* Lapu-Lapu City RTC Branch 27 Judge Nelson Leyco granted P1 million bail to contractor Cezarah Rowena “Sarah” Discaya and P300,000 bail to DPWH official Czar Ryan Ubungen in a P96.5-million malversation case.
* The court ruled that prosecution evidence showed strong proof of a ghost flood control project along the Culaman River, but was currently insufficient to establish Discaya and Ubungen’s direct criminal participation.
* Judge Leyco denied bail to St. Timothy Construction president Ma. Roma Angeline Rimando and seven DPWH Davao Occidental officials, citing strong evidence of guilt against them as the case proceeds to trial.
A REGIONAL Trial Court (RTC) in Lapu-Lapu City has allowed embattled contractor Cezarah Rowena “Sarah” Discaya to post P1 million bail in a P96.5-million malversation case involving an alleged ghost flood control project along the Culaman River in Jose Abad Santos, Davao Occidental.
Prosecutors said St. Timothy Construction Corp. and officials of the Department of Public Works and Highways (DPWH) made it appear that the project had been completed in 2022, leading to the release of public funds.
RTC Branch 27 Presiding Judge Nelson Leyco granted Discaya’s petition for bail in a 15-page resolution dated Tuesday, July 7, 2026. He set her bail at P1 million.
Leyco also allowed Czar Ryan Ubungen, acting chief of the finance section of the DPWH Davao Occidental District Engineering Office, to post bail of P300,000.
The ruling does not decide whether Discaya or Ubungen is guilty or innocent. It only means the court found the evidence against them insufficient, for now, to deny bail while the case is pending.
The questioned project was in Davao Occidental, but the case is being handled by the RTC Branch 27 because of Supreme Court guidelines on infrastructure-related corruption cases.
The cases were originally filed in Malita, Davao Occidental, then transferred to Lapu-Lapu City. Supreme Court spokesperson Camille Ting said corruption-related cases involving infrastructure projects should be forwarded to the nearest designated anti-graft court of the nearest judicial region.
Basis for Discaya’s bail
Discaya was accused of being the true and beneficial owner of St. Timothy Construction Corp., the contractor for the questioned project identified as Contract ID No. 22LE0029.
In his resolution, Leyco said the prosecution’s evidence tended to show Discaya’s link to the company, but he added that ownership, a corporate position or a connection to the contractor is not enough by itself to establish criminal liability.
Citing rulings from the Supreme Court (SC), Leyco said corporate officers, directors or shareholders may be held criminally liable only when there is proof that they actively joined the wrongful act or had the power to prevent it.
“To be held criminally liable for the acts of a corporation, there must be a showing that its officers, directors, and shareholders actively participated in or had the power to prevent the wrongful act,” Leyco said.
The presiding judge said no prosecution witness directly testified that Discaya took part in the Culaman River project, noting that two former St. Timothy employees denied personal knowledge of her alleged participation and said they had no role in the bidding, document preparation, notice of award, construction, or request for funds to buy bid documents for the project.
Because of this, Leyco said Discaya must be allowed to exercise her constitutional right to bail while the trial continues.
“At this point in time, the pieces of evidence highlighted by the prosecution are not yet enough to prove Discaya’s instrumental participation in committing the criminal act of falsifying the documents, or in conspiring with the other accused,” the resolution read.
Why Ubungen was also allowed bail
For Ubungen, Leyco said the prosecution relied mainly on his signatures on disbursement vouchers and financial certifications. These included certifications stating “cash available” and “supporting documents complete and amount claimed proper.”
Leyco said those signatures were not strong enough, at this point, to show that Ubungen conspired with the other accused in falsifying documents on the existence of the revetment.
“However, nothing in the said vouchers is strong enough to implicate him, for now, in the alleged conspiracy,” the resolution read.
Leyco said the documents did not sufficiently show that Ubungen was “in cahoots” with other officials. He, however, still found strong evidence that the flood control project was a ghost project.
Who was denied bail
RTC Branch 27 denied bail to St. Timothy Construction president Ma. Roma Angeline Rimando and seven DPWH officials after finding that the evidence of guilt against them remained strong.
The DPWH officials denied bail were District Engineer Rodrigo Larete, Assistant District Engineer Michael Awa, Construction Section officer in charge Joel Lumogdang, Project Engineer Harold John Villaver, Quality Assurance Section officer in charge Jafel Faunillan, Planning and Design Section chief Josephine Valdez and Maintenance Section chief Ranulfo Flores.
They are among the accused facing charges of malversation of public funds or property through falsification of public documents under Article 217 in relation to Articles 171 and 172 of the Revised Penal Code.
“Strong evidence of a ghost project”
The grant of bail to Discaya and Ubungen did not mean the court rejected the prosecution’s claim that the flood control project was fake.
On that point, Leyco said the evidence was strong for purposes of the bail proceedings.
“The central issue is whether the flood control project was constructed in the year 2022. The evidence shows that it was not,” Leyco said.
“At this stage, the prosecution was able to sufficiently establish, and strongly demonstrate through evidence, that it is a ghost project,” he added.
Leyco cited several circumstances. The project was reported to be 50 percent complete after only four days. The court also cited a 400-meter difference between the approved starting point and the location shown in the as-built plan.
An as-built plan is supposed to show what was actually constructed. In this case, the court said the plan appeared to carry nearly the same technical details as the original design despite an alleged change in location.
Leyco also cited investigators’ observation that the structure later pointed to by the accused appeared newly built. Some portions were still exposed, the cement color appeared consistent with newly poured concrete, and there were no remnants of an old revetment structure.
Those findings supported the prosecution’s claim that the structure was built only in 2025, after the flood control scandal became public.
Why the flood explanation did not persuade the court
The accused argued that the project may have been completed in 2022 but later destroyed by floods. Leyco rejected that argument at the bail stage.
The judge said the project documents showed that the structure was designed to withstand major flooding. If the revetment had been built according to the plan and specifications certified by the accused, the court said, it should have survived flash floods and heavy rains.
“If this project was indeed constructed according to the plan and specifications, as expressly attested to by the accused in their certifications, then it should have survived those flash floods and torrential rains,” Leyco said.
What happens next
The case will proceed to trial. Leyco said the bail ruling does not decide guilt or innocence: granting bail does not mean the prosecution has lost, and denying bail does not guarantee a conviction.
“A full-blown trial on the merits remains to be the proper forum where all parties may present their complete evidence, and where criminal liability is finally adjudicated,” the court said.
Prosecutors must still prove guilt beyond reasonable doubt. / DPC