MANILA, Philippines — Supreme Court (SC) has upheld the graft conviction of former Pagsanjan, Laguna Mayor Jeorge “ER” Ejercito Estregan for illegally awarding an insurance contract without public bidding.

In a decision penned by Associate Justice Ricardo R. Rosario, the SC’s First Division found Ejercito and Marilyn M. Bruel, owner of First Rapids Care Ventures (FRCV), guilty of violating Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act. Both were sentenced to up to eight years in prison and perpetually disqualified from holding public office.

The ruling stemmed from a complaint by the United Boatmen Association of Pagsanjan (UBAP), which accused Ejercito and other officials of granting FRCV a contract without the required public bidding. The agreement allowed FRCV to provide accident insurance to tourists and boatmen at the Pagsanjan Gorge Tourist Zone, despite lacking a license from the Insurance Commission.

“The law is clear on procurement rules—contracts for goods and services must undergo competitive bidding to ensure transparency and fairness,” the SC stated in its ruling.

The Office of the Ombudsman charged Ejercito, Bruel, and several local officials before the Sandiganbayan, which convicted them. However, the vice mayor was acquitted due to insufficient evidence.

Ejercito defended his actions before the SC, claiming FRCV was the only qualified provider, making public bidding unnecessary. Bruel argued that the contract was for special services rather than insurance.

The SC rejected these arguments, ruling that the contract involved insurance, which is classified as “goods” under the Government Procurement Reform Act and thus subject to competitive bidding. The Court emphasized that competitive bidding ensures the best possible deal for the public while preventing favoritism and corruption.

“Exceptions to bidding are strictly regulated and apply only in rare circumstances, such as emergencies or multiple failed bidding attempts—none of which occurred in this case,” the SC ruled.

Instead of holding a competitive process, Ejercito awarded the contract through “negotiated procurement” without valid justification, giving FRCV an unfair advantage.

Under RA 3019, public officials are prohibited from granting private entities undue benefits through bias, bad faith, or negligence. The SC found that Ejercito knowingly bypassed legal procurement procedures and ignored clear red flags regarding FRCV’s legitimacy.

“By purposely sparing FRCV from the rigors of the procurement law and consciously turning a blind eye to irregularities, [Ejercito] gave it unwarranted benefit, advantage, or preference,” the SC ruled.

Records show FRCV lacked a Certificate of Authority from the Insurance Commission and was registered with the Department of Trade and Industry and the Bureau of Internal Revenue just five days before offering its services to Ejercito. This led the Court to conclude that FRCV was created solely to service Pagsanjan’s insurance needs despite lacking relevant experience.

Bruel was also found guilty of misrepresenting FRCV’s qualifications and conspiring with Ejercito to secure the contract. She falsely claimed FRCV could provide insurance services, even though its tax registration categorized it as a computer business.

Meanwhile, the SC acquitted the Sangguniang Bayan members, ruling that while their ordinance allowed negotiated procurement, it did not explicitly prohibit competitive bidding. As a result, the Court found no proof of favoritism or bad faith on their part.