Ghost Flood Control Projects: A Costly Lesson in Corruption

When Finance Secretary Ralph Recto revealed that ghost flood control projects drained between ₱42.3 billion and ₱118.5 billion from the Philippine economy between 2023 and 2025, the figures were meant to shock.

Illustration of school children wading through floodwaters in the Philippines. Despite billions in nationwide flood control allocations, ghost projects have left flood mitigation weak. (Illustrator: ASK)

Equivalent to US$0.9 to 2.4 billion, this diversion of public money represented not only a budgetary black hole but also a squandered chance to create up to 266,000 jobs.

“Raising revenues is no joke,” Recto said. “Then you will see that it does not go to the right projects and the welfare of the people, some even become ghost projects.”

Yet Recto’s estimates may capture only a fraction of the losses. 

His figures exclude the multiplier effect of public spending, where every peso invested properly stimulates wages, consumption, and private investment.

Recto’s calculation does not account for the multiplier effect of public spending. Government expenditure, when invested properly, circulates through the economy, multiplying its value across wages, consumption, and private investment.

Redirected to health, education, or renewable energy, the missing billions — or more plausibly, trillions — could have driven long-term growth.

Even using a conservative fiscal multiplier of 1.5, every peso misused deprived the economy of another fifty centavos in lost potential.

Evidence shows the problem runs deeper — and across the country.

Across Manila, Quezon City, Bulacan, Central Luzon, Mindoro, and as far as Davao Occidental, hundreds of flood control projects were reported as completed, paid for, and even celebrated, yet most turned out to be nonexistent, dysfunctional, or substandard.

In Manila, over 200 projects worth ₱14 billion proceeded without permits, while Quezon City tallied 254 projects valued at ₱14.24 billion, with only a handful undergoing the required coordination. The pattern suggests a deliberate attempt to bypass oversight and evade on-site audits.

In Bulacan, at least 60 suspected ghost projects form part of ₱9 billion in questionable contracts, while in Mindoro, billions in flood-mitigation projects were flagged by local officials as either grossly overpriced or abandoned outright.

Davao Occidental saw a ₱96.5 million project exposed as entirely fabricated, while Central Luzon has been tied to another ₱5 billion in ghost allocations.

Collectively, these anomalies sit within a ₱545.6 billion national flood-mitigation budget, of which about ₱100 billion has been cornered by only 15 contractors as exposed by President Ferdinand Marcos, Jr.

Investigations suggest the issue extends well beyond initial estimates.

The Senate Blue Ribbon Committee, now chaired by Senator Ping Lacson, has flagged an extensive roster of private firms and public officials (including legislators) for their roles in what is now emerging as one of the most brazen plunders of public works in recent history.

Lacson has revealed that as much as half of the nearly ₱2 trillion allocated for flood control over the past 15 years may have been lost to corruption, with only about 40 percent of funds translating into functioning infrastructure.

Greenpeace Philippines has added its own warning, estimating that ₱1.089 trillion in climate-tagged government expenditure has been vulnerable to corruption since 2023, including ₱560 billion in 2025 alone. The Department of Public Works and Highways (DPWH), which oversees most of these projects, sits at the center of the controversy.

“Climate criminals,” Greenpeace campaigner Jefferson Chua called those siphoning off funds intended to protect communities.

The implications are devastating.

Corruption has gutted the country’s ability to withstand intensifying floods, already projected to cost the Philippines $42 billion in GDP losses by 2050, according to research firm GHD.

The irony is stark — the very projects meant to defend against the threat of floods have become channels of plunder.

The health consequences are equally devastating. 

Flood-prone communities report rising cases of leptospirosis, dengue, and cholera, as stagnant waters from failed projects turn into breeding grounds for disease.

Manila Mayor Isko Moreno captured the frustration bluntly, “We have the biggest flood control budget…and yet we are still the most flooded city.”

Hospitals and clinics already under strain are left to absorb the fallout.

History shows that floods do more than dampen property. 

They depress local GDP, displace families, and disrupt supply chains. Typhoon Ondoy in 2009 caused an estimated ₱22.54 billion in losses in Pasig and Marikina, according to a PIDS study.

Ghost projects magnify this vulnerability.

When floodwaters rise, so do food prices, unemployment, and inequality. For the poor, who often live in the most flood-prone areas, every ghost project is another guarantee of suffering.

Some policymakers will argue that Recto’s estimates are sufficient. 

But the focus on headline numbers alone risks downplaying the full picture. The economic losses are not linear — they compound.

Funds lost to ghost projects mean stalled infrastructure, stunted job creation, missed opportunities in agriculture and manufacturing, and lower foreign direct investment.

The true bill is not the max-estimated ₱118.5 billion loss (as pegged by Finance Secretary Recto) but a cascading erosion of national competitiveness.

This is more than a fiscal issue; it is a moral one. 

With nearly 40 percent of the population under 25, the scandal sends a dangerous signal to the next generation about the kind of country they will inherit.

If corruption remains unchecked, why should young Filipinos believe taxes will ever translate into classrooms, hospitals, or roads?

When floodwaters rise, so do food prices, unemployment, and inequality. For the poor, who often live in the most flood-prone areas, every ghost project is another guarantee of suffering.

President Ferdinand Marcos Jr. has pledged reforms through the Independent Commission for Infrastructure (ICI) and vowed to hold perpetrators accountable. He has further promised to compel them to shoulder the cost of completing or rectifying projects while forfeiting any illicit proceeds.

These are steps in the right direction, but without systemic reforms in procurement, auditing, and political oversight (a.k.a. Budget Insertions), ghost projects will continue to haunt national budgets.

Transparency in contracting, competitive bidding, and real-time monitoring — possibly through digital platforms accessible to the public — could help restore confidence.

[Proposals such as Senator Bam Aquino’s National Budget Blockchain System, which would make every peso traceable in real time, point to a path forward.]

The Philippines cannot afford to treat this as just another scandal. 

The lesson of the ghost flood control saga is stark — corruption is not just about stolen money; it is about stolen futures. 

The billions (trillions?) siphoned off could have pushed GDP growth above 6 percent, funded resilient schools and hospitals, and created jobs for thousands of Filipinos.

Instead, they left behind empty ditches and rusting steel, monuments to plunder rather than progress.

For every peso lost to ghost projects, the nation forfeits resilience, credibility, and the hope of a fairer future.

Whether leaders confront this crisis as a turning point — or let it wash away beneath the next flood — will define the country’s path forward.