ODA partners may keep close eye on how Philippines addresses corruption

The Philippine government’s response to corruption allegations involving flood control projects could have far-reaching implications for its official development assistance (ODA) portfolio, the Department of Economy, Planning, and Development (DEPDev) said.

DEPDev Undersecretary Rosemarie G. Edillon said on Thursday that the country’s ODA partners will be looking at how the government will address the issues of corruption in flood control and other infrastructure projects.

“(ODA partners) will take note of the fact that (this) issue being discussed out in the open. They’ll be looking for details on how exactly we address it,” Ms. Edillon told reporters on the sidelines of the Philippine Chamber of Commerce and Industry event on Thursday.

Infrastructure projects are now facing more scrutiny after allegations of corruption in flood control projects involving lawmakers and contractors.

Ms. Edillon said that ODA-funded projects undergo strict appraisal and monitoring, and that additional safeguards are being considered.

“If it’s ODA, then it goes through us for appraisal, etcetera… We could assure them of other measures that we will be putting in place,” she said.

The country’s ODA portfolio rose by 6% to $39.6 billion in 2024. ODA is a form of aid, typically loans and grants with concessional terms, provided by governments or international organizations to developing countries.

The country’s top sources of ODA include Japan, the Asian Development Bank, World Bank, the United States and South Korea.

Ms. Edillon also addressed concerns over job losses in the construction sector due to the ongoing investigations, describing them as temporary.

She stressed the need for the government to address the corruption in public works projects, so that there will be no impact on jobs in the construction industry.

Ms. Edillon called for stronger transparency mechanisms and encouraged private sector participation in monitoring infrastructure projects.

She cited the Department of Budget and Management’s Digital Information for Monitoring and Evaluation (DIME) initiative, which uses satellite imagery, drones, and geotagging to track government projects and prevent so-called “ghost” infrastructure.

Finance Secretary Ralph G. Recto earlier said corruption related to flood control projects may have cost the Philippines between PHP 42.3 billion and PHP 118.5 billion in average economic losses since 2023.

Meetings in Japan

Meawhile, Mr. Recto and DEPDev Secretary Arsenio M. Balisacan have held high-level meetings with Japanese officials, including the Japan International Cooperation Agency (JICA).

Japan remains the Philippines’ largest development partner, with USD 13.23 billion in active commitments across 82 projects.

The officials discussed the progress of major infrastructure projects, including the Metro Manila Subway Project, the North-South Commuter Railway Project, and the Metro Rail Transit Line 3 Rehabilitation Project.

The meeting followed an Aug. 27 dialogue between JICA’s Parliamentary League and Philippine officials in Pasay City, which tackled implementation delays due to right-of-way and counterpart funding issues.

Mr. Recto also met with the Kankeiren Executive Committee, representing over 1,300 Japanese firms, to promote the Philippines as a strategic investment destination.

“In the Philippines, you are in the right place, at the right time, with the right partners, and the right opportunities to win big,” he was quoted as saying in a Department of Finance statement.

He cited the country’s two “A-” investment-grade ratings from Japanese credit agencies as a vote of confidence in the Philippines’ fiscal management and growth trajectory.

Last month, Japanese credit watchdog Rating and Investment Information, Inc. affirmed the Philippines’ investment-grade “A-” rating with a “stable” outlook, citing its steady economic growth. — Aubrey Rose A. Inosante