SC clears BSP, PNB of liability in sugar fund suit

“The trial court was correct in the ruling, “(t)hat there is no Sugar Restitution Fund even up to this time is not the fault of the herein defendants. Indeed, one cannot give what he does not have,” the SC explained. (File Photo By Mike Gonzalez (TheCoffee) – Own work, CC BY-SA 3.0)

MANILA — The Supreme Court (SC) cleared the Bangko Sentral ng Pilipinas (BSP) and the Philippine National Bank (PNB) of liability in a claim filed by sugar farmers under Republic Act (RA) 7202 or the Sugar Restitution Law.

In a 12-page decision promulgated on February 6, the High Court, through Associate Justice Marvic Leonen, said: “the Court of Appeals erred in ruling that petitioner Bangko Sentral ng Pilipinas is mandated to pay the sugar producers.”

Associate Justices Diosdado M. Peralta, Francis H. Jardeleza, Andres B. Reyes Jr., and Rosmari D. Carandang concurred.

The tribunal explained that the money to be used to compensate these sugar producers should come from the sugar restitution fund.

“Without the fund, there is no restitution to speak of at all,” the SC said.

The court explained that the BSP cannot affect the restitution since neither the Presidential Commission on Good Government (PCGG) nor other government agencies have turned over funds to it for the sugar producers’ compensation.

“The trial court was correct in the ruling, “(t)hat there is no Sugar Restitution Fund even up to this time is not the fault of the herein defendants. Indeed, one cannot give what he does not have,” the SC explained.

The Court of Appeals earlier ordered the BSP and the PNB to pay spouses Juanito and Victoria Ledesma the amount of PHP353,529, to be taken from the sugar restitution fund upon its establishment.

The Ledesma spouses stated in their complaint that they were farmers engaged in sugar farming in Negros Occidental, with sugar productions from crop year 1974 to 1975 to crop year 1984 to 1985. Within this period, they were among those who suffered losses in sugar farming operations due to the actions of government-owned and -controlled corporations, among them the BSP and the PNB.

The couple obtained several crop loans from PNB. After full payment of the loans, there was excess payment of PHP353,529, as admitted by the PNB and as certified by the Commission on Audit.

They claimed that under RA 7202, the BSP and the PCGG should compensate them for their losses and refund the excess payment from the sugar restitution fund.

The Court pointed out that under the law, the sugar restitution fund must come from ill-gotten wealth recovered by the government through the PCGG or any other agency or from any other source within the Philippines or abroad, and whatever assets or funds that may be recovered, or already recovered, which have been determined by PCGG or any other competent agency of the government to have been stolen or illegally acquired from the sugar industry.