Global funds scrutinize Philippine debt after corruption scandal

A NUMBER of asset managers are reviewing their exposure to Philippine government debt earmarked for climate and social objectives, amid concerns they may have inadvertently financed projects under investigation for graft.

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Robeco Institutional Asset Management BV and Mirova SA told Bloomberg they’re trying to confirm whether any proceeds from sustainable bonds sold by a government-backed flood-protection program were tainted by the scandal. Neuberger Berman Group LLC is monitoring the situation, adding that ongoing probes show the country is working to improve its efforts on governance.

Accusations of corruption have sparked a flurry of arrests, left assets worth some $200 million frozen, and forced out two secretaries from President Ferdinand R. Marcos, Jr’s Cabinet. Revelations that many flood defense projects are defective —and in some cases not even built — have triggered mass protests in a Southeast Asian nation that’s highly vulnerable to extreme weather, and where hundreds of people were killed in two recent typhoons.