From BusinessMirror’s editorial: The recent revelations by Senator Panfilo Lacson regarding the alarming state of flood-control projects in the Philippines expose a rot at the heart of governance that can only be described as “creative corruption.”
Drowning in corruption: The flood control sham
BusinessMirror Editorial August 25, 2025
The recent revelations by Senator Panfilo Lacson regarding the alarming state of flood-control projects in the Philippines expose a rot at the heart of governance that can only be described as “creative corruption.” As communities grapple with the devastating impacts of massive flooding, it is painfully clear that billions of taxpayer pesos have been siphoned off under the guise of public works—a betrayal of every citizen who expects accountability and integrity from their government. (Read the BusinessMirror story: “Flood control projects subject to ‘creative corruption,’” August 22, 2025).
Lacson’s investigation sheds light on a complex web of deceit, revealing terms like “Distinct,” “Reseta,” and “Passing Through-Parking Fee,” which encapsulate the various mechanisms through which corrupt officials and contractors exploit public funds. The term “Distinct,” for instance, highlights how multiple budget items can mask the true ownership of projects, allowing corrupt practices to flourish with impunity.
The senator’s findings suggest that over the last 15 years, at least P1.9 trillion has been misappropriated, a staggering sum that underscores the scale of the problem. It is not merely a matter of mismanagement; it is an orchestrated scheme involving an organized network that thrives on abuse of power. This corruption is not just financial; it represents a moral failing that undermines trust in public institutions.
The mechanisms of corruption that Lacson describes are particularly insidious. A prime example is the “Reseta,” a kickback that contractors are expected to accept, highlighting just how systemic the problem has become.
Furthermore, the “Passing Through-Parking Fee” and the role of “Funders” illustrate how political patronage intertwines with corruption. This arrangement not only inflates project costs but also undermines the very essence of public service, where elected officials should prioritize the needs of their constituents over personal gain.
Lacson highlighted that the costs of flood control projects comprise 5 percent for Value-Added Tax, 2 percent for withholding tax, 1 percent for bonds and insurances, and 1 percent for materials testing, leaving 82 percent for the project itself after accounting for an allowable contractor’s profit of 8 to 10 percent. However, he said that these funds are further diminished by allocations including 8 to 10 percent for DPWH officials, with at least 6 percent going to district engineers; 2 to 3 percent for the District Engineering Office; 5 to 6 percent for members of the Bids and Awards Committee; 0.5 to 1 percent for the Commission on Audit; 5 to 6 percent as a “passing through” or “parking fee” for political figures controlling the districts; and 20 to 25 percent for the funders or politicians advocating for the project.
As the country faces the repercussions of these corrupt practices, the need for institutional reform becomes paramount. Transparency and accountability must be non-negotiable principles in public service. The mechanisms that allow for such vast sums of money to be misappropriated must be dismantled, and those responsible held to account.
The time for action is now. Citizens must demand stronger oversight of public projects and advocate for reforms that eliminate opportunities for corruption. If we fail to address these issues, the cycle of abuse will continue, and future generations will inherit a legacy of corruption that diminishes the very fabric of society.
In the wake of this scandal, the call for integrity in governance cannot be overstated. It is not just about recovering lost funds, but about restoring faith in a system that should work for the people. The fight against corruption is a fight for the future of the nation, and it is a battle that must be won.