A Regional Trial Court in Lapu-Lapu City, Cebu has granted bail to contractor Cezarah Rowena "Sarah" C. Discaya in the malversation case stemming from an allegedly non-existent ₱96.5-million flood control project in Davao Occidental, ruling that prosecutors have not yet presented sufficient evidence of her personal participation in the alleged conspiracy.
In a 15-page resolution dated July 7, 2026, RTC Branch 27 Presiding Judge Nelson G. Leyco fixed bail at ₱1 million for Discaya, the beneficial owner of St. Timothy Construction Corporation. The same resolution denied bail to eight other co-accused, keeping them in detention pending full trial.
Bail Fixed at ₱1 Million for Discaya, ₱300,000 for Finance Official
Judge Leyco also granted bail to Czar Ryan S. Ubungen, acting chief of the finance section of the Department of Public Works and Highways (DPWH) Davao Occidental District Engineering Office, setting his bail at ₱300,000.
The case, docketed as Case No. R-LLP-25-01890-CR, charges the accused with malversation of public funds or property through falsification under Article 217 in relation to Articles 171 and 172 of the Revised Penal Code. Because malversation involving the amount at issue is ordinarily non-bailable, all accused had to petition the court separately for provisional liberty.
The court held that the petitions of Ubungen and Discaya were "impressed with merit," citing the nature of the charge, the amount involved, and the evidence presented so far against each of the two accused.
No Witness Testified to Discaya's Direct Role in Scheme
The court found that the prosecution had not established Discaya's active, personal role in the alleged scheme. According to the ruling, the evidence highlighted by the prosecution is "not yet enough to prove Discaya's instrumental participation" in falsifying the project documents or in conspiring with her co-accused.
No witness testified during the bail hearing to Discaya's participation in the Davao Occidental project. A prosecution witness who had worked for St. Timothy Construction acknowledged having no personal knowledge of her involvement, the court noted.
The court reached a similar conclusion regarding Ubungen, whose alleged liability rests on his signatures appearing on disbursement vouchers rather than on the falsified certifications at the center of the case.
Eight Co-Accused Denied Bail After Evidence Found Strong
The court denied bail to the remaining accused, finding the evidence against them strong. Among those whose petitions were rejected were District Engineer Rodrigo C. Larete, Assistant District Engineer Michael P. Awa, and Joel M. Lumogdang, officer-in-charge of the construction section.
Also denied were Harold John E. Villaver, project engineer; Jafel C. Faunillan, OIC of the quality assurance section; Josephine C. Valdez, chief of the planning and design section; Ranulfo A. Flores, chief of the maintenance section; and Ma. Roma Angeline D. Rimando, the authorized managing officer of St. Timothy Construction, widely identified in earlier reports as the company's president.
According to the resolution, these accused were shown to have signed the false certifications and supporting documents that allowed public funds to be released.
Project Awarded in 2022, Certified Complete Despite Never Being Built
The Office of the Ombudsman filed malversation and graft charges in December 2025 over the flood control project in Davao Occidental that investigators concluded was paid for with public money despite never having been carried out.
The project was awarded to St. Timothy Construction Corporation in January 2022 and certified as completed in October of that year. Government investigators later found no such project on the ground, with documents processed and payments released as though the work had been properly delivered — resulting in the alleged misuse of ₱96.5 million in public funds.
Discaya, Rimando, and the eight DPWH officials pleaded not guilty at their arraignment in January 2026 before Branch 27, a court designated by the Supreme Court to hear infrastructure corruption cases. They were committed to the Lapu-Lapu City Jail in December 2025 after arrest warrants were issued. The case was originally filed before the Digos Regional Trial Court before being transferred to Lapu-Lapu City.
In April 2026, the Supreme Court sitting en banc dismissed Discaya's petition for certiorari challenging the Ombudsman's finding of probable cause, holding that the petition had been rendered moot.
Discaya Faces Separate Non-Bailable Case in Bulacan, Tax Charges at CTA
Bail in this case does not automatically mean release. Discaya faces a separate non-bailable case in Bulacan filed against her and her husband, Pacifico "Curlee" Discaya, and she separately faces four counts of tax evasion before the Court of Tax Appeals for alleged violations of Sections 254 and 255 of the National Internal Revenue Code.
Counsel for the DPWH officials whose petitions were denied said they were disappointed by the ruling and are weighing their options, including a motion for reconsideration and, if unsuccessful, a petition for certiorari. They said they remain confident in the evidence they intend to present at full trial. Discaya's counsel declined to comment on the resolution.
All accused have denied the allegations. The prosecution's case now proceeds to full trial, where the court will weigh the complete body of evidence rather than the preliminary showing required at a bail hearing.
By the Numbers
- ₱96.5 million — total public funds allegedly misused in the ghost flood control project
- ₱1 million — bail fixed for contractor Sarah Discaya
- ₱300,000 — bail fixed for DPWH finance official Czar Ryan Ubungen
- 8 — co-accused denied bail and kept in detention pending trial
- 15 pages — length of the court's bail resolution dated July 7, 2026
- 4 counts — separate tax evasion charges against Discaya before the Court of Tax Appeals
- January 2022 — month the flood control project was awarded to St. Timothy Construction
- October 2022 — month the project was falsely certified as completed
Why This Matters
The case involves ₱96.5 million in public funds allegedly paid out for a flood control infrastructure project that government investigators say was never built, illustrating the scale of potential losses from ghost projects in public works contracting. The court's split ruling — granting bail to two accused while detaining eight others — underscores the individualized evidentiary standard applied in non-bailable offenses, a significant procedural development as the case moves toward full trial. The outcome of the trial will have direct implications for accountability in DPWH contracting and the prosecution of corruption cases handled by the Ombudsman.
Photo credit: Photo from Ombudsman of the Philippines