Global shame

Economic managers have a lot of explaining to do to foreign donors such as the World Bank and the Asian Development Bank to keep these multilateral agencies from pulling the plug on cheap loans flowing into the country.

According to analysts, the probable consequence of the diversion of flood-control funds to pork barrel projects is a loss of confidence in the government by lending institutions.

The country experiences frequent typhoons and flooding, with Metro Manila being particularly vulnerable and requiring vital funding for flood control projects. The ongoing scandal has placed the concessionary loans in peril.

For instance, the Metro Manila Flood Management Project and Pasig-Marikina Channel Improvement Project are flagship initiatives aimed at mitigating these risks.

Their defunding or underfunding could exacerbate flooding, leading to loss of life, property damage, and economic disruption, meaning the legitimate projects are delayed due to the controversy.

Official Development Assistance (ODA) projects involve bilateral and multilateral agreements with foreign governments and institutions.

To unlock the development funds, the government needs to raise counterpart financing in the national budget.

Failing to allocate funds as agreed on could strain diplomatic relations and reduce the ability to secure future foreign assistance, according to a financial sector veteran.

A recent report by a South Korean daily indicated that President Lee Jae-myung had ordered an immediate halt to a civil engineering project in the Philippines amid the corruption scandal.

Last February, a project estimated to cost 700 billion won (P28.7 billion), was denied loan support by the Economic Development Cooperation Fund (EDCF) of Korea’s Ministry of Economy and Finance due to risks of irregularities and mismanagement.

A Korean weekly news magazine reported that the project was restarted after People Power Party Representative Kweon Seong-dong supposedly pressured then Finance Minister Choi Sang-mok and other officials to resume it.

In a Facebook post on Wednesday linking to the report, Lee said it was “fortunate” the project had not yet begun and no EDCF funds had been disbursed.

Davao City Rep. Sid Ungab, who exposed the misuse of ODA funds in the 2024 and 2025 national budgets, is worried over the embarrassment to foreign creditors.

In a privilege speech, he called for an independent investigation into allegations of Congress’ abuse. He wants to safeguard the public trust, emphasizing that integrity is the “lifeblood” of the institution.

Ungab exposed the removal of the 2024 ODA funds and their drastic reduction in 2025.

The bicameral conference committee, which removed all 2024 ODA funds, has been criticized for operating with limited transparency.

The 2025 General Appropriations Bill (GAB) included “28 blank items” in the bicameral report, raising questions about the legitimacy of the process. Ungab, along with others, have filed a petition in the Supreme Court to declare the 2025 GAA unconstitutional, citing these irregularities.

The bicameral conference stage is meant to reconcile differences in the budget, not introduce significant changes like the complete defunding of projects.

According to Ungab, the proposed national budgets for 2024 and 2025 initially included 11 major flood control projects funded by foreign aid.

These projects, which had a combined budget of P21.6 billion for 2024 and P27.5 billion for 2025, were supported by signed loan agreements and were meant to protect key economic areas and communities from floods and climate-related disasters.

Ungab revealed that the P21.6 billion allocated for 2024 was initially included in the General Appropriations Bill. However, it was reduced by P5.49 billion during the third reading at the House of Representatives and was eventually removed entirely during the Senate and bicam stages.

He said that for 2025, the original P27.5 billion allocation was significantly cut by P18.6 billion in the House-approved version, leaving only P8.9 billion.

Ungab said that in the General Appropriations Act (GAA) for 2025 the approved budget for flood control projects was P9.2 billion, a 67-percent reduction from the initially proposed amount.

The cut in the budget for the well-planned flood control projects approved by the lending agencies diverted money to smaller, ineffective initiatives in different legislative districts.

Corruption is pulling the country down into the abyss of opprobrium, from where it may never rise.