05 DECEMBER 2012

A is an employee of the Bangko Sentral ng Pilipinas (BSP) who was assigned to

examine Mapera Rural Bank (MRB) located in Malasiqui, Pangasinan. During the
period of examination, A applied for a Car Loan with MRB in the amount of One
Million Eight Hundred Thousand Pesos (P1,800,000.00) payable in two years. A
purchased a Ford Expedition 2012 Model in Ford UN Ave., Manila. However, A
failed to pay the installments and refused to pay MRB despite repeated written
and verbal demands. Aside from the Chattel Mortgage over the subject vehicle, A
also executed a Promissory Note in favor of MRB. A is a consistent recipient of the
Best Employee Award from the BSP and special awards for his exemplary
performance as public servant from the Civil Service Commission.
MRB consulted your law office and would like your legal opinion on the course(s)
of action/remedy(ies), if any, that it may take against A.
Below are provisions of laws/rules gathered from the legal research of your Junior
Associate:

RA No. 7653 (BSP Charter)

Section 16. Responsibility. - Members of the Monetary Board, officials, examiners,
and employees of the Bangko Sentral who willfully violate this Act or who are
guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to
exercise extraordinary diligence in the performance of his duties shall be held
liable for any loss or injury suffered by the Bangko Sentral or other banking
institutions as a result of such violation, negligence, abuse, malfeasance,
misfeasance or failure to exercise extraordinary diligence.
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Section 27. Prohibitions. - In addition to the prohibitions found in Republic Act

Nos. 3019 and 6713, personnel of the Bangko Sentral are hereby prohibited from:
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(d) borrowing from any institution subject to supervision or examination by the

Bangko Sentral shall be prohibited unless said borrowings are adequately
secured, fully disclosed to the Monetary Board, and shall be subject to such
further rules and regulations as the Monetary Board may prescribe: Provided,
however, That personnel of the supervising and examining departments are
prohibited from borrowing from a bank under their supervision or examination.

Section 28. Examination and Fees. - The supervising and examining department
head, personally or by deputy, shall examine the books of every banking
institution once in every twelve (12) months, and at such other times as the
Monetary Board by an affirmative vote of five (5) members, may deem expedient
and to make a report on the same to the Monetary Board: Provided, That there
shall be an interval of at least twelve (12) months between annual examinations.

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The 1987 Constitution

Article XI
Accountability of Public Officers
Section 1. Public office is a public trust. Public officers and employees must, at all
times, be accountable to the people, serve them with utmost responsibility,
integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest
lives.
The Revised Uniform Rules on Administrative Cases in the Civil Service
Rule V Penalties
Section 52. Classification of Offenses
The following are grave offenses with their corresponding penalties:
Contracting loans or money or other property from persons with whom the office
of the employee has business relations.
1st Offense Dismissal
1. Prepare the promissory note that A executed in favor of MRB in contracting
the Car Loan.
2. Prepare the requested legal opinion.