SECOND DIVISION

[G.R. No. 154499. March 14, 2003.]

ALBERTO V. REYES, WILFREDO B. DOMO-ONG, and HERMINIO C.

PRINCIPIO , petitioners, vs . RURAL BANK OF SAN MIGUEL (BULACAN),
INC., represented by HILARIO P. SORIANO, President and Principal
Stockholder , respondent.

Yngson & Associates for petitioners.

Lamberto A. Gonzales, Jr. for private respondent.
SYNOPSIS
Petitioners Alberto V. Reyes, Wilfredo B. Domo-ong and Herminio Principio are
o cials of the Bangko Sentral ng Pilipinas (BSP. Reyes was Deputy Governor and Head
of the Supervision and Examination Sector (SES), Domo-ong was Director of the
Department of Rural Banks (DRB), while Principio was an Examiner of the DRB.
Respondent Rural Bank of San Miguel (Bulacan), Inc. (RBSMI) led a letter-complaint
with the Monetary Board (MB) alleging that petitioners, particularly petitioner Reyes,
carelessly handled con dential and vital information regarding the nancial status of
their bank. RBSMI also claimed that during one of the BSP training seminars, the bank
was used as a case study and the facilitators of the seminar who prepared the
materials obviously applied little or no creativity at all as shown by the words used
therein, i.e., "Mr. Ona I. Ros" which clearly is Soriano's (RBSMI's president) name in
reverse, and "Rural Bank of Barangay Ginebra" referring to the bank's name — Rural Bank
of San Miguel. They alleged further that Reyes illegally and unethically brokered for the
sale of their bank. The MB referred the case to an Ad Hoc Committee which it had
created. The committee found that RBSMI has not substantiated its allegations of
petitioner's unprofessionalism and failed to present su cient factual and legal bases
to administratively charge respondents with violation of any provision of R.A. No. 3019
and/or R.A. No. 6713. The acts complained of were done by respondents in the
performance of their o cial duties. The MB adopted the recommendation of the Ad
Hoc Committee prompting, RBSMI to appeal to the Court of Appeals the dismissal of
the complaint as well as the denial of its motion for reconsideration and supplemental
motion to vacate or reconsider. The Court of Appeals reversed the ndings of the Ad
Hoc Committee and the Monetary Board. Hence, the present petition.
The Supreme Court a rmed the judgment of the Court of Appeals. According to
the Court, as high ranking o cials of the Bangko Sentral ng Pilipinas, petitioners should
have exercised their power of control and supervision so that the alleged incident of
respondent bank being used as a case study during a training seminar could have been
prevented or at the very least remedied. While there was indeed no evidence showing
that either petitioner Reyes or petitioner Domo-ong distributed or used the materials,
the very fact that the seminar was conducted under their auspices is enough to make
them liable to a certain extent. The Court also ruled that petitioner Reyes' act of
introducing respondent bank's president to the presidents of two other banks was
done not in his o cial capacity, and his active participation in looking for a possible
buyer of the bank was clearly a violation of the standards of professionalism. It is
enough that he brought the parties together to discuss the possibility of a sale in order
for him to be found guilty of illegally brokering. Petitioner Reyes did not have to be paid
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 for what he did in order to be considered to have committed a breach of the
requirement of propriety expected of a BSP o cial. The circulars presented by
petitioner Reyes indicate that it is indeed BSP's policy to promote mergers and
consolidations by providing incentives for banks who would undergo such corporate
combinations. But nowhere in the said circulars is it stated that BSP o cials should
take an active role in bringing parties together for the possibility of a buy-in or sell-out.
Petitioner Alberto V. Reyes was ordered to pay a ne equivalent to two (2) months
salary, while petitioner Wilfredo B Domo-ong was ned in an amount equivalent to one
(1) month salary. Petitioner Herminio C. Principio was absolved from administrative
liability.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE

AGENCIES; IT IS PRESUMED THAT THE AD HOC COMMITTEE CREATED BY THE CENTRAL
BANK MONETARY BOARD HAD PERFORMED ITS TASK WITH REGULARITY AND GOOD
FAITH AND THUS ENTITLED TO DUE RESPECT. — It is indeed unfortunate that information
regarding the nancial needs of RBSMI came to the knowledge of the media. We realize
that a bank's lifeline depends largely on the trust and con dence accorded to it by its
depositors and the public in general. However, too many possibilities exist on how word
got to the press. It is to be noted that before the Manila Times article came out in 1999,
RBSMI had already undergone several examinations and was subject to continuous
monitoring for major exceptions and violations found during the 1996 General
Examination. Word could have gotten around that the bank was being examined and that,
interested persons or entities could have inquired into the purpose of the examinations
and monitoring. RBSMI's own employees could have made remarks to friends and family
members — maybe harmless — without totally realizing the effect of such statements.
Indeed, MERALCO said that the basis of its memorandum was the information concerning
RBSMI obtained from the Philippine Clearing House, an entity distinct and separate from
the BSP. In fact, it was the BSP which dispelled the rumors which incited the second
memorandum of recantation. The undated fax message alleged to be a forged
memorandum has not been su ciently proven as having been produced by any of the
petitioners. The article might have attributed the source to be an o cial or employee of
the BSP if only to appear more credible. In any case, an inquiry was conducted by an
investigating committee especially formed upon RBSMI's request. But the committee was
unable to determine the source of the leak. We have to presume that the said committee
had performed its tasks with regularity and good faith, and thus it is entitled to due
respect for its findings.
2. POLITICAL LAW; ADMINISTRATIVE LAW; PUBLIC OFFICERS AND
EMPLOYEES; AS HIGH RANKING OFFICIALS OF THE BANK, PETITIONERS SHOULD HAVE
EXERCISED THEIR POWER OF CONTROL AND SUPERVISION SO THAT ALLEGED INCIDENT
OF RESPONDENT BANK BEING USED AS A CASE STUDY DURING A TRAINING SEMINAR
COULD HAVE BEEN PREVENTED OR AT THE VERY LEAST REMEDIED. — The facilitators of
the seminar who prepared the materials obviously applied little or no creativity at all as
shown by the words used therein, i.e., "Mrs. Ona I. Ros" which clearly is Soriano's name in
reverse, and "Rural Bank of Barangay Ginebra" referring to the bank's name — Rural Bank of
San Miguel. While there was indeed no evidence showing that either petitioner Reyes or
petitioner Domo-ong distributed or used the materials, the very fact that the seminar was
conducted under their auspices is enough to make them liable to a certain extent.
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 Petitioner Reyes, as Head of the BSP Supervision and Examination Sector, and petitioner
Domo-ong, as Director of the BSP Department of Rural Banks, should have exercised their
power of control and supervision so that the incident could have been prevented or at the
very least remedied. IDaEHC

3. ID.; ID.; ID.; PETITIONER'S ACTIVE PARTICIPATION IN LOOKING FOR A

POSSIBLE BUYER OF THE BANK WAS CLEARLY A VIOLATION OF THE STANDARDS OF
PROFESSIONALISM. — In introducing Soriano to the presidents of TA Bank and EIB Bank,
petitioner Reyes was clearly not acting in his o cial capacity. It is enough that he brought
the parties together to discuss the possibility of a sale in order for him to be found guilty
of brokering. Petitioner Reyes did not have to be paid for what he did in order to be
considered to have committed a breach of the requirement of propriety expected of a BSP
o cial. The circulars presented by petitioner Reyes indicate that it is indeed BSP's policy
to promote mergers and consolidations by providing incentives for banks who would
undergo such corporate combinations. But nowhere in these circulars is it stated that BSP
officials should take an active role in bringing parties together for the possibility of a buy-in
or sell-out. We do not think Soriano was subjected to undue pressure since he was also
interested in selling the bank. However, petitioner Reyes' active participation in looking for
possible buyers for RBSMI was clearly a violation of the standards of professionalism.

DECISION

MENDOZA , J : p

Petitioners are o cials of the Bangko Sentral ng Pilipinas (BSP). At the time
material to this case, Alberto V. Reyes was Deputy Governor and Head of the Supervision
and Examination Sector (SES), Wilfredo B. Domo-ong was Director of the Department of
Rural Banks (DRB), while Herminio Principio was an Examiner of the DRB. They led this
petition for review on certiorari of the decisions 1 of the Court of Appeals which found
them administratively liable for unprofessionalism under the Code of Conduct and Ethical
Standards on Public O cials and Employees and imposed upon each of them a ne
equivalent to six months of their salaries.
The case arose from a letter, 2 dated May 19, 1999, which respondent Rural Bank of
San Miguel (Bulacan), Inc. (RBSMI) sent to then BSP Governor Gabriel Singson. In its letter,
RBSMI charged petitioners with violations of Republic Act No. 3019 (Anti-Graft and
Corrupt Practices Act) and Republic Act No. 6713 (Code of Conduct and Ethical Standards
for Public O cials and Employees). The Monetary Board of the BSP created a committee
to investigate the matter.
The ensuing investigation revealed that RBSMI had had a history of major
violations/exceptions dating back to 1995. The Report of Examination 3 on RBSMI as of
July 31, 1995, submitted by BSP Examiner Danilo J. Castillo, cited 10 major
exceptions/violations and de ciencies of RBSMI, for which reason the latter was directed
to immediately desist from conducting business in an unsound and unsafe manner. On
March 15, 1996, RBSMI undertook to take corrective measures and/or comply with the
instructions/recommendations of the BSP. 4
In 1996, RBSMI was again examined. The examination team was led by petitioner
Principio who, in a "Report of Examination 5 on RBSMI as of September 15, 1996," noted 20
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 serious exceptions/violations and de ciencies of RBSMI. On January 9, 1997, upon her
request, Rose Ilagan, an RBSMI director, was given a copy of the list of
exceptions/de ciencies found by petitioner Principio. Ms. Ilagan, however, in a sworn
a davit, 6 dated August 10, 1999, claimed that the copy she was given was unreadable,
"making it impossible for RBSMI to immediately react to said list of exceptions."
The exit conference on the September 1996 General Examination on RBSMI was
originally scheduled on January 13, 1997, but on that date, RBSMI's Legal Counsel and
Corporate Secretary requested a rescheduling of the conference "to allow RBSMI to review
the ndings/exceptions and thereafter, prepare their comments/observations on the
same." 7 In a letter, dated January 14, 1997, petitioner Domo-ong granted the request and
the conference was reset to January 21, 1997.
It is claimed that the board of RBSMI discussed the exceptions noted in the list
given to them on January 21, 1997, but as the copy sent to them was unreadable, "it was
unable to understand many exceptions." As the members of the board were furnished clear
copies only during the exit conference, RBSMI asked for 30 days within which to submit its
answer to the exceptions.
Meanwhile, an advance copy of the report of petitioner Principio was submitted to
the Monetary Board (MB) after review of said report by petitioner Domo-ong. The report,
which was dated January 23, 1997, was signed by petitioner Reyes and submitted to the
MB on January 27, 1997. Acting on this memorandum, the MB issued Resolution No. 96 8
requiring RBSMI to explain in writing within 15 days the ndings of the examiner. It also
directed the DRB to verify, monitor, and report to the Deputy Governor, petitioner Reyes, the
findings/exceptions noted until the same had been corrected.
On February 26, 1997, RBSMI submitted its comments on the
exceptions/de ciencies/ ndings noted by petitioners in a paper entitled "Concurrence,
Corrections and Comments on the Exceptions, De ciencies and Recommendations of BSP
in its 'General Examination of RBSMI's Books of Accounts as of September 15, 1996 as
contained in the Report of Examiner Herminio C. Principio, dated December 23, 1996,
initially discussed on January 21, 1997.'" 9
Pursuant to the MB's directive in Resolution No. 96, another examination team
conducted a special examination on RBSMI from March 4, 1997 to March 26, 1997, with
February 28, 1997 as the cut-off date of examination. The special examination team,
headed by petitioner Principio and assisted by Ms. Carmelita Reyes, was introduced to
RBSMI through a letter of petitioner Domo-ong dated February 14, 1997.
RBSMI president Hilario Soriano claims that he was pressured on March 4, 1997
into issuing a memorandum to the bank employees authorizing petitioner Principio and
Ms. Reyes to review the bank's accounting and internal control system. He likewise claims
that sometime in March 1997, petitioner Reyes urged him (Soriano) to consider selling the
bank. Soriano says that on or about May 28, 1997, Soriano, through a telephone
introduction made by petitioner Reyes the day before, met with Exequiel Villacorta,
President and Chief Executive O cer of TA Bank. In his sworn a davit, 1 0 Villacorta
con rmed that he and Soriano indeed met to discuss a possible corporate combination of
RBSMI and TA Bank. The talks between TA Bank and RBSMI never got past the exploratory
stage. Their discussions were cut short as Soriano wanted a "sell-out," while Villacorta was
interested in a "buy-in."
Soriano continues: Around the last week of May, petitioner Reyes asked him
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 (Soriano) whether he wanted another buyer. When told that he did, petitioner Reyes
introduced Soriano by telephone to Benjamin P. Castillo of the Export and Industry Bank
(EIB). Hence; he and Castillo met on June 26, 1997, but their talks ended then and there
because, as per his a davit 1 1 dated July 12, 1999, Castillo alleged that Soriano insisted
on an RBSMI sell-out while he wanted a mere EIB buy-in and take-over of the management.
Meanwhile, on June 13, 1997, the MB approved Resolution No. 724 1 2 noting the
Report on the examination of RBSMI submitted by petitioner Domo-ong. The MB
con rmed the steps taken or to be taken by the DRB. It also ordered RBSMI to correct the
major exceptions noted within 30 days from receipt of the advice and to remit to the BSP
the amount of P2,538,483.00 as nes and penalties for incurring de ciencies in reserves
against deposit liabilities.
In accordance with the MB resolution, petitioner Domo-ong wrote the bank on June
25, 1997, informing it of the prescriptions of the resolution. On July 21, 1997, Soriano
submitted RBSMI's answers to the BSP exceptions/findings mentioned. Soriano said in the
letter that "the actions taken or to be taken by the bank (RBSMI) were deliberated and
rati ed by the Board of Directors in its regular meeting held on July 9, 1997." With regard
to the nes and penalties amounting to P2,538,483.00, RBSMI requested the director of
the DRB to debit its demand deposit with the amount. 1 3
On September 22, 1997, nearly six months after MB Resolution No. 96 had been
issued, RBSMI wrote petitioner Domo-ong seeking clarification of two specific issues:
1. May the scope/coverage of monitoring be expanded as to include
verifications of bank transactions, before and beyond the cut-off date
of the general examinations as of September 15, 1996? If so, to what
extent?
2. Was there no pre-empting of the Monetary Board directive which was
approved under Resolution No. 96 dated January 29, 1997? 1 4
In a letter, dated November 13, 1997, petitioner Domo-ong explained that "DRB's
monitoring of the extent of corrective measures must necessarily cover bank transactions
after the examination cut-off date to be assured that the same exceptions have not been
repeated." As to the second issue, he explained that "there was no pre-empting of the MB
directive as it was approved on January 29, 1997, way ahead of the initial monitoring which
was undertaken from March 4 to 26, 1997 with a cut-off date of February 26, 1997." In
conclusion, petitioner Domo-ong said that "considering that 'monitoring' in this regard
simply means overseeing, observing or keeping track of the corrective measures being
made by the bank on the serious ndings/exceptions noted, we do not see any reason for
your apprehensions on the matter. As soon as said ndings/exceptions have been fully
corrected, then the DRB can immediately recommend the lifting of said monitoring." 1 5
Meanwhile, petitioner Principio allegedly requested RBSMI on October 6, 1997 to
authorize him and a new BSP examiner, Ms. Zeny Cabais, to visit the bank from time to
time to review accounting and control systems. This was before a letter of introduction,
dated October 10, 1997, was issued by DRB introducing the new examination team of
petitioner Principio and Ms. Cabais. The letter of instruction stated that both examiners
were authorized, pursuant to MB Resolution No. 96, to verify and monitor the corrective
measures taken by RBSMI on the ndings/exceptions noted in the general examination of
September 15, 1996. DCSTAH

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 When petitioner Principio presented the letter to Ms. Ilagan on October 22, 1997, the
latter allegedly asked for a speci cation of the scope of his examination. However, Ms.
Ilagan claimed in her sworn a davit that on October 22, 1997 Soriano asked petitioner
Principio to make a formal request for the records which he wanted to examine in order to
avoid confusion. Nevertheless, Soriano subsequently allowed petitioner Principio to
conduct the examination without the formal request.
Soriano claims that sometime in November 1997, he accidentally met petitioner
Reyes who allegedly told him to sell out or RBSMI would suffer a bank run and it would be
placed under conservatorship. Early that month, the Monetary Board issued Resolution No.
1473, 1 6 dated November 5, 1997, ordering the continuous veri cation/monitoring of
RBSMI until the major exceptions were substantially corrected. It likewise warned the
o cers of the bank that unless they ceased from conducting business in such an unsafe
and unsound manner, drastic actions might be taken against the bank, including the take-
over of management without prejudice to the prosecution of parties responsible pursuant
to §36 of R.A. No. 7653.
The action of the MB was followed on March 20, 1998 by the MB's notation of DRB's
report on the corrective measures taken by complainant on the serious
ndings/exceptions in the September 15, 1996 General Examination. However, as there
were some major and/or serious exceptions/ ndings which remained uncorrected, the MB
again ordered its DRB to continue the veri cation/monitoring of RBSMI until the
exceptions/findings were fully corrected.
In another development, the Manila Electric Company (MERALCO) issued a
memorandum, 1 7 dated April 6, 1998, to all of its collection o cers enjoining them not to
accept RBSMI checks from customers and other payees of bills, service deposit, and,
other payments until further advice from the Treasury. MERALCO thought that RBSMI had
declared a "bank holiday." The next day (April 7, 1998), MERALCO issued another
memorandum 1 8 to its collection o cers, informing them that RBSMI's alleged bank
holiday was not true and instructing them to accept RBSMI checks from customers and
other payees. This was after the BSP had denied the news of pending RBSMI bank holiday.
On the same date, MERALCO issued a letter of apology to RBSMI Chairman Atty. Sedfrey
A. Ordoñez.
Thereafter, more than one year after authorizing the BSP to debit its demand
deposit up to the extent of the nes and penalties imposed by BSP, RBSMI, through its
counsel Atty. Rene Saguisag, in a letter, 1 9 dated November 4, 1998, appealed to the MB to
reverse the imposition of the P2.5 million penalty on the ground that "no Board Resolution
[had been] adopted to authorize the debit in the Demand Deposit maintained by the bank
with the Bangko Sentral ng Pilipinas."
RBSMI reiterated its request for the reversal of the imposition of penalty in another
letter. 2 0 Atty. Saguisag said that "as for the letter of Mr. Hilario requesting the Bangko
Sentral ng Pilipinas to debit the account of our client, I would like to state that, at that time,
he was under a state of extreme pressure to sell the bank at an unreasonably low price,
hence, the reason for the said measure of desperation." The aforesaid letters of Atty.
Saguisag were answered by the BSP in its letter 2 1 dated November 18, 1998, explaining to
Atty. Saguisag the bases for BSP's imposition of the penalty on RBSMI.
On January 21, 1999, the MB, through Resolution No. 71, authorized the conditional
reversal of sixty percent (60%) of the penalty debited against RBSMI pending resolution of
the dispute on the ndings on reserve de ciency. The conditional reversal was
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 communicated to RBSMI by petitioner Reyes through a letter, dated February 8, 1999. In a
letter, dated March 29, 1999, RBSMI agreed to "the interim reversal of the penalty, such
that said P2.5 million will be credited to RBSMI, without prejudice to the outcome of the
legal study regarding the propriety of the imposition of the penalty." Later, on April 7, 1999,
the MB approved the interim reversal of the entire amount of the penalty "pending the
outcome of the study on the legal and factual basis for the imposition of the penalty."
Accordingly, the BSP credited RBSMI's demand deposit account to the extent of the
remaining forty percent (40%) of the penalty.
On February 3, 1999, Atty. Sedfrey A. Ordoñez, RBSMI Chairman, and Soriano wrote
the MB regarding the release of the remaining proceeds of the emergency loans granted
to RBSMI. Later on, RBSMI would claim that this letter was somehow leaked to the press.
The Manila Timesissue of March 10, 1999 carried a news article by Jun T. Ebias entitled " 2
rural banks seek emergency loans, investors," 2 2 which quoted certain portions of the
February 3, 1999 letter of RBSMI to the MB. In addition, RBSMI alleged that supposedly
forged directives from Soriano addressed to all directors of the rural bank were faxed to
the municipal mayors of Bulacan. The undated fax message announced a special board
meeting of the directors of RBSMI on February 20, 1999 to discuss internal and external
audit ndings, unpaid savings deposit withdrawals and matured time deposits, and the
possible closure of the bank due to insolvency.
In a letter, dated March 10, 1999, Soriano asked for an inquiry into the alleged leak
of sensitive information which can "logically be traced [to] Bangko Sentral ng Pilipinas
sources." After investigating the matter, BSP, through petitioner Reyes and BSP Deputy
Governor and General Counsel Armando L. Suratos, informed RBSMI in a letter, dated
March 23, 1999, that the BSP was unable to determine the source of information of the
Manila Times.
On the basis of the foregoing, RBSMI, through counsel, led its letter-complaint of
May 19, 1999, which was referred by the MB to an Ad Hoc Committee it had created. After
the parties had submitted their respective pleadings, documents and memoranda, the Ad
Hoc Committee issued a resolution, 2 3 dated February 16, 2000, the pertinent part of which
reads:
CONCLUSION AND RECOMMENDATION:
After a thorough review of the records, we nd that complainant has not
substantiated its allegations of respondents' unprofessionalism. It has failed to
present su cient factual and legal bases to administratively charge respondents
with the violation of any provision of R.A. No. 3019 and/or R.A. No. 6713. The
acts complained of were done by respondents in the performance of their o cial
duties.
IN VIEW WHEREOF, this Committee respectfully recommends that upon the
approval of these ndings, the monetary Board of the Bangko Sentral ng Pilipinas
dismiss the complaint for lack of merit."

The MB adopted the recommendation of the Ad Hoc Committee, prompting RBSMI

to appeal to the Court of Appeals the dismissal of the complaint as well as the denial of its
motion for reconsideration and supplemental motion to vacate or reconsider. On
December 14, 2001, the Court of Appeals reversed. The dispositive portion of its decision
states:
WHEREFORE, the instant petition is hereby GRANTED. Accordingly,
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 Resolution No. 257 dated February 18, 2000 and letter dated July 31, 2000 of the
respondent Monetary Board are hereby REVERSED and SET ASIDE and a new one
entered nding respondents BSP Deputy Governor Alberto V. Reyes, Director
Wilfredo B. Domo-ong of the BSP Department of Rural Bank, and bank examiner
Herminio C. Principio, administratively liable for unprofessionalism and are each
meted the penalty of fine equivalent to six (6) months salary. 2 4
SO ORDERED.

Petitioners led a motion for reconsideration. However, the motion was denied on
July 29, 2002. Hence, this petition for review.
Petitioners submit the following issues:
I. Contrary to the baseless and illogical conclusion of the Court of
Appeals, there exists no substantial and convincing evidence to support the
charge that Petitioners Reyes and Domo-ong are guilty of unprofessionalism by
reason of their alleged "careless handling of con dential matters involving the
internal problems of RBSMI."
II. Contrary to the conclusion of the Court of Appeals, Petitioner Reyes
did not commit any act of unprofessionalism by reason of his alleged "illegal and
unethical act of brokering the sale of RBSMI."
III. The conclusion of the Court of Appeals that petitioner Principio is
liable for the charge of undue pressure against RBSMI, as a consequence of the
undue haste by which petitioner Principio submitted his advance report to the MB,
exposes the lack of knowledge of the Court of Appeals on how BSP o cials work
and perform their functions and duties and/or lack of full understanding of the
facts of the case.
IV. The justi cation advanced by the Court of Appeals in declaring
petitioners guilty of undue pressure, unprofessionalism, and arrogance relative to
the latter's act of recommending penalty charges for RBSMI's reserve de ciency,
is absolutely without any factual and legal basis.
V. The ndings of fact of the Ad Hoc Committee as approved by the
Monetary Board of the BSP in its Resolution No. 257 was not accorded due
consideration by the Court of Appeals despite the fact that said ndings of fact
are supported by substantial evidence.
VI. The questioned decision violates the constitutional provision that a
decision should state the facts and law on which it is based.

The present petition warrants the modification of the Court of Appeals' decision.
First. Petitioners, particularly petitioner Reyes, are faulted with the careless handling
of con dential and vital information regarding the nancial status of RBSMI. The Court of
Appeals ruled:
The respondent BSP o cials cannot deny that the newspaper article in the
Manila Times which was brought to the attention of respondent Alberto V. Reyes
unequivocably states that the source of the information concerning the alleged
nancial needs of RBSMI came from BSP and from an o cer of the Monetary
Board. If Reyes himself was not the source of such a con dential information, he
should have, at the very least and considering his exalted position as no less than
the BSP Deputy Governor, exerted efforts to discover the leak and make
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 accountable the concerned BSP o cials or employees. . . . Unfortunately,
however, Reyes appeared to have done nothing to unmask and hold responsible
the talkative o cial or employee of the BSP. His unlawful act of omission on
such a delicate and con dential matter is no less censurable as an act of
omission.

This is error. It is indeed unfortunate that information regarding the nancial needs
of RBSMI came to the knowledge of the media. We realize that a bank's lifeline depends
largely on the trust and con dence accorded to it by its depositors and the public in
general. However, too many possibilities exist on how word got to the press.
It is to be noted that before the Manila Times article came out in 1999, RBSMI had
already undergone several examinations and was subject to continuous monitoring for
major exceptions and violations found during the 1996 General Examination. Word could
have gotten around that the bank was being examined and that, interested persons or
entities could have inquired into the purpose of the examinations and monitoring. RBSMI's
own employees could have made remarks to friends and family members — maybe
harmless — without totally realizing the effect of such statements. Indeed, MERALCO said
that the basis of its memorandum was the information concerning RBSMI obtained from
the Philippine Clearing House, an entity distinct and separate from the BSP. In fact, it was
the BSP which dispelled the rumors which incited the second memorandum of recantation.
The undated fax message alleged to be a forged memorandum has not been su ciently
proven as having been produced by any of the petitioners.
The article might have attributed the source to be an o cial or employee of the BSP
if only to appear more credible. In any case, an inquiry was conducted by an investigating
committee especially formed upon RBSMI's request. But the committee was unable to
determine the source of the leak. We have to presume that the said committee had
performed its tasks with regularity and good faith, and thus it is entitled to due respect for
its findings.
The issue of the training materials is a different matter. RBSMI claims that during
one of the BSP training seminars, the bank was used as a case study albeit not speci cally
mentioned in the training materials. The Court of Appeals found that "the decision against
RBSMI in the seminar materials is truly an additional pound of salt to RBSMI's already
wounded reputation." 2 5 Petitioners allege that the seminar was for bank examiners who
were bound not to reveal any con dential information they learned in the performance of
their duties. They further claim that there is no evidence showing that petitioners Reyes
and Domo-ong were the ones who distributed and used the materials or that they harbored
any ill will against the bank to employ such means.
We agree with the appellate court. The facilitators of the seminar who prepared the
materials obviously applied little or no creativity at all as shown by the words used therein,
i.e., "Mrs. Ona I. Ros" which clearly is Soriano's name in reverse, and " Rural Bank of
Barangay Ginebra" referring to the bank's name — Rural Bank of San Miguel. While there
was indeed no evidence showing that either petitioner Reyes or petitioner Domo-ong
distributed or used the materials, the very fact that the seminar was conducted under their
auspices is enough to make them liable to a certain extent. Petitioner Reyes, as Head of
the BSP Supervision and Examination Sector, and petitioner Domo-ong, as Director of the
BSP Department of Rural Banks, should have exercised their power of control and
supervision so that the incident could have been prevented or at the very least remedied.
Second. On the charge that petitioner Reyes was brokering the sale of RBSMI, the
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 Court of Appeals ruled:
Nor can respondent Reyes escape administrative liability for the charge of
having displayed undue interest in brokering the sale of petitioner RBSM. In a
number of occasions, such an interest readily surfaced. . . . If anything else,
Reyes' actuations smack of unprofessionalism as he had concerned himself with
transactions that had nothing to do with his o cial function as BSP Deputy
Governor.
xxx xxx xxx
Nor is it correct to say that respondent Alberto V. Reyes did no brokering
simply because he was not paid for his efforts. As rightly argued by petitioner,
there is no law which de nes brokering in terms of payment thereof. To our mind,
it su ces that respondent Reyes introduced and brought the parties together to
try to hammer out a sale of RBSMI. After all, a broker's duty is mainly to bring the
prospective buyers and sellers together.

We agree with the foregoing ruling of the Court of Appeals. In introducing Soriano to
the presidents of TA Bank and EIB Bank, petitioner Reyes was clearly not acting in his
o cial capacity. It is enough that he brought the parties together to discuss the possibility
of a sale in order for him to be found guilty of brokering. Petitioner Reyes did not have to
be paid for what he did in order to be considered to have committed a breach of the
requirement of propriety expected of a BSP o cial. The circulars 2 6 presented by
petitioner Reyes indicate that it is indeed BSP's policy to promote mergers and
consolidations by providing incentives for banks who would undergo such corporate
combinations. But nowhere in these circulars is it stated that BSP o cials should take an
active role in bringing parties together for the possibility of a buy-in or sell-out.
Section 4 (A)(b) of R.A. No. 6713 states:
Norms of Conduct of Public O cials and Employees . — (A) Every public
o cial and employee shall observe the following as standards of personal
conduct in the discharge and execution of official duties:
xxx xxx xxx
(b) Professionalism — Public o cials and employees shall perform
and discharge their duties with the highest degree of excellence, professionalism,
intelligence and skill. They shall enter public service with utmost devotion and
dedication to duty. They shall endeavor to discourage wrong perceptions of their
roles as dispensers or peddlers of undue patronage.

We do not think Soriano was subjected to undue pressure since he was also
interested in selling the bank. 2 7 However, petitioner Reyes' active participation in looking
for possible buyers for RBSMI was clearly a violation of the standards of professionalism.
Third. For his part, petitioner Principio is charged with "undue haste" in submitting
his report to the Monetary Board. His recommendation for the imposition of a penalty of
P2.5 million on RBSMI is also complained of as a way of pressuring the bank. RBSMI
points out that there was an irregularity in the fact that petitioner Principio headed the
three consecutive examinations conducted on the bank.
We nd no undue haste in the submission of petitioner Principio's report. The 1996
examination on RBSMI was concluded on December 13, 1996. The list of exceptions
prepared by petitioner Principio was dated December 23, 1996, and a copy thereof was
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 sent to RBSMI on January 9, 1997. This was 18 days before petitioner Principio nally
submitted the report to the Monetary Board. Having had su cient time to prepare its
reply, RBSMI cannot pretend ignorance of the ndings of the examiner. It should have
anticipated the actions it needed to take considering the urgency of the matter.
Moreover, it is clear from the records that RBSMI was given not only one but two
opportunities to answer the ndings in the report before the report was submitted to the
MB. It should be noted that the exit conference for the 1996 General Examination was
originally scheduled on January 13, 1997. However, upon the request of RBSMI's corporate
counsel, the examination was postponed to January 21, 1997. RBSMI was furnished a
copy of the ndings on January 9, 1997. Although RBSMI claimed that the copy it received
was unreadable, it made this accusation only after the complaint had been led with the
Monetary Board.
The members of the Board of Directors only discussed their reply on the very day of
the rescheduled exit conference. Surely, RBSMI, only had itself to blame. It was given a
sporting chance to react to the ndings before it was con rmed by the MB, but it did not
make use of the opportunity. Again, it was given another chance after the exit conference
when the MB, upon review of the report of petitioner Principio, issued Resolution No. 96
requiring RBSMI to answer the findings within 15 days from receipt of the advice.
On the other hand, the imposition of the P2.5 million ne was made on the basis of
the nding of legal reserve de ciencies. Soriano wrote to the BSP authorizing the latter to
debit its demand deposit in the amount of the penalty a few days after MB Resolution No.
96 was issued. It took RBSMI more than one year before it contested the imposition of the
penalty. That the BSP subsequently reversed, albeit conditionally, the debiting of the
amount of penalty is not an admission that it erred in imposing the same. It was only an
accommodation on the part of the BSP to ease the nancial di culties of RBSMI. More
importantly, it was a conditional reversal pending the resolution of the dispute on the
finding of legal reserve deficiency.
RBSMI likewise complains that petitioner Principio took part in three consecutive
examinations in violation of BSP's own Manual of Examiners which states:
G. ROTATION OF ASSIGNMENTS FOR EXAMINERS:
A Bank Examiner shall not be in charge of more than two consecutive
examinations of any nancial institutions. No exception to this rule shall be
permitted.

But, as petitioners explain, RBSMI was subjected only to one examination — the
1996 General Examination — in which major exceptions and violations were found. The
ensuing examinations were "special examinations" meant to monitor the progress of the
bank in correcting the exceptions found. With the nding of serious violations by the bank,
the MB, through its Resolution No. 96, thought it best to put RBSMI under continuous
monitoring until the exceptions had been corrected. It is logical for petitioner Principio to
be part of the monitoring team considering that he was the initial examiner and was
familiar with the matters to be male in order. THEDCA

By and large, therefore, we nd that while there may have been some irregularities
and badges of unprofessionalism which can be held against petitioners, these are not so
grave as to merit the imposition of the penalty of ne equal to six months salary imposed
by the appellate court. The modification of the Court of Appeals decision is proper.
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 WHEREFORE, the decision of the Court of Appeals dated December 14, 2001 is
AFFIRMED with MODIFICATIONS. Petitioner Alberto V. Reyes is ordered to pay a ne
equivalent to two (2) months salary, while petitioner Wilfredo B. Domo-ong is ned in an
amount equivalent to one (1) month salary. Petitioner Herminio C. Principio is found not
administratively liable.
SO ORDERED.
Bellosillo, Quisumbing, Austria-Martinez and Callejo, Sr., JJ., concur.

Footnotes

1. Per Associate Justice Cancio C. Garcia with Justices Roberto A. Barrios and Bienvenido
L. Reyes concurring.
2. CA Rollo, p. 201.

3. Id., p. 245.
4. Id., p. 270.
5. Id., p. 278.
6. Id., p. 118.
7. Id., p. 460.
8. Resolution of the BSP Ad Hoc Committee, p. 6; CA Rollo, p. 68.
9. CA Rollo, p. 470.

10. Id., p. 340.

11. Id., p. 342.
12. Resolution, p. 8; CA Rollo, p. 70.

13. CA Rollo, p. 485.

14. Id., p. 463.
15. Id., p. 464.
16. Resolution, p. 14; CA Rollo, p. 76.
17. Copy of Memorandum; CA Rollo, p. 524.

18. Id.
19. CA Rollo, p. 490.

20. Id., p. 491.

21. Id., p. 581.
22. Photocopy of the article; CA Rollo, p. 527.

23. CA Rollo, p. 63.

24. Rollo, p. 40.

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 25. CA Decision, p. 22; Rollo, p. 61.
26. Circular No. 1312, Series of 1991; Circular No. 172, Series of 1998; Circular No. 193,
Series of 1999; Circular No. 207, Series of 1999; Circular No. 225, Series of 2000; Circular
No. 237, Series of 2000; and Circular No. 256, Series of 2000. CA Rollo, pp. 888-904.

27. Mr. Soriano met and discussed with Mr. Castillo and Mr. Villacorta on his own accord.
The affidavits of Mssrs. Castillo and Villacorta fully support this statement. (See notes
at 11 and 12) Moreover, Mr. Soriano's own statements revealed that he was undecided
as to whether he should sell the bank or not inasmuch as he was concerned with how
much the bank would sell for. (See RBSMI's Petition for Review with the Court of
Appeals, pp. 8-10; CA Rollo, pp. 31-33.)

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