Corruption derails concessions

A person who matters in the investor community expressed deep concern about flagship projects that secure ready development funding on concessional terms but are delayed for years due to political expediency.

The term “expediency” carries a double-edged sword, implying not only convenience but also the risk that such projects are being indirectly leveraged for corrupt practices.

The investor, involved in blue-chip projects, noted: “We sometimes face serious issues with delays in payments from the Philippine government to contractors. Still, all those major projects are moving forward.”

Investors concerned about “serious” delays translate to impeding future funding prospects, all because their projects, with ready financing, are being shoved to the side to make way for pork barrel.

The practice that intensified over the past three years under President Ferdinand Marcos Jr. was the manipulation of the budget to favor the insertion of pet projects.

The way this was done was patently devious, since counterpart financing for ODA-funded projects was relegated to Unprogrammed Appropriations (UA), thereby delaying infrastructure development.

UA use standby or contingent funds authorized in the General Appropriations Act that can only be released when specific conditions are met, such as excess revenue collections beyond targets, new revenue measures, approved grants, or realized foreign loan proceeds.

The UA has ballooned dramatically since 2022 under the Marcos administration. Historical levels stayed under P250 billion annually, or from 2011 to 2021, but then surged to P251.6 billion in 2022, P807.2 billion in 2023, P731.4 billion in 2024, and P363.4 billion in 2025.

When the flood control scandal exploded, the UA dropped sharply to P150.9 billion in 2026, the lowest since 2019, after President Marcos vetoed P92.5 billion.

Congress drove much of this expansion by hiking the UA beyond the executive’s National Expenditure Program proposals to make way for over P1.1 trillion in “budget insertions” across the 2022 to 2025 budgets, turning the UA into a de facto repository for patronage spending.

Many projects under the Build Better More program and its predecessor, Build! Build! Build!, such as railways, bus rapid transit systems and major flood-control and river-basin works, are foreign-assisted projects (FAPs) financed primarily through ODA concessional loans.

The powerful Bicameral Conference Committee of Congress deprogrammed large chunks of FAPs that reached nearly P800 billion from 2023 to 2026, creating chronic delays in counterpart releases and loan drawdowns.

ODA loans have near-zero or very low interest rates, long repayment periods of up to 40 years and grace periods that make them far cheaper than domestic borrowing or commercial loans.

Delays trigger contract escalations, redesigns, rebidding and remobilization costs.

At least six ODA projects already saw increases totaling P57.12 billion due to design changes, price hikes and extra right-of-way payments.

The government will incur an additional P260 billion to cover funding gaps and keep projects afloat after stalled counterpart funding froze ODA disbursements.

Projects that could have benefited from concessional ODA financing instead faced cost overruns, added fees, and higher-cost bridging, burdens ultimately passed on to taxpayers.

The public bears the cost, as the UA’s original contingency purpose was stretched into a vehicle for political insertions.

The country, thus, lags in Asia’s infrastructure race and posts feeble growth to keep lining the pockets of the crooks in government.