Authorities raided a steel manufacturing plant inside an industrial estate supervised by the Department of National Defense (DND) in Tagoloan, Misamis Oriental on Saturday, May 16, and discovered 69 undocumented Chinese nationals and one Filipino allegedly working illegally in the facility, DND Secretary Gilberto Teodoro Jr. confirmed.

Teodoro said the raid conducted on the strength of a wearch warrant by the Armed Forces of the Philippines (AFP), Presidential Anti-Organized Crime Commission (PAOCC), National Bureau of Investigation (NBI), Philippine National Police (PNP), and other law enforcement agencies at the Phil. Sanjia Steel Corporation manufacturing plant located inside the Philippine Veterans Investment Development Corporation (PHIVIDEC) Industrial Authority prompted a wider national security investigation as the workers were found handling “potentially hazardous materials” during the operation.

The DND said the workers were melting imported and locally sourced steel in the plant. In the initial report of authorities, the steel being processed in the plant is considered hazardous, which could potentially have harmful effects on the surrounding area and on the workers inside the facility.

The DND added that there is also a possibility that the steel being produced is substandard, which could be dangerous if used in structures across the country.

According to Teodoro, the steel plant is reportedly owned by controversial Chinese businessman Tony Yang, who had previously been linked to Philippine offshore gaming operator (POGO) activities. He was arrested in 2024 due to his alleged link to POGO operations.

He is the brother of Michael Yang, former economic adviser of ex-president Rodrigo Duterte, who had been linked to various controversies as well.

“Binabalaan namin, kung sinuman ang magtatangkang makialam sa kaso na ito, kakasuhan namin ng obstruction of justice kahit sino pa ’yan dahil ito ay national security issue (We are warning anyone who attempts to interfere in this case that we will file obstruction of justice charges against them, no matter who they are, because this is a national security issue),” Teodoro said, noting that the plant is situated near a Philippine Navy (PN) facility being built in the area.

Further, Teodoro said the discovery raised questions about the oversight and actual operations inside the PHIVIDEC. An investigation was conducted to review all registered locators operating inside the industrial estate.

“Ang PHIVIDEC ay semi-autonomous na GOCC pero sa ngayon ito prima facie evidence na kailangan tingnan natin mabuti kung ano talaga ang ginagawa nito, kung ano talaga ang kontribusyon nito sa national economy and nation-building (PHIVIDEC is a semi-autonomous GOCC but at this point, this is prima facie evidence that we need to closely examine what it is really doing and what its actual contribution is to the national economy and nation-building),” he said.

“Kasi ito, hindi local industrial estate ito. Estate ito ng veterans at dapat nagcocontribute ito sa national security (Because this is not just a local industrial estate. This is an estate for veterans, and it should be contributing to national security),” the defense chief added.

Aside from the undocumented workers, investigators were also looking into alleged labor and safety violations inside the plant.

The DND and PAOCC said the facility was already under scrutiny for “serious violations of law” before the raid.

Meanwhile, Teodoro directed the OCD-10 to conduct a full inventory and accounting of employees affected by the halted operations, as the facility remains an active crime scene with an ongoing search warrant.  

He also instructed OCD-10 to coordinate with different government agencies to extend assistance to displaced workers such as the Department of Social Welfare and Development (DSWD) to provide necessary aid and interventions, and the Department of Labor and Employment (DOLE) to help affected personnel secure temporaary or permanent employment opportunities.

Recognizing the possible health risks posed by exposure to hazardous substances or chemicals, including radiation, Teodoro also ordered the conduct of comprehensive medical examinations for all personnel involved in the operation of the manufacturing plant.