A Cebu court has allowed a construction contractor to post bail in a major public funds malversation case, even as eight of her co-accused remain locked up, after finding that prosecutors have yet to sufficiently establish her direct involvement in an allegedly fabricated flood control project worth ₱96.5 million.
The Regional Trial Court Branch 27 in Lapu-Lapu City issued a 15-page resolution on July 7, 2026, granting provisional liberty to Cezarah Rowena "Sarah" C. Discaya, identified as the beneficial owner of St. Timothy Construction Corporation. Presiding Judge Nelson G. Leyco fixed her bail at ₱1 million, according to court records.
Finance Official Also Granted Bail at Lower Amount
The same resolution extended bail relief to a second accused: Czar Ryan S. Ubungen, who served as acting chief of the finance section of the Department of Public Works and Highways (DPWH) Davao Occidental District Engineering Office. Judge Leyco set Ubungen's bail at ₱300,000, court records show.
The court described both petitions as "impressed with merit," taking into account the specific nature of the charges, the total amount involved, and the prosecution evidence presented against each of the two individuals at the bail hearing stage.
The charges in Case No. R-LLP-25-01890-CR involve malversation of public funds or property through falsification under Article 217 in relation to Articles 171 and 172 of the Revised Penal Code. Because the offense ordinarily carries a non-bailable classification given the scale of the alleged misuse, all accused were required to individually petition the court for provisional release.
Prosecution Falls Short on Discaya's Personal Involvement
Central to the court's decision on Discaya was the absence of direct evidence tying her personally to the alleged scheme. The court ruled that the prosecution's evidence was "not yet enough to prove Discaya's instrumental participation" in the falsification of project documents or in any conspiracy with her co-accused, court records indicate.
No witness who testified at the bail hearing spoke to any direct participation by Discaya in the Davao Occidental project. Notably, according to the court's resolution, a prosecution witness who had worked under St. Timothy Construction openly admitted having no personal knowledge of her specific involvement in the transactions at the center of the case.
With respect to Ubungen, the court noted that his alleged culpability was tied mainly to his signatures appearing on disbursement vouchers — documents that, while related to the case, were distinct from the falsified certifications that prosecutors identified as the core instruments of the fraud.
Eight Remaining Accused Kept in Detention After Bail Denied
While Discaya and Ubungen were granted relief, the court found the prosecution's evidence against the remaining eight accused to be strong enough to justify continued detention. Among those denied bail, according to the resolution, were District Engineer Rodrigo C. Larete, Assistant District Engineer Michael P. Awa, and Joel M. Lumogdang, officer-in-charge of the construction section.
The resolution also denied bail to Harold John E. Villaver, identified as 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 referred to in earlier reports as the company's president.
The court found, based on the resolution, that these eight individuals had affixed their signatures to false certifications and supporting disbursement documents that enabled government payments to be released for work that was never done.
Project Awarded in 2022, Certified Complete — But Never Built
The Office of the Ombudsman filed malversation and graft charges in December 2025 in connection with the flood control infrastructure project in Davao Occidental, which government investigators concluded was paid for entirely using public money despite no actual construction ever taking place on the ground.
St. Timothy Construction Corporation was awarded the project in January 2022. By October 2022, documents in the government's files certified the project as completed. However, when investigators examined the site, they found no evidence the flood control project had ever been built — yet payments had been processed and released as if the work had been properly delivered, resulting in the alleged loss of ₱96.5 million in public funds.
All accused — Discaya, Rimando, and the eight DPWH officials — entered pleas of not guilty at their arraignment in January 2026 before Branch 27, a court designated by the Supreme Court to hear infrastructure corruption cases. They had been committed to the Lapu-Lapu City Jail in December 2025 following the issuance of arrest warrants. The case was originally filed before the Digos Regional Trial Court before being re-raffled to Lapu-Lapu City.
Earlier in April 2026, the Supreme Court sitting en banc dismissed a petition for certiorari filed by Discaya that challenged the Ombudsman's finding of probable cause, ruling that the petition had already been rendered moot, according to court records.
Discaya Still Faces Separate Cases in Bulacan and Tax Court
Bail in the Lapu-Lapu case does not automatically translate to freedom for Discaya. She faces a separate non-bailable case filed in Bulacan involving both her and her husband, Pacifico "Curlee" Discaya. Additionally, she is confronting 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.
Lawyers for the DPWH officials whose bail petitions were rejected said they were disappointed with the outcome and are reviewing their legal options, which could include a motion for reconsideration or, if that fails, a petition for certiorari before a higher court. They maintained confidence in the evidence they intend to present when the case proceeds to full trial. Discaya's legal counsel declined to issue any statement regarding the resolution.
All of the accused have denied the allegations against them. The case now moves toward a full trial, where the court will evaluate the complete evidentiary record — a significantly higher standard than the preliminary showing assessed at a bail hearing.
By the Numbers
- ₱96.5 million — total public funds allegedly lost in the ghost flood control project
- ₱1 million — bail amount set for contractor Sarah Discaya
- ₱300,000 — bail amount set for DPWH finance section chief Czar Ryan Ubungen
- 8 — co-accused denied bail and ordered to remain in detention pending trial
- 15 pages — length of the court resolution issued on July 7, 2026
- 4 counts — tax evasion charges against Discaya pending before the Court of Tax Appeals
- January 2022 — when the flood control project was awarded to St. Timothy Construction
- October 2022 — when the project was falsely certified as completed
Why This Matters
The alleged disbursement of ₱96.5 million for a flood control project that investigators say was never actually constructed highlights how ghost projects can drain public infrastructure funds through document falsification at multiple levels of government. The court's split ruling — freeing two accused on bail while detaining eight others — demonstrates how courts apply individualized evidentiary assessments in non-bailable cases, a procedurally significant distinction as the case heads toward full trial. A conviction or acquittal will carry broad implications for how the Ombudsman and the judiciary hold DPWH contractors and district engineering officials accountable for public works fraud.
Source: Originally reported by Balita / breakingnewsnegros.com