Unmasking the Ghost Flood Control Scandal in Metro Manila

Introduction: The Impact of Flooding on Metro Manila

Severe flooding in Metro Manila has highlighted the dire consequences of failed or substandard flood control projects. Recently, many commuters found themselves stranded during intense storms. This situation raises critical questions about the integrity of infrastructure investments in the region.

Background: Uncovering “Ghost” Flood Control Projects

Allegations of “ghost” flood control projects—where infrastructure was paid for but never built—have recently shaken the Philippines. In his 2025 State of the Nation Address, President Ferdinand Marcos Jr. revealed that faulty, substandard, and even non-existent flood control projects were contributing to disastrous flooding.

Only 15 contractors cornered about ₱100 billion, which is roughly 20% of the ₱545-billion national flood control budget since 2022. This raises red flags regarding favoritism and collusion. In August 2025, a Senate Blue Ribbon Committee inquiry confirmed the existence of these ghost projects. Officials from the Department of Public Works and Highways (DPWH) admitted to receiving reports of projects in Bulacan that had paperwork and funding but lacked actual construction. One contractor, Wawao Builders, was awarded ₱9 billion worth of projects, including alleged ghost works in towns like Calumpit and Hagonoy.

Kickbacks of 20–25% reportedly went to politicians and officials even before projects began. This left only 30–40% of the budget for actual work. Such a culture of kickbacks and “license renting” has led to a proliferation of dubious contractors and non-existent projects.

The Commission on Audit (COA) has since launched a fraud audit of Bulacan projects. Despite receiving the highest flood control funding nationwide, Central Luzon communities still suffered severe floods.

The BIR Steps In: Tax Compliance Investigation

The Bureau of Internal Revenue (BIR) has announced investigations into the tax compliance of all contractors linked to the flood control projects, including those associated with alleged ghost projects. Commissioner Romeo Lumagui Jr. emphasized that the bureau will coordinate closely with ongoing probes and demand project records.

This angle is crucial: even if contractors evaded public works oversight, they could be caught through their tax filings. If payments were received, they should be reported as income. Ghost projects often rely on “ghost receipts” or fake invoices to liquidate public funds and evade taxes.

Under the BIR’s Run After Fake Transactions (RAFT) program, the bureau has aggressively prosecuted ghost receipts. In August alone, 23 corporations were charged for using fake receipts worth ₱1.41 billion in evaded taxes. These ghost corporations existed only on paper but were used to fabricate expenses.

By tracing the flow of money and cross-checking tax returns, the BIR aims to uncover inconsistencies and support graft prosecutions with financial evidence.

Legal Framework and Potential Charges

The scandal implicates numerous Philippine laws:

• Anti-Graft and Corrupt Practices Act (RA 3019) – for approving payments for non-existent projects.

• Plunder (RA 7080) – when public officials plunder ₱50 million or more.

• Government Procurement Reform Act (RA 9184) – violations where undercapitalized firms bag massive contracts.

• Revised Penal Code – fraud, estafa, falsification for ghost project documents.

  
  

Tax-related liabilities include:

• Tax evasion and fraudulent returns under the Tax Code.

• Ghost receipts to underdeclare income or inflate expenses.

• Administrative sanctions, such as blacklisting from government contracts.

  
  

The Ombudsman also plays a key role, with the authority to investigate and prosecute officials before the Sandiganbayan.

Investigative Insights: How the Scam Operated

The scam involved several key players:

• Politicians allocating budget insertions.

• Agency officials awarding projects.

• Contractors, some of them shell firms, collecting payments.

  
  

Kickbacks of 20–25% were demanded upfront. By the time the funds reached actual work, only 30–40% remained. Often, nothing was built—such as the ₱55-million Baliuag river wall project, which President Marcos inspected and found to be nonexistent.

Another red flag: 15 contractors received 18% of the total flood control budget, despite limited capacity. Many projects also had duplicate costs and vague descriptions, suggesting copy-paste contracts used as vehicles for fund diversion.

Anti-Corruption Efforts and Public Engagement

In response to these alarming revelations, President Marcos launched “Sumbong sa Pangulo.” This online platform lists all flood control projects and allows citizens to report anomalies, even uploading photos. With nearly 10,000 projects listed, he appealed for “80 or 90 million pairs of eyes” to monitor these initiatives.

This transparency tool works alongside COA audits, Senate hearings, and BIR tax probes. By attacking corruption through tax law—similar to how Al Capone was jailed for tax evasion—authorities hope to secure quicker convictions.

International Parallels and Broader Implications

Ghost projects are not unique to the Philippines. For instance, in Laos, an audit uncovered ghost road projects worth over $36 million. In the Philippines, ghost employees have also drained government funds.

Reforms needed to combat this issue include:

• Digital project tracking

• Transparent bidding processes

• Citizen audits

• Strong whistleblower protections

  
  

Public outrage over recent flooding adds urgency to these reforms. However, the ultimate test will be sustained prosecution, real penalties, and systemic changes to break the cycle of corruption.

Conclusion: A Call for Accountability

The ghost flood control scandal illustrates how corruption undermines both infrastructure and public trust. The BIR’s involvement underscores that financial transparency is a potent weapon against graft. If pursued fully, this case could set a precedent where ghost projects—long thought untouchable—finally face accountability.

For Filipinos, the hope is that public funds will at last go where they are meant to: into projects that save lives, not into private pockets. It is imperative that we remain vigilant and demand accountability from those in power.

In this context, I believe that the ongoing investigations and public engagement are crucial steps toward restoring trust and ensuring that our infrastructure serves its intended purpose.