GSIS Trustees Pushed Questionable ₱2B IT Deal Despite Warnings
The Government Service Insurance System (GSIS) finds itself embroiled in another controversy as newly surfaced documents reveal how three trustees pushed a dubious ₱2-billion information technology deal with DBP Data Center Inc. (DCI), despite the company's own admission that it lacked the capability to deliver.
Trustees Evelina Escudero, Merceditas Gutierrez, and Rita Riddle championed the IT modernization project with DCI, a government-owned corporation under the Development Bank of the Philippines. Both Gutierrez and Riddle have since resigned from the GSIS board.
Fast-Tracked Deal Raises Red Flags
On September 2, 2025, DCI representatives met directly with the GSIS Board of Trustees to present their IT services proposal. The meeting itself raised concerns, as it allowed a potential contractor unusual direct access to board members, blurring proper procurement procedures.
Just two weeks later, during a Legal Oversight Committee meeting on September 15, trustees proposed executing a Memorandum of Understanding with DCI through a fast-tracked board referendum that bypassed full deliberation.
For an institution managing billions in pension assets belonging to government employees, such haste appears indefensible. The trustees were not merely entertaining a presentation but laying groundwork for what would become a ₱2-billion project.
GSIS President Intervenes
GSIS President and General Manager Jose Arnulfo "Wick" Veloso stepped in on September 29, 2025, during a Risk Oversight Committee meeting, requesting that MOU approval be deferred. Veloso, who had not attended earlier presentations, questioned why such a significant deal had progressed without his knowledge.
He requested a direct meeting with DCI's top executives, scheduled for October 9, 2025. What unfolded during that meeting should have ended the deal permanently.
DCI Admits Lack of Capability
During the October meeting, DCI executives revealed damaging information about their company's limitations. They described DCI as a "40-year-old startup" offering IT support and staff augmentation services, admitting they did not develop DBP's core systems and merely provided manpower support "when needed."
Most tellingly, DCI President Michielson Luakian conceded that "GSIS is significantly more advanced in IT than most government-owned corporations" and that DCI "does not have the capability to undertake the development of GSIS's core systems."
Luakian ultimately stated that DCI would formally withdraw its interest to avoid further delays in GSIS's internal plans.
Troubling Connections Emerge
When Veloso asked who had introduced DCI to GSIS, the answer came from Vice President Jonathan Pineda: trustees Riddle and Escudero, with backing from Gutierrez.
The trustees had suggested that GSIS's IT systems be "reviewed and audited by DCI" through an "agency-to-agency procurement" arrangement. Such arrangements between government entities are exempt from public bidding under Republic Act 9184, creating potential loopholes for massive expenditures without competitive scrutiny.
Further investigation revealed that DCI President Luakian previously served as business development head of M.E. Sicat Construction Incorporated, a DPWH contractor involved in public works projects. This connection links the proposed IT deal to the same construction sector now tainted by flood-control scandals.
Pattern of Institutional Decay
The DCI episode represents a troubling pattern in public finance where "modernization" projects are weaponized. When agencies face scandals, they often announce grand reform projects, usually IT-related and worth millions or billions of pesos.
These projects rarely address core problems and instead digitize existing dysfunction. Without ethical leadership, even the most advanced systems become conduits for questionable practices.
Need for Ethical Reform
GSIS faces intense scrutiny for investment losses and procurement issues at a time when public trust in government institutions remains fragile. The institution needs ethical reform more than technological upgrades.
The involvement of trustees Escudero, Gutierrez, and Riddle in facilitating this questionable deal highlights the danger posed not by technological inadequacy but by moral decay within the institution.
Until GSIS addresses these ethical challenges and ensures proper governance, no amount of digital transformation can restore public confidence in this vital pension system that serves millions of government employees across the archipelago.