President Ferdinand Marcos Jr. first brought the issue forward in his state of the nation address, calling out officials and contractors who conspire to pocket the nation’s funds. Since then, he has ordered an independent commission to investigate widespread irregularities.
Senate hearings have gripped the country in the past weeks, with testimonies from government engineers and contractors that payoffs were made to lawmakers in exchange for the approval of their projects. Several lawmakers and high-profile political figures, including the President’s cousin, have been linked to the investigations, heightening people’s outrage.
A senate committee chair has estimated that only 40 per cent of flood relief funds have been legitimately implemented since 2022, with the rest siphoned off through bribes and other corrupt schemes. Watchdog Greenpeace has reported that up to US$19.1 billion in climate-tagged funds may have been lost to corruption and bogus flood control projects since 2023.
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The concept of Filipinos being resilient has been really overplayed.
Angelo Kairos dela Cruz, executive director, Institute for Climate and Sustainable Cities
On the latest edition of the Eco-Business podcast, Angelo Kairos dela Cruz, executive director of nonprofit Institute for Climate and Sustainable Cities (ICSC), talks about why he thinks there has been a widespread outcry despite calls for investigations into the so-called fraudulent deals.
The ICSC is an organisation which oversees climate finance-backed projects in the Philippines, and dela Cruz says he is “not surprised” by the allegations.
“We started this work almost a decade ago and we’ve had inklings [about the existence of corruption borne out of flood relief projects] every time we go to our communities,” dela Cruz told Eco-Business. “We try to track how these internationally-funded programmes are implemented on the ground… Sometimes even the design is really flawed. But the effects and impacts [of the projects] on the people have been negative rather than climate positive.”
Tune in as we talk about:
Kairos dela Cruz, executive director of nonprofit Institute for Climate and Sustainable Cities (ICSC). Image: ICSC
- How Filipino resilience is “trivilaised” in the face of natural disasters
- Gaps in climate budgeting process as loopholes for corruption
- Investing in mangroves and reforestation not just flood control measures
- Impact of flood control scandal on international donor support
- Civil society’s role in corrupt climate finance-backed projects
The Philippines is currently engulfed in a massive flood control scandal, but calls for investigating these alleged anomalous flood control projects were also prevalent last year. Why do you think the public outcry is this widespread now?
The first reason is a growing awareness of what climate change is and what it means for us as a nation. This awareness created the hunger to know more about it and to translate climate data into layman’s language. Given that flooding is one of the impacts that we can consider as real – it’s the headline in the news, in social media, and we ourselves suffer from it. Filipinos live our lives with flooding as a part of it. I haven’t met any Filipino who grew up in the Philippines, who didn’t have any experience with flooding.
The second reason is that the awareness that we deserve something better from the government has also been growing in the minds of the people.
Linked to these first two reasons is my third reason, which is accountability can now take many forms. Social audits can be done at lower cost. People can just post a forum that can already trigger engagements and in this case, it can even trigger investigations.
As a country with only two seasons officially, which is wet and wetter, we are already inherently exposed to hazards such as flooding. Having to deal with a very obvious problem with obvious solutions and these solutions failing because of really obvious corruption can and should dictate a different temperament among the people.
Having something so visual playing out more frequently really changes the general and political mood, which means people’s patience is running out.
Do you think Filipinos’ so-called resilience to extreme weather events has also ran out?
I do not think our resilience has run out, but I think the concept of Filipinos being resilient has been really overplayed. We’ve seen a lot of posts on social media which add humor to those sufferings in general. We can see people playing basketball, drinking or singing in videoke, amid flooding, for example.
The concept of the Filipino spirit being waterproof has been so trivialised. Our resilience has not run out but what’s really changing is that Filipinos are saying that their inherent resilience, the capacity to absorb these shocks is not only because of our inherent exposure to these hazards, but also because of the failure of our policies and programmes to address these vulnerabilities.
Disasters happen because systems fail. In the same way, we feel like our resilience is being used as an excuse by a lot of government agencies when their programmes and policies fail. What really changed is this collective shift of thinking, of challenging the concept as well.
Tens of thousands of protesters, including civil society coalitions, youth, and anti-corruption groups, gather at the EDSA Shrine in Ortigas Avenue, Quezon City on 21 September, to condemn the alleged widespread corruption in the government. Image: Russco Gray, CC0, via Wikipedia Commons
Greenpeace has reported that up to US$19.1 billion in government climate-tagged funds may have been lost to corruption and anomalous flood control projects since 2023. Based on past climate budgets, does this figure seem about right?
It can go both ways. First, it could be higher because the typology or what counts as climate change-related finance is not yet fully integrated in government budgeting processes. It could be bigger if you didn’t tag something [as climate-related] or if that amount is lost to corruption.
It could also be smaller because sometimes the idea of an office having to tag everything that’s related to climate is an extension of their performance of as an office. Most probably that office will tag everything or most of the things that they can tag as climate change-related. But when you look at the granularity of these funds, they’re not even [all] adaptation [projects]. Some of them are disaster risk reduction. It’s fine as long as it’s implemented the right way. But at the same time it’s giving a different picture of accounting of where we are when it comes to climate financing here in the Philippines.
We haven’t had the chance to look at the details of the Greenpeace report. It’s based on Climate Change Expenditure Tagging (CCET) data sets that they have. It’s a good starting point, but I think more nuance is required to make sure that we really discuss it. Tagging is an important step, but at the same time, focusing on the impacts [of the projects] would be more important in the long run.
Speaking of tagging, you mentioned in a previous interview that the lack of proper climate finance accounting mechanisms and poor budget tagging for projects could be one of the key reasons why the Philippines has been struggling to close its climate adaptation financing gap. Could poor budget tagging be one of the loopholes for corruption to seep through?
I think it plays a role in terms of excusing potentially corrupted programmes and projects [from being accountable]. Sometimes, when you look at the discussions now in terms of budget cuts for flood control, there’s a very real and grounded discussion that these projects should not have been implemented.
Poor project planning is more of a function of [not being able to] monitor the impacts of climate finance. For vulnerable countries such as the Philippines, we should be able to identify how much we actually need, where to get it and how to monitor our progress from step zero to the finish line.
But because of poor budget planning here in the Philippines, you can see that sometimes the government appears to be funding more programmes for things that are not really identified as part of the national adaptation plan or nationally determined contributions.
I think it’s a work in progress.The Climate Change Commission has made significant steps forward, but I think there is a lot that needs to be done if we are to use budget tagging to become more reflective of what we actually need and translate that into our national budgeting process.
Could you give examples of projects that have been approved but are not really a priority?
Flood control projects are getting the lion’s share of our budget, but it’s not that connected to our national adaptation strategies.
We have to allocate flood control at some extent to our overall plan to make it sensible for us as a country. It’s getting a lot of financing on the grey infrastructure part for things that require a lot of capital outlay to be built.
But at the same time, we are not financing enough ecosystem-based adaptation or nature-based solutions. We are still underfunding reforestation and mangrove protection.
It should raise a lot of alarm bells now because if you have a flood control project that is substandard, or worse, a ghost project, we know that a mangrove forest is more reliable in terms of stopping flooding and enduring the integrity of riverbanks. Just to be clear, I think flood control has a role to play, but we have to be able to deliberate in identifying its added value. We can decide at some point if more resources should be in allocated to deforestation or mangrove protection instead of just being fixated on gray infrastructure projects.
How does this issue affect how international donors will support the Philippines? For example, South Korea has ordered the suspension of a proposed US$503 million infrastructure loan for a bridge-building project due to corruption concerns, even though Manila insists no such agreement was ever signed.
Beyond international donors, we should really be careful in planning how it will affect our credit rating. Most donors of climate funds look at a country’s credit rating, as well as our political stability, and the capacity of a government to curb corruption.
It affects identifying which modality of finance can be accessed and at what scale. For example, if we are vying for a US$2 billion loan from the Word Bank combined with the Green Climate Fund financing, we cannot avail the lower end of interest rates if we have a really bad climate finance accounting system. The ripple effect is going to be real. But at the same time, I think the measure of our success in terms of curbing this corruption can also have a positive impact later on.
It can go both ways. If we manage to figure it out, then maybe confidence and interest will come back. But if we fumble the whole thing, we can already expect a lot of hesitation from the international community, particularly those that are giving financing on aligned programmes and projects. Flood control has been one of the main recipients of international climate finance particularly between 2016 and 2022. That’s why we have to be careful about how we figure it out as a country in general.
Apart from international funding, what about the government’s People’s Survival Fund (PSF) climate fund? You were one of the main drivers of this law which is the country’s first legislated climate finance mechanism dedicated to local adaptation projects. Does this issue affect its fund disbursements?
A local government’s application process for the fund will be affected. If you have a local government that’s embroiled in the whole fiasco, definitely that local government, even if it has a really good proposal, won’t get approval for funding.
One of the requirements in certification is that you don’t have any pending administrative cases with the Department of Interior and Local Government. By default, that local government would be ineligible to access the People’s Survival Fund.
However, like most of the positive things which I try to focus more on lately, I think the People Survival Fund would also benefit a lot from showing what areas of intervention can be done in flood control.
A PSF has both gray and green interventions already funded and currently being implemented. We’re not part of the [PSF] board anymore, but I think the PSF board can really take this opportunity to showcase how a direct access climate change adaptation fund can remove the possibility of corruption by creating more ownership among local governments and by ensuring the most possible buy-in of the community before a project is actually done.
We’ve seen how the buy-in and knowledge [of the community] of an implementing project is really absent in anomalous flood control projects. The PSF can show how direct access is actually working in the Philippines.
What can the civil society space do to help alleviate this issue?
Civil society has a huge role in assisting, facilitating, and fixing the areas of disconnect between government systems and local communities.
What civil society can deliver is engage with both lawmakers and communities. We have to use that agility, that flexibility to provide platforms for communities as well.
I think civil society has to just keep on pushing to create more spaces where these discussions can happen. It’s really encouraging that the Philippine Congress has opened this discussion with civil society organisations in terms of the budgeting process.
The Congressional Policy, Budget and Research Department or (CPBRD) started these civil society direct discussions with lawmakers, particularly those members of the appropriations committee to talk give and receive direct feedback at the same table. Last year this was not present at all. But now we have that space. Civil society has to make sure that we fill that space as significantly as we can. To be able to do that, we need to bring in more community voices, more perspective from the ground to make sure that our funding is really responsive to what the people actually need.
You mentioned a positive side to this scandal. How would you like this issue to end? Should we have more rallies, should we just continue with the senate hearings?
First of all, I think we definitely need more rallies. We need people to keep on developing this idea that we can do something by just showing up. I think it’s fundamental to any societal change that we want to do.
My wish is for accountability to be seen as a shared responsibility. We need this common understanding that accountability goes both ways – coming from the source of financing, as well as from the recipient side.
If there is the understanding that accountability is a shared responsibility, climate funds will no longer be a source or entry point of misuse or disconnection, but clearly as a tool for empowerment, resilience, and genuine climate justice.
This transcript has been edited for brevity and clarity.
