Holding elites responsible for bad behavior has always been difficult in a country with one of the lowest journalistic safety environment ratings in the world. But even during a period of relative press freedom under Bongbong Marcos – where undeniable evidence now comprises a mountain – an inability / unwillingness on the part of local courts to throw the book at culprits could derail the country’s long search for justice, as well as manifesting the death nell of its credit rating and foreign investment.
R. Ballater Aegis
Makati, MM
Nov. 2nd, 2025
MANILA — As the rainy season’s wrath recedes, leaving behind flooded streets and shattered lives, the Philippines grapples with a deeper deluge: a multibillion-peso corruption scandal at the Department of Public Works and Highways (DPWH) that threatens to drown the nation’s economic aspirations. Revelations of ghost projects, overpriced contracts, and substandard flood-control infrastructure have ignited public outrage, but with key politicians implicated yet unprosecuted, experts warn of a cascading crisis that could shave points off GDP growth, scare off investors, and perpetuate a vicious cycle of underdevelopment.
The scandal, which erupted in mid-2024 and intensified through 2025, centers on the DPWH’s flood management initiatives—projects meant to shield vulnerable communities from climate-fueled disasters but instead lining the pockets of corrupt officials and contractors. Sworn testimonies before the Senate Blue Ribbon Committee in September 2025 painted a grim picture. Whistleblowers like Brice Ericson Hernandez and Jaypee Mendoza described how bids were rigged, materials cheapened to allow for massive kickbacks, and funds siphoned into “ghost” works that exist only on paper.
President Ferdinand Marcos Jr. first spotlighted the issue in his July 2025 State of the Nation Address, vowing a crackdown and establishing an inter-agency task force. Yet, as investigations by the Department of Justice and National Bureau of Investigation uncover a sprawling network involving high-ranking politicians—no arrests of major figures have materialized by November.
This inaction, observers say, is not mere delay but a harbinger of economic peril. The Department of Finance estimates that corruption in flood-control projects alone has already hemorrhaged ₱118.5 billion (about $2 billion) from the economy between 2023 and 2025, with up to 70% of allocated funds vanishing into illicit channels. Greenpeace Philippines decries this as an “obscene plunder” of climate-tagged expenditures, with as much as ₱1.089 trillion at risk since 2023—a sum that could have fortified resilient infrastructure amid rising sea levels and typhoons.
If the politicians at the scandal’s heart evade arrest, prosecution, and meaningful prison terms, the fallout could extend far beyond these figures. Economists and business leaders foresee a “crisis of trust” eroding the foundations of growth in Southeast Asia’s fastest-expanding economy. Finance Secretary Ralph Recto, in a stark October 2025 assessment, linked the scandal directly to subdued growth projections. “If part of the budget hadn’t been lost to corruption, the economy might’ve been growing by around 6% to 6.2%,” he told reporters, instead of the revised 5.2% forecast for 2025. The ripple effects are already visible: foreign direct investment dipped 8% in the third quarter of 2025, with infrastructure-sensitive sectors like construction and real estate hit hardest, as global firms cite governance risks in their pullback.
At its core, unpunished corruption acts as a stealth tax on progress, diverting resources from vital public goods. The World Bank has long flagged the Philippines’ infrastructure deficit – estimated at $8.4 trillion in unmet needs through 2040 – as a drag on competitiveness, exacerbated by graft that inflates project costs by 20-30% on average. Without deterrence, scandals like the DPWH’s become normalized, breeding inefficiency. Roads crumble prematurely, bridges fail under load, and flood defenses wash away in the first storm. This not only stalls job creation, construction employs over 4 million Filipinos but also amplifies disaster costs. The 2024 typhoon season alone racked up ₱50 billion in damages, much of it preventable with honest fund use.
Public trust, the invisible currency of economic stability, hangs in the balance. A September 2025 survey by the Ateneo School of Government found 68% of respondents doubting the government’s anti-corruption resolve, a sentiment echoed in youth-led protests that paralyzed Manila’s streets earlier in the year. “Corruption isn’t just theft; it’s sabotage,” says Dr. Maria Luzviminda Santos, an economist at the University of the Philippines. “Untouched, it signals to investors that the rule of law is optional, choking off the capital inflows we need to hit upper-middle-income status by 2030”, she submitted. Historical precedents bolster her case. Past unprosecuted scandals, from the 2013 pork barrel scam to recent procurement irregularities, have correlated with persistent low rankings on Transparency International’s Corruption Perceptions Index, where the Philippines languishes at 115th out of 180 nations.
The human toll compounds the macroeconomic strain. Diverted funds mean fewer schools protected in flood-prone barangays, strained hospitals without upgraded levees, and families trapped in poverty cycles as agricultural lands turn to mudslides. P&A Grant Thornton, in a 2024 analysis updated amid the current crisis, estimated that widespread graft has cost the Philippines “great opportunities” over decades, stunting per capita GDP growth by up to 1.5 percentage points annually. If impunity prevails, this lost potential could swell to trillions, widening inequality in a nation where the top 1% already holds 47% of wealth.
Yet, glimmers of reform persist. The Ombudsman has notched over 300 convictions in corruption cases from January to July 2025, a record pace under Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act. Advocacy groups like the Center for International Development and Security at UP Diliman urge “strong political will” to dismantle the “layered architecture” of infra corruption, from bid manipulation to unprogrammed fund diversions. Business coalitions, too, are mobilizing, with the Philippine Business for Education warning that a “darkened outlook” could derail the “Build Better More” program’s ambitious pipeline of 194 flagship projects.
As 2025 draws to a close, a decision must be made now. Either prosecute the powerful, or watch the economy submerge in the floods of its own making. For an archipelago battered by nature’s fury, the real storm is the one we brew ourselves, one of eroded accountability that leaves no high ground for growth.
