Can high-ranking officials in government-owned corporations be held criminally liable for selling assets at a loss without proper authorization, leading to significant financial harm to the government?
Case Title:
People of the Philippines vs. Danilo Reyes Crisologo and Roberto Loleng Manlavi
G.R. No. 253327, June 27, 2022
Facts of the Case:
Danilo Reyes Crisologo, the President of the Philippine Aerospace Development Corporation (PADC), and Roberto Loleng Manlavi, the Senior Vice President of the same corporation, were charged with violating Section 3(e) of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act. The charges stemmed from their sale of PADC aircraft spare parts to Wingtips Parts Corporation in 2008 at prices below the standard 30% markup required by PADC's revised pricing policy, causing a loss of approximately Php 6.6 million.
Crisologo and Manlavi allegedly conspired to sell these parts through negotiated sale without the required approval from PADC's Board of Directors or any expert appraisal of the parts' value. The sale disregarded existing Commission on Audit (COA) rules and PADC policies, leading to financial injury to the corporation.
In their defense, both officials claimed that the parts were already obsolete and would eventually lose their value. They further argued that the sale was made in good faith to prevent the spare parts from becoming valueless, and that the proceeds of the sale were for the benefit of PADC.
The Sandiganbayan, however, found both officials guilty of gross negligence, evident bad faith, and manifest partiality. It held that the sale was conducted without public bidding or any valid justification for the negotiated sale. The Sandiganbayan sentenced them to imprisonment of six years and one month to ten years, with perpetual disqualification from holding public office.
Primary Issue in the Supreme Court:
Whether Crisologo and Manlavi acted with manifest partiality, evident bad faith, or gross negligence in selling government property at a loss, thus causing undue injury to the government and providing unwarranted benefits to Wingtips Parts Corporation.
Supreme Court Ruling:
The Supreme Court affirmed the Sandiganbayan's ruling. It held that Crisologo and Manlavi violated Section 3(e) of R.A. No. 3019 by selling the aircraft spare parts without proper authorization, without a public bidding, and at prices that resulted in substantial financial losses to the government. The Court ruled that both officials acted with manifest partiality and evident bad faith by disregarding PADC's revised pricing policies and giving unwarranted benefits to Wingtips Parts Corporation.
Dispositive Portion of the Decision:
The appeal is dismissed. The Decision dated November 29, 2019, of the Sandiganbayan in Criminal Case No. SB-17-CRM-0168 is affirmed. Appellants Danilo Reyes Crisologo and Roberto Loleng Manlavi are sentenced to the indeterminate penalty of six (6) years and one (1) month as minimum to ten (10) years as maximum, with perpetual disqualification from holding public office.
Thought-provoking Question:
Should public officials be held accountable for losses incurred in government contracts, even when they claim to act in good faith?
Important Doctrines:
-
Manifest Partiality, Evident Bad Faith, or Gross Negligence
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Public officials can be held liable under R.A. 3019 if they cause undue injury to the government or provide unwarranted benefits to private parties through any of the three modes: manifest partiality, evident bad faith, or gross negligence. Each mode is distinct, and proof of any one of them is sufficient to warrant conviction.
-
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Negotiated Sale vs. Public Auction (COA Circular No. 89-296)
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Government assets should primarily be disposed of through public auction, with negotiated sale allowed only in exceptional circumstances. Failure to justify the resort to negotiated sale constitutes gross negligence and manifest partiality.
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Presumption of Regularity in Government Transactions
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Claims of good faith do not absolve public officials of liability when there is clear evidence of deviation from established policies and procedures that result in government loss.
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Classification: Criminal Law
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🎓 In this short content,
we delve into the case of People of the Philippines vs. Danilo Reyes
Crisologo and Roberto Loleng Manlavi, G.R. No. 253327, promulgated on June
27, 2022. This criminal case revolves around a violation of Section 3(e)
of Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act,
and presents critical doctrines on manifest partiality, evident bad
faith, and gross negligence in public office.
This content is crafted to assist law students, Bar
examinees, and legal practitioners in recalling essential doctrines
laid down by the Supreme Court in interpreting Section 3(e) of R.A. No. 3019.
🧑⚖️ Case Title &
Nature
People of the Philippines vs. Danilo Reyes Crisologo and Roberto Loleng
Manlavi
G.R. No. 253327 | Criminal Law | Promulgated: June 27, 2022
Nature: Violation of Anti-Graft and Corrupt Practices Act – criminal
prosecution under Section 3(e) of R.A. No. 3019.
📌 Brief Summary of the
Case
Danilo Crisologo and Roberto Manlavi, as PADC officials, sold aircraft spare
parts to a private firm, Wingtips Parts Corp., at prices far below the
required 30% markup, without board approval or public bidding, causing over ₱6.6
million loss to the government. They were found guilty by the Sandiganbayan
and their conviction was affirmed by the Supreme Court, which ruled that
their acts constituted evident bad faith and manifest partiality,
resulting in undue injury to the government.
💭 Thought-Provoking
Question:
Should government officials still be held criminally liable if they claim good
faith in making financially damaging decisions?
📚 10 IMPORTANT DOCTRINES
FROM THE CASE
Source: G.R. No. 253327, June 27, 2022 | People vs.
Crisologo and Manlavi
- Section
3(e), R.A. No. 3019 – Modes of Commission
✅ The offense may be committed through manifest partiality, evident bad faith, or gross inexcusable negligence—proof of any one is sufficient for conviction.
(p. 32) - Elements
of Violation Under Section 3(e)
✅ (1) Public officer status, (2) undue injury or unwarranted benefit, (3) done with partiality, bad faith, or negligence.
(p. 32) - Definition
of "Bad Faith"
✅ A dishonest purpose, moral obliquity, or conscious doing of wrong; not mere bad judgment or simple negligence.
(p. 34) - Manifest
Partiality Defined
✅ A clear, notorious inclination to favor a party over others; denotes bias with intent to cause harm.
(p. 34) - Disjunctive
Liability for "Undue Injury" OR "Unwarranted Benefit"
✅ Causing either undue injury OR giving unwarranted benefits to a private party is enough for liability under Section 3(e).
(p. 42) - Unilateral
Acts Without Board Approval as Evident Bad Faith
✅ Bypassing institutional approval processes—like skipping Board or pricing committee consent—shows deliberate intent to disregard laws.
(p. 29 & 44) - Inventory
Held for Sale Exemption – Not Absolute
✅ Even if exempt from COA Circular 89-296, GOCC sales must still comply with internal corporate pricing and due process.
(p. 38–40) - Due
Diligence Requirement in GOCC Dispositions
✅ PADC officials failed to establish market value, consult experts, or follow accounting rules like Net Realizable Value assessments.
(p. 44–45) - Public
Bidding is Primary Mode of Government Disposal
✅ Negotiated sales are permitted only when justified; lack of justification renders the transaction irregular.
(p. 27–28) - No
Excuse for Unauthorized Sale Due to "Obsolescence"
✅ Claim of obsolescence does not justify unlawful sale unless backed by clear evidence and expert valuation.
(p. 44)
🎓 Welcome to this legal quizzer
crafted specifically for law students, Bar reviewees, and practitioners. In
this quiz, we focus on the landmark criminal case of People of the Philippines
vs. Danilo Reyes Crisologo and Roberto Loleng Manlavi, G.R. No. 253327,
promulgated by the Supreme Court on June 27, 2022.
🧑⚖️ Nature of the Case:
This is a Criminal Law case involving a violation of the Anti-Graft and Corrupt
Practices Act. The accused were both high-ranking officials of the Philippine
Aerospace Development Corporation (PADC), a government-owned and controlled
corporation.
🧾 Brief Summary:
The case revolves around the negotiated sale of aircraft spare parts by PADC
officials to a private company at prices significantly below the required
markup, leading to a ₱6.6
million loss to the government. The issue centered on whether the accused acted
with manifest partiality, evident bad faith, or gross negligence, thereby
causing undue injury to the government and giving unwarranted benefits to a
private entity.
The Sandiganbayan convicted both
officials, and the Supreme Court affirmed this ruling, holding that the
officials committed acts that clearly constituted evident bad faith and
manifest partiality.
✅ The answer key will be provided at
the end of the video. Now, let’s begin with 10 HOTS-based multiple choice
questions at an easy difficulty level.
🔍 10 HOTS-BASED MULTIPLE CHOICE
QUESTIONS
1. What role did Danilo Crisologo hold
at the Philippine Aerospace Development Corporation during the questioned
transaction?
A. Board Chairman
B. Legal Counsel
C. President
D. Chief Accountant
2. Which company benefited from the
improperly priced sale of aircraft spare parts?
A. Aeroparts Incorporated
B. Wingtips Parts Corporation
C. Jetfix Solutions
D. Skytrack Aviation
3. What was the reason given by the
accused for selling the aircraft parts at reduced prices?
A. The parts were recently acquired
B. The Board approved the markdown
C. The parts were allegedly obsolete
D. The items were transferred to another GOCC
4. What was the required markup
according to PADC’s pricing policy for aircraft spare parts?
A. 10%
B. 30%
C. 50%
D. 15%
5. What was the approximate amount of
financial loss suffered by the government due to the unauthorized sale?
A. ₱1
million
B. ₱3.4
million
C. ₱6.6
million
D. ₱10
million
6. Which key element of the anti-graft
law focuses on giving private parties unfair benefit through a public officer's
action?
A. Abuse of discretion
B. Conflict of interest
C. Unwarranted benefit
D. Criminal intent
7. What did the Supreme Court say about
the condition of the parts sold at reduced prices?
A. They were confirmed scrap
B. They had expired warranties
C. They were still stored in the inventory and not obsolete
D. They were donated by a foreign agency
8. What procedural lapse did Crisologo
and Manlavi commit regarding pricing approval?
A. They submitted it to the Senate
B. They consulted only their lawyers
C. They bypassed the pricing committee and board
D. They posted it publicly without approval
9. What was used in the sale instead of
the official, serially-numbered receipts?
A. Handwritten notes
B. Unverified digital slips
C. Computer-printed receipts
D. Pre-printed invoices from suppliers
10. What final penalty did the Supreme
Court impose on both Crisologo and Manlavi?
A. Administrative suspension
B. Acquittal due to lack of evidence
C. Reprimand with fine
D. Imprisonment and perpetual disqualification from public office
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