EN BANC

 

 

G.R. No. 200238 - PHILIPPINE SAVINGS BANK and PASCUAL M. GARCIA III, as representative of Philippine Savings Bank and in his personal capacity, Petitioners, - versus SENATE IMPEACHMENT COURT, consisting of the Senators of the Republic of the Philippines, acting as Senator Judges, namely: Juan Ponce Enrile, Jinggoy Ejercito Estrada, Vicente C. Sotto III, Alan Peter S. Cayetano, Edgardo J. Angara, Joker P. Arroyo, Pia S. Cayetano, Franklin M. Drilon, Francis G. Escudero, Teofisto Guingona III, Gregorio B. Honasan II, Panfilo M. Lacson, Manuel M. Lapid, Loren B. Legarda, Ferdinand R. Marcos, Jr., Sergio R. Osmena III, Kiko Pangilinan, Aquilino Pimentel III, Ralph G. Recto, Ramon Revilla, Jr., Antonio F. Trillanes IV, Manny Villar, and the Honorable Members of the Prosecution Panel of the House of Representatives, Respondents.

 

 

Promulgated:

 

February 9, 2012

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DISSENTING OPINION

 

 

CARPIO, J.:

 

 

I dissent because the majority ruling makes a mockery of all existing laws designed to insure transparency and good governance in public service.

 

The majority ruling in effect advises all government officials and employees that they can legally evade reporting their actual assets in their Statement of Assets, Liabilities and Net Worth, which is required by the Constitution1 and RA Nos. 30192 and 6713,3 by simply opening foreign currency deposit accounts with local banks. The majority holds that under Section 8 of RA No. 6426,4 foreign currency deposits of government officials and employees are absolutely confidential, even in impeachment or bribery cases filed against them. The majority declares that foreign currency deposit accounts can be opened in any judicial, administrative, legislative, or impeachment inquiry only if the account owner himself consents in writing to open his account to his prosecutors or investigators.

 

The world will now know that Philippine foreign currency deposit accounts provide a much better safe haven for ill-gotten wealth than Swiss bank accounts. Former President Ferdinand Marcos was wrong in depositing hundreds of millions of U.S. dollars in Swiss bank accounts.5 Had he deposited, even in his own name, the money in foreign currency accounts with local banks under RA No. 6426, as amended by his three Presidential Decrees,6 he would have gotten away with his loot under this ruling of the majority.

 

Is this the intention of Section 8 of RA No. 6426 when it mandates the secrecy of foreign currency deposits? The answer is clearly no. Section 8 was inserted by PD No. 1246, whose last two Whereas clauses provide:

 

Whereas, in order to insure the development and speedy growth of the Foreign Currency Deposit System and the Offshore Banking System in the Philippines, certain incentives were provided for under the two Systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest income of depositors who are non-residents and are not engaged in trade or business in the Philippines;

 

Whereas, making absolute the protective cloak of confidentiality over such foreign currency deposits, exempting such deposits from tax, and guaranteeing the vested rights of depositors would better encourage the inflow of foreign currency deposits into the banking institutions authorized to accept such deposits in the Philippines thereby placing such institutions more in a position to properly channel the same to loans and investments in the Philippines, thus directly contributing to the economic development of the country. (Emphasis supplied)

 

 

Thus, PD No. 1246 expressly declares that the secrecy of foreign currency deposits under Section 8 of RA No. 6426 is intended to protect depositors who are non-residents because the purpose of the secrecy is to encourage the inflow of foreign currency deposits to Philippine banks from such depositors who are non-residents.

 

This express intent of PD No. 1246 was affirmed by the Supreme Court in several cases. In Salvacion v. Central Bank,7 decided in 1997, this Court ruled:

 

In his Comment, the Solicitor General correctly opined, thus:

 

x x x

 

It is evident from the above [Whereas clauses] that the Offshore Banking system and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors (Vide second whereas of PD No. 1034; third whereas of PD No. 1035). It is these deposits that are induced by the two laws and given protection and incentives by them. (Emphasis supplied)

 

 

In Salvacion, the Court emphatically stressed that the deposits protected under the Foreign Currency Deposit System are deposits from foreign lenders and investors.

 

Likewise, in China Banking Corporation v. Court of Appeals,8 decided in 2006, the Court declared:

 

 

It must be remembered that under the whereas clause of Presidential Decree No. 1246 which amended Sec. 8 of Republic Act No. 6426, the Foreign Currency Deposit System including the Offshore Banking System under Presidential Decree 1034 were intended to draw deposits from foreign lenders and investors, and we quote:

 

Whereas, in order to assure the development and speedy growth of the Foreign Currency Deposit System and the Offshore Banking System in the Philippines, certain incentives were provided for under the two Systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest income of depositors who are nonresidents and are not engaged in trade or business in the Philippines;

 

Whereas, making absolute the protective cloak of confidentiality over such foreign currency deposits, exempting such deposits from tax, and guaranteeing the vested rights of depositors would better encourage the inflow of foreign currency deposits into the banking institutions authorized to accept such deposits in the Philippines thereby placing such institutions more in a position to properly channel the same to loans and investments in the Philippines, thus directly contributing to the economic development of the country. (Emphasis supplied)

 

 

Thus, in China Banking Corporation, the Court again stressed that the Foreign Currency Deposit System including the Offshore Banking System under Presidential Decree 1034 were intended to draw deposits from foreign lenders and investors.

 

Even GSIS v. Court of Appeals,9 decided in 2011, which the majority cites in its ruling, also declared that Republic Act No. 6426 was intended to encourage deposits from foreign lenders and investors. Clearly, the secrecy of foreign currency deposits in Section 8 of RA No. 6426, a special law, applies only to foreign depositors and investors.

 

What secrecy then applies to Philippine citizens who hold foreign currency deposits with local banks? Such deposits of Philippine citizens are governed by RA No. 1405,10 the general law on secrecy of bank deposits, which provides:

 

Section 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation. (Emphasis supplied)

 

 

Under Section 2 of RA No. 1405, all deposits of whatever nature with banks xxx may be examined, inquired or looked into xxx in cases of impeachment. Thus, there is no question that the impeachment court can pry open the foreign currency accounts of impeachable officers.

 

There is even a more compelling legal ground why the foreign currency accounts in question are not confidential. Section 8 of RA No. 6713, as amended, mandates the disclosure of the assets of government officials and employees who have an obligation to disclose their assets. Moreover, Section 8 expressly states that the public has the right to know the assets of government officials and employees. Section 8 of RA No. 6713 provides:

 

Sec. 8. Statements and Disclosure. Public officials and employees have an obligation to accomplish and submit declarations under oath of, and the public has the right to know, the assets, liabilities, net worth and financial and business interests including those of their spouses and of unmarried children under eighteen (18) years of age and living in their households. (Emphasis supplied)

 

 

 

Thus, government officials and employees have the obligation to disclose their assets to the public, and the public has the right to know the assets of government officials and employees. This obligation of government officials and employees to disclose all their assets is absolute and has no exception. The right of the public to know the assets of government officials and employees is also absolute and has no exception.

 

What the majority has ruled is that government officials and employees have no obligation to disclose their foreign currency accounts, and that the public has no right to know such foreign currency accounts. This completely violates Section 8 of RA No. 6713. The majority ruling invents an exception that is not found in Section 8 of RA 6713. This exception renders Section 8 of RA 6713 useless. Government officials and employees can simply open foreign currency accounts and deposit all their cash in such accounts. Then they no longer have the obligation to disclose their cash assets, and the public no longer has the right to know such assets.

 

Section 8 of RA No. 671311 is a much later law than Section 8 of RA No. 6426.12 The repealing clause of RA No. 6713 states that all laws, decrees and orders or parts thereof inconsistent herewith, are deemed repealed or modified accordingly, unless the same provide for a heavier penalty.13 Since there is an irreconcilable inconsistency between Section 8 of RA No. 6713 and Section 8 of RA No. 6426, the later law, which is RA No. 6713, prevails. In short, the government officials and employees obligation to disclose their assets, and the peoples right to know such assets, as expressly mandated by Section 8 of RA No. 6713, prevails over the secrecy of foreign currency deposits under Section 8 of RA No. 6426, granting that such secrecy applies to Philippine citizens.

 

Incidentally, Chief Justice Renato C. Corona has publicly admitted that he owns the foreign currency accounts in question. The Philippine Star news report entitled Disclosure in Due Time, Says CJ, written by Perseus Escheminada on 11 February 2012, states in part:

 

MANILA, Philippines - Chief Justice Renato Corona yesterday admitted having dollar accounts and vowed to disclose them in due time.

 

Corona belied insinuations that his bid in the Supreme Court to stop the subpoena of the Senate impeachment court on his foreign currency accounts in Philippine Savings Bank (PSBank) was a sign of guilt or obvious move to conceal the truth.

 

I will make the disclosure in due time, the Chief Justice told The STAR in a text message.

 

He explained that he filed an urgent petition seeking the issuance of a temporary restraining order (TRO) on the impeachment trial, including the subpoena on his dollar accounts, because his rights were being violated in the proceedings.

 

Corona said he just wanted legal issues to be resolved first before the disclosure of his dollar accounts.

 

With this admission that he owns the foreign currency accounts in question, Chief Justice Corona has the obligation to disclose these foreign currency assets to the people, who have the right to know his assets.

 

The Constitution mandates that public officers and employees must at all times be accountable to the people.14 A government official or employee who refuses to be accountable to the people by not disclosing assets he admittedly owns, despite his obligation to so disclose to the people, who have the right to know his assets, puts himself beyond accountability to the people.

 

Accordingly, since the foreign currency accounts in question are not covered by Section 8 of RA No. 6426, and petitioners will not suffer grave and irreparable injury, I vote to DENY petitioners prayer for a Temporary Restraining Order.

 

 

 

 

 

 

ANTONIO T. CARPIO

Associate Justice

 

1 Section 17, Article XI, of the 1987 Constitution provides:

 

Sec. 17. A public officer or employee shall, upon assumption of office and as often thereafter as may be required by law, submit a declaration under oath of his assets, liabilities, and net worth. In the case of the President, the Vice-President, the Members of the Cabinet, the Congress, the Supreme Court, the Constitutional Commissions and other constitutional offices, and officers of the armed forces with general or flag rank, the declaration shall be disclosed to the public in the manner provided by law.

2 Section 7 of RA No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, provides:

 

Sec. 7. Statement of Assets and Liabilities. - Every public officer, within thirty days after assuming office and, thereafter, on or before the fifteenth day of April following the close of every calendar year, as well as upon the expiration of his term of office, or upon his resignation or separation from office, shall prepare and file with the office of the corresponding Department Head, or in the case of a Head of Department or Chief of an independent office, with the Office of the President, a true, detailed and sworn statement of assets and liabilities, including a statement of the amounts and sources of his income, the amounts of his personal and family expenses and the amount of income taxes paid for the preceding calendar year: Provided, That public officers assuming office less than two months before the end of the calendar year, may file their first statement on or before the fifteenth day of April following the close of the said calendar year.

3 Section 8, RA No. 6713, as amended, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees, quoted on page 6 of this Opinion.

4 Section 8 of RA No. 6426 provides:

 

Section 8. Secrecy of Foreign Currency Deposits. All foreign currency deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositors, in no instance shall such foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or private: Provided, however, that said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever.

 

 

5 See Republic v. Sandiganbayan, G.R. No. 152154, 15 July 2003, 406 SCRA 1900.

6 Presidential Decree Nos. 1034, 1035 and 1246.

7 G.R. No. 94723, 21 August 1997, 278 SCRA 27, 45.

8 G.R. No. 140687, 18 December 2006, 511 SCRA110, 117-118.

 

9 G.R. No. 189206, 8 June 2011.

10 An Act Prohibiting Disclosure of or Inquiry into, Deposits with any Banking Institution and Providing Penalty Therefor.

 

11 Approved on 20 February 1989.

12 Issued on 21 November 1977.

13 Section 16, RA No. 6713, as amended.

 

14 Section 1, Article XI, 1987 Constitution.