Ghost flood control projects bled economy of up to P118.5B – Recto
MANILA, Philippines – Corruption in the Department of Public Works and Highways’ (DPWH) flood control projects has cost the Philippine economy up to P118.5 billion in just two years, Finance Secretary Ralph Recto said.
“Because of ghost projects, our economy lost between P42.3 billion and P118.5 billion from 2023 to 2025,” Recto told senators during a finance committee hearing on Tuesday, September 2.
The losses, based on anecdotal reports that 25% to 70% of project funds are pocketed, could have created as many as 266,000 jobs, Recto said. Instead, the funds were wasted while growth slowed.
The economy grew 5.5% in 2023 and 5.7% in 2024. Recto argued that with proper spending, growth could have topped 6%. “It’s a waste. The economy would have expanded faster, and more jobs would have been created,” he said.
A P900-billion problem
Flood control has become a budget behemoth. The DPWH is one of the government’s biggest fund recipients, bagging over P900 billion this year, much of it for flood projects.
But the billions have not translated into protection against worsening floods. Instead, corruption allegations keep surfacing.
President Ferdinand Marcos Jr. himself admitted that P100 billion out of P545 billion in flood control funds since 2022 ended up with just 15 favored contractors.
On the heels of mounting scandals, Marcos replaced DPWH Secretary Manuel Bonoan with Vivencio “Vince” Dizon, a close ally from the Duterte administration, and set up an independent commission to probe the anomalies.
Ghost projects, real fallout
For Recto, the issue goes beyond wasted funds. It undermines investor confidence and exposes systemic rot in public works spending.
“If that money was spent better, we could have grown by 6%,” he said, noting that the controversy adds pressure to an economy already facing high tariffs and climate shocks.
Still, the government is sticking to its 5.5%–6.5% GDP growth target for 2025. Growth averaged 5.4% in the first half of 2025, slightly below target.
Luxury cars and big contractors
The crackdown has now reached the country’s customs bureau. On Tuesday, September 2, the Bureau of Customs (BoC) raided a Pasig compound tied to the Discaya family to seize 12 luxury cars, but only found two.
Among the contractors earlier flagged by Marcos were Omega & Alpha Construction and St. Timothy Construction, both linked to former Pasig mayoral candidate Cezarah Rowena “Sarah” Discaya.
BoC chief Ariel Nepomuceno vowed accountability. “We will ensure that these vehicles are located without delay, and if discrepancies are uncovered, all taxes and duties will be collected in full,” he said, warning that those hiding the cars will face the “fullest extent of the law.”
The bigger picture
The flood control scandal underscores how public works, meant to shield communities from disasters, have instead become conduits of corruption.
As billions vanish into ghost projects, Filipinos remain exposed to deadly floods, jobs are lost, and growth is stunted.
“The extent of the problem is this big,” Recto said. “It’s not just wasted money. It’s wasted opportunities.”
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