Case Digest: ​ Republic vs Sandiganbayan

ISSUE:  Whether or not the Swiss funds can be forfeited in favour of the Republic, on the basis of the Marcoses’s lawful income.

FACTS:  Petitioner Republic, through the Presidential Commission on Good Government (PCGG), represented by the Office of the Solicitor General (OSG), filed a petition for forfeiture before the Sandiganbayan. Petitioner sought the declaration of the aggregate amount of US$356 million (now estimated to be more than US$658 million inclusive of interest) deposited in escrow in the PNB, as ill-gotten wealth. The funds were previously held by the following five account groups, using various foreign foundations in certain Swiss banks. Moreover, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couple's salaries, other lawful income as well as income from legitimately acquired property. The treasury notes are frozen at the Central Bank of the Philippines, now Bangko Sentral ng Pilipinas, by virtue of the freeze order issued by the PCGG. Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos family to identify, collate, cause the inventory of and distribute all assets presumed to be owned by the Marcos family under their conditions contained therein. 

DECISION:  Granted 

RATIO DECIDENDI:  Yes. Their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for determining the existence of a prima facie case of forfeiture of the Swiss funds. The sum of $304,372.43 should be held as the only known lawful income of respondents since they did not file any Statement of Assets and Liabilities (SAL), as required by law, from which their net worth could be determined. Besides, under the 1935 Constitution, Ferdinand E. Marcos as President could not receive "any other emolument from the Government or any of its subdivisions and instrumentalities." Likewise, under the 1973 Constitution, Ferdinand E. Marcos as President could "not receive during his tenure any other emolument from the Government or any other source." In fact, his management of businesses, like the administration of foundations to accumulate funds, was expressly prohibited under the 1973 Constitution.