PAGCOR Chairman and CEO Alejandro Tengco has denied allegations that contracts won by his family’s construction firm during his time as head of the national gaming regulator represents a conflict of interest, insisting that he had divested his personal stake in the company to his children and had no influence over the awarding of public works contracts.
This follows a report by Rappler on Thursday which reveals Nationstar Development Corporation, founded by Tengco in 2015, had won 14 contracts worth a combined Php7.1 billion (US$120 million) since becoming PAGCOR chair in August 2022. Nationstar had previously won Php8.6 billion (US$146 million) worth of contracts between 2015 and 2022, according to data from the Department of Public Works and Highways (DPWH).
In a statement issued by PAGCOR on Thursday, Tengco insisted that the award of contracts to his family’s firm was not connected to his close friendship with Philippine President Ferdinand Marcos Jr.
“There is no conflict of interest because under the Anti-Graft and Corrupt Practices Act (RA 3019) and the Code of Conduct of Government Employees (RA 6713), conflict of interest occurs when a public official has direct or indirect financial or pecuniary interest in any business contract or transaction in which they must intervene in their official capacity,” he said.
“For one, my position as Chairman and CEO of PAGCOR has no direct or indirect influence in the awarding of public works contracts to Nationstar.
“For another, I have fully divested all my interests in Nationstar when I assumed the top PAGCOR post in 2022, thus eliminating any potential conflict of interest. I actually started divesting my holdings to my children in 2019.”
Tengco added that it was ultimately up to Congress to determine whether there are existing gaps in conflict-of-interest laws, and what measures they would come up with, if any.
“As a legitimate business entity, Nationstar has previous and ongoing contracts with both the government and the private sector, including many local government units,” he said.
“During the time of President Benigno Aquino III and President Rodrigo Duterte, Nationstar executed retrofit and fit-out works based on specifications and with high quality standard at the Malacañang premier guest house and the Presidential Management Staff Building.
“These projects have established our goodwill or reputation in the industry and thus, the subsequent projects awarded to us.”
Graft and conflict of interest among public officials has been in the headlines in the Philippines in recent months due to the flood works scandal that has rocked the nation and claimed a series of political scalps. There is no suggestion that Tengco or Nationstar has any ties to such scandals.
Rappler did, however, note that the value of Nationstar’s contracts in Tengco’s time running the regulator has tripled compared to previous years.
Its biggest contract, it added, was worth Php4.6 billion (US$78 million) as one of five companies appointed to a bypass road project in Davao City.
Tengco, however, pointed out that this contract was not exclusive because it was too big for any one company to complete.
“We joined a consortium which included the China Road and Bridges Corporation because they have the capability to undertake such big project, and the consortium won the bid, not Nationstar,” he said.
“Singling out my close ties with the Marcos family would thus seem very selective, and distorts the efforts of Nationstar to engage in legitimate business activities regardless of partisan political considerations.”
The PAGCOR chair added that Nationstar had been employed to conduct many projects, both public and private, in recent years and had played an important role in building modular hospitals during the pandemic.
He stated, “Nationstar also completed the retrofit and fit-out of Meralco’s headquarters just a year ago, both to show that it has easily passed vetting by both public and private institutions.
“It must also be noted that although Nationstar has secured DPWH projects through fair and impartial bids, none is related to flood control projects or even the so-called ghost projects, another testament to the company’s track record and professional integrity.”
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