I feel the way they determined the players for each group in the first round was okay (still could use some tweaks, but generally fine). I also think the methodology to determine the groupings for the subsequent rounds is also fine. It's a nice, simple systematic process.
The problem that they have is determining the order, or group numbers, of the first round groups. The way they have it right now, they have Hohmann in Group #1, Manalo in Group #2, Orcullo in Group #3...and so on. What they should have done is to totally randomize the group numbers after the players of each group was determined. That way, Hohmann, Manalo, and all the top seeds won't necessarily be in groups right next to each other. Therefore, they can use the same round advancement methodology without the fear of top seeds automatically playing each other early in the tournament.