IMPEACHMENT TRIAL: Thursday, January 26, 2012

At 2:03 p.m., the hearing was called to order with Senate President Juan Ponce Enrile presiding.


THE PRESIDING OFFICER.  The Impeachment trial of the Supreme Court Chief Justice Renato C. Corona is hereby called to order.  (Gavel)

We shall be led in prayer by Senate President Pro Tempore Jinggoy Ejercito Estrada.


SEN. ESTRADA.  Ilagay natin ang ating mga sarili sa dakilang presensiya ng ating Panginoon.

Ama naming makapangyarihan, Ikaw ay aming binibigyan ng parangal at papuri.  Basbasan po ninyo kami ng sapat na katalinuhan, tiyaga at pasensiya upang mamayani sa bawa’t isa sa amin ang katotohanan.

Patnubayan ninyo po ang bawa’t isa sa amin upang maisakatuparan at magampanan namin ang aming tungkulin bilang mga hukom sa paglilitis ngayong hapong ito.  Dulutan po kami ng lakas ng loob na maisantabi ang mga personal na paniniwala upang ang aming mga desisyon ay maging patas at walang kinikilingan.

Sa Inyo, Panginoon namin, inaalay ang lahat ng magaganap sa hapong ito at sa Inyo rin po ang tagumpay

Ito ay aming dalangin sa matamis na ngalan ng Inyong Anak na si Hesus.  Amen.

THE PRESIDING OFFICER.  The Secretary will now please call the roll of senators.

THE SECRETARY GENERAL.  The honorable Senators Angara; Arroyo; Cayetano, Allan Peter ‘Compañero’; Cayetano, Pia; Defensor-Santiago; Drilon, Ejercito-Estrada; Escudero; Guingona; Honasan; Lacson; Lapid; Legarda; Marcos; Osmeña; Pangilinan; Pimentel; Recto; Revilla; Sotto; Trillanes; Villar; Senate President Enrile.

THE PRESIDING OFFICER.  With 13 Senator-Judges present, the Presiding Officer declares the presence of a quorum.  (Gavel)

Majority Floor Leader

SEN. SOTTO.  Mr. President, may I ask the Sergeant-at-Arms to make the proclamation.

THE PRESIDING OFFICER.  The Sergeant-at-Arms is directed to make the proclamation.

THE SEARGENT-AT ARMS.  All presents are commanded to keep silent under pain of penalty while the Senate is seating in trial on the Articles of Impeachment against Chief Justice Renato C. Corona.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  Mr. President, I move that we dispense with the reading of the January 25, 2012 Journal of the Senate, seating as an Impeachment Court and consider the same as approved.

THE PRESIDING OFFICER.  Is there any objection?  (Silence)  There being none, the January 25, 2012 Journal of this Impeachment Court is approved.  (Gavel)

The Secretary please call the case before the Senate seating as an Impeachment Court.

THE SECRETARY GENERAL.  Case No. 002-2011 in the matter of impeachment trial of honourable Chief Justice Renato C. Corona.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  Mr. President, may we ask the parties and/or their respective counsel to enter their appearances.

REP. TUPAS.  Good afternoon, Mr. President and honourable Members of the Senate.


REP. TUPAS.  For the House of Representatives prosecution panel, same appearances, Your Honors.

THE PRESIDING OFFICER.  Noted.  The defense.

JUSTICE CUEVAS.  Good afternoon, Your Honor, and the honourable Members of this Impeachment Court.

We are entering the same appearance, Your Honor, for the respondent, the Honourable Renato Corona, Your Honor.


Majority Floor Leader.

SEN. SOTTO.  Thank you.

Mr. President, before the Business for the Day, I move that we recognize Senator Miriam Defensor-Santiago.

THE PRESIDING OFFICER.  The woman Senator Jurist of Iloilo has the floor.

SEN. SANTIAGO.  On second thought, I will not object to Lady Senator even if it sounds baby Senator, because it sounds like a term of endearment, and it might refer to certain physical assets that I might possibly possess.

But let me move on, I would prefer, if possible, with the consent of our colleagues, to raise my question to counsel and then to the pending witness.  So, I prefer that you should be called first.  We are scheduled to resume her examination today.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  Therefore, Mr. President, we are ready with the continuation of the presentation of evidence.

SEN. SANTIAGO.  If that is the case, counsel can call his witness now.


REP. TUPAS.  With the permission of the honorable Senator Santiago, before we call, can we just request the Senate President to excuse four of our witnesses because they have been here the whole week and we might not call them today.

So, maybe the Register of Deeds of Marikina City, Makati City and Quezon City, as well at the representative of the Burgundy Realty Corporation, may we request the Senate President to excuse them for today, and they be directed to appear on Monday at two o’clock in the afternoon.

THE PRESIDING OFFICER.  The named witnesses for the prosecution are hereby excused with the injunction that they will appear in this court when they are called again to testify.  (Gavel)

REP. TUPAS.  And also Monday, Mr. President.  Monday, two o’clock in the afternoon.

THE PRESIDING OFFICER.  And Monday at two o’clock, as suggested by the prosecution.  (Gavel)

REP. TUPAS.  Thank you.

Now, we call the Commissioner of the Bureau of Internal Revenue, Kim Henares, and we also call private prosecutor, Atty. Arthur Lim, to conduct the direct examination and to answer the questions of the Honorable Senator from Iloilo.

THE PRESIDING OFFICER.  The Commissioner of Internal Revenue, the Honorable Kim Henares, may now take the stand, with the chosen counsel for the prosecution to propound the questions.  Proceed with the …

SEN. SANTIAGO.  Counsel, I refer to your complaint, Article II.  And I will read it, “Respondent committed culpable violation of the Constitution and/or betrayed the public trust when he failed to disclose to the public his statement of assets, liabilities and networth, as required under the 1987 Constitution”.

I do not need to underline that what you say, what you alleged against the respondent is that he failed to disclose to the public his statement of assets, liabilities and networth, which I shall call SAL or SALN.

Under the Rules, you are not allowed to introduce evidence that is not relevant to the failure to disclose to the public the SALN.  But in the spirit of liberality, this court has allowed you to do so.

Now, I will proceed to the discussion of Article II, under your paragraph 2.3, and i quote, “it is also reported that some of the properties of respondent are not included in his declaration of his assets, liabilities and networth, in violation of the Anti-Graft and Corrupt Practices Act.

First question to you, are you charging the respondent under the Anti-Graft and Corrupt Practices Act?

ATTY. LIM.  Your Honor, please, to answer the question, with the permission of the honorable Presiding Officer.


ATTY. LIM.  And with the indulgence of the honorable Senators, may I be permitted to point out in the—first of all, that …

SEN. SANTIAGO.  Why do you have to point out?  Answer, yes or no.

ATTY. LIM.  The allegation …

SEN. SANTIAGO.  I am tired of hearing your voice.

ATTY. LIM.  Yes, but the allegations of the complaint determine the jurisdiction of the court …

SEN. SANTIAGO.  We have already seen that counsel …

ATTY. LIM.  … over the case, Your Honor.

SEN. SANTIAGO.  Do not override me.  We have already heard that on your pleadings.  You have said that in your motion for subpoena. You have said that in your memorandum.  Do not be sententious because every hour counts.

Kaya madali lang naman sagutin itong pagtatanong na ito.  Ito bang pinapasagot natin or respondent natin ay binibintangan mo sa ilalim ng Anti –Graft and Corrupt Practices Act, yes or no?

ATTY. LIM.  Opo, Madam Senator, dahil nakalagay dito, in violation of the Anti-Graft and Corrupt Practices Act.

SEN. SANTIAGO.  Absolutely, I can read.  Give me the presumption of literacy.

ATTY. LIM.  Yes.

SEN. SANTIAGO.  And do not ever overstep yourself.

Ngayon, pagtatanong ko sa iyo, ganito.  Do not engage on a colloquy with me.  As I have pointed out during the Estrada impeachment trial, you are not suppose to discuss or argue during an impeachment trial, especially when you are speaking to the impeachment judge.

ATTY. LIM.  Can we answer the question, …


ATTY. LIM.  … however, the way we feel …


ATTY. LIM.  … it should be answered.

SEN. SANTIAGO.  No.  You should answer according to the Rules of Court, as determined by the Senate, acting as an Impeachment Court.

That is the Rule here.

ATTY. LIM.  Can the specific rule be cited for our guidance, Your Honor.


ATTY. LIM.  Okay.

SEN. SANTIAGO.  The Constitution allows the Senate to promulgate its own Rules of Procedure.  That has been repeated in this instance, and this is the end of this colloquy.  How dare you raise questions to my authority?  Be careful because I might request my colleagues to inhibit you and disqualify you from appearing here.

THE PRESIDING OFFICER.  May I intervene, Madam Senator.  I would like to explain that the Members—the non-elected members of the Senate as well as the House of Representatives can argue among themselves, but not to argue against any elected Members of Congress, because we—there is a parliamentary tradition involved in this.  Only elected members of the people can use this forum to argue with one another.

SEN. SANTIAGO.  I am a Senator judge, I am not here in my capacity as a politician.  Politicians, when I appear in a rally, anyone can hackle me, but you cannot hackle me, you cannot engage in what the law calls a colloquy with me.  You cannot engage in a discussion or argumentation with me.  I am the judge.  I preside here.  How many years have you been in trial practice counsel.

ATTY. LIM.  42 years.

SEN. SANTIAGO.  And what have you specialized in.  Is it not true that you specialized in Maritime Law?

ATTY. LIM.  In everything, Your Honor.

SEN. SANTIAGO.  What an impertinent answer.  Let me go to the point because I might lose my temper with you.  Ngayon, sinasabi mo na you are accusing the respondent under the Anti-Graft and Corrupt Practices Act.  I have here before me a copy of the Anti-Graft and Corrupt Practices Act.  It enumerates what are the acts which establish graft and corruption.  Show me or read to me which of this particular listing under the law you are accusing, under which of this listing are you accusing the respondent of  graft and corruption.  Dahil dito may A, B, C, D, E hanggang K.  I am talking about Section 3 of the Anti-Graft and Corrupt Practices Act. . Section 3.  Corrupt Practices of Public Officers.  O, ngayon, ituro mo, saan diyan?  From letter A to letter K.

ATTY. LIM.  Directly, letter C.  Can I read?

SEN. SANTIAGO. Yes, please.

ATTY. LIM.  Directly or indirectly requesting or receiving any gift, which includes discount …

SEN. SANTIAGO.  Will you please stop emphasizing your words like these.  It startles everybody.

ATTY. LIM.  I will just read softly, Your Honor.

SEN. SANTIAGO.  Good, thank you.

ATTY. LIM.  Directly or indirectly requesting or receiving any gift, present, or other pecuniary or material benefit for himself or for another from any person for whom the public officer in any manner or capacity has secured or obtained or will secure or obtain any government permit or license in consideration for the help given or to be given without prejudice to Section 13 of this Act.

Letter D also, Your Honor.  Accepting or having any member of his family accept employment in a private enterprise which has pending official business with him during the pendency thereof or within one year after its termination.

And most especially, Letter E.  Causing any undue injury to any party, including the government or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.  This provision shall apply to officers and employees of offices of government corporations charged with the grant of licenses or permits or other concessions.

And Letter F also, most especially, neglecting or refusing after due demand or request, without sufficient justification, to act within a reasonable time on any matter pending before him for the purpose of obtaining directly or indirectly from any person interested in the matter some pecuniary or material benefit or advantage or for the purpose of favoring his own interest or giving undue advantage in favor of or discriminating against any other interested party.

And Section 7, Your Honor, in relation to 9-B, if the good Senator will allow the reading, Section 7.  Every public officer within 30 days after assuming office and thereafter …

SEN. SANTIAGO.  Excuse me.  Anti-Graft and Corrupt Practices ang pagtatanong natin dito.

ATTY. LIM.  I am reading Section 7 of the Anti-Graft Law, Your Honor.

SEN. SANTIAGO.  No.  That is statement of assets and liabilities.  Hindi iyan nakalista dito sa Section 3.  Sinabi ko na Section 3 tayo eh.  You enumerate the corrupt practices of public officers.  Ayan.  Sinabi ko na.  Mayroong letter A to letter K.  Kaya mamili ka diyan sa kursunada mo kung ano ang pagbibintang mo.

ATTY. LIM.  Yes, Your Honor.

SEN. SANTIAGO.  Pero huwag kang lumampas sa Section 3.

ATTY. LIM.  I have read them already, Your Honor.

SEN. SANTIAGO.  O.  You read it out already.

ATTY. LIM.  Yes, Your Honor.

SEN SANTIAGO.  All right.  Those are your allegations against the respondent in violation of the Anti-Graft and Corrupt Practices Act.  Counsel, I am holding before you your own verified complaint for impeachment.  I go to page 11.  It is entitled, Grounds for Impeachment.  It begins with Article I and ends with Article VIII.  Pakita mo sa akin, saan dito sa Article I hanggang Article VIII itong mga probisyon na binasa mo ngayon sa Anti-Graft and Corrupt Practices Act.

ATTY. LIM.  Only ultimate facts, with all due respect, need to be alleged because…

SEN. DEFENSOR SANTIAGO.  Do not lecture me on what is the Rules of Court.  You are again engaging in a coloquey.  Answer me.

ATTY. LIM.  I believe…

SEN. DEFENSOR SANTIAGO.  Nasaan dito sa grounds for impeachment.

ATTY. LIM.  I believe the best evidence would be the complaint and we leave it to the Senate to interpret.

SEN. DEFENSOR SANTIAGO.  Good.  Now, let’s move on.  Ngayon, we have allowed you to introduce your evidence and I supported this controversial move to introduce in testimony the Internal Revenue Commissioner plus her documents that she will attest to even if it is not strictly within the literal words of the Article II which speaks only of the failure to file the SALN.  Pero hindi bale sige, sige lang tayo.  Ngayon, itinatanong ko sa iyo, saan dito sa listahan ng Anti-Graft and Corrupt Practices Act ang iyong grounds for impeachment dahil kailangan pag may complaint ka ilista mo lahat ng krimen na ipinagdedemanda mo sa respondent mo.  Dahil kung wala iyan diyan, hindi ka pwedeng magbigay ng ebidensya tungkol sa krimen kung hindi mo muna amiyendahin o palitan ang iyong complaint.  That is the gist of my line of questioning.  Ngayon, wala dito sa grounds for impeachment mo kaya you cannot introduce evidence about the Anti-Graft and Corrupt Practices Act and instead what you are doing, counsel, is you are invoking the Anti-Graft and Corrupt Practices Act , Section 8 which is not among the list of corrupt practices instead it is a peculiar law of evidence.  In fact it should be included as an amendment to the law on evidence because Section 8 is subtitled “Prima facie evidence of and dismissal due to unexplained wealth”.  So what you are actually referring to when you in your complaint that you are charging a certain offense in connection with the Anti-Graft and Corrupt Practices Act is not that you are charging the respondent with a specific act of corruption as enumerated in Section 3 but that you are invoking a presumption that is laid down in Section 8 and this is only a presumption because the title is Prima facie evidence.  Ngayon, ang pagtatanong ko sa iyo ay ganito—ang pinag-uusapan natin sa iyong Article II ay failure to file SALN.  Ano ba ngayon ang batas na ini-invoke mo?  Anti-Graft and Corrupt Practices Act at wala kang napatunay na may krimen doon na nakalista doon sa act na iyon or are you on the contrary, and I am already trying to help you to the best of my ability, are you on the contrary invoking the republic act  entitled for short the Code of Conduct and Ethical Standards because that is where we find the requirement that every public official shall file a SALN and if he does not do so accurately he will be penalized.  Kaya mamili ka.

ATTY. LIM.  Answer—both, Your Honor.

SEN. DEFENSOR SANTIAGO.  That is always a safe answer and unfortunately this is not a theoretical exam.  Ngayon hindi bale na, payagan pa rin kita.

ATTY. LIM.  Thank you, Your Honor.

SEN. DEFENSOR SANTIAGO.  You are invoking this presumption.  Now, I will now turn to the witness.  Witness, you have been called here in your capacity as an attesting or authenticating official not in your capacity as an expert witness.  That was established yesterday afternoon.  Do you understand what I am saying?

COM. HENARES.  Yes, ma’am.

SEN. DEFENSOR SANTIAGO.  Yes.  If you recall, I emphasized this point yesterday because the main difference between and ordinary witness and an expert witness is this—an expert witness  is allowed to testify on his opinion.  He is allowed to sway the jury or the judge by what he says because he is an expert.  But we already clarified yesterday you were not called here as an expert witness but simply as an attesting officer.  Do you understand that?

COM. HENARES.  Yes, ma’am.

SEN. DEFENSOR SANTIAGO.  I asked this, please do not feel insulted, simply so that we will know whether you understand that terms that sometimes we have  a predilection for inside the courtroom.  So yesterday you were drawing any conclusions or expressing any opinions, were you?  You were only presenting documents and you were saying, these are the documents that are on file in the Bureau of Internal Revenue.

COM. HENARES.  Yes, ma’am.

SEN. DEFENSOR SANTIAGO.  Were you in any way implying or saying that any of those entries in the documents that you were with you were stating falsities or stating the truth.  Did you imply any truth or falsehood with respect to those entries, or did you just testify that these are the entries as they are reflected in our records?

COMMISSIONER HENARES.  I testified as to these are the entries as submitted to us by the taxpayer.

SEN. SANTIAGO.  That is correct, because to repeat, you are not qualified as an expert witness, and therefore, you have no business expressing your opinion or drawing conclusions.  You can simply read out of the document or recite them if they memorized.


SEN. SANTIAGO.  Good.  Very good.  Now we understand each other.

So, may I please—my comment now, Mr. President, the problem at this instance of our trial is that the presumption of unexplained wealth when the income and the assets do not tally, meaning to say the assets are so much far more in value than the income, this is a presumption that is laid down in the Anti-Graft and corrupt Practices Act.  Instead, maybe it was a congressional oversight, it should have been included in the separate law which is called the Code of Conduct and Ethical Standards which is devoted mostly to the filing of the SALN.

I’m not directing this to you, witness.  I’m simply explaining myself.  That is why we are a little confused here.  Now, remember this is only a prima facie or as the Filipinos say, prima facie evidence lang iyon.  ‘Pag hindi sila nagtugma, prima facie, ay di ninakaw niya siguro yan.  Bakit ang dami-dami niyang pag-aari, konti lang pala ang kinikita niya.  But that is only a presumption.  That is only prima facie presumption.  It can be impeached.  Meaning to say, it can be overthrown, or can be defeated by evidence to the country.  Just for your elucidation.

Thank you, Mr. President.


SEN. SOTTO.  Mr. President, may I move that Senator Joker Arroyo be recognized.

THE PRESIDING OFFICER.  The Gentleman from Makati and Bicol is recognized.

SEN. ARROYO.  Thank you, Mr. President.  This is really a point of inquiry.

I would like to know whether these exhibits, you know we were given two folders, that must be around 50 or 60 exhibits, but among those that I found is Exhibit CCCCC-1, which is—Can you please look at that.

THE PRESIDING OFFICER.  What is that exhibit?

SEN. ARROYO.  CCCCC-1.  No, no, no.  C as in Canada.

THE PRESIDING OFFICER.  And the nature of the document?

SEN. ARROYO.  This is precisely what I would like to ask, Mr. President.

THE PRESIDING OFFICER.  All right.  Proceed.

SEN. ARROYO.  My understanding is that these documents yesterday were marked, but not yet admitted in evidence.

Now, any document that has not been admitted in evidence is not yet a public document.

Income tax returns are sacrosanct.  They are very, very confidential.  Now, it has been marked, identified, now, my question, Madam Commissioner, is, can you look at Exhibit CCCCC-1, or more particularly—Yes, and the rest of it.

These are the income tax returns data of Renato C. Corona.  Why was this released?  Has this been released to anyone?

COMMISSIONER HENARES.  Sir, the release was to the Senate.

SEN. ARROYO.  Only to the Senate.


SEN. ARROYO.  In other words, this has not gone out yet.

COMMISSIONER HENARES.  Not that I know of, Sir.  We submit it to the Senate based on a subpoena issued.

SEN. ARROYO.  Yes, we understand.


SEN. ARROYO.  There is nothing wrong up to the subpoena.  I am asking about whether these documents, which are not yet public documents because they have not yet been admitted by the court, have been released to anyone.


SEN. ARROYO.  May I ask—the commissioner said that it was released only to the Senate.  May I know whether this has been released to anyone else.

No, it is only a yes or no.  Pardon?

ATTY. CRUZ.  Sir, we furnished copies to the defense, the prosecution and to the Senators, Your Honor.

SEN. ARROYO.  To the defense and the …

ATTY. CRUZ.  Prosecutors and to the Senators, Your Honor.

SEN. ARROYO.  So, in other words, if these are released at all, the sources will be either the prosecution or the defense.

ATTY. CRUZ.  Yes, Your Honor, or the Senators, Your Honor.

SEN. ARROYO.  May I request that the parties be enjoined from releasing any data on this until we admit it because we defeat the purpose of this confidentiality of the income tax return.  That is the subject of our caucus.  We discussed it yesterday.

SEN. CAYETANO (P.).  Mr. President, with the indulgence of Senator Arroyo, just a follow-up question.

THE PRESIDING OFFICER.  The Senator from …

SEN. CAYETANO (P.).  Perhaps we could ask both the defense and the prosecutors if they have released this because I know for a fact that on media, daily after the session adjourns, everyone is on TV, so, just for the record, at least, we all know, because I do not really follow it but I constantly see people flashing documents.  So, to—first with the question of Senator Arroyo, has these documents been shown on television, or for that matter anywhere else?

May we hear from the prosecution and the defense.

THE PRESIDING OFFICER.  The prosecution panel may reply.

REP. TUPAS.  Yes, as far as we know, as far as we are concerned, Mr. President, we have not released anything to other parties.  It is just with us.

THE PRESIDING OFFICER.  Did you not release this to your spokemen?

REP. TUPAS.  As far as we are concerned, no, Mr. President.

THE PRESIDING OFFICER.  Are the spokesmen a member of the prosecution panel?

REP. TUPAS.  The spokesmen are not, but they are Members of the House.

THE PRESIDING OFFICER.  The Gentleman from Cavite.

SEN. LACSON.  Thank you, Mr. President.  This is a public trial.  If we want to keep confidential certain documents, then we should call for an executive session.

I submit, Mr. President.

SEN. ARROYO.  I do not want to engage in public discussion.  It is just a cautionary statement on my part.

THE PRESIDING OFFICER.  My understanding of the request of the Senator from Makati and Bicol is for the Chair to caution both the prosecution and the defense in exposing evidence not yet offered in evidence in this—formally offered in evidence in th is court.  The presentation of the evidence in this court of a document is simply to let it be recorded as an evidence for the prosecution.  The time for offer will come, not at the time of marking of the evidence for purposes of identification and for purposes of the witness–the statements of declaration of the witness.

So, I would like to caution the lawyers appearing here to be very careful. The prosecution.

REP. TUPAS.  Thank you, Mr. President.  I just want to …

THE PRESIDING OFFICER.  Let the prosecution react first.

REP. TUPAS.  Mr. Senate President, I just want to put on record that the only document we released to the public was on January 3, that was the Belagio and after that, after the Senate President raised its concern about it, and some Senators, we haven’t released any document to the public.  So, we complied at that moment, around first week of January, we complied with the directive of the  Senate President and until the present we are complying. And we intend to comply until the completion of the trial.

THE PRESIDING OFFICER.  May we request the spokesmen of the prosecution as well as of the defense not to discuss the evidence including the merits of this case outside of this court.  They can discuss what happened, the procedure, but not the contents of the evidence as well as the evaluation of the merits contained in those documents.

REP. TUPAS.  We will tell them, Mr. Senate President.

THE PRESIDING OFFICER.  The Gentleman from Misamis Oriental.

SEN. GUINGONA.  Thank you, Mr. President.  Mr. President, I would just like to manifest my support to the statement of my colleague, Senator Panfilo Lacson.  I am uncomfortable with this because this is a public trial.  This is a trial and this is a people’s court.  It is a process by which the people are actually judging for themselves through what they see.  And if we are to have a public trial, yet the evidence will not be available to the public, then, it would defeat the purpose.  However, I do not to engage in any debate with my distinguished colleague from Makati, Senator Arroyo.  I just would like to manifest my support with the view of Senator Lacson.  Thank you, Mr. President.

THE PRESIDING OFFICER.  The gentle Lady from Taguig.

SEN. CAYETANO (P.). Thank you.  Mr. President, I believe there is no disagreement among the Senators.  I think we can reconcile the views   We simply have to distinguish between the presentation or the marking of the evidence and the formal offer of evidence when we are just in the marking stage.  By all means, this should not be paraded.  And I  beg to disagree when the statement is made that this has not been released.  Perhaps it has not been distributed to the public, but the news will bear me out that it is shown like this by spokespersons.  I don’t know how close up that goes and I do not know if after that is released because I have reports that it is circulating in the internet.  And there is a big difference between documents that have been marked and have been offered.  And I totally agree that this is a public hearing, that the public should be well-informed, that we should not hide anything.  In fact, I am not aware that we have provisions for executive sessions.  But there is a big difference between deceiving the public and making it appear that these have already been formally offered when, in fact, they have only been marked.  And these are fine distinctions that lawyers or members of the Senate Judges will be able to determine at the proper time.  But to use it at a time in media, when it has only been marked, is deceiving the public, Mr. President.

THE PRESIDING OFFICER.  Thank you.  Anyway, the Chair has cautioned the two sides of these proceeding, adversarial proceeding, the prosecution and the defense, to exercise caution.  You know, in other countries, when you are going to publicize a case, a criminal case especially, and it is inordinately discussed in public, it could be a basis for a mistrial which of course is not a part of our system of criminal procedure.  But nonetheless, there is a purpose for this caution because we must not unnecessarily  create an impression in the minds of the public that this is already an admitted evidence.  Not yet.  It is only being presented.  The Minority Floor Leader.

SEN. CAYETANO.  Thank you, Mr. Presiding Officer.  Mr. Presiding Officer, if we look at Rule 18.  At all times, when the Senate is sitting… prosecutors to the persons impeached and to their respective counsels and witness.  I read this rule in support of all those who stood before me.  Senator Joker Arroyo is correct that just because it is a trial and it is open, that does not mean that we violate peoples’ right.  But Senator Lacson is correct in pointing out that we have to suspend our rules if we want to go in executive session but we all agreed when we made the rules that we should in fact put everything before the people, ilantad lahat po ito para walang magsuspetsa kung ano ang magiging desisyon, kung ano ang mga ebidensya.  Pero, Mr. President, I would like to point out two things.  First, our witness here has been very careful and has followed her oath and her work very well by, noong iprinesent po iyong alpha list ng Supreme Court, sinabi naman po niya na may ibang names doon.  Kaya ang ginawa po niya hindi niya inilabas para makita iyong ibang mga pangalan.  And there were times in the past that this was the discussion and in fact we have been discussing halimbawa maglalabas ng mga titulo na may mga ibang pangalan dito kalian pwedeng madamay iyong ibang tao because it is necessary in the trial at kalian hindi.  So I agree with the Presiding Officer to exercise caution and let us just simply follow the law.  In the case of the ITR of the Chief Justice, the President has already authorized its release and if it is brought up in the trial, the cameras here are very powerful.  They can zoom in any time and see it for themselves.  But let me make the second point very briefly, Your Honor.

I keep reading in the newspapers a gag rule and I think they are referring to the  second and third paragraphs I read.  Let me just point out that there is a difference between a subjudice rule and a gag rule.  Because a gag rule is absolute.  Ang ibig sabihin nga ng gag ay tatakpan mo iyong bibig in layman’s term at hindi pwedeng magsalita anything and everything about that case.  Iyong subjudice ay meron certain parameters.  For example, if you are simply narrating or detailing what was in the complaint or what happened today or what it was in the answer or if you are a part of the media or the spokesman and you are simply recapping or showing both sides.  That is why if you look at the words, nakalagay refrain.  Hindi nakalagay dito na absolutely huwag magsalita ang prosecution or judges.  But sa judges mas maingat kami sapagkat mai-interpret na kinakampihan naming ang isang side pag nagsalita kami.

So, Mr. President, let me just agree with my colleagues here and let me agree with you.  Let’s just be very careful.  Let’s not be too excited that in coming out with the evidence whether for the prosecution  or the defense  we violate and trample upon people’s right.  But so far our witnesses  have been very careful from the Clerk of the Supreme Court to the BIR Commissioner.  Thank you, Mr. President.

SEN. SOTTO.  Perhaps, Mr. President, the final word from Senator Joker Arroyo.  May we recognize him.

THE PRESIDING OFFICER.  The Gentleman from Makati.

SEN. ARROYO.  Mr. President, I do not want to belabour the point, I started this.

We have rules and rules are designed so that every one would follow the rule.  The rule is simple—that any evidence that is identified or marked is not yet evidence.  It is nothing but a piece of paper.  When will it be a public document?  When it is admitted.  When it is admitted then it becomes a public document.  The Internal Revenue Code is very strict in this.  About the internal revenue the ITRs to be sacrosanct.  As a matter of fact, Commissioner Henares  would not have been here or brought those documents had not the President of the Philippines no less authorized the opening of those documents.  The National Internal Revenue Code says that insofar as the ITR is concerned, the commissioner must seek the permission of the President, which she said she did in writing.

So, in other words, no matter how public our hearing is, the rule of secrecy must be followed.  There is no exception to that.  It is a public trial, but order must be maintained.  Otherwise, it’s no trial at all.  That is the reason for this trial.  A trial assumes order, system.  If without it then it’s useless.  That is all.  I don’t want to argue with anyone on that.  I just want to call the attention, so that henceforth, we will follow the rules.

Thank you, Mr. President.

THE PRESIDING OFFICER.  I would like to state for the record that that was precisely the reason why the Chair cautioned the private prosecutor not to go into the substance of the document, meaning the contents, because the Commissioner of Internal Revenue was brought here to testify on the documents that she brought, and whether they were an authentic documents, meaning that they have conformed with the formal requirements of the stature, and to present those documents, because those documents are the best evidence of the contents, whether there’s any income tax or income reported and whether taxes were paid.  There’s no better evidence than the income tax, of course, in the supporting receipts no.

So, I hope we will adhere to these rules so that we can move into the trial smoothly.  I could not object to the questions relating to the substance because I’m the Presiding Officer.  But I cautioned—The records will show that the Chair cautioned the private prosecutor in delving into the contents of the documents that were presented by the Commissioner of Internal Revenue.

In fact, even the alpha list, I said, the best evidence of the contents of the alpha list is the alpha list itself.

So, with that, now, I would like to hear the pleasure of the defense counsel.

JUSTICE CUEVAS.  Thank you, Your Honor.

We have always been emphasizing and with positive articulation, Your Honor, that when it comes to documentary evidence, there is a process that is ordained under our Rules of Court and Procedure that there must first be identification, there must be marking, and there must be an offer, and the party against whom it is offered must have the opportunity to comment and/or object.  And it is only after all these proceedings have taken place that an order of admission or ejection can be properly made by the court, Your Honor.

Now, in fact, we wanted very much to bring to the attention of this honourable court the violation of all these things relative to confidentiality and so on, Your Honor.  But for fear that we may again be accused of delaying the proceedings in this case, we have chosen not to.

Now, they have brought this matter very openly.  In fact, when we were still on trial here, our people told us that they were already discussing this issue in this conferences being held, Your Honor.

Now, we have no way of stopping them, Your Honor.  It is their pleasure, and all we can say or all our spokesmen said was this has not been evidence as yet, because they are not yet been offered, neither had the court ruled on their admissibility.  That’s the only manifestation we have made, Your Honor.  We have never discussed—We do not want to engage them in a discussion relative to the contents of the document, Your Honor.

Now, we are very sure that this is—that all these things should not have happened if all the parties concerned, most especially the spokesman of the prosecution, that we should avoid discussing the case on the merits.  We are not presenting this evidence so that the public will know what is our purpose, what are the proceedings taking place in this court.  So much so that until and unless, a formal offer is made of these documentary exhibits, and a ruling is made, then this shall not be considered as evidence in the case, Your Honor.

Now, with respect to the comment that they are not public document, I am sorry that I may not agree with the honorable Gentleman from Makati, because the nature of the document is determined by the contents thereof.  Has it been notarized?  Was it executed before a public official duly authorized to administer oath?  If that is the case, then it is public document.

The element of being offered and admitted in a judicial proceeding does not go into the character of the evidence presented, Your Honor.

Now, there have been likewise statements here, made by the private prosecution, Your Honor, relative to the basis of their complaint, and there was a mention that has been made of several articles, Your Honor, may we be allowed to state for the record, that there is nothing in their complaint, impeachment complaint, Your Honor, which alleges the particular acts or omission, constitutive of the violation.  And that is elementary in criminal procedure.  The acts or omissions constituting the offense must be specifically alleged.  There is no allegation of that sort, Your Honor, hence we were not able and we did not choose to discuss this matter in our answer, Your Honor.

It is not correct and accurate to state that the basis of their action for this impeachment complaint, Your Honor, are the various sections of the Anti-Graft Law.  And secondly, the court will probably agree with me, and so with the rest of the honorable members of this court, that this is—there is no statement here relative to being—to the violation of the Anti-Graft Law.  What they said is, failure to disclose and so on down the line, and there is a violation of public trust, there is culpable violation of the Constitution, but never violation of the Anti-Graft Law.

If we found that, first, our first impulse was to file a motion to dismiss, Your Honor, but we are prohibited, and we are afraid and apprehensive that this may be raised as an argument for us, delaying the case.

There was also a suggestion that we should have filed a motion for bill of particulars.  We do not agree with that kind of a suggestion, Your Honor, because a motion for a bill of particulars alleges or for purposes of merry making the unspecified definite allegation to be more concrete and definite.

Here, there are no allegations whatsoever.  So, …

THE PRESIDING OFFICER.  And besides, counsel, if you will file a bill of particulars, the articles of impeachment are one thing, an amendment would be the proper remedy.  And if you amend the articles of impeachment, it has to go back to the House where it came from for amendment.  It cannot be amended by the prosecutors.  It has to be amended by the House, and that amendment must be voted upon.

JUSTICE CUEVAS.  And that goes into initiation, Your Honor.  And we are of the humble submission, Your Honor, that this will require that the complaint for impeachment must undergo another proceedings before the House of Representatives.

Again, maybe, they will be crying hell.  O alam na ninyo, ayan ginawa na naman ng defense counsel.  Gusto lang nilang ma-delay, babalik.

But when we argue our points, Your Honor, when we object to a particular question, it is not because we just wanted to object, because this is part and parcel of the right of the accused to due process.  If there is no more opportunity to object, there is no more opportunity to argue, then what are we here for?

SEN. SOTTO.  Senator Santiago, Mr. President.

THE PRESIDING OFFICER.  Mr. Majority Floor Leader.

SEN. SOTTO.  Senator Santiago wishes to be recognized.

JUSTICE CUEVAS.  Thank you, Your Honor.

THE PRESIDING OFFICER.  The Gentle Lady from Iloilo.

SEN. SANTIAGO.  Thank you.  Under the Rules of Court, no party is allowed to present evidence, unless that evidence is relevant to the charges contained in the complaint, or as in our case, in the articles of impeachment.  That is the general rule.  You can admit evidence that is not related to any of the charges in the complaint, only after you have amended the complaint.

Now, my query now is, presented to both counsel and to my fellow, my brothers and sisters in the impeachment court is this, and I will not necessarily request for an answer at this time, it may be memoranda.

The question is this, what is the time frame for amending the complaint or the articles of impeachment?  Can you amend at any time or is there a deadline?  If the counsels are interested in this question, may I offer the suggestion that they should file memoranda, so that at caucus, the Senate court might discuss this among ourselves.

JUSTICE CUEVAS.  May I be allowed to present the view of the defense, Your Honor?

THE PRESIDING OFFICER.  I think the counsel for the prosecution has stood to make a remark.  We will allow him first.

ATTY. LIM.  May I be allowed to present some manifestations or comment.


ATTY. LIM.  Thank you, Your Honor.  I believe that distinction must be drawn between  the factum probandum and  the factum probands

THE PRESIDING OFFICER.  That is correct.  What is the probandum here?

ATTY. LIM.  The probandum here, Your Honor, is, as stated in Article II and in the body of Article II explaining it, since the title cannot be taken in isolation, it is failure to report SALN or disclose SALN to the public and the commission of the acts described in paragraphs 2.2 and 2.3.  As a matter of fact, even with respect to Article 2.4, if I may be permitted to respectfully invite the attention to the Journal record of January 25, 2012, starting on page 3, where we see the name Senator Drilon, just to amplify, Mr. Senate President, When the court ruled indeed that the court will allow introduction of evicdence on 2.2 and 2.3 which would allow evidence to prove that evidence can be introduced that a property, whether real or personal, is not included in the SALN, however, under Article 2.4, which asserts that such properties could be ill-gotten, the court did not rule on that.  And we will rely on the presumptions of evidence on the presumptions of law, particularly the Anti-Graft Law, Mr. President.  “The Presiding Officer.  That is correct.”  It is our humble submission and manifestation then that this honorable court …

THE PRESIDING OFFICER.  Just a minute, Counsel.

ATTY. LIM.  Yes, Your Honor.

THE PRESIDING OFFICER.  We are guided by a decision of the Supreme Court in the case of the articles of impeachment against the former Ombudsman Merceditas Gutierrez.  I am trying to get a copy of the decision.  And in that decision, the Supreme Court’s opinion, penned by the present Ombudsman, then Justice Conchita Carpio- Morales, said that the articles of impeachment must charge only one, must embrace only one charge for each article of impeachment.  That is very emphatic.  It is a rule established by the court.  We did not establish it here.  So, I am sad to say that there was fault in the crafting of your pleading.  And that is why we have to correct it in a caucus.  We became very liberal.  In fact, we allowed paragraph 2.3 but we disallowed paragraph 2.4 because it is obviously not germane to the question of SALN or Article II and you included it in Article 2 of the Articles of Impeachment.  And, in fact, even paragraph 2.3, if you read the specification under the grounds  ofr impeachment stated in your articles of impeachment, for Article II, you merely alleged the ultimate fact of non-disclosure of the SALN.  But we became liberal to allow evidence to be introduced on paragraph 2.3 of your discussion.  Mind you, this is the discussion of your Article II, not Article II itself, but a discussion of Article II.

SEN. ARROYO.  Mr. President.  Mr. President.  THE PRESIDING OFFICER.  The Gentleman from Makati and Bicol.

SEN. ARROYO.  I hate to say this but the rule as directed by the Chair and the body is that private prosecutors can conduct the examination of witnesses but cannot argue points of law and whatever.  Then if we liberalize this, then we will have again another problem.  I am now trying to stand up every time I see every relaxation, not relaxation but a violation of our rules.  Otherwise there will be no order.  That is all.  Because nobody is suppressing the prosecution from presenting their position but it has to be a member, I was a member of the prosecution before but it has to be the House commissioned by the House of Representatives that will have to articulate and represent the House of Representatives but counsel outside counsel cannot because they were not given the authority by the House of Representatives as the prosecutors.

THE PRESIDING OFFICER.  That is correct.  That is under the rules of the House itself that created the panel so I think the lead counsel of the House should exercise his power to control the private lawyers as hired  by the House to assist.

REP. TUPAS.  We will do that, Your Honors.

JUSTICE CUEVAS.  Your Honor please, in connection with the topic we are now discussing, Your Honor, may I be permitted and allowed to read the portion of the disposition as embodied in this journal or minutes of the proceedings yesterday.  It states and I quote verbatimly, Your Honor:  “The prosecution may introduce if it has evidence that would support the allegations contained in paragraph 2.2 and paragraph 2.3 under Article II of the Articles of Impeachment but not to introduce evidence under paragraph 2.4 Article II of the Articles of Impeachment.

THE PRESIDING OFFICER.  That is correct.

JUSTICE CUEVAS.  This is disposition, Your Honor, and we have not seen any modification much less reversal of this particular disposition of this honourable court.  Now, may I now proceed to the amendment which was posed by the Honorable Defensor Santiago, Your Honor.

THE PRESIDING OFFICER.  The Gentleman from Iloilo, Senator Drilon.

SEN. DRILON.  Just to complete the reading of the records on page four of the records of the Senate sitting as an impeachment court, Wednesday, January 25, 2012, after the Senate President issued an order that the prosecution may introduce if he has evidence that would support the allegations contained in paragraphs 2.2, 2.3 under Article II of the Articles of Impeachment but not to introduce evidence in 2.4 of Article II of the Articles of Impeachment. So ordered.   We stood up and clarified that the court ruling during the caucus was as we have stated on page 4 of the records and we said, when the court ruled indeed that the court will allow introduction of evidence in 2.2 and 2.3 which would allow evidence to prove that evidence can be introduced that a property whether real or personal is not included in the SALN.  However, under Article 2.4 which asserts that such properties could be ill-gotten, the court did not rule on that and we rely on the presumption of evidence, on the presumption of law particularly the Anti-Graft Law, Mr. President.  And the Presiding Officer said that is correct and that’s clear on the records, Mr. President.  And this is a reflection of the ruling of the court during the caucus which was manifested by the President and this Representation in open hearing and during the actual hearing.  So I think the records are clear, Your Honor.

JUSTICE CUEVAS.  Mr. President, we have no quarrel with the observation made, Your Honor.  But what we wanted to place on record is what was dictated orally as the resolution on our motion, Your Honor.  And this is not part of the resolution.  This is merely a narration of what happened in that caucus.  It does not form part of the decision, Your Honor.

SEN. DRILON.  Mr. President, I beg to disagree.  That is a decision of the court.

JUSTICE CUEVAS.  It is not reflected.  That’s why, Your Honor, …

SEN. DRILON.  At any case, that is—we have precisely—we go to these caucuses and we decide on how to dispose of the motions.  And this is what was agreed to be the ruling of the court on this issue.  And that is confirmed by no less than the Senate President.

THE PRESIDING OFFICER.  At any rate, Gentlemen, with your indulgence, we are going to write a formal resolution, and this will be discussed again by the Members of the court.

So, the records will indicate the ruling of the Chair which is actually a ruling of the Senate, as seating as an Impeachment Court.

Now, the Gentleman from Iloilo.

SEN. CAYETANO (A.).  From Taguig and Pateros, Mr. President.

SEN. SOTTO.  Senator Allan Cayetano, Mr. President.


SEN. CAYETANO (A.).  Mr. President, we just want to place on record, napag-usapan naming ni Senator Lacson na napanood na namin ito kahapon e, parang nag-replay tayo.

So, obviously, ang ibig pong sabihin, there is a misunderstanding with the ruling, because I also was surprised when the prosecution stood up to make also a motion for reconsideration, but at the same time the defense are also making some comments.  Ang ibig sabihin po, parehong ayaw sa desisyon.  Bihira po mangyari iyon.

So, let me try to do my part in making some clarification.  My understanding of the agreement in the caucus, without expounding no, simply saying the understanding, ang ill-gotten wealth cannot be accepted as a charge as a separate charge.  Because, tingnan niyo lahat ng articles, walang nakalagay doon na graft and corruption na ill-gotten wealth, okay?  So, this court will not be accepting evidence to prove ill-gotten wealth as far as a separate charge.

But as far as Article II is concerned, nondisclosure means, hindi ka nag-file, or nag-file ka na hindi kumpleto, o nag-file ka na mayroon pong mga iniba o hindi sinama.

Now, in the course of proving 2.2 and 2.3, kung maipakita na mayroong properties na hindi naisama sa SALN at ‘pag napakita na iyong mga properties na ‘to ay hindi kayang bayaran ng legitimate income ng Chief Justice, then there is a presumption in law because there are Supreme Court cases that say, magshi-shift ngayon ang burden.  Magiging ngayon burden ng kabila to show that this is not ill-gotten.

So, in the sense, you are not proving the pagiging ill-gotten.  You are still proving, whether or not, may full disclosure or mayroong complete disclosure under Article II.

That is my understanding, Mr. President, but I will stick to what the President said yesterday and the Gentleman from Iloilo, because anything else we say today will be in the nature of a motion for reconsideration, e klaro naman po ang sinabi ng ating Senate President, at klaro naman po ang sinabi ng—ang clarification po ni Senator Drilon.  So, anything, anyone else says here right now, unless any of the judges are asking a motion for reconsideration, but yesterday, we were unanimous.

So, ang pakiusap ko ho siguro namin ay ituloy na po natin iyong hearing no, and let’s not argue on this point already, because it’s already been decided, and we spent so much time reading your memoranda and discussing this on the floor already.

Thank you, Mr. President.

THE PRESIDING OFFICER.  Let me cut short this discussion.  I just want to read to you the opinion of the Ponente in the case of—this is the case involving the impeachment case against Ombudsman Gutierrez and a portion of the opinion of the court, of the Supreme Court says, “suffice it state that the Constitution allows the indictment for multiple impeachment offenses with each charge”, and I hope you will take heed of this, this is a rule of pleading that the court established, “with each charge representing an article of impeachment, assembled in one set, known as articles of impeachment, it therefore follows that an impeachment complaint need not allege only one impeachable offense as a whole, but each charge must be represented by an article of impeachment.”

And that is the quandary where this court was in when we held the caucus, because Article II now was expanded from what was its specification and allegation when the grounds for impeachment were actually narrated in the articles of impeachment.

So with that, let us proceed with the trial.

SEN. SOTTO.  Mr. President, may we recognize Senator Francis Escudero.

THE PRESIDING OFFICER.  The Gentleman from Sorsogon.

SEN. ESCUDERO.  Before we leave the point, just so that we are sure that we are clear on the matter.

Mr. President, I raised the point, as the Chair conceded, that each article must alleged only one specific act.  Kaya nga po sa Estados Unidos, minsan iyong articles of impeachment, umaabot ng hanggang 30 o 40 dahil kada individual impeachable act, hiwa-hiwalay na article iyon.  But I raised a second question, Mr. President, which I raised a second question, Mr. President, which I address perhaps to the body and to the Presiding Officer.  We are impeaching Chief Justice Corona as Chief Justice, I presume, not as an associate justice, not as an adviser to the Office of the Vice President before, not as a presidential legal counsel.

My point, Mr. President, is this, kahapon po, ang dami kong narinig na ebidensya kaugnay sa ITR noong 1992, noong 2003, hindi po ba ang pinag-uusapan natin dito ay—and I seek the guidance of the Chair and my colleagues.  Hindi po ba ang pinag-uusapan natin dito, acts of the Chief Justice as Chief Justice, not prior acts.  Hindi po ba hindi natin puwedeng i-impeach ang isang opisyal sa mga ginawa niya bago siya naging Chief Justice?  Halimbawa po, si Vice President Binay, kung magiging Presidente, we cannot impeach him for acts committed as Vice President once he is already President.

I admit, an associate justice is subject to impeachment proceedings, and he is an impeachable officer, but now, we are impeaching the Chief Justice, I presume, as Chief Justice, my question, Mr. President, is, limitado lang ho ba tayo sa mga ginawa at hindi niya ginawa na impeachable habang Chief Justice lamang siya, o kasama rin ba dahil tila saklaw iyon sa ipiniprisintang ebidensya ngayon, o kasama rin ba iyong mga nagawa niya bilang associate justiced lamang, o bago pa noon?  Dahil tila ang ebidensyang pinprisinta po sa atin dito ay may kinalaman sa mga ginawa niya noong unang panahon pa, except perhaps, to establish a pattern or practice, but that was not part of the offer of the prosecution when they presented this and the previous witnesses.

I submit, Mr. President, and seek the guidance of the Presiding Officer or the body, and as well as the parties as to how we dispose of this matter.

THE PRESIDNG OFFICER.  I will put that request under the advice, not because I will have to consult the Members of the court, I must confess that the Chair is not in a position to make a definitive ruling done by the respondent as an associate justice, all the way to his acts when he was appointed as the Chief Justice.

He was appointed as a Chief Justice of the Supreme Court only on May 17, 2010.  So, whether the acts that he did prior to that, we will have to study it whether it can be covered.  Offhand, I would say that probably, it is relevant because he is both an associate justice and chief justice of the Supreme Court.  But I am not saying that that is a definitive position because that is my offhand reaction.  But I will have to study it.

SEN SOTTO.  Thank you.  Mr. President.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  May we have a brief statement from Sen. Francis Pangilinan.

SEN. PANGILINAN.  Yes, just very quickly but again subject to final discussion and decision of the court.  Section 2 of Article XI.  Public Accountability.  Accountability of Public Officers.  It states:  “The President, the Vice-President, the Members of the Supreme Court, the members of the Constitutional Commission and so forth and so on, may be removed from office on impeachment for and conviction of, and so forth and so on.”  So, it does not say the Chief Justice.  It just says the members of the Supreme Court.  And since Chief Justice Corona has been a member of the Supreme Court since 2002, then I would like to think that he falls four square in terms of the jurisdiction of this court from the time that he became …

THE PRESIDING OFFICER.  We will note the opinion of the Gentleman.

SEN. SOTTO.  Mr. President.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  Yes.  Nevertheless, we do not, I don’t think the answer is being asked of by Senator Escudero today.  So, we are ready for the continuation of the presentation of the evidence of the prosecution, Mr. President.

REP. TUPAS.  May we proceed now, Mr. President.

JUSTICE CUEVAS.  If, Your Honor please.  Just a minute, Your Honor.  If we may be allowed, Your Honor.

THE PRESIDING OFFICER. You have one minute.

JUSTICE CUEVAS.  Yes, Your Honor.  There was a query posed by the honourable member of this court, the Honorable Senator Miriam Defensor Santiago, Your Honor, as to whether the complaint may be amended, when, where and what would be the result of that amendment.  Lest, we are charged we are charged with violating of what she wanted us to do.  I am now prepared to discuss this particular point.  Even two or three minutes only, Your Honor.  But if the court so desires that it must be done later, we will be heavily thankful for that.

THE PRESIDING OFFICER.  In the spirit of fairness, you proceed.

JUSTICE CUEVAS.  Thank you, Your Honor.


JUSTICE CUEVAS.  Amendments, in accordance with our rules of procedure may be of two kinds.  Amendment which is a matter of right and amendment which is discretionary.  Now, when is an amendment a matter of right, before answer.  So, the moment there is an answer, there could be no amendment anymore as a matter of right.  It must be with leave of court, Your Honor.  And that must refer even to substance or form.  Now, supposing there is already an answer, what is the right of the parties to make an amendment?  It will be discretionary, Your Honor.  There must be a motion and only after the motion is granted that the amendment may be made.  Now, the next point is, what will be the effect of the amendment?  Necessarily, the amendment that was allowed to be submitted by the party seeking an amendment, Your Honor, will form part of the proceedings, will form part of the records of the case.  It will be incorporated in the main petition or main answer, Your Honor.  So much so, that it now contains the issues and matters that should be the subject of trial and reception of evidence.  Now, in this particular case, may the petition be amended, Your Honor, so as the proceedings before this court may continue receiving evidence on the controversial issue?  Our answer is no, Your Honor, because that will entirely be a different complaint.  It will be violative of the right of the accused to due process, Your Honor.  It must, therefore, undergo proceedings before the House of Representatives because that will refer to initiation.  And intiation must be in accordance with the Constitution and their laws.  There must be finding of probable cause.  There must be voting, and it must be deliberated upon by the Congress in session.

THE PRESIDING OFFICER.  And there is a constitutional injunction against multiplicity of impeachment complaint within a certain time.

JUSTICE CUEVAS.  Thank you, Your Honor.  I rest my case insofar as that particular issue is concerned.

THE PRESIDING OFFICER.  We have discussed this extensively, we will proceed with the trial.

REP. TUPAS.  We will proceed now, Mr. President.


REP. TUPAS.  With the presentation of our witness, Atty. Art Lim.

ATTY. LIM.  Atty. Arthur Lim, Your Honor, respectfully entering the same appearance as private prosecutor for purposes of the presentation of the witness on the witness stand.

THE PRESIDING OFFICER.  Proceed.  There is need to enter your appearance, it has been entered earlier.

ATTY. LIM.  Thank you, Your Honor.

JUSTICE CUEVAS.  Your Honor please.

ATTY. LIM.  The witness will be testifying under the same oath, Your Honor.

JUSTICE CUEVAS.  Your Honor please, there are other witnesses  that the prosecution will present in these proceedings.  May we request that they be temporarily excluded from this…

THE PRESIDING OFFICER.  So ordered.  The other witnesses will have to go to the confinement area so that they will not be hearing the declaration of the witness on the stand.

ATTY. LIM.  I understand, Your Honor, that the other witnesses are in the holding room.  I am not sure if they could hear from there.

JUSTICE CUEVAS.  May we know their names please so that we can verify whether they are in or out.  You do not know their names.

ATTY. LIM.  Giovanni Ng, Nerissa N. Coset, Aniceto Bisna Jr.

THE PRESIDING OFFICER.  Anyway, counsel for the defense, if they are no longer inside the hall, they are somewhere else in the building, then the trial may begin.

JUSTICE CUEVAS.  Thank you, Your Honor.

ATTY. LIM.  May please the honourable court and with your kind permission, Your Honor,…


SEN. SOTTO.  Mr. President.

THE PRESIDING OFFICER.  The President Pro Tempore.

SEN. ESTRADA.  Narinig ko po kanina, ilan po ang inyong mga testigo na pinalalabas ni Justice Cuevas?

ATTY. LIM.  Tatlo po pero nandoroon na raw sa holding room

SEN. ESTRADA.  Doon ba ho holding room hindi ba ho may telebisyon ho roon at namo-monitor din iyon ating mga proceedings.

ATTY. LIM.  Wala daw po.

SEN. ESTRADA.  Sigurado ho kayong walang telebisyon doon?

ATTY. LIM.  Wala po.

SEN. ESTRADA.  Pwede ho i-instruct iyong ating mga Page kung talagang walang TV roon sa holding room nila?  Dahil alam ko live ho iyong proceedings sa telebisyon.

THE PRESIDING OFFICER.  The Sergeant-at-Arms is required to check.

SEN. ESTRADA.  At saka kung meron ding computer iyon ay live ho tayo sa computer.  Iyon lang po, Ginoong Pangulo.

THE PRESIDING OFFICER.  Anyway, pending the return of the Sergeant-at-Arms, I suggest that we proceed with the hearing to discuss the preliminaries.  Counsel, proceed.

ATTY. LIM.  Thank you, Your Honor.  With you kind permission, Your Honor, Madam Witness, in yesterday’s hearing when you were identifying the various CARs or certificates authorizing registration for the La Vista, Bellagio, Bonifacio Ridge and Fort Mckinley properties which were marked respectively as Exhibits GGGGG, HHHHH, IIIII, JJJJJ and KKKKK as well as LLLLL and also MMMMM and as well as Exhibit NNNNN as in Nancy you told the honourable court that these various CARs went through a system or a process in the bureau.  Will you please state to the court what exactly is this system that the BIR follows in the issuance by it of a CAR for a property transaction?

COM HENARES.  We call the system, the Onet System.  The first thing that a taxpayer will do is they will file a capital gain tax return which is Form 1707, filed it with a bank, pay the amount to the bank, then submit it to the Bureau of Internal Revenue, together with the Deed of Sale for the transfer.

Thereafter, the Bureau of Internal Revenue will check whether the value stated is correct, in the sense that it should follow the rule that it should not be either the selling price or zonal value, whichever is higher.

THE PRESIDING OFFICER.  I would like interrupt the testimony.  The Sergeant-At-Arms has arrived.  Will you please report about what you found in the holding area.

SERGEANT-AT-ARMS.  Upon the instruction of the Senate President, I went to verify the room.  There are four people there, there is no audio, there is no video, and there is even no computer that will monitor what’s happening in here because we’re online.

Thank you, Sir.

THE PRESIDING OFFICER.  Thank you.  Proceed.

COMMISSIONER HENARES.  After getting all these documents, the Bureau of Internal Revenue will evaluate whether the proper taxes have been paid, if the proper taxes has been paid.  If the proper taxes are not paid, they make an assessment and the taxpayer will have to pay additional amount.

Upon full and proper payment, the Bureau of Internal Revenue will issue a Certificate Authorizing Registration stating therein the name of the buyer, the name of the seller and the particulars, and what is being transferred, and description, the zonal value, the selling price to the parties, and the party will—then, that’s where the job of the Bureau of Internal Revenue ends.

ATTY. LIM.  Is it correct to state, Madam witness, that when everything shall have been found to be in order, the Bureau then issues the CAR which now enables the Register of Deeds to transfer the property?


ATTY. LIM.  After you received the subpoena for your appearance today and yesterday before this honourable court, and for you to produce the documents required therein, among them the said C-A-R-S or CARs, did you take any further action apart from instructing your RDOs or Revenue District Officers to submit to you the documents, particularly the ITRs of the persons mentioned in the subpoena?

COMMISSIONER HENARES.  As part of my official function, we reviewed the document first to determine whether it is complete.  Then, as an incident to that, we looked at the—we were surprised at what we found because one of the parties who bought the property does not seem to have income.  So, basically, that’s the other thing that we did.

ATTY. LIM.  What specific property transaction was this, Madam witness, when you said you were surprised upon reviewing it?

COMMISSIONER HENARES.  The sale between Christina Corona and the daughter, Ma. Carla Corona Constantino, for P18 million.

ATTY. LIM.  For the CAR involving said property, it shows the sellers as Ma. Christina Corona married to Renato C. Corona, sellers, in favour of Ma. Carla Corona …

THE PRESIDING OFFICER.  Counsel.  (Gavel)  Wait a minute.

What paragraph are you asking these questions?

ATTY. LIM.  2.2, Your Honor, and 2.3, Your Honor.

THE PRESIDING OFFICER.  Where 2.2 deals with the SALN of the respondent.  2.3 deals with the nondisclosure of an asset.  So, are you now proving a nondisclosure of an asset?

ATTY. LIM.  Yes, Your Honor.  Definitely, Your Honor.  And the nondisclosure of the asset is embraced not only in 2.2 and 2.3 but within the title itself.  And …


ATTY. LIM.  I am sorry, Your Honor, within the title of Article II, Your Honor.

THE PRESIDING OFFICER.  The title of Article II is, non-disclosure of …


THE PRESIDING OFFICER.  … the SALN, not non-disclosure of accumulated assets, that is under paragraph 2.3.

ATTY. LIM.  Yes, Your Honor.

This is under paragraph 2.3, Your Honor.


ATTY. LIM.  Thank you, Your Honor.

For the CAR pertaining to the La Vista property, where the seller is the respondent and his wife, and the buyer is her daughter Carla, for the sum of P18 million, what did you find out in that review?

COMMISSIONER HENARES.  That the daughter does not have enough—has very minimal income, and therefore, is not capable of buying the property.

JUSTICE CUEVAS.  Your Honor, please.

ATTY. LIM.  What documents, if any, did you review?

JUSTICE CUEVAS.  Your Honor, please …

THE PRESIDING OFFICER.  Wait a minute, let the counsel react.

JUSTICE CUEVAS.  We move to strike out the answer of the witness, Your Honor, because that is specifically irrelevant, impertinent and immaterial.  The conclusion that the parties therein stated, especially the buyer, has no means to buy the property is not borne out by the evidence, Your Honor.

There is no basis.

ATTY. LIM.  May I reply.

JUSTICE CUEVAS.  That is her opinion.

THE PRESIDING OFFICER.  Wait a minute.  Madam Commissioner, what is the purpose—in income taxation, the tax is due from the seller of the property, the buyer has no tax obligation, why are you investigating the buyer?

COMMISSIONER HENARES.  Your Honor, if the buyer does not have capacity to—if the land being purchased, let us say, is P18 million, and her income is only P11,000, then there is a reason to investigate because it means that either the sale is a donation—it is not a sale, it is a donation, so that is a 20% tax rate.

THE PRESIDING OFFICER.  In this particular case, did you find that the Chief Justice was donating the property to the daughter?

Did you make a finding?

COMMISSIONER HENARES.  Sir, that finding is confidential.

THE PRESIDING OFFICER.  No, no, no, no, no, you are before this court, you testified and you revealed this fact, the court has a right to know.  Did you assessed the donors and donees tax?  What is the present law that taxes gratuitious transfers?

COMMMISIONER HENARES.   Your Honor, we have two choices.  One is to assess donor tax against the donor or two, to go and assess undeclared income against the buyer who does not have enough income, and/or to file tax evasion case against the buyer.

THE PRESIDING OFFICER.  Precisely, did you do that?

COMMISSIONER HENARES.  We are in the process of doing that.

THE PRESIDING OFFICER.  No, no, no, when was this?  When was this transaction?

COMMISSIONER HENARES.  The transaction was in 2010, but we came to know about this only last Friday, when we were asked to get the CAR and the income tax return of the parties.

THE PRESIDING OFFICER.  When did you get the CAR?

COMMISSIONER HENARES.  We retrieved the CAR only upon receipt of the subpoena from the Senate, Sir.

THE PRESIDING OFFICER.  But, isn’t it a process that is included in your description of the process, in connection with the sale—purchase and sale or the sale of capital assets that you—the Bureau of Internal Revenue will go through that process precisely for purposes of registration.  Okay, why it has already been registered, why are you late in knowing this fact?

COMMISSIONER HENARES.  Your Honor, when we determine the issuance of the CAR, it is only to determine whether the capital gains tax and the documentary stamp tax are properly paid.  We do not look into the capacity of the buyer at that point.  That will come later if we have evidence or information to show that there is something wrong in the sense that buyer does not have the capacity to purchase those property.

THE PRESIDING OFFICER.  All right, proceed, Counsel.

ATTY. LIM. . Thank you, Your Honor.  Madam Witness, you stated that you reviewed the relevant documents and arrived at that finding.  If you are shown the income tax return of Carla Corona Castillo for the year 2009 which has already been marked as Exhibit EEEEE, would you be able to identify the same before this honorable court?

COM. HENARES.  Yes, sir.

ATTY. LIM.  May I please request the Secretariat to produce the exhibit, Exhibit EEEEE because the Secretariat is holding all the documents marked.  The originals are with the Secretariat.  May I make of record that the Secretariat, as requested, produce the folder marked Exhibit EEEEE, Maria Carla Beatriz C. Castillo.  Do you confirm that to be the income tax return which you said you reviewed?

COM. HENARES.  Yes, Your Honor, Income Tax Return 2009 and 2008.

ATTY. LIM.  Referring you to Exhibit EEEEE, which is the income tax return for 2009 …

THE PRESIDING OFFICER.  Income tax return for what year is that?

ATTY. LIM.  For 2009 Your Honor.  And for 2009, Your Honor, the taxable income as per Exhibit EEEEE-1 is P8,476.00.  Did you also review that entry?

COM. HENARES.  Yes, sir.

THE PRESIDING OFFICER.  And the transaction happened when?

COM. HENARES.  This is her taxable income for year 2009.

THE PRESIDING OFFICER.  Precisely, when was the sale of the property to the buyer?

COM. HENARES.  2010.


JUSTICE CUEVAS.  May we make of record, Your Honor, that witness is going over the documents in her possession apparently perusing the same as though this is the first time she has seen it.

ATTY. LIM.  Naturally, Your Honor, the witness has to peruse.  But we take exception that the witness saw it only today.

THE PRESIDING OFFICER.  Do not argue.  Do not argue.  Just present the evidence.

ATTY. LIM.  My apologies, Your Honor.

THE PRESIDING OFFICER.  You know, I request both sides, the two counsels, not to waste the time of this court in argumentation.

ATTY. LIM.  We submit, Your Honor.

JUSTICE CUEVAS.  Your Honor, please …

COM. HENARES.  Sir, the CAR was issued on October 22 …

THE PRESIDING OFFICER.  Let her finish first the presentation.

COM. HENARES.  The CAR was issued on October 22, 2010

THE PRESIDING OFFICER.  So that is 10 months after the end of the taxable year 2009.

COM. HENARES.  Yes, sir, but she did not file…

THE PRESIDING OFFICER.  I am asking you how long a time between the end of the taxable year and the time of the transaction.

COM. HENARES.  When we gave appearance, it’s 10 months after.

THE PRESIDING OFFICER.  When was the deed of sale?  Proceed.

COM HENARES.  November 9, 2010.

THE PRESIDING OFFICER.  November 9, 2010.  So that is 11 months.

COM. HENARES.  Sorry.  The deed of sale is October 18, 2010.

THE PRESIDING OFFICER.  So 10 months after the taxable year ended.

COM. HENARES.  Yes, sir.

THE PRESIDING OFFICER.  Alright.  Proceed.

ATTY. LIM.  Thank you, Your Honor.

JUSTICE CUEVAS.  Your Honor please.

THE PRESIDING OFFICER.  What is the pleasure of the…

JUSTICE CUEVAS.  We were about to object, Your Honor, but the witness was allowed to answer  so the remedy now is to move to strike out the answer of the witness because what is touched in her testimony is income tax returns and this goes to the violation of the ruling of this court that any and all evidence relative to allege acquisition of illegal wealth are precluded or proscribed from being presented.

THE PRESIDING OFFICER.  The evidence is being offered for unreported asset, that is the offer of the prosecution so the Chair will allow it as a part of the testimony of the witness.

JUSTICE CUEVAS.  Thank you, Your Honor.

ATTY. LIM.  Thank you, Your Honor.

Madam Witness, did you also review the tax paid or the amount of tax paid in the amount of P423.80 as per Exhibit EEEEE-3-C?

JUSTICE  CUEVAS.  Very leading, Your Honor.  The witness is a very intelligent witness.

THE PRESIDING OFFICER.  Reform the question.

ATTY. LIM.  Will you tell the honourable court what specific items did you review in Exhibit EEEEE, the income tax return of Carla Corona for the year 2009?  Please make that of record.

THE PRESIDING OFFICER.  Madam Commissioner, will you please state what is the content of that document?

COM. HENARES.  The document is an annual income tax return, ITR Form No. 1701.  It is to declare her income  for the year 2009.  In it among the figures presented  is that she had a sale of, her business, she registered as a business, a gross sale of P97,460, a taxable income of P8,476, a tax due of P423.80.

JUSTICE CUEVAS.  Your Honor please.

THE PRESIDING OFFICER.  Well, those are only facts relating to the income tax returns.  So what is the pleasure of the defense counsel?

JUSTICE CUEVAS.  Precisely, Your Honor, we were about to object sana a little while ago but there was already an answer.  This refers to the income tax returns of one allegedly Carla and not the public official being impeached, Your Honor, so it is immaterial, irrelevant and impertinent, Your Honor.

THE PRESIDING OFFICER.  That is why the Chair asked the purpose of this evidence being offered and they said that if the counsel for the prosecution said that it is offered under paragraph 2.3 which is an unincluded, not included assets.  So the Chair allowed that because the tendency of the question is he is proving that the asset sold to the alleged daughter is still the asset of the respondent.

ATTY. LIM.  Yes, Your Honor.

JUSTICE CUEVAS.  If Your Honor please, but this is the income tax return not of the respondent  but of Carla.  Why will the act omission and declaration of a party affect the respondent here, Your Honor?

THE PRESIDING OFFICER.  Anyway, the ruling of the Chair is let it remain in the record.


ATTY. LIM.  Thank you, Your Honor.  May I proceed, Your Honor.

Madam Witness, will you now please kindly produce before the honourable court as subpoenaed, the income tax return of Carla Corona Castillo for the year 2009 which you have just identified.

JUSTICE CUEVAS.  Again, we will just place on record, Your Honor, our objection to this kind of evidence because it does not conform to the resolution of this court, disallowing or prohibiting the presentation or submission of evidence pending to prove the alleged illegally acquired wealth, because it was not properly alleged, Your Honor.

THE PRESIDING OFFICER.  Let the objection be recorded and that will be taken at the proper time when there is an offer of evidence.

ATTY. LIM.  Thank you, Your Honor.  May I proceed?


ATTY. LIM.  The witness has produced and handed to counsel the original copy of the subject income tax return, a photocopy of which was marked before the Senate Secretariat as Exhibit EEEEE, in view of the non-stipulation during the marking by the defense lawyers of the photocopy marked as a faithful reproduction of the original.  We are now requesting that stipulation in open court.

JUSTICE CUEVAS.  No objection to the substitution if that is the desired purpose, Your Honor.

We go on record that what is being identified now is a faithful reproduction of the original, Your Honor.

ATTY. LIM.  Thank you, Justice.

May I proceed, Your Honor?


ATTY. LIM.  Do you have any other ITR of Carla which you reviewed as per your testimony earlier?

JUSTICE CUEVAS.  We will enter our continuing objection as we have earlier stated, Your Honor, because we do not want to impernate the records with our objection, Your Honor.

THE PRESIDING OFFICER.  Let that continuing objection be recorded.

COMMISSIONER HENARES.  She has not filed any income tax return other than the year 2008 and 2009.

ATTY. LIM.  For the year 2008, what data did you find in your review?

THE PRESIDING OFFICER.  What is the relevance of the income tax return on 2008?

ATTY. LIM.  To show, Your Honor, to reinforce and bolster the total lack of financial capacity of the buyer, vis-a-vis the P18 million La Vista property transaction.

We believe, Your Honor, that it is admissible because it’s relevant to 2.3.

THE PRESIDING OFFICER.  Why don’t you expedite the proceedings?  Why don’t you just—If you have it, present it to the witness and present it into the—introduce it in the trial instead of going into the contents of those documents?  This is delaying us, you see.

ATTY. LIM.  Only this, Your Honor.

THE PRESIDING OFFICER.  You know, these are all covered by the Best Evidence Rule.  The contents of that document cannot be added by the lawyer nor anybody.  The document is the only acceptable evidence of the content and you cannot add anything to it.  Proceed.

ATTY. LIM.  Can we be allowed to enter it into the Journal aside from being in the document itself, Your Honor?


ATTY. LIM.  The transcript of stenographic notes.  I understand that is called Journal in this honourable Chamber.

THE PRESIDING OFFICER.  Yes, but you have already examined—marked this exhibit.  And it is the court that will appreciate the contents of that document.

ATTY. LIM.  Gladly, Your Honor.  I will just mark it in that case.  Thank you, Your Honor.

I show you this income tax return for the calendar year 2008 which was marked as Exhibit—that is 2008, Your Honor, do you have the original with you, Madam witness?


ATTY. LIM.  Can we please request stipulation that the photocopy already marked as Exhibit EEEEE but marked without stipulation, be now shown to the defense panel.

THE PRESIDING OFFICER.  Proceed.  Proceed.

ATTY. LIM.  And I request for stipulation that it is a faithful reproduction of the original, Your Honor.

THE PRESIDING OFFICER.  Proceed.  Let us not be too formal in these proceedings.  This is a court of law but, as the prosecution said, let us relax, alright, we will relax the Rules to do all these formalities, just present the evidence and let the defense say so if they agree or not agree.

Counsel proceed.

JUSTICE CUEVAS.  We withdraw, Your Honor, our intended manifestation, Your Honor.

THE PRESIDING OFFICER.  So, what is the pleasure?  Do you accept the genuineness of that document?

JUSTICE CUEVAS.  No, they are only asking whether we can stipulate or we stipulate that the document being identified is a faithful reproduction of the original.


And you agree that it is a faithful reproduction of the original?

JUSTICE CUEVAS.  Yes, Your Honor.

THE PRESIDING OFFICER.  All right, let it be recorded.

ATTY. LIM.  Madam witness, were there other documents …

THE PRESIDING OFFICER.  One-minute suspension.

It was 3:53 p.m.

At 4:19 p.m., the hearing was resumed.

THE PRESIDING OFFICER.  The prosecution may now proceed with the Business of the Day.

ATTY. LIM.  Just a few minutes more, Your Honor.  May I proceed, Your Honor.

THE PRESIDING OFFICER.  Yes, please.  Go ahead.

ATTY. LIM.  Thank you, Your Honor.  With regard to the property transaction involving McKinley Hills lot Did you also review the CAR for that transaction?

COM. HENARES.  Yes, sir.

ATTY. LIM.  And can you tell the honourable court…

THE PRESIDING OFFICER.  Just to clarify.  Is that one of the alleged undisclosed or rather unincluded assets of the respondent?

ATTY. LIM.  In the SALN?  Yes, Your Honor.

THE PRESIDING OFFICER.  Alright, proceed.

ATTY. LIM.  Thank you, Your Honor.  Please answer, Madam Witness.

COM. HENARES.  Yes, sir, we reviewed the certificate authorizing registration and the income tax history of the buyer.

ATTY.  LIM.  Who is the buyer, ma’am?

COM. HENARES.  Ma. Czarina R. Corona.

ATTY. LIM.  Who is the seller, ma’am?

COM. HENARES.  Megaworld Corporation.

ATTY. LIM.  And what was your finding with respect to the buyer?

COM. HENARES.  The buyer is registered with us as an ONETT taxpayer which is just to purchase this property and have not filed any income tax return to date.

ATTY. LIM.  I would like that point clarified before the honourable impeachment court.  Not a single income tax return, Madam witness?

COM. HENARES.  None, sir.

ATTY. LIM.  What about what we mentioned yesterday, alpha list?  Is there an alpha list including the buyer?

COM. HENARES.  None, sir, because she just registered as a one-time taxpayer, sir.

THE PRESIDING OFFICER.  When was the transaction?

COM. HENARES.  The transaction was dated October 22, 2008.

THE PRESIDING OFFICER.  October 22, 2008.  This time the buyer is the wife of the respondent.

ATTY. LIM.  No, Your Honor please, daughter of the respondent Chief Justice.


ATTY. LIM.  Daughter by the name of Czarina.

THE PRESIDING OFFICER.  This is apart from the one sold to another daughter.

ATTY. LIM.  Apart from La Vista property sold to Ma. Carla Beatriz.


ATTY. LIM.  Do you have the original of the CAR for the Mckinley lot transaction?

COM. HENARES.  Yes, sir.

ATTY. LIM.  May we show the original together with this photocopy marked before the Secretariat as Exhibit RRRRR with a request for stipulation that the marked copy is a faithful reproduction of the original.

JUSTICE CUEVAS.  No objection to the substitution, Your Honor.  We agree that the document being identified is a faithful reproduction of its original.


ATTY.  LIM.  Thank you, Justice.  Madam Witness, there is a certification dated January 25, 2012 with regard to this particular taxpayer marked before the Secretariat as Exhibit FFFFF-1.

COMMISSIONER HENARES.  It is my signature, Sir.

ATTY. LIM.  Madam witness, in the course of your review of the Fort McKinley transaction—Fort McKinley lot …


ATTY. LIM.  McKinley Hills, I’m sorry, Your Honor.

Did you come across the Deed of Sale and other pertinent documents to the transaction?

THE PRESIDING OFFICER.  What pertinent documents do you mean?

ATTY. LIM.  I reform, Your Honor.


ATTY. LIM.  I will just limit myself to identification, Your Honor.

You also issued, Madam witness, a certified true correct copy from the original marked Exhibit FFFFF-2 of the BIR Integrated Tax System printout of the ITS concerning this taxpayer.  For the sake of identifying the document, can you confirm the signature above the name Kim S. Jacinto Henares?

COMMISSIONER HENARES.  Yes, Sir, it is my signature.

ATTY. LIM.  Do you also make the same confirmation with respect to Exhibit FFFFF-3?

COMMISSIONER HENARES.  Yes, Sir.  It’s mine.

ATTY. LIM.  What about Exhibit FFFFF-4?

COMMISSIONER HENARES.  It is my signature.

ATTY. LIM.  What about Exhibit FFFFF-5?

COMMISSIONER HENARES.  It’s my signature.


COMMISSIONER HENARES.  It’s my signature.


COMMISSIONER HENARES.  It’s my signature?


COMMISSIONER HENARES.  Yes, it’s my signature.

ATTY. LIM.  And lastly, FFFFF-9?

COMMISSIONER HENARES.  It’s my signature, Sir.

ATTY. LIM.  Last item, Your Honor, and I will close.


ATTY. LIM.  You also mentioned yesterday, Madam witness, that the BIR also issued a CAR or Certificate Authorizing Registration for share of stock at the Palms Country Club.  Do you have the original of that particular CAR?


ATTY. LIM.  I respectfully show to the defense the original of the CAR, together with this photocopy marked before the Secretariat as Exhibit …


Is there a law requiring a CAR for securities?  My recollection is the authorization of the Commissioner is under the Internal Revenue Code is limited to capital gains arising from real estate property.

COMMISSIONER HENARES.  The authority is for capital gains from real property and shares of stocks, Sir.

THE PRESIDING OFFICER.  What’s the authority for shares of stock?  I don’t remember—I was the one wrote that Internal Revenue Code, unless it was amended that there is an authorization to secure the—any authority from the BIR to register shares of stock when it’s transferred to another name.

COMMISSIONER HENARES.  Sir, the Certificate Authorizing Registration covers those that are subject to donor’s tax, subject to estate tax, subject to capital gains tax, which include transfer of real property, transfer of shares of stock.

THE PRESIDING OFFICER.  Is that in the Internal Revenue Code or that is a part of your regulation.

COMMISSIONER HENARES.  It is in the Internal Revenue Code, Sir.


COMMISSIONER HENARES.  Section 24-C of the Tax Code, Sir.







THE PRESIDING OFFICER.  Can you read it into the record.

COMMISSIONER HENARES.  24 C—Capital gains from the sale of shares of stock not created in the stock exchange.  The provision of Section 39 B, notwithstanding a final tax at the rate prescribed below is hereby imposed upon the net capital gains realized during the taxable year from sale, barter, exchange or other disposition of shares of stock, in a domestic corporation, except shares sold or disposed of through the stock exchange, not over P100,000, 5% on an amount in excess of 10%.

THE PRESIDING OFFICER.  Where is the requirement that before the stocks are transferred, there must be an authority from the Commissioner of Internal Revenue?

COMMISSIONER HENARES.  So, it is in the end.

THE PRESIDING OFFICER.  I remember that I did not write such provision in the code, but it is only required that the tax must be ten percent, instead of half a percent.

COMMISSIONER HENARES.  Sir, I know, it is here.  Can I come back and …

THE PRESIDING OFFICER.  I am sure that I did not write in the law, I revised the Internal Revenue Code in 1996.  And the only thing that we say is that in the case of the sale of tax—securities and shares of stock outside the Philippine Stock Exchange, is that the tax must be 10% over—I think, over P100,000.  And the assessment must be made by the Bureau of Internal Revenue, but there is no requirement that the Commissioner of Internal Revenue will have to make a certification so that the succeeding issuance of new certificate to the buyer can be issued.  Except—that is also only true in the case of land registration or land titles.

COMMISSIONER HENARES.  Sir, can I come back and answer that …

THE PRESIDING OFFICER.  Yes, you may, but I do not think you can find it.

Counsel proceed.

ATTY. LIM.  Thank you, Your Honor.  Can I reiterate my request for defense counsel to please stipulate that the photocopy marked as Exhibit PPPPP is a faithful copy of the CAR for this …

THE PRESIDING OFFICER.  I think, that will not be allowed because until now, the commissioner cannot show us that she has to authorize the transfer of stock certificates.

There was a reason for—in the case of real estate, and a policy reason—and that is to prevent tax evasion.

ATTY. LIM.  Can I at least request for conditional marking, Your Honor.

THE PRESIDING OFFICER.  No, you present it at the time that the Commissioner is ready to show us the law.

ATTY. LIM.  Thank you, Your Honor, we submit.

Will you please identify, Madam witness, your certification in Exhibit PPPPP-2 and Exhibit PPPPP-2-C.

COMMISSIONER HENARES.  It is the deed of sale of common shares that was submitted to the Bureau of Internal Revenue by the parties.

ATTY. LIM.  Can I request stipulation, and this will be my last question.

THE PRESIDING OFFICER.  The same thing.  We will have to find out first whether there is an authority to the Commissioner to give authorization in the transfer of stocks transacted privately before the new certificate was issued to the buyer.

ATTY. LIM.  We submit, Your Honor, and so, we respectfully reserve our right to present these documents upon compliance with the directive of the Honorable Presiding Officer.


ATTY. LIM.  Thank you very much, Your Honor.  That will be all and I beg the court’s indulgence if I have any failings.

THE PRESIDING OFFICER.  No.  No.  No problem.

ATTY. LIM.   Thank you for your patience, Your Honor.

THE PRESIDING OFFICER.  You are doing well.

ATTY. LIM.  Thank you, Your Honor.

THE PRESIDING OFFICER.  Counsel my cross-examine, if he wants to cross-examine.

JUSTICE CUEVAS.  If  Your Honor please, they have not announced on record that they are through with the direct-examination.  I would like to start now.  But there may be a lot of repercussions later because we may ask quite a number of questions.  I am willing to proceed, Your Honor.

ATTY. LIM.  By thanking the …

THE PRESIDING OFFICER.  I give the pleasure to you to start the cross-examination now or not.  It is your decision.

JUSTICE CUEVAS.  If it will not be asking too much, Your Honor, I will start with my cross-examination.


JUSTICE CUEVAS.  This is in compliance with the directive of the honourable Presiding Officer, Your Honor.  With the kind permission of the honourable Court.

I noticed that you have identified and discussed quite a number of transactions allegedly entered into between the Coronas wherein the matter was brought to your attention, and within a week you have acted on it, am I right.

COM. HENARES.  Yes, Your Honor.

JUSTICE CUEVAS.  You dig dipper into those matters.  You dig deeper into the capacity of the alleged buyer to pay the subject matter of the transaction, did I get you right?

COM HENARES.  It is in the face of the returns, sir.  I don’t have to dig deeper.

JUSTICE CUEVAS.   No.  You mean you did not examine anymore the examination made?

COM. HENARES.  No, the income tax returns I retrieved and, therefore, I looked at the return and the CAR that was submitted, and based on that.  That is why I said, we made an examination.

JUSTICE CUEVAS.  Is this ordinary procedure that you adopt in your office?

COM. HENARES.  Yes, Your Honor.  For some of the cases especially net worth methods of investigation.

JUSTICE CUEVAS.  So, you will be able to present before this Court transactions similar in circumstance with this in the next hearing of this case.

COM. HENARES.  Sir, I don’t have to submit because we filed a case against Mr. Villarica under the same circumstance.

JUSTICE CUEVAS.  But I am not asking you whether you filed the case or not.  I am asking you will be able to proceed to produce before this court.

ATTY. LIM.  Objection, materiality, Your Honor.  I invoke materiality as legal ground.

THE PRESIDING OFFICER.  Well, he is under cross-examination.  Let the witness answer.

JUSTICE CUEVAS.  Now, kindly tell this honourable court, even one, two or three transactions involving similar circumstance as this that you have acted upon within a week.

COM. HENARES.  Yes, sir.  Especially if a taxpayer does not pay any taxes at all.  Then, it is a very simple investigation.

JUSTICE CUEVAS.  No, you are not answering my question, Madam Commissioner.  My question is, will you kindly tell this honourable court the cases that you have acted which are similar to the present case.

COM. HENARES.  That is confidential information because my authority to disclose information is only limited to those in the subpoena.

THE PRESIDING OFFICER.  But you are under cross-examination.  The counsel is simply asking whether there are taxpayers similarly situated that also received a similar treatment.

COM. HENARES.  Yes, sir.

JUSTICE CUEVAS.  My question is, whether she could make of record those alleged cases, Your Honor.

THE PRESIDING OFFICER.  If she knows. If you know.

MS. HENARES.  Sir, I know, but I don’t have authority to divulge it because of Section 71 and Section 270 of the National Internal Revenue Code.

JUSTICE CUEVAS.  But I heard you divulging a lot of transactions relative to income tax returns with respect to other persons in here other than the honourable …

ATTY. LIM.  Misleading, Your Honor.

JUSTICE CUEVAS.  We submit, Your Honor.

THE PRESIDING OFFICER.  Leading questions are authorized.

ATTY. LIM.  Misleading, Your Honor please


ATTY. LIM.  Yes, Your Honor.


ATTY. LIM.  It assumes as true a fact not stated by the witness or contrary to what the witness has stated, Your Honor.

THE PRESIDING OFFICER.  What is the fact assumed by the counsel?

ATTY. LIM.  The counsel is assuming that the witness has mentioned other taxpayer’s name which is not the case aside from those listed in the subpoena.  There are no other names.

JUSTICE CUEVAS.  I am in cross-examination, if Your Honor please

ATTY. LIM.  I am objecting on the ground that it is misleading.  You cannot ask misleading questions on cross.

JUSTICE CUEVAS.  Are you directing me?

ATTY. LIM.  The Chair.  I request the Chair to so direct you.


THE PRESIDING OFFICER.  Just a minute, to clarify.  Were you authorized by the President of the Philippines to reveal the income tax return of the persons mentioned by you in the course of your examination…

COM. HENARES.  Sir, the order of the President said that I can disclose any information regarding the income of Chief Justice Corona from year 1992 to year 2010, Mrs. Cristina Corona from 1992 to 2010, Ma. Carla Corona Constantino from year 2000 to 2010, the husband, Constantino Castillo III , from 2000 to 2010, Ma. Czarina Corona from year 2005 to 2010, Francis Corona from 2005 to 2010 and all the CARs relating to Bellagio I in year 2009, all the CARs in relating to transaction of Mckinley Hills for a certain year.  It is in the memorandum issued by the President and I have not disclosed  anything that is not included in that order.

THE PRESIDING OFFICER.  Well, the question of the defense counsel  has been answered.  Those are the other persons mentioned.

JUSTICE CUEVAS.  Thank you, Your Honor.  Now, I notice that your coming in here to testify as a witness was a pursuant to a subpoena issued by this honourable court, right?

COM. HENARES.  Yes, sir.

JUSTICE CUEVAS.  Were it not for the subpoena you would not have voluntarily come over and testify.

COM. HENARES.  No, I would not.

JUSTICE CUEVAS.  You would not.  Alright.  I suppose you must have been informed about the nature of the testimony and that will be listed from you in this trial, right?

ATTY. LIM.  Your Honor, that is hypothetical.

THE PRESIDING OFFICER.  Let  the witness answer.

JUSTICE CUEVAS.  This is a request for admission, Your Honor.

THE PRESIDING OFFICER.  Let the witness answer.  She is a very intelligent witness.

COM. HENARES.  Sir, by reason of the subpoena, I would believe an intelligent person would know what he would be asked to testify on.

JUSTICE CUEVAS.  You mean the subpoena states the matter that will be subject or covered in your testimony or you are merely referring to the documents that you have to produce.  Kindly clarify.

COM. HENARES.  Sir, otherwise I don’t think I will be needed to testify if not for those document that need to be presented.

JUSTICE CUEVAS.  No, but that is not the question to you.  Did you have knowledge or information as to what will be the subject of your testimony aside from producing the documents allegedly mentioned in the subpoena.

COM. HENARES.  The knowledge I derived is from the subpoena sent to me, sir.

JUSTICE CUEVAS.  Nothing more.

COM. HENARES.  Nothing more.

JUSTICE CUEVAS.  Alright.  So am I right that you do not know Chief Justice Corona personally?

COM. HENARES.  Actually I think I know him personally because he was my colleague in SGV for probably four months and he is a professor of Ateneo Law School although I was not under him.  My husband was under him and my husband said he is one of his favourite students.

JUSTICE CUEVAS.  Thank you.  How about Mrs. Corona?

COM. HENARES.  I do not know her personally but I always meet her when she accompanies Justice Corona.

JUSTICE CUEVAS.  You are not acquainted with one another personally.

COM. HENARES.  Acquainted as in I know she is Mrs. Corona and we say hi and we kiss each other in the cheek, yes, we are acquainted.

JUSTICE CUEVAS.  How about the children that you mentioned in your direct examination?  Are you acquainted with them personally?

COMMISSIONER HENARES.  I’ve never met them personally.  I may have met them but don’t know that they were them.  I mean, they were never introduced to me.


Now, one of the daughters that you mentioned appearing in the Deed of Sale is Czarina Corona.  Do you know her personally?


JUSTICE CUEVAS.  You do not know, therefore, that she is abroad for no less than 10 years?

COMMISSIONER HENARES.  I was asked to testify only as the documents that I have …

THE PRESIDING OFFICER.  No, the question is do you know her personally?



JUSTICE CUEVAS.  So, your answer is, you probably do not know that she is abroad for no less than a decade.

COMMISSIONER HENARES.  It is not within my jurisdiction to know about that, Sir.

JUSTICE CUEVAS.  I’m not asking you about your jurisdiction.  I’m asking you a question personal to your …

COMMISSIONER HENARES.  I already said I don’t know her so how can I know she’s here or not.

THE PRESIDING OFFICER.  Just answer the question.


THE PRESIDING OFFICER.  Whether you know her or you do not know her.

COMMISSIONER HENARES.  Yes, Sir.  I answered that I do not know her.  And I would not know where she is at this time.

JUSTICE CUEVAS.  May I now continue, Your Honor.


JUSTICE CUEVAS.  Prior to your taking the witness stand today, I suppose you must have been in conference with the lawyers for the prosecution.

COMMISSIONER HENARES.  It is natural that they would get in touch with me, Sir.

JUSTICE CUEVAS.  No, but you do not answer my question.  Were you ever in conference with them?  I’m not asking you whether you were in touch.

COMMISSIONER HENARES.  Yes, Sir.  Of course.

JUSTICE CUEVAS.  Who in particular?  Congressman Tupas?

COMMISSIONER HENARES.  I met him, yes, Sir, in one of the meetings.

JUSTICE CUEVAS.  So, he conferred with you in connection with this case?

COMMISSIONER HENARES.  With regard to the subpoena that they requested the Senate court to issue.

JUSTICE CUEVAS.  How about the private prosecutor?




JUSTICE CUEVAS.  And what was the coverage of your examination today were matters you discussed with them?



What did they tell you, that they will be asking you in connection with the alleged impeachment complaint filed against Chief Justice Corona?

COMMISSIONER HENARES.  They told me that I have to present all the documents that they are requesting for, and that I will testify with regard to the contents thereof.

JUSTICE CUEVAS.  I suppose they also informed you about the expectation on the subject that would be the subject matter of your examination.  Or they did not tell you about that?

ATTY. LIM.  What expectation?  That’s a legal ground, Your Honor, please.

JUSTICE CUEVAS.  Submitted, Your Honor.

THE PRESIDING OFFICER.  Counsel must clarify.  What the term used, so that it will be understandable by the witness.

JUSTICE CUEVAS.  All right.  Now, when they talked with you, did they inform you as to what their purpose was when they conferred with you in connection with this impeachment case?

COMMISSIONER HENARES.  They told me that they are prosecuting an impeachment case against Chief Justice Corona.

JUSTICE CUEVAS.  I suppose they also told you about what questions they will be propounding to you, is it not?

COMMISSIONER HENARES.  They told me that I will be asked to present the documents and the content thereof.

JUSTICE CUEVAS.  Nothing more?


JUSTICE CUEVAS.  So, when they started—when questions were propounded to you on matters that allegedly you know personally, that was not covered in your conference?

ATTY. LIM.  What matters?  There you are again, Your Honor.  The records will show that it can be anything under the sun, Your Honor.

THE PRESIDING OFFICER.  Let the witness answer.  She is very intelligent.  That matters is a very common term.

ATTY. LIM.  Thank you, Your Honor.

COMMISSIONER HENARES.  Sir, I only testified as to the documents and the content of the documents, and I did not testify on anything else.  There’s nothing to discuss, Sir.

JUSTICE CUEVAS.  So, when they conferred with you, they never mentioned to you about their alleged impeachment complaint brought against the Chief Justice?

ATTY. LIM.  Misleading.

COMMISSIONER HENARES.  It is a public knowledge.  I read the newspaper everyday and I watch news every evening, and therefore, any person knows that there’s an impeachment proceeding.

JUSTICE CUEVAS.  All right.  Yes, but that is not my question whether you know or not.  My question to you is, did they tell you what to expect to question you in connection with your examination now?

COMMISSIONER HENARES.  Sir, We never even discussed what their objective is, because I think, everyone knows there’s an impeachment proceeding and they’re the prosecutor, and they want me to present this evidence, this document.  So, there is no discussion of what it is they want to because I do not think, there is even a need to discuss that anymore.

JUSTICE CUEVAS.  They did not go any further except that you bring the documents they wanted you to produce.  Is that right?


JUSTICE CUEVAS.  They did not even asked you or tell you what this impeachment case is about.  True, there is an impeachment case but did they tell you what this impeachment case is about?  Also no.

COMMISSIONER HENARES.  Sir, no more.  It is judicial …


COMMISSIONER HENARES.  It is public knowledge.



JUSTICE CUEVAS.  What I am asking you is …

COMMISSIONER HENARES.  That is why there is no need to even talk to me, what the impeachment proceeding is all about, because it is public knowledge, I am a lawyer, I can read, and I can get copy of the impeachment complaint, it is in the—I can have access to that and I guess, to be …


COMMISSIONER HENARES.  … Commissioner of Internal Revenue, I should know reading comprehension, Sir.

JUSTICE CUEVAS.  So, you have read news reports about this, in the newspaper and also television also.

COMMISSIONER HENARES.  Yes, Sir, that is part of my habit.

JUSTICE CUEVAS.  Alright.  And you knew, and by this time, you must have been informed about the grounds of the impeachment, right?


JUSTICE CUEVAS.  Will you tell us, what you were able to retain when you hear it in talk shows, in the TV and newspaper.

COMMISSIONER HENARES.  Well, first, that—because it has eight grounds, some of the ground is that he should not have accepted the midnight appointment, because it is a violation of the Constitution.

Second, that he is biased by the vote that he voted.  And I think, there is culpable violation of the Constitution and all those things.  And then, the non-disclosure of statement of assets, liabilities and networth.

Those are the things that I can remember.

JUSTICE CUEVAS.  Yes.  The way you made your narration, I am inclined to believe that you never had the impression that in this case, a problem of illegally acquired wealth never surfaced.

COMMISSIONER HENARES.  Well, for me, Sir, when we talk of statement of assets, liabilities and networth, it is inherent in that document that what we are talking about is illegally obtained wealth, because otherwise, there is no need for anyone to even submit a statement of assets, liabilities and networth.  It would be just a piece of paper that anyone can just file and it is just a tedious process, so …

JUSTICE CUEVAS.  So, when you came over, in obedience to that subpoena, you knew, you will be testifying in connection with the alleged illegally acquired wealth of the honorable Chief Justice Corona, or you do not know?

COMMISSIONER HENARES.  I will be testifying as to what income has he reported, what income has the wife, the daughters, the son-in-law, the son, has reported in their tax history.   And also, I will be asked about transfers of properties.

JUSTICE CUEVAS.  Now, I understand that Chief Justice Corona is now being sued, pursuant to an article of impeachment for failure to file and make public his SALN, …

ATTY. LIM.  Your, Honor, please.

JUSTICE CUEVAS.  I am not yet through, Your Honor, please.

THE PRESIDING OFFICER.  Let the question be finished.

Do not be nervous counsel.

JUSTICE CUEVAS.  Did you come to know about that?

THE PRESIDING OFFICER.  We have plenty of time to respond.

ATTY. LIM.  Your Honor, please, I object on the ground that it calls for a legal opinion or deals with legal conclusions which is the function of the court.

THE PRESIDING OFFICER.  Since the Commissioner of Internal Revenue is just waiting to answer …

JUSTICE CUEVAS.  You asked her about a lot of legal battles, now I am asking her what she knows.

COMMISSIONER HENARES.  Sir, what is the question again?

JUSTICE CUEVAS.  May we request for a reading of the question from the—wala, ah wala.

THE PRESIDING OFFICER.  Restate the question.

JUSTICE CUEVAS.  I will do as so ordered, Your Honor, as directed.

When you came over, you already knew that one of the matters that will be dealt in your examination will be the issue of whether they had filed the statement of assets and liabilities.  I am referring to Chief Justice Corona.

COMMISSIONER HENARES.  Sir, I think, everyone knows because everyone keep on arguing about that article, sir.  Yes, sir, I know, of all the arguments that have been …

THE PRESIDING OFFICER.  I admonish the answer the question.  Understand the question and answer the question as precisely as concisely as you can do it.

JUSTICE CUEVAS.  That is why that necessitates a comparative study of Chief Justice Corona’s statement of liabilities in relation to other documents in your possession as Commissioner of Internal Revenue, am I right?

COM. HENARES.  Sir, I don’t have the statement of liability and net worth of Chief Justice Corona.  It is not submitted to the Bureau of Internal Revenue.  What I was asked to provide are only his income tax return or income tax payment, if any.

JUSTICE CUEVAS.  Correct.  Thank you for the information.  So, you have never seen any statement of assets and liabilities of the respondent Chief Justice Corona, am I right?

COM. HENARES.  Today, I have seen it already.


COM. HENARES.  You said I have never seen.  I have seen it today.  As of today, I have seen it, sir.

JUSTICE CUEVAS.  Only today.

COM. HENARES.  No, no.  As of today, I have already seen the statement of assets and liabilities and net worth.

THE PRESIDING OFFICER.  Just to clarify.  When exactly were you able to see the SALN of the respondent for the first time?

COM. HENARES.  When it was given to me by a media person after the SALN was presented to me.


COM. HENARES.  Yes, sir.  When I was waiting for Thursday when I was called.


COM. HENARES.  January 19.


COM. HENARES.  19, sir.  I was here on January 19, sir, in the holding room.

THE PRESIDING OFFICER.  Proceed, counsel.

JUSTICE CUEVAS.  So, this statement of assets and liabilities that is now the center of discussion now, have never been discussed by you with the prosecution panel, am I right, because this is the first time you saw it?

COM. HENARES.  Yes, sir.  No, the first time I saw it was January 19.


COM. HENARES.  Yes, sir.

JUSTICE CUEVAS.  That was when the case was already filed.

COM. HENARES.  Yes, sir.

JUSTICE CUEVAS.  And that was when the case was being tried already, the impeachment case, is that not right?

COM. HENARES.  Yes, sir.

JUSTICE CUEVAS.  So, you have no idea of what is the issue about this alleged statement of assets and liabilities of the Chief Justice?

COM. HENARES.  Sir, I have to idea in the sense that I don’t know what his assets and liabilities are.  Yes, sir.

JUSTICE CUEVAS.  Kindly tell the honourable court whether that was the subject of your discussion with the prosecution panel at any time before you took the witness stand.

COM. HENARES.  We did not discuss the SALN, we discussed the CARs, the income tax return and the other, like the alpha list.

JUSTICE CUEVAS.  So, there was never a query coming from them asking you whether based on the statement of assets and liabilities together with the documents you have examined, there is a discrepancy or there is something not included there, am I right?

COM. HENARES.  Yes, sir.  They never asked me that question.

JUSTICE CUEVAS.  Now, when you discovered or when you were informed that you will be taking the witness stand, this is the time that you asked permission from the honorable President of the Republic of the Philippines …

COM. HENARES.  Pardon, sir.  May I …

JUSTICE CUEVAS.  Alam ninyo, Commissioner, matanda na rin ako eh kaya makalimutin ako eh.  All right.  When you came to know that you will be testifying, that was the time when you asked authority from the President of the Republic of the Philippine to allow you to come over, testify and bring the documents required in the subpoena.

COM. HENARES.  When I got the subpoena, when my office got the subpoena on January 19, I was in Tacloban … 18, I was in Tacloban, and the subpoena said I have to appear here on January 19.  So, I appeared here without any documents just to comply with the subpoena and I asked that I be excused so that I can gather all the documents, sir.  But on the 18th, when I got the subpoena, I already ordered my people to start preparing it, and then while I was here waiting, January 19, I also ordered the drafting of a memorandum to His Excellency, President Aquino, requesting for an authority.

JUSTICE CUEVAS.  So that was after a couple of days when you had been here…

COM. HENARES.  No, that first day I am here.

JUSTICE CUEVAS.  The next day.

COM. HENARES.  The first day I was here, that afternoon after being excused, I left here and went to my office and drafted my memorandum and faxed it to the President.

JUSTICE CUEVAS.  Alright.  And that was the time when the authority was given to you.

COM. HENARES.  The authority was given to me the very next day, January 20.

JUSTICE CUEVAS.  I notice it was not an authority coming personally from the honourable President of the Republic of the Philippines but by the Executive Secretary, right?


ATTY. LIM.  We object, Your Honor.  It says by authority of the President.

JUSTICE CUEVAS.  That was precisely my question.

ATTY. LIM.  That is by the President himself.

THE PRESIDING OFFICER.  Let the witness answer.

COM. HENARES.  It was issued under the…

THE PRESIDING OFFICER.  Just a minute.  You are all too jumpy.

COM. HENARES.  It was signed by the Executive Secretary under the order of the President.

JUSTICE CUEVAS.  Right.  Alright.  Was there any instance prior or after that authority was issued that you have a talk with the honourable President of the Republic of the Philippines.

COM. HENARES.  No, I have no opportunity to talk to him.

JUSTICE CUEVAS.  So it is safe to presume that when the President knew about this he never talk to you at any time.

COM. HENARES.  From the time I wrote the memo, no.  I coursed it through the Deputy Presidential Legal Counsel who is in his office.

JUSTICE CUEVAS.  And did you have a talk with the honourable Executive Secretary about your appearing here?

COM. HENARES.  No, sir.

JUSTICE CUEVAS.  With any high government official in connection with your coming over as a witness  for the prosecution.

COM. HENARES.  I informed my Secretary of Finance that I got a subpoena and that I will be asking for an order from the President to order me to bring those documents.

JUSTICE CUEVAS.  Did he tell you, go ahead, sundin mo iyang subpoena, mag-appear ka, tumestigo ka at sabihin mo ang katotohanan.


JUSTICE CUEVAS.  Did he also say that durugin mo na si Corona kung maaari.

COM. HENARES.  Wala ho siyang sinasabing ganoon.

JUSTICE CUEVAS.  A wala siyang sinabi.  So you were holding your punches in connection with the subject matter of your testimony because there was no such statement on the part of the higher-up of Malacañang.

COM. HENARES.  Sir, I do not hold punches, I only do my job and I am a very professional person.  Even if you are my worst enemy, I will just do my job.  If you are complying, then I don’t…Pardon?

JUSTICE CUEVAS.  I said even if you are my worst enemy.  Please do not consider me an enemy.  I am just discharging the duties or the functions of a defense lawyer, Madam Witness.

COM. HENARES.  Yes, sir.  I am only here discharging my function as Commissioner of Internal Revenue.

JUSTICE CUEVAS.  Now, examining the SAL of Chief Justice Corona which you saw when you were here already to testify, based thereon, kindly tell the honourable court whether you notice any discrepancy or falsity in the said SAL.

COM. HENARES.  I noticed a lot of discrepancy in the SAL that I saw, that the media gave me because I measure it in relation to the SAL I have to submit.

JUSTICE CUEVAS.  By the way, is your office connected in any manner with the filing of the SALN?

COM. HENARES.  Only on our own SALN and in relation to when we audit and examine government official, we request for statement of assets and liabilities and net worth.

JUSTICE CUEVAS.  In other words, it is very clear that insofar as the SALN is concerned of any government official including the impeached Chief Justice, that is not a function pertaining to your office.

COM. HENARES.  Sir, I never said it is my function.

JUSTICE CUEVAS.  I am not saying that you said, I am asking you whether it is part of your…

COM. HENARES.  It is not.  It is only a function of my office in relation to when I file or assess tax deficiency or tax evasion cases.


THE PRESIDING OFFICER.  I have just one point to clarify.   Is this the first time that you ask for authority from the President to release the income tax return of taxpayers?

COM. HENARES.  Yes, sir, because this is the first time I’ve ever been subpoenaed to do so.

THE PRESIDING OFFICER.  You do not know whether this kind of authorization which is lodged on the President is covered by authority of the President authority of the Executive Secretary?

COMMISSIONER HENARES.  Sir, the BIR has had in past on our record authority granted by the President, signed by the Executive Secretary.

THE PRESIDING OFFICER.  So, that’s on record that it has been a practice that release of income tax returns was done by the signing authority of the Executive Secretary by authority of the President?



JUSTICE CUEVAS.  All right.  So, the way I understood your statement now, it is my understanding that so far as the SALN of any person, including the impeached public respondent here, your office has nothing to do with it?

COMMISSIONER HENARES.  To the extent that I just described, no, I don’t have anything to do with it.

JUSTICE CUEVAS.  All right.  Neither does your office take charge of the collection, compiling and taking care of the SALN?  It is entirely foreign to your function as Bureau of internal Revenue Commissioner?

COMMISSIONER HENARES.  Only for our own employees, we collate and keep record of our SALN.

JUSTICE CUEVAS.  How about other government officials?  I’m not asking you about your employees.  What about government officials?

COMMISSIONER HENARES.  It is filed not with us.

JUSTICE CUEVAS.  But it is filed their respective offices to whichever they belong?


JUSTICE CUEVAS.  Is that right?


JUSTICE CUEVAS.  So much so that if you have no case involving it, you will not come to know whether it was filed, whether the entries therein appearing are correct, authentic and believable?


JUSTICE CUEVAS.  I think that will be all in the meanwhile, Your Honor, with the witness.  I will ask permission to be allowed to continue my cross-examination because I have to deal with a lot of all the documents.

THE PRESIDING OFFICER.  All right.  The manifestation of the counsel for the defense is noted and recorded.  (Gavel)

The Gentleman from Sorsogon.  After that the Gentleman from Pampanga.

SEN. ESCUDERO.  Just a few questions, Mr. President.

First question is really to enrich jurisprudence on this matter.  Madam Commissioner, how would you define an assessment?  Ano po ba ang ibig sabihin ng assessment?

COMMISSIONER HENARES.  When somebody file—An assessment is a letter written by the Bureau of Internal Revenue to the taxpayer telling them that either they have not paid the taxes and therefore this is their tax liability, or what they have filed is deficient, and therefore there are more taxes that they have to pay.

SEN. ESCUDERO.  Sinulatan niyo na ho ba ng assessment si Chief Justice Corona, yung kanyang asawa, ang kanyang mga anak?


SEN. ESCUDERO.  Again, Mr. President, we already admitted this into evidence but only to enrich jurisprudence.

The section cited by the honourable Commissioner is Section 71 of the Tax Code says, “After the assessment shall have been made,” so on and so forth, and that’s where the authority of the President comes in for it to be released, because the ITR is already now with the Office of the Commissioner.  But correct me if I’m wrong, before that, the ITRs and other documents are not yet with the Office of the Commissioner and somewhere—siguro nasa baba, ‘di ho ba?

Again, we already admitted it into the records.  It’s part of the records of this case.  Gusto ko lang ho maliwanagan para in subsequent cases, klaro ho yung authority na ibinibigay.

COMMISSIONER HENARES.  Because if you look at our tax system, it can be argued that when you filed a return, it is a self-assessment.  It is a voluntary assessment on yourself.

But, aside from Section 71, it’s said here, rules and regulations, there are rules and regulation No. 33 which is an old, old rule since 1992, and which has also been cited in the Supreme Court on whom versus somebody, that says that, when there is a proceeding where government interest is involved, we can actually present the document without the order of the President.

SEN. ESCUDERO.  I agree with you, Madam Commissioner.  You can do that under perhaps Section 270 or another section of the Tax Code.  But for this particular instance, you quoted in your memorandum to the President in response to the subpoena, Section 71 and not any other section of the Tax Code.

Again, I just want to be clarified that we’re sure that next time we do it, we would be doing it properly also.

COMMISSIONER HENARES.  Sir, if I may recall, I beg the indulgence of the Senate President, I think, when I was excused, the Senate President mentioned that I should make sure that I comply with Section 71 and Section 270, and therefore, just so that it will not delay the proceeding, I went ahead—it is like an overkill—I just went ahead and got those order to make sure …

SEN. ESCUDERO.  That you comply with our subpoena.


SEN. ESCUDERO.  But strictly speaking, under any other circumstance, the permission of the President can only be given after assessment shall have been made.

COMMISSIONER HENARES.  That is something that has not been resolved by jurisprudence.

SEN. ESCUDERO.  Thank you, Ma’am.  My next question, Mr. President, is hindi ko maintindihan actually iyong tinatanong ni Atty. Cuevas kanina pero para malaman ko lang iyong significance, pag abroad po ba ang isang Pilipino, kailangan niyang mag-file ng income tax return?

COMMISSIONER HENARES.  Sir, kapag—ganito ho, kapag kayo ho ay overseas Filipino worker, ibig sabihin noon, may kontrata kayo na employer-employee arrangement, exempted ho kayo sa pagbabayad ng buwis sa Pilipinas kasi nagbabayad ho kayo ng buwis sa ibang bansa.

Iyon ho iyong—kasi hindi ho porke nasa abroad kayo ay exempted na ho kasi kayo.

SEN. ESCUDERO.  So, OFW lang ang exempted maski na—kapag hindi ka OFW, kailangan mong mag-file?


SEN. ESCUDERO.  Next, I have encountered several situations with office before your term, in fairness, Madam commissioner, na sinasabi ng BIR, no record on file pero  hindi pa naman kumpleto kasi iyong computerization at that time, may I ask the status of that?

When you say no record on file, is that full proof and 100% or is it possible that there is an ITR somewhere there na hindi pa napapasok sa computer?

COMMISSIONER HENARES.  There is a slim possibility, Sir, especially for early returns, for the earlier year returns, but not for the more recent return, and especially, the possibility is not there if he is never registered as a taxpayer.

SEN. ESCUDERO.  As a final question, Mr. Presiding Officer, may I ask, what taxes, aside from capital gains, nabanggit nyo na po iyon, ano po iyong mga buwis na pwede nyong bayaran na nabayaran na, na hindi kailanganang ideklara sa ITR.

Pasensya na ho kayo, isa sa mga pinakamahina kong subject ang tax noon, so, kindly educate me also on this.

COMMISSIONER HENARES.  In relation to income ho ano?


COMMISSIONER HENARES.  Kung subject na ho siya sa final tax, katulad ng interest sa bank deposit, ito ho, interes na ho sa bank deposit, kasi kapag interes ho sa ibang bagay, kailangan pa rin ho nyong ideklara.

Capital gains stock, kasi mayroon kayong idinedeklara sa ibang returns.


COMMISSIONER HENARES.  Stock transaction tax sa stock exchange.


THE PRESIDING OFFICER.  Capital gains or real estate.

COMMISSIONER HENARES.  Yes, capital gains.

THE PRESIDING OFFICER.  On capital assets.

COMMISSIONER HENARES.  Oho, nakadeklara iyan ho sa another returns.  So, basically ho, those are the …

SEN. ESCUDERO.  So, itong tatlong ito, kapag kumita ka doon, hindi mo kailangang ideklara sa ITR mo dahil may ibang forms na sina-submit sa BIR para doon.

COMMISSIONER HENARES.  Oho, iyon hong withholding sa interest on bank deposit.  Dapat ang bangko, mayroon hong ipinapadala ho sa amin para hong alpha list rin ho iyon.

SEN. ESCUDERO.  At sa kaso naman ng shares of stocks, iyong stock exchange o iyongb broker.

COMMISSIONER HENARES.  Oho, iyong sa stock exchange, iniimbestigahan naming ho iyon in regular interval ho.

SEN. ESCUDERO.  Thank you, Mr. President.  Thank you, Madam Commissioner.

THE PRESIDING OFFICER.  The Gentleman from Pampanga.

SEN. PANGILINAN.  Thank you very much, Mr. President.

Just a few questions sa ating commissioner.  Magandang hapon.

COMMISSIONER HENARES.  Magandang hapon ho.

SEN. PANGILINAN.  Noong isang araw, nabanggit po ninyo, Commissioner Henares, na Biyernes lamang ninyo nabuo iyong mga dokumento para—iyong mga dokumento o tax records ng mag-asawang Corona at iyong mga anak, tama po ba iyon?

COMMISSIONER HENARES.  Actually, it went all the way ho to Monday …

SEN. PANGILINAN.  Hanggang Lunes.


SEN. PANGILINAN.  In other words, fairly recent.  Bago noon hindi nyo pa nabuo iyong mga tax records na ito.

COMMISSIONER HENARES.  Oho, hindi pa ho.

SEN. PANGILINAN.  Tinatanong ko iyon dahil gusto ko ring dagdagan iyong unang punto na nabanggit ni Senator Escudero, mayroong A-list, possible ba na iyong nasa A-list, ay mag-file ng separate income tax return na hindi nyo—o wala sa record nyo, o hindi napaabot sa Office of the Commissioner?

COMMISSIONER HENARES.  Kaya ho kung makikita nyo ho ninyo iyong certification naming, wala ho siyang return kaya we have to go to more deeper step.  Because we know he is employed.  So, how can he have no return?  So, we went to the next step of getting the alpha list.  So, that is how the process goes.

SEN. PANGILINAN.  So, nakita natin mayroon siyang pangalan doon sa alpha list from 2007 up to 2011, tama ho ba?

COM. HENARES.  2006 to 2010.

SEN. PANGILINAN.  Yes.  Ang tanong ko, dahil sabi ninyo kanina, maaaring may mga income tax return na hindi pa nare-retrieve.  Minimal.  Sabi ho ninyo kanina sa interpellation kay ..

COM. HENARES.  Hindi.  Tanong ho niya kung may possibility ba ho na hindi ho kami nakakuha noong income tax return.

SEN. PANGILINAN.  That is right.  Ang sabi ninyo, minimal.

COM. HENARES.  Yes, sir.

SEN. PANGILINAN.  So, is it possible na mayroong income tax returns ang mag-asawang Corona na hindi ninyo nalikom at maaaring naririyan pa?  In other words, to prove that mayroon siyang ibang source of income apart from iyong dokumento ninyo sa A list.

COM. HENARES.  As far as we are concerned, we checked everywhere, so, of course it is a possibility, nobody can foreclose that, but upon diligent search, we did not really get an ITR.  Hence, we went one step further because we cannot believe that there is no income tax return.  Because we know that he is employed.  So, we really double checked and then since there is none, we went and looked for the alpha list, otherwise, we would not have gone for the alpha list.

SEN. PANGILINAN.  From the alpha list, wala ng ibang record kayong na-secure na mayroong ibang tax records ang nasasakdal.

COM. HENARES.  Maliban ho doon sa CAR.

SEN. PANGILINAN.  And the CAR, sorry.  Apart from the alpha list and the car.


SEN. PANGILINAN.  But, as you said, potentially, possible, there could be an ITR there somewhere that you have not been able to retrieve.  And assuming it is out there, I mean hypothetically, would you still be able to retrieve it, sabihin na natin, given the next few days, the next few weeks, with a more diligent search?

COM. HENARES.  We already certified that there is no return.  Normally, it is like this, sir.  If there is a return out there, then, it must be a no payment return.  No taxes were paid on that return.  Because all returns that have payments will automatically be tagged in our system.  If there is any return out there, the tax due is zero.  So, it would be very, very minimal, sir.

SEN. PANGILINAN.  Okay.  And this is another point altogether, and I beg the indulgence of our colleagues here.  But I was just interested and curious.  Sabi ninyo, walang ni-remit ang Supreme Court na A list from what year to what year?

COM. HENARES.  Walang sinabmit ho.


COM. HENARES.  Alpha list ho from 2002 to 2005.

SEN. PANGILINAN.  Ano ang ibig sabihin noon, from 2002 to 2005, hindi sila nag …

COM. HENARES.  Hindi ho.  May mga taxpayer ho na nagwi-withhold sila at nire-remit niya iyong withhiolding tax, whether tama iyon o hindi, we have to check.  But, they are remiss in the reporting requirement.  This is a reporting requirement.  But they feel that sometimes it is not necessary.  They think it is not necessary  and the tax code kasi it only provides a penalty.  Some people will say, I will just be penalized.

SEN. PANGILINAN.  But that doesn’t mean that the taxes that were withheld were not turned over.  Hindi ibig sabihin iyon.

COM. HENARES.  Hindi ho.  Hindi ho ibig sabihin iyon.

SEN. PANGILINAN.  Maraming salamat.  Salamat po.

SEN. SOTTO.  Mr. President, Senator Cayetano wishes to be recognized, then Senator Drilon, and then thereafter, Senator Ralph Recto, Mr. President.


SEN. CAYETANO (A.).  Thank you, Mr. President.  Ma’am, magandang hapon po.

COM. HENARES.  Magandang hapon ho.

SEN. CAYETANO (A.).  Just some questions to clarify.  Sabi ninyo po may nakita kayong discrepancies sa SALN ng Chief Justice, tama po ba iyon?  Observation iyan.


SEN. CAYETANO (A.).  What do you mean discrepancies?

COM. HENARES.  Well, first, sir, the most important thing in the SALN is the acquisition cost column.  The SALN of the Chief Justice he does not fill up the acquisition cost column and secondly, based on the CARs that were issued, there were properties that should have been registered on a certain year but it was not registered, it was registered subsequently.  And then there were properties that were not registered.

SEN. CAYETANO (A.P.).  Okay.  Let us stop there because as the defense had been pointing out it is important that competent iyong isang person mag-testify on that matter and I wouldn’t have asked you kung hindi ka tinatanong din ni Justice Cuevas.  But my point is and to be fair to everyone, just because may discrepancies, hindi ibig sabihin na illegal ito o mali na ito.  Meaning it could be but it could also be explainable.  Correct?

COM. HENARES.  It is possible, sir.

SEN. CAYETANO (A.P.).  Yes.  Meaning you are just giving your observation that you saw it at sa tingin mo may discrepancies.  But to be fair to the side of the Chief Justice, it’s possible that it can be explained.

COM. HENARES.  Yes, sir, it’s for him to explain.

SEN. CAYETANO (A.P.).  For example, sabi ninyo po hindi inilagay iyong mode of acquisition.  Kasi ang alam ko diyan you can have a choice pagdating sa price you can either put the appraised or assessed value or you can put the acquisition cost.  Ang nakalagay kasi dito sa SALN niya mode of acquisition hindi iyong price noong acquisition.  But we are not here to argue this.  I just wanted to point out going to another point that the point is you have a presumption of innocence but then if you can show that there is property not included here or even if it is included pero hindi mo maipakita nasa income mo kaya mong bilhin iyon, then the presumption shifts, hndi ba?  Nagiging presumption na meron kang ill-gotten wealth and then the defense can now show na, can try to explain and if they can explain kung saan galing ang pera at illegitimate iyong pera, then na-overthrow ulit ang presumption.  So my point, ma’am, kasi kanina nag-testify kayo na iyong  isang daughter was si Czarina nagkaroon kayo ng investigation dahil sabi ninyo wala siyang income pero nakabili ng property.


SEN. CAYETANO (A.P.).  Okay.  Did you ask her or give her opportunity to answer at the stage of your investigation it didn’t call for that yet?

COM. HENARES.  It just came to our attention while we were preparing for the impeachment case and I didn’t have any opportunity to go back to my office and do my work so I don’t have the opportunity.

SEN. CAYETANO (A.P.).  Yes.  So you were simply testifying on your personal knowledge and the usual course of the procedure when something is brought up to your knowledge.

COM. HENARES.  Yes, sir.

SEN. CAYETANO (A.P.).  Yes.  But meaning, to be fair again to the defense and to everyone, there is a possibility when she is asked to explain, she will be able to explain.

COM. HENARES.  There is a possibility, sir.

SEN. CAYETANO (A.P.).  And, for example, for those possibilities, halimbawa, ma’am, pagka kayo ba ay kumita sa stock market halimbawa, di ba final tax iyon?  Hindi ka naman magpa-file talaga ng income tax doon, di ba?

COM. HENARES.  Oho.  Pero ang problema ho doon is dapat ho meron kayong unang capital e wala naman ho siyang income.

SEN. CAYETANO (A.P.).  And are you familiar with the presidential decree of President Marcos which prohibits gifts to public officials?

COM. HENARES.  Yes, sir.

SEN. CAYETANO (A.P.).  Are you familiar with the exception?

COM. HENARES.  Not really, sir.

SEN. CAYETANO (A.P.).  To family members’ donations of small amounts or reasonable amounts are allowed.  So if for 18 years binibigyan mo ang anak mo ng P500,000 a year for 18 years, then you would have P1.8 million when you are already 18 years old.  So I am not giving or testifying for anyone here.  I am just saying balansehin natin that tama po iyong sinabi ninyo.  There has to be capital.

COM. HENARES.  Yes, sir.

SEN. CAYETANO (A.P.).  But I also like to point out that that is why the burden is on the prosecution to show that there in fact properties na hindi maipaliwanag at kung maipakita nilang hindi nga maipaliwanag, nagsi-shift na ang burden na ito and I just didn’t like to end the day na you did your job well and you testified in your personal knowledge but then hindi natin makumpleto iyong picture just on your testimony that is why I wanted to clarify those matters.

Lastly, Your Honor, you got authority from the President to testify on the income tax returns, correct?

COM. HENARES.  To bring and to testify on it, right?

SEN. CAYETANO (A.P.).  Can a taxpayer waive his right Meaning, ako, sabihin ko, halimbawa, chinallenge ng media, o lahat ng prosecution pakita niyo rin ang SALN niyo.  Lahat ng judges, pakita niyo rin.  O, BIR niyo ilabas.  Can we write you a letter and say na ipakita niyo?


SEN. CAYETANO (A.).  Can we waive it in favour of a different person?  I waive it na sinasabi ko, the Secretary of the Senate is authorized to look at my income tax.


SEN. CAYETANO (A.).  Okay.

COMMISSIONER HENARES.  In effect, you’re telling me to allow him to look at …

SEN. CAYETANO (A.).  Correct.  Again, to be fair, Your Honor, let me just read the statement behind the—which was signed by public officials when they do the SALN.  “I hereby authorize the Ombudsman or his duly representative”—mali yata Inggles—dapat duly—his duly representative—binabasa ko lang po ito ha, hindi ko ‘to English—“to obtain and secure”—hindi, eto po ang nakalagay e—I hereby authorize—I’m reading behind the Exhibit G-1—“I hereby authorize the Ombudsman or his duly representative to obtain and secure from all appropriate government agencies including the Bureau of Internal Revenue such documents that may show assets, liability, net worth, business interest and financial connections to incluse”—hindi include—“to incluse those of my spouse and unmarried children below 18 years of age living with me in my household covering previous years to include the years I first assumed office in government.”

I’m saying this because, apparently, hindi unusual na tingan ang SALN at tingan ang tax records ng isang public official.  In fact, baligtad.  Dapat tininingnan ng Ombudsman at dapat may nagbabantay dahil ito magiging basehan kung tapat ang isang public official or kung siya’s nagpapayaman.

COMMISSIONER HENARES.  Oho.  Parati ho kami hinihingan ng Ombudsman ng SALN namin at tax return.

SEN. CAYETANO (A.).  Thank you, Mr. President.  My time is up.  I have a number of other questions but let me give way to the other Senator-Judges.

THE PRESIDING OFFICER.  I just want to clarify one point.  Madam Commissioner, just for the information of this court, when you do a net worth method of investigating any taxpayer, you use acquisition process, don’t you?


THE PRESIDING OFFICER.  Not the fair market value?


THE PRESIDING OFFICER.  Acquisition cost against liabilities …

COMMISSIONER HENARES.  Real liabilities, Sir.




SEN. SOTTO.  Senator Drilon, Mr. President.

THE PRESIDING OFFICER.  The Gentleman from Iloilo.

SEN. DRILON.  Madam witness, ..


SEN. DRILON.  … for many of us, we heard of the alpha list for the first time only yesterday.  And from the way we understood your testimony, where the income is only from one source, then it is the employer who, in effect, files the income tax return, and the taxpayer need not file an income tax return.

COMMISSIONER HENARES.  Yes.  If the income is from one source and that withholding tax are properly withheld …


COMMISSIONER HENARES.  … then the annual alpha list will take the place of the income tax return and person need not file an income tax return.

SEN. DRILON.  So that if there are other sources of income, you have to file an income tax return and you have to pay the taxes, if any.

COMMISSIONER HENARES.  Yes, Sir.  If there are other sources of income, or if the taxes were less than what you have to pay, you have to file an income tax return.

THE PRESIDING OFFICER.  With the permission of Senator Drilon.

Withholding applies to bonuses and allowances?


THE PRESIDING OFFICER.  Will the party paying the bonus and the allowances will have to …

COMMISSIONER HENARES.  Yes, Sir.  All the exemption is up to P30,000, and for a government official, it’s the RATA, representation allowance and transportation allowance, and the PERA.  Those are the only exemptions, Sir.


SEN. DRILON.  Your earlier mentioned that after you received the subpoena on this particular matter of Chief Justice Corona, you went one step further.  I heard that phrase.  Can you tell us exactly what you meant by going one step further?

COMMISSIONER HENARES.  Sir, because the subpoena said income tax return of the people involved.  So, we looked for the income tax return and we cannot find any.  But we know that he is employed, and therefore, we gave instruction to find out where the Supreme Court file—is a taxpayer.  And we ask the RDO if the Supreme Court submit alpha list, and to provide us with the alpha list.  So, that is the one step further that we meant, Sir.

SEN. DRILON.  And Chief Justice Corona was in the alpha list submitted by the Supreme Court.


SEN. DRILON.  And since you mentioned that the alpha list would only be feasible, where you have one source of income from one employer, where withholding tax was done, it means that in the case of Chief Justice Corona, your records will show that he had only one source of income, and that is his salary from the Supreme Court.

Is that a correct statement?

COMMISSIONER HENARES.  Yes, Sir.  And that salary is only—that income is the amount shown in the alpha list.

SEN. DRILON.  That income is what is shown in the alpha list.

Does the alpha list indicate whether it is basic salary, bonus, etcetera, or not?

COMMISSIONER HENARES.  It has different column.  It includes there non-taxable bonuses and gratuities and the GSIS, Pag-IBIG, PhilHealth contribution, it is in the column, Sir.

SEN. DRILON.  In the case of Chief Justice Corona, where did the compensation, on which column did his compensation appear?

COMMISSIONER HENARES.  With Justice Corona, the column is like this, there is a gross compensation income, it says, under the gross compensation, it has a sub-heading, non-taxable.  And under non-taxable, there is GSIS, PHIC and HDMF, the amount there is P23,374.74.  Then, there is a bonus/benefits, it said there, P30,000.

Then, it said taxable, there is a taxable sub-column, and it said there, bonus/benefit, which is taxable, P27,417.  Then, another sub-column saying salaries and others, P604,388.46.

SEN. DRILON.  What year was that?


Then, there is an amount of exemption, I think, this is personal exemption, it said  P41,000.  Then, tax due, January to December, it is P154,057.75.

Then, it said, tax withheld, January to December, P157,236.24.

Then, because there is a column over withheld tax or refunded, under withheld tax, there is over withheld, so, P3,178.49.

So, this tax withheld as adjusted is P154,057.75

SEN. DRILON.  P154 thousand …


SEN. DRILON.  And therefore, he got a refund.

COMMISSIONER HENARES.  Ano, when you are in the alpha list, it is a requirement under Tax Code, the December, the employer have to make the adjustment, so that there is no more refunding coming from the BIR.

SEN. DRILON.  So, that amount corresponded to the taxes on the bonus in excess of P30,000 and the salary of P604,388.45.  Is that correct?


SEN. DRILON.  Alright.  Now, you said that Chief Justice Corona had no income tax return filed.


SEN. DRILON.  It means that other than the alpha list, what is stated in the alpha list, the Chief Justice did not have any other income per BIR records.


SEN. DRILON.  What about his wife?

COMMISSIONER HENARES.  His wife  COM. HENARES.  His wife also did not file an ITR.  She also has an alpha list from Camp John Hay.

SEN. DRILON.  And, therefore, the same presumption is valid that she did not have any other compensation other than what appears in the alpha list.

COM. HENARES.  Actually, with the wife, she has a little problem because she received, aside from her compensation, she received a director’s fee where the withholding tax was only P10,000.00, so there was no proper withholding of taxes and she should have filed an income tax return.

SEN. DRILON.  And your records will not show that her income tax return was filed.

COM. HENARES.  Yes, there is no income tax return filed.

SEN. DRILO.  Thank you, Mr. President.

THE PRESIDING OFFICER.  Anyone else?  Majority Floor Leader.

SEN. SOTTO.  Senator Recto, Mr. President.

THE PRESIDING OFFICER.  The Gentleman from Batangas.

SEN. RECTO.  Thank you, Mr. President, very briefly, in the interest of fairness and justice and to increase the intellectual quotient of our public with regard to taxes, I ask these few questions, Mr. President.

Mr. President, let me first follow up on the question of our Senate President.  Allowances and bonuses.  Ang sinabi ng ating testigo kanina, pagka mahigit P30,000.00 ay taxable na, tama ho ba iyon?


SEN. RECTO.  Sino ang dapat mag withhold niyan, iyong employer?

COM. HENARES.  Oho, ang employer ho.

SEN. RECTO.  At kung alam ng employee na kulang ang winithhold, dapat nagfile siya ng income tax return.


SEN. RECTO.  Para iyong balanse, siya dapat ang magbayad.


SEN. RECTO.  Pero mahirap sigurong isipin para sa ordinaryong empleyado that that is the case.  Halimbawa pag ditto ka nagtatrabaho sa Senado, nakatanggap ka ng bonus, mahigit P30,000.00, hindi ka na magpa-file ng bagong income tax return.  I suppose that is happening throughout the bureaucracy in the different government agencies.


SEN. RECTO.  I am just laying a fact, ha.

COM. HENARES.  It should be the employer who should make the adjustment at the end of the year.

SEN. RECTO.  Correct.  So, samakatuwid, pagka halimbawa, in the case of the Supreme Court, there is an accounting office, on the initial basic salary, kung hindi nila kinaltasan, lalo pang hindi nila ni-remit, sila ang mananagot.

COM. HENARES.  Actually, sa batas, dalawa ho ang mananagot, silang dalawa pareho.

SEN. RECTO.  I will just review the law, pero, silang dalawa ang mananagot.

COM. HENARES.  Oho.  Iyong isa, for non-withholding, iyong isa for not paying taxes.

SEN. RECTO.  Posible.  Okay.  So, let me move from that issue.  Incidentally, I do have a bill on February 2, we will have a hearing on that.  But let me move on, Mr. President.  On the face of the CAR testified to earlier, I think this is WW.  This is with regard to the La Vista property.  Without looking at the income tax returns, ito iyong  binenta ni Cristina Corona kay Maria Carla Castillo.  Just on its face, samakatuwid, ditto nakalagay ditto, binenta ko itong property na ito, P18 million ang halaga.  Just on its face, at nakalagay ditto nagbayad si Mrs. Corona ng P1,200,000.00, tama ho ba iyon?


SEN. RECTO.  Therefore, kumita siya ng mahigit P16 million, tama?

COM. HENARES.  Oho, kung totoo ho iyong transaction.

SEN. RECTO.  Tama, on its face, totoo iyong transaction nangyari.  Let us not have any conclusions further than that.

COM. HENARES.  Yes, sir.

SEN,. RECTO.  So, having said that, Madam Witness, aside from the income of the Chief Justice, para makita natin ang katotohanan diyan, to be fair to the defense as well, halimbawa, kung saka-sakali na totoo itong transaksyon na ito, hindi lamang iyong suweldo ni Chief Justice Corona ang dapat nating i-compute, kung hindi etong isang pagbentang ito, nagbayad pa siya ng buwis, katunayan ng P1,296,000.00, at dapat idadagdag natin ito, kumita siya ng mahigit P16 million ditto, on its face, isn’t that correct?

COM. HENARES.  On its face, yes, sir, but …

SEN,. RECTO.  Thank you.  Thank you.  Thank for the answer.

COM. HENARES.  But the period is different.

SEN. RECTO.  No, what you are saying now is, in the income tax return, so, leet me proceed to that, what you testified earlier is on the income tax return of Maria Carla Castillo.

COM. HENARES.  Yes, sir.

SEN. RECTO.  In effect, you are questioning her capability to buy this property.

COM. HENARES.  Yes, sir.

SEN. RECTO.  Just by reviewing the income tax returns.

COM. HENARES.  Of Ma. Carla Constantino.

SEN. RECTO.  That is right.  Have you reviewed the income tax returns of the husband as well?

COM. HENARES.  Yes, sir.

SEN. RECTO.  But that has not been testified yet.

COM. HENARES.  No, sir.

SEN. RECTO.  Hindi pa.  So ibig sabihin magkakaroon pa kayo niyan.  Posible.

COM. HENARES.  I do not know, sir.

SEN. RECTO.  Maybe kasi tinawag ng prosecution.  Okay.  Kung halimbawa naman iyong kanyang father-in-law ang nagpautang sa kanya, I mean it does not necessarily prove anything immediately.  If at all non-payment of taxes sila but it does not prove immediately that it is conclusive na wala silang pera para bilhin ito on that other hand.

COM. HENARES.  Yes, sir.

SEN. RECTO.  Hindi ba?  Well, thank you for that.  My time is up, Mr. President.

THE PRESIDING OFFICER.  In other words, the mere incapacity on record of his income tax by a buyer of property to buy the property is not an absolute evidence of illegalness of resources used to buy the property.

COM. HENARES.  We have to look at other circumstances, sir.

THE PRESIDING OFFICER.  Precisely.  You are just basing your conclusion on the fact that the income tax return on its face of the buyer would not support the ability to purchase.

COM. HENARES.  Yes, sir.


SEN. SOTTO.  Mr. President, one final member of the court, Senator Joker Arroyo, wishes to be recognized.

THE PRESIDING OFFICER.  The Gentleman from Makati and Bicol.

SEN. ARROYO.  This is not really a question but clarification.   You said that on the 19th of January you received a subpoena.

COM. HENARES.  18th.

SEN. ARROYO.  18th.  And immediately you wrote the Executive Secretary.

COM. HENARES.  I wrote the Executive Secretary on January 19, the next day.

SEN. ARROYO.  Alright.  And on January 20 you received the authorization.

COM. HENARES.  Yes, sir, at 4 p.m.

SEN. ARROYO.  I just want to say the speed with which…

COM. HENARES.  Pardon?

SEN. ARROYO.  The speed with which…

COM. HENARES.  Sir, I harassed him to issued it otherwise I might be cited in contempt by the Senate.

SEN. ARROYO.  How could you have harassed him when you said you did not talk to them.

COM. HENARES.  No.  I harassed the Deputy Legal Presidential Counsel, sir.

SEN. ARROYO.  Now, I did not exactly capture what you answered the defense.  Is this the first time since you assumed office that the President of the Philippines issued an authority to the Bureau of Internal Revenue to releasethe ITRs.

COM. HENARES.  Yes, sir.

SEN. ARROYO.  So in other words throughout the period when you were—when did you assume the office of…

COM. HENARES.  Just July 2, 2010, sir, at the same time as the President.

SEN. ARROYO.  So that is roughly one and a half years.

COM. HENARES.  Yes, sir.

SEN. ARROYO.  Okay.  So for one and a half years, there was never an instance where the President of the Philippines have authorized the release of an ITR..

COM. HENARES.  No, sir.

SEN. ARROYO.  So this stands out as a kind of singular incident.

COM. HENARES.  Sir, because nobody ask for returns from us that is not authorized, sir.

SEN. ARROYO.  Then again, I want to be clarified as to the statement that the Bureau of Internal Revenue is now conducting an investigation of Chief Justice Corona.

COM. HENARES.  Sir, I said that if it warrants further investigation.

SEN. ARROYO.  Okay.  Correct me if I’m wrong , because I’m just basing this on the recollection of your statement.  In the course of our examination of the papers you have, you found it necessary to pursue an investigation.  Do I understand you correctly?

COMMISSIONER HENARES.  Sir, because of the—

SEN. ARROYO.  Don’t give me the reason first.  It was because of your investigation.  What was the cause of that?  The papers in front of you.

COMMISSIONER HENARES.  The papers in front of me dictates that I should investigate further.

SEN. ARROYO.  All right.  Now,—and you conducted the investigation?

COMMISSIONER HENARES.  We are conducting an investigation at present.

SEN. ARROYO.  Now, does the Commissioner of Internal Revenue personally conduct an investigation?  I mean, at your level, is that not delegated to someone else?

COMMISSIONER HENARES.  Sir, when paper comes to me and I see there’s something wrong, I order the investigation.  So, on my first review, if there is something wrong, then I will order.  But if there’s nothing wrong, then I will just let it aside.

SEN. ARROYO.  I asked this question because if you pursue your investigation, I’m not saying you shouldn’t, then there will be a parallel case against the Chief Justice.  One in the impeachment court and another one in the Commissioner of Internal Revenue.

Now, I get a little bothered by that.  I’m not saying it’s wrong or right.  But a twin move against one person, here in the Senate through impeachment, another one in the Internal Revenue through investigation using the powers of the Internal Revenue that’s very potent.  I’m just saying that because from your testimony, you said that you—we are now conducting an investigation.  There seem to be an over-eagerness involved by that.

COMMISSIONER HENARES.  Sir, it’s not—I think the thing there is if we see there’s something wrong and we do not do anything, people will accuse us of sleeping on our job.

SEN. ARROYO.  Let me ask you, do you think you could have postponed the investigation.  You can imagine, you are going to appear here, simultaneously you’re conducting an investigation.

I mean, isn’t that a bit unusual?  What I’m saying is this.  You are preparing for your testimony here.  At the same time, you and your office are studying already whether the respondent Corona did not file or—what’s that?—did not have enough income or—What’s your investigation about?


SEN. ARROYO.  What is the nature of your investigation?

COMMISSIONER HENARES.  It’s a asset net worth method to determine whether there was some income he did not report and did not pay taxes thereon.

SEN. ARROYO.  All right.  I ask the question, can you not have waited?

COMMISSIONER HENARES.  Sir, I only answered the question about seeing this—

SEN. ARROYO.  Remember, the question is one of policy.  We don’t want the public to think that the forces of the government are being used.  One impeachment initiated by the House of Representatives, and now tossed to the Senate for trial.  Then another one by the Internal Revenue for some tax malfeasance or whatever.  I’m just saying, that is my concern.


SEN. ARROYO.  Thank you very much.


SEN. SOTTO.  Mr. President.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  Thank you, Mr. President.  In as much as it was manifested earlier that the continuance of the cross-examination would be next week, may I manifest some other matters. Mr. President, we would like to make of record that yesterday, January 25, 2012, the prosecution filed a manifestation stating that the prosecution is now temporarily discharging from appearing before this honorable tribunal, until further notice, the following:  Robert Guillermo, Register of Deeds, Pasay City; Ramoles D. Padilla, Assistant City Assessor, Makati; Raymond G. Ramos, Register of Deeds, Paranaque City; Fernando M. Fandino, City Assessor, Pasay City; Marco Antonio B. Abad, OIC, City Assessor, Paranaque City; Roberto S. Villaluz, OIC, City Assessor, Taguig City; Jaime Agbayani, President and CEO, John Hay Management Corporation; Sonica O. Angeles, Vice-President, Staff Officer IV, Office of the Vice President; and Jose D. Castro, City Assessor, Quezon City.


SEN. SOTTO.  Thank you, Mr. President.  Yesterday also, January 25, 2012, counsel of Chief Justice Renato Corona filed an opposition to the January 25, 2012 request of the prosecution for the court to issue subpoena ad testificandum and subpoena duces tecum, requiring certain officers of various banks to testify or to bring documents in relation to the purported bank accounts of Chief Justice Corona and/or his wife, Cristina R. Corona.

This morning, the prosecution filed a motion to withdraw its earlier request for the issuance of subpoena to certain officers of the Bank of the Philippine Islands, Rizal Commercial Banking Corporation, Philippine National Bank, Landbank of the Philipines, and the Bank of the Philippine Islands Family Savings Bank, so as not to saddle this honorable court.  And while waiting for the issuance of the formal resolution of this honorable court regarding the clarifications, to its 25 January 2012 ruling in the said motion, the prosecution prays that the request for subpoena ad testificandum and subpoena duces tecum dated 25 January 2012 be withdrawn, with reservation to the right of the prosecution to file the appropriate request for specific bank accounts or Renato C. Corona and Cristina R. Corona at appropriate time.

I move, Mr. President, that the Presiding Officer rule on the motion.

THE PRESIDING OFFICER.  If I recall correctly, there was a—I think, a motion of the prosecution to withdraw that request for subpoena against the banks.

REP. TUPAS.  Yes.  Yes, we filed, for the information, Mr. President, we filed a manifestation.  I think, it was filed this morning.

THE PRESIDING OFFICER.  Yes, we received it, that is why I am taking that statement that the request for subpoena against the banks had been withdrawn.


THE PRESIDING OFFICER.  Am I correct in this?

REP. TUPAS.  Yes, you are correct, Mr. President.

THE PRESIDING OFFICER.  Now, may I request the Chair, rather now request the parties that when they request for a subpoena to be issued by this court, you must make your request for subpoena duces tecum, with respect to documents, in such a manner that there is specificity of the documents to be requested.  Because I noticed that the prosecution first requested this court to issue a subpoena against certain real estate developers, especially, developers of buildings like condominiums, requiring the production of all kinds of records involved in the development, which is a back shot manner of requesting subpoena.  And I am not saying that you are doing it intentionally, but the impression is that you are actually fishing for evidence, which is not proper.

So, although, if I will grant the subpoena, then, I will be compelling the developers to bring even the engineering plans, the architectural plans, the sewage plans, and all other documents involving the construction of the building which are not relevant in these proceedings.  So, I would suggest that in order not to intrude into the privacy of the people who are not involved in these proceedings, that you specify with particularity the documents that you want this court to be subpoenaed.

REP. TUPAS.  We will comply, Mr. President.

THE PRESIDING OFFICER.  Is there anything else, Majority Floor Leader.

SEN., SOTTO.  Yes, Mr. President.  Just two small items.  We are in receipt of a notice of appearance filed by several private prosecutors on January 25, 2012 who are as counsel for complainants in relation to Article I subject to the control and supervision of the public prosecutors.  The names and signatures of the counsels are indicated in the said notice, Mr. President, just to manifest.

THE PRESIDING OFFICER.  With the notice?

SEN. SOTTO.  Yes.  And receipt of the notice, Mr. President..  We will just take note.  Thank you.

THE PRESIDING OFFICER.  Can you read the notice.

SEN. SOTTO.  One final matter, Mr. President.  May we recognize Senator Gregorio Honasan for a manifestation.

THE PRESIDING OFFICER.  The Gentleman from Bicol.

SEN. HONASAN.  Mr. President, with the indulgence of the court, I would just like to raise two issues.  One administrative and procedural, the other a matter of principle as it relates to procedures.

Mr. President, I would like to move for the court to direct the court’s spokesperson to confer with the spokespersons of both the prosecution and the defense so that if it is not yet being done, they may moderate their public pronouncements and statements.

Mr. President, I proceed from the issues raised by Senator Arroyo about the premature and unwarranted disclosure of what constitutes the merits of a case, which to my mind remains unresolved and unverified.  I am not suggesting a gagroo.  I still subscribe to the liberal application of the rules.

Mr. President,distinguished colleagues, to my mind, I believe that the trial outside the court room is proceeding faster than the trial inside the court room.  And as we speak, I think it should be the other way around because as we speak, verdicts are being rendered in the hearts and minds of our people.

The second issue, Mr. President, is an issue that we raised when we resumed last Tuesday, to which both the prosecution and the defense agreed.  The principle in the rule of our Constitution that presumes innocence.  Mr. President, I believe this is a continuing presumption until a verdict is rendered.  In fact, I would expand this principle.  What about the presumption of honor, of a good family name.  Sa tingin ko po, Ginoong Pangulo, hindi naman tama.  I don’t think it was the intention of the law or the spirit of the law na payagan tayong sirain iyong pangalan ng isa’t isa.  What our children and grandchildren?  What about their future?

So, Mr. President, I submit.

THE PRESIDING OFFICER.  Before we proceed, I would like to state that the Chair approves and grants the motion of the prosecution to withdraw their request for subpoena duces tecum against the banks filed by them previously.  So ordered.

Now, there is this request by certain private lawyers to appear for the prosecution.  Are they authorized to represent the prosecution, or are they appearing here in their private capacities to participate in the proceeding and are they asking the leave of this court?

REP. TUPAS.  I signed that request, Your Honor, as a part of the House panel prosecution under the direct control and supervision …

THE PRESIDING OFFICER.  It is upon the behest of the panel of prosecutors, House prosecutors, that this request is requested.

REP. TUPAS.  And it is specific that they will act as private prosecutors for a particular article of impeachment.

THE PRESIDING OFFICER.  So, you want these people to assist you.

REP. TUPAS.  Yes, Mr. President.

THE PRESIDING OFFICER.  Alright, granted.

REP. TUPAS.  We heard earlier that the defense reserve their right to continue their cross-examination of the witness and I was informed by the witness, Your Honors, and I would like to inform the defense and this honourable body that next week she will be out for one week, from Monday until the following Monday because of official, I think it’s official out of the country, official business.  So I just want to inform the honourable tribunal.

THE PRESIDING OFFICER.  The defense counsel may consider postponing his cross-examination upon the return of this witness.

JUSTICE CUEVAS.  We have no objection.  If Your Honor please, why we were not able to terminate is because they have not announced that they are terminating the direct.


JUSTICE CUEVAS.  Now if they have closed their direct examination, Your Honor, I will be compelled to carry on the cross-examination.  It is on that basis, Your Honor.  We have no objection, if Your Honor please.

THE PRESIDING OFFICER.  Alright, granted.  The request of the witness to appear for further cross-examination when she returns is granted.

SEN. SOTTO.  Mr. President, the manifestation of Senator Honasan was in the form of a motion.  I call for the previous question, Mr. President.

THE PRESIDING OFFICER.  Is there any objection regarding the motion of Senator Honasan?

SEN. SOTTO.  Clarification.  It is for the spokesperson of the Senate to coordinate with the two panel’s spokespersons.  Administrative matter, Mr. President.

THE PRESIDING OFFICER.  Is there any objection to that request?  There is none, the request is granted.

SEN.SOTTO.  Thank you, Mr. President.

May we ask the Sergeant-at-Arms to make an announcement.

THE SERGEANT-AT-ARMS.  Please rise.  All persons are commanded to remain in their places until the Senate President and the Senators have left the session hall.

SEN. SOTTO.  Mr. President, I move that we adjourn until 2 o’clock in the afternoon of Monday, January 30, 2012 for the continuation of the presentation of the prosecution.

THE PRESIDING OFFICER.  Any objection to the motion of the Majority Floor Leader.  So approved.

It was 6:02 p.m.


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