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Manila Bulletin devider Business devider Banking & Finance devider ADB tightens safeguards after Philippine flood-control scandal

ADB tightens safeguards after Philippine flood-control scandal

Published Jul 2, 2026 06:18 pm

The Asian Development Bank (ADB) tightened oversight of its Philippine infrastructure projects following the multibillion-peso flood-control corruption scandal that shook its host country, despite finding no evidence of wrongdoing involving contracts it finances.

In its Anticorruption and Integrity Report 2025 published last June 23, the Manila-based multilateral lender said it enhanced contract monitoring as well as contractor screening to identify and mitigate integrity risks in the wake of “grave corruption concerns” surrounding Philippine flood-control projects.

The report said the ADB’s Office of Anticorruption and Integrity (OAI) conducted proactive integrity reviews (PIRs) last year to identify risks in ongoing sovereign projects with high-risk profiles and provide practical recommendations to help prevent improper contract awards, cost overruns, implementation delays, as well as reputational damage.

According to the report, one PIR identified seven potential instances of bid misrepresentation across two contracts in a Philippine-based project, highlighting control gaps that prompted recommendations to strengthen sanctions screening across sovereign operations.

Also, following the Philippines’ flood-control controversy involving allegations of bid misrepresentation and potential collusion in public infrastructure projects, OAI identified six ADB-financed projects involving firms included in the government’s “Sumbong sa Pangulo” flood-control monitoring list.

The lender stressed, however, that it found no misconduct in those ADB-financed contracts.

OAI nonetheless advised project teams to strengthen due diligence by closely monitoring contract implementation to promptly detect and correct signs of irregularities, conducting sanctions screening and consulting OAI before awarding new contracts or approving contract variations involving contractors on the “Sumbong sa Pangulo” platform, as well as monitoring government investigations and media coverage that could affect project integrity or the ADB’s reputation.

The report also identified the Department of Public Works and Highways (DPWH) as one of the executing agencies subject to an enhanced integrity risk review because of its elevated integrity risk profile.

For projects implemented by agencies identified as having elevated integrity risk profiles, OAI urged ADB project teams to exercise vigilance by conducting sanctions screening and other integrity due diligence checks required under ADB business processes, while proactively identifying and reporting red flags indicating potential integrity violations in procurement, contract and asset management, as well as financial management processes.

OAI also advised project teams to disclose elevated integrity risks and corresponding mitigation measures in project documents.

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