By Adolfo Quizon Paglinawan

 

Series 17: Forever peace or forever war?

What blows my mind is how Stratbase Institute can position itself as “independent” when it is an adjunct of the Center for Strategic and International Studies in Washington DC, which is a key lobbyist at Capitol Hill of the so-called Deep State, the military industrial complex?

Its chairman of the board is Manuel Pangilinan, CEO of the First Pacific Holdings based in Hongkong, the multinational that has as one of its subsidiaries Forum Energy which has stakes in the oil and gas exploration at Reed Bank.

If you review its credentials, the institute is the benign face of Bower Group Asia representing about 150 to 200 multinational companies, many of whom are US based. doing business in the Indo-Pacific and Africa.

One of the standout non-resident fellow of Stratbase is a former US air force colonel, Raymond Powell, who is a verified agent of the US Naval Concerns under the cover of a Sealight platform for a so-called transparency initiative aimed at shaming China.

Last March 9, the Institute hosted a delegation from the United States Air War College led by Capt. Albert Benoit and Lt. Col. Brandon Vigneron of the U.S. Air Force.

Thus, so much for “independence”.

Stratbase founder and president Victor Andres Manhit, defended Defense Secretary Gilberto “Gibo” Teodoro Jr. by strongly condemning “foreign pressure” and “threats” from Beijing regarding the raid he led at the Sanjia Steel Corporation last May – “We must assert that no foreign government can dictate how Philippine agencies and courts enforce domestic laws or intimidate officials carrying out their duties.”

Sanjia faux pas

With only a pea brain underneath his bald top, Manhit took Teodoro’s talking points hook, line and sinker and exonerated his use of military personnel and later equipment in flying allegedly 69 suspected undocumented Chinese, in what was supposed to be a civilian law enforcement activity.

The Stratbase president should be terribly embarrassed that after being detained in a dingy immigration facility and subjected for an inquest, the Sanjia Chinese workers were subsequently ordered released by the National Prosecutorial Service for lack of prima facie case and evidence.

Is Manhit equally ignorant that legal; representation is neither interfering with Philippine laws or pressuring or threatening any parties, but part and parcel of our diplomatic relations and China embassy’s consular duties to its nationals?

The secretary framed his usurpation of arrest powers since Sanjia is located within the compound of the Philivdec Development Authority which is supervised by the Department of National Defense.

Observers, however, smelled something fishy when Teodoro exposed his motives by telling the local press at Misamis Oriental that the raid was motivated by suspicions that the steel factory was owned by a certain Tony Yang, alleged brother of Michael Yang who was implicated in Philippine Offshore Gaming Operations (POGO) that have been outlawed some years back.

Sanjia lawyers, however, submitted proof  that Michael has never been connected with the facility, and that Tony had long divested himself from any stockholdings in the company.

At that stage, it was carelessness, first by leading the raid, and second by his diarrhea of the mouth that complicated matters for the defense secretary whose behavior was seen as compromising the integrity of the Armed Forces of the Philippines, the institution that he represents.

Teodoro’s implication of “POGO” into what otherwise could have been addressed by government regulatory agencies is not only labeling but painting ghosts

PAOCC spin

In a Bilyonaryo.com report, however, authorities are investigating more than 40 Chinese-linked steel plants for suspected illegal activities, widening a probe that has already led to raids on three facilities over allegedly substandard products, hazardous materials and environmental violations.

The plot thickens.

Presidential Anti-Organized Crime Commission  executive director Benjamin Acorda Jr. (accent on “presidential”) said intelligence reports showed an apparent pattern among Chinese-owned steel manufacturers.

But his tongue quickly forked, as he stressed that the probe focused on suspected violations of Philippine law rather than nationality.

The three companies targeted in recent operations were Sanjia Steel Corp. in Tagoloan, Misamis Oriental; and Davao Mighty Steel Corp. in Davao City.; and Chuangxing Steel Inc. in Magalang, Pampanga.

If it were not nationality, what surfaced as the common denominator was that authorities were after primarily were steel mills using induction furnace, while radioactive isotopes were also allegedly mentioned during the operations.

Note that as giants clash, more than 300 in Misamis Oriental, 174 in Davao City and about 400 workers in Pampanga were displaced by the raids.

The probe has also raised concerns over the quality of steel entering the construction market – an issue that can be curbed as early as their arrival at the Bureau of Customs. One of the common problems of raw material imports worldwide in the steel industry is being laced with radioactive materials.

Now here is where the scenario has begged for more scrutiny.

Manhit’s warning against foreign manipulation and interference echoed a concern by the Armed Forces (AFP) spokesperson for the West Philippine Sea, Rear Adm. Roy Vincent Trinidad, that foreign malign influence activities targeting the Philippines and the WPS have increased significantly since May.

Why are the military and maritime issues suddenly in the picture?

Steel, suddenly geopolitical

A candidate for doctorate in philosophy and Manila Times columnist Anna Malindog-Uy observes that “apparently in today’s Philippines, a steel bar no longer needs to only pass tensile strength, elongation and quality tests. It may also need geopolitical clearance.

She particularly noticed a song-and-dance pattern in the government narratives:

• Teodoro condemns “foreign pressure and threats” from China.
• Acorda describes the growing number of Chinese investment in steel mills as “alarming,”
• while Trinidad warns of security implications and even raises the possibility of “economic sabotage”.

Uy said, “If steel produced by both Philippine and foreign companies is unsafe, investigate it. If environmental laws were violated, enforce them. If foreign workers violated immigration law, prosecute them.

“Nationality does not provide immunity from Philippine laws. But neither does Chinese ownership and being Chinese workers of a steel company constitute probable guilt.”

Moreover, rather than making sensational claims, Acorda should also substantiate his claim with actual data and details, and not just engaged in loose talk and fishing expedition through search warrant-aided raids.

The Manila Times columnist said, “Publish the list. Identify ownership structures. Show operating permits, production capacity, specific violations and failed laboratory results rather than nationality-based geopolitical tagging and insinuation.

“The same applies to Trinidad’s ‘substandard steel’ argument. Philippine standards recognize multiple steel-bar grades and specifications, with requirements covering matters such as elongation, bend tests, dimensions and markings.”

Calling steel “substandard” therefore requires identification of the product, grade, applicable standard, batch and laboratory test results, not simply dramatic television interviews, she added.

Radioactivity

But note that “radioactivity” is a measurement, not a political adjective.

Philippine Nuclear Research Institute (DOST-PNRI) findings by themselves do not answer the essential scientific questions: what is the threshold, which isotopes, at what activity concentration, producing what dose rate, through what exposure pathway and for how long?

Radioactive materials are used under controlled conditions in medicine, research and industry. What determines hazard is not merely that radioactivity exists, but its type, quantity, concentration and exposure.

Significantly, health authorities reported that the Filipino workers examined initially showed no symptoms of radiation exposure.

Furthermore, we need to ask some questions.

Why do we see the likes of Trinidad, Acorda, and most specifically, Teodoro, suddenly becoming metallurgists and industrial, radioactive environment, labor, immigration and customs specialists?

NBI and PAOCC may lawfully investigate criminal conduct, and AFP personnel can support operations. But technical and regulatory conclusions should come from the agencies possessing the technical competence.

US involvement?

Then came the US involvement, and this is where Sanjia stops being merely an industrial-regulation story.

Only months after the raid and arrests, the US Embassy confirmed that US soldiers went to the same Sanjia facility to assess its potential use for Balikatan 2027.

Uy reiterates that Sanja was raided on the pretext of national-security rhetoric; Chinese workers were arrested and later released for insufficient evidence, and then American military planners, after a month, turned up to evaluate the facility.

Anna Malindog-Uy asks: “Are these events unrelated, or connected and orchestrated?

“This question matters more because Lumbia Airport in Cagayan de Oro, an EDCA site (a US military base) selected for rotational US forces and infrastructure development, is a critical staging location for future Indo-Pacific military contingencies involving the US.”

The National Geospatial-Intelligence Agency (NGA), a combat support agency under the US Department of Defense recently released a report acknowledging that the nine US military bases in the Philippines had provoked “ongoing domestic resistance” among Filipinos, while negative views of the US “contrasts with [China’s] approach” in the country. 

Against the backdrop of Chinese companies being welcomed by local communities as they invest and establish businesses, while US military bases continue to fuel security anxiety, it is not difficult to see that Washington makes no secret of its desire to use the Philippine government to drive Chinese-invested companies out.

This is the first time my theory is being confirmed that when Bongbong Marcos authorized four additional sites for EDCA in February 2026, he started condoning an “embargo” of everything Chinese.

The effect of this silent policy is now public.

During the first quarter of 2003, our GNP was 4.62%. As we speak, we could barely make the projected 3% for this year.

Today, the US wants to assess whether a steel plant is suitable for military exercises; tomorrow, it could pry into a Chinese-invested port, industrial park or energy facility. Today, it engages in a fishing expedition about the activities of employees of Chinese-funded companies; tomorrow, more Chinese investment projects could be scrutinized framed just like Sanjia, under improvised “national security” concerns.

Teodoro must disabuse our minds from his lame excuses, and explain why suddenly he has postured onto a new identity as “iron” man.

Whistle blown

Another newshen picked up the tab at this point, alleging that “pretending there is no commercial interest behind an industry campaign seeking restrictions on competing technology would insult the public’s intelligence.”

Gigie Arcilla, a DailyTribune columnist, pointed out:

“Something deeply unsettling is happening in the Philippine steel industry. What is being presented as a campaign against unsafe steel increasingly looks like a corporate turf war, with the machinery of the State leaning heavily on one side.”

Then she blows the whistle: “At the center are two rival blocs. The Philippine Iron and Steel Institute (PISI) has campaigned for years against induction-furnace steelmaking. The Philippine Induction Smelting Industry Association (PISIA) represents independent operators using precisely that technology.”

What is an induction furnace process?

An induction furnace melts steel using electromagnetic energy and electrical resistance instead of burning fossil fuels.

A water-cooled copper coil surrounds a refractory crucible holding the steel scrap. High-frequency alternating current (AC) runs through the coil. The AC current creates a fast-changing magnetic field. The magnetic field passes through the lining and induces circulating electrical currents—called eddy currents—inside the metal. The metal resists these currents and converts electrical energy into heat, melting the steel quickly from the inside out.

The key benefits of this system are

• Efficiency rates often exceed 80%, outperforming traditional fossil fuel furnaces.
• The system produces no combustion gases or direct stack emissions.
• Operators can easily regulate temperatures and adjust alloy mixes for small or specific batches.

Unsettling Industry war

When PISI pushed to ban induction furnaces in 2018, it was not a public safety campaign in an economic vacuum, but competing interests fighting over technology, regulation, and market share.

The Department of Trade and Industry (DTI) did not impose a blanket prohibition, maintaining instead that manufacturers could operate provided their products complied with Philippine National Standards.

That should have established a simple principle to judge the steel by — whether it met the standards, not merely which furnace produced it.

What PISI using the fossil fuel system, could not achieve through regulation is now being accomplished, plant by plant, through government enforcement.

Induction-furnace operators now confront not merely DTI or DENR or regulatory inspectors, but the NBI and the PAOCC,  DND and the AFP, and other agencies wielding the awesome power of the State.

Sanjia Steel was subjected to a massive interagency operation. Davao Mighty was raided. Chuangxing came under scrutiny.

The Tribune columnist drives a sharp point – “When the companies being hit largely occupy one side of a commercial war, government owes the public something more convincing than coincidence.”

This is where, she said, the controversy starts to look like cartelization.

A cartel does not become less worthy of investigation merely because government action may have facilitated market concentration.

When competitors are progressively disrupted, who inherits their customers? Who benefits from reduced supply? Who acquires greater pricing power?

School batchmates?

PISI is hardly a disinterested spectator. Its prominent personalities have direct corporate connections with SteelAsia, the country’s dominant steel producer.

None of this yet proves conspiracy.

But pretending there is no commercial interest behind an industry campaign seeking restrictions on competing technology would insult the public’s intelligence.

This is where a familiar name sprouts.

That Defense Secretary Gilberto Teodoro Jr. is personally involved in what appears to be industrial regulation, raises a lot of eyebrows.

Media investigative reports have noted that Teodoro and SteelAsia Chairman and CEO Benjamin Yao are batchmates from Xavier School, an elite all-boys preparatory school in San Juan, Metro Manila.

Aside from their personal connection, they regularly interface at the institutional level.

As the country’s Defense Chief, Teodoro has worked alongside Yao’s SteelAsia Manufacturing Corporation and the Office of Civil Defense to push for local manufacturing self-reliance and infrastructure security.

The two have engaged professionally through civil defense partnerships. For instance, SteelAsia, represented by Yao, has collaborated with the Department of National Defense (DND) and the Office of Civil Defense (OCD) to coordinate industrial contributions to national initiative.

Teodoro’s recent defense directives heavily focus on nationalizing resources and enforcing industrial standards.

This directly intersects with Yao’s role as the head of SteelAsia Manufacturing Corporation, the steel producer that has positioned itself to lead efforts toward Philippine “industrial self-reliance”.

Arcila qualifies, “the investigative report adds uncomfortable details. School ties isn’t corruption, but when State power targets rivals, transparency is demanded.”

What makes this more obnoxious that something is rotten in Denmark is Richard Heydarian’s alleluia’s at the Philippines Daily Inquirer, entitled “Men of steel’: PH-style industrial policy”, exalting Teodoro’s “overseeing the establishment of a 21st-century defense industry.

The viability of his “Self-Reliant Defense Posture”, in particular, would largely depend on the success of companies such as SteelAsia, as building ships, drones, missiles, and other key defense platforms require steady, safe, and affordable access to primary inputs, such as steel.

Arcilla was correct in her indictment of cartelization.

There is just too much of intersecting interests here.

Of course, it can never also be a coincidence that Heydarian who is a non-resident fellow of Pangilinan and Manhit’s Stratbase Institute, storified Yao’s business last April 14, a public relations pitch that has served no purpose but reinforce a possible connivance between Teodoro and Yao.

Davao Mighty (PISIA)

Then came the government’s strongest argument.

After the recent General Santos earthquake, authorities began linking defective rebars in damaged structures to Davao Mighty Steel.

Arcilla remarked, “For a frightened public, it was a compelling narrative.”

The calendar, however, posed a problem. The Jollibee-FitMart building opened in August 1998. The Notre Dame of Dadiangas University elementary building was completed in June 2008.

Davao Mighty Steel was not established until 2012 and could not have supplied the steel for the buildings completed years before the company came into existence.

This casts doubt on the credibility of that NBI and PAOCC narrative. How can they declare someone guilty in a press release when the timeline contradicts the accusation?

Steel Asia (PISI)

If radioactive contamination exists, the government must act. In this respect, SteelAsia is neither a virgin.

Indonesia rejected 23 containers of zinc dust contaminated with Cesium-137 and returned them to the Philippines. The report says the Philippine Nuclear Research Institute identified SteelAsia as the source, while SteelAsia disputed responsibility.

Arcilla asks: Doesn’t SteelAsia deserve due process, and so does everybody else?

There is also a Chinese contradiction – Chinese involvement is framed as a security concern when linked to independent competitors, yet welcomed as an economic partnership when tied to SteelAsia.

The standard should be consistent.

If PISIA (induction furnace) operators close, who gets their market? If competition contracts, who gains pricing power?

Gut consequences

These questions do not establish guilt, do they? They precisely establish exactly why an independent investigation is necessary.

Again, cartelization refers to businesses conniving to manipulate the market to their advantage cause significant harm to consumers by engaging in coordinated anti-competitive behavior such as price-fixing, bid-rigging, output restriction, and market allocation.

The primary law prohibiting cartels and anti-competitive behavior in the Philippines is Republic Act No. 10667, also known as the Philippine Competition Act (PCA).

The Philippine Competition Commission should examine market concentration before and after the crackdown, the communications among PISI, SteelAsia, and government agencies, and the economic beneficiaries of plant closures.

The Commission should open the records.

Who initiated the cases?

What communications occurred between Teodoro and Yao concerning the steel industry?

If steelmakers sell substandard products or break the law, they should be held accountable.

Enforcement must be equal — whether PISI, PISIA, SteelAsia, or Davao Mighty.

The NBI, PAOCC, AFP and DND must serve the public, not private business interests.

Investigations must be stopped momentarily until the Philippine Competition Commission comes out with its findings and recommendations.

Powered by search warrants that the NBI and PAOCC can easily access, raids are creating a blanket impression of harassment of the private business and uneven enforcement of law and regulations that are aggravating an already discombobulated foreign investments from entering the country.

Conclusion

Government must never become a silent partner to any cartel.

Arcilla said, “Until the government releases the records, explains the timeline, reveals the relevant corporate ties, and shows that the law is applied equally, one question will refuse to be muted:

Is the power of the State being weaponized to settle a private fight over steel?”

It was Teodoro who applied pressure with his threatening presence and intervention in civilian law enforcement, given these newfound symptoms of cartelization.

The defense secretary may have even breached Republic Act 3019, the Anti-Graft and Corrupt Practices Act, Section 3 “(e) Undue Injury or Favor: Causing harm to any party or giving unwarranted benefits through bad faith, manifest partiality, or gross negligence. (h) Financial Interest: Having a financial stake in a business or transaction where the officer intervenes in an official capacity.”

Now that Teodoro’s hand has been caught dipping in the cookie jar, he can no longer resort to his shallow propaganda to escape accountability.

At this point, a less weak President should already look for his replacement.

   

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