Corruption and Governance in the Philippines

As of 2026-08-30 · Updated 2026-08-30 · Section: Politics, Governance & Judiciary · 日本語版

0. Five things to grasp first

1. Numbers on where things stand now: transparency indicators

1-1. Transparency International Corruption Perceptions Index (CPI)

• Local reporting (Philstar and others) describes the 2025 edition as the Philippines' "worst-ever ranking." However, 注 the pool of countries grew from 180 to 182, so a simple rank comparison needs care. The 1-point drop in score, from 33 to 32, is easier to treat as genuine evidence of deterioration.
• Southeast Asia comparison (CPI 2025, Transparency International)

• 注 The CPI is a "perception" index, not a measure of the actual amount of corruption. It is a composite of expert surveys and business-risk assessments, so the score can fall even in "a year when more got exposed," once a large scandal is widely reported. Reading "CPI fell = corruption increased" is a misreading.
• 注 The CPI covers public-sector corruption only; it does not measure private-to-private bribery or a country's role as a destination for laundered money.

1-2. World Bank Worldwide Governance Indicators (WGI)

Source: World Bank Worldwide Governance Indicators (as compiled by TheGlobalEconomy). 注 The WGI, too, is a composite of various surveys, so it is inappropriate to describe a single year's move in the second decimal place as "improvement" or "deterioration." The fact worth taking away is the long-run flatness — the Philippines has been stuck around -0.6 for close to 30 years.

2. Institutions: who investigates corruption

2-1. The four pillars

• The Ombudsman serves a 7-year, non-renewable term, removable only by impeachment. The President appoints from a shortlist recommended by the Judicial and Bar Council (JBC). 注 The design of "an independent body whose head the President appoints" reliably triggers an independence controversy whenever someone close to the administration takes the post. Remulla, too, was the sitting administration's immediately preceding Justice Secretary, and conflict-of-interest objections were raised when he took office.
• The Sandiganbayan is composed of 1 Presiding Justice plus 14 Associate Justices (15 total), organized into 7 Divisions of 3 each (expanded from 5 Divisions under RA 10660, 2015).
• 注 COA can audit and disallow, but has no power to impose administrative penalties on officials (Supreme Court, Biong v. COA, 2024). A COA "finding" is neither an indictment nor a conviction. When reporting says "COA flagged irregularities," that is an accounting-level question, not a determination of criminal fact.

2-2. Key statutes

注 "Plunder" and "Graft" are separate offenses. Japanese-language reporting tends to translate both as "corruption," but Plunder — with its ₱50 million-plus threshold, non-bailable status, and life-imprisonment-level penalty — is a different, more severe class of crime, with an entirely different political impact.

3. The 2025–2026 flood control scandal

3-1. Discovery and scale

Trigger: In July 2025, Cardinal Pablo Virgilio David raised questions about a ₱5 billion flood project in Malabon/Navotas, and President Marcos himself addressed flood-control projects in his July 28 State of the Nation Address (SONA). On August 11, the President disclosed that "₱100 billion was concentrated in 15 companies" and opened the "Sumbong sa Pangulo" whistleblower site. On August 22, DPWH Batangas district engineer Abelardo Calalo was caught in the act and arrested for attempted bribery involving ₱3.1 million.

Anatomy of the scheme: bid-rigging (the same group of contractors bidding on a single project under multiple company names), license-renting, legislators inserting pet items into the budget in exchange for kickbacks, and "ghost projects" that either never break ground or fall short of standards. The Senate Blue Ribbon Committee's "Philippines Under Water" inquiry made visible a three-way structure linking contractors, district engineers, and legislators.

3-2. ICI (Independent Commission for Infrastructure)

注 ICI's numbers vary hugely depending on the context. On November 21, 2025, the ICI stated "as many as 1,200 could be subject to prosecution" (Philstar), but only 65 were actually formally referred to the Ombudsman. Do not reuse the headline "1,200 to be prosecuted" as-is.

注 The ICI's disbandment drew criticism. On March 23, 2026, reporting surfaced that "the ICI's internal findings had cleared former House Speaker Romualdez," and the Palace found itself explaining that "the investigation continues even after the ICI closes" (PNA, March 15, 2026). Since the ICI was a fact-finding body, not a prosecuting one, its findings do not determine criminal liability.

3-3. Senate and House investigations

3-4. Politicians prosecuted or facing prosecution (as of August 25, 2026)

Key contractors

3-5. Political fallout

• The large-scale protests of September 21, 2025: approximately 100,000 at "Baha sa Luneta" in Rizal Park (Luneta), and approximately 70,000 at the "Trillion Peso March" at the EDSA Shrine, with simultaneous rallies in Cebu, Baguio, Davao, Iloilo, and elsewhere. Clashes broke out in some areas (around Mendiola/Recto/Ayala), leaving 2 dead, roughly 76 civilians and 95 police officers injured, and 244 arrests. Further large rallies followed on November 30, 2025 (a second round) and February 25, 2026 (the 40th anniversary of People Power).
• A cascading collapse of legislative leadership: House Speaker went from Romualdez → Faustino "Bojie" Dy III (from September 17, 2025). Senate President went from Escudero (31st, May 20, 2024–September 8, 2025) → (September 8, 2025) Tito Sotto (32nd) → (May 11, 2026) Alan Peter Cayetano (33rd, until June 3) → 注 the presidency was vacant June 3–17 (with Gatchalian acting as President Pro Tempore) → (June 17, 2026) Sherwin Gatchalian (34th, incumbent; the same day, Tito Sotto was elected acting Senate President Pro Tempore, and both former presidents Zubiri and Escudero witnessed Gatchalian's oath of office). (The vacancy period and the numbering of presidencies were filled in through cross-checking on 2026-08-25. 2026-08-27, source replaced: the previous draft cited the English-language Wikipedia articles "List of presidents of the Senate of the Philippines" and "Sherwin Gatchalian"; this was re-verified against primary reporting. Sources: Philippine News Agency, "Gatchalian formally elected as Senate President," 2026-06-17; GMA News, "Sherwin Gatchalian elected Senate president," 2026-06-17; Rappler, "Win Gatchalian is elected Senate president," 2026-06-17; the Commission on Appointments' official site (comappt.gov.ph), article dated 2026-06-17. All retrieved 2026-08-27. The numbering itself [31st–34th] could not be explicitly confirmed in the primary reporting above and is being provisionally retained as the value on which multiple search results agree = needs re-verification) 注 Having 4 different Senate Presidents in a single year is an extraordinary situation that has severely undermined the predictability of legislative deliberation.
• The DPWH Secretary changed from Bonoan to Vince Dizon (from September 1, 2025), who was directed to "clean up" the ₱881.3 billion DPWH budget.
• Public opinion: In SWS's Q2 2026 survey, President Marcos's trust rating was 34% (Vice President Sara Duterte's was 57%). The SWS survey also found that corruption/governance had overtaken economic issues as the public's top concern, and that 59% of Metro Manila residents said DPWH corruption had "gotten worse over the past 3 years."

3-6. Economic spillover

注 Do not misread the mechanism. The direct cause of the GDP slowdown is less that "corruption made money disappear" than a "chilling effect" — bureaucrats, fearing prosecution, freezing bidding and spending. Both the World Bank and the ADB cite the corruption issue as a risk factor for the Philippines' 2026 growth outlook. In other words, the country is in the politically awkward position where exposing corruption is itself becoming a short-term drag on growth.

3-7. The 2027 budget: scrutiny of ₱107 billion

• DPWH requested ₱107.4 billion for flood-control projects in the 2027 budget (Rappler, August 11, 2026 / Philstar, August 12) — the lowest level since 2019.
• Following major flooding in Metro Manila on August 17, 2026, the ₱107 billion request itself became the target of intense congressional scrutiny (BusinessWorld, August 17, 2026 / Philstar, "Senate to scrutinize ₱107-B flood control budget," August 22, 2026).
• Transparency measures floated include a requirement to publish GPS coordinates for every project (Philstar, August 16, 2026) and the Ombudsman announcing monitoring at every stage (Daily Tribune, August 18, 2026).
• For reference: in the 2026 budget, ₱225 billion was reallocated from flood control to education and health, and ₱36 billion to social welfare, and on September 8, 2025 President Marcos had stated "no new flood-control budget will be allocated for 2026."

4. Pork Barrel: the two 2013–2014 unconstitutionality rulings

注 "Pork barrel was abolished in 2013" is inaccurate. What was ruled unconstitutional was the specific PDAF mechanism; afterward it survived in new forms such as "budget insertions," "lump-sum items," and "ayuda (assistance) programs." The 2025–2026 flood-control scandal is precisely the latest incarnation of this "insertion"-style pork barrel. Zaldy Co's claim that he "inserted about ₱100 billion" into the budget shows that, after PDAF's abolition, legislative discretion simply moved to the budget-deliberation stage.

注 The criminal outcomes of the PDAF scandal were extremely limited.

Over more than a decade, the major plunder charges against the senators accused turned out, almost across the board, to end in acquittal or an unresolved outcome. Do not read "indicted" as "will eventually be convicted." This is the single most important reference point when thinking through where the 2026 flood-control case is likely to end up.

5. The history of ill-gotten wealth: the Marcos family and the June 2026 ruling

The June 2026 Sandiganbayan ruling

• In June 2026, the Sandiganbayan dismissed the "remaining asset claims" in the ill-gotten-wealth case against the Marcos family (Bloomberg, June 5, 2026; ABS-CBN, June 6, 2026). Reporting identifies the claims affected as including Civil Case No. 0141. This legally closed the main part of a recovery case that had run for 35 years since it was filed in 1991.
• 注 Reporting does not agree on the legal grounds for the dismissal (insufficient evidence versus a procedural reason), and it cannot be stated definitively as of this article = needs verification.
• Civil society groups such as ATOM (August Twenty-One Movement) condemned the ruling as "utterly unacceptable" and called it "a pattern of impunity for the Marcos family" (ABS-CBN/Manila Times, June 6–7, 2026).
• In August 2026, President Marcos himself stated that "it has never been proven that the family's assets were ill-gotten," reigniting the controversy (Inquirer, August 15, 2026; Daily Tribune, August 14, 2026).

注 This is an extremely politically sensitive area. When covering it, always keep separate: the "₱171 billion recovered" (an actual, confirmed figure), the "US$5–10 billion in ill-gotten wealth" (an estimate), and the "dismissed claims" (a judicial ruling).

6. Procurement: RA 12009 (the New Government Procurement Act)

注 (Confirmed against amended text, 2026-08-26) Describing "RA 12009 as a comprehensive revision of RA 9184" is inaccurate. The official title is "An Act Revising Republic Act No. 9184…," but RA 12009 Section 115 (the Repealing Clause) "repeals" RA 9184 and Commonwealth Act No. 138 outright. The original text reads: "Republic Act No. 9184 otherwise known as the 'Government Procurement Reform Act' and Commonwealth Act No. 138 are hereby repealed." However, since RA 12009 Section 113 (Transitory Provision) states that "Prior to the effectivity of the IRR of this Act, the provisions of Republic Act No. 9184 and its IRR shall remain in force and effect...," the repeal actually took legal effect only on the IRR's effectivity date of February 25, 2025. A procurement project publicly announced before February 25, 2025 therefore falls under RA 9184. 注Do not confuse "a section of the amending law" with "the law amended/repealed" — Sections 113 and 115 are both section numbers of RA 12009 itself, not of RA 9184. (Source: GPPB Resolution No. 05-2025, which quotes Sections 113 and 115 verbatim / GPPB-TSO's official page)

Main changes

注 Note the irony of the timing. Even though RA 12009 was enacted in July 2024 and its IRR issued in February 2025, most of the projects implicated in the 2025 flood-control scandal were actually awarded under the old law (RA 9184). "A new law exists" does not equal "the problem is solved." If anything, some argue that by adding "evaluation criteria beyond price," MEARB widens the evaluation committee's discretion, and, depending on implementation, could open the door to new forms of discretionary corruption. In July 2026, KPMG published a piece discussing "closing procurement gaps with digital tools (Accountability by Design)."

7. Whistleblower protection: the biggest institutional gap

注 This is shaping how the flood-control case is being investigated. The arrests and indictments that have gone forward have relied on confessions and testimony from insiders themselves — the Discaya couple, a former DPWH engineer. But with no permanent legal framework protecting them, on August 18, 2026, the Ombudsman was reported to be "considering plunder charges against 4 of Zaldy Co's former bodyguards themselves, following their recantation of earlier statements" (Manila Bulletin). The constant risk of recantation is a direct consequence of having no protection law.

8. Estimates of the economic losses from corruption, and how to read them

注 It is wrong to blend these four figures together and write "the Philippines' corruption losses total ₱1 trillion." The principle for telling them apart:

In particular, articles even in the Japanese-language sphere are seen misreading "the ₱545.6 billion flood-control budget" as "₱545.6 billion was stolen." ₱545.6 billion is the total budget allocation, of which only a portion is suspected of fraud.

注 The long-circulating claim that "20% of the national budget disappears to corruption in the Philippines" also, when its origin is traced, most often leads back to statements by the Ombudsman or the World Bank from the 1990s–2000s, and no updated government statistic confirming it as of 2025–2026 has been found = unconfirmed. If you use it, always attach the year and the source.

9. Local corruption

Corruption in the Philippines is not just a national-government problem. Local government units (LGUs) have, since the 1991 Local Government Code (RA 7160), controlled substantial funding through the internal revenue allotment (now the National Tax Allotment), giving mayors and governors considerable discretion.

Examples of local cases the Ombudsman acted on in 2025–2026 (reporting-based)

Local governments are also central to the flood-control scandal. The Ombudsman's investigations cover roughly ₱60 billion worth of flood-control projects in Cebu province alone. 注 The clearest structural finding to emerge from the 2025–2026 investigations is that DPWH's "District Engineering Offices" (DEOs) have become the nodes connecting the national budget with local contractors and local legislators.

Practical implication: for a Japanese company doing business in the provinces, corruption risk concentrates less in "permits from the capital" and more around "local permits, local contractors, and local power brokers." Note that this exposure can trigger extraterritorial application of Japan's Unfair Competition Prevention Act (the foreign-bribery offense), the U.S. FCPA, and the UK Bribery Act.

10. Efforts at reform

11. Checklist for Japanese business practitioners

12. Key sources

13. 注 Matters this article treats as "unconfirmed" (cautions for citation)

日本語の詳細版: 分野「政治・統治・司法」「汚職とガバナンス」（本サイト日本語版）。