The Department of Public Works and Highways (DPWH) has joined forces with the Insurance Commission (IC) to recover government funds lost to so-called “ghost” flood control projects, as authorities turn their sights on the insurance firms used by contractors linked to the anomaly.
In a memorandum of agreement signed Wednesday afternoon in Manila, DPWH and IC formalized their partnership to pursue claims against insurance companies that issued performance bonds to contractors involved in allegedly bogus infrastructure projects.
DPWH Secretary Vince Dizon said the first step is to target insurance firms connected to the cases already filed before the Independent Commission for Infrastructure (ICI) in mid-September.
These include projects under the jurisdiction of Cagayan’s Isabela-Dinapigue district where several contracts were later found to be non-existent or “ghost” projects.
“Filing claims against the insurance companies is one way of recovering public funds,” Dizon explained. “Every contract comes with a performance bond, and up to 30 percent of the contract value can be recovered through those claims.”
He noted that many of the projects under investigation are worth around P100 million each — meaning as much as P30 million per contract could potentially be reclaimed by the government.
Dizon identified three insurance companies now under scrutiny for their involvement in the questionable flood control projects in Bulacan’s First District — Liberty Insurance, Carbre Insurance and Sterling Insurance. These firms, he said, were used by contractors to secure bonds for projects that have since been flagged as fictitious.
“We’ve already written to these companies, but so far, none of them have responded,” Dizon said.
For his part, Insurance Commissioner Reynaldo Regalado warned that non-cooperative insurers could face administrative sanctions — including suspension or even revocation of their licenses to operate.
During the press conference, Dizon appealed to companies involved in the irregularities to cooperate rather than drag the issue through lengthy legal battles.
“The President has made it clear — we must recover the money as fast as possible,” he said. “We’re appealing to those involved to work with us and help correct these mistakes.”
The DPWH’s initiative forms part of a broader government effort to hold accountable those behind anomalous flood control projects nationwide, as the administration pushes for transparency and integrity in public infrastructure spending.