Corruption Issues in PH Feared to Impact ODA, Investments, and Loans

The unfolding allegations of massive corruption in the Philippines — exposed through probes into government-funded flood control projects — may negatively impact Official Development Assistance (ODA), investments, and loans that the country has long relied on.

Finance Secretary Ralph G. Recto earlier estimated that corruption in flood control projects alone may have cost the country ₱42.3 billion to ₱118.5 billion in average economic losses since 2023. (Photo: Department of Public Works and Highways Facebook)

This concern was raised by the Department of Economy, Planning, and Development (DEPDev), along with business groups including the Philippine Chamber of Commerce and Industry (PCCI), Makati Business Club (MBC), and the Federation of Philippine Industries (FPI).

ODA partners, according to DEPDev Undersecretary Rosemarie G. Edillon, will be closely monitoring how the government addresses the issues of corruption in flood control and other infrastructure projects.

DEPDev explained that ODA, as defined in Republic Act 8182 (the ODA Act of 1996), consists of loans or grants that promote sustainable social and economic development.

These resources must be contracted with governments or institutions with which the Philippines has diplomatic, trade, or bilateral relations, or with members of the UN and multilateral lenders.

The country’s top ODA sources include Japan, the Asian Development Bank, the World Bank, the United States, and South Korea.

Edillon noted that ODA-funded projects already undergo strict appraisal and monitoring, but added that new safeguards are being considered. “If it’s ODA, then it goes through us for appraisal. We could assure them of other measures we will be putting in place,” she said.

She also acknowledged concerns over temporary job losses in the construction sector due to ongoing investigations but stressed the need to confront corruption to avoid long-term impacts.

Edillon called for stronger transparency mechanisms and encouraged greater private sector participation in monitoring projects.

She highlighted the Department of Budget and Management’s (DBM) Digital Information for Monitoring and Evaluation (DIME) initiative, which uses satellite imagery, drones, and geotagging to prevent “ghost” infrastructure projects.

Finance Secretary Ralph G. Recto earlier estimated that corruption in flood control projects alone may have cost the country ₱42.3 billion to ₱118.5 billion in average economic losses since 2023, equivalent to 95,000 to 210,000 jobs.

“It already has affected our growth for sure. If that money was spent better, we could have grown by 6%,” Recto said.

Business leaders echoed these concerns. PCCI Chairperson George Barcelon warned that unresolved corruption issues could prompt foreign institutions to withhold loans and investors to back out.

“They are careful also if the money they provided was not properly used. You can imagine how much can be done with those billions — you can actually build a new city,” he said.

Barcelon also noted reports of officials allegedly losing nearly ₱1 billion in casinos, urging a thorough money trail investigation.

The MBC expressed alarm at the billions poured into flood control projects despite persistent flooding nationwide.

The FPI said corruption and negligence in such projects “endanger lives and undermine confidence in government programs.”

FPI Chair Elizabeth Lee added: “Reports of undocumented projects, identical contract amounts, and substandard works are not just signs of corruption — they are threats to public safety, industry operations, and national resilience. Every failed or fraudulent project leaves Filipino communities and industries exposed to devastating floods.”

PCCI, MBC, and FPI declared support for the Marcos administration’s anti-corruption drive in infrastructure.