CONGRESSMAN Celso Gomera Regencia filed graft charges against Iligan City Mayor Frederick W. Siao on Tuesday, Feb. 18, 2025, over the Pala-o Market project.
The charges, filed before the Office of the Ombudsman in Davao City, cited violations of Section 3(e) and (g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act), Article 217 of the Revised Penal Code (Malversation of Public Funds), and administrative offenses of Grave Misconduct and Grave Abuse of Authority.
Meanwhile, in a phone interviews, the Iligan City mayor denied any wrongdoing in the project implementation. Nonethess, he would respond once he reads and reviews the complaint.
The complaint itemized several alleged violations, including the following:
First is the Unauthorized Contract Awarding: Mayor Siao allegedly entered into a contract with Metro Stonerich Corporation amounting to P253,986,000.00 without securing prior approval from the Sangguniang Panlungsod (SP), a violation of Section 455 of the Local Government Code (RA 7160).
Second, Financial Disadvantage to the Government: The original project cost was
P583,468,951.01, with BM Marketing (BM) completing 92.71% of the work, leaving only P42,539,329.40 worth of work to be done.
However, Mayor Siao awarded a new contract to Metro Stonerich for P253,986,000.00, resulting in an undue price increase of P231,360,288.69.
Third, the Misuse of Public Funds: Mayor Siao allegedly authorized an advance payment of
P38,097,900.00 to Metro Stonerich Corporation without proper justification, a violation of Article 217 of the Revised Penal Code, which prohibits the misappropriation of public funds.
Fourth, the Invalid Termination of BM Marketing’s Contract: The complaint further alleges that Mayor Siao acted in bad faith by unjustifiably terminating BM Marketing’s contract and manipulating reported work accomplishment rates to justify the termination.
The Construction Industry Arbitration Commission (CIAC) has since ruled the termination invalid and ordered the City Government of Iligan to pay BM Marketing a total of P560,843,238.70.
Lastly, the Delayed Project Completion impacts public Welfare: The market’s completion has been severely delayed due to Mayor Siao’s actions, causing financial hardships for vendors and inconvenience to the public who depend on the Pala-o Market for their livelihood and daily needs.
Iligan City Congressman Regencia, in an interview with reporters on Tuesday morning outside the Ombudsman Mindanao office, said, “I filed this case against Mayor Siao because I am seeking justice for the people of Iligan’s money. During my time as mayor, I set aside P590 million, and the bidding reached P583 million. As an outgoing mayor who was no longer running for mayor of Iligan, there was only a small amount left to complete [the project], and there was an allocation to finish it. They did not deduct it, which is why I am hurt because they promised before they ran [for office].”
“One of the things that needs to be addressed properly is the city of Iligan. Nothing was built when I ran [for office], and that was my promise to the people – that we will fix the old market in the city of Iligan,” he added.
He said he filed cases for violations of Republic Act 3019 (Anti-Graft and Corrupt Practices Act) and grave abuse of authority.
“Mayor Siao, this would not have happened; the construction would not have stopped if there were no instructions from him. It stopped in 2023 when I was no longer the mayor. They did not continue [the project] after the election. On July 1, they assumed office as mayor, a new set of officers and elected officials. That is why they did not continue the market with the contractor even though it had a 92.71 percent completion [rate],” he further explained.
When asked who was with him in filing the case, he replied, “My companions in this are market vendors and taxpayers.”
He stated the Office of the Ombudsman is expected to review the case and proceed with the necessary legal processes.
Iligan City mayor responds
In a phone interview on Tuesday afternoon, Feb. 18, Iligan City Mayor Frederick Siao addressed the graft charges filed against him, stating, “First of all, I have not yet received a copy [of the complaint], and we have not yet seen what the complaint is about. So, we will give a clear answer once we receive the copy and read it. But this is about the market that they built before. There were issues, there were problems with the project’s completion.”
“The contractor said it was finished; they are claiming that the project is complete and they are trying to collect from the city government. On our end, the BIU and the city engineer’s office saw that only 72% [of the project] was completed. So that’s where we disagree,” he explained.
“Now, there’s a COA audit, or COA findings, that the contractor only completed 69%. So the case is pending in the Court of Appeals. We will wait for the court’s decision and see what will happen about the case against me. As of now, it is not yet finished; we cannot yet comment because I do not know the details of the complaint against us,” he added.
“That is what the contractor is claiming, so the contractor should be the one to file a complaint, not our former mayor who signed that contract. So what they are doing right now is in favor of what he committed to do because he is the former mayor; I am the incumbent mayor. What is in their contract agreement, I am just fulfilling it,” he further stated.
When asked about the alleged misuse of public funds, he replied, “Allegedly, that’s their point, but of course, with the urgency that the project will end, we have to continue that project. We don’t have to wait for the court to decide in whose favor it will be. But the point for now, as far as we can see, is that the project is not yet finished.”
“We are the customer, the city government of Iligan. The contractor said they are finished, but in our opinion, it is not yet; it is only 72%. So, of course, the customer will be followed, on our side,” he further added.
When asked if the cases filed against him would affect the trust of his constituents, he said, “The one who will lose trust in him is him; he was the former signatory. He should be favoring the city government. I’m wondering, is he a contractor? Why is he worried about the project? That’s a big question mark now.”
“As I said earlier, we will wait until we read the complaint and what their complaint is before we can answer what our defense is,” he concluded.
Photos courtesy of Rhoda Grace B Saron
