The Supreme Court has ruled that a government official is not required to declare in their Statement of Assets, Liabilities, and Net Worth (SALN) the assets of their spouse if their marriage is governed by a complete separation of property. This decision clarifies that the mandatory SALN disclosure, aimed at preventing corruption, does not extend to properties over which the official has no control or claim due to their marital property regime. This ruling ensures fairness and recognizes the distinct financial autonomy of spouses in such marriages.

Beyond the Form: When Marriage Laws Define SALN Requirements

Estrella Abid-Babano, a DepEd Regional Director, faced administrative charges for failing to disclose in her SALN motor vehicles owned by her husband. The Presidential Anti-Graft Commission (PAGC) found her guilty of simple neglect of duty, a decision later affirmed by the Office of the President (OP) and the Court of Appeals (CA). Babano argued that as a Muslim whose marriage was governed by the Code of Muslim Personal Laws, she was not obligated to include her husband’s separate properties in her SALN. This case highlights the intersection of family law and anti-corruption measures, specifically questioning whether SALN disclosure requirements should uniformly apply regardless of the spouses’ property regime.

The requirement for filing a SALN is enshrined in the 1987 Constitution and implemented through Republic Act No. 6713, also known as the Code of Conduct and Ethical Standards for Public Officials and Employees. Section 8 of R.A. 6713 mandates every government official or employee to disclose their assets, liabilities, net worth, and financial interests, including those of their spouse and unmarried children under 18 years of age living in their households. This requirement aims to promote transparency and deter corruption by providing a mechanism to monitor the financial dealings of public servants.

However, the Supreme Court recognized an exception to this broad disclosure requirement. It acknowledged that the Code of Muslim Personal Laws establishes a regime of complete separation of property for Muslim spouses unless they stipulate otherwise in their marriage settlements. Article 38 of the Code states that, absent any agreement, the property relations between Muslim spouses “shall be governed by the regime of complete separation of property.”

This separation means that each spouse retains full ownership and control over their individual property, as elaborated in Article 42: “Each spouse shall own, possess, administer, enjoy and dispose of his or her own exclusive estate even without the consent of the other.” This principle is crucial because it underscores the independence of each spouse’s financial affairs. Consequently, the Court reasoned, requiring a public official to declare the separate properties of a spouse over which they have no control or claim would be both inequitable and impractical.

The Court also drew parallels with similar provisions in the Civil Code and the Family Code applicable to non-Muslim marriages under a regime of complete separation of property. Article 214 of the Civil Code and Article 145 of the Family Code both affirm that each spouse owns and manages their separate estate without the need for the other’s consent. These provisions highlight the complete dominion each spouse exercises over their exclusive properties, reinforcing the idea that such properties should not be subject to mandatory disclosure in the other spouse’s SALN.

Furthermore, the Supreme Court considered the legislative intent behind the SALN disclosure requirement. It emphasized that the primary objective is to prevent the concealment of ill-gotten wealth by public officials. Quoting Office of the Ombudsman v. Valencia, the Court reiterated that SALNs serve as a “valid check and balance mechanism to verify undisclosed properties and wealth.” However, in cases where spouses have complete separation of property, the risk of concealing wealth through the spouse diminishes significantly, as each spouse’s assets are independently owned and managed.

Section 8 above, speaks of unlawful acquisition of wealth, the evil sought to be suppressed and avoided, and Section 7, which mandates full disclosure of wealth in the SALN, is a means of preventing said evil and is aimed particularly at curtailing and minimizing, the opportunities for official corruption and maintaining a standard of honesty in the public service. “Unexplained” matter normally results from “non-disclosure” or concealment of vital facts. SALN, which all public officials and employees are mandated to file, are the means to achieve the policy of accountability of all public officers and employees in the government. By the SALN, the public [is] able to monitor movement in the fortune of a public official; it is a valid check and balance mechanism to verify undisclosed properties and wealth.

The Court also referred to Senator Rene Saguisag’s sponsorship speech during the enactment of Republic Act No. 6713, which rationalized the exclusion of properties of children 18 years and older from the SALN disclosure requirement. This exclusion is rooted in the concept of emancipation, wherein children attaining majority age are legally capable of holding property independently from their parents. Applying a similar rationale to spouses with complete separation of property, the Court concluded that the same principle of independent ownership should exempt their separate assets from the mandatory disclosure requirement.

Justice Leonen’s concurring opinion added a crucial dimension to the discussion, emphasizing the importance of the review and compliance procedure outlined in Section 10 of Republic Act No. 6713. This procedure requires government offices to establish committees that review SALNs for completeness and accuracy, giving public officers an opportunity to correct any deficiencies before being subjected to administrative or criminal liability. As Justice Leonen noted, the records did not show that Babano’s case underwent this review process, further supporting the decision to dismiss the charges against her.

The Supreme Court’s decision in this case reflects a nuanced understanding of the interplay between anti-corruption laws and family law principles. By recognizing the distinct property rights of spouses in marriages governed by complete separation of property, the Court has ensured that SALN disclosure requirements are applied fairly and consistently with the underlying legislative intent.

FAQs

What was the key issue in this case?	The central issue was whether a government official is required to disclose in their SALN the assets of their spouse when their marriage is governed by a complete separation of property.
What is a SALN?	SALN stands for Statement of Assets, Liabilities, and Net Worth. It is a document that government officials and employees are required to file to disclose their financial interests.
What is complete separation of property?	Complete separation of property is a marital property regime where each spouse owns, controls, and manages their assets independently, without the need for the other spouse’s consent.
What did the Court rule?	The Supreme Court ruled that a government official is not required to include in their SALN the assets of their spouse if they have a complete separation of property.
Why did the Court make this ruling?	The Court reasoned that requiring disclosure of separately owned assets would be inequitable, impractical, and inconsistent with the legislative intent behind SALN laws, which primarily aim to prevent the concealment of ill-gotten wealth.
What is the Code of Muslim Personal Laws?	The Code of Muslim Personal Laws is a law in the Philippines that governs personal status, domestic relations, and property relations of Muslims. It provides for a regime of complete separation of property for Muslim spouses unless otherwise stipulated.
What is the review and compliance procedure mentioned in the case?	The review and compliance procedure, as per Republic Act No. 6713, requires government offices to review SALNs for completeness and accuracy, giving public officers an opportunity to correct any deficiencies before penalties are imposed.
What was the original charge against the petitioner?	The petitioner, Estrella Abid-Babano, was initially charged with simple neglect of duty for failing to disclose in her SALN motor vehicles owned by her husband.
Does this ruling apply to non-Muslims?	Yes, the ruling’s rationale extends to non-Muslim marriages governed by a regime of complete separation of property under the Civil Code or the Family Code.

This landmark decision provides clarity on the scope of SALN disclosure requirements, ensuring fairness and consistency in their application. By acknowledging the distinct property rights of spouses under different marital regimes, the Court has struck a balance between promoting transparency and respecting individual financial autonomy.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Estrella Abid-Babano v. Executive Secretary, G.R. No. 201176, August 28, 2019