Banks, contractors, stocks hit by corruption mess

For sure, someone has to pay the piper. And it's not so much the engineers - pun intended - who designed this grand thievery of flood control projects, but us. As with every corruption saga in our nation of 115 million, it's you, me and everyone we know who will again pay the price.

- IRIS GONZALES

Days ago, a source sidled up to me and whispered that banks are already getting hit. Some contractors can no longer settle their debts to the banks - at least for now

These are billions in loans, mostly financing for projects and supposedly to be paid in tranches.

Since this jaw-dropping scandal erupted, some contractors have been remiss or have slowed in settling their loan amortization, primarily because they are unable to collect from the government.

My source said that, as it is now, DPWH officials and executives are afraid to sign the bills for fear of investigation or repercussions later on.

Note that the DPWH also earlier temporarily halted all projects. The DPWH has since lifted the suspension of procurement activities for locally funded projects but provisions have been tightened - understandably and necessarily so. But like it or not, this will surely cause delays in critical infrastructure.

Perhaps, contractors are also preserving their cash in these uncertain times, which is why they are unable to pay their loans on schedule. These aren't necessarily the unscrupulous contractors who are sitting on heaps of cash. Many are legitimate ones.

Unfortunately, we all know what happens when banks don’t get paid. Am I wrong to imagine a systemic risk that could jolt the banking system? I sure hope I’m wrong.

'Everybody dreads contractors'

Speaking of legitimate contractors, many of them are sighing in frustration and crying foul because they are now being avoided like the plague - by potential clients, investors and lenders.