The current DPWH flood control projects corruption scandal is the biggest in the history of the Philippines in terms of amount (even if adjusted for inflation), and in the number of government officials and politicians involved. There has always been overpricing and kickbacks in government public works projects in the national and local levels, but it has been in the 10% to 15% range for decades. The two exceptions in recent years were; the Napoles social programs scandal where only 20% was spent and 80% was shared by the arrangers and the politician senators. The other was the Pharmally overpriced medical supplies during COVID-19 pandemic in the Duterte years where the overprice was 70%.
All these corruption scandals have economic, social, and political consequences, with the slower/weakened growth of the economy and the lower trajectory of the GDP curve, as being the immediate effects felt by the people. The social and political anger and dismay of the people are initially strong and widespread but tapers off and softens over time. Maybe, due to the amounts stolen, which are hundreds of billions of pesos, the number and prominence of the politicians involved, and the more active social media, these DPWH corruption scandals will have larger/longer implications and effects on the social and political conditions of the Philippines.
The Philippines Statistics office, the Banko Sentral ng Pilipinas, and the Department of Economic Development released last week the Philippines GDP growth rate for 2025 at 4.4%, the inflation rate at 2%, the unemployment rate at 4% and underemployment at 8%. The corruption scandal was acknowledged as the main cause of the slower growth rate, due to the slower government expenditures and infrastructure investments. The diversion of government payments to private pockets and the suspension of payments to contractors of many government projects, decreased aggregate consumption expenditures, restricted employment, and slightly constricted production of some goods and services. The percentages on unemployment and underemployment were steady, but more were unemployed due to the larger labor force.
It is imperative that the Philippine government reverse and counteract these negative factors to prevent the detrimental economic effects stretching over the medium and long-term economic trajectory of the country. The government has resumed all public works projects, including some of the unfinished/under specification flood-control projects, and are updating the payments of unaffected contractors and sub-contractors. Presumably, these are now better monitored, evaluated, and controlled to avoid repetition of the scandals.
Trust and confidence on government officials, government offices, congressmen, senators and their institutions have been severely eroded in this DPWH corruption scandal, as reported in their low trust ratings, validated by the scathing report/comments in the main and social media. Even the reputation of the courts up to the Supreme Court is questioned as to its impartiality and fairness. The country and its democratic traditions are moving in the wrong and dangerous path and direction, if we cannot rebuild the credibility and prestige of these institutions.
At this time, the Department of Justice, the ombudsman, some senators, congressmen, and local officials are holding the line with the investigations, prosecutions and arrests of all the corruption participants, with the aim delivering justice and satisfying the demands of the people. The Filipino people have the right to expect positive and beneficial consequences of the biggest government corruption scandal in Philippine history, the prosecution, conviction, and jailing of all the guilty.