THE Sandiganbayan has recalled its 15-year-old directive requiring the Presidential Commission on Good Government (PCGG) to pay 6 percent yearly interest on sequestered funds of Palm Avenue Holding Co. Inc. and Palm Avenue Realty Development Corp., referred to as the Palm Companies.
In an eight-page resolution promulgated on Feb. 6, 2025 but released only last Friday (March 28), the Sixth Division sustained government’s stand that the Palm Companies failed to show that they are entitled to payment of interest.
The Palm Companies belong to the family of late Ambassador Benjamin “Kokoy” Romualdez, father of Speaker Martin Romualdez, having been cleared in 2010 of allegations they form part of the family’s unexplained wealth.
The PCGG sequestered the two firms in 1986, including stocks and funds totaling P110.8 million but in 1989, the Sandiganbayan held that the funds should not have been remitted to the Comprehensive Agrarian Reform Program (CARP) Fund pending final determination of rightful ownership.
On Oct. 28, 2009, the Palm Companies won a court ruling which held that they are entitled to be paid 6 percent yearly interest on the sequestered sum.
Government lawyers filed a motion for reconsideration on Nov. 4, 2009 arguing that the only requirement for the PCGG as custodial entity was to “conserve and preserve” what was sequestered, hence there was no basis for imposing interest since the funds remain intact with the Bureau of Treasury
They added that the release of sequestered funds is not a monetary obligation and that the pending civil case did not create monetary obligations on the part of the Republic.
The Palm Companies, in their opposition, countered that the PCGG should have pulled out the P110.8 million from the CARP when the 1989 ruling was issued, but instead it continued infuse funds. They noted that before being transferred to CARP, the sum already earned interests totaling P4.48 million and would have continued to earn more if not sequestered by mistake.
In her ponencia, Associate Justice Sarah Jane T. Fernandez the Palm Companies have not established the right to recover interest which could only arise by virtue of a contract or damages in the form of compensatory interest.
Associate Justices Miachel Fredrick L. Musngi and Kevin Narce B. Vivero concurred.
“The Palm Companies are not entitled to monetary interest on the sequestered funds previously transferred to the CARP Fund. It must be emphasized that the said funds were under the custody of the PCGG not because plaintiff and the Palm Companies entered into a contract for the use of the said funds. The subject funds came into the PCGG’s custody by virtue of a sequestration order,” the anti-graft court pointed out.
PCGG maintains custody over shares of stocks and funds of the Palm Companies despite a 2014 Supreme Court decision ordering their release because the filed the motion for execution four years too late.
In a resolution dated July 19, 2024, the Sandiganbayan Sixth Division held that he Palm Companies had only until Feb. 10, 2020 to file their motion for execution but they did so only on April 19, 2024, or nine years, two months, and 10 days from the date of the entry of judgment.
