The flood control scandal, the investigations involving powerful political figures, the impending arrest of Senator Bato de la Rosa, and the impeachment proceedings against Vice President Sara Duterte may appear to be separate political developments. But they raise one fundamental question: Can the Philippines finally move beyond political personalities and confront the deeper problems of corruption, weak institutions and poor governance?

This is not just a political question. It is an economic one.

At a time when the economy needs more investment, stronger consumer spending and renewed business confidence, the country is caught in a cycle of political controversy and institutional uncertainty. The consequences are being felt not only in government but also in businesses, households and the broader economy.

Consider what is happening. The economy grew by only 2.3% in the second quarter of 2026. More troubling, investment declined by 9.2%. Household consumption continued to grow, but at a slower pace of 2.8%, extending a four-quarter slowdown.

These numbers have several explanations, including surging inflation, higher borrowing costs and persistent external shocks. But governance and political uncertainty are also part of the problem. And we should not underestimate their economic cost.

Corruption is more than stolen money

The flood control anomalies have exposed how public funds intended to protect communities from flooding and disasters may have been wasted or diverted through questionable projects and contracts.

The damage goes far beyond the money allegedly lost.

Every peso wasted on an overpriced, substandard or nonexistent project is a peso that could have built a better road, protected a community, improved a school or supported a hospital. When flood control projects fail, families lose homes and livelihoods, businesses suffer disruptions, and farmers lose crops. The economy pays repeatedly for infrastructure that should have protected it in the first place.

This is why accountability matters. Investigations, audits and the filing of cases against those implicated are necessary. No public official or contractor should be above the law.

But catching the people responsible is only half the job. We must also change the system that allowed these things to happen.

How can questionable projects pass through government approval? Why are procurement and project monitoring safeguards inadequate? Why can public funds be allocated without sufficiently transparent and independent scrutiny?

Unless these questions are answered, the country risks repeating the same scandal under different names and political personalities.

The danger of turning accountability into another political fight

The impeachment proceedings against the Vice President present another test of our democratic institutions.

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The issue should not be whether one belongs to the administration or the opposition, or whether one enjoys greater political support. The issue is whether constitutional processes are followed fairly, transparently and consistently.

The same standards must apply to everyone implicated in corruption allegations, regardless of political position or affiliation. The presumption of innocence and the right to due process must be respected. Impeachment must be decided on constitutional and evidentiary grounds, not political alliance or convenience.

There is a danger that these proceedings will become another contest between political factions, with each side more concerned about winning power than strengthening institutions.

If people come to believe that investigations and impeachment are simply weapons used against political opponents, public trust will suffer further. Even legitimate efforts to establish accountability can lose credibility when they are perceived as selective or partisan.

The country needs justice, not political revenge. It needs accountability, not another round of political score-settling.

The economy pays for uncertainty

Why should ordinary Filipinos care about these political and institutional developments?

Because confidence matters to economic activity.

Businesses invest when they believe the rules are predictable, contracts will be honored, government policies will be consistent and public institutions can be trusted. When uncertainty rises, businesses hesitate. They postpone expansion, delay purchases of equipment, defer hiring and sometimes move their investments elsewhere.

Households behave similarly. When people worry about their jobs, incomes, prices and the country’s economic direction, they become more cautious. They postpone buying a house, a car or appliances. They reduce discretionary spending and save more for emergencies.

When businesses invest less and households spend less, economic activity weakens. Companies earn less, employment opportunities become limited, and government collects less revenue. This can reinforce the very economic difficulties that created the uncertainty in the first place.

This is the connection between governance and the everyday lives of Filipinos. Corruption and political instability are not abstract problems confined to Congress, Malacañang or government agencies. They affect jobs, incomes, prices, public services and opportunities.

The cost of corruption is not only the money stolen. It is also the investment that never happens, the job that is never created and the economic opportunity that is lost.

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We must change the system, not just the personalities

Perhaps the most difficult truth is that Philippine politics remains heavily driven by personalities, political dynasties, patronage and narrow vested interests.

Political alliances change, personalities rise and fall, and elections rearrange the balance of power. But the underlying incentives often remain the same.

We cannot expect meaningful transformation simply by replacing one group of politicians with another of their kind. Unless we reform the way political power is exercised and public money is allocated, the same problems will return.

We need more transparent political financing, stronger procurement safeguards, independent auditing, meaningful legislative oversight and greater public access to information about government spending.

The budget process itself deserves serious reform. Public funds must be allocated according to clear national priorities and measurable economic and social benefits, not political accommodation. The 2027 national budget provides an immediate opportunity to demonstrate that government has learned from the flood control scandal.

Political dynasties and the concentration of political power should also be squarely addressed, as contemplated by the Constitution. Ultimately, public office must be treated as a responsibility to serve, not an opportunity to accumulate power and resources.

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Wanted: Integrity dividend 

There is an argument that aggressively pursuing corruption cases and confronting political controversies could further unsettle the economy. There may indeed be short-term costs when questionable projects are suspended, government spending is reviewed and powerful political interests are challenged.

But avoiding accountability in the name of economic stability would be a much greater mistake.

The solution is not to abandon investigations or compromise justice. It is to ensure that accountability is pursued fairly, efficiently and without political interference, while legitimate public investments and essential services continue.

The Philippines needs what may be called an integrity dividend: the benefits that come when people trust government, public funds are used properly, businesses feel secure investing, and households believe that the future is worth preparing for.

This dividend cannot be produced simply by arresting a few prominent personalities or removing one political figure from office. It requires institutions that work regardless of who occupies public office.

The real measure of success is not only about how many politicians are investigated, arrested or impeached. It is also about how public money is better spent, government services improve, businesses invest with greater confidence, and ordinary Filipinos enjoy more opportunities.

The country does not need another political savior. It needs a political and economic system that does not depend on saviors in the first place.

Good governance is not an obstacle to economic growth. It is one of its most important foundations. And when governance fails, it is ultimately the ordinary Filipinos who pay the price. – Rappler.com

Diwa C. Guinigundo is the former deputy governor for monetary policy and other aspects of central banking. He was a former alternate executive director at the IMF in Washington, DC in 2001-2003. He is the author and editor of several books on political economy, regional crisis and cooperation, debt and economic growth and public policy agenda.

He serves as independent director of several corporate and financial institutions with focus on corporate governance, risk oversight and audit.

He also serves as principal advisor for New York-based GlobalSourcePartners. He remains in the advisory board of ASEAN Macroeconomic Research Office and Singapore Management University’s Sim Kee Boon Institute for Financial Economics.

He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

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