MANILA — The Philippines fell to 120th place out of 182 countries in Transparency International’s 2025 Corruption Perceptions Index (CPI), posting a score of 32 out of 100 — its lowest rating in more than a decade.
The ranking places the country near the bottom of Southeast Asia, ahead only of Myanmar and Cambodia. Regional peers including Singapore, Malaysia, Vietnam and Indonesia maintained stronger or improving standings in the annual index, which measures perceived levels of public sector corruption.
The decline marks a continued downward trend for the Philippines and reflects mounting concerns over governance, public spending oversight and institutional accountability.
Regional Comparison
Within ASEAN, Singapore remains among the world’s highest-ranked countries for clean governance. Malaysia and Vietnam have recorded incremental gains in recent years, supported by anti-corruption campaigns and procurement reforms. Indonesia has expanded digital monitoring systems aimed at improving transparency in public projects.
By contrast, the Philippines’ relative position has weakened. A decade ago, it was frequently cited as a reform-oriented economy in the region. The latest CPI results underscore a widening gap between Manila and several of its neighbors in governance perception metrics.
Flood Control Controversy
Analysts link much of the 2025 decline to a large-scale corruption investigation involving flood control infrastructure projects.
Audits and legislative inquiries conducted throughout 2024 and 2025 identified alleged ghost projects, inflated contracts and kickback arrangements within the Department of Public Works and Highways (DPWH). Investigators estimate that up to ₱100 billion in public funds may have been exposed to irregularities.
According to audit findings, hundreds of projects reported as completed were either unfinished, structurally deficient or, in some cases, non-existent. Several flood mitigation structures reportedly failed during heavy monsoon rains, raising concerns about project quality and compliance with engineering standards.
Officials described patterns of subcontracting chains and shell entities that complicated tracking of fund disbursements. Oversight mechanisms appeared weakest in remote and rural districts, where independent verification was limited.
Government agencies have opened investigations, though no comprehensive resolution has yet been announced.
Market Impact
Financial markets reflected the governance concerns.
The Philippine Stock Exchange index declined more than 7 percent in 2025, making it one of the weaker-performing benchmarks in Asia. Market data show that foreign investors withdrew over $500 million from local equities in October alone, coinciding with expanded public reporting on the infrastructure investigations.
Foreign direct investment (FDI) also slowed. Preliminary figures indicate inflows declined by roughly 25 percent compared with 2024. Investors cited procurement risk, regulatory uncertainty and project oversight concerns as contributing factors.
Several multinational firms redirected expansion plans toward Vietnam and Indonesia, where governance risk premiums are perceived to be lower. International lenders reportedly adjusted pricing for Philippine infrastructure projects, factoring in elevated compliance and monitoring costs.
The peso remained under pressure for much of the second half of 2025, trading near 59 to the U.S. dollar. Economists attributed the currency’s performance to a combination of global dollar strength and domestic fiscal concerns linked to inefficiencies in public spending.
Institutional Concerns
The CPI findings highlight long-standing institutional challenges.
Prosecution timelines for high-level corruption cases remain extended, often spanning multiple years. Legal backlogs and procedural delays limit the speed of case resolution. Whistleblower protections are limited in scope, reducing incentives for civil servants to report procurement irregularities.
The Commission on Audit (COA) continues to publish findings on project deficiencies and spending anomalies. However, enforcement outcomes vary depending on agency response and legal follow-through.
The government has announced task forces and administrative reviews in response to the flood control controversy. Officials have emphasized ongoing investigations and reiterated commitments to transparency.
Governance specialists note that sustained reforms may require structural measures, including expanded digital procurement platforms, open-data access to infrastructure contracts and clearer campaign finance regulations.
Economic Context
The CPI results come at a critical juncture for the Philippine economy.
The government is pursuing large-scale infrastructure expansion under its public works and energy transition programs. Projects in transportation, flood mitigation, renewable energy and digital infrastructure depend heavily on investor confidence and multilateral financing support.
Governance perception plays a significant role in capital allocation decisions. The CPI, while based on perception surveys rather than direct measurement of criminal activity, is widely referenced by investors, credit analysts and international institutions as an indicator of regulatory and compliance risk.
A lower ranking can influence borrowing costs, insurance premiums and investment due diligence assessments.
Regional Competition
Within Southeast Asia, competition for manufacturing relocation, supply chain diversification and green energy investment has intensified. Vietnam and Indonesia have attracted significant capital inflows in recent years, supported in part by governance reform initiatives and digital procurement monitoring.
Malaysia has strengthened oversight mechanisms following past financial controversies. Singapore continues to set regional standards in regulatory enforcement and public sector transparency.
The Philippines’ decline in the CPI ranking places it at a relative disadvantage in this competitive environment, particularly in sectors requiring long-term infrastructure partnerships.
Outlook
Transparency International’s index reflects perceptions from business leaders, analysts and institutional observers. While it does not measure individual cases of corruption directly, it influences external assessments of governance quality.
As 2026 begins, policymakers face the dual task of restoring investor confidence while sustaining economic growth. Ongoing investigations into flood control spending and potential reforms to procurement oversight are likely to shape future perception trends.
Economic planners have indicated that infrastructure modernization and climate resilience projects remain priorities. Analysts say the credibility of implementation and enforcement mechanisms will be central to improving governance indicators.
The 2025 CPI results underscore the importance of transparent procurement systems, timely case resolution and consistent audit enforcement. How effectively these issues are addressed may determine whether the Philippines stabilizes or continues to slide in future global rankings. ©KuryenteNews