Banks, contractors, stocks hit by corruption mess

For sure, someone has to pay the piper. 

And it’s not so much the engineers – pun intended – who designed this grand thievery of flood control projects, but us. As with every corruption saga in our nation of 115 million, it’s you, me and everyone we know who will again pay the price.

Days ago, a source sidled up to me and whispered that banks are already getting hit. Some contractors can no longer settle their debts to the banks – at least for now

These are billions in loans, mostly financing for projects and supposedly to be paid in tranches.

Since this jaw-dropping scandal erupted, some contractors have been remiss or have slowed in settling their loan amortization, primarily because they are unable to collect from the government.

My source said that, as it is now, DPWH officials and executives are afraid to sign the bills for fear of investigation or repercussions later on.

Note that the DPWH also earlier temporarily halted all projects. The DPWH has since lifted the suspension of procurement activities for locally funded projects but provisions have been tightened – understandably and necessarily so. But like it or not, this will surely cause delays in critical infrastructure.

Perhaps, contractors are also preserving their cash in these uncertain times, which is why they are unable to pay their loans on schedule. These aren’t necessarily the unscrupulous contractors who are sitting on heaps of cash. Many are legitimate ones.

Unfortunately, we all know what happens when banks don’t get paid. Am I wrong to imagine a systemic risk that could jolt the banking system? I sure hope I’m wrong.

‘Everybody dreads contractors’

Speaking of legitimate contractors, many of them are sighing in frustration and crying foul because they are now being avoided like the plague – by potential clients, investors and lenders.

I’m referring to some of the big names in the industry, the triple- or quadruple-A builders with ISO certifications and all, who have protected their reputation by avoiding flood control projects that involve paying grease money to lawmakers, DPWH and local officials.

“Imagine, we’ve stayed away from flood control projects only to be stereotyped and labeled as corrupt,” one quadruple-A contractor said.

‘We helped build the nation’

Another builder said it’s unfortunate for them who are doing honest business because they are now having a challenging time continuing some of their projects.

“Everybody dreads contractors now. They forgot we helped build the nation,” another source said, adding that nobody is protecting contractors now. Extortionists are likewise trying to take advantage of the situation.

Unfortunately for these builders, they are paying the price as the bad eggs in their industry have destroyed whatever nation-building and legacy the legitimate and honest contractors have established.

The result of this uncertainty is a slowdown in construction projects and critical infrastructure works around the country – roads, bridges, highways and yes, flood control.

Stocks, too

The Philippine stock market has also been hit.

On Tuesday, as ex-DPWH district engineer Henry Alcantara sang like a canary, the stock market tumbled as some foreign funds dashed to the exit door, not wanting to park their cash in our corruption-ridden country.

“The local market plunged as investors expressed dismay over the corruption issues in the Philippines’ flood control projects,” according to Philstocks Research.

That day, the benchmark stock exchange index declined by 96.29 points to 6,118.54 with foreign investors dumping P3.7 billion worth of stocks.

Alcantara named names of those allegedly involved in the mess – including his boss, retired DPWH undersecretary Roberto Bernardo, former senator Bong Revilla, former congresswoman Mitch Cajayon-Uy and incumbent lawmakers Jinggoy Estrada, Joel Villanueva and Zaldy Co.

The amounts of alleged kickbacks to lawmakers that Alcantara mentioned were dizzying enough – P150 million for Villanueva from the 2023 unprogrammed appropriations of the DPWH; P88 million allegedly for Estrada or 25 percent of the total 2024 budget that was supposed to fund flood control projects in Bulacan and P90 million for Revilla, or 30 percent of the P300 million the ex-lawmaker allegedly inserted in the 2024 budget.

As for Uy, she supposedly received 10 percent from a P411-million project in Alcantara’s district.

Estrada, Revilla and Villanueva, who also figured prominently in the PDAF scam in 2013, denied any involvement.

Multi-millions of pesos in kickbacks. Imagine that. It’s as shocking as a Molotov explosion.

But just when you think that’s bad enough, Alcantara pried Pandora’s box open even wider: an estimated P1 billion in cold cash, stacked in dozens of suitcases and loaded into seven vans, was allegedly delivered to Co who, later in the day, denied the allegations.

Indeed, not surprisingly, all those mentioned claimed innocence, each one scrubbing their hands like Pontius Pilate himself.

But make no mistake. The damage is done.

This national disgrace will come at a cost. Banks are already affected. Legitimate businesses are struggling. Projects are halted. Construction laborers will be jobless. The economy will slow down.

It’s just like the Pied Piper of Hamelin: when the townspeople refused to pay him after he rid the town of rats, he took their children as punishment.

In the same way, someone has to pay the piper – and for sure, it won’t be the crooks, but us and our children after us.

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Email: [email protected]. Follow her on  X @eyesgonzales. Column archives at EyesWideOpen on FB.