Petitioner Ernesto Z. Giduquio together with one Antonio T. Corpuz were charged with violation of Section 3 (e) of Republic Act No. 3019, as amended, in Criminal Case No. 23720 in an Information that reads as follows:

That in or about the year 1992, and for sometime subsequent thereto, at Cebu City, Philippines, and within the jurisdiction of this Honorable Court, above-named accused, public officers, being the Vice-President and Manager of the Small Island Grid, respectively, National Power Corporation (NPC)-Visayas, Cebu City, in such capacity, were in-charge of the management, direction, monitoring and control of the operation of the various diesel plants of cooperatives in the Island Grid, while in the performance of their official functions and taking advantage of their public positions, conniving and confederating together and mutually helping with (sic) each other, with deliberate intent, with manifest partiality and evident bad faith, did then and there willfully, unlawfully and feloniously: split or cause the splitting into twelve (12) schedules/phases of works the pakiao contracts and job orders, making it appear that the cost of each, does not exceed P100,000.00; award or cause to be awarded to one and single contractor the 12 schedules of the construction project; execute or by executing the said contract despite the fact that it was outside their scope; inflate the cost estimate to over 369.71%; award or cause the awarding of the contract to a contractor without the benefit of a public bidding; have the project inspected by the SIG people to the exclusion of the OPO Engineers and or cause the payment of the contracts despite several deficiencies in the construction works, thus accused, in the discharge of their official functions had given unwarranted benefits, advantage or preference to themselves and the contractor, to the damage and prejudice of the government.

CONTRARY TO LAW.^[1]

The information charged the accused of having committed the following distinct acts through manifest partiality and evident bad faith:

1. split or cause the splitting into twelve (12) schedules/phases of works the pakiao contracts and job orders, making it appear that the cost of each, does not exceed P100,000.00;
   
   
2. awarded or caused to be awarded to one and single contractor the 12 schedules of the construction project;
   
   
3. executed the said contract despite the fact that it was outside their scope;
   
   
4. inflated the cost estimate to over 369.71%;
   
   
5. awarded or caused the awarding of the contact to a contractor without the benefit of a public bidding;
   
   
6. had the project inspected by SIG people to the exclusion of the OPO Engineers; and/or
   
   
7. caused the payment of the contracts despite several deficiencies in the construction work.
   

Following the arraignment and pre-trial, trial on the merits ensued.

The prosecution presented Alexander Tan, Engr. Danilo Maglasang and Engr. Loubain Monterola as witnesses.

The prosecution established that in 1993, the Regional Director of the Commission on Audit (COA) of Cebu ordered a fact-finding inquiry on the alleged irregularities committed by certain officials of the NPC in the construction of power plants in the three islands of Cebu, namely, Olango, Guintarcan and Doong. After a review of the job orders, canvass papers, canvass of bids, pakiao labor contracts, NPC existing relevant policies and other pertinent documents, Alexander Tan, resident auditor of NPC, Visayas Regional Center and a member of the fact-finding team, prepared and submitted to the Cebu City COA Regional Director a report embodying the following findings:

a) there were splitting of contracts in which violated NPC Circular No. 92-34 which mandated that one project should be covered by one contract;

b) the Abstract of Canvass revealed that there were three other groups of workers who were interested hence, public bidding should have been conducted;

c) the person who conducted the spot canvass was under accused Giduquio;

d) NPC policies prohibited the construction of a structure under the pakiao system;

e) the cost estimates were inflated;

f) Giduqio approved the Certificates of Inspection and Acceptance and certified that the projects had been satisfactorily completed.  Full payment to the contractors were made on the basis of his certifications;

g) Giduqio also certified that the expenses were necessary, lawful, and incurred under his direct supervision, the prices were reasonable and were not in excess of current rates in the locality, and that it was only after this certification that payment for the three projects were processed; and,

h) the required 10% retention was not implemented.^[2]

NPC Vice-president Antonio Corpuz likewise created a task force to inspect the three power plants. The task force found that there were indeed deficiencies in the three projects. Loubain Monterola, a mechanical engineer of NPC-Cebu Regional Office, and the designated team leader of the task force, testified that after due inspection of the construction of the power plants, he and his team had observed some deficiencies in the actual construction of the projects. He, however, said that the deficiencies were minor ones and in a follow-up inspection in 1995, saw that they had been corrected.^[3]

After the prosecution rested its case, both the accused demurred to the prosecution's evidence.

On 30 October 2001, the Sandiganbayan granted the demurrer to evidence filed by Corpuz but denied that of petitioner's, leaving the latter as the lone accused in the case. In the same decision, the Sandiganbayan declared petitioner innocent of the first, second, third and sixth acts alleged in the Information. However, it found sufficient evidence against petitioner with respect to the other three remaining acts. Consequently, petitioner was required to present evidence to negate his presumptive guilt in respect to the three remaining charges.^[4]

For his defense, petitioner and Thomas Agtarap were presented as witnesses.

Petitioner testified, among others, that a bidding was not necessary for a pakiao contract. Moreover, he alleged that there was no competition in the construction of the three projects. He also stated that he had merely dispatched Senior Engineer Villacarlos to conduct a spot canvass and that the latter had asked from among the local residents if they could perform the job. He also averred that the persons listed in the spot canvass had not made any offer.

Petitioner, however, admitted that he had recommended the full payment of the workers despite the fact that the construction had not been fully completed as the NPC had incurred delay in the delivery of the construction supplies. Petitioner stated that the projects had been only less than 1% incomplete and would have taken only three days to complete. He also asserted that he had taken the following measures before recommending the full payment of the workers, to wit: (1) he had evaluated the projects and found that 99% had already been accomplished; (2) the five group leaders had signed a Letter of Guarantee that they would resume work once the materials have been delivered; (3) he had indicated in the Certificate of Inspection and Partial Acceptance that the contractor would be responsible to complete the work (and in fact, said deficiencies had been completed).^[5]

Agtarap, then the Vice-President of NPC-Engineering Department, testified that he had certified all the spot canvasses prepared by petitioner; that the engineering committee had evaluated all documents forwarded by petitioner and that the petitioner did not participate in the splitting, preparation and award of the contract to a particular contractor as all contracts had been made in the head office on the basis of the recommendations of the engineering committee.^[6] Agtarap also explained that a formal public bidding was dispensed with because of the absence of competition and the urgency of the matter.^[7]

After trial, the Sandiganbayan held that there was reasonable doubt that petitioner committed the fourth act, i.e., that of inflating the cost estimates.^[8]  The Sandiganbayan, though, found petitioner guilty of having committed the fifth and seventh acts, i.e., awarding the contracts without public bidding and causing the payment of the contracts despite several deficiencies, respectively. It disposed as follows:

WHEREFORE, the Court finds accused ERNESTO Z. GIDUQUIO GUILTY, beyond reasonable doubt, for violation of Section 3(e) of R.A. No. 3019. Pursuant to Section 9 thereof, he is hereby sentenced to suffer the penalty of:

(A) Imprisonment of, after applying the Indeterminate Sentence Law, six (6) years and one (1) month as minimum, up to ten (10) years and one (1) month as maximum; and,

(B) Perpetual Disqualification from Public Office.

No civil liability is adjudged in view of the failure of the prosecution to present evidence on this matter and the fact that the projects were already completed.

SO ORDERED.^[9]

With the denial of his motion for reconsideration, per the graft court's resolution of 10 November 2004, petitioner is now before us via the instant recourse.

In his Memorandum^[10] dated 2 September 2005, petitioner asserts that there was no need for a public bidding in the award of the contracts and that in any event, he had no participation in the award thereof. He also maintains that he was justified in causing the payment of the contracts despite the non-completion of the construction work.^[11]

There is merit in the petition.

The law violated is R. A. No. 3019, Section 3(e).  It provides as follows:

Sec. 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:

x x x

(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.  This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

The following elements need to be proven in order to constitute a violation of Section 3(e) of Republic Act 3019, viz:

1. The accused is a public officer discharging administrative or official functions or private persons charged in conspiracy with them;
   
   
2. The public officer committed the prohibited act during the performance of his official duty or in relation to his public position;
   
   
3. The public officer acted with manifest partiality, evident bad faith or gross, inexcusable negligence; and
   
   
4. His action caused undue injury to the Government or any private party, or gave any party any unwarranted benefit, advantage or preference to such parties.^[12]
   

There are two ways of violating Section 3(e), Republic Act No. 3019, to wit: (a) by causing any undue injury to any party, including the Government; (b) by giving any private party unwarranted benefit, advantage or preference. The accused may be charged under either mode or under both.

The court a quo held that petitioner violated the above-quoted law by awarding or causing the award of the pakiao contracts without public bidding and causing their payment despite deficiencies in the construction works. We hold otherwise.

For one, the Court believes that the public bidding was reasonably dispensed with due to the urgency of the matter. Agtarap, petitioner's superior, pertinently stated that:

CHAIRMAN: So notwithstanding the fact that under the circular, if there are two or more pakyaw contractors who are offering their certain bids, you have to conduct a bidding, you disregard that condition because according to you this is an urgent matter which, under the law, you are authorized to disregard that particular provision in that circular?

T. AGTARAP: In that sense...

CHAIRMAN: That is what you are telling us, right, because of the urgency of the project?

T. AGTARAP: Yes, your Honor.^[13]

It is well to recall that in the early 1990's, the country suffered from a crippling power crisis.^[14] Power outages lasted 8-12 hours daily and power generation was badly needed. Addressing the problem, the NPC sought to attract investors in power plant operations by providing them with incentives, one of which was through NPC's assumption of payment of their taxes.^[15] For the same purpose, NPC reconditioned existing power plants. In the small islands, it put up new power plants.

It likewise bears emphasis that Agtarap confirmed petitioner's non-participation in the award of the pakiao contracts, to wit:

ATTY. CASTEL:
	Mr. Witness, when the pakyaw contract was made, was the name of the contractor already typewritten there?
A:	Yes, sir.
Q:	How about the contract price?
A:	The same thing, sir, because that was already defined and identified.
Q:	What was the participation of Mr. Giduquio in the preparation of the contract?
A:	I mentioned that all these things were prepared in the Head office and therefore the evaluation, the typing...
CHAIRMAN:
	... So accused Giduquio has no participation whatsoever to the preparation of that contract, right? That's according to the witness.
ATTY. CASTEL:
	What was the participation of Mr. Giduquio in the awarding of contract to a particular labor contract?
A:	Since the award is done in the Head Office, Giduquio did not participate in the awarding of the contract, sir.
Q:	By the way, Mr. Witness, who caused the labor schedules.. will you inform us who caused the pakyaw labor contract to be divided into different schedules?
A:	Sir, the different stages were already part of a typical concept made by the head Office as also required by us to check the different schedules (1) to expedite the work in far-flung areas; (2) the possibility that we can get labor within the community. That is why the decision of the management to have different schedules for this project.
Q:	So, that division is also caused by the Head Office?
A:	Yes, sir.[16]

It is also noteworthy that it was NPC Senior Vice-President Mr. Ramas, not petitioner, who signed the pakiao contracts as testified to by petitioner, to wit:

PROS. MONTEROSO
x x x
Q:	So, in other words, supposedly it should be you who should be the supposed signatory of the pakyaw contract?
A:	Yes, sir.
Q:	But you did not?
A:	Yes, sir.
JUSTICE FERRER:
Q:	You did not sign it?
A:	Yes, Your Honors.
Q:	Then who signed it?
A:	The Senior Vice-President based in Diliman, Quezon City Mr. Ramas.
...
Q:	You mean to say that the pakyaw contract was already signed in manila before it was sent to you?
A:	Yes, Your Honors.
x x x
JUSTICE FERRER:
Q:	So the pakyaw leader signed only after it was already signed by your superior?
A:	Yes, Sir.[17]

And most importantly, it was petitioner's superiors who ordered him to implement the pakiao contracts.^[18]

Anent the issue of premature payment, the Court believes that petitioner is justified in having caused payment as the construction works have been substantially finished at the time of the acceptance. Petitioner testified that:

Q:

Why is that so? Why did you recommend payment despite the fact that the projects were not yet fully completed?

A:

Okay, with this chart I prepared, you will notice the project consisting of twelve (12) schedules. These were broken down into different activities, like Schedule 1, it was completed. In other words, of the twelve (12) schedules, eight (8) were completed and only four (4) were not. Before payment was made, I evaluated the project as to the physical accomplishment. The report was based on Schedule 5 which was already 97.99% accomplished at that time. Schedule 6 was likewise 90.6 accomplished; And schedule 7, 99.6 % accomplished, so that Schedule 12 was already 99.12 accomplished. In other words, the total relative weight of the remaining level cost is 99.5%, or .39% is left. Considering the total project, what is this? This means the total level cost to complete the project is only P1,850.00 or the total is P267,025.00, divide this by this, the remaining cost of labor against the total contract will amount only to .39% or less than .25%.[19]

In any event, the construction works were eventually completed proving lack of injury to the government. Significant of all is the lack of proof that petitioner committed the supposedly prohibited acts with manifest partiality and bad faith. To the contrary, the Court finds that petitioner in causing the payment was moved by sympathy for the plight of the workers, even while imposing safeguard measures for the government which belies claim of partiality, viz.:

Q:	Considering that you [are] already recommending payments to the workers and there were still some of the materials to be installed, what preliminary measures did you take then?
A:	You will notice that before I recommended payment, there was an evaluation of the project, whether it was completed or not. I tried to find out if it was really reasonable to pay the workers. And when the project was evaluated, it was already 99. 9% accomplished.
Q:	And so, what did you do?
A:	So, out of humanitarian consideration, I sympathized the plight of the workers, they are just ordinary fishermen, ordinary farmers, but some of them are skilled carpenters. I asked from them the letter of guarantee; that should the materials be delivered, they would resume the work. And so, when the materials were delivered, they performed and completed the job, and not only that, in the Certificate of Inspection I issued, it was so worded that it shall be the responsibility of the contractor to complete the work...
A:	I am referring to this Certificate of Acceptance. This Certificate of Inspection and partial Acceptance which in no way relieved the contractor of the responsibility and obligation to accomplish the work, as required by the NPC. So, there were precautions.
AJ FERRER:
	You mean to say that you have them signed the document before you paid for the whole project?
WITNESS:
	Yes, your Honor.
AJ FERRER
Q:	You are admitting that even before the projects were 100% accomplished, you paid the pakyaw contractor?
WITNESS:
	Something like that, your Honor, out of humanitarian reason.
AJ FERRER:
Q:	And subsequently, when the materials came, they completed their work, without any extra cost from you?
WITNESS:
	No, your Honor, it took about three (3) months after they completed the project that they received the payment. I was so worried., your Honor, because while I am receiving P32,000.00 monthly salary, and these people were in hunger, so x x x[20]

In order to be held guilty of violating Section 3(e), R. A. No. 3019, in this case, the prohibited acts of the petitioner must have been done with evident bad faith or with manifest partiality. In Sistoza v. Desierto, et al,^[21] we held that "mere bad faith or partiality are not enough for one to be held liable under the law since the act of bad faith or partiality must be ..evident or manifest, respectively." Nowhere in the records of this case is such bad faith evident or partiality, manifest. In the absence of these elements, petitioner cannot be convicted of the offense charged.

Thus, while it is true that the "factual findings of the trial court are entitled to great weight and are even conclusive and binding" to this Court, this principle does not apply here.  The findings of facts of the Sandiganbayan are not sufficiently established by evidence, leaving serious doubts in our minds regarding the culpability of petitioner.

In sum, we find that the prosecution failed to prove by evidence beyond reasonable doubt the guilt of herein petitioner for violation of Section 3(e) of Republic Act No. 3019, as amended.

WHEREFORE, the petition is GRANTED. The Decision dated 30 August 2004 of the Sandiganbayan in Crim. Case No. 23720 is REVERSED and petitioner is ACQUITTED of the offense of violating Section 3(e) of Republic Act No. 3019, as amended. No costs.

SO ORDERED.

Carpio-Morales,^* (Acting Chairperson), Velasco, Jr., Leonardo-De Castro,^** and Brion, JJ., concur.

---

* Acting Chairperson as replacement of Justice Leonardo A. Quisumbing who is on official leave per Special Order No. 618.

** Additional member of the Second Division per Special Order No. 619.

^[1] Rollo, pp. 44-45.

^[2] Id. at  46-47.

^[3] Id. at  48-49.

^[4] Id. at 49, 55.

^[5] Id. at  51.

^[6] Id. at   52.

^[7] Id. at  168-169.

^[8] In a Decision dated 30 August 2004; Rollo, pp. 44-63; Penned by Associate Justice Norberto Y. Geraldez with the concurrence of Associate Justices Gregory S. Ong and Efren N. De La Cruz.

^[9] Rollo, pp. 61-62.

^[10] Id. at  158-188.

^[11] Id. at  166.

^[12] Quibal v. Sandiganbayan, 314  Phil. 66, 75-76 (1995).

^[13] TSN, 25 September 2003, pp. 54-56.

^[14] Purefoods v. Court of Appeals, G.R. No. 128069, 19 June 2000, 333 SCRA 684, 688.

^[15] Batangas Power Corporation,  G.R. No. 152675, 28 April 2004, 428 SCRA 250, 251.

^[16] TSN, 25 September 2003, pp. 22-23.

^[17] TSN, 11 July 2002, pp. 15-18.

^[18] TSN, 11 July 2002, pp. 11-12.

^[19] Rollo, pp. 174-175.

^[20] Id. at 182-183.

^[21] G.R. No.  144784, 388 SCRA, 307, 324, 326 (2002).