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447 Phil. 327


[ G.R. No. 154499, March 14, 2003 ]




Petitioners are officials of the Bangko Sentral ng Pilipinas (BSP). At the time material to this case, Alberto V. Reyes was Deputy Governor and Head of the Supervision and Examination Sector (SES), Wilfredo B. Domo-ong was Director of the Department of Rural Banks (DRB), while Herminio Principio was an Examiner of the DRB. They filed this petition for review on certiorari of the decision[1] of the Court of Appeals which found them administratively liable for unprofessionalism under the Code of Conduct and Ethical Standards on Public Officials and Employees and imposed upon each of them a fine equivalent to six months of their salaries.

The case arose from a letter,[2] dated May 19, 1999, which respondent Rural Bank of San Miguel (Bulacan), Inc. (RBSMI) sent to then BSP Governor Gabriel Singson. In its letter, RBSMI charged petitioners with violations of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) and Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees). The Monetary Board of the BSP created a committee to investigate the matter.

The ensuing investigation revealed that RBSMI had had a history of major violations/exceptions dating back to 1995. The Report of Examination[3] on RBSMI as of July 31, 1995, submitted by BSP Examiner Danilo J. Castillo, cited 10 major exceptions/violations and deficiencies of RBSMI, for which reason the latter was directed to immediately desist from conducting business in an unsound and unsafe manner. On March 15, 1996, RBSMI undertook to take corrective measures and/or comply with the instructions/recommendations of the BSP.[4]

In 1996, RBSMI was again examined. The examination team was led by petitioner Principio who, in a “Report of Examination[5] on RBSMI as of September 15, 1996,” noted 20 serious exceptions/violations and deficiencies of RBSMI. On January 9, 1997, upon her request, Rose Ilagan, an RBSMI director, was given a copy of the list of exceptions/deficiencies found by petitioner Principio. Ms. Ilagan, however, in a sworn affidavit,[6] dated August 10, 1999, claimed that the copy she was given was unreadable, “making it impossible for RBSMI to immediately react to said list of exceptions.”

The exit conference on the September 1996 General Examination on RBSMI was originally scheduled on January 13, 1997, but on that date, RBSMI’s Legal Counsel and Corporate Secretary requested a rescheduling of the conference “to allow RBSMI to review the findings/ exceptions and thereafter, prepare their comments/observations on the same.”[7] In a letter, dated January 14, 1997, petitioner Domo-ong granted the request and the conference was reset to January 21, 1997.

It is claimed that the board of RBSMI discussed the exceptions noted in the list given to them on January 21, 1997, but as the copy sent to them was unreadable, “it was unable to understand many exceptions.” As the members of the board were furnished clear copies only during the exit conference, RBSMI asked for 30 days within which to submit its answer to the exceptions.

Meanwhile, an advance copy of the report of petitioner Principio was submitted to the Monetary Board (MB) after review of said report by petitioner Domo-ong. The report, which was dated January 23, 1997, was signed by petitioner Reyes and submitted to the MB on January 27, 1997. Acting on this memorandum, the MB issued Resolution No. 96[8] requiring RBSMI to explain in writing within 15 days the findings of the examiner. It also directed the DRB to verify, monitor, and report to the Deputy Governor, petitioner Reyes, the findings/exceptions noted until the same had been corrected.

On February 26, 1997, RBSMI submitted its comments on the exceptions/deficiencies/findings noted by petitioners in a paper entitled “Concurrence, Corrections and Comments on the Exceptions, Deficiencies and Recommendations of BSP in its ‘General Examination of RBSMI’s Books of Accounts as of September 15, 1996 as contained in the Report of Examiner Herminio C. Principio, dated December 23, 1996, initially discussed on January 21, 1997.’”[9]

Pursuant to the MB’s directive in Resolution No. 96, another examination team conducted a special examination on RBSMI from March 4, 1997 to March 26, 1997, with February 28, 1997 as the cut-off date of examination. The special examination team, headed by petitioner Principio and assisted by Ms. Carmelita Reyes, was introduced to RBSMI through a letter of petitioner Domo-ong dated February 14, 1997.

RBSMI president Hilario Soriano claims that he was pressured on March 4, 1997 into issuing a memorandum to the bank employees authorizing petitioner Principio and Ms. Reyes to review the bank’s accounting and internal control system. He likewise claims that sometime in March 1997, petitioner Reyes urged him (Soriano) to consider selling the bank. Soriano says that on or about May 28, 1997, Soriano, through a telephone introduction made by petitioner Reyes the day before, met with Exequiel Villacorta, President and Chief Executive Officer of TA Bank. In his sworn affidavit,[10] Villacorta confirmed that he and Soriano indeed met to discuss a possible corporate combination of RBSMI and TA Bank. The talks between TA Bank and RBSMI never got past the exploratory stage. Their discussions were cut short as Soriano wanted a “sell-out,” while Villacorta was interested in a “buy-in.”

Soriano continues: Around the last week of May, petitioner Reyes asked him (Soriano) whether he wanted another buyer. When told that he did, petitioner Reyes introduced Soriano by telephone to Benjamin P. Castillo of the Export and Industry Bank (EIB). Hence, he and Castillo met on June 26, 1997, but their talks ended then and there because, as per his affidavit[11] dated July 12, 1999, Castillo alleged that Soriano insisted on an RBSMI sell-out while he wanted a mere EIB buy-in and take-over of the management.

Meanwhile, on June 13, 1997, the MB approved Resolution No. 724[12] noting the Report on the examination of RBSMI submitted by petitioner Domo-ong. The MB confirmed the steps taken or to be taken by the DRB. It also ordered RBSMI to correct the major exceptions noted within 30 days from receipt of the advice and to remit to the BSP the amount of P2,538,483.00 as fines and penalties for incurring deficiencies in reserves against deposit liabilities.

In accordance with the MB resolution, petitioner Domo-ong wrote the bank on June 25, 1997, informing it of the prescriptions of the resolution. On July 21, 1997, Soriano submitted RBSMI’s answers to the BSP exceptions/findings mentioned. Soriano said in the letter that “the actions taken or to be taken by the bank (RBSMI) were deliberated and ratified by the Board of Directors in its regular meeting held on July 9, 1997.” With regard to the fines and penalties amounting to P2,538,483.00, RBSMI requested the director of the DRB to debit its demand deposit with the amount.[13]

On September 22, 1997, nearly six months after MB Resolution No. 96 had been issued, RBSMI wrote petitioner Domo-ong seeking clarification of two specific issues:
  1. May the scope/coverage of monitoring be expanded as to include verifications of bank transactions, before and beyond the cut-off date of the general examinations as of September 15, 1996? If so, to what extent?

  2. Was there no pre-empting of the Monetary Board directive which was approved under Resolution No. 96 dated January 29, 1997?[14]
In a letter, dated November 13, 1997, petitioner Domo-ong explained that “DRB’s monitoring of the extent of corrective measures must necessarily cover bank transactions after the examination cut-off date to be assured that the same exceptions have not been repeated.” As to the second issue, he explained that “there was no pre-empting of the MB directive as it was approved on January 29, 1997, way ahead of the initial monitoring which was undertaken from March 4 to 26, 1997 with a cut-off date of February 26, 1997.” In conclusion, petitioner Domo-ong said that “considering that ‘monitoring’ in this regard simply means overseeing, observing or keeping track of the corrective measures being made by the bank on the serious findings/exceptions noted, we do not see any reason for your apprehensions on the matter. As soon as said findings/exceptions have been fully corrected, then the DRB can immediately recommend the lifting of said monitoring.”[15]

Meanwhile, petitioner Principio allegedly requested RBSMI on October 6, 1997 to authorize him and a new BSP examiner, Ms. Zeny Cabais, to visit the bank from time to time to review accounting and control systems. This was before a letter of introduction, dated October 10, 1997, was issued by DRB introducing the new examination team of petitioner Principio and Ms. Cabais. The letter of instruction stated that both examiners were authorized, pursuant to MB Resolution No. 96, to verify and monitor the corrective measures taken by RBSMI on the findings/exceptions noted in the general examination of September 15, 1996.

When petitioner Principio presented the letter to Ms. Ilagan on October 22, 1997, the latter allegedly asked for a specification of the scope of his examination. However, Ms. Ilagan claimed in her sworn affidavit that on October 22, 1997 Soriano asked petitioner Principio to make a formal request for the records which he wanted to examine in order to avoid confusion. Nevertheless, Soriano subsequently allowed petitioner Principio to conduct the examination without the formal request.

Soriano claims that sometime in November 1997, he accidentally met petitioner Reyes who allegedly told him to sell out or RBSMI would suffer a bank run and it would be placed under conservatorship. Early that month, the Monetary Board issued Resolution No. 1473,[16] dated November 5, 1997, ordering the continuous verification/monitoring of RBSMI until the major exceptions were substantially corrected. It likewise warned the officers of the bank that unless they ceased from conducting business in such an unsafe and unsound manner, drastic actions might be taken against the bank, including the take-over of management without prejudice to the prosecution of parties responsible pursuant to § 36 of R.A. No. 7653.

The action of the MB was followed on March 20, 1998 by the MB’s notation of DRB’s report on the corrective measures taken by complainant on the serious findings/exceptions in the September 15, 1996 General Examination. However, as there were some major and/or serious exceptions/findings which remained uncorrected, the MB again ordered its DRB to continue the verification/monitoring of RBSMI until the exceptions/findings were fully corrected.

In another development, the Manila Electric Company (MERALCO) issued a memorandum,[17] dated April 6, 1998, to all of its collection officers enjoining them not to accept RBSMI checks from customers and other payees of bills, service deposit, and other payments until further advice from the Treasury. MERALCO thought that RBSMI had declared a “bank holiday.” The next day (April 7, 1998), MERALCO issued another memorandum[18] to its collection officers, informing them that RBSMI’s alleged bank holiday was not true and instructing them to accept RBSMI checks from customers and other payees. This was after the BSP had denied the news of pending RBSMI bank holiday. On the same date, MERALCO issued a letter of apology to RBSMI Chairman Atty. Sedfrey A. Ordoñez.

Thereafter, more than one year after authorizing the BSP to debit its demand deposit up to the extent of the fines and penalties imposed by BSP, RBSMI, through its counsel Atty. Rene Saguisag, in a letter,[19] dated November 4, 1998, appealed to the MB to reverse the imposition of the P2.5 million penalty on the ground that “no Board Resolution [had been] adopted to authorize the debit in the Demand Deposit maintained by the bank with the Bangko Sentral ng Pilipinas.”

RBSMI reiterated its request for the reversal of the imposition of penalty in another letter.[20] Atty. Saguisag said that “as for the letter of Mr. Hilario requesting the Bangko Sentral ng Pilipinas to debit the account of our client, I would like to state that, at that time, he was under a state of extreme pressure to sell the bank at an unreasonably low price, hence, the reason for the said measure of desperation.” The aforesaid letters of Atty. Saguisag were answered by the BSP in its letter[21] dated November 18, 1998, explaining to Atty. Saguisag the bases for BSP’s imposition of the penalty on RBSMI.

On January 21, 1999, the MB, through Resolution No. 71, authorized the conditional reversal of sixty percent (60%) of the penalty debited against RBSMI pending resolution of the dispute on the findings on reserve deficiency. The conditional reversal was communicated to RBSMI by petitioner Reyes through a letter, dated February 8, 1999. In a letter, dated March 29, 1999, RBSMI agreed to “the interim reversal of the penalty, such that said P2.5 million will be credited to RBSMI, without prejudice to the outcome of the legal study regarding the propriety of the imposition of the penalty.” Later, on April 7, 1999, the MB approved the interim reversal of the entire amount of the penalty “pending the outcome of the study on the legal and factual basis for the imposition of the penalty.” Accordingly, the BSP credited RBSMI’s demand deposit account to the extent of the remaining forty percent (40%) of the penalty.

On February 3, 1999, Atty. Sedfrey A. Ordoñez, RBSMI Chairman, and Soriano wrote the MB regarding the release of the remaining proceeds of the emergency loans granted to RBSMI. Later on, RBSMI would claim that this letter was somehow leaked to the press. The Manila Times issue of March 10, 1999 carried a news article by Jun T. Ebias entitled “2 rural banks seek emergency loans, investors,[22] which quoted certain portions of the February 3, 1999 letter of RBSMI to the MB. In addition, RBSMI alleged that supposedly forged directives from Soriano addressed to all directors of the rural bank were faxed to the municipal mayors of Bulacan. The undated fax message announced a special board meeting of the directors of RBSMI on February 20, 1999 to discuss internal and external audit findings, unpaid savings deposit withdrawals and matured time deposits, and the possible closure of the bank due to insolvency.

In a letter, dated March 10, 1999, Soriano asked for an inquiry into the alleged leak of sensitive information which can “logically be traced [to] Bangko Sentral ng Pilipinas sources.” After investigating the matter, BSP, through petitioner Reyes and BSP Deputy Governor and General Counsel Armando L. Suratos, informed RBSMI in a letter, dated March 23, 1999, that the BSP was unable to determine the source of information of the Manila Times.

On the basis of the foregoing, RBSMI, through counsel, filed its letter-complaint of May 19, 1999, which was referred by the MB to an Ad Hoc Committee it had created. After the parties had submitted their respective pleadings, documents and memoranda, the Ad Hoc Committee issued a resolution,[23] dated February 16, 2000, the pertinent part of which reads:

After a thorough review of the records, we find that complainant has not substantiated its allegations of respondents’ unprofessionalism. It has failed to present sufficient factual and legal bases to administratively charge respondents with the violation of any provision of R.A. No. 3019 and/or R.A. No. 6713. The acts complained of were done by respondents in the performance of their official duties.

IN VIEW WHEREOF, this Committee respectfully recommends that upon the approval of these findings, the monetary Board of the Bangko Sentral ng Pilipinas dismiss the complaint for lack of merit.”
The MB adopted the recommendation of the Ad Hoc Committee, prompting RBSMI to appeal to the Court of Appeals the dismissal of the complaint as well as the denial of its motion for reconsideration and supplemental motion to vacate or reconsider. On December 14, 2001, the Court of Appeals reversed. The dispositive portion of its decision states:
WHEREFORE, the instant petition is hereby GRANTED. Accordingly, Resolution No. 257 dated February 18, 2000 and letter dated July 31, 2000 of the respondent Monetary Board are hereby REVERSED and SET ASIDE and a new one entered finding respondents BSP Deputy Governor Alberto V. Reyes, Director Wilfredo B. Domo-ong of the BSP Department of Rural Bank, and bank examiner Herminio C. Principio, administratively liable for unprofessionalism and are each meted the penalty of fine equivalent to six (6) months salary. [24]

Petitioners filed a motion for reconsideration. However, the motion was denied on July 29, 2002. Hence, this petition for review.

Petitioners submit the following issues:
  1. Contrary to the baseless and illogical conclusion of the Court of Appeals, there exists no substantial and convincing evidence to support the charge that Petitioners Reyes and Domo-ong are guilty of unprofessionalism by reason of their alleged “careless handling of confidential matters involving the internal problems of RBSMI.”

  2. Contrary to the conclusion of the Court of Appeals, Petitioner Reyes did not commit any act of unprofessionalism by reason of his alleged “illegal and unethical act of brokering the sale of RBSMI.”

  3. The conclusion of the Court of Appeals that petitioner Principio is liable for the charge of undue pressure against RBSMI, as a consequence of the undue haste by which petitioner Principio submitted his advance report to the MB, exposes the lack of knowledge of the Court of Appeals on how BSP officials work and perform their functions and duties and/or lack of full understanding of the facts of the case.

  4. The justification advanced by the Court of Appeals in declaring petitioners guilty of undue pressure, unprofessionalism, and arrogance relative to the latter’s act of recommending penalty charges for RBSMI’s reserve deficiency, is absolutely without any factual and legal basis.

  5. The findings of fact of the Ad Hoc Committee as approved by the Monetary Board of the BSP in its Resolution No. 257 was not accorded due consideration by the Court of Appeals despite the fact that said findings of fact are supported by substantial evidence.

  6. The questioned decision violates the constitutional provision that a decision should state the facts and law on which it is based.
The present petition warrants the modification of the Court of Appeals’ decision.

First. Petitioners, particularly petitioner Reyes, are faulted with the careless handling of confidential and vital information regarding the financial status of RBSMI. The Court of Appeals ruled:
The respondent BSP officials cannot deny that the newspaper article in the Manila Times which was brought to the attention of respondent Alberto V. Reyes unequivocably states that the source of the information concerning the alleged financial needs of RBSMI came from BSP and from an officer of the Monetary Board. If Reyes himself was not the source of such a confidential information, he should have, at the very least and considering his exalted position as no less than the BSP Deputy Governor, exerted efforts to discover the leak and make accountable the concerned BSP officials or employees. . . . Unfortunately, however, Reyes appeared to have done nothing to unmask and hold responsible the talkative official or employee of the BSP. His unlawful act of omission on such a delicate and confidential matter is no less censurable as an act of omission.
This is error. It is indeed unfortunate that information regarding the financial needs of RBSMI came to the knowledge of the media. We realize that a bank’s lifeline depends largely on the trust and confidence accorded to it by its depositors and the public in general. However, too many possibilities exist on how word got to the press.

It is to be noted that before the Manila Times article came out in 1999, RBSMI had already undergone several examinations and was subject to continuous monitoring for major exceptions and violations found during the 1996 General Examination. Word could have gotten around that the bank was being examined and that interested persons or entities could have inquired into the purpose of the examinations and monitoring. RBSMI’s own employees could have made remarks to friends and family members - maybe harmless - without totally realizing the effect of such statements. Indeed, MERALCO said that the basis of its memorandum was the information concerning RBSMI obtained from the Philippine Clearing House, an entity distinct and separate from the BSP. In fact, it was the BSP which dispelled the rumors which incited the second memorandum of recantation. The undated fax message alleged to be a forged memorandum has not been sufficiently proven as having been produced by any of the petitioners.

The article might have attributed the source to be an official or employee of the BSP if only to appear more credible. In any case, an inquiry was conducted by an investigating committee especially formed upon RBSMI’s request. But the committee was unable to determine the source of the leak. We have to presume that the said committee had performed its tasks with regularity and good faith, and thus it is entitled to due respect for its findings.

The issue of the training materials is a different matter. RBSMI claims that during one of the BSP training seminars, the bank was used as a case study albeit not specifically mentioned in the training materials. The Court of Appeals found that “the derision against RBSMI in the seminar materials is truly an additional pound of salt to RBSMI’s already wounded reputation.”[25] Petitioners allege that the seminar was for bank examiners who were bound not to reveal any confidential information they learned in the performance of their duties. They further claim that there is no evidence showing that petitioners Reyes and Domo-ong were the ones who distributed and used the materials or that they harbored any ill will against the bank to employ such means.

We agree with the appellate court. The facilitators of the seminar who prepared the materials obviously applied little or no creativity at all as shown by the words used therein, i.e., “Mrs. Ona I. Ros” which clearly is Soriano’s name in reverse, and “Rural Bank of Barangay Ginebra” referring to the bank’s name - Rural Bank of San Miguel. While there was indeed no evidence showing that either petitioner Reyes or petitioner Domo-ong distributed or used the materials, the very fact that the seminar was conducted under their auspices is enough to make them liable to a certain extent. Petitioner Reyes, as Head of the BSP Supervision and Examination Sector, and petitioner Domo-ong, as Director of the BSP Department of Rural Banks, should have exercised their power of control and supervision so that the incident could have been prevented or at the very least remedied.

Second. On the charge that petitioner Reyes was brokering the sale of RBSMI, the Court of Appeals ruled:
Nor can respondent Reyes escape administrative liability for the charge of having displayed undue interest in brokering the sale of petitioner RBSM. In a number of occasions, such an interest readily surfaced. . . . If anything else, Reyes’ actuations smack of unprofessionaliam as he had concerned himself with transactions that had nothing to do with his official function as BSP Deputy Governor.

. . . .

Nor is it correct to say that respondent Alberto V. Reyes did no brokering simply because he was not paid for his efforts. As rightly argued by petitioner, there is no law which defines brokering in terms of payment thereof. To our mind, it suffices that respondent Reyes introduced and brought the parties together to try to hammer out a sale of RBSMI. After all, a broker’s duty is mainly to bring the prospective buyers and sellers together.
We agree with the foregoing ruling of the Court of Appeals. In introducing Soriano to the presidents of TA Bank and EIB Bank, petitioner Reyes was clearly not acting in his official capacity. It is enough that he brought the parties together to discuss the possibility of a sale in order for him to be found guilty of brokering. Petitioner Reyes did not have to be paid for what he did in order to be considered to have committed a breach of the requirement of propriety expected of a BSP official. The circulars[26] presented by petitioner Reyes indicate that it is indeed BSP’s policy to promote mergers and consolidations by providing incentives for banks who would undergo such corporate combinations. But nowhere in these circulars is it stated that BSP officials should take an active role in bringing parties together for the possibility of a buy-in or sell-out.

Section 4 (A)(b) of R.A. No. 6713 states:
Norms of Conduct of Public Officials and Employees. - (A) Every public official and employee shall observe the following as standards of personal conduct in the discharge and execution of official duties:

. . . .

(b) Professionalism - Public officials and employees shall perform and discharge their duties with the highest degree of excellence, professionalism, intelligence and skill. They shall enter public service with utmost devotion and dedication to duty. They shall endeavor to discourage wrong perceptions of their roles as dispensers or peddlers of undue patronage.
We do not think Soriano was subjected to undue pressure since he was also interested in selling the bank.[27] However, petitioner Reyes’ active participation in looking for possible buyers for RBSMI was clearly a violation of the standards of professionalism.

Third. For his part, petitioner Principio is charged with “undue haste” in submitting his report to the Monetary Board. His recommendation for the imposition of a penalty of P2.5 million on RBSMI is also complained of as a way of pressuring the bank. RBSMI points out that there was an irregularity in the fact that petitioner Principio headed the three consecutive examinations conducted on the bank.

We find no undue haste in the submission of petitioner Principio’s report. The 1996 examination on RBSMI was concluded on December 13, 1996. The list of exceptions prepared by petitioner Principio was dated December 23, 1996, and a copy thereof was sent to RBSMI on January 9, 1997. This was 18 days before petitioner Principio finally submitted the report to the Monetary Board. Having had sufficient time to prepare its reply, RBSMI cannot pretend ignorance of the findings of the examiner. It should have anticipated the actions it needed to take considering the urgency of the matter.

Moreover, it is clear from the records that RBSMI was given not only one but two opportunities to answer the findings in the report before the report was submitted to the MB. It should be noted that the exit conference for the 1996 General Examination was originally scheduled on January 13, 1997. However, upon the request of RBSMI’s corporate counsel, the examination was postponed to January 21, 1997. RBSMI was furnished a copy of the findings on January 9, 1997. Although RBSMI claimed that the copy it received was unreadable, it made this accusation only after the complaint had been filed with the Monetary Board.

The members of the Board of Directors only discussed their reply on the very day of the rescheduled exit conference. Surely, RBSMI only had itself to blame. It was given a sporting chance to react to the findings before it was confirmed by the MB, but it did not make use of the opportunity. Again, it was given another chance after the exit conference when the MB, upon review of the report of petitioner Principio, issued Resolution No. 96 requiring RBSMI to answer the findings within 15 days from receipt of the advice.

On the other hand, the imposition of the P2.5 million fine was made on the basis of the finding of legal reserve deficiencies. Soriano wrote to the BSP authorizing the latter to debit its demand deposit in the amount of the penalty a few days after MB Resolution No. 96 was issued. It took RBSMI more than one year before it contested the imposition of the penalty. That the BSP subsequently reversed, albeit conditionally, the debiting of the amount of penalty is not an admission that it erred in imposing the same. It was only an accommodation on the part of the BSP to ease the financial difficulties of RBSMI. More importantly, it was a conditional reversal pending the resolution of the dispute on the finding of legal reserve deficiency.

RBSMI likewise complains that petitioner Principio took part in three consecutive examinations in violation of BSP’s own Manual of Examiners which states:

A Bank Examiner shall not be in charge of more than two consecutive examinations of any financial institutions. No exception to this rule shall be permitted.
But, as petitioners explain, RBSMI was subjected only to one examination ¾ the 1996 General Examination ¾ in which major exceptions and violations were found. The ensuing examinations were “special examinations” meant to monitor the progress of the bank in correcting the exceptions found. With the finding of serious violations by the bank, the MB, through its Resolution No. 96, thought it best to put RBSMI under continuous monitoring until the exceptions had been corrected. It is logical for petitioner Principio to be part of the monitoring team considering that he was the initial examiner and was familiar with the matters to be made in order.

By and large, therefore, we find that while there may have been some irregularities and badges of unprofessionalism which can be held against petitioners, these are not so grave as to merit the imposition of the penalty of fine equal to six months salary imposed by the appellate court. The modification of the Court of Appeals decision is proper.

WHEREFORE, the decision of the Court of Appeals dated December 14, 2001 is AFFIRMED with MODIFICATIONS. Petitioner Alberto V. Reyes is ordered to pay a fine equivalent to two (2) months salary, while petitioner Wilfredo B Domo-ong is fined in an amount equivalent to one (1) month salary. Petitioner Herminio C. Principio is found not administratively liable.


Bellosillo, (Chairman), Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.

[1] Per Associate Justice Cancio C. Garcia with Justices Roberto A. Barrios and Bienvenido L. Reyes concurring.

[2] CA Rollo, p. 201.

[3] Id., p. 245.

[4] Id., p. 270.

[5] Id., p. 278.

[6] Id., p. 118.

[7] Id., p. 460.

[8] Resolution of the BSP Ad Hoc Committee, p. 6; CA Rollo, p. 68.

[9] CA Rollo, p. 470.

[10] Id., p. 340.

[11] Id., p. 342.

[12] Resolution, p. 8; CA Rollo, p. 70.

[13] CA Rollo, p. 485.

[14] Id., p. 463.

[15] Id., p. 464.

[16] Resolution, p. 14; CA Rollo, p. 76.

[17] Copy of Memorandum; CA Rollo, p. 524.

[18] Id.

[19] CA Rollo, p. 490.

[20] Id., p. 491.

[21] Id., p. 581.

[22] Photocopy of the article; CA Rollo, p. 527.

[23] CA Rollo, p. 63.

[24] Rollo, p. 40.

[25] CA Decision, p. 22; Rollo, p. 61.

[26] Circular No. 1312, Series of 1991; Circular No. 172, Series of 1998; Circular No. 193, Series of 1999; Circular No. 207, Series of 1999; Circular No. 225, Series of 2000; Circular No. 237, Series of 2000; and Circular No. 256, Series of 2000. CA Rollo, pp. 888-904.

[27] Mr. Soriano met and discussed with Mr. Castillo and Mr. Villacorta on his own accord. The affidavits of Mssrs. Castillo and Villacorta fully support this statement. (See notes at 11 and 12) Moreover, Mr. Soriano’s own statements revealed that he was undecided as to whether he should sell the bank or not inasmuch as he was concerned with how much the bank would sell for. (See RBSMI’s Petition for Review with the Court of Appeals, pp. 8-10; CA Rollo, pp. 31-33.)

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