Public Bidding Does Not Exempt Takay Projects From the Election Spending Ban

Every election season, government offices face the same question: may a public works project that went through a public bidding still be paid for during the election period? In Leyaley v. Commission on Elections (G.R. No. 160061, October 11, 2006), the Supreme Court answered no when the work was actually undertaken under the takay or paquiao system. The ruling matters to public officials, contractors, and auditors because it fixes a limit on how far a valid bidding can shield a disbursement from the election spending ban.

What the case was about

Leonardo Leyaley was the Officer-in-Charge and District Engineer of the Mountain Province Engineering District of the Department of Public Works and Highways in Bontoc. For the May 11, 1998 national and local elections, complainants Sario Malinias and Tony Oppas alleged that P14,805,000 in public funds was released to the district office and disbursed by Leyaley on May 6, 1998, days before the polls.

Leyaley was charged with violating Section 261(v) of Batas Pambansa Blg. 881, the Omnibus Election Code. His defense was straightforward: the projects had been awarded after a public bidding held before the election ban took effect, so the payments fell within the exception for work awarded by contract through a bidding conducted ahead of the ban. He also said he had obtained an exemption from the Comelec Regional Director for the Cordillera Administrative Region.

The Comelec Law Department agreed with him and recommended dismissal for lack of probable cause. The Comelec En Banc reversed that recommendation, directed that a criminal information be filed, and later denied reconsideration. Leyaley elevated the matter to the Supreme Court through a petition for certiorari.

The election ban on releases of public funds

The decision explains that Section 261(v) prohibits a public official or employee from releasing, disbursing, or expending public funds for any and all kinds of public works within 45 days before a regular election and 30 days before a special election. The provision then lists exceptions. One of them covers work undertaken by contract through a public bidding held, or a negotiated contract awarded, before the 45-day period.

The decision does not treat that exception as open-ended. It also provides that work undertaken under the so-called takay or paquiao system is not considered work contract for purposes of the section. The full statutory wording is not reproduced here; the discussion below tracks the Comelec and Court's description of the provision.

Why the public bidding did not save the project

The Comelec En Banc found that the Mountain Province projects were in fact takay or paquiao projects. Because the law itself excludes such work from the category of work contract, the bidding exception could not apply to them. The fact that a bidding was held before the ban took effect did not change the nature of the work performed.

The Comelec added a practical reason: reading the exception the other way would let anyone defeat the prohibition simply by holding a public bidding. The Supreme Court found this conclusion supported by logical reasoning and firmly based on the wording of Section 261(v), and saw no grave abuse of discretion on the part of the Comelec.

The other defenses that failed

Leyaley also invoked the exemption for ongoing public works projects commenced before the campaign period. That argument collapsed on the facts. The Comelec found that the projects had already been completed on January 29, 1998, before the campaign period began. Completed work is not ongoing work, so the exemption did not reach it.

His claim of a Comelec exemption fared no better. According to the Comelec, the exemption granted by the Regional Director was an exemption from the public works ban, not from the prohibition on the release, disbursement, or expenditure of public funds. He was charged under one paragraph of Section 261, not the other, so the exemption he relied on did not cover the act complained of.

Why the Supreme Court dismissed the petition

The Court began from the settled rule that Comelec decisions are not disturbed absent grave abuse of discretion. It found no showing of capricious, arbitrary, or whimsical exercise of power. Leyaley's arguments, the Court said, went to the correctness of the Comelec's interpretation, which is an error of judgment rather than an error of jurisdiction. Certiorari is designed to correct errors of jurisdiction, not errors of judgment.

The Court also noted that criminal informations had already been filed with the Regional Trial Court of Bontoc, Mountain Province in January 2004 on the same charges. Once an information is filed in court, the disposition of the case — dismissal, conviction, or acquittal — rests with the trial court. The petition had therefore become moot and academic, and the petition was dismissed.

Practical takeaways

• A public bidding before the election period does not by itself exempt a public works payment from the election ban if the work was done under the takay or paquiao system.
• The ban covers releases, disbursements, and expenditures of public funds for public works within 45 days before a regular election and 30 days before a special election.
• The ongoing-projects exemption applies to work still ongoing and commenced before the campaign period — not to projects already completed.
• An exemption from the public works ban is not the same as an exemption from the ban on releasing or spending public funds. Match the exemption to the specific act charged.
• Once an information is filed in court, the Comelec's finding of probable cause is generally no longer reviewable by certiorari; the trial court controls the case.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.