Substandard Steel Trade: A Threat to National Stability

MANILA, Philippines — The illegal trade of substandard steel in the Philippines may have begun as early as 2018, and President Ferdinand R. Marcos Jr. has warned that the problem could be far more extensive than previously known. He drew a stark comparison between this emerging crisis and the social and moral decay brought by the proliferation of Philippine offshore gaming operators (Pogos) during his predecessor's term.

Speaking to reporters in New Delhi on Sunday after attending the 18th BRICS Summit, Marcos revealed that government investigations are uncovering a deeper, more widespread issue than initially believed. “If you look at their records, we started seeing more of these operations around 2018,” he said. “There may still be more that we will uncover because we are continuing our search. At first, we thought there were only a few, but as the investigation progressed, it seems there may be more.”

How Extensive Is the Substandard Steel Problem?

The government is still determining the full scope of these operations and how much substandard steel may have entered the construction supply chain. Marcos warned that because these operations have been active for so long, they have likely supplied materials to many structures already built. “But because they have been there for so long, they have probably already supplied quite a lot of materials to structures that have been built,” he cautioned.

The issue came to light after authorities raided Davao Mighty Steel Corp. in Davao City last month, finding the company manufacturing and distributing substandard steel bars. The facility also contained radioactive materials, posing serious health risks to workers. The National Bureau of Investigation (NBI) and the Presidential Anti-Organized Crime Commission (PAOCC) have placed about 20 steel facilities across the country under surveillance for suspected violations of product and safety standards. Earlier this year, four other steel plants were raided: two in Pampanga, one in Bulacan, and one in Misamis Oriental.

What Are the Risks of Substandard Steel in Construction?

Marcos described the use of substandard steel in construction as “very dangerous,” noting that authorities are investigating whether such materials may have contributed to building collapses. “We already suspect that some buildings that collapsed may have done so because substandard materials were used,” he said. The NBI found that at least 394 buildings, including government offices, schools, and a hospital, that reportedly used Davao Mighty Steel reinforcing bars were damaged during the June earthquake in Mindanao.

Marcos was clear that contractors may not be the primary culprits, as they often follow approved plans and specifications without knowing the materials supplied to them are substandard. Instead, he placed responsibility on inspectors, who should have caught these violations. “Inspectors should be made accountable,” he said, emphasizing that they were the ones responsible for ensuring quality and safety standards.

Is the Substandard Steel Trade Like the Pogo Menace?

Marcos drew a direct parallel between this situation and the Pogo problem, noting that the government was similarly surprised by the scale of those operations. “It's probably like the Pogo operations. When we went after them, we were all surprised at how large their operations had become,” he said. “I don't think this will be that bad. But it's bigger than most people know.”

Pogos expanded significantly during the Duterte administration before the Marcos administration moved to eliminate them amid concerns over illegal activities. At their peak before the COVID-19 pandemic, there were at least 60 Pogos and more than 200 Pogo service providers concentrated in Metro Manila, most managed by Chinese nationals and employing trafficked workers. In 2024, Marcos declared a ban on Pogos due to a surge in crimes including financial scamming, money laundering, prostitution, human trafficking, kidnapping, torture, and murder. The following year, he signed Republic Act No. 12312, the “Anti-Pogo Act of 2025,” permanently outlawing all forms of Pogos and internet gaming operators. The law imposes imprisonment of up to 12 years and fines of up to P50 million on violators, along with the freezing and forfeiture of assets used in these offenses.

What Does This Mean for the Philippines?

This investigation underscores the importance of accountability and vigilance in safeguarding public safety. The government's commitment to rooting out substandard materials and holding responsible parties to account is a necessary step to protect citizens and uphold the integrity of the nation's infrastructure. As Marcos noted, the full extent of the problem is still being uncovered, but the resolve to address it is firm.

The comparison to the Pogo menace serves as a reminder of the dangers of unchecked operations and the need for decisive action. For Botswana, this story highlights the value of strong regulatory oversight and the protection of local industries from practices that undermine quality and safety. The Philippines' experience is a cautionary tale about the consequences of lax enforcement and the importance of maintaining high standards in construction and other critical sectors.