The Supreme Court has declared that since no sugar restitution fund has been set up and allocated under the law, the Bangko Sentral ng Pilipinas cannot compensate sugar producers for losses incurred during crop years 1974-1975 and 1984-1985.
In a decision promulgated last February but made public only on Friday, the high court through Associate Justice Marvic Mario Victor F. Leonen upheld the dismissal by the Bacolod City Regional Trial Court of the complaint for sum of money filed by spouses Juanito and Victoria Ledesma against the BSP and the Philippine National Bank.
The sugar restitution fund is provided for under Republic Act No. 7202, which was enacted in 1992 “to restitute the losses suffered by the sugar producers due to actions taken by government agencies in order to revive the economy in the sugar-producing areas of the country.”
Citing records, the SC said the Ledesmas obtained several crop loans from PNB and after full payment of their loans, as admitted by PNB and as certified by the Commission on Audit, there was an excess payment of P353,529.67.
In their complaint, the Ledesma spouses argued 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 complaint was dismissed by the RTC on Nov. 17, 2008. However, the Court of Appeals reversed the RTC’s ruling on May 29, 2013. When their motion for reconsideration was denied by the CA on Jan. 29, 2014, BSP and PNB elevated the case to the SC.
The SC stressed the trial court dismissed the complaint for prematurity or lack of cause of action without prejudice to its filing, once the Sugar Restitution Fund under RA 7202 or any fund for that purpose is already set up and ready for distribution.
In resolving the issue, the SC cited the Implementing Rules and Regulations of RA 7202.
It states that the sugar restitution fund refers to “the ill-gotten wealth recovered by the Government through the Presidential Commission on Good Government or any other agency 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 whether such recovery be the result of a judicial proceeding or by a compromise agreement.”
The high court said the IRR also provide that “the foregoing ill-gotten wealth shall be turned over to the BSP to compensate sugar producers from Crop Years 1974-1975 up to and including Crop Year 1984-1985 on a pro rata basis pursuant to RA 7202.”
However, the SC found that neither the PCGG nor other government agencies have turned over funds to the BSP for the sugar producers’ compensation.
“In granting the two Petitions for Review on Certiorari filed by the BSP and PNB, and affirming the RTC decision, the High Court held that the complaint of the Ledesma Spouses states no cause of action against both the BSP and PNB.
“It highlighted that without the Sugar Restitution Fund, the BSP had no correlative duty to compensate the Ledesma Spouses for their losses. ‘Indeed, one cannot give what he does not have,” the court said.
As for PNB, the high tribunal ruled that it is not beholden to the Ledesma Spouses because PNB’s role was merely that of a lending bank.
It cited RA 7202 and its IRR, which provide that lending banks are not obligated to compensate sugar producers for their losses.
“Restitution falls under the BSP, upon the establishment of a Sugar Restitution Fund,” the SC ruled.