Malicious Mischief

I need would like to ask some advice on how to handle a malicious mischief complaint.

Our next door neighbor is accusing my husband of causing scratches to his car and formalize his complain thru our barangay.
Of course, my husband did not do his allegations.
We already attended the 2 meetings in our barangay, first with the barangay captain and the second, with the "lupon" and still no resolution.

Complainant wants my husband to admit that he purposely scratched his car stating that he saw him walking near his car in our common garage at 1:30-2:00am of May 16.

In that 2 seperate meetings we attended, all we asked from him is to show evidence to prove that my husband vandalized his vehicle. Of course, complainant had nothing to show.

I know my husband's conscience is clear and this is a weak case because he has no proof to show but the "abala" is really getting on my nerves. My husband has been suffering anxiety because of the harassment this case is bringing him.

I want to know:

a. How does the barangay deal with this kind of case? Do they have the authority to dismiss a case or they really just there to make to parties settle?
b. If this case will be dismissed, can I file a complaint against our neighbor for causing harassment not only to my husband but to my whole family?

Please advise...

(1) Cases are not "filed" with the Barangay. Cases are just referred to the Barangay for the parties to have a venue to talk and discuss a possible settlement that will eventually avoid litigation. So it is the task of the Barangay Chairman to exert effort to enable the parties to reach an agreement. But if the parties failed to settle, then the Barangay issues a Certificate to File Action to the complaining party. A Certificate to File Action is sometimes a pre-requisite before a party can file a case in court where both parties are residents of the same barangay.

(2) Because cases are not filed with the Barangay, the Barangay does not dismiss cases. As discussed, the Barangay merely issues a Certificate to File Action. If you felt that you were "harassed", you can file a civil case for damages and/or a criminal case for unjust vexation.

By the way, if your neighbor fails to file a malicios mischief complaint with the Prosecutor's Office within the prescribed period (if I remember it right, I think 2 months from the date the alleged criminal act was committed since it is only a light offense), then the crimininal liability will prescribe and your husband can no longer be charged with the said crime.