Here in the Philippines, the flood control corruption scandals are not only keeping many Filipinos very angry but they are also affecting the economy negatively as the nation was prevented from achieving a credit rating upgrade from S&P Global Ratings, according to a news report by BusinessWorld.
To put things in perspective, posted below is an excerpt from the BusinessWorld. Some parts in boldface…
THE FINANCE CHIEF on Tuesday said the multibillion-peso flood control scandal prevented the Philippines from getting a credit rating upgrade from S&P Global Ratings.
“If [only] we did not have the flood control issue,” Finance Secretary Ralph G. Recto told reporters on the sidelines of a Senate budget hearing. “We met with S&P, and they were ready to give us a credit rating upgrade this year.”
The controversy, which involves “ghost” projects and fund misuse in government flood control programs, has triggered investigations by Congress, the Commission on Audit, the Ombudsman, and the Independent Commission for Infrastructure.
The Marcos administration is facing increasing scrutiny over flood control projects, where billions of pesos in public funds were diverted through padded contracts and shell companies.
The scandal highlighted spending inefficiencies and governance lapses that credit agencies closely monitor when evaluating institutional credibility and fiscal management.
Asked whether the Philippines can achieve an “A” credit rating in the next two years, Mr. Recto said: “I hope so.”
He said the government wants to maintain its current credit rating, despite the multibillion-peso corruption scandal.
“There is a big chance they will maintain it, but there was a bigger chance for a credit rating upgrade,” he added.
In November 2024, S&P affirmed its “BBB+” long-term credit rating for the Philippines, which is a notch below the “A” level grade targeted by the government.
S&P had also raised its rating outlook to “positive” from “stable.” A positive outlook means the Philippines’ credit rating could be raised over the next two years if improvements are sustained.
Mr. Recto said the government needs to improve its governance and resolve the flood control mess.
Let me end this post by asking you readers: What is your reaction to this development? What do you think the national government should do to resolve the flood control mess? Are you convinced that the ongoing flood control corruption scandals are already turning away potential foreign investors?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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