Billions in public funds intended for flood control projects allegedly ended up inside suitcases instead of construction sites. This was the central issue raised during the Senate Blue Ribbon Committee hearing on 25 September, as lawmakers sought to unravel how such large sums moved from state coffers to private hands.

The Land Bank of the Philippines, the government’s official depository bank, came under scrutiny when its Malolos, Bulacan branch was linked to the disbursement of funds to Department of Public Works and Highways (DPWH) contractors. This comes after the review of SYMS Construction's Sally Santos was able to withdraw P457 million twice, in cash, on 24 March and 3 July 2025.

Branch manager Lilibeth Lim outlined the process, explaining that the DPWH provides the bank with a list of accredited contractors and cash allocations. Once approved projects undergo review by the Bureau of the Treasury, a list of due and demandable accounts payable is generated. The bank then initiates debiting through the Auto Debit Arrangement, and within 24 hours, the funds are credited to contractor accounts.

Senator Francis “Kiko” Pangilinan pressed further, questioning why a massive withdrawal of P457 million in cash did not raise any red flags, considering that under the Anti-Money Laundering Act (AMLA), transactions worth P500,000 and above automatically trigger a report.

Lim admitted, “Hindi kasi ako magtataka or mag-iisip ng negative since the funding is coming from the government and DPWH for the project.”

(I would not be suspicious or think negatively since the funding is coming from the government and DPWH for the project.)

Her statement highlighted a gray area between banking protocols and state safeguards. While banks follow “know your customer” (KYC) procedures, including profiling account holders’ employment, cash inflows, withdrawals, and assets, large-scale cash withdrawals are far harder to monitor once money leaves the system. Contractors’ funds, cleared by the bank for disbursement though still reported for AMLA checks, were legally withdrawn, but in cash, making them untraceable afterward.

In practice, financial institutions retain discretion over their internal risk levels and relationship with depositors when clearing such withdrawals. This sets a loophole that allows the funds to escape scrutiny.

Coincidentally, in July 2025, House Speaker Martin Romualdez filed House Bill No. 7, seeking to amend the country’s strict Bank Secrecy Law, or RA 1405, to expand the Bangko Sentral ng Pilipinas’ (BSP) authority to examine deposits when there is “reasonable ground to believe that fraud, serious irregularity or unlawful activity has been or is being committed.” The bill also provides that BSP’s inquiry results remain confidential, except when shared with agencies such as the Securities and Exchange Commission, Philippine Deposit Insurance Corporation, Anti-Money Laundering Council, Department of Justice, and the courts for crime prevention or prosecution.

Despite these safeguards, allegations persisted during the hearing that funds were diverted into the pockets of engineers, politicians, and businessmen instead of being used for the construction of the flood control projects, with only 30 percent of the allocated funds reportedly utilized.

Testimonies from DPWH engineers claimed that portions of project allocations, estimated at 25 to 30 percent, were allegedly delivered as cash-filled suitcases to the homes of political figures in Valle Verde and Forbes Park. Romualdez and former Ako Bicol Representative Zaldy Co were both implicated, with Co described as a key player in the alleged kickback scheme.