Recto: Ghost projects cost economy P118.5 billion annually

National

MONEY meant to protect Filipinos from floods has been washing away in corruption, costing the country as much as P118.5 billion annually, the Department of Finance (DOF) told senators on Tuesday, September 2.

At a Senate briefing on the proposed 2026 national budget, Finance Secretary Ralph Recto said anomalies and ghost projects in flood control programs have deprived the economy of stronger growth and more jobs. He explained that without these losses, gross domestic product could have expanded by up to six percent and created as many as 266,000 jobs.

“Raising revenues is no joke. Then you will see that it does not go to the right projects and the welfare of the people. Some even become non-existent,” Recto said during the Development Budget Coordination Committee (DBCC) hearing, as quoted by Philstar.

The Philippine economy grew by 5.4 percent in the first quarter and 5.5 percent in the second quarter of 2025. Full-year growth in 2024 was recorded at 5.7 percent, slightly higher than the 5.5 percent posted in 2023.

The DBCC has trimmed its growth target for 2025 to 5.5 to 6.5 percent from an earlier forecast of six to eight percent, though Recto said he remained optimistic that the third-quarter target is still within reach.

Recto also reported significant revenue losses at the Bureau of Customs (BOC), estimating around P150 billion this year from oil and merchandise smuggling.

He had earlier projected a P100-billion shortfall, pointing to reduced rice tariffs and tax incentives for hybrid and electric vehicles as contributing factors.

The DBCC has lowered Customs’ revenue target from P1.06 trillion to P990 billion due to weaker imports and lower tariffs. On the 60-day suspension of rice imports ordered by President Marcos, Recto said any losses would depend on global prices, but noted that lower costs would ultimately benefit consumers by easing inflation.

Lawmakers also flagged irregularities in the Department of Public Works and Highways (DPWH) budget. Senate finance committee chair Sherwin Gatchalian pointed out that flood control projects such as the P50-million flood mitigation plan for the Agno River in Pangasinan appeared both in the 2025 budget and again in the 2026 National Expenditure Program (NEP).

A similar duplication, he said, was found in a project along the Agos River in Quezon.

“These are not clerical errors. These are deceptively and intentionally inserted in the NEP,” Gatchalian said in the same report, pressing the Department of Budget and Management (DBM) to improve its review process.

Budget Secretary Amenah Pangandaman admitted her department lacks the technical expertise to confirm the status or even the existence of individual projects included in the NEP.

Sen. Panfilo Lacson meanwhile expressed concern over P51.82 billion worth of vague budget insertions, describing them as part of a “quadruple whammy” that burdens taxpayers throughout the budget process.

He said questionable amendments appear in the NEP, in House and Senate versions of the spending bill, and again during bicameral conference deliberations, adding that the overlap between lawmakers and contractors allows these practices to persist.

Lacson also criticized the low adoption of local government project proposals, noting DBCC data showing that only 19.9 percent of submissions from local development councils were included in the 2026 NEP.

He said local programs should make up at least 30 to 40 percent of the budget but are often sidelined because councils usually submit their proposals months after the budget process begins.(MyTVCebu)