From my Trial Techniques blog:
Rule 130, sec. 32 of the Rules on Evidence provides that "an act or declaration made in the presence and within the hearing or observation of a party who does or says nothing when the act or declaration is such as naturally to call for action or comment if not true, and when proper and possible for him to do so, may be given in evidence against him." This admission is what is commonly referred to as an "admission by silence"
The reason behind it is quite simple and straightforward. It is based on human experience, as most of the rules on evidence are. The admission is premised on the natural and human instinct to defend oneself from any act or declaration that would be prejudicial to one's interest if made within earshot or in one's presence and when there is an opportunity to do so. If the act or declaration is such that it would have called for an automatic response and no response was made, then the silence is considered an admission of that fact.
A common analogy given is a bad joke that goes: Person A shouts at Person B, "Hey, you stupid jerk!" Person B retorts angrily, "Hey, I'm not stupid." As with most analogies, this one limps, though I think the point is made.
A more precise example, not analogy, perhaps would be Justice Ruben Reyes's initial silence to insinuations and loud hints that his office was behind the leak of the umpromulgated draft decision in the Limkaichong election case pending before the Supreme Court, which has led to a new controversy with certain quarters insisting on bringing in the Chief Justice.
One would think that Justice Reyes would have been so deafening in his protestations of innocence in the face of such serious insinuations. Yet, from all official and unofficial reports, his silence was the only thing that was deafening. It was only much later, ironically only when media started to pick it up, that Justice Reyes was loudly protesting his innocence (conveniently so, he hinted that any liability might have been from his staff; respondeat superior, Mr. Justice?)
Silence is often a good thing because it places many things in perspective. The eloquence of the silence that accompanied the press conference of Atty. Biraogo's announcement of the leaked draft--which naturally would have pointed only to Justice Reyes's Chambers--speaks volumes in this case.