Regulating the board room, not the bridge
Of the half a trillion pesos in projects Malacañang itself reviewed, almost a hundred billion worth were cornered by 15 contractors alone.
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Of the half a trillion pesos in projects Malacañang itself reviewed, almost a hundred billion worth were cornered by 15 contractors alone.
Flood control money and stock market distrust are pricing in the same problem: governance.
Nature grades government homework, and this week it failed the country. The North Luzon Expressway at San Simon, Pampanga was drowning for days. A two-hour drive became a two-day ordeal. Thousands of vehicles idled, some for more than 20 hours. A trucker, out of fuel and out of patience, wept over pandesal, waiting on a river that refused to recede.
This was not an unprecedented storm. It was ordinary rain meeting extraordinary neglect, and the gap between the two is measured in pesos the public is only now learning to add up.
The ledger is staggering. Nearly two trillion pesos have gone to flood control since 2011, the annual figure climbing from seventy billion to nearly two hundred fifty billion by 2025. Of the half a trillion pesos in projects Malacañang itself reviewed, almost a hundred billion worth were cornered by 15 contractors alone.
One senator counted the daily burn rate at P1.4 billion. San Simon did not flood for want of a budget. It flooded despite one, an even harder failure to forgive.
This is the ground on which the Commission’s proposed designation of contractors as corporations vested with public interest means to work. Independent directors and audit committees cannot lower a river. They exist to ask, before the rain falls, whether a seawall was built or merely billed. Governance is not concrete. It is the discipline that decides whether the concrete was real.
The initiative also sits squarely on what the Commission is for. The SEC does not merely register corporations; under the Securities Regulation Code, it is tasked with developing the capital market itself, and those two mandates meet exactly there.
A contractor with an independent audit committee is less likely to misstate a receivable. A board with outside directors is less likely to let a related party quietly absorb public money. Multiply that discipline across every firm handling government funds, and what compounds is not just cleaner books but a market where prices can finally be trusted to mean something.
Capital market development, in the end, is not built on incentives or roadshows alone. It is built on the boring, unglamorous certainty that the numbers a company reports are true.
That certainty is precisely what is missing, and the market is pricing its absence. Eduardo Francisco, president of BDO Capital, calls the Philippines nearly negligible in the portfolios of foreign fund managers. Here is the paradox worth sitting with: Philippine shares are cheap, among the cheapest in Asia, and still nobody is buying.
Cheap should summon bargain hunters. Instead it has summoned silence. Net foreign portfolio inflows collapsed roughly ninety percent in July alone — not one company listed on the exchange in the first half of 2026. A market this inexpensive should be crowded with buyers. But it is empty, because price is not the same as trust, and investors are discounting not earnings but the word of the institutions that report them.
A flooded expressway and an unbought stock market read like unrelated headlines. They, however, share one author: a system where the appearance of a project, or the appearance of a clean set of books, has too often stood in for the thing itself.
Water does not read press releases. Fund managers do not buy on discount alone. Both wait to see what was actually built, and this year both found the answer wanting.
The rain will stop. The discount will not close itself.
