The Sandiganbayan has convicted former Palawan Governor Mario Joel Reyes and several former provincial officials and contractors for graft in connection with fraudulent infrastructure projects funded by the Malampaya Fund.
The decision, issued Tuesday in a 625-page ruling penned by Presiding Justice Geraldine Faith Econg, found Reyes and coaccused—including former quality control division chief Alfredo Padua, engineers Rolly Matudio and Bayani Buenaventura—guilty of select charges under Section 3(e) of the Anti-Graft and Corrupt Practices Act.
The graft and falsification cases stemmed from at least 39 infrastructure projects in Palawan, funded through the province’s share in the multibillion-peso Malampaya natural gas revenues. Reyes was found guilty in one of the charges for approving falsified documents and authorizing payment for a project that was falsely reported as fully completed. He was sentenced to six to ten years in prison.
He was, however, acquitted in other charges due to insufficient evidence, including those involving the construction of a generator house and a road segment.
Origins of the Case
The charges date back to March 2017, when Reyes and 41 others were indicted over anomalies in 209 contracts funded by ₱1.53 billion in royalties from the Malampaya gas field between 2008 and 2009. Of the 159 criminal charges heard by the court, many involved irregularities within the provincial engineering office during Reyes’ term as governor.
Reyes himself faced 14 counts of violating Section 3(e) for allegedly causing undue injury to the government and 22 counts under Section 3(g) for entering into contracts disadvantageous to public interest.
Palawan had received part of the gas royalties through Executive Order No. 683, issued in 2007, which gave the province half of its claim to a 40% share in Malampaya revenues amid an unresolved territorial dispute.
Audit Irregularities and COA Findings
The Commission on Audit (COA) flagged widespread irregularities in the implementation and reporting of the projects—some falsely marked as “100% complete.” The court noted that these discrepancies were backed by audit reports and corroborated through testimonies and falsified documents.
Among the irregularities: one project listed at ₱45 million was found to have noncompliant carpentry work and missing construction materials.
The court also found violations of procurement rules, including the failure to publish bidding notices, incomplete documentation, and questionable awarding of contracts.
“There was manifest partiality when accused Reyes, as Head of the Procuring Entity (HoPE), improperly evaluated the bid proposals, leading to the award of numerous or overlapping contracts to a single contractor using the same set of key personnel,” the decision read.
Convictions and Acquittals
Padua and Matudio were convicted in multiple counts for signing or approving falsified statements of work and inspection reports that led to overpayments. Several accused, however, were acquitted due to a lack of criminal intent or insufficient proof.
Cases were dismissed against several accused who died before the trial concluded, including former provincial engineer Charlie Factor, general services officer Ferdinand Dilig, and construction firm representatives.
Other cases were archived for accused persons still at large, including Elizabeth Tisara of DJ Builders Corp. and Teofilo Palanca Jr., the former provincial treasurer.
Link to Ortega Slay, Exile, and Return
The irregularities linked to the Malampaya projects were allegedly connected to the 2011 assassination of environmentalist broadcaster Gerry Ortega, a vocal critic of Reyes. Ortega was shot dead in Puerto Princesa City, and the confessed gunman identified Rodolfo Edrad Jr., Reyes’ former security aide, as the one who hired him. Edrad later turned state witness and implicated Reyes as the mastermind.
Reyes fled the country with his brother, former Coron Mayor Mario Reyes Jr., in 2012. They were later arrested in Thailand in 2015 for overstaying.
He was released in January 2018 after the Court of Appeals ruled in his favor, but that decision was reversed in November 2019. In March 2023, the Supreme Court ordered the Puerto Princesa Regional Trial Court to issue an arrest warrant and resume Reyes’ murder trial.
Reyes went into hiding until he surrendered to the National Bureau of Investigation in September 2024, reportedly while receiving hospital treatment in Metro Manila. He has remained under hospital arrest since then.
The Department of Justice has since confirmed its intention to revive the Ortega murder case, with Reyes now back in custody.
