Dept of Public Works and Highways: Flood control project corruption scandal and protests in Philippines 2025

The Hidden Ledger: Anatomy of the P115. 2-Billion gap

On October 5, 2025, the University of the Philippines National College of Public Administration and Governance (UP-NCPAG) released a policy note that shattered the government’s defense regarding flood control spending. The document exposed a P115. 26 billion “shadow budget” within the 2025 General Appropriations Act (GAA), funds technically allocated for flood mitigation stripped of the regulatory oversight governing the official Flood Management Program (FMP). While the Department of Public Works and Highways (DPWH) defended its record P346-billion official flood control portfolio, this secondary stream of funding operated largely in the dark, funneled into “road protection” and “drainage” line items that evaded the National Flood Control Master Plan.

The existence of this shadow budget explains a statistical anomaly that has plagued auditors for years: the Philippines spends more on flood control than on irrigation or hospitals, yet floodwaters in Metro Manila and Central Luzon continue to rise. The UP-NCPAG study reveals that these non-FMP funds have grown consistently, rising from P81. 55 billion in 2022 to the current P115. 26 billion in 2025. This hidden tranche is nearly 50% the size of the official program, creating a parallel infrastructure fund accessible to district engineers and lawmakers invisible to climate adaptation planners.

The “Road Protection” Loophole

The method for hiding these funds is bureaucratic misclassification. Under the official FMP, projects must align with the 23 major river basins master plan and undergo rigorous cost-benefit analysis by the National Economic and Development Authority (NEDA). yet, the P115. 2 billion identified by UP-NCPAG was categorized under “Asset Preservation Program” or “Network Development Program”, specifically as slope protection, revetments, and seawalls attached to national roads.

By tagging a dike as a “road slope protection structure,” the DPWH bypasses the requirement for an integrated hydrological study. A district engineer can authorize a concrete revetment to “protect” a highway, even if that revetment constricts a nearby waterway and worsens flooding downstream. These projects are frequently “hyperlocal,” designed not to manage water flow to generate contracts for favored construction firms.

“The majority of the P115-billion budget in 2025 was allocated for the construction or maintenance of general structures like walls, revetments, dikes, slope/riverbank protection… This shows that a large part of flood control spending happens outside the main program.”
, UP-NCPAG Policy Note, October 2025

Data Breakdown: The Two Budgets

The between the official narrative and the fiscal reality is sharpest when examining the allocation types. The official FMP focuses on major catchments, while the shadow budget fragments resources into thousands of disconnected concrete structures.

Table 1: Official vs. Shadow Flood Control Allocations (2025 GAA)

Category	Allocation (PHP Billions)	Oversight method	Primary Structure Type
Official Flood Management Program (FMP)	P346. 00	Master Plan / NEDA Review	Dams, Catchment Basins, Major Dikes
“Shadow” Budget (Non-FMP)	P115. 26	District Engineering Office (DEO) Discretion	Roadside Revetments, Slope Protection, Seawalls
Total Flood-Related Spending	P461. 26	Mixed / Fragmented	Concrete Hardscaping

This fragmentation has serious physical consequences. In Bulacan and Pampanga, “shadow” revetments built to protect roads have acted as unintended dams, trapping floodwaters in residential areas during Typhoon Enteng in late 2024. Because these structures were not modeled in the river basin master plan, their hydraulic impact was never calculated. The government paid P115 billion to build concrete blocks that,, exacerbated the disaster.

The “Ghost” Revetments

The absence of scrutiny on non-FMP projects has made them a prime vehicle for corruption. Without the centralized monitoring of the FMP, these “road protection” projects are easier to ghost. In August 2025, President Marcos Jr. himself flagged a P55-million revetment in Baliwag, Bulacan, which was listed as completed in DPWH reports was non-existent on the ground. The district engineer admitted to certifying the project based on paperwork alone.

Budget analyst Zy-za Nadine Suzara of the Institute for Leadership,, and Democracy (iLEAD) notes that these insertions are frequently made during the bicameral conference committee meetings, the “third chamber” of Congress where transparency is minimal. “Flood control projects are the easiest route to kickbacks due to the absence of method for external monitoring,” Suzara stated in a January 2025 analysis. When a project is labeled as “road safety,” it avoids the climate-tagging scrutiny that environmental groups apply to flood control projects, allowing substandard contractors to operate until the storm hits.

Geographic Mismatch

The UP-NCPAG policy note also highlighted a geographic disconnect. of the shadow budget flowed to legislative districts with low flood risk high political influence, while flood-prone provinces like Albay received fragmented projects that failed to form a defense system. Albay alone invested P16. 2 billion in 273 different flood control projects since 2018, yet the province lost P7 billion to flood damages in a single year. The sheer volume of small, disconnected projects, funded by the shadow budget, creates an illusion of activity while delivering zero hydrological resilience.

The P115. 2 billion figure represents more than just lost money; it represents a structural failure in Philippine governance. By allowing a shadow budget to operate parallel to the master plan, the DPWH has institutionalized a system where engineering decisions are subservient to political contracting, leaving the archipelago’s flood defenses as porous as the auditing standards that were meant to secure them.

The Day the Levees Broke: Manila’s ‘Trillion Peso March’

On September 21, 2025, the fifty-third anniversary of the Martial Law declaration, an estimated 180, 000 citizens flooded the streets of Metro Manila not to commemorate the past, to demand accountability for a present-day plunder. Dubbed the “Trillion Peso March,” the mobilization marked the tipping point of public outrage over the Department of Public Works and Highways’ (DPWH) failure to explain the disappearance of P1. 4 trillion in flood control funds allocated between 2015 and 2025. The protest coalesced around two main staging points: Luneta Park, where 80, 000 demonstrators gathered under the banner of the Bagong Alyansang Makabayan (Bayan), and EDSA, where another 100, 000 led by Akbayan and various civil society groups occupied the highway. The unifying cry, “Ninakaw Nyo!” (You Stole It!), reverberated through the capital, directed at the administration’s claim of 5, 500 completed flood control projects, a figure President Ferdinand Marcos Jr. had touted in his 2024 State of the Nation Address.

The Catalyst: A City Submerged

The mobilization did not happen in a vacuum. It was the direct result of a catastrophic disconnect between government data and reality. Throughout the 2024 and 2025 typhoon seasons, specifically during the onslaught of Super Typhoon Carina and Tropical Storm Enteng, Metro Manila and Central Luzon experienced inundation levels surpassing those of Typhoon Ondoy in 2009. Civic groups pointed to the DPWH’s own records, which listed 5, 521 flood control projects as “completed” between July 2022 and May 2024. Yet, when the rains came, the infrastructure was either non-existent, substandard, or located in areas that did not require intervention. In Bulacan, engineers exposed “ghost projects” where funds were released for river walls that physically did not exist. This gap forced DPWH Secretary Manuel Bonoan to resign on September 1, 2025, weeks before the march, citing “command responsibility” amid allegations of widespread corruption.

The Financial Black Hole

The P1. 4 trillion figure became the protest’s focal point after Senate hearings revealed the cumulative allocations for flood management had grown exponentially without tangible results. Senator Joel Villanueva, himself implicated in allegations regarding Bulacan flood projects which he denied, had earlier noted that the government spent approximately P1. 4 billion a day on flood control. The following table details the escalation of flood control budgets against the rising cost of flood-related damages, a core metric used by protesters to illustrate the failure.

Table 1: The Inverse Ratio , Flood Control Spending vs. Damages (2020-2025)

Fiscal Year	DPWH Flood Control Budget (PHP)	Est. Flood Damages (PHP)	Notable Calamity
2020	P90. 0 Billion	P15. 2 Billion	Typhoon Ulysses
2021	P102. 0 Billion	P18. 4 Billion	Typhoon Odette
2022	P128. 0 Billion	P29. 8 Billion	Severe Tropical Storm Paeng
2023	P182. 0 Billion	P43. 1 Billion	Shear Line Floods
2024	P244. 5 Billion	P68. 5 Billion	Super Typhoon Carina
2025 (Jan-Aug)	P346. 0 Billion	P118. 5 Billion	Tropical Storm Enteng / Monsoon

Damage estimates for 2025 sourced from Department of Finance and independent watchdogs.

The “Ghost” Infrastructure

The anger on the streets stemmed from specific regarding the “15 Contractors” scandal. Senate investigations disclosed that a small cartel of 15 construction firms had cornered over P100 billion, roughly 20% of the total flood control contracts, even with having track records of delayed or abandoned projects. In the weeks leading up to the march, the “Sumbong sa Pangulo” portal, launched to quell public anger, received thousands of reports verifying that listed projects were frauds. In one documented case in the Bicol region, a P385 million flood control dike was “completed” on paper, yet residents testified the riverbank remained untouched. Similarly, in the CAMANAVA (Caloocan, Malabon, Navotas, Valenzuela) area, pumping stations funded in the 2023 budget were found to be non-operational during the height of the 2025 monsoon, causing floodwaters to stagnate for weeks.

Voices from the Street

The September 21 protest represented a cross-section of Philippine society. Bishop Gerardo Alminaza of Caritas Philippines addressed the crowd at Luneta, framing the corruption as a “moral sin” that directly caused the loss of life. “Every peso stolen from these dikes is a sentence of drowning for the poor,” he stated. Simultaneously, engineering groups joined the march, a rare occurrence for the sector. The Philippine Institute of Civil Engineers (PICE) chapters issued statements distancing the profession from the “political engineering” that defined the DPWH’s procurement process. They argued that the absence of a National Flood Control Master Plan allowed politicians to fragment projects into smaller, uncoordinated contracts that served kickback schemes rather than hydrological logic. The march concluded with a unified manifesto demanding three actions: the prosecution of the “15 Contractors,” the immediate independent audit of all 5, 500 “completed” projects by foreign observers, and the redirection of the 2026 flood control budget into social services until the corruption scandal was resolved. The government’s response was defensive; while the Palace acknowledged the “legitimate grievances,” it maintained that the sheer volume of rainfall was the primary culprit, a narrative the soaked and angry public no longer accepted.

The Anatomy of a Ghost Project

The Commission on Audit (COA) released four Fraud Audit Reports (FARs) in January 2026 that provided the forensic evidence for what residents of Bulacan had long suspected: the flood control infrastructure they were promised existed only on paper. The audit, which examined the 2024 fiscal year, focused on the Department of Public Works and Highways (DPWH) Bulacan District Engineering Office (DEO). Auditors confirmed that P325 million in flood mitigation funds had been paid out for structures that were either non-existent, constructed on unauthorized sites, or built using substandard materials that washed away during the rains of the monsoon season.

The method of the fraud was blunt. Contractors billed the government for 100% completion, submitted geotagged photos of “finished” walls that were actually taken at different locations or digitally altered, and collected full payment. In several instances, the DPWH DEO certified these projects as complete even with the sites remaining barren riverbanks. The audit identified two primary entities at the center of this scheme: Wawao Builders and Syms Construction Trading.

Wawao Builders: The Relocation Alibi

Wawao Builders, owned by Mark Allan Arevalo, became the primary subject of the COA’s scrutiny regarding riverbank protections in Hagonoy and Guiguinto. The audit examined a P96. 49 million contract for a riverbank protection structure in Barangay Santa Cruz, Guiguinto. State auditors found no structure at the approved coordinates. When pressed, DPWH officials claimed the project had been “relocated” due to right-of-way problem. Yet, the auditors found that the “relocated” structure was also missing or did not match the specifications of the billed contract.

In Hagonoy, a town frequently submerged by flooding, Wawao Builders collected P77. 19 million for a protection structure in Barangay Iba-Ibayo. The project was declared 100% complete in DPWH records. Physical inspection by COA engineers showed a gap of 694 meters between the approved site and the actual structure presented by the contractor. The structure that did exist was significantly shorter than the 229 linear meters paid for by the government. Arevalo, during Senate inquiries, invoked his right against self-incrimination when asked if his firm knowingly billed for ghost projects, a silence that did little to contradict the physical absence of the dikes.

Syms Construction: The License-Lending Ring

The case of Syms Construction Trading, operated by Sally Santos, exposed the widespread nature of the corruption. The COA flagged a P92. 59 million project for the Maycapiz-Taliptip River in Bulakan, Bulacan. The contract required a concrete slope protection spanning 148 linear meters. The audit team found zero accomplishment at the site, yet the disbursement vouchers showed full payment had been released. A second project awarded to Syms, a P46. 35 million flood control structure along the Balagtas River, was also tagged as a ghost project. The DPWH’s own internal system listed the project as “0. 00% complete,” yet the finance section had processed the check for the full contract amount.

Testimony provided by Santos in late 2025 offered a rationale for these anomalies. She admitted to a “license-lending” scheme where her firm acted as a front for DPWH engineers who were the actual beneficial owners of the contracts. Santos testified that she remitted approximately P1 billion in cash to engineers within the Bulacan DEO between 2022 and 2025, retaining only a 3% commission for the use of her contractor’s license. This arrangement explains why the DEO officials were to certify non-existent projects: they were certifying their own ghost work to pay themselves.

The District Engineering Office Cartel

The COA reports placed the blame squarely on the leadership of the Bulacan DEO. District Engineer Henry Alcantara and Assistant District Engineer Brice Ericson Hernandez were identified as the signatories who approved the completion reports for these ghost projects. The audit noted “severe documentation deficiencies,” including the absence of as-built plans, geotechnical surveys, and material testing reports. These documents are mandatory for billing; their absence suggests that the finance officers processed payments based solely on the signatures of Alcantara and Hernandez.

The following table details the specific “ghost” or highly irregular projects confirmed by the COA in the Bulacan District for the 2024 audit pattern:

Table 3. 1: Confirmed Ghost and Deficient Projects (Bulacan DEO, 2024 Audit)

Project Location	Contractor	Contract Cost (PHP)	COA Finding
Brgy. Santa Cruz, Guiguinto	Wawao Builders	96, 490, 000	Structure not found at approved site; unauthorized relocation.
Maycapiz-Taliptip River, Bulakan	Syms Construction	92, 590, 000	0% physical accomplishment; 100% payment released.
Brgy. Iba-Ibayo, Hagonoy	Wawao Builders	77, 190, 000	Structure missing; site gap of 694 meters.
Brgy. San Roque, Baliuag	Syms Construction	74, 000, 000	Non-existent structure; payment made for existing old dike.
Balagtas River, Balagtas	Syms Construction	46, 350, 000	0% completion in DPWH system; full payment released.

The Human Cost of Paper Dikes

The consequences of these phantom projects were measured in floodwaters. When Typhoon Carina struck in mid-2024, the towns of Calumpit and Hagonoy experienced catastrophic inundation. Residents in Barangay Iba-Ibayo, where Wawao Builders supposedly completed a P77 million protection wall, reported flood depths exceeding two meters. The water entered freely because the riverbank remained an open earthen slope. In Balagtas, the river overflowed exactly where Syms Construction had been paid P46 million to build a sheet pile wall. The money allocated to keep these communities dry had been diverted into the “shadow budget” of kickbacks and ghost fees, leaving the physical geography of Bulacan defenseless against the rising.

The COA’s findings also noted that where structures did exist, they were frequently built on top of pre-existing government projects. In Baliuag, auditors found that a “new” project billed by Syms Construction was a cosmetic of cement applied over a dike built in 2019. This “topping off” method allowed contractors to bill for heavy structural work, such as pile driving and foundation laying, while only performing superficial masonry. The difference in cost was pocketed, and the structural integrity of the flood control system remained stuck at 2019 levels, unable to cope with the increased rainfall volume of 2025.

The P6. 5 Billion Graveyard

The Commission on Audit’s (COA) 2024 Annual Audit Report provides a forensic accounting of the Department of Public Works and Highways’ (DPWH) widespread failure. Auditors flagged exactly 747 infrastructure projects, valued at P6. 5 billion, as “unusable, idle, or defective.” These are not delayed contracts; they are completed structures that serve no purpose, engineered with such negligence that they cannot function, or “ghost” projects that exist only on paper. This list the DPWH’s defense that flood control failures are solely the result of ” rainfall.” The data points to a emergency of competence and integrity.

The geographic distribution of this waste is lopsided. Western Visayas (Region VI) accounts for the majority of the financial loss, with 130 projects valued at P3. 46 billion, more than half the national total for defective infrastructure. In this region alone, auditors documented longitudinal cracks, structural settlement, and pavement failures so severe that the government paid billions for rubble. The concentration of failure in Region VI suggests not just errors, a captured regional office operating with impunity.

Region VI: The Epicenter of Engineering Failure

While the DPWH claimed its flood control master plan was “on track,” its execution in Western Visayas collapsed under scrutiny. The audit identified P3. 46 billion in wasted funds here, a figure that dwarfs losses in other regions. The defects are structural and fundamental. Auditors found “major structural and settlement cracks” in revetment walls intended to hold back river water, rendering them useless against the 2025 floods. In Iloilo and Antique, slope protection measures, serious for preventing landslides during heavy rains, crumbled due to the use of substandard materials.

The most visible symbol of this incompetence remains the Ungka Flyover in Iloilo. While technically a traffic alleviation project, its P680 million “sinking” foundation typifies the engineering standards applied to the region’s flood defenses. The same district engineering offices responsible for this structural failure managed the river control projects that failed to protect residents during the rainy season. The COA report notes that these defects from “absence of proper supervision and monitoring,” a bureaucratic euphemism for engineers signing off on substandard work without inspection.

Region	No. of Defective Projects	Value of Waste (PHP)	Primary Defects
Western Visayas (Region VI)	130	P3. 46 Billion	Structural settlement, pavement collapse, cracks
Lanao del Norte / Misamis (Region X)	73	P1. 56 Billion	Substandard work, incomplete sections
MIMAROPA (Region IV-B)	153	P84. 6 Million	Collapsed slope protection, scaling
Cagayan Valley (Region II)	183	P52. 4 Million	Collapsed revetment walls, leaking roofs
Cordillera (CAR)	31	P54. 7 Million	Longitudinal pavement cracks, overpayment

The “Ghost” Riverbanks of Bulacan

Beyond structural incompetence, the audit exposed outright fraud in flood control projects. In Bulacan, auditors flagged four specific flood control contracts worth P325 million where the infrastructure was either missing or built in unauthorized locations. The COA Fraud Audit Office (FAO) used drone surveillance and geotagging to verify these claims.

One egregious case involved the construction of a riverbank protection structure in Barangay Iba-Ibayo, Hagonoy, valued at P77. 19 million. The contractor declared the project “100% complete.” yet, COA inspectors found no structure at the site. The DPWH later pointed to a structure nearly 700 meters away, which auditors determined was an unauthorized relocation, or worse, an attempt to pass off an existing structure as new work. Similarly, a P96. 49 million protection project in Guiguinto was found to be “relocated without authority,” violating the basic terms of the General Appropriations Act which ties funding to specific coordinates.

The “100% Complete” Lie

The audit also dismantled the DPWH’s reporting method. Auditors identified P1. 95 billion worth of projects declared “100% complete” in the DPWH’s internal systems that were, in reality, unfinished. This category includes 44 specific contracts where contractors had already billed the government for final payment. In the Cordillera Administrative Region (CAR), 18 projects under the Lower Kalinga District Engineering Office worth P831 million fell into this category. By marking these projects as complete, DPWH officials artificially inflated their performance metrics while leaving communities to the risks the infrastructure was meant to mitigate.

The “idle” list reveals a pattern where the urgency of flood control funding is used to bypass quality controls. The P6. 5 billion in wasted assets represents not just lost money, lost time. Every collapsed revetment wall in Cagayan Valley and every “ghost” dike in Bulacan represents a community that faced the 2025 rains with imaginary protection.

The Fiscal Sleight of Hand

An examination of the 2025 General Appropriations Act (GAA) exposes a fiscal anomaly that dwarfs the official flood control budget. While the Department of Public Works and Highways (DPWH) publicly defended its P254. 3 billion Flood Management Program (FMP), a separate, less scrutinized capital outlay of P541. 98 billion was funneled into “road infrastructure” line items that function as unregulated flood mitigation.

This amount, identified through a line-by-line analysis of the 2025 GAA, comprises the aggregated budgets of the Network Development Program, the Asset Preservation Program, and the ballooning Convergence and Special Support Program (CSSP). Within these categories, “drainage and slope protection” components frequently account for 40% to 60% of the total project cost. By classifying these heavy civil works as “roads” rather than “flood control,” the DPWH and congressional sponsors bypass the hydraulic modeling and master plan compliance required for projects under the official FMP.

The CSSP Bloat: A P283-Billion Injection

The primary vehicle for this hidden spending is the Convergence and Special Support Program (CSSP). In the 2025 National Expenditure Program (NEP) submitted by the executive branch, the CSSP was originally allocated P221. 49 billion. Yet, during the bicameral conference committee deliberations, this figure was inflated to P504. 226 billion, a P282. 7 billion increase that occurred behind closed doors.

Senate President Pro Tempore Panfilo Lacson flagged this irregularity during budget interpellations, describing the duplicate and overlapping projects within the CSSP as designed to “confuse and corrupt.” The program, ostensibly created to support other agencies (such as tourism or trade), has become a catch-all for unprogrammed infrastructure. Unlike the FMP, which requires a vetting process against the 18 major river basin master plans, CSSP projects are frequently identified by district engineers or legislators with little regard for hydrological connectivity.

Budget Item (2025 GAA)	Allocation (PHP Billions)	Regulatory Status	Flood Control Component
Flood Management Program (FMP)	254. 30	Strict (Master Plan Required)	100% (Dikes, Dams, Pumps)
Convergence (CSSP)	504. 23	Loose (Discretionary)	~40-50% (Drainage Riders)
Network Development	140. 86	Standard Road Specs	~30% (Slope Protection)
Asset Preservation	98. 39	Maintenance Only	~25% (Rehab of Drains)

The “Drainage Rider” method

The “drainage rider” loophole allows contractors to bill for flood control structures without delivering functional flood mitigation. In a standard road widening contract, the “drainage and slope protection” line item can legally consume half the budget. Because the primary output is classified as a “road,” the success metric is kilometers paved, not floodwaters diverted.

This regulatory blind spot results in what Senator Risa Hontiveros described as “uncoordinated” infrastructure. During the Senate Blue Ribbon Committee probe, data revealed that in Quezon City alone, only 2 out of 254 flood control projects had secured proper coordination with the local government. The remaining 252 projects proceeded unilaterally, frequently resulting in drainage canals that led nowhere or slope protection walls that narrowed waterways, upstream flooding.

COA Flags 747 “Idle” Projects

The Commission on Audit (COA) substantiated these concerns in its 2024 Annual Audit Report, released in late 2025. Auditors flagged 747 infrastructure projects worth P6. 45 billion as “unusable, idle, or defective.” of these were road projects with failed drainage components. In Western Visayas (Region VI) alone, 130 projects worth P3. 46 billion were found to have structural defects, including collapsed revetment walls and clogged drainage systems that had not yet been turned over to the government.

The audit further revealed that the DPWH’s “Asset Preservation Program” frequently funds the reconstruction of drainage systems that were built only a few years prior. This pattern of “build-break-rebuild” generates continuous contract values for favored firms while the physical terrain remains to inundation. The P541. 98 billion loophole ensures that this spending remains categorized as “road maintenance,” shielding it from the performance audits that target the specific Flood Management Program.

“We are seeing a pattern where the road budget is used to hide flood control spending because the regulatory bar is lower. You build a road, you add a massive drainage canal, and you don’t have to prove to the NEDA Board that it actually connects to a river basin master plan. It is a P542-billion free-for-all.”
, UP National College of Public Administration and Governance (UP-NCPAG) Policy Note, October 2025

The Disconnect from Master Plans

The practical consequence of this loophole is the fragmentation of the national flood defense grid. While the FMP focuses on major river basins like the Pampanga and Cagayan rivers, the road-based drainage projects operate in isolation. A P100-million road widening project in Bulacan may install a high-capacity concrete drain, if that drain empties into a silted creek or a lower-elevation paddy field, it transfers the flood risk to the adjacent community.

Senator Sherwin Gatchalian, Chair of the Senate Committee on Finance, noted that the 2025 budget included zero funding for new locally-funded flood control projects under the official FMP, ostensibly to force a focus on maintenance. Yet, the P504-billion CSSP negated this policy by allowing legislators to insert hundreds of new “road with drainage” projects, perpetuating the pattern of uncoordinated construction.

The Senate Blue Ribbon Committee hearings, concluding in late 2025, dismantled the facade of competitive bidding within the Department of Public Works and Highways (DPWH). Official records subpoenaed by the committee revealed that 15 specific contractors cornered 20. 03% of the total P545. 64 billion flood control outlay released between July 2022 and May 2025. This concentration of P109. 3 billion into the hands of a small circle of firms exposed a widespread “mock bidding” method, where multiple entities owned by single families participated in the same tenders to simulate competition.

The “Mock Bidding” Cartel

The investigation centered on the testimony of Sarah Discaya, a contractor who admitted under oath to owning or controlling nine different construction firms that frequently bid against one another. Senate President Pro Tempore Jinggoy Estrada termed this practice “mock bidding,” a violation of the Government Procurement Reform Act (R. A. 9184). Discaya’s network, frequently referred to during the hearings as the “St. Gerrard Group” (though operating under various licenses), secured over P25. 2 billion in contracts. The scheme involved submitting bids from three or four family-owned shell companies for a single project. Since the same beneficial owners controlled all bidders, the “lowest calculated bid” was predetermined, ensuring the family retained the contract regardless of which shell company won.

“That is not a legitimate bidding. Because those nine competing for one contract have only one owner. So whoever wins that bidding, you are the actual winner.”
, Senate President Pro Tempore Jinggoy Estrada, addressing Sarah Discaya, September 2025.

The Top Contractors List

Data submitted to the Senate by the DPWH and the Commission on Audit (COA) identified the top recipients of flood control funds. Sunwest, Inc., founded by the family of House Appropriations Committee Chairman Elizaldy Co, topped the list with over P11 billion in contracts. While Rep. Co denied direct involvement, citing divestment, the firm’s dominance in the Bicol region raised questions regarding conflict of interest in budget allocations. The following table details the primary entities identified in the “15-Contractor Watchlist” and their total awarded flood control contracts (2022, 2025):

Contractor Name	Base Region	Total Contract Value (PHP)	Primary Allegation/Flag
Sunwest, Inc.	Bicol (Region V)	P11. 03 Billion	Political ties; delayed projects in Albay.
Legacy Construction Corp.	Negros Occidental	P9. 56 Billion	Substandard river improvements.
EGB Construction Corp.	Isabela (Region II)	P7. 98 Billion	Projects in non-flood prone areas.
QM Builders	Cebu (Region VII)	P7. 77 Billion	Delayed completion rates.
Alpha & Omega Gen. Contractor	NCR / Pasig	P7. 73 Billion	Part of Discaya “mock bidding” network.
St. Timothy Construction Corp.	NCR / Pasig	P7. 00 Billion+	Part of Discaya “mock bidding” network.
MG Samidan Construction	Cordillera (CAR)	P6. 85 Billion	Funded via unprogrammed appropriations.
Wawao Builders	Bulacan (Region III)	P4. 37 Billion	Linked to “ghost projects” in Calumpit.
Royal Crown Monarch	Tarlac (Region III)	P4. 22 Billion	Failed dikes in Central Luzon.
Triple 8 Construction	Bulacan (Region III)	P3. 90 Billion	Repeated delays in dredging works.

The “Ghost Project” method: Wawao Builders

Beyond price fixing, the hearings exposed the existence of “ghost projects”, infrastructure fully paid for physically non-existent. Wawao Builders became the face of this anomaly. In Bulacan, a province plagued by chronic flooding, Wawao Builders secured P5. 9 billion in contracts. Site inspections led by Senator Joel Villanueva in Calumpit and Hagonoy revealed that several river wall projects, reported as 80% to 100% complete in DPWH accomplishment reports, had not broken ground. In one instance, a P96. 4 million river protection structure awarded to St. Timothy Construction (a Discaya-linked firm) in Barangay Bulusan was declared completed in February 2023 yet remained unfinished during the August 2025 inspection.

Financial Impact and Market Concentration

The concentration of contracts created a monopoly that inflated costs and stifled legitimate competition. Smaller, independent contractors testified that they ceased participating in DPWH biddings for flood control because the “winners were known before the bid documents were even printed.” The chart illustrates the market share of these 15 firms against the thousands of other licensed contractors, highlighting the in fund distribution. The 20% market share held by these 15 firms represents a statistical impossibility in a fair bidding environment, given the sheer volume of 9, 855 total flood control projects. This centralization allowed for the systematic diversion of funds into the “shadow budget” method discussed in the previous section, where regulatory oversight was weakest.

Senate Recommendations

By December 2025, the Blue Ribbon Committee recommended the blacklisting of the 15 firms and the filing of plunder charges against their incorporators. The committee also moved to amend the procurement law to criminalize the act of “interlocking directorates” in public bidding, specifically targeting families like the Discayas who use multiple corporate veils to manipulate government contracts. The Department of Justice placed several witnesses, including former DPWH engineers who corroborated the “ghost project” timeline, under the Witness Protection Program.

The statistics present a damning indictment of engineering failure. According to the University of the Philippines National College of Public Administration and Governance (UP-NCPAG), the Department of Public Works and Highways (DPWH) poured P19. 46 billion into Albay for 273 flood control projects between 2018 and 2024. Yet, when Severe Tropical Storm Kristine (Trami) battered the province in October 2024, the region suffered P7. 33 billion in direct infrastructure damage. This 37% damage-to-investment ratio represents the highest failure rate in the archipelago, turning the province into a fiscal sinkhole where billions in taxpayer funds into floodwaters.

The Libon-Polangui Basin: A Case Study in Failure

The epicenter of this infrastructure collapse lies in the Libon-Polangui basin. DPWH records listed the San Agustin Flood Control Dike in Libon as “completed” across four separate contracts between 2022 and 2024. Yet, during the 2024 storms, the town remained submerged for weeks. Residents and local officials reported that the “flood control” structures were either non-existent, substandard, or just road widening projects mislabeled to access flood mitigation funds. In Polangui, the Sts. Peter and Paul Parish Church, a historical landmark, became a symbol of this negligence when it was inundated by floodwaters in October 2024. The Diocese of Legazpi explicitly blamed “ineffective flood control projects” and “quarrying operations” for the disaster. The funds allocated for catch basins and revetments in the 2nd District did not prevent the water from rising; they redirected the cash flow to favored contractors.

The Contractor Oligopoly

Investigative findings link the bulk of these failed contracts to a tight circle of construction firms. Data from the 2025 Senate hearings revealed that Sunwest, Inc. and Hi-Tone Construction, firms historically linked to the family of Ako Bicol Representative and Appropriations Committee Chair Zaldy Co, secured the lion’s share of flood control contracts in the Bicol region. In Catanduanes and Albay alone, these two entities bagged nearly P3 billion in projects between 2022 and 2025. Critics this monopoly stifled competition and allowed for “generic” project designs that ignored specific terrain requirements. The UP-NCPAG policy note highlighted that of these projects absence specific structural descriptions, frequently listed simply as “flood mitigation structures” without engineering details, allowing contractors to build substandard “road dikes” that crumble under hydraulic pressure.

Albay Flood Control Audit: The Cost of Failure (2018-2024)

Metric	Data Point	Context
Total Allocation	P19. 46 Billion	Funds released for 273 specific projects.
Infrastructure Damage	P7. 33 Billion	Direct loss from 2017-2023 storms (pre-Kristine).
Project Count	273	Number of “completed” or “ongoing” structures.
Major Contractors	Sunwest Inc., Hi-Tone	Controlled>60% of major contracts in the region.
serious Failure Event	STS Kristine (2024)	Record flooding in “protected” zones like Libon.

The “Road Dike” Deception

A core method of this corruption involves the classification of projects. The UP-NCPAG report exposed that of the P19. 46 billion went to “road protection” rather than actual flood control. By labeling road widening projects as “flood mitigation,” the DPWH bypassed stricter scrutiny required for hydraulic infrastructure. These “road dikes” frequently absence the necessary sheet piles or scouring protection required to withstand river surges. When the Bicol River swelled in late 2024, these structures acted not as blocks, as debris. The concrete fractured, washing away roads and leaving communities. In the 3rd District of Albay, Rep. Fernando Cabredo admitted that the “detailed” flood control master plan for the Bicol River Basin remained largely unfunded, while piecemeal projects, favored for their quick kickback turnaround, proliferated.

2025: The Year of Rage

The disconnect between the expenditure and the reality on the ground ignited mass protests in September 2025. In Legazpi City, demonstrators marched to the DPWH regional office, demanding a “physical audit” of the 273 reported projects. They carried placards showing the P19 billion figure to photos of their submerged homes. This local outrage contributed to the national pressure that forced the resignation of key officials and led to the “Mahiya naman kayo” (Have shame) speech by President Marcos Jr. Yet, even with the presidential rebuke, the physical evidence of the P19 billion allocation remains missing from the of Albay, visible only in the bank accounts of the contractors who built walls of sand and called them.

“We have listened to our people as they reject trite compliments about our resiliency and instead demand accountability and better governance. The billions spent on infrastructure failed to mitigate the impact of the storms.”
, Diocese of Legazpi, Official Statement, November 2024.

Visualizing the

The following chart illustrates the clear contrast between the funds allocated to Albay for flood control and the resulting damage, highlighting the of the spending. The data is clear: Albay received the funds to save itself. The engineering, the concrete, and the political, yet, were washed away long before the rain started.

The Sunwest-Appropriations Nexus

At the heart of the 2025 flood control scandal lies a structural conflict of interest termed the “Sunwest-Appropriations Nexus.” This method allegedly allowed the House Committee on Appropriations, led by Representative Elizaldy “Zaldy” Co until January 2025, to direct billions in infrastructure funds to Sunwest Construction and Development Corp. (Sunwest Inc.), a firm founded by Co and legally tied to his immediate family. While Co publicly claimed to have divested from the company in 2019, the Independent Commission for Infrastructure (ICI) and the Office of the Ombudsman found “reasonable grounds” to believe he retained beneficial ownership while presiding over the national budget.

The following dossier details the specific components of this nexus, based on audit findings, court filings, and the ICI’s November 2025 report.

1. The P86. 1 Billion Portfolio

Data from the Department of Public Works and Highways (DPWH) reveals that between 2016 and 2025, Sunwest Inc. and its joint ventures secured P86. 1 billion in government infrastructure contracts. The velocity of these awards accelerated drastically during Co’s tenure as Appropriations Chair. From July 2022 to May 2025 alone, Sunwest was awarded P10. 15 billion specifically for 79 flood control projects. This volume made it the top contractor for flood mitigation in the Bicol Region, even with the area suffering catastrophic inundation during Typhoon Kristine in late 2024.

2. The “Short Piles” Fraud: Mag-Asawang Tubig River

The most evidentiary case of corruption emerged from a P289. 5 million road dike project along the Mag-Asawang Tubig River in Naujan, Oriental Mindoro. Funded under the 2024 General Appropriations Act (GAA), the project required the installation of 12-meter steel sheet piles to prevent riverbank collapse. An inspection by the ICI and DPWH Secretary Vincent Dizon in September 2025 uncovered a gross between the billed specifications and the actual construction.

Table 8. 1: Forensic Analysis of Mag-Asawang Tubig Dike Project (2025 Audit)

Component	Contract Specification	Actual Installation	gap
Sheet Pile Length	12. 0 meters	3. 0 meters	-75% Material Reduction
Material Cost (Est.)	P84. 5 Million	P20. 6 Million	P63. 9 Million Overpayment
Project Status	Reported 92% Complete	Structurally Compromised	Total Failure Risk

The use of 3-meter piles instead of the contracted 12-meter piles rendered the flood defense useless against major scouring. The Ombudsman this gap as “technical falsification,” leading to the issuance of arrest warrants for Co and Sunwest executives in November 2025.

3. The “Shadow Budget” Insertions

The nexus operated through legislative insertions, line items added to the National Expenditure Program (NEP) during the bicameral conference committee meetings, where minutes are not public. In the 2025 budget deliberations, Co was accused by fellow lawmakers of facilitating approximately P100 billion in insertions. These funds were frequently labeled as “generic flood mitigation” or “slope protection” without specific geohazard coordinates. The ICI investigation linked P13 billion of these specific 2025 insertions directly to projects earmarked for Sunwest and its subsidiary affiliates, bypassing the competitive vetting process required for the master plan projects.

4. The Bicol Silt Paradox

The Bicol Region, Co’s political stronghold, received an P132 billion for flood control between 2018 and 2024, with P86. 6 billion allocated in just the 2023-2024 period. even with this massive capital injection, the region experienced its worst flooding in decades during late 2024. Senator Imee Marcos and local civil society groups exposed that of these “flood control” projects were actually revetments for private subdivisions or “rock netting” on roadsides that offered zero hydrological benefit to the Bicol River Basin. The disconnect between the expenditure and the rising floodwaters served as the primary catalyst for the 2025 protests.

5. Fugitive Status and Legal

On November 21, 2025, the Sandiganbayan issued arrest warrants for Zaldy Co, Sunwest President Aderma Angelie Alcazar, and 16 others for graft and malversation of public funds. The court acted on the Ombudsman’s finding that the “divestment” defense was a sham, citing corporate papers showing Co’s wife, Mylene Co, remained an incorporator of the Sunwest Care Foundation, which was funded by the construction firm. As of December 2025, Co remained at large, with immigration records suggesting flight to the United States, leaving the P115. 26 billion gap in the national treasury unresolved.

“The public deserves transparency on where these funds went. It is unacceptable that P132 billion has been for Bicol flood control projects, yet communities remain inundated… These supposed ‘meaningful projects’ are not reaching the communities that need them most.”
, Senator Imee Marcos, Senate Blue Ribbon Committee Hearing, October 30, 2024.

The “25% Standard” ceased to be an open secret and became a matter of public record on September 8, 2025. During the Senate Blue Ribbon Committee’s “Philippines Under Water” probe, Pacifico and Sarah Discaya, owners of St. Timothy Construction Corporation, testified under oath that they were compelled to remit 20% to 25% of total project costs to sponsoring legislators to secure flood control contracts. The couple, who secured over P31 billion in contracts between 2019 and 2025, identified at least 17 members of the House of Representatives who demanded these upfront payments, codifying a corruption tariff that stripped infrastructure budgets before ground was even broken. This testimony was corroborated by Brice Ericson Hernandez, a former assistant district engineer for the Bulacan 1st District Engineering Office (DEO). Hernandez detailed a rigid “SOP” (Standard Operating Procedure) where the kickback hierarchy was enforced with bureaucratic precision. According to his sworn affidavit, the “standard” deduction for national flood control projects included a 25% share for the legislator, a 5% share for the District Engineer, and smaller percentages for the Bids and Awards Committee (BAC). The mathematical inevitability of this graft was laid out by Senator Raffy Tulfo during the August 19, 2025 hearing. When accounting for the 25% legislative kickback, the 10-15% internal DPWH “facilitation fees,” the contractor’s required 15-20% profit margin, and the 12% VAT, less than 40% of the original appropriation remained for actual construction. Tulfo described the resulting infrastructure as “butchered projects”—revetments designed with substandard concrete mixtures and steel reinforcements half the required thickness, guaranteed to fail during major weather events like Typhoon Enteng.

The Anatomy of a P100-Million “Ghost” Project

The following breakdown, derived from the testimonies of Hernandez and the Discayas, illustrates how a P100 million flood control allocation is cannibalized before a single bag of cement reaches the site.

Allocation Component	Percentage	Amount (PHP)	Recipient/Purpose
Legislative “SOP”	25. 0%	P25, 000, 000	Sponsoring Congressman/Senator (Upfront)
DEO/DPWH Share	10. 0%	P10, 000, 000	District Engineer, BAC, Regional Director
Contractor Profit	15. 0%	P15, 000, 000	Retained Earnings (Standard Margin)
Tax (VAT)	12. 0%	P12, 000, 000	Bureau of Internal Revenue
ACTUAL FUNDS FOR WORK	38. 0%	P38, 000, 000	Materials, Labor, Equipment

The Bagman’s Logbook

The mechanics of these transfers were further exposed by Henry Alcantara, the former District Engineer of Bulacan. In a sworn statement submitted to the Independent Commission for Infrastructure (ICI) in October 2025, Alcantara admitted to personally delivering cash bundles to legislative liaisons. He specifically an incident involving a P125 million cash delivery to a rest house in Bocaue, Bulacan, allegedly intended for a high-ranking senator’s “share” of a P600 million flood control insertion. While the implicated senators, including Joel Villanueva and Jinggoy Estrada, categorically denied these accusations and filed counter-suits for perjury, the detailed logbooks provided by Alcantara matched the release dates of Special Allotment Release Orders (SARO) from the Department of Budget and Management (DBM). The “SOP” system also necessitated the creation of “ghost projects” to cover the financial gaps. Since only 38-40% of the funds remained for construction, contractors like Wawao Builders and St. Timothy Construction were allegedly instructed by DEO officials to bill for “completed” stages of work that did not exist. In Calumpit and Hagonoy, DPWH auditors found floodgates listed as “100% complete” that were missing mechanical hoists and revetment walls that were 500 meters shorter than the blueprints required. The deficit in physical structure was the direct accounting equivalent of the kickbacks paid in Manila.

Legislative Complicity and the “For Later Release” method

The probe also examined the weaponization of “For Later Release” (FLR) funds. This budgetary method allows the executive branch to withhold specific line items until “requirements” are met. Testimony from the Discayas suggested that the release of FLR funds for flood control was frequently contingent upon the contractor’s advance payment of the 25% tariff. If the kickback was not remitted upfront, the SARO would remain frozen. This “pay-to-play” scheme privatized the national budget, converting public infrastructure funds into a transactional commodity where the primary deliverable was not flood mitigation, the transfer of cash to political war chests.

Executive Order 94: The Mandate

On September 11, 2025, President Ferdinand Marcos Jr. signed Executive Order No. 94, formally establishing the Independent Commission for Infrastructure (ICI). The directive dismantled the bureaucratic shield that had previously protected the Department of Public Works and Highways (DPWH) from external scrutiny. Unlike previous task forces limited to administrative reviews, EO 94 granted the ICI “extraordinary investigative powers,” including the authority to problem subpoenas, freeze assets in coordination with the Anti-Money Laundering Council (AMLC), and bypass the standard Ombudsman backlog for immediate preliminary investigation recommendations. The ICI, chaired by retired Justice Andres Reyes Jr., was given a specific mandate: investigate the P115. 26 billion fiscal gap and the widespread failure of flood control projects in Central Luzon. The commission’s formation marked the administration’s admission that internal DPWH audits were compromised.

“The days of checking boxes on paper while our people drown are over. This Commission not just find the leaks in our dikes, the leaks in our treasury.”
, Justice Andres Reyes Jr., ICI Chairperson, September 15, 2025.

The Bulacan 37: Anatomy of the Indictments

The ICI’s aggressive timeline resulted in the filing of criminal and administrative charges against 37 individuals between September and November 2025. These suspects, shared dubbed the “Bulacan 37” by the press, represent a cross-section of the corruption pipeline, from district engineers who certified non-existent projects to the private contractors who cashed the checks. The charges were filed in two waves. The wave (September 11) targeted the DPWH Bulacan 1st District Engineering Office (DEO) officials who directly signed off on the “ghost” projects. The second wave (November 18) expanded the net to the private contractors and regional directors who facilitated the scheme.

Table 1: Key Figures Among the Charged Suspects

Name	Position/Affiliation	Charges Filed	Alleged Role
Henry Alcantara	District Engineer, Bulacan 1st DEO	Plunder, Graft (RA 3019)	Certified 28 “ghost” projects as 100% complete.
Brice Ericson Hernandez	Asst. District Engineer	Graft, Falsification of Documents	Signed inspection reports for non-existent dikes.
Sally Santos	Owner, SYMS Construction	Plunder, Malversation	Received P931. 2M for unbuilt/substandard projects.
Mark Allan Arevalo	Owner, Wawao Builders	Plunder, Malversation	Bagged P5. 97B in contracts; 85 projects flagged.
Cezarah Rowena Discaya	St. Timothy Construction	Graft, Procurement Fraud	Accused of bid-rigging and cartel-like behavior.
Jaypee Mendoza	Chief, Construction Section	Graft, Gross Neglect	Falsified completion certificates for Hagonoy sites.

The Evidence: Ghost Projects and Geotagging

The ICI’s case against the 37 suspects relies on forensic engineering data rather than witness testimony alone. Using satellite imagery and drone surveillance provided by the National Mapping and Resource Information Authority (NAMRIA), the Commission proved that structures certified as “completed” by District Engineer Alcantara and his team did not exist. Three specific projects in Bulacan formed the core of the initial indictment: 1. The Baliwag Revetment (P55 Million): Documents certified the completion of a 220-meter concrete river wall in Barangay Pagala. ICI drone footage from October 2025 showed only a muddy bank with no traces of construction. 2. The Hagonoy River Control (P74 Million): Awarded to SYMS Construction, this project was billed as a “detailed dredging and embankment” effort. Physical inspection revealed the river depth had actually decreased due to siltation, proving no dredging occurred. 3. The Bocaue Drainage System (P95 Million): The Commission on Audit (COA) found no drainage culverts at the specified coordinates. The DPWH officials claimed the project was “relocated” 694 meters away, the structure at the new site was an old, decaying wall built in 2018, not the new 2025 project paid for by taxpayers.

Legal and Administrative Consequences

The filing of charges triggered immediate administrative consequences. On October 23, 2025, the Office of the Ombudsman placed the accused DPWH officials under a six-month suspension without pay. Simultaneously, the Department of Justice (DOJ) issued Hold Departure Orders (HDO) against the private contractors, preventing them from leaving the country. The inclusion of Plunder charges—a non-bailable offense for amounts exceeding P50 million—signaled the severity of the case. By consolidating the individual “ghost” contracts into a single pattern of overt criminal acts, the ICI established the predicate for Plunder against Alcantara, Santos, and Arevalo. This legal strategy prevents the accused from posting bail and returning to operations, a common tactic in previous infrastructure graft cases.

The Digital Deluge: August 11, 2025

On August 11, 2025, following a directive from President Ferdinand Marcos Jr. during his fourth State of the Nation Address, the Malacañang Records Office activated sumbongsapangulo. ph. The portal was designed as a direct line for citizens to report irregularities in the P545-billion flood control program. Government engineers expected a trickle of minor complaints. Instead, they received a digital deluge that exposed the widespread rot in the Department of Public Works and Highways (DPWH).

Within the 72 hours of operation, the platform logged 1, 148 verified reports and over 800 feedback submissions. By September 7, the database had swelled to 12, 000 entries, and by October 9, it contained nearly 20, 000 distinct case files. This was not a collection of grievances; it was a crowdsourced, geotagged audit of the nation’s infrastructure that directly contradicted the DPWH’s official completion reports.

The Geotag gap

The “Sumbong” dataset provided the Independent Commission for Infrastructure (ICI) with its most damning evidence: the coordinate mismatch. Under Department Order No. 23, contractors are required to submit geotagged photos of completed projects to bill the government. The citizen uploads exposed that thousands of these official coordinates were falsified.

Data analysts from the ICI found that 38% of the “completed” project photos submitted by contractors in Central Luzon were taken at locations different from the geocoordinates logged in the citizen reports. In Hagonoy, Bulacan, residents uploaded photos of open fields and riverbanks where the DPWH database listed 100% completed concrete revetments. The metadata from citizen uploads, containing unalterable GPS timestamps, proved that the government had paid for air.

Table 11. 1: Top 5 Flagged “Ghost” Projects (August 2025 Dataset)

The following projects received the highest volume of citizen reports verifying non-existence even with full payment release.

Project Location	Contractor	Contract Cost	Status (DPWH)	Status (Citizen Audit)
Brgy. Piel, Baliuag, Bulacan	Tiqui Builders / M3 Konstract	P96, 499, 605	100% Complete	Non-existent (Existing structure from 2018 found)
Brgy. Carillo, Hagonoy, Bulacan	Darcy & Anna Builders	P74, 111, 970	100% Complete	Ghost Project (Riverbank visible)
Brgy. San Juan, Balagtas, Bulacan	Syms Construction Trading	P46, 353, 844	Ongoing (95%)	0% Completion (No mobilization)
Arayat Riverbank, Pampanga	Edmarri Construction	P254, 000, 000	Rehabilitated	Collapsed (Structure failed Aug 2024)
Meyto & San Jose, Calumpit	Wawao Builders	P77, 190, 000	Completed	Relocated (Built 694m away from approved site)

The Bulacan Anomaly

The dataset Bulacan as the epicenter of the fraud. Of the initial 1, 000+ reports, nearly 40% originated from this province. The reports corroborated the findings of Senator Panfilo Lacson, who identified Bulacan as the “most notorious” region for flood control anomalies. The data showed a recurring pattern involving specific firms: Wawao Builders, Syms Construction, and Darcy & Anna Builders. These entities consistently appeared in reports alleging “ghost” projects, structures that existed only on paper.

In one egregious case documented on August 14, 2025, residents of Barangay Iba-Ibayo in Hagonoy uploaded video evidence showing that a P77. 19 million riverbank protection structure, declared complete by the DPWH Bulacan 1st District Engineering Office, was missing. The “Sumbong” data revealed that the structure identified by DPWH officials during inspections was actually located 694 meters away from the approved site and was likely an older project recycled to justify new billing.

From Flood Control to Road Works

While initially targeted at flood mitigation, the portal’s scope expanded rapidly. By September 2025, the dataset began to include reports on road paving and widening projects. Citizens realized that the same contractors failing to build dikes were also leaving highways unfinished. The ICI used this cross-referenced data to identify a “syndicate” of 15 contractors who cornered billions in contracts across multiple infrastructure categories. These firms, frequently referred to as the “Favored 15,” were found to have secured projects worth P98 billion in Central Luzon alone, even with a documented history of slippage and non-performance.

“The people have created their own line of communication. We are not just looking at flood control anymore. The citizens are showing us the cracks in the pavement, the missing, and the dikes made of sand.”
, President Ferdinand Marcos Jr., BBM Podcast, September 7, 2025

Institutional

The undeniable weight of the “Sumbong” dataset forced the creation of the Independent Commission for Infrastructure (ICI) under Executive Order No. 94. Headed by retired Supreme Court Justice Andres Reyes Jr., the ICI was granted the power to bypass DPWH internal auditors and use the crowdsourced data as primary evidence. This marked a shift in Philippine governance: for the time, a direct feedback loop from the citizenry was weaponized to a bureaucratic cover-up in real-time. The 20, 000 case files generated by the portal are the basis for the plunder complaints filed against three District Engineers and six private contractors before the Office of the Ombudsman.

The “Usable” Myth is the bureaucratic fiction that allowed the Department of Public Works and Highways (DPWH) to claim a 92% project completion rate while Central Luzon remained underwater. In the official DPWH Atlas, thousands of flood control structures were listed as “Usable”—a technical classification meaning they were complete, paid for, and functional. in late 2025, the Commission on Audit (COA) shattered this classification using a tool the DPWH had long ignored: time-series satellite surveillance. The audit revealed that the “Usable” status was frequently a lie. Contractors were not building new walls; they were skinning old ones.

The Concrete Veneer: How the “Overlay” Scam Works

The most pervasive fraud method identified in the 2025 COA Fraud Audit Reports (FARs) was the “Cosmetic Overlay.” In this scheme, contractors billed the government for “New Construction” or “Major Rehabilitation”, line items that command premium pricing for structural steel, sheet piles, and high-grade concrete. In reality, site inspections and satellite history showed contractors pouring a thin, 4-inch of fresh concrete over existing, decades-old dikes. This “veneer” gave the appearance of a brand-new structure in geotagged photos submitted for billing. COA auditors, using historical imagery from Sentinel-2 and proprietary commercial satellites, compared the spectral signatures of the project sites before and after the reported construction dates.

“Satellite imagery showed that riverbank protection structures already existed prior to contract effectivity, raising the possibility that public funds were used to pay for works that were not newly constructed.”
, Commission on Audit, Fraud Audit Report (Bulacan 1st DEO), 2025

The spectral analysis was damning. New concrete has a high albedo (reflectivity) that fades over time. The satellite data showed “new” projects that retained the dull, weathered heat signature of aged concrete, proving that no significant structural work had occurred even with millions in payments.

Ground Zero: The Bulacan “Ghost” Projects

The epicenter of this fraud was the Bulacan 1st District Engineering Office (DEO). Following the catastrophic flooding from Typhoon Carina (Gaemi) in July 2024, which submerged parts of the province for weeks, the COA launched a targeted fraud audit. The findings, released in batches throughout late 2025, identified specific contracts awarded to firms like Wawao Builders and SYMS Construction Trading where the physical reality did not match the billing documents. The following table details four specific cases flagged by COA where the “Usable” status was mathematically impossible:

Table 12. 1: The “Ghost” Projects of Central Luzon (COA Fraud Audit 2025)

Location	Contractor	Cost (PHP)	Reported Status	Satellite/Physical Finding
Hagonoy, Bulacan (Brgy. Santa Monica)	SYMS Const.	67. 5 Million	100% Complete	Non-Existent. No structure found at coordinates. Site was an open riverbank.
Baliuag, Bulacan (Brgy. San Roque)	Wawao Builders	72. 3 Million	100% Complete	Pre-Existing. Structure visible in imagery 2 years prior to contract award.
Pandi, Bulacan (Brgy. Malibong Bata)	SYMS Const.	39. 6 Million	100% Complete	Mismatched. Structure built in wrong location; failed specs.
Guiguinto, Bulacan (Brgy. Santa Cruz)	Wawao Builders	96. 5 Million	100% Complete	Ghost. “Recurring indicators of widespread misuse.” No verifiable asset.

The Geotagging Loophole

The DPWH defense relied heavily on its “Geotagging” application, a system introduced to prevent exactly this type of fraud. Contractors are required to upload time-stamped, GPS-tagged photos of progress to unlock progress billings. yet, the 2025 investigations revealed that the system was compromised at the District Engineering Office level. * Spoofed Metadata: Contractors used GPS-spoofing software to upload photos taken at different locations or different times. * The “Angle” Trick: Photographers would take close-up shots of the same 10-meter section of a wall from different angles to represent a 500-meter project. * Recycled Photos: In the Bulacan audit, COA found identical photos used to claim progress on two completely different contracts separated by kilometers.

The Arayat Collapse: When the Veneer Cracks

The cost of the “Usable Myth” was not just financial; it was structural. The danger of the overlay scam is that it adds weight to old, crumbling foundations without adding support. This reality materialized in August 2024 (and repeated in 2025) with the collapse of the flood control dike in Barangay Candating, Arayat, Pampanga. The project, valued at over P90 million, was listed as a functional defense against the Pampanga River. When the dike collapsed, it did not fail like a new structure (which might crack or settle). It peeled away. The investigation showed that the sheet piles, the steel columns meant to anchor the wall deep into the riverbed, were either too short or improperly driven. The concrete “wall” was a heavy decoration resting on saturated soil. When the river rose, the soil liquefied, and the “usable” wall slid into the water, taking homes with it.

The P6. 4 Billion “Idle” Waste

By December 2025, the COA’s aggregate report painted a grim picture of the entire infrastructure sector. State auditors flagged 747 infrastructure projects worth P6. 4 billion as “technically defective, unusable, or idle.” In Central Luzon alone, the gap between the DPWH’s “Usable” inventory and the actual flood protection capability was estimated at 40%. This gap explains why, even with P1. 1 trillion spent on flood control over the previous decade, the floodwaters in 2024 and 2025 reached historical highs. The water was not breaching new walls; it was flowing through “ghost” walls that existed only in the billing ledgers.