The controversial construction firm owned by the Discaya couple, blacklisted in 2020 due to alleged involvement in government flood control anomalies, has made a stunning comeback by securing ₱1.6 billion worth of contracts in the province formerly overseen by ex-Department of Public Works and Highways (DPWH) chief Roger Mercado.
This development has reignited public concern about corruption, rigged bidding, and lack of accountability in Filipino public infrastructure projects, specifically flood control initiatives.
Background: The Discaya Firms’ Blacklisting and Controversies
The Discayas, Pacifico “Curlee” Discaya and Cezarah Rowena “Sarah” Discaya, have long been under the spotlight following disclosures of alleged bid rigging and collusion that helped their companies corner flood control contracts nationwide.
Despite a 2020 blacklisting of one of their primary firms, St. Gerrard Construction, a core Discaya-linked company, there has been regulatory and political concern over their continued presence and influence in government contracting.
The Philippine Contractors Accreditation Board (PCAB) revoked the licenses of nine firms connected to Sarah Discaya in September 2025, citing violations of the Government Procurement Reform Act and evidence of anti-competitive conduct—including multiple bidding under different firm names to monopolise flood control contracts.
These firms were said to have received billions in infrastructure contracts, some allegedly ghost or substandard projects.
The Resurgence of Discaya Firms During Roger Mercado’s Tenure
Amid ongoing investigations and license revocations, the Discaya companies reportedly secured their largest recent haul—amounting to ₱1.6 billion worth of government contracts—in Southern Leyte, a province formerly led politically by Roger Mercado, who served as DPWH Secretary after Mark Villar.
Public reports indicate that during Mercado’s leadership, regulatory oversight was loose enough to allow banned and blacklisted firms like those owned by the Discaya family to continue winning lucrative contracts.
The nexus between political influence and contract awarding has raised alarms about governance integrity, with opposition figures and advocacy groups calling for deeper probes into how the Discayas’ banned firms still maneuver public procurement.
Allegations and Investigations
Multiple Senate hearings and Department of Justice (DOJ) complaints have focused on bid-rigging and corrupt practices involving Discaya-linked firms and some DPWH officials. Testimonies revealed:
- Coordinated bidding strategies with intentionally suppressed competition.
- Kickbacks and commissions paid to officials and lawmakers to guarantee contract awards.
- Falsified project accomplishment reports triggering government payments despite defective or non-existent work.
Secretary Vince Dizon of DPWH has publicly confirmed gestures toward P300 billion fines against the Discayas for irregular flood control contract awards, noting that maximum penalties exceed contract values by a wide margin.
Table: Overview of Discaya-Linked Firms and Controversies (2025)
| Firm Name | License Status | Alleged Issues | Contract Value (₱ Billion) | Related Political Figures |
| St. Gerrard Construction | Blacklisted 2020 | Bid-rigging, substandard work | Included in P77.9B total* | Roger Mercado connection claimed |
| Alpha and Omega General Contractor | License revoked Sept 2025 | Collusion, multiple bidding | Part of ₱1.6B Southern Leyte contracts | Political patronage suspected |
| St. Timothy Construction | License revoked Sept 2025 | Rigged bids, ghost projects | Included in national flood contracts | Linked to DPWH officials |
| Great Pacific Builders | License revoked Sept 2025 | Questionable project quality | National contracts | Accused of collusion |
- Contract value noted in multiple flood mitigation projects across regions, including Southern Leyte and Bulacan.
Governance and Accountability Measures
Following these revelations:
- The PCAB moved decisively to revoke Discaya company licenses effective immediately.
- The National Bureau of Investigation (NBI) and DOJ were tasked to probe possible criminal charges including graft, malversation, falsification of public documents, and violation of procurement laws.
- The DPWH launched an internal audit, while Secretary Vince Dizon pledged to prevent any further contract awards to firms involved in rigging and corruption scandals.
The moves signal a critical government effort to restore public trust and ensure that flood control infrastructure investments genuinely serve their purpose amid rising climate-change-induced flood risks in the Philippines.
Political Fallout and Public Reaction
The resurgence of banned firms has sparked outrage among activists, opposition legislators, and citizen watchdog groups.
Rep. Terry Ridon and other critics emphasize the need for systemic reforms in public procurement and transparent enforcement actions against collusive behavior.
Pasig Mayor Vico Sotto, a known critic of the Discayas, condemned the awarding of contracts to blacklisted firms, calling for stronger governance reforms especially in flood mitigation projects crucial for vulnerable communities.
Consequences for Future Infrastructure Projects
The scandal highlights ongoing vulnerabilities in the Philippine government procurement system and the challenge of balancing infrastructure development urgency with transparent, ethical administration.
The Discayas’ case underscores:
- The necessity of tighter contractor vetting and monitoring.
- Full transparency in bidding procedures.
- Stricter sanctions and enforcement for violators.
- Enhanced cooperation between entities like PCAB, DPWH, COA, and DOJ.
Such reforms are pivotal as the country faces increasing infrastructure demands from growing urban populations and more frequent weather extremes.
Frequently Asked Questions (FAQs)
1. Why was the Discaya firm banned and yet still awarded contracts?
The firms were blacklisted due to irregularities including bid rigging and substandard projects, but political connections and regulatory weaknesses enabled continued contract wins, especially during ex-DPWH chief Mercado’s tenure.
2. How much government money has been awarded to Discaya-linked firms?
Discaya firms reportedly secured flood control contracts worth approximately ₱77.9 billion from 2016 to 2025, with ₱1.6 billion in recent deals in Southern Leyte alone.
3. What are the allegations against these firms?
Allegations include rigged bidding processes, submission of falsified accomplishment reports, collusion among sister companies bidding for the same contracts, and payment of kickbacks to officials.
4. What actions have been taken against the Discaya companies?
PCAB revoked licenses of nine firms, DOJ and NBI launched investigations, and DPWH promised to prevent further contract awards and impose penalties including potential fines up to ₱300 billion.
5. How does this scandal affect public trust and infrastructure?
It damages confidence in government infrastructure projects, risks wasting taxpayer money, delays critical flood control projects, and underscores the urgent need for transparency and systemic reform.
