December 16, 2025 • 19 mins
The Philippines is no stranger to typhoons, but this year’s storms exposed something far uglier: a vast corruption scandal.
On today’s Big Take Asia Podcast, host K. Oanh Ha speaks to Bloomberg’s Andreo Calonzo and Rosalind Mathieson about how billions of dollars earmarked for flood control vanished and what the crisis means for the country’s political and economic stability.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. The Philippines is no
stranger to storms, but this year the country's been hit
with some of the most brutal monsoons in the years.
Speaker 2 (00:17):
Hipen Cormeggie ripped through the Philippines, killing more than one
hundred and eighty eight people.
Speaker 3 (00:22):
Over's forecast to cause widespread damage, power, ouchages and flooding
across the island of Louzon.
Speaker 1 (00:29):
Hundreds of people were killed when several typhoons barreled through
the archipelago earlier this year. In the aftermath, Bloomberg reporter
Andrea Golonzo and our colleagues traveled to one of the
hardest hit regions, in a village called Francis on the
outskirts of the capital of Manila. He met Estlita Bagnan annan.
Speaker 3 (00:49):
Esilita was cleaning the mud on her front yard when
we spotted her. She had a broom, she was wearing
rubber boots.
Speaker 1 (00:58):
She was cleaning up flood debris that washed up when
the nearby river overflowed during the storms.
Speaker 3 (01:07):
When we talk to her, she told us that she's
already exhausted from cleaning her house every time a flood
comes in. She said, she's already getting sick. She's already old.
She can't do this every single time.
Speaker 1 (01:24):
Like many people in Francis, Estaliita's house is built close
to the Pampanga River. For years, villagers have relied on
the river water for farming, but for at least half
the year, the river is also a liability.
Speaker 3 (01:39):
Francis village is also what is called a catch basin,
so whenever there are floods in nearby towns in nearby provinces,
all the water also end up in that village.
Speaker 1 (01:54):
This region floods every year. After years of fielding complaints,
the Philippine government finally stepped in a few years ago.
It allocated money for a dike to stop floodwater from
inundating the village.
Speaker 3 (02:07):
The villagers were telling us that they were very happy
when they saw that the dike was being built. They
thought that it was already the end of their struggles
with the flooding and the high tide.
Speaker 1 (02:21):
It wasn't, villagers said. The dike, which was completed in
twenty twenty three, made the flooding worse. When Dreo visited
Francis at the end of November, it hadn't rained for weeks,
but the floodwater was still there.
Speaker 3 (02:36):
The residents told us that before, when it rains, the
water subsides in a couple of days or a maximum
of a week, but now the water stays on for months.
Speaker 1 (02:49):
An initial government inspection of the dike found it wasn't
built properly and it wasn't the only one.
Speaker 3 (02:57):
Kamramin pruekto pars of flodlalpat.
Speaker 1 (03:02):
In his State of the Nation address in July, Philippine
President Ferdinand Marcos Junior announced that his government had uncovered
a web of corruption that potentially touches thousands of public
flood control projects. Some were constructed shoddily or had serious defects.
Others were paid for by the government but never built.
It's one of the biggest corruption scandals the country has
(03:25):
ever had to contend with. The Government's probe implicated dozens
of contractors, public works officials, and politicians who allegedly colluded
with each other to receive kickbacks over the years. The
network of corruption may have looted as much as seventy
percent of the public money allocated to flood control projects
in the last two years. That's an estimated two billion
(03:47):
US dollars.
Speaker 2 (03:49):
Corruption is something that's been going on for years in
the Philippines, but even by Philippine standards, this scandal has
been pretty shockying.
Speaker 1 (03:57):
Rosalind Matheson is the Chief Asia Course at Bloomberg. She
says countries across Southeast Asia have struggled with flooding this year,
but the situation in the Philippines has been complicated by
a corruption scandal that has struck a nerve with its
citizens and put intense public pressure on President Marcos.
Speaker 2 (04:16):
There's quite a lot of anger there, frustration, and a
lot of anxiety about what will happen next year. A
lot of economists are expecting this to really be a
drag on the economy and for a lot of businesses
who are looking at the Philippines and saying is this
the place to invest or to continue to invest? Is
their fundamental reform because of theirs.
Speaker 1 (04:40):
This is the Big Take Asia from Bloomberg News.
Speaker 3 (04:43):
I'm Wanha.
Speaker 1 (04:44):
Every week we take you inside some of the world's
biggest and most powerful economies and the markets, tycoons and
businesses that drive this ever shifting region. Today, on the show,
the devastating impact of one of the biggest corruption scandals
ever to hit the Philippines. We look at how lawmakers
and contractors fleece the government out of billions of dollars
(05:06):
that was earmarked to mitigate floods, and how the depth
of this corruption risks paralyzing the country's economy. Public outrage
(05:30):
over the years long corruption in projects designed to reduce
flooding has boiled over in the Philippines. Massive protests began
this summer and continued through to the end of November.
Tens of thousands of Filipinos have taken to the streets
calling for an end to corruption and for prosecutions. Bloomberg's
Dreoklonzo witnessed that anger firsthand in Francis. That's where he
(05:55):
met Jesse Ciago, the village chief man.
Speaker 4 (06:03):
Always the people I talk to are angry at the
high level corrupt officials, congressmen, senators. In the news, we
see millions of pestls and kickbacks. I sometimes think that
we never learn those implicated before still end up winning
elections and then repeating what they did.
Speaker 1 (06:23):
Jesse told Reo that people in the village are furious
about what they see as rampant corruption. He says, some
of the people accused in the flood scheme had been
implicated in corruption scandals in the past and had managed
to keep their roles in public office. Then of course
there's the total devastation on the ground.
Speaker 3 (06:43):
There were farmers who don't have farmlands anymore. Students have
to build a makeshift bridge on the school so that
they can go to their classes. The village chief also
told us that it was a struggle for ambulance says
to reach residents w or having heart attacks because of
(07:04):
the flooding. And they also worry now that stagnant water
from the flooding will say there and breathed ben ge Mosquitos.
So it's really affecting their lives, their livelihoods and their health.
Speaker 1 (07:20):
The dike in Francis was supposed to help prevent these
types of catastrophes by diverting floodwaters away from homes and businesses,
but Reo says so far it hasn't worked out.
Speaker 3 (07:32):
Instead of keeping the water in the river and draining
the water from the streets to the river, the dike
is trapping the water in streets and in residences.
Speaker 1 (07:45):
The dike took five months to build and cracked open
less than a year after it was completed.
Speaker 3 (07:52):
We saw that the dyke had poor workmanship. The bars
were exposed. Part of the dike was already called in gress,
meaning the Sementa's already been entirely washed away.
Speaker 1 (08:06):
The dike in Francis is just one of thousands of
projects that a government investigation alleges are part of a
vast corruption network. There are at least twenty four hundred
contractors in the Philippines, but just fifteen of them managed
to corner twenty percent of the flood control projects across
the country over the past three years.
Speaker 3 (08:27):
The scheme starts with a lawmaker proposing a project to
the Department of Public Works and Highways. It's kind of
like they're sponsoring a project with expectation that they are
going to get a kickback from that project.
Speaker 1 (08:43):
The government says these lawmakers conspired with public works officials
and contractors. The lawmakers work to get the funding for
flood mitigation projects through the Senate. The public works officials
then rig the bids for the projects in favor of
the contractors in the network. Once those contractors were paid,
they kicked back a chunk of that money to the
(09:04):
officials and politicians. How much did these corrupt networks deal
It's not clear. Estimates vary anywhere from twenty five to
seventy percent of the total costs of the projects, but
Bloomberg's Rosalind Matheson says what is clear is that there
wasn't enough money left for the actual structures to be
built to standard.
Speaker 2 (09:26):
In some cases, the allegation is that the contractors use
very substandard products to build these protective dikes. They cut corners.
So one local said to us, this dike was supposed
to have, you know, for every ten bags of cement,
they're only used too And if you look at the dike,
you can see areas where they've crumbled away and inside
its hollow.
Speaker 1 (09:47):
The dikes, dams, and bridges that were built were shoddy
and unable to withstand the severe floods they were supposed
to contain. That's if they were built at all.
Speaker 2 (09:59):
Every place we went to there was at least one
ghost project where they said the funds were allocated and
nothing ever was built, and so the money has just disappeared.
Speaker 1 (10:09):
Government investigators are still trying to figure out exactly how
much has been lost to graft and corruption for all
these flood mitigation projects.
Speaker 3 (10:17):
We're not talking yet about subsidel projects, so safe to
say that the Philippines has lost billions of US dollars
in this corruption scheme. For the past decade.
Speaker 1 (10:31):
Before the scandal broke, the Philippines ranked one hundred and
fourteenth on Transparency International's Corruption Index of one hundred eighty
countries and territories. Dreo says this scandal has revealed just
how deep the alleged corruption reaches.
Speaker 3 (10:47):
The Public Works chief has called this a syndicate. Everybody
seems to be in on the scheme, from the top,
from the lawmakers to the bottom to the contractors.
Speaker 1 (11:00):
Coming up after the break, we look at the government's
response to the scandal. Will it be enough to reassure
investors worried about putting money to work in Southeast Asia,
a region swamped by natural disasters and often clouded by corruption.
(11:26):
As recently as last month, torrential monsoon rains have triggered
floods and landslides across Asia, from Sri Lanka to Indonesia,
Thailand and Malaysia. Initial estimates put the damages for the
disasters in the region at twenty billion dollars just last
month alone. Climate change has made the extreme storms that
(11:46):
batter the region around half a year more commonplace. Corrupt
practices make the devastation even worse. Bloomberg's Rosalind Matheson says
the corrupt practices that stand in the way of trying
to manage class time change are most pronounced in the Philippines.
Speaker 2 (12:03):
Does corruption go on in flood mitigation in other countries
quite potentially, when you've got politics and big contractors mixing,
it's a bit of a toxic combination, potentially, But we
haven't seen the scale of it come to light in
any way in other countries to the extent that we've
seen it come to light in the Philippines.
Speaker 1 (12:22):
Since the scandal first broke in July, the Philippine government
has cracked down hard and fast. Authorities have frozen more
than two hundred million dollars in assets so far, including
bank accounts, cars, real estate, and nearly a dozen aircraft.
A handful of people have been arrested, and President Ferdinand
Marcos Junior has promised that moral officials would be locked
(12:44):
up by Christmas.
Speaker 3 (12:45):
But you cannot steal from Filipido people and expect to
hide or fly away on your private judge you'll have
the money to run.
Speaker 1 (12:54):
Bloomberg's Roslind Matheson says the current administration wants to show
the public they're taking the scandal seriously.
Speaker 2 (13:01):
They've frozen hundreds of millions of dollars from bank accounts.
Have they actually recouped that yet, not necessarily, and it's
still a small amount of what they estimate was siphoned off.
They say the investigations are ongoing. Some people have been arrested,
but so far it's mostly lower level officials who've been arrested,
(13:22):
and the government says that they have to do really
proper probes of more senior names, more senior politicians.
Speaker 1 (13:31):
But Roslind says the promise of accountability has done little
to quell anger in the country. She says, deep rooted
graft and corruption have been tolerated, even accepted as part
of life in the Philippines, but this scandal feels different.
Speaker 2 (13:46):
Corruption is something that's been going on for years in
the Philippines. It's not that startling in a way, it's
sort of seen as a facet of life. But even
by Philippine standards, this scandal has been pretty shocking, and
that's why you've seen big street protests. I think because
the weather in away is so visceral for people. I mean,
(14:06):
twenty typhoons at least come through the Philippines every year.
People know that they have to deal with this weather
every year, the risk of flooding. It's quite fundamental for them,
and they've been putting their faith in the government to
fix it. And then to hear from the President that,
in fact, this corruption has been going on for years
it never came to light. So I think it's a
(14:28):
combination really of this being such a direct impact on
people's lives.
Speaker 1 (14:32):
The corruption allegations and public uproar that followed have hammered
Philippine markets. Economic growth in the third quarter were surprisingly
weak and grew at the slowest piece since twenty twenty one.
The peso slumped to a record low against the dollar
in October, and the benchmark stock index fell more than
fourteen percent at one point this year. To ensure that
(14:55):
even more money isn't lost to corruption, the government has
frozen spending for flood control projects through twenty twenty six.
That might stop the rot in the short term, but
Roslin says it comes at a cost.
Speaker 2 (15:09):
It's frozen. Not just government spending, but it's frozen people's
decision making about whether to expand their business, to invest
in a new plant, to wait and see. Really, and
that kind of indecisiveness can be a real infection for
an economy because once that sentiment starts, it's hard to
know when it starts to fade away again and people
(15:29):
start to regain confidence.
Speaker 1 (15:32):
Economists and analysts that Roslin spoke to expect the scandal
to continue to be a drag on the economy through
at least the first half of twenty twenty six, and
perhaps even longer. I asked rosalind, what's at stake for
the Philippines if leaders fail to address the more deep
rooted issues, including the lack of transparency and budget accountability,
(15:52):
that are behind the scandal.
Speaker 2 (15:54):
Well, the sense is that unless the Philippines fundamentally addresses
some of these issues, that it will be stuck in
this doom loop of corruption and relative underperformance. And really,
if you look at the Philippines, it's a country that's
got loads going for it. I mean, it's in a
terrific location in terms of the global supply chain for trade.
It has a young, dynamic population, it's quite involved in
(16:17):
the BPO sector, because it's got a strong English speaking base,
it's had some success in drawing tech investment from China,
and so on the surface of it, the Philippines should
be and is an attractive investment destination. It's just that
this corruption cloud hangs over it.
Speaker 1 (16:34):
And with this corruption cloud hanging over the Philippines, Rasland says,
it could pose an even bigger risk for the country
long term. It could push investors already looking elsewhere in
Southeast Asia to seek out opportunities to invest and do
business in places like Vietnam and Thailand.
Speaker 2 (16:51):
For the Philippines has quite a lot at stake in
this in terms of its ability to present itself as
an attractive destination for investment and business, especially when it's
competing against a lot of other countries in the region,
and those countries are actively touting for business and all
trying to draw companies as well away from China. As
the global trade map gets redrawn and global supply chains
(17:14):
get redrawn, there's a real opportunity here for the Philippines.
But the danger is if this remains an overhang for
the next year, other countries will have a one year
head start on the Philippines in doing so. The warnings
that we're hearing from investors, economists, and so on is
that the Philippine government really needs to demonstrate fundamental action here,
(17:34):
not just you know, here's a few people we found
who we've arrested and charged, but we really tried to
rout out the people who are behind the scheme.
Speaker 1 (17:44):
As the Philippine government works to fix the country's reputational damage,
the villagers of Francis are focused on fixing the damage
to their town. With no projects being funded next year,
they're not likely to get a new dake for the
foreseeable future, and says they're taking matters into their own hands.
Speaker 2 (18:03):
They're like, we're just going to have to get on
and find a way. So they're trying to dig drains
down the sides of houses, They're trying to raise roads
in order to prevent further flooding. What surprised me is
how stoic people are about it, how is lyn they are.
They say they're not getting a ton of help, and
their big concern is obviously that the floodwater will finally
(18:27):
fully recede, and then you get into the next rainy
season and it all just begins again.
Speaker 1 (18:37):
This is The Big Take Asia from Bloomberg News.
Speaker 3 (18:39):
I'm one half.
Speaker 1 (18:41):
To get more from The Big Take and unlimited access
to all of Bloomberg dot Com, subscribe today at Bloomberg
dot com slash podcast Offer. If you liked the episode,
make sure to subscribed and review The Big Take Asia
wherever you listen to podcasts. It really helps people find
the show. Thanks for listening, See you next time.
Speaker 4 (19:01):
The Spy and d
Bloomberg Audio Studios, podcasts, radio news. The Philippines is no
stranger to storms, but this year the country's been hit
with some of the most brutal monsoons in the years.
Speaker 2 (00:17):
Hipen Cormeggie ripped through the Philippines, killing more than one
hundred and eighty eight people.
Speaker 3 (00:22):
Over's forecast to cause widespread damage, power, ouchages and flooding
across the island of Louzon.
Speaker 1 (00:29):
Hundreds of people were killed when several typhoons barreled through
the archipelago earlier this year. In the aftermath, Bloomberg reporter
Andrea Golonzo and our colleagues traveled to one of the
hardest hit regions, in a village called Francis on the
outskirts of the capital of Manila. He met Estlita Bagnan annan.
Speaker 3 (00:49):
Esilita was cleaning the mud on her front yard when
we spotted her. She had a broom, she was wearing
rubber boots.
Speaker 1 (00:58):
She was cleaning up flood debris that washed up when
the nearby river overflowed during the storms.
Speaker 3 (01:07):
When we talk to her, she told us that she's
already exhausted from cleaning her house every time a flood
comes in. She said, she's already getting sick. She's already old.
She can't do this every single time.
Speaker 1 (01:24):
Like many people in Francis, Estaliita's house is built close
to the Pampanga River. For years, villagers have relied on
the river water for farming, but for at least half
the year, the river is also a liability.
Speaker 3 (01:39):
Francis village is also what is called a catch basin,
so whenever there are floods in nearby towns in nearby provinces,
all the water also end up in that village.
Speaker 1 (01:54):
This region floods every year. After years of fielding complaints,
the Philippine government finally stepped in a few years ago.
It allocated money for a dike to stop floodwater from
inundating the village.
Speaker 3 (02:07):
The villagers were telling us that they were very happy
when they saw that the dike was being built. They
thought that it was already the end of their struggles
with the flooding and the high tide.
Speaker 1 (02:21):
It wasn't, villagers said. The dike, which was completed in
twenty twenty three, made the flooding worse. When Dreo visited
Francis at the end of November, it hadn't rained for weeks,
but the floodwater was still there.
Speaker 3 (02:36):
The residents told us that before, when it rains, the
water subsides in a couple of days or a maximum
of a week, but now the water stays on for months.
Speaker 1 (02:49):
An initial government inspection of the dike found it wasn't
built properly and it wasn't the only one.
Speaker 3 (02:57):
Kamramin pruekto pars of flodlalpat.
Speaker 1 (03:02):
In his State of the Nation address in July, Philippine
President Ferdinand Marcos Junior announced that his government had uncovered
a web of corruption that potentially touches thousands of public
flood control projects. Some were constructed shoddily or had serious defects.
Others were paid for by the government but never built.
It's one of the biggest corruption scandals the country has
(03:25):
ever had to contend with. The Government's probe implicated dozens
of contractors, public works officials, and politicians who allegedly colluded
with each other to receive kickbacks over the years. The
network of corruption may have looted as much as seventy
percent of the public money allocated to flood control projects
in the last two years. That's an estimated two billion
(03:47):
US dollars.
Speaker 2 (03:49):
Corruption is something that's been going on for years in
the Philippines, but even by Philippine standards, this scandal has
been pretty shockying.
Speaker 1 (03:57):
Rosalind Matheson is the Chief Asia Course at Bloomberg. She
says countries across Southeast Asia have struggled with flooding this year,
but the situation in the Philippines has been complicated by
a corruption scandal that has struck a nerve with its
citizens and put intense public pressure on President Marcos.
Speaker 2 (04:16):
There's quite a lot of anger there, frustration, and a
lot of anxiety about what will happen next year. A
lot of economists are expecting this to really be a
drag on the economy and for a lot of businesses
who are looking at the Philippines and saying is this
the place to invest or to continue to invest? Is
their fundamental reform because of theirs.
Speaker 1 (04:40):
This is the Big Take Asia from Bloomberg News.
Speaker 3 (04:43):
I'm Wanha.
Speaker 1 (04:44):
Every week we take you inside some of the world's
biggest and most powerful economies and the markets, tycoons and
businesses that drive this ever shifting region. Today, on the show,
the devastating impact of one of the biggest corruption scandals
ever to hit the Philippines. We look at how lawmakers
and contractors fleece the government out of billions of dollars
(05:06):
that was earmarked to mitigate floods, and how the depth
of this corruption risks paralyzing the country's economy. Public outrage
(05:30):
over the years long corruption in projects designed to reduce
flooding has boiled over in the Philippines. Massive protests began
this summer and continued through to the end of November.
Tens of thousands of Filipinos have taken to the streets
calling for an end to corruption and for prosecutions. Bloomberg's
Dreoklonzo witnessed that anger firsthand in Francis. That's where he
(05:55):
met Jesse Ciago, the village chief man.
Speaker 4 (06:03):
Always the people I talk to are angry at the
high level corrupt officials, congressmen, senators. In the news, we
see millions of pestls and kickbacks. I sometimes think that
we never learn those implicated before still end up winning
elections and then repeating what they did.
Speaker 1 (06:23):
Jesse told Reo that people in the village are furious
about what they see as rampant corruption. He says, some
of the people accused in the flood scheme had been
implicated in corruption scandals in the past and had managed
to keep their roles in public office. Then of course
there's the total devastation on the ground.
Speaker 3 (06:43):
There were farmers who don't have farmlands anymore. Students have
to build a makeshift bridge on the school so that
they can go to their classes. The village chief also
told us that it was a struggle for ambulance says
to reach residents w or having heart attacks because of
(07:04):
the flooding. And they also worry now that stagnant water
from the flooding will say there and breathed ben ge Mosquitos.
So it's really affecting their lives, their livelihoods and their health.
Speaker 1 (07:20):
The dike in Francis was supposed to help prevent these
types of catastrophes by diverting floodwaters away from homes and businesses,
but Reo says so far it hasn't worked out.
Speaker 3 (07:32):
Instead of keeping the water in the river and draining
the water from the streets to the river, the dike
is trapping the water in streets and in residences.
Speaker 1 (07:45):
The dike took five months to build and cracked open
less than a year after it was completed.
Speaker 3 (07:52):
We saw that the dyke had poor workmanship. The bars
were exposed. Part of the dike was already called in gress,
meaning the Sementa's already been entirely washed away.
Speaker 1 (08:06):
The dike in Francis is just one of thousands of
projects that a government investigation alleges are part of a
vast corruption network. There are at least twenty four hundred
contractors in the Philippines, but just fifteen of them managed
to corner twenty percent of the flood control projects across
the country over the past three years.
Speaker 3 (08:27):
The scheme starts with a lawmaker proposing a project to
the Department of Public Works and Highways. It's kind of
like they're sponsoring a project with expectation that they are
going to get a kickback from that project.
Speaker 1 (08:43):
The government says these lawmakers conspired with public works officials
and contractors. The lawmakers work to get the funding for
flood mitigation projects through the Senate. The public works officials
then rig the bids for the projects in favor of
the contractors in the network. Once those contractors were paid,
they kicked back a chunk of that money to the
(09:04):
officials and politicians. How much did these corrupt networks deal
It's not clear. Estimates vary anywhere from twenty five to
seventy percent of the total costs of the projects, but
Bloomberg's Rosalind Matheson says what is clear is that there
wasn't enough money left for the actual structures to be
built to standard.
Speaker 2 (09:26):
In some cases, the allegation is that the contractors use
very substandard products to build these protective dikes. They cut corners.
So one local said to us, this dike was supposed
to have, you know, for every ten bags of cement,
they're only used too And if you look at the dike,
you can see areas where they've crumbled away and inside
its hollow.
Speaker 1 (09:47):
The dikes, dams, and bridges that were built were shoddy
and unable to withstand the severe floods they were supposed
to contain. That's if they were built at all.
Speaker 2 (09:59):
Every place we went to there was at least one
ghost project where they said the funds were allocated and
nothing ever was built, and so the money has just disappeared.
Speaker 1 (10:09):
Government investigators are still trying to figure out exactly how
much has been lost to graft and corruption for all
these flood mitigation projects.
Speaker 3 (10:17):
We're not talking yet about subsidel projects, so safe to
say that the Philippines has lost billions of US dollars
in this corruption scheme. For the past decade.
Speaker 1 (10:31):
Before the scandal broke, the Philippines ranked one hundred and
fourteenth on Transparency International's Corruption Index of one hundred eighty
countries and territories. Dreo says this scandal has revealed just
how deep the alleged corruption reaches.
Speaker 3 (10:47):
The Public Works chief has called this a syndicate. Everybody
seems to be in on the scheme, from the top,
from the lawmakers to the bottom to the contractors.
Speaker 1 (11:00):
Coming up after the break, we look at the government's
response to the scandal. Will it be enough to reassure
investors worried about putting money to work in Southeast Asia,
a region swamped by natural disasters and often clouded by corruption.
(11:26):
As recently as last month, torrential monsoon rains have triggered
floods and landslides across Asia, from Sri Lanka to Indonesia,
Thailand and Malaysia. Initial estimates put the damages for the
disasters in the region at twenty billion dollars just last
month alone. Climate change has made the extreme storms that
(11:46):
batter the region around half a year more commonplace. Corrupt
practices make the devastation even worse. Bloomberg's Rosalind Matheson says
the corrupt practices that stand in the way of trying
to manage class time change are most pronounced in the Philippines.
Speaker 2 (12:03):
Does corruption go on in flood mitigation in other countries
quite potentially, when you've got politics and big contractors mixing,
it's a bit of a toxic combination, potentially, But we
haven't seen the scale of it come to light in
any way in other countries to the extent that we've
seen it come to light in the Philippines.
Speaker 1 (12:22):
Since the scandal first broke in July, the Philippine government
has cracked down hard and fast. Authorities have frozen more
than two hundred million dollars in assets so far, including
bank accounts, cars, real estate, and nearly a dozen aircraft.
A handful of people have been arrested, and President Ferdinand
Marcos Junior has promised that moral officials would be locked
(12:44):
up by Christmas.
Speaker 3 (12:45):
But you cannot steal from Filipido people and expect to
hide or fly away on your private judge you'll have
the money to run.
Speaker 1 (12:54):
Bloomberg's Roslind Matheson says the current administration wants to show
the public they're taking the scandal seriously.
Speaker 2 (13:01):
They've frozen hundreds of millions of dollars from bank accounts.
Have they actually recouped that yet, not necessarily, and it's
still a small amount of what they estimate was siphoned off.
They say the investigations are ongoing. Some people have been arrested,
but so far it's mostly lower level officials who've been arrested,
(13:22):
and the government says that they have to do really
proper probes of more senior names, more senior politicians.
Speaker 1 (13:31):
But Roslind says the promise of accountability has done little
to quell anger in the country. She says, deep rooted
graft and corruption have been tolerated, even accepted as part
of life in the Philippines, but this scandal feels different.
Speaker 2 (13:46):
Corruption is something that's been going on for years in
the Philippines. It's not that startling in a way, it's
sort of seen as a facet of life. But even
by Philippine standards, this scandal has been pretty shocking, and
that's why you've seen big street protests. I think because
the weather in away is so visceral for people. I mean,
(14:06):
twenty typhoons at least come through the Philippines every year.
People know that they have to deal with this weather
every year, the risk of flooding. It's quite fundamental for them,
and they've been putting their faith in the government to
fix it. And then to hear from the President that,
in fact, this corruption has been going on for years
it never came to light. So I think it's a
(14:28):
combination really of this being such a direct impact on
people's lives.
Speaker 1 (14:32):
The corruption allegations and public uproar that followed have hammered
Philippine markets. Economic growth in the third quarter were surprisingly
weak and grew at the slowest piece since twenty twenty one.
The peso slumped to a record low against the dollar
in October, and the benchmark stock index fell more than
fourteen percent at one point this year. To ensure that
(14:55):
even more money isn't lost to corruption, the government has
frozen spending for flood control projects through twenty twenty six.
That might stop the rot in the short term, but
Roslin says it comes at a cost.
Speaker 2 (15:09):
It's frozen. Not just government spending, but it's frozen people's
decision making about whether to expand their business, to invest
in a new plant, to wait and see. Really, and
that kind of indecisiveness can be a real infection for
an economy because once that sentiment starts, it's hard to
know when it starts to fade away again and people
(15:29):
start to regain confidence.
Speaker 1 (15:32):
Economists and analysts that Roslin spoke to expect the scandal
to continue to be a drag on the economy through
at least the first half of twenty twenty six, and
perhaps even longer. I asked rosalind, what's at stake for
the Philippines if leaders fail to address the more deep
rooted issues, including the lack of transparency and budget accountability,
(15:52):
that are behind the scandal.
Speaker 2 (15:54):
Well, the sense is that unless the Philippines fundamentally addresses
some of these issues, that it will be stuck in
this doom loop of corruption and relative underperformance. And really,
if you look at the Philippines, it's a country that's
got loads going for it. I mean, it's in a
terrific location in terms of the global supply chain for trade.
It has a young, dynamic population, it's quite involved in
(16:17):
the BPO sector, because it's got a strong English speaking base,
it's had some success in drawing tech investment from China,
and so on the surface of it, the Philippines should
be and is an attractive investment destination. It's just that
this corruption cloud hangs over it.
Speaker 1 (16:34):
And with this corruption cloud hanging over the Philippines, Rasland says,
it could pose an even bigger risk for the country
long term. It could push investors already looking elsewhere in
Southeast Asia to seek out opportunities to invest and do
business in places like Vietnam and Thailand.
Speaker 2 (16:51):
For the Philippines has quite a lot at stake in
this in terms of its ability to present itself as
an attractive destination for investment and business, especially when it's
competing against a lot of other countries in the region,
and those countries are actively touting for business and all
trying to draw companies as well away from China. As
the global trade map gets redrawn and global supply chains
(17:14):
get redrawn, there's a real opportunity here for the Philippines.
But the danger is if this remains an overhang for
the next year, other countries will have a one year
head start on the Philippines in doing so. The warnings
that we're hearing from investors, economists, and so on is
that the Philippine government really needs to demonstrate fundamental action here,
(17:34):
not just you know, here's a few people we found
who we've arrested and charged, but we really tried to
rout out the people who are behind the scheme.
Speaker 1 (17:44):
As the Philippine government works to fix the country's reputational damage,
the villagers of Francis are focused on fixing the damage
to their town. With no projects being funded next year,
they're not likely to get a new dake for the
foreseeable future, and says they're taking matters into their own hands.
Speaker 2 (18:03):
They're like, we're just going to have to get on
and find a way. So they're trying to dig drains
down the sides of houses, They're trying to raise roads
in order to prevent further flooding. What surprised me is
how stoic people are about it, how is lyn they are.
They say they're not getting a ton of help, and
their big concern is obviously that the floodwater will finally
(18:27):
fully recede, and then you get into the next rainy
season and it all just begins again.
Speaker 1 (18:37):
This is The Big Take Asia from Bloomberg News.
Speaker 3 (18:39):
I'm one half.
Speaker 1 (18:41):
To get more from The Big Take and unlimited access
to all of Bloomberg dot Com, subscribe today at Bloomberg
dot com slash podcast Offer. If you liked the episode,
make sure to subscribed and review The Big Take Asia
wherever you listen to podcasts. It really helps people find
the show. Thanks for listening, See you next time.
Speaker 4 (19:01):
The Spy and d
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Betrayal: Weekly
Betrayal Weekly is back for a brand new season. Every Thursday, Betrayal Weekly shares first-hand accounts of broken trust, shocking deceptions, and the trail of destruction they leave behind. Hosted by Andrea Gunning, this weekly ongoing series digs into real-life stories of betrayal and the aftermath. From stories of double lives to dark discoveries, these are cautionary tales and accounts of resilience against all odds. From the producers of the critically acclaimed Betrayal series, Betrayal Weekly drops new episodes every Thursday. Please join our Substack for additional exclusive content, curated book recommendations and community discussions. Sign up FREE by clicking this link Beyond Betrayal Substack. Join our community dedicated to truth, resilience and healing. Your voice matters! Be a part of our Betrayal journey on Substack. And make sure to check out Seasons 1-4 of Betrayal, along with Betrayal Weekly Season 1.