Marcos freed up P214B in unprogrammed funds for ‘priority’ infra. Many of these projects prioritized graft over the public good.

By Guinevere Latoza

Philippine Center for Investigative Journalism

The term “unprogrammed appropriations,” known as UAs, sounds innocent enough. But to politicians, public works officials and contractors, they are an opportunity for graft.

UAs are standby funds sourced from new or excess government revenues and foreign loans. These revenues were not expected and so were not included in the regular budget.

In 2023 and 2024, the Marcos administration freed up P213.8 billion in unprogrammed funds for its “priority” infrastructure projects. These were handled by the Department of Public Works and Highways, which is now at the center of corruption probes.

Unlike programmed items in the national budget, there was no oversight over these projects. No transparency. No democracy—because Congress as a body doesn’t get to vote on individual UA-funded projects. It only approves broad categories of spending that can be funded from these appropriations.

Instead, funds for specific projects were identified and negotiated behind closed doors between executive branch officials and powerful members of the legislature. This lack of transparency meant that unprogrammed appropriations became a magnet for corruption, a source of billions in kickbacks.

The Department of Budget and Management (DBM) said these allocations have helped in times of crisis and allowed the government to spend on priority projects.

But to critics, UAs represent what’s in effect free money that is prone to misuse. They say the national budget already has programmed funds dedicated for emergencies such as the Contingent Fund and the Calamity Fund.

They also insist that priority projects, if they really were key to the president’s economic agenda,  should be funded from available resources instead of standby funds, over which there is scant oversight.

The House of Representatives, reeling from corruption charges against its own members, could have wiped out UAs in this year’s budget hearings. But they did not. This lucrative source of kickbacks remains in place, despite ample evidence of abuse.

The budget is now being deliberated in the Senate and it remains to be seen whether that body can rein in the abuse of UAs.

PCIJ obtained the list of UA-funded priority public works projects in 2023 and 2024. Here are five things we found.

1. President Marcos endorsed releases of unprogrammed funds for “priority” projects meant to “achieve” his economic agenda. Many of these projects, however, were congressional insertions and were not included in any government master plan.

The official rationale for the release of P213.8 billion in UAs for public works projects was President Marcos’ “Eight-Point Economic Agenda,” which is focused on addressing “the immediate issues of inflation, socioeconomic scarring and low income.” While infrastructure is not one of the eight points of this agenda, public works projects, including flood-protection structures, were considered by the administration as a means of job creation.

PCIJ obtained the documents proving DBM’s fund releases for what were deemed priority projects and therefore eligible for UA allocations. These records are called Special Allotment Release Orders.

Marcos signed off on those releases, which are based on project proposals from district engineering offices and DPWH regional offices. By the time these proposals get to the president, they would already have been vetted by the DPWH central office and the DBM, which ensures projects are aligned with the president’s priorities and approves the use of standby funds for these projects.

According to Surigao del Sur Rep. Romeo Momo, who sponsored the DPWH’s budget in the House on Sept. 30, DBM approval signals approval from the Office of the President.

The DBM, however, can release project funds only if the national treasurer certifies there are excess funds. But budget watchdogs doubt if such funds were really available.

“When they (Bureau of Treasury) certify that there is excess revenue, these documents are not made available to the public… We have no way of verifying if these revenues truly exist,” said budget reform advocate Adolfo Jose Montesa. His group, the People’s Budget Coalition, has been calling for a more transparent budget process.

This, however, is only half the story. Legislators also have a big say in determining UA allocations, according to the Independent Commission for Infrastructure. In its second report to the Ombudsman, the ICI asserted that UA funding for public works projects are negotiated in secret between lawmakers and public works officials.

The outcome of these negotiations were massive projects that did not go through rigorous planning. In an Oct. 20 Senate hearing, DPWH Secretary Vivencio “Vince” Dizon said that many flood-control projects, including more than P100-billion worth funded through UAs, were not in any government master plans.

“In fact, marami po sa mga nakita ko mismo at nakita rin po ng ating pangulo ay wala nga ho kahit plano e. So, definitely, it was not part of the ongoing masterplan for the 18 river basins. It was not part of the Central Luzon mitigation plan. Wala po. Hindi po sila part ng mas malaki o pangmalawakang master plan,” Dizon said.

[Translation: In fact, many of these projects don’t even have plans behind them. So, definitely, these were not part of the ongoing master plan for the 18 river basins. It was not part of the Central Luzon mitigation plan. Not at all. They were not part of a bigger or broader master plan.

2. Legislators and executive branch officials allowed UA insertions that subverted the budget process.

Government departments put together the first draft of the national budget, known at this stage as the National Expenditure Program (NEP), which goes to Congress for deliberation at the middle of each calendar year.

Congress has the power of the purse and lawmakers can amend and add new projects. The House appropriations committee reviews the proposed budget before it goes to the House plenary for approval. The budget is then deliberated by the Senate and any differences between the two houses are ironed out in the bicameral committee, known as the “bicam.”

Toward the end of the year, Congress submits the amended budget, now called the General Appropriations Bill, for approval by the president.

It seems like a simple process but it is not. Lawmakers can intervene at every step and insert funding for their favored projects. The House appropriations committee chair is particularly powerful as he can swing approval for projects not previously proposed by government departments.

“Most of the infra projects funded under the UA were insertions sponsored/proposed by legislators starting from the NEP, HGAB (House General Appropriations Bill) and Senate versions all the way to the bicam,” Senator Panfilo Lacson, who headed the Senate blue ribbon committee’s investigation into flood-control projects, told PCIJ.

Lacson earlier claimed that proponents or politicians who introduce or “insert” DPWH projects in the budget get a 20% to 25% cut from the project cost. He also said that legislators who agree to host in their districts projects inserted into the budget by other Congress members can be paid as much as 6% of the project cost. Lacson called this payoff a “parking fee.”

In a Rappler interview, former DPWH Secretary Manuel Bonoan said that for UA projects that are not foreign-assisted, the initiative “comes from everybody in the House.” He stopped short of mentioning names.

3. Zaldy Co played a central role in allocating UA funds.

A deep dive into DPWH’s UA-funded projects leads to embattled former Ako Bicol Party-list Rep. Zaldy Co, who was chair of the House appropriations committee. Under his leadership, the amount of UAs quadrupled in the national budget from P252 billion in 2022 to P807 billion in 2023. Last year, UAs totaled P731 billion.

Bulacan was the top recipient of UA-funded priority infrastructure projects. Flood control was the most favored project type. And the Bulacan 1st District Engineering Office (DEO) handled most of the province’s projects.

The former assistant district engineer for Bulacan, Brice Hernandez, admitted in a Senate hearing that all of his district’s projects are substandard due to kickbacks for politicians. His boss, the dismissed district chief, Henry Alcantara, said that since 2022, Co pocketed up to 25% of the funds allocated for both programmed and unprogrammed flood-control projects in his Bulacan district.

According to the ICI, Alcantara and his colleagues delivered the kickbacks to Co’s staff in cash. They packed the money in boxes and suitcases—P50 million in a large suitcase; up to P40 million in a smaller one.

The public works officials also told the ICI that each delivery consisted of at least seven vans, each one containing five to six suitcases of cash. These, they said, were turned over to “Mark” and “Paul,” the congressman’s bagmen, either at the Shangri-La Hotel in Taguig City or Co’s house in Pasig City. The ICI estimated that between 2022 and early 2025, Bulacan 1st DEO officials made 13 to 16 such deliveries to Co.

Co is a known Marcos ally. Former House Speaker Ferdinand Martin Romualdez, the president’s cousin, personally picked his long-time friend to lead the House appropriations panel in the 19th Congress.

The ex-congressman and his party-list Ako Bicol were also responsible for “inserting” projects in other provinces that were among the top recipients of UA funds — Oriental Mindoro (top 2), Albay (top 4), Occidental Mindoro (top 7) and Abra (top 9) — according to Navotas Rep. Tobias “Toby” Tiangco.

Mines and Geosciences Bureau data show that Bulacan, Oriental Mindoro, and Tarlac are among the top 10 most flood-prone areas in the country. But there was no scientific basis behind many flood-control projects granted to these and other provinces. It would seem that projects were funded based not so much on whether they were urgent or necessary but because they provided opportunities for graft.The Department of Environment and Natural Resources revealed that only 23% of over 5,300 flood-control projects implemented from 2021 to 2024 have effectively protected communities from flooding. Through geospatial analysis, they found structures that only worsened flooding, transferred flood risk to other areas, or simply did not function as flood-control projects.Meanwhile, the UP – National College of Public Administration and Governance found that in Luzon, numerous structures were built in low flood-risk areas.Under Co’s leadership, graft-prone public works projects were included in both the regular budget and UAs. “Actually what they did was unprecedented,” said Lacson, “juggling items from the regular budget or from programmed to the UA and vice versa. I have not seen anything like that in all my 18 years as senator.”

4. Dubious and politician-linked contractors were prioritized in the awarding of UA-funded projects.

The flood-control scandal showed that politician-linked firms with checkered records got the most lucrative contracts funded by the regular budget.

This, too, was evident in UA projects in Bulacan and Oriental Mindoro.

In Bulacan, Wawao Builders and SYMS Construction Trading were the top two contractors, receiving 38 UA-funded projects worth P2.9 billion. Anywhere from 15% to 30% of this amount went into the pockets of officials, according to affidavits presented to the ICI by Alcantara and former DPWH undersecretary Roberto Bernardo.

In a Senate hearing in September, two contractors—Mark Arevalo of Wawao and Sally Santos of SYMS—admitted to “lending” their contractor licenses to officials from the Bulacan 1st DEO. These officials would then take over their projects, giving contractors over 2% of the allocated funds in exchange.

The Commission on Audit has flagged a number of Wawao and SYMS projects as substandard or completely non-existent. The DPWH, now led by Dizon, has also banned these firms from participating in future biddings.

Two other companies, both of them linked to politicians, were also awarded UA-funded projects in Bulacan from which Co received kickbacks, according to Alcantara. These companies are:

• R. Patron Builders & Developers Corp. – managed by Mark Patron of Batangas’ Patron dynasty. Mark ran as the second nominee of FPJ Partylist, but failed to get a seat. The construction company is a top DPWH contractor in Batangas.
• I&E Construction Corporation – managed by Carlo Aguilar, a cousin of Senators Mark and Camille Villar. Many of its projects are located in Las Piñas City and Cavite province.

These two firms have not previously had projects with Bulacan DEOs, according to the DPWH’s portal.

In Oriental Mindoro, Co-founded Sunwest, Inc. got projects worth P5 billion in UA funds, or nearly a third of the province’s entire share in 2023 and 2024. The DPWH Regional Office IV-B, then headed by Engr. Gerald Pacanan, implemented most of these. 

5. Key officials got billions in kickbacks from UA-funded public works projects.

The investigations are still ongoing but PCIJ made some preliminary calculations based on testimonies and documents presented to both the Senate blue ribbon committee and the ICI.

Our rough estimate of kickbacks from UA-funded projects paid to Senator Villanueva, ex-Rep. Co and education undersecretary Trygve Olaivar is P2.4 billion. This is based on the testimonies of Bernardo and Alcantara who said they delivered 25% of project allocations to Villanueva, 25% to Co, and 15% to Olaivar from P10.6-billion worth of UA-funded projects that were awarded to the 1st Bulacan DEO.

Co and Villanueva, the ICI said, got these kickbacks because they had inserted the UA-funded projects into the budget.

Olaivar’s connection is more tenuous. Former DPWH chief Bernardo told the ICI that the education undersecretary called him to discuss UA-funded projects on behalf of the Office of the Executive Secretary. Alcantara collected the “agreed 15% commitment,” gave it to Bernardo, who said he delivered the money to Olaivar in Makati City and “other places.”

(Executive Secretary Lucas Bersamin has denied any links to the alleged payoff.)

The P2.4 billion is on top of other kickbacks allegedly inserted by other lawmakers at different stages of the budget process. We traced these insertions and the kickbacks from them based on testimonies made in the Senate and the ICI and verified the inserted projects’ existence in other government records. If added together, lost public funds would amount to nearly P10 billion. There could be more as additional evidence surfaces.

The ICI has asked the Ombudsman to file bribery, corruption and plunder charges against Co, Villanueva, Estrada and Cajayon-Uy. The first three were legislators at the time they allegedly requested kickbacks. Cajayon-Uy was then a Duterte appointee at the social work department and was elected to Congress in 2022.“There is simply no denying that the advances given to the subject legislators were by reason of their office as members of the House of Representatives and the Senate who had all the power to dictate what projects are to be funded, and to influence the DPWH as to who could be the contractors that would benefit from the award of projects,” the commission said in its recommendation.The House has a new leadership. Isabela Rep. Faustino “Bojie” Dy III has replaced Leyte Rep. Romualdez as speaker. Nueva Ecija Rep. Mikaela Suansing now steers the appropriations panel and has vowed to create a more transparent budget process.But when the lower chamber passed its version of the 2026 budget, 12 lawmakers protested. This marks the largest objection to the House’s General Appropriations Bill under the Marcos administration, according to Rappler.Most of the dissenting legislators objected to the retention of UAs amounting to P243 billion. Even though infrastructure projects were removed from UAs, “assistance for social programs” remained. Critics have slammed this as a form of “soft pork” that can also be abused by erring public officials.The budget is now in the hands of the Senate, whose leadership has also been rocked by the corruption scandal.Senate President Vicente “Tito” Sotto III and finance committee chair Senator Sherwin Gatchalian vowed to eliminate unprogrammed funds. Can they rally support among their colleagues?—With research by Christian Chua.

Methodology

PCIJ obtained Special Allotment Release Orders for President Marcos’ priority infrastructure projects and some foreign-assisted projects funded through unprogrammed appropriations.

All the SARO numbers showed up in the Department of Budget and Management’s public listing and matched the corresponding amounts. But there was no indication in the database that these were UA releases; that information was only made available in the individual SARO documents.

These SAROs provided a breakdown of the priority projects. We were able to find a number of the project contracts on the Department of Public Works and Highways’ main website. But the Sumbong sa Pangulo website and the DPWH’s portal which tracks projects’ status and contractors do not include these projects.

PCIJ has yet to identify all contractors of the over 3,700 priority UA projects of the DPWH across the country in 2023 and 2024. This requires sifting through all contracts on the department’s main website. Secretary Vivencio Dizon vowed to release a portal that will include all projects funded through UAs, but his department has yet to unveil it.

We calculated the kickback amount of P10 billion from the affidavits submitted to the ICI by former DPWH undersecretary Roberto Bernardo and Bulacan 1st DEO engineer Henry Alcantara, and the Senate testimony of former Bulacan 1st DEO assistant engineer Jaypee Mendoza. These documents named public works projects that were inserted into the budget by legislators or were linked to executive branch officials who demanded payoffs.

DBM and DPWH records confirmed the existence of these projects.

We arrived at the P10 billion figure by calculating the amounts for each official based on the kickback percentages (anywhere from 15% to 30%) attested to by the affidavits and testimonies.

These figures do not include the 30% kickback from P2.85 billion-worth of UA-funded projects that the Bulacan district office provided to undersecretary Bernardo. District chief Alcantara said his driver delivered the payoffs to Bernardo who then shared the amount with the proponents, that is, legislators who inserted the public works projects into the budget. These proponents were not named and so were not included on the list.