million, while at the present the landed cost is
P6.63 Million.226 The amounts refer to the same brand and same
speciflcation.f" but the present model is an improved versiorr'" because it
is already cornputerized.F" The mother company of JCB is in Australla.f"
GIL AUGUSTUS A. BALMADRID231
He became a Civil Engineer in 1982.232Presently, he is employed at the

Department of Public Works and Highways (DPWH) as Assistant District
Engineer of the Catanduanes Engineering District.233
His duties and responsibilities include assisting the District Engineer in

ensuring that the infrastructure projects being implemented by the district
office is the appropriate project and if it is, they have to ensure the quality
and its completion on time; overseeing the technical and non-technical staff
of the district office; signing checks issued by the district office, as one of
the signatories, and in the absence of the District Engineer, taking charge
of the supervision of the district office.234
He is a member of the Catanduanes Sustainable Ecosytem Development,

Inc. (ECODEV), the Philippine Institute of Civil Engineers (PICE), the
Mountain Cares and Hyper Association (MCHA), and the Philippine
National Red Cross (PNRC).235
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
ibid.
DECISION
S8-10-CRM-0032
Page 19 of 39
ECODEV is a non-government orqanlzation.f" It was established on

August 2008 to disseminate information and conduct education campaigns
regarding the importance of preserving the environrnent.?" He joined the
organization in 2010 and presently serves as its Treasurer. He is also one
of the resource persons in the organization with respect to solid waste
management. 238
As part of his job and also as a result of his membership in ECODEV, he

had attended seminars on solid waste management as sponsored by the
University of the Philippines - Diliman, the Development Academy of the
Philippines-Cebu City, and the Department of Environment and Natural
Resources (DENR).239 He also had the chance to visit various local
government units and companies that showcased their best practices in
solid waste rnanaqement."" He also conducted lectures in different local
government units regarding solid waste management. 241
Among the topics of the seminars on solid waste management that he had
attended include the establishment of a sanitary landfil1.242
A sanitary landfill is an engineered facility where the waste is finally

disposed of.243 It involves the process of spreading, compacting, and
covering of plants, and which processes are carried out through the use of
equipment, particularly a bulldozer, for spreading the waste; a road roller,
for compacting the waste; and a "hydraulic excavator", for spreading the
soil coveraqe.?"
Considering his line of work, he is familiar with the JCB 4CX Loader
Backhoe.F" This machine can perform the following functions: digging,
loading, dozing, grading, backfilling, grabbing, breaking, forklift, and
excavating.246 It can be used in small construction or doing other farm
works, but not for the construction of a sanitary landfill because it cannot
effectively do the three functions involved therein. 247 Firstly, it cannot
spread the waste because its wheels are made of rubber and can be easily
punctured by sharp objects and, secondly, it cannot do the compacting due
to the fact that it has no capacity for compaction because it does not have
an attachment of a steel drum.248 It can, however, do the function of soil
covering.249
He admitted that he and Prosecutor Lim hail from the same province.P?
that his membership in the different organizations are not part of his duties
and responsibitities.i'" that some of the seminars he had attended were
during officials hours;252 that he had always sought the authority of the
District Engineer prior to attending the seminars;253 that he knows there are
three equipment necessary to maintain a sanitary landfill because of the
236
237
ibid.
238
239
240
241
ibid.
242
243
ibid.
244
245
246
247
248
249
ibid.
250
251
252
ibid
253
DECISION
S8-10-CRM-0032
Page 20 of 39
seminar on ecological solid waste management he attended in UP

Diliman,254 and that these equipment are a bulldozer, a road roller, and a
backhoe or excavator.i" To manage a sanitary landfill more effectively, the
said equipment should be purchased.i"
He is not so familiar with the JCB Backhoe,257 but he has tested one in the
course of his employment as an Assistant District Engineer. 258 The
Catanduanes Engineering District does not have a backhoe.f" He has
neither seen how a backhoe works nor is he familiar with the performance
of a heavy equipment."? He has not been to Romblon as wel1.261He is not
familiar with the individual cost of the equipment needed in the sanitary
landfill262 because it is the Bureau of Equipment of the DPWH that does the
purchasing of equipment.263
LUISA F. MOL0264
She has been the Barangay Captain of Barangay Capaclan, Romblon,

Romblon for eleven (11) years.265 Among her functions is attending the
regular meetings of the Association of Barangay Captains (ABC).266
On April 4, 2006, she attended a meeting of the ABC wherein she, together
with thirty (30) other barangay captains.f" strongly recommended to Mayor
Leo Merida, the Mayor of Romblon, Romblon, to cancel the contract with
CAMEC (Compressed Air Machineries & Equipment Corporation) and to
withdraw the Php13,950,000.00 loan with the Philippine National Bank.268
They formally passed a Resolution for said purpose (Resolution No. 01-
2006)269and submitted the same to the Sangguniang Bayan of Romblon.F"
The ABC President at the time of the adoption of Resolution No. 01-2006 is
Barangay Captain Edler Robis of Barangay Lauran and presently one of
the accused in the present case.?"
As barangay captain, she is also a member of the Municipal Executive

Council of the Municipality of Romblon.272 The Municipal Executive Council
aim is to look after the people's general welfare, to render basic services,
and to provide them with a clean place to live in.273
In the subject purchase by the Municipality of Romblon, one of the

barangays to be benefited is their barangay, Barangay Capaclan as the
landfill is located therein.'?" Although she is one of those who indorsed the
purchase of the backhos.i" she joined the passage of Resolution No. 01-
254
255
256
Ibid.
257
supra., see note 99.
256
259
Ibid.
260
261
262
263
264
265
266
Ibid.
267
268
Supra., see note 131.
269
270
Exhibit "U".
271
272
273
TSN dated January 22,2013, pp. 13 -14.
274
275
DECISION
S8-10-CRM-0032
Page 21 of 39
276
2006 because the price of the backhoe to be purchased is exorbitant.
Being Romblomanons, with most of them engaged in the business of
marble mining, they are familiar with the price of a backhoe."? Although
they do not have any cost-comparison, the price of backhoes is public
knowledge in their locality since the mining companies in their place are
using backhoes?78
His nephew, Herejon Molo, is an operator of a backhoe and he was a

source of the cost-comparison she conducted, but that Herejon Molo did
not provide any document as to the amount of the backhoe.?" He
inspected the backhoe purchased by the Municipality and said that some of
the functions of said backhoe are more highly technical than the backhoe
they are using.280 Although Herejon Molo said that the price of the backhoe
is exorbitant, he did not provide any price point for the same.281
ROSALIE B. DE GUZMAN282
She is the Secretary of the Sangguniang Bayan of Romblon and began

serving in such capacity since July 5, 2004.283 Her duties and
responsibilities include attending meetings of the Sangguniang Bayan and
keeping journals of its Minutes.284 In connection with the performance of her
duties, she attended the Sangguniang Bayan's 41 st Regular on October 24,
2005;285the 43rd Regular Session on November 7, 2005;286the 15th Special
Session on November 9, 2005;287 the 44th Regular Session of the on
November 14, 2005;288 the 47'h Special Session on December 12, 2005;289
the 47'h Regular Session on February 6, 2006;290 the 6th Regular Session
on February 13, 2006,291and the 24th Regular Session on June 19, 2006.292
She identified the Minutes of these sessions and confirmed the truthfulness
and veracity of its contents.
GERARD S. MONTOJ0293
He is presently the Municipal Mayor of the Municipality of Romblon,

Romblon.294 He is a commissioned Notary Public295 On January 2006, he
notarized the Joint Affidavit of Bryant R Riano, Gerry M. Mijares, Mariano
. M. Mateo, Ramon M. Magallon, Edler M. Robis, and Rafael R Riano.296
276
277
278
ibid.
279
280
281 ibid.
282
TSN dated October 10,2012, pp. 39 - 77.
283
284
285
TSN dated October 10, 2012, pp, 45 - 51.
286
287
288
289
290
291
292 TSN dated October 10, 2012, pp. 72 -74.
293
294
295
296
Exhibit T; TSN dated March 11,2013, p. 148; pp. 149-152.
DECISION
S8-10-CRM-0032
Page 22 of 39
The prosecution's documentary evidence consist of the following: the Letter

of Ester A. Olavides, the Officer-in-Charge (OIC) - Regional Director of the
Department of Environment and Natural Resources (DENR), dated September
15, 2005, to accused Mayor Leo G. Merida (Exhibits "A" to "A-3"); the Minutes
of the 41st Regular Session of the Sangguniang Bayan of Romblon, Rombon
(Exhibits "C" to "C-S"); the Minutes of the November 3, 2005 Meeting of the
Municipal Development Council (MDC) Executive Committee and MDC
Executive Committee Resolution No. 04-2005 (Exhibits "E" and "E-1 "); the
Sangguniang Bayan Resolution No. 137-2005 of the Sangguniang Bayan of
Romblon, Romblon (Exhibits "G" to "G-2"); the Minutes of the 44th Regular
Session of the Sangguniang Bayan of Romblon, Romblon (Exhibits "H" to "H-
2"); the Letter of the Municipal Finance Committee dated December 9, 2005
(Exhibits "I" to "1-3"); the Excerpt from the Minutes of the 47'h Special Session
of the Sangguniang Bayan of Romblon, Romblon and Sangguniang Bayan
Resolution No. 147-2005 of the Sangguniang Bayan of Romblon, Romblon
(Exhibits "J" to "J-2"); the Loan Agreement and its annexes between the
Municipality of Romblon, Romblon and the Philippine National Bank (PNB) dated
December 28, 2005 (Exhibits"K" and "K-1 "); the Deed of Assignment between
the Municipality of Romblon and the PNB (Exhibits "L" and "L-1"); the Chattel
Mortgage between the Municipality of Romblon, Romblon and the PNB (Exhibit
"M"); the Letter of Municipal Treasurer Monica M. Malay to Accountant Ricardo
F. Rodeo dated September 11, 2006 (Exhibit "N"); the Minutes of the 5th
Regular Session of the Sangguniang Bayan of Romblon, Romblon (Exhibits "0"
and "0-1 "); the Minutes of the 24th Regular Session of the Sangguniang Bayan
of Romblon, Romblon (Exhibits "Q" and "Q-1 "); the Delivery Receipt of the
JCB 4CX Backhoe Loader 4x4x4 dated September 13, 2006 (Exhibits "R" to
"R-3"); the Minutes of the 47'h Regular Session of the Sangguniang Bayan of
Romblon, Romblon (Exhibits "5" and "5-1"); the Joint Affidavit dated January
23, 2006 executed by accused Bryant R. Riano, Rafael R. Riano, Mariano M.
Mateo, Gerry M. Mijares, Ramon M. Magallon and Edler M. Robis (Exhibits "T"
to "T-2"); the Minutes from the Special Meeting of the Association of Barangay
Councils and Resolution No. 01-2006 dated April 4, 2006 (Exhibits "U" to "U-
S"); the Letter of Municipal Accountant Ricardo F. Rodeo dated April 16, 2007
addressed to accused Mayor Leo G. Merida (Exhibits "V" to "V-4"); the
Statement of Loan Amortization of JCB Backhoe Loan Agreement - PNB as of
June 30, 2012 (Exhibits "X" and "X-1 "); the Bank Statements relative to the
loan amortization and payments made by the Municipality of Romblon, Romblon
(Exhibit "Y"); the Complaint-Affidavit dated October 6, 2006 (Exhibits "z" to
"Z-6"); the Office 1.0. and Professional Regulatory Commission (PRC) of Engr.
Gil Augustus Arcilla Balmadrid (Exhibit "AA"); the Service Record of Engr. Gil
Augustus A. Balmadrid (Exhibit "AA-1"); the Appointment Paper of Engr. Gil
Augustus A. Balmadrid as Engineer IV (ADE) of Department of Public Works and
Highways (DPWH) (Exhibit "AA-2"); the Certificate of Attendance of Engr. Gil
Augustus A. Balmadrid entitled "Orientation Course Integrated Solid Waste
Management" (Exhibit "BB"); the Certificate of Completion of Engr. Gil
Augustus A. Balmadrid entitled "Solid Waste Management and Technology"
(Exhibit "BB-2"); the Certificate of Participation of Engr. Gil Augustus A.
Balmadrid entitled "Knowledge Enhancement on Solid Waste Management for
Provincial Government (Exhibit "BB-4"); a photo of a bulldozer (Exhibit "CC"),
road roller (Exhibit "CC-1"), and a hydraulic excavator (Exhibit "CC-2"); a copy
of Republic Act No. 9003, otherwise known as the "Ecological Solid Waste
Management Act of 2000 (Exhibits ''~O'' to "00-2"), and the Backhoe Loader
Value Computation (Exhibits "EE" to "EE-2").
DECISION
88-10-CRM-0032
Page 23 of 39
Defense Evidence
The defense presented only two witnesses, both of them an accused in

the present case. The first who took the witness stand was Sangguniang Bayan
member Francisco R. Mayor, Jr. who testified on May 5, 2014, followed by
Municipal Mayor Leo G. Merida, on May 6, 2014. The two testified in this wise:
FRANCISCO R. MAYOR, JR.297
At the time relevant to the case, he was on his last term as member of the
Sangguniang Bayan of Romblon (2004 - 2007).298 As member of the
Sangguniang Bayan of Romblon, he prepares the annual budget of the
Municipality of Romblon and acts on matters brought to their attention by
the locality.299
The Sangguniang Bayan of Romblon received a Resolution from the

Municipal Development Council informing them of the warning issued by
the Department of Environment and Natural Resources (DENR) to the
Municipality of Romblon. The Municipal Development Council re-aligned an
amount for the acquisition of the heavy equipment. It also requested the
Sangguniang Bayan of Romblon to pass a Resolution for the purchase of
the heavy equipment needed and another Resolution authorizing the
Municipal Mayor to apply for a loan with the Philippine National Bank
(PNB).300 The Municipal Development Council is comprised of the
Municipal Mayor, Chairperson of the Committee on Appropriation of the
Sangguniang Bayan of Romblon all barangay captains of the municipality,
and some representatives of the private sectors.?"
The Chairman of the General Services Office, Engineer Caldit, appeared

before the Sangguniang Bayan of Romblon to apprise them of the letter
from the DENR regarding the problem with the open dumpsite of the
Municipality of Romblon.302 Engineer Caldit informed them that the
Municipality of Romblon needs to purchase a heavy equipment to solve the
dumpsite problem.i"? He also told them that there is a proponent for the
heavy equipment. 304
When the DENR sent the letter to the Municipality of Romblon on

September 2005, the Municipality was operating a dumpsite without a
permit.305The Municipality had been operating a dumpsite without a permit
since 2003 or 2004,306but it has never been penalized by the DENR, even
with the operation of the open dumpsite at the time they received the
letter. 307It was in the process of applying for a permit to operate a dumpsite
with the DENR.
In a series of sessions, the Sangguniang Bayan of Romblon deliberated on

the information given by Engineer Caldit and discussed whether the
equipment is really necessary.i''" To help them decide, the Sangguniang
297
TSN dated May 5, 2014, pp. 5 - 48.
298
TSN dated May 5, 2014, pp. 9 - 10.
299
300
TSN dated May 5, 2014, pp. 22 - 23.
301
302
TSN dated May 5,2014, pp. 11 - 12.
303
304
305
TSN dated May 5, 2014, pp. 34 - 35.
306
307
308
DECISION
S8-10-CRM-0032
Page 24 of 39
Bayan of Romblon consulted other officers of the local government. One of

those they have consulted is Municipal Engineer Leonardo Mendez, the
Chairman of the Bids and Awards Committee. Mendez submitted to them a
certification from the Secretary of Foreign Affairs certifying that
Compressed Air Machineries and Equipment Corporation (CAMEC) was
the sole exclusive distributor of the heavy equipment manufactured by JCB
England.309 Mendez also submitted to them the cost estimate, cost
comparison, and other sales information regarding the heavy equiprnent."?
After a series of deliberations, the Sangguniang Bayan of Romblon passed

a Resolution authorizing the Municipal Mayor to enter into an agreement
with the PNB for the purpose of acquiring the heavy equipment needed.?"
When Engineer Mendez appeared before the Sangguniang Bayan of

Romblon, he informed them that the· purchase of the equipment is exempt
from competitive bidding and provided them with the certification issued by
him as Chairman of the BAC that all government policies and regulations
have been upheld and complied with in the acquisition of the heavy
equipment. 312The Sangguniang Bayan of Romblon approved Resolution
No. 135-2005313 because they were of the belief that they really needed the
heavy equipment because of the emergency situation.?" There are,
however, other members of the Sangguniang Bayan of Romblon who
objected, including private complainant Salvacion DUCO.315
He clarified that he was neither a member of the Bids and Awards

Committee (BAC) nor of the Municipal Development Council.?" that the
budget enacted for 2005 does not include the budget for the purchase of a
backhoe, specitically.f" but only that of the heavy equlpment.?" that the
Municipality acquired the backhoe 5 or 6 months after Municipal Mayor
Merida was authorized to acquire a backhoe.f" that the Municipal Mayor
cannot augment the loan appropriation without the imprimatur of the
Municipal Development Council;32o that the certification from the Secretary
of Foreign Affairs does not show whether CAMEC has sub-dealers in the
Philippines;321 that JCB Sales Asia stationed in Singapore is a sales office
of JCB England, but in the Philippines, CAMEC is the sole distributor.?"
that the loan of the Municipality of Romblon with the PNB had already been
paid;323that the authorization the Sangguniang Bayan of Romblon gave to
the Mayor to contract a loan from PNB was for the amount of Thirteen
Million Pesos.f" that the amount indicated and the authority given by the
Sangguniang Bayan of Romblon was before they could determine the cost
of the backhoe to be purchased.?" that in authorizing the Municipal Mayor
for the amount of Thirteen Million Pesos, they relied on the costing given by
Engineer Mendez;326 that the backhoe under sole distributorship is the
backhoe manufactured by the company in England, but there are backhoes
309
Exhibit "7"; TSN dated May 5, 2014, pp. 17 - 20.
310
Exhibits "8," "9," and "10"; TSN dated May 5, 2014, pp. 21 - 22.
311
TSN dated May 5, 2014, pp. 24 - 25.
312
Exhibit"27"; TSN dated Ma~ 5,2014, pp. 25 - 29.
313
Exhibit"14".
314
TSN dated May 5, 2014, pp. 29 - 30.
315 TSN dated May 5, 2014, pp. 30 - 31.
316
TSN dated May 5, 2014, p. 32 - 33
317 TSN dated May 5, 2014, p. 33.
318
319 TSN dated May 5, 2014, p. 35.
320
321
322
TSN dated May 5, 2014, pp. 41 - 43.
323 TSN dated May 5, 2014, p. 43.
324
325 TSN dated May 5, 2014, p. 44.
326
DECISION
S8-10-CRM-0032
Page 25 of 39
manufactured by other companies;327 that the decision to purchase from

CAMEC was made after considering the documents submitted by
Engineers Mendez and Caldit and also the sales representation by the
proponent.F" that it was CAMEC who gave them documents showing that
they are the sole distributor of JCB backhoes.?" that they also relied on the
representations of Engineers Mendez and Caldit regarding CAMEC;33o that
during the series of sessions conducted by the Sangguniang Bayan of
Romblon, they asked Engineers Mendez and Caldit to go to Manila and
look for other available backhoes.?" that as a result of their directive,
Engineers Mendez and Caldit submitted the documents.f" that the
Sangguniang Bayan of Romblon agreed to purchase the JCB backhoe from
CAMEC because it is the sole distributor and also, given the urgency of the
situation, CAMEC could act immediately;333 that despite the urgency, it took
them until December to make the purchase.f" that it is the task of the BAC
to conduct a public bidding, not the Sangguniang Bayan of Romblon;335 that
the task of the Sangguniang Bayan of Romblon is to authorize the
Municipal Mayor regarding the procurement processes.f" and that it was
the heads of the offices who advised the Sangguniang Bayan of Romblon
in this case.?"
LEO G. MERIDA 338
He is the Municipal Mayor of the Municipality of Romblon from 2004 to

2007.339 As Municipal Mayor, he supervises and manages the operation
and other affairs of the municipal government and gives recommendation of
prioritized projects and activlties.?"
In the course of the performance of his duties and responsibilities, he

received two (2) letters from the Department of Environment and Natural
Resources (DENR), which letter warned the Municipality of Romblon
regarding the open dumpsite and ordered them to close the Municipality's
open dumpsite; otherwise, a fine in the amount of Fifty Thousand will be
imposed.t"
Upon receipt of the first letter from the DENR dated September 15, 2005,
he immediately went to the Office of Engineer Wenceslao Caldit, the
General Services Officer. He showed Engineer Caldit the letter and
instructed him to study the same and make the necessary
recommendation.?" He also went to the Office of Engineer Leonardo
Mendez, the Municipal Engineer, who was concurrently the Chairman of
the Bids and Awards Committee (BAC).343 He requested Engineers
Mendez and Caldit to have an audience with the Sangguniang Bayan of
Romblon to inform the body of the problem that besets the Muntcipality.?"
327
328
329
330
331
TSN dated May 5, 2014, pp. 45 - 46.
332
333
334
335
336
TSN dated May 5, 2014, pp. 47 - 48.
337
338
TSN dated May 6,2014, pp. 6 - 62.
339
340
341
TSN dated May 6,2014, pp. 9 - 11.
342
343
344
DECISION
SB-10-CRM-0032
Page 26 of 39
He referred the matter to the two engineers because he has no expertise in

mac hineri .
menes or equlpmen t .345
Engineers Mendez and Caldit informed him that there was a need to
purchase a heavy equiprnent'" as it was difficult to manage the dumpsite
due to the overwhelming bulk of the garbage collected evervday?" It was
both Engineers Mendez and Caldit who contacted persons for the canvass
and comparisons regarding the machines available to address the problem
of the Municipality. 348
Upon being informed by Engineers Mendez and Caldit of the heavy

equipment to be purchased, he immediately convened the Municipal
Development Council.349 The Municipal Development Council is composed
of the all the barangay captains in the locality, some of the heads of the
agencies, some of the members of the Sangguniang Bayan of Romblon
and private sectors.t" It maintains and prioritizes the projects that will affect
the health and sanitary condition of the Municipality.351
When he convened the Municipal Development Council and informed it of

the problem regarding the dumpsite, it conducted a series of deliberations.
Engineers Mendez and Caldit informed them that there is an urgent need
for the purchase of the one unit of backhoe payloader to address the
prevailing problem of the Municipality.352 The Municipal Development
Council Executive Committee agreed to pass a Resolution requesting the
Sangguniang Bayan of Romblon to authorize the Municipal Mayor to enter
into a contract with the PNB for the purpose of procuring a backhoe."?
After the passage of said Resolution by the Municipal Development Council

Executive Committee, the Resolution was indorsed to the Sangguniang
Bayan of Romblon354 The Sangguniang Bayan of Romblon then passed the
Resolution requested by the Municipal Development Council Executive
Cornmittee.t'"
Mendez, the then Chairman of the BAC, told the Board that there was no
need of a competitive public bidding because there was a certificationf"
and documentary proof.357 Engineer Mendez also submitted brochures,
certifications, and a comparison, which they went over for evaluation.P"
After all the information given by Engineer Mendez, they proceeded with
the preparation of the Loan Agreement,359
After being charged before the Office of the Ombudsman, he filed a

counter-affidavit. 360In Annex "5" of his Counter-Affidavit.j'" it is indicated "x-
stock subject to prior sale",362 which means one has to pay for the cost of
345
346
347
348
349
350
351
352
353
TSN dated May 6, 2014, pp. 15 - 16.
354
355
TSN dated May 6,2014, pp. 17 - 18.
356
TSN dated May 6, 2014, pp. 18
357
TN dated May 6,2014, pp. 22 - 24.
358
TSN dated May 6, 2014, pp. 19 - 20.
359
360
TSN dated May 6, 2014, pp. 25 - 29.
361
Exhibit "29".
362
DECISION
88-10-CRM-0032
Page 27 of 39
the item and that it will be delivered later if there is already an available
stock.363
As far as he can recall, the Municipality only paid CAMEC a month after the
backhoe was delivered364 and the payment of the backhoe was sourced
from the proceeds of the loan from PNB.365 The loan was granted on
December 28, 2005.366 However, he cannot recall if the single drawdown
was made on January 4, 2006.367 The backhoe was delivered on
September 15, 2006.368 In the loan agreement with PNB (Exhibit "K') , the
Municipality is already required to pay interest for the loan 253 days prior to
the delivery of the backhoe.f" but the Municipal Accountant told them that
the Municipality started paying the backhoe beginning 2007.370 As far as he
knows, the proceeds of the loan was deposited by the Municipality with
PNB-Romblon371 and the backhoe was paid in monthly installment for five
(5) years372; that they deposited the loan proceeds with the bank for
safekeeping (instead of paying the full amount and incurring no interest
over the loan as noted by the Court); that before the backhoe was delivered
in September 2006, since the loan was approved on December 2005 and
released on January 2006, the Municipality has been paying interest over
the loan and, at the same time, earning interest over the bank deposit (the
Court noted that the Municipality is still losing money because the interest
over the loan is surely higher than the interest over the deposit);373 that he
cannot explain why the loan was not paid in full because it was the
Municipal Treasurer who took charge of the safekeeping of the loan
proceedsr'" that aside from the loan interest, the Municipality, through the
Municipal Treasurer, paid the full amount of P18,049,891.93 to CAMEC for
the backhoe.?" that he has no idea if the Municipality paid 1 Million of loan
interest even before the backhoe was oelivereo.?" and that despite being
an emergency purchase, he cannot explain why the delivery was made a
year later after the purchase was made.?"
It was Engineer Mendez, the Chairman of the Bids and Awards Committee,
who informed him that public bidding is no longer necessarv.?" The other
members of the BAC had not been consulted and had no participation
because Engineer Mendez is already the Chairman of the BAC.379 They
(he and the other Municipal officials presently charged380) believed that the
advice of the Chairman of the BAC alone as to the mode of procurement
would sufflce.""
There was a meeting convened for the Municipal Development Council and
another meeting for the Municipal Development Council Executive
Committee on November 3, 2005.382 Even prior to the meeting, on October
363
364
365
366
TSN dated May 6, 2014, pp. 33; 35 - 36.
367
368
369 TSN dated May 6,2014, p. 37.
370
371
372 TSN dated May 6,2014, pp. 39, 41 - 42.
373
TSN dated May 6, 2014, pp. 40 - 41.
374
TSN dated May 6,2014, pp. 41,43.
375
376 TSN dated May 6,2014, p. 45.
377
378
379
380 TSN dated May 6,2014, pp. 48 - 49.
361
382
TSN dated May 6, 2014, pp. 52 - 54.
DECISION
S8-10-CRM-0032
Page 28 of 39
22, 2005, he already affixed his signature (Exhibit "9') because of the
emergency and urgency of the need of the Municipality.383 However,
despite such prior signature, the Municipal Development Council was still
convened for purposes of appropriating the amount needed for the
purchase and finding a source for the said amount?" The amount
appropriated for the construction of the wet market was re-aligned for the
purchase of the JCB Backhoe.385 The cost of the backhoe was more than
the loan of the Municipality from PNB.386
The Municipal Treasurer did caution him of the cost of the backhoe?" and
they did consider the Municipal Treasurer's advice, but eventually they
were able to persuade the Municipal Treasurer due to the urgency of need
of the Municipality.3BB The 9-in-1 function of the backhoe cannot be
considered an emergency, but only its function vis-a-vis the sanitary
landfil1.3B9Although there is a cheaper alternative, it does not have the
same set of functions available. They purchased the JCB backhoe because
aside from the urgency, they also considered the functionality available,
even though the function is not related to the urgency or emergency.390
Based on the suggestion by the Municipal Treasurer to purchase a
backhoe at a lower cost, they scouted for other backhoe. However, as a
second-class municipality, they are prohibited to procure a secondhand
backhoe.?" There was no other brand new backhoe that was offered to
them at the time.392 He entrusted and requested the two (2) engineers,
Engineers Mendez and Caldit, to scout other units, but that they did not find
any.393These engineers were the ones who recommended to purchase the
backhoe from CAMEC ..
The documentary evidence submitted by the defense consists of the

following documents: the Letter of Ester A. Olavides, the Officer-in-Charge (OIC)
- Regional Director of the Department of Environment and Natural Resources
(DENR) - EMB MIMAROPA Region, dated September 15, 2005, to accused
Mayor Leo G. Merida (Exhibit "1 "); the Letter of Vecente S. Paragas, the
Officer-in-Charge (OIC) Assistant Secretary for Field Operation & Concurrent
Executive Director of the DENR-EMB, dated November 21, 2005, addressed to
accused Mayor Leo G. Merida (Exhibit "2"); the Sangguniang Bayan Resolution
No. 137-2005 of the Sangguniang Bayan of Romblon, Romblon (Exhibit "3");
the Minutes of the Meeting of the Municipal Development Council (MDC)
E ecutive Committee held on November 3, 2005 (Exhibit "4"); the Municipal
evelopment Council (MDC) Executive Committee Resolution No. 04-2005
dated November 3, 2005 (Exhibit "5"); the Distribution Agreement between
CAMEC and JCB (Exhibit "6"); the Brochure of JCB Backhoe Loader (Exhibit
"8"); the Specification of the JCB Backhoe Loader (Exhibit "9"); the Cost
Comparison of the JCB Backhoe Loader (Exhibit "10"); the PNB Deposit Slips
dated February 6, 2006, March 6, 2006, April 4, 2006, May 4, 2006, June 6,
2006, July 6, 2006, August 6, 2006, and September 6, 2006 (Exhibits "11" to
"11-C"); the CAMEC Vouchers Nos. 22976, 23023, and 2310 (Exhibits "12" to
"12-B"); the Project Rationale prepared by the Municipal Planning and
363
TSN dated May 6,2014, pp. 54 - 55.
364
TSN dated May 6,2014, pp. 55 - 56.
385
TSN dated May 6,2014, pp. 55 - 56.
386
387
388
TSN dated May 6,2014, pp. 56 - 57.
389
390
TSN dated May 6,2014, pp. 57 - 58.
391
392
393
DECISION
S8-10-CRM-0032
Page 29 of 39
Development Coordinator (Exhibit "13"); the Sangguniang Sayan Resolution

No. 135-2005 entitled "Approving the Municipal Development Council Executive
th
Committee Resolution Nos. 04 and 06 (Exhibit "14"); the Minutes of the 48
Regular Session of the Sangguniang Bayan of Romblon held on December 19,
2005 (Exhibit "15"); the findings of the Mines and Geosciences (Exhibit "16");
the CAMEC Delivery Receipt No. 4392 (Exhibit "17"); the Certification issues by
the Barangay Captains of the Municipality of Romblon (Exhibit "18"); the
Certification issued by Ricardo F. Rodeo, Municipal Accountant (Exhibit "19");
the Minutes of the 415t Regular Session of the Sangguniang Bayan of Romblon
held on October 24, 2005 (Exhibit "20"); the Minutes of the 43rd Regular
Session of the Sangguniang Bayan of Romblon dated November 7, 2005
(Exhibit "21 "); the Minutes of the 15th Special Session of the Sangguniang
Baran of Romblon held on November 9, 2005 (Exhibit "22"); the Minutes of the
47' Regular Session of the Sangguniang Bayan of Romblon held on December
12, 2005 (Exhibit "23"); the Minutes of the s"
Regular Session of the
Sangguniang Bayan of Romblon held on February 6, 2006 (Exhibit "24"); the
Minutes of the 27'h Regular Session of the Sangguniang Bayan of Romblon held
on July 10, 2006 (Exhibit "25"); the Minutes of the 38th Regular Session of the
Sangguniang Sayan of Romblon held on October 2, 2006 (Exhibit "26"); the
Certification issued by Engr. Leonardo M. Mendes, Ricardo Rodeo and Mayor
Leo G. Merida dated December 1, 2005 (Exhibit "27"); the Memorandum
Circular No. 99-66 dated April 23, 1999, issued by the Department of Interior and
Local Government (Exhibit "28"), and the Joint Affidavit of all the accused
(Exhibit "29").
DISCUSSION
The issues presented for resolution of the Court are straightforward: (a)
whether resort to negotiated purchase as alternative method of procurement for
the purchase of the JCB Backhoe is justified; (b) whether the procedure therefor
had been followed; and, ultimately, (c) whether the accused violated Section 3
(e) of Republic Act No. 3019.394
Alternative Method of Procurement
The term negotiated purchase is specifically found in Commission on Audit

Circular No. 92_386,395particularly Section 94 thereof,396 and in Republic Act No.
7160, otherwise known as the Local Government Code, particularly Sections
366397 and 369398 thereof. These provisions, however, find no application in the
394
Supra .. see note 9.
395
Prescribing Rules and Regulations on Supply and Property Management in the Local
Governments.
396
Sj::C. 94. When to Make a Negotiated Purchase. - In cases where public bidding have failed for
two (2) consecutive times and no suppliers or dealers have qualified to participate or win in the
biddings x x x.
Section 366. Procurement Without Public Bidding. - Procurement of supplies may be made without
the benefit of public bidding under any of the following modes:
(a) Personal canvass of responsible merchants;
(b) Emergency purchase;
(c) Negotiated purchase;
(d) Direct purchase from manufacturers or exclusive distributors; and
(e) Purchase from other government entities.
398
Section 369. Negotiated Purchase. -
DECISION
S8-10-CRM-0032
Page 30 of 39
present case considering that the situation contemplated thereby involves failure
of public bidding.
Further, in view of Sections 75399 and 76400 of Republic Act No. 9184,
otherwise known as the Government Procurement Reform Act, COA Circular No.
92-386, as well as Title Six, Book Two of Republic Act No. 7160, are deemed to
have been superseded.
The applicable law at the time relevant to this case is Republic Act No.
9184, under which the term used is negotiated procurement.
Negotiated Procurement is an alternative method of procurement whereby

the Procuring Entity directly negotiates a contract with a technically, legally and
financially capable supplier, contractor.or consultant.t?' Section 53 of the same
law provides the instances when use thereof may be resorted to.402
(a) In cases where public biddings have failed for two (2) consecutive times and no suppliers have
qualified to participate or win in the biddings. local government units may, through the local chief
executive concerned, undertake the procurement of supplies by negotiated purchase, regardless of
amount, without public bidding: Provided, however, That the contract covering the negotiated
purchase shall be approved by the sanggunian concerned.
399
SEC. 75. Implementing Rules and Regulations and Standard Forms. - Within sixty (60) days from
the promulgation of this Act, the necessary rules and regulations for the proper implementation of
its provisions shall be formulated by the GPPB, jOintly with the members of the Oversight
Committee created under Section 74 hereof. The said rules and regulations shall be approved by
the President of the Philippines. For a period not later than thirty (30) days upon the approval of the
implementing rules and regulations, the standard forms for Procurement shall be formulated and
approved.
400
SEC. 76. Repealing Clause. - This law repeals Executive Order No. 40, series of 2001, entitled
"Consolidating Procurement Rules and Procedures for All National Government Agencies,
Government-Owned-or -Controlled Corporations and/or Government Financial Institutions, and
Requiring the Use of the Government Electronic Procurement System"; Executive Order No. 262,
Series of 2000, entitled "Amending Executive Order No. 302, series of 1996, entitled "Providing
Polices, Guidelines, Rules and Regulations for the Procurement of Goods/Supplies by the National
Government" and Section 3 of Executive Order No. 201, series of 2000, entitled "Providing
Additional Policies and Guidelines in the Procurement of Goods/Supplies by the National
Government"; Executive Order No. 302, series of 1996, entitled "Providing Policies, Guidelines,
Rules and Regulations for the Procurement of Goods/Supplies by the National Government" and
Presidential Decree No. 1594 dated June 11, 1978, entitled 'Prescribing Policies, Guidelines, Rules
and RegUlations for Government Infrastructure Contracts." This law amends Title Six, Book Two of
Republic Act No. 7160, otherwise known as the "Local Government Code of 1991"; the relevant
provisions of Executive Order No. 164, Series of 1987, entitled "Providing Additional Guidelines in
the Processing and Approval of Contracts of the National Government"; and the relevant provisions
of Republic Act No. 7898 dated February 23, 1995, entitled "An Act Providing for the Modernization
of the Armed Forces of the Philippines and for Other Purposes." Any other law, presidential decree
or issuance, executive order, letter of instruction, administrative order, proclamation, charter, rule or
regulation and/or parts thereof contrary to or inconsistent with the provisions of this Act is hereby
repealed, modified or amended accordingly.
Section 48 (e), Republic Act No. 9184.
SEC. 53. Negotiated Procurement. - Negotiated procurement shall be allowed only in the following
instances: (a) in cases of two failed biddings, as provided in Section 35 of R.A. No. 9184; (b) in
case of imminent danger to life or property during a state of calamity, or when time is of the
essence arising from natural or man-made calamities or other causes where immediate action is
necessary to prevent damage to or loss of life or property, or to restore vital public services,
infrastructure facilities and other public utilities; (c) take-over of contracts, which have been
rescinded or terminated for causes provided for in the contract and existing laws, where immediate
action is necessary to prevent damage to or loss of life or property, or to restore vital public
services, infrastructure facilities and other public utilities; (d) where the subject contract is adjacent
or contiguous to an on-going infrastructure project, as defined in the IRR: Provided, however, That
the original contract is the result of a Competitive Bidding; the subject contract to be negotiated has
similar or related scopes of work; it is within the contracting capacity of the contractor; the
contractor uses the same prices or lower unit prices as in the original contract less mobilization
cost; the amount involved does not exceed the amount of the ongoing project; and, the contractor
has no negative slippage: Provided, further, That negotiations for the procurement are commenced
DECISION
S8-10-CRM-0032
Page 31 of 39
In the present case, the accused claims to have relied on Section 53 (b)
that allows the use of negotiated procurement "in case of imminent danger to life
or property during a state of calamity, or when time is of the essence arising from
natural or man-made calamities or other causes where immediate action is
necessary to prevent damage to or loss of life or property, or to restore vital
public services, infrastructure facilities and other public utilities."
During trial, the parties have engaged lengthily in arguing their respective
points as to whether there exists an urgency of action or an emergency situation
to warrant the use of negotiated procurement by the accused as an alternative
method of procurement, overlooking the fact that in Resolution No. 137-2005
entitled, "A Resolution Authorizing The Municipal Mayor To Represent the
Municipal Government of Romblon to Apply For, Negotiate With, Arrange
Repayment, Enter Into and Obtain A Loan From Philippine National Bank (PNB)
in the Amount of Thirteen Million Nine Hundred Fifty Thousand Pesos
(P13,950,OOO.OO)- Net of 1% & 4% Withholding Tax and EVAT Inclusive of
Payment of Duties, Taxes, Oelivery Charges, Training Costs,
Purchase/Acquisition of One (1) Unit Brand New JCB 4CX 4x4x4 Backhoe
Loader From (CAMEC); And To Sign For and In Behalf of the Municipality the
Loan Agreement/S, Promissory Note/s, Deed of Chattel Mortgage, Payment
Instructions and Other Documents Related Thereto and Contemplated Thereby,"
accused Mayor Leo G. Merida ("Merida"), as the approving authority; accused
Vice-Mayor Nonito S. Mallen ("Mallen"), as the Presiding Officer of the
Sangguniang Bayan of Ramblon; and the accused Sangguniang Bayan
members of Romblon, namely, Melben M. Mesana ("Mesana"), Francisco R.
Mayor, Jr., ("Mayor, Jr."), Chris G. Mazo ("Mazo"), Gerry M. Mijares ("Mijares"),
Ramon M. Magallon ("Magallon"), Bryant R. Riano ("B. Riano"), Mariano M.
Mateo ("Mateo"), Rafael R. Riana ("R. Riano"), and Edler M. Robis ("Robis"),
specifically stated in one of the whereas clauses therein that the alternative mode
of procurement to be used in the purchase is that ~rovided for under Rule 11,
Section 105 (a) and (b) of COA Circular No. 92-386,4 3 viz-
WHEREAS, the purchase/acquisition of the aforesaid JCB 4CX 4x4x4 from

CAMEC is exempted from Public Bidding in accordance with the provisions
of Rule 11 Section 105 (a) and (b) of the Commission on Audit (COA)
Circular 92-386, Rules and Regulations implementing the Local
Government Code of 1991 Art. 437c;
xxx xxx xxx
before the expiry of the original contract. Whenever applicable, this principle shall also govern
consultancy contracts, where the consultants have unique experience and expertise to deliver the
required service; or, (e) subject to the guidelines specified in the IRR, purchases of Goods from
another agency of the Government, such as the Procurement Service of the OBM, which is tasked
with a centralized procurement of commonly used Goods for the government in accordance with
Letters of Instruction No. 755 and Executive Order No. 359, series of 1989.
403
Rule 11. Procurement form Exclusive Philippine Agents or Distributors.
SEC. 105. When Procurement from Exclusive Philippine Agents or Distributors may be Made. -
Procurement of supplies or property of foreign origin may preferably be made directly from the
exclusive or reputable Philippine distributors or agents subject to the following condictions:
a. the Philippine distributor has no subdealers selling at lower prices; and

b. no suitable substitutes of substantially the same quality are available at lower prices.
Provided, That certification to the effect that the distributor has no subdealers selling at lower price
is secured from the principal and/or exclusive distributor.
DECISION
S8-10-CRM-0032
Page 32 of 39
The aforecited provision refer to direct contracting as an alternative method

of procurement and notwithstanding the repeal of COA Circular No. 92-386, as
earlier discussed, Section 50 of Republic Act No. 9184 and its Implementing
Rules and Regulations Part A (IRR-A) provide for direct contracting.
Direct Contracting or "single source procurement" is a method of

procurement of goods that does not require elaborate bidding documents. The
supplier is simply asked to submit a price quotation or a pro-forma invoice
together with the conditions of sale. The offer may be accepted immediately or
after some negotiations.
There are three instances when direct contracting may be used, one of
which is when the goods to be procured is sold by an exclusive dealer or
manufacturer which does not have sub-dealers selling at lower prices and for
which no suitable substitute can be obtained at more advantageous terms to the
Government.
For a clearer understanding of direct contracting, the prescribed procedures

therefor, and the participants therein, the recent case of Smartmatic which was
decided en bane by the Supreme Court is instructive.t?' Relevant portions
thereof is reproduced hereunder, viz-
How can Direct Contracting be justified?
To justify the need to procure through the Direct Contracting method, the
BAC should conduct a survey of the industry and determine the supply
source. This survey should confirm the exclusivity of the source of goods or
services to be procured. In all cases where Direct Contracting is
contemplated, the survey must be conducted prior to the commencement of
the procurement process. Moreover, the Procuring Entity must justify the
necessity for an item that may only be procured through Direct Contracting,
and it must be able to prove that there is no suitable substitute in the
market that can be obtained at more advantageous terms.
Who are involved in procurement through Direct Contracting?
The following are involved in the conduct of direct contracting:
1. The Head of the Procuring Entity;

2. The BAC;
3. The TWG;
4. The BAC Secretariat/ Procurement Unit; and
5. The supplier/manufacturer.
Methodology: How is Direct Contracting conducted?
The following steps are undertaken in conducting Direct Contracting:
1. The method of procurement to be used shall be as indicated in the

approved APP. If the original mode of procurement recommended in the
APP was Public Bidding but cannot be ultimately pursued, the BAC,
through a resolution shall justify and recommend the change in the mode of
procurement to be approved by the Head of the Procuring Entity.
2. For information purposes, the BAC, through the BAC Secretariat shall
post the notice direct contracting in the following:
404
Pabillo, et.al. v. COMELEC, G.R. Nos. 216098 and 216562, April 21 ,2015.
DECISION
SB-10-CRM-0032
Page 33 of 39
a. The PhiIGEPS;
b. The website of the Procuring Entity and its electronic procurement
service provider, if any; and
c. Any conspicuous place in the premises of the Procuring Entity.
3. The BAC, through the TWG and the BAC Secretariat, prepares the
Request for Quotation, technical specifications and draft contract in
accordance with the procedures laid down in this Manual, in the IRR-A and
in the PBDs.
4. The BAC, through the Secretariat, identifies the supplier from whom the
goods will be procured.
5. If a pre-procurement conference is required or deemed necessary, as
previously discussed in this Manual, the BAC holds such a conference. If a
pre-procurement conference is held, the participants should confirm the
existence of the conditions required by law for procurement through Direct
Contracting.
(Citations omitted)
In the present case, the accused claim that Compressed Air Machineries
and Equipment Corporation (CAMEC) is the exclusive distributor of the JCB
Backhoe and that there is no suitable substitute for the JCB Backhoe that can be
obtained at more advantageous terms to the Municipality of Romblon,
considering that the JCB Backhoe can perform a 9-in-1 function. They thus went
to offer into evidence the JCB Distributor Agreement between JCB Sales Asia
Pacific Pte. Ltd. and CAMEC (Exhibit "6"); the Certification from the Department
of Foreign Affairs, certifying that Compressed Air Machineries and Equipment
Corporation (CAMEC) is the exclusive distributor of JCB products manufactured
by JCB Sales Limited of Rocester, Staffordshire, England (Exhibit "7'), and the
Cost Comparison for JCB 4CX 4x4x4 Backhoe Loader (Exhibit "10').
The Court, however, finds it futile to engage in a discussion of whether the

accused was justified to have resorted to direct contracting because it was not
upon any of them to determine which of the alternative methods enumerated
therein may be used for the procurement. Neither is it upon the Chairperson of
the Bids and Awards Committee alone as the defense would like to impress upon
the Court when it presented in evidence the Certification issued by Bids and
Awards Committee Chairperson Municipal Engineer Leonardo Mendez, certifying
that all government policies and regulations in the award of the contract for the
acquisition of a backhoe from CAMEC had been complied with (Exhibit "27'). It is
the Bids and Awards Committee that is tasked by law to recommend to the Head
of the Procurin~ Entity the use of direct contracting as an alternative method of
procurement. 40
405
SEC. 12. Functions of the BAC. - The BAC shall have the following functions: advertise and/or post
the invitation to bid, conduct pre-procurement and pre-bid conferences, determine the eligibility of
prospective bidders, receive bids, conduct the evaluation of bids, undertake post-qualification
proceedings, recommend award of contracts to the Head of the Procuring Entity or his duly
authorized representative: Provided, That in the event the Head of the Procuring Entity shall
disapprove such recommendation, such disapproval shall be based only on valid, reasonable and
justifiable grounds to be expressed in writing, copy furnished the BAC; recommend the imposition of
sanctions in accordance with Article XXIII, and perform such other related functions as may be
necessary, including the creation of a Technical Working Group from a pool of technical, financial
and/or legal experts to assist in the procurement process.
DECISION
S8-10-CRM-0032
Page 34 of 39
Violation of Section 3 (e) of Republic Act No. 3019
This brings the discussion to the crux of the controversy - are the accused
liable of violation of Section 3 (e) of Republic Act No. 3019?
Section 3 (e) of Republic Act No. 3019 provides, viz-
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:
xxx xxx xxx
(e) Causing any undue Injury to any party, including the

Government, or giving any private party any unwarranted
benefits, advantage or preference in the discharge of his official
administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence. x x x
To secure conviction, the prosecution has the burden of proving the

concurrence of the following elements: (1) the accused is a public officer
discharging administrative, judicial or official functions, or a private person
charged in conspiracy with the public officer; (2) the public officer acts with
manifest partiality, evident bad faith or gross inexcusable negligence, and (3) the
public officer's action caused undue injury to any party, including the
government, or gave any private party unwarranted benefits, advantage or
preference in the discharge of his functicns.t'"
First Element
The existence of the first element is beyond dispute, it having been

stipulated that at the time relevant to the case, accused Merida and Mallen were
the Mayor and Vice-Mayor, respectively, while accused Melben M. Mesana,
Gerry M. Mijares, Mariano M. Mateo, Francisco G. Mayor, Jr., Chris G. Mazo,
Ramon M. Magallon, Edler M. Robis, Rafael R. Riano, and Bryant R. Riano were
Sangguniang 8ayan members, all of the Municipality of Romblon, Romblon.
econd and Third Element
In Fonacier, et.al. v. Sandiganbayan, et.al.,407 the Supreme Court has

defined manifest partiality, evident bad faith, and gross inexcusable negligence in
this wise:
In proper cases, the BAC shall also recommend to the Head of the Procuring Entity the use of
Alternative Methods of Procurement as provided for in Article XVI hereof.
The BAC shall be responsible for ensuring that the Procuring Entity abides by the standards set forth
by this Act and the IRR, and it shall prepare a procurement monitoring report that shall be approved
and submitted by the Head of the Procuring Entity to the GPPB on a semestral basis. The contents
and coverage of this report shall be provided in the IRR.
406
Cabrera v. Sandiganbayan, G.R. Nos. 162314 - 17, October 25,2004.
407
G.R. No. L-50691, December 5,2994,238 SeRA 655.
DECISION
S8-10-CRM-0032
Page 35 of 39
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 matters as they are wished for rather than as they
are." "Bad faith does not simply connote bad judgment or
negligence; it imputes a dishonest purpose or some moral obliquity
and conscious doing of a wrong; a breach of sworn duty through
some motive or intent or ill will; it partakes of the nature of fraud."
"Gross negligence has been so defined as negligence
characterized by the want of even slight care, acting or omitting to act
in a situation where there is a duty to act, not inadvertently but wilfully
and intentionally with a conscious indifference to consequences in so
far as other persons may be affected. It is the omission of that care
which even inattentive and thoughtless men never fail to take on their
own property." 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.
(Emphasis supplied)
While in Cabrera v. Sandiganbayan,408 the Supreme Court ruled that

"unwarranted means lacking adequate or official support; unjustified;
unauthorized; or without justification or adequate reasons. Advantage means a
more favorable or improved position or condition; benefit or gain of any kind;
benefit from course of action. Preference signifies priority or higher evaluation or
desirability; choice or estimation above another."
Based on the evidence presented, the Court is convinced that the accused,
in the award of the contract to CAMEC for Thirteen Million Nine Hundred Fifty
Thousand Pesos (P13,950,000.00) without the benefit of public bidding and in
disregard of the prescribed procedures for the use of alternative method of
procurement under Republic Act No. 9184 and its Implementing Rules and
Regulations Part A, has acted with evident bad faith and gave CAMEC
unwarranted benefit.
FIRST. The proposed procurement was not referred to the Bids and Awards
Committee. Accused Merida, himself, testified that he convened the Municipal
Development Council and the Municipal Development Council Executive
Committee, instead of referring the procurement of the JCB Backhoe to the Bids
nd Awards Committee, claiming that this decision was based on the advice of
Municipal General Services Officer Wenceslao Caldit and Municipal Engineer
Leonardo Mendez.
SECOND. While the twin proposal of purchasing a backhoe and contracting

a loan from the Philippine National Bank was undergoing evaluation by the
tripartite committee tasked on October 24, 2005 to study the proposals, or that
even before the Municipal Development Council Executive Committee convened
and passed Resolution No. 04-2005 on November 3, 2005, requesting the
Sangguniang Bayan of Romblon to authorize the Municipal Mayor to obtain a
loan from the Philippine National Bank for the purchase of the JCB Backhoe, or
that before the Sangguniang Bayan of Romblon could grant such request and
408
G.R. Nos. 162314 -17, October 25,2004.
DECISION
S8-10-CRM-0032
Page 36 of 39
pass Resolution No. 137-2005 on November 9, 2005, accused Merida had

already entered into contract with CAMEC for the purchase of the JCB Backhoe.
The Quotation and Contract dated October 28, 2005 (Exhibit "9") for the
purchase of the JCB Backhoe in the amount of Thirteen Million Nine Hundred
Fifty Thousand Pesos (P13,950,OOO.00), Net of 1% and 4% Withholding Tax and
EVAT, had been signed by accused Merida, under the following terms:
DELIVERY: Ex-stock subject to prior sale.

PAYMENT: Confirmed, Irrevocable, Letter of Credit at Sight or thru
bank financing.
VALIDITY: 30 days.
NOTES: 1) Price quote is inclusive of payment of Customs Taxes &
duties, brokerage, training cost, etc.
2) Warranty: Twelve (12) months or 2,000 hours,
whichever comes first, against factory defects and faulty
workmanship.
3) Spare parts always available at CAMEC yard.
4) Above unit JCB 4CX 4x4x4 being exclusively distributed
by CAMEC is exempted from public bidding per COA
Circular 92-386 Rule 11; DILG Implementing Rules &
Regulations Art 437(e); R.A. 9184 Art XVI Sec. 48(b) &
Sec 50(c); & Adm. Order No. 103 Series of 2004.
THIRD. Neither Sangguniang Bayan Resolution No. 137-2005 nor

Sangguniang Bayan Resolution No. 147-2005 had authorized accused Merida to
enter into a contract with CAMEC in behalf of the Municipality of Romblon for the
purchase of the JCB Backhoe. The only authority given to the accused Municipal
Mayor is to obtain a loan from the Philippine National Bank.
FOURTH. The JCB Backhoe was only delivered on September 13, 2006,
despite the fact that CAMEC had been fully paid upon the signing of the Loan
Agreement between the Municipality of Romblon and the Philippine National
Bank, the terms of the loan specifically stating that the amount of Thirteen Million
Nine Hundred Fifty Thousand (P13,950,OOO.00) is available to the Borrower in
one drawdown, and despite the fact that the Municipality of Romblon
commenced payment of its monthly amortization on January 2006.409
Existence of Conspiracy
Conspiracy exists when two or more persons come to an agreement

concerning the commission of a felony and decide to commit i1.410 In Bahilidad v.
People,411 the Supreme Court discussed the nature of conspiracy as follows, viz
.
•
Conspiracy is not presumed. Like the physical acts constituting the crime
itself, the elements of conspiracy must be proven beyond reasonable
doubt. While conspiracy need not be established by direct evidence, for it
may be inferred from the conduct of the accused before, during and after
the commission of the crime, all taken together, however, the evidence
must be strong enough to show the community of criminal design. For
409
Supra., see note 138.
410
Article 8, Revised Penal Code.
411
G.R. No. 185195, March 17,2010.
DECISION
58-10-CRM-0032
Page37 of 39
conspiracy to exist, it is essential that there must be a conscious design to

commit an offense. Conspiracy is the product of intentionality on the part of
the cohorts.
In this case, Resolution No. 137-2005 authorizing accused Merida to

obtain a loan from the Philippine National Bank was hurriedly approved by all the
accused on November 9, 2005, despite the fact that it was only on October 24,
2005 when the Sangguniang Bayan of Romblon had resolved to refer the matter
of procurement for further study by a tripartite committee and despite the fact that
there was a heated discussion on the proposed Resolution, following the
objection interposed by Sangguniang Bayan member Salvacion Duco.
Also, Resolution No. 147-2005 on December 12, 2005, ratifying the Loan
Agreement between the Municipality of Romblon and PNB, as well as all the
documents relevant thereto, despite the fact that during the said date there was
nothing yet to ratify yet because the Deed of Assignment, the Loan Agreement,
and the Chattel Mortgage were only signed on December 22, 2005 and
December 28,2005, respectively.
With the passage of Resolution No. 137-2005 and Resolution No. 147-
2005, the crime had been consummated and the Joint Affidavit executed by
accused B. Riano, Mijares, Mateo, R. Riano, Magallon, and Robis on January 23,
2006 is reduced to a mere afterthouqht.l"
In sum, the Court finds that the prosecution was able to prove the existence
of conspiracy between and among the accused beyond peradventure.
Right to Speedy Disposition of Cases
Lastly, the accused invokes violation of their constitutional right to speedy

disposition of cases, alleging that the 4-year conduct of preliminary investigation
by the Office of the Ombudsman constitute inordinate delay, to support their
prayer for acquittal.
Extant from the records is the fact that after being required to file their
counter-affidavits on November 20, 2006; that compliance was made by the
accused on January 5, 2007 and January 25, 2007; and that, on June 30, 2008,
the Office of the Ombudsman issued its Resolution recommending that the
a used be indicted for violation of Section 3 (e) of Republic Act No. 3019;413that
on December 5, 2011, this Court granted the accused right to a complete
preliminary investiqation.t" and that at the time the Court issued its December 5,
2011 Resolution until the Office of the Ombudsman filed its report thereon on
March 23, 2012,415 and even until this case proceeded to trial, there had been no
invocation by the accused of its constitutional right to speedy disposition of
cases.
Apart from finding no factual support, the Court notes that to raise this issue
for the first time at this stage is to devalue the constitutional guarantee to speedy
disposition of cases, and behooves Us to remind the accused that the right to
412
Exhibit "T".
413
Records, Volume 1, pp. 7 - 31.
414
415
DECISION
S8-10-CRM-0032
Page 38 of 39
speedy disposition of cases guaranteed them under the Constitution are shields,
not weapons.t"
WHEREFORE, in view of the foregoing, the Court finds Leo G. Merida,

Melben M. Mesana, Gerry M. Mijares, Mariano M. Mateo, Francisco G.
Mayor, Jr., Chris G. Mazo, Ramon M. Magallon, Edler M. Robis, Rafael R.
Riano, and Bryant R. Riano GUILTY beyond reasonable doubt of violating
Section 3 (e) of Republic Act No. 3019, as amended. They are hereby sentenced
to suffer an indeterminate penalty of imprisonment of six (6) years and one (1)
month, as the minimum term, to ten (10) years, as the maximum term, and
perpetual disqualification from public office.
In view of the death of accused Nonito S. Mallen,417 pursuant to Article 89

of the Revised Penal Code, the case against him is hereby ordered DISMISSED.
Accordingly, LET the Hold Departure Order issued against the deceased
accused be LIFTED and SET ASIDE. His bail bond is ordered RELEASED,
subject to the usual auditing and accounting procedures.
SO ORDERED.
Quezon City, Philippines.
Chairper on
WE CONCUR:
.~
R ALD . CRUZ GER~AITH A. ~G*
Associate Justice Associate Justice
416
McCandles v. District Court, 61 N.W.2d. 674(1954).
417
Records, Volume 1, pp. 461- 465.
'Sitting as Permanent Special Member of the Fourth Division as per Administrative Order No. 024-2017 dated February 1,
2017.
DECISION
58-10-CRM-0032
Page 39 of 39
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court's Division.
~~RO~JE-TA G
.. Acting Presiding Justice

Aub-Ibauha/Z Au: Republic of The Philippines Quezon City

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REPUBLIC OF THE PHILIPPINES

PEOPLE OF THE PHILIPPINES, SB-10-CRM-0032

This is an indictment against the Mayor, Vice-Mayor, and members of the

Records, Volume I, pp. 1 - 4.

Subsequent to the issuance by the Court of the Pre-Trial Order on August

The prosecution and the defense filed their respective memoranda on

Accused's predicament began when the Department of Environment and

On October 24, 2005, the Sangguniang Bayan of Romblon took up the

In the meantime, the Municipal Development Council Executive Committee

Sitjar informed the Municipal Development Council Executive Committee

After Sitjar's presentation and clarifications, the MDC Executive Committee

The Municipal Development Council Executive Committee Resolution No.

On December 9, 2005, the Finance Committee decided to intervene and

On December 12, 2005, during the 47'h Regular Session of the

Mortgage and Other Documents Contemplated Thereby Between the

Merida signed the Deed of Assignment on December 22,2005 (Exhibit "L').

On September 13, 2006, CAMEC delivered the JCB Backhoe Loader

The prosecution presented sixteen (16) witnesses, namely, Lyndon M.

The respective testimonies of Herman Rollon, Jerry Mallorca, Roberto

LYNDON M. MOLlN039 was a former public official in the Municipality of

was released by the Philippine National Bank to CAMEC Philippines on even

SALVACION M. MAESTRO-DUC041 was a member of the Sangguniang Bayan

The controversy began at the regular session of the Sangguniang Bayan of

Caldit told the Sangguniang Bayan of Romblon that a backhoe would be

The referral to the proper committee, notwithstanding, during the November

The Municipal Development Council Executive Committee is composed of

the Accountant, among others." Its purpose is to assure that the

Subsequently, on November 9, 2005·,the Sangguniang Bayan of Romblon

On November 14, 2005, even before the Sangguniang Bayan of Romblon

On the next session of the Sangguniang Bayan of Romblon on December

Despite her objection, however, the Sangguniang Bayan of Romblon

TSN dated August 22,2012, p. 85.

She stressed that neither Resolution No. 137-2005 not 147-2005

IBARRA M. SILVERI068 is a businessman who has been engaged in the marble

The backhoe purchased by the Municipality of Romblon costs Thirteen

WENCESLAO J. CALDIT,75 the Municipal General Services Officer of the

He received the letters of the DENR-EMB MIMAROPA on September 27,

It was the Municipal Development Council" who approved on October 7,

Officer, one member of the Sangguniang Bayan, and all Barangay

As it was his office that is responsible in looking for a backhoe unit,82 he

Up to the present, the Municipality of Romblon remains to have no sanitary

MONICA M. MALA y96 is the Municipal Treasurer of the Municipality of Romblon

On December 9, 2005, along with Municipal Planning and Development

As Municipal Treasurer, she is also a member of the Finance Committee, of

The Municipal Development Council is composed of the Municipal Mayor,

The Municipal Development Council Executive Committee ensures that all

In 2005, the Municipal Mayor of the Municipality of Romblon is Leo G.

The Finance Committee, on the other hand, determines the projected

She first learned that the Municipality of Romblon is going to acquire a

When Sitjar suggested procurement from sole distributorship, she objected

The mode of procurement of the equipment was not indicated in the

Subsequent to the Municipal Development Council Executive Committee

The signing of the Memorandum of Agreement was held in a hotel along

As far as he knows, the loan agreement pushed throuqh.!" The first

Rodeo's testimony is as follows:

He is in charge of the accounting and internal audit, particularly, installing

The modes of procurement that the Municipality may resort to are

In case of procurement, there must first be an Obligation Request and

Internal Audit is an independent operation activity within the organization

procedure.:" He then verbally informed Mayor Leo Merida of his

He is not aware if the Municipality was reimbursed by CAMEC

Emergency Purchase may be resorted to when the delay in the delivery of

At present, the landfill still exists.':"