In Barangay Lagtang, Talisay City alone, several major projects are ongoing, including the construction of four flood control structures along both sides of the Mananga River, each costing ₱144.75 million under QM Builders. | Photo by Aldo Banaynal
CEBU CITY, PHILIPPINES — Senators have started looking into suspected ghost flood-control projects awarded to favored contractors, including firms with as little as ₱250,000 to ₱1 million in paid-up capital but managed to secure billions in contracts in just three years.
At the Senate Blue Ribbon Committee hearing yesterday, Senator Sherwin Gatchalian flagged Cebu-based QM Builders—one of 15 contractors that cornered a quarter of the ₱545 billion flood-control budget since 2022—for bagging 93 projects worth ₱7.38 billion despite having only ₱1.25 million in paid-up capital.
Among QM Builders’ contracts are the construction of flood control along Mananga River (Right Side) at Sitio Tigib, Barangay Lagtang, Talisay City, Cebu (Package 2)- P144,750,000; construction of revetment wall structure along Mananga River (Right Side), Sitio Bogo, Barangay Camp 4, Talisay City, Cebu- P148,500,000; construction of revetment wall structure along Mananga River (Left Side), Sitio Bogo, Barangay Camp 4, Talisay City, Cebu- P148,500,000; construction of revetment wall structure along Mananga River (Right Side), Purok Narra, Barangay Jaclupan, Talisay City, Cebu- P138,600,000; construction of flood control along Mananga River (Left Side) at Sitio Tigib, Barangay Lagtang, Talisay City, Cebu (Package 4)- P144,750,000; construction of flood control along Mananga River (Right Side) at Sitio Tigib, Barangay Lagtang, Talisay City, Cebu (Package 3)- P144,750,000; construction of flood control along Mananga River (Left Side) at Sitio Tigib, Barangay Lagtang, Talisay City, Cebu (Package 3)- P144,750,000; and construction of Ocaña River flood control structure, Carcar City, Cebu-P120,625,000.
Gatchalian said the Philippine Contractors Accreditation Board requires at least ₱1 billion capitalization to qualify for contracts worth ₱450 million and above.
“The Department of Public Works and Highways (DPWH) is awarding contracts to undercapitalized corporations. If a corporation is undercapitalized, and they scrimped on the projects, obviously they are doomed to fail,” Gatchalian said.
The senator warned that awarding “big-ticket projects to undercapitalized corporations would surely result in substandard flood-control infrastructure.”
“In my opinion, there is some form of collusion, or some form of corruption, in awarding contracts to contractors not capitalized adequately,” he added. Of the 15 contractors summoned, only 11 responded, and just seven attended the hearing, including QM Builders’ owner Allan Quirante.
DPWH Secretary Manuel Bonoan defended the agency’s process, saying contracts are awarded based on technical capabilities and Net Financial Contracting Capacity (NFCC), not capitalization.
NFCC, he explained, is computed by subtracting current liabilities from current assets, then multiplying the result by a factor based on contract duration.
But Gatchalian countered: “Current assets minus current liabilities times 10. Eh kung negative yung capitalization niya, isang milyon lang po. Kahit e-minus pa yung liabilities, hindi talaga aabot ng P7 billion.”
The senator cited Securities and Exchange Commission (SEC) documents showing that QM Builders had posted losses since 2022 and reported no revenues or profits from 2015 to 2024.
“Paano po’ng nangyari na nakakuha siya (QM Builders) ng kontrata worth P7.3 billion when it’s capitalization is only P1.2 million?” Gatchalian asked.
Senator Ronald “Bato” dela Rosa pressed Quirante to explain his company’s financial standing.
“Nagtataka ako Mr. Chair saan nanggaling ang information kasi ang QM Builders nag-umpisa tayo noong 1992 as hardware and construction materials,” Quirante said.
He insisted the SEC data may have reflected their hardware business, not their construction arm. “To tell you the truth, QM Builders is quadruple A po,” Quirante said, referring to the highest contractor classification granted by the PCAB.
Quirante said that in 2017, the firm attained a “AAA” rating and by 2024 had already achieved “AAAA,” proving their capacity to handle billion-peso projects. Quirante said the firm’s NFCC stands at around ₱40 billion, with assets worth over ₱2 billion—enough to qualify them for billion-peso flood-control projects.
“Kaya naming mangontrata hanggang ₱40 billion,” he said.
He clarified that QM Builders is operating as a sole proprietorship with a PCAB license—the entity tapped by DPWH—while “QM Builders Inc.” listed in SEC records is still being activated and has not been used for bidding.
Committee chair Senator Rodante Marcoleta raised another issue, questioning whether DPWH can award contracts to sole proprietorships.
Bonoan explained that sole proprietorships are allowed, provided they hold the required PCAB license.
The inquiry forms part of the Senate’s broader probe into alleged anomalies in DPWH flood-control projects flagged by President Ferdinand Marcos Jr.
QM Builders was among 15 contractors named by the President for cornering a significant share of projects nationwide.
Based in Barangay Poblacion, Dumanjug, Cebu, QM Builders employs more than 2,000 workers, including 150 engineers and project managers, according to its official website. It began as a hardware store in 1992 before expanding into construction.
The Blue Ribbon Committee has directed Quirante to submit audited financial statements filed with the Bureau of Internal Revenue (BIR) to verify his claims.Earlier, DPWH-Central Visayas and Dumanjug Mayor Gungun Gica defended QM Builders from insinuations of wrongdoings. with reports from Philippine Star News Service/FPL
| Written by Jonnavie Villa/FPL
