SC: PCGG doesn’t owe damages over funds seized from Kokoy firms

MANILA, Philippines — The Supreme Court has handed the government what may be considered a rare victory in its four-decade campaign to recover the Marcoses’ alleged ill-gotten wealth, ruling that the Presidential Commission on Good Government (PCGG) does not owe interest or damages on the P110.8 million it seized from companies linked to the late Benjamin “Kokoy” Romualdez.

The high court’s First Division dismissed for lack of merit the petition of Palm Avenue Holding Co. and Palm Avenue Realty Development Corp., which demanded that the PCGG pay interest on funds sequestered in 1986.

Romualdez, the brother of former first lady Imelda Marcos and father of former Speaker Martin Romualdez, was among the businessmen and political figures whose assets were targeted by the PCGG after the fall of the Marcos dictatorship.

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READ: Court junks forfeiture bid over $5M in Romualdez clan Swiss account

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Sequestration

The ruling protects the PCGG from treating seized assets as if they were government-held investments that continued to earn money for their owners while under sequestration.

“Sequestration was never intended to be a commercial or investment undertaking run by the government for the benefit of those suspected to have accumulated ill-gotten wealth,” the court said in its 24-page decision.

“To rule otherwise would unduly burden the state’s resources, undermine the provisional and preservative nature of sequestration, and adulterate the very purpose of the PCGG to recover ill-gotten wealth.”

The Aug. 26 decision, penned by Associate Justice Ramon Paul Hernando and released Friday, affirmed Sandiganbayan resolutions issued last year rejecting the companies’ demand for interest and compensatory damages.

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The case involved more than P198 million in cash dividends from shares registered in the names of the Palm companies, with Romualdez identified as the beneficial owner.

SC draws the line

Of the seized dividends, P106.3 million, which had generated P4.48 million in interest, was transferred to a Comprehensive Agrarian Reform Program fund (CARP).

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The companies claimed the funds stopped earning interest after the transfer and demanded that the PCGG pay interest at 12 percent a year from the time it took custody of the money until full payment.

The Sandiganbayan, in its Feb. 25 and March 18, 2025 resolutions, rejected the claim, ruling that the PCGG was “never a debtor” of the companies and therefore had “no obligation to pay” them.

READ: Sandiganbayan throws out 1987 case vs Kokoy Romualdez

The Supreme Court agreed, saying that the PCGG held the money under a sequestration order, not under a contract allowing it to use the funds.

“The sequestered funds were in the PCGG’s custody by virtue of a sequestration order, and not because of any contract for the use of the funds,” it said.

It also rejected the companies’ claim for damages, finding that they failed to establish a legal right to such compensation.

The court further ruled that the PCGG did not exceed its mandate by transferring the funds to CARP.

It stressed that the administration of sequestered assets is presumed regular unless there is clear and convincing evidence showing otherwise.

“At the outset, the PCGG’s administration of sequestered funds are presumed regular absent clear and convincing evidence to the contrary,” the court said.

“Hence, nothing short of clear and convincing evidence to the contrary will overthrow this presumption in favor of the PCGG.”

Rare win after setbacks

The decision stands out as a rare Supreme Court victory for the PCGG, which has spent four decades pursuing assets allegedly amassed by Marcos Sr., his family and their associates.

The commission suffered a major setback in 2023 when the Supreme Court rejected its attempt to recover assets allegedly acquired illegally through companies linked to businessman Lucio Tan.

The court then ruled that the PCGG had failed to establish through evidence that the Marcoses and Tan-owned businesses had taken undue advantage of their positions, influence and connections or benefited from one another.

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Earlier this month, the Supreme Court also reversed Imelda Marcos’ conviction on seven graft counts involving the Marcoses’ Swiss foundations, citing the prosecution’s failure to meet the evidentiary requirements for proving guilt beyond reasonable doubt. /das