Loans secured by government employees

Dear PAO,

I was raised by my aunt since I was in grade school. Though I am already working to help her out, we are still experiencing financial difficulties brought by the pandemic. My aunt has been a civil servant for as long as I can remember. Anyway, one of the clients of their office learned about her financial predicament and offered her a loan. My aunt does not feel right about it. While we really need money now, she is not sure if it is allowed. Is there a law that prohibits this kind of transaction?

Olive

Dear Olive,

Public service is a public trust. So, while government employees are not proscribed to enter into civil transactions such as obtaining loans, they should always be mindful of the ethical standards they are bound to uphold. Republic Act (RA) 6713, otherwise known as the “Code of Conduct and Ethical Standards for Public Officials and Employees,” clearly states:

“Section 7. Prohibited Acts and Transactions. - In addition to acts and omissions of public officials and employees now prescribed in the Constitution and existing laws, the following shall constitute prohibited acts and transactions of any public official and employee and are hereby declared to be unlawful:

“x x x

“x x x

“(d) Solicitation or acceptance of gifts. - Public officials and employees shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the course of their official duties or in connection with any operation being regulated by, or any transaction which may be affected by the functions of their office.

“As to gifts or grants from foreign governments, the Congress consents to:

“(i)The acceptance and retention by a public official or employee of a gift of nominal value tendered and received as a souvenir or mark of courtesy;

“(ii)The acceptance by a public official or employee of a gift in the nature of a scholarship or fellowship grant or medical treatment; or

“(iii)The acceptance by a public official or employee of travel grants or expenses for travel taking place entirely outside the Philippine (such as allowances, transportation, food, and lodging) of more than nominal value if such acceptance is appropriate or consistent with the interests of the Philippines, and permitted by the head of office, branch or agency to which he belongs. x x x” (Emphasis supplied)

In order to determine if a transaction involving monies come within the purview of the afore-mentioned provision, our Supreme Court enlightened:

“In order to sustain a conviction for violation of Section 7 (d) of RA 6713, the following elements must be proved with moral certainty: (a) that the accused is a public official or employee; (b) that the accused solicited or accepted any loan or anything of monetary value from any person; and (c) that the said act was done in the course of the accused’s official duties or in connection with any operation being regulated by, or any transaction which may be affected by the functions of his office. x x x

“The overarching policy objective of RA 6713 is ‘to promote a high standard of ethics in public service.’ Accordingly, certain acts which violate these ethics, such as that provided under Section 7 (d), have been declared unlawful and accordingly, classified as mala prohibita. Notably, RA 6713 exhorts that ‘[p] ublic officials and employees shall always uphold the public interest over and above personal interest.’ Thus, public officials do not enjoy the same autonomy as that of private individuals, and hence, usually normal transactions such as that of obtaining loans — as in this case — come with necessary restrictions whereby personal interests take a back seat for the sake of preserving the pristine image and unqualified integrity of one’s public office.” (Villanueva vs. People of the Philippines, GR 237738, June 10, 2019, Ponente: Associate Justice Estela Perlas-Bernabe)

Therefore, if upon assessment of your aunt, the foregoing elements are present or would most likely be present, then she should turn down and not pursue obtaining a loan from said person. While she may be in dire need, pursuing such transaction may render her liable for violation of RA 6713, the penalty of which is imprisonment of not exceeding five years, or a fine not exceeding P5,000, or both, and, in the discretion of the court of competent jurisdiction, disqualification to hold public office. (Section 11, Id.)

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.