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Advocates Philippines
BIR Files Criminal Case Against Contractor Over 'Ghost' Flood Project
Photo credit: Bureau of Internal Revenue Philippines
MANILA — The Bureau of Internal Revenue (BIR) opened 2026 by filing criminal complaints against a major flood-control contractor over an alleged ₱48.39-million tax deficiency tied to a so-called ghost project in Malolos City, Bulacan.
The complaints were filed before the Department of Justice against Mark Allan Villamor Arevalo, sole proprietor of Wawao Builders, in connection with a flood-control project that authorities say was reported as completed—but was never actually built.
According to the BIR, Wawao Builders allegedly violated Sections 254 and 255 of the National Internal Revenue Code, which cover tax evasion and the failure to file correct and accurate tax returns, particularly for income tax and VAT filings for the first and second quarters of 2024.
BIR Commissioner Charlito Martin R. Mendoza said the case forms part of the government’s broader crackdown on corruption in infrastructure projects, in line with the directive of President Ferdinand R. Marcos Jr. and Finance Secretary Frederick D. Go.
“This case reflects the BIR’s active participation in the President’s anti-corruption crusade,” Mendoza said. “While other agencies address the irregularities in project implementation, we at the BIR are doing our part by filing criminal complaints against those who misuse public funds and evade their tax obligations through these ghost projects.”
Records show that Wawao Builders was awarded a ₱77.20-million contract in January 2024 to construct a riverbank protection structure in Barangay Caingin, Malolos City. The contractor later collected ₱72.37 million, net of withholding taxes, in three tranches from March to April 2025. However, inspections by the Commission on Audit and the BIR found no actual structure at the site, despite documents claiming 100 percent project completion.
As a result, the BIR disallowed the contractor’s claimed deductions and input VAT. Mendoza also warned that investigations are ongoing—not only against Wawao Builders’ other projects but also against other flood-control contractors flagged in recent anti-corruption probes.
“We will continue to investigate and file cases against these contractors to protect public funds, strengthen accountability in public spending, and uphold our tax code,” Mendoza emphasized.
With the latest filing, the BIR has now lodged 13 criminal complaints linked to anomalous flood-control projects, with potential tax liabilities reaching ₱8.92 billion still under investigation.
The complaints were filed before the Department of Justice against Mark Allan Villamor Arevalo, sole proprietor of Wawao Builders, in connection with a flood-control project that authorities say was reported as completed—but was never actually built.
According to the BIR, Wawao Builders allegedly violated Sections 254 and 255 of the National Internal Revenue Code, which cover tax evasion and the failure to file correct and accurate tax returns, particularly for income tax and VAT filings for the first and second quarters of 2024.
BIR Commissioner Charlito Martin R. Mendoza said the case forms part of the government’s broader crackdown on corruption in infrastructure projects, in line with the directive of President Ferdinand R. Marcos Jr. and Finance Secretary Frederick D. Go.
“This case reflects the BIR’s active participation in the President’s anti-corruption crusade,” Mendoza said. “While other agencies address the irregularities in project implementation, we at the BIR are doing our part by filing criminal complaints against those who misuse public funds and evade their tax obligations through these ghost projects.”
Records show that Wawao Builders was awarded a ₱77.20-million contract in January 2024 to construct a riverbank protection structure in Barangay Caingin, Malolos City. The contractor later collected ₱72.37 million, net of withholding taxes, in three tranches from March to April 2025. However, inspections by the Commission on Audit and the BIR found no actual structure at the site, despite documents claiming 100 percent project completion.
As a result, the BIR disallowed the contractor’s claimed deductions and input VAT. Mendoza also warned that investigations are ongoing—not only against Wawao Builders’ other projects but also against other flood-control contractors flagged in recent anti-corruption probes.
“We will continue to investigate and file cases against these contractors to protect public funds, strengthen accountability in public spending, and uphold our tax code,” Mendoza emphasized.
With the latest filing, the BIR has now lodged 13 criminal complaints linked to anomalous flood-control projects, with potential tax liabilities reaching ₱8.92 billion still under investigation.
Jan 8, 2026
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