Gifts of Discounts

SECTION 13 of the New Code of Philippine Judicial Conduct (27 April 2004) stated: Judges and members of their families shall neither ask for nor receive any gift, bequest, loan, or favor in relation to anything done or to be done or omitted to be done by him or her in connection with the performance of judicial duties.

Its annotation explains that: Public officials and employees shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of money 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."

The key phrase here is--"in the course of their official duties." It means that as long as a judge remains a judge of Philippine courts, this Code applies, prohibiting any receipt, directly or indirectly, from any person.

The question then is: Is a discount a gift?

On 30 January 2012, a marketing executive of Megaworld Corporation who sold to Chief Justice Renato Corona a penthouse unit at the Bellagio Tower I said during the presentation of evidence in the impeachment trial that the original price of P24 million had been volutarily reduce to P19 million [discount of P5 million] because of some structural damages and leakages due to a typhoon.

The company's finance director also testified that they slashed the price again to P16 million [discount of P3 million] because Corona paid "almost in cash" and on a "shorter term."  

The above discounts amounting to P8 million are business concessions due to property defects as well as a standard policy of discounting due to the mode of payment chosen. These are discounts that was made, on the surface, because the buyer was a high court justice. In my opinion, these are standard discounts that any buyer, given the same property condition and mode of payment, can get from the company. In effect, it cannot be considered "a gift" as referred to in Section 13.

However, there is a difference of P2 million in the disclosed P10-million discount that Corona received from the Bellagio Tower I purchase. It is not known (not reported) what was this discount for. On its face, it is a special discount that can be considered "a gift" where Section 13 can apply. If this gift cannot be explained convincingly, it can pain the Chief Justice for the violation of this section.

Obvioiusly, a discount is a gift simply for the reason that it represents a share of the property value that was not collected by the seller. Discounts for a part of the actual value of a property even if the seller received nothing for it. A property that values P24 million continues to value at P24 million (and more with years to come) regardless of how much discount was given at its purchase. A discount of P10 million did not bring down the value of the property to P12 million. Indeed, if Corona so decides to sell the property at the market value upon purchase, it must be sold at P24 million, and not at P12 million.

This is where the issue of SALN comes in because it must disclose the actual market value (P24 million) of the property, and not the actual purchase amount (P12 million). And there is also the matter of the computation of sales tax. Will the tax due to the government be based on the selling amount, or the market value at purchase?

The judicial ethics against receiving of gifts cannot be overemphasized. Because gifts, even in the form of discounts, are financial favors that can be translated to political and judicial favors later on. And when a justice of court violates this, such action can put a doubt on the trustworthiness and credibility of the entire justice system.

At the end of the day, dispensing justice walks on the tightrope of credibility. True justice cannot be discharged by an incredible justice. Neither can it be a blind justice when the factor of money or property gifts intrudes into the conditions that weighs on the mind of the judge who is tasked to dispense justice. A court or justice that favors those who can give monetary or property favors in millions can only be an agent of injustice to those who cannot provide the same. And is not the law supposed to be more for those who cannot protect themselves?