Business confidence, economic outlook may take a hit amid corruption probe

THE PHILIPPINE government must deliver swift and credible results in its investigation into allegations of corruption in flood control projects, to avoid hurting growth prospects and losing the confidence of investors and the business community, experts said.

- By Aubrey Rose A. Inosante and Justine Irish D. Tabile Reporters

Department of Economy, Planning, and Development Undersecretary Rosemarie G. Edillon said investor confidence can be restored if the probe into alleged irregularities in some projects is conducted swiftly and impartially.

"We have to show results. We have to demonstrate credibility. Maybe, that's what (investors) need to see," she told Business-World on the sidelines of an event on Wednesday, noting that the capital market tends to be "flighty."

Financial markets have been rattled by the widening probe into corruption in flood control projects. Separate investigations by Congress, the Ombudsman, and the Independent Commission for Infrastructure are looking into alleged collusion among Department of Public Works and Highways officials, contractors, and even lawmakers to divert billions in funds meant for flood control projects.

Ms. Edillon also said waning investor confidence should be viewed in the context of broader global market, including US tariff policies that continue to weigh on sentiment.

However, she noted that ensuring political issues do not seep into the economy is a "big challenge."

Economists and business groups also warned that the Marcos administration's graft probe is now becoming politicized and lacks substance, stoking unease among the private sector.

Foreign Buyers Association of the Philippines President Robert M. Young said the government-wide probe has devolved into a "circus" and became politicized, citing abrupt leadership changes in both the House and Senate, as well as the creation of a new infrastructure oversight body.

"This is lacking a clear roadmap or a plan," Mr. Young told Business-World over the phone on Wednesday. "All these are making the businessmen jittery and nervous. They have a feeling of pessimism and withdrawal to conduct business, which explains why the stock market has this week-long slump."