Democracy Under Duress: Corruption, Fiscal Challenges,and the Rising Discontent of the Filipino People

Political Briefer

Center for People Empowerment in Governance (CenPEG) 

August 2025

Introduction

Philippine politics in August 2025 is marked by an ever-deepening power struggle between the administration of President Ferdinand "Bongbong" Marcos Jr. and the camp of Vice President Sara Duterte. The feud, a defining feature of the current political climate, has intensified in the wake of key legal and political developments in the aftermath of the April midterm elections and Marcos Jr.’s fourth State of the Nation Address in late July.

The Supreme Court's procedural dismissal of an impeachment complaint against Vice President Duterte, followed by the Senate's decision to archive the case, seems to have won the Dutertes some breathing space and legal capital. But the contradiction between both factions has not dissipated and continues to set the stage for a critical power consolidation ahead of the 2028 presidential elections.

The political intramurals continue to unfold against a backdrop of persistent and systemic issues that continue to impact the lives of ordinary Filipinos. Accusations of large-scale corruption, particularly in the Department of Public Works and Highways' (DPWH) flood control projects, both under the previous and present administrations, have resurfaced. Revelations that over Php1 trillion of flood-control allocations in just the last three years have gone to overpriced, defective, and even ghost projects, underpin the systemic and bipartisan nature of corruption. This has fueled public discontent, and may possibly ignite a more sustained protest movement.

At the same time, the legal reckoning of the previous administration continues, with former President Rodrigo Duterte still in the custody of the International Criminal Court (ICC) in Den Haag facing charges of crimes against humanity. Whether the Marcos administration sees the case through in the face of the ex-president’s continued (seeming) popularity is still in question.

Meanwhile, the Marcos administration is also navigating an increasingly complicated international environment. For one, the genocide and famine in Gaza has called into question the Philippines’ relationship with Israel. While the Marcos administration has expressed concern over the increasing humanitarian crisis, it has so far continued to have dealings with Israel, including longstanding arms contracts, though certain new deals have reportedly been suspended pending diplomatic review.

The Philippines' relationship with the United States, of course, continues to deepen amid a shared objective of countering China in the South China Sea. The Marcos-Trump alliance has harvested a significant increase in joint armed drills, new defense industry linkages, and the deployment of advanced missile systems on Philippine soil. These moves, of course, have drawn the ire of Beijing and heightened the risk of direct confrontation between China and the PH-US.

Continuing Intramurals in Philippine Politics

The month of August 2025 has been defined by the continuing political conflict between the ruling Marcos-Romualdez and the Duterte cliques. This friction, which has been simmering for months, if not years, escalated following the Supreme Court's decision to void the fourth impeachment complaint against Vice President Sara Duterte and the Senate's subsequent move to archive the case.

While the Supreme Court's July 25 ruling and the Senate's August 6 vote were propaganda victories for the Vice President, these did not fully resolve the underlying political tensions. As CenPEG noted in its statement, the Supreme Court's decision was a procedural dismissal based on the "one-year bar rule," not a substantive clearing of the charges. This was underscored by President Marcos Jr., who clarified that the Supreme Court decision “has no bearing on the rightness or wrongness of the impeachment.”

The move to impeach the Vice President is widely seen as a way to put brakes on her presidential bid in the 2028 elections, which President Marcos himself cannot contest due to a single-term limit, but whose clique is expected to continue to vie for the presidency.

The conflict has also been characterized by a deeper struggle over resources and policy direction. Access to confidential funds allocations, lucrative infrastructure contracts, and leadership posts in both houses of Congress has emerged as key battlegrounds. The corruption scandals surrounding flood control projects have laid bare how deeply embedded both Duterte- and Marcos-linked figures are in profiteering from state contracts.

Senate and House inquiries revealed that out of Php 545bn spent on flood control in the past three years, at least Php100bn went to just 15 contractors, many of whom were also favored during the Duterte administration. These firms, despite “unsatisfactory” project ratings and clear conflict of interests, continue to secure deals, exposing the entrenched networks of collusion between agencies, lawmakers, and private contractors. The fallout has been severe: the dismissal of Public Works Secretary Manny Bonoan on August 31 and the forced resignation of NBI Director Jaime Santiago two weeks prior have deepened perceptions of a deepening row within the Marcos ruling clique itself.

Meanwhile, the International Criminal Court (ICC) case against former President Rodrigo Duterte continues to advance. After being surrendered to the ICC in March 2025, Duterte is currently in the court's custody in The Hague. The confirmation of charges hearing is scheduled on Sept. 23. The Duterte camp's legal team filed a petition to disqualify the lead prosecutor, Karim Khan, citing partiality. Court records from August 2025 show various filings and transmissions related to the case, including responses from the Office of Public Counsel for Victims and the defense, indicating the proceedings are moving forward. Though Duterte’s supporters continue to mount public rallies, these mobilizations are notably smaller than in the immediate aftermath of the arrest.

However, it stands to reason that the mass support – especially among overseas Filipinos as well as the Davao constituency – remains formidable.

The traditional and progressive opposition groups are navigating this political environment where it is a minority voice. Senators Francis Pangilinan and Bam Aquino, while formally joining the Senate majority, have demonstrated some independence, as seen by their votes against archiving the impeachment complaint. Their decision to join the majority bloc has secured them committee chairmanships but has drawn criticism for signaling “token opposition.”

By contrast, the progressive opposition, particularly the Makabayan Bloc in the lower House, continues its diligent work in holding the government accountable—filing resolutions on corruption scandals, challenging militarization in the countryside, and pushing for wage increases.

In the absence of a strong broad opposition, their role remains indispensable as the consistent parliamentary voice of grassroots struggles despite continued state attacks.

Economic Crisis, Still

The economic condition in the Philippines continues to sink, despite the government's optimistic outlook. The continuing crisis in the prices of basic commodities is a major concern for the populace. Data from the Philippine Statistics Authority (PSA) shows that while the average retail price of regular milled rice slightly decreased in the second half of August to PhP 40.35 per kilo from PhP 40.61, it remains a significant burden on low-income families. Other food items, such as cabbage and red onions, have also seen price increases, further eroding the purchasing power of the poor.

The issue of low wages is also a source of popular discontent. Demands for significant wage hikes have been met with resistance from the Marcos administration. While the House of Representatives passed a bill for a Php200 across-the-board wage increase and the Senate passed a Php100 increase, the President has continued to dillydally in putting imprimatur on either bill, claiming to be studying the proposals and their potential economic implications.

As expected, and as per the neoliberal logic, the administration expressed concerns that a significant legislated wage hike could lead to inflation and negatively impact the economy. This, of course, is a position that labor groups and progressive blocs argue does not hold water and indicates the state’s partiality with big businesses over the welfare of workers. Real wages, adjusted for inflation, remain stagnant or declining, a reality that undermines the administration’s “prosperity” narrative.

The economic toll of the recurring floods, particularly in the National Capital Region and in areas like central and northern Luzon, continues to be a major headwind. Beyond the immediate damage to infrastructure and property, the floods have a devastating impact on agriculture, which directly affects the prices of basic commodities and dooms the fate of peasants.

This issue is intrinsically linked to the corruption in flood control projects, where billions of pesos are wasted on substandard and "ghost" projects, leaving communities vulnerable and exacerbating the economic hardship caused by the flooding. For many, these floods have become a symbol of both vulnerability to climate change and endemic corruption.

PH in Firm Alignment with US

As we have seen now for more than three years, the Marcos administration's foreign policy is marked by a solid-rock alignment with the United States while claiming to maintain a level of diplomatic independence.

On the Israel-Palestine conflict, President Marcos Jr. has expressed concern about the humanitarian catastrophe in Gaza, calling at ASEAN and UN forums for the protection of civilians and unhampered aid delivery. Yet, even amid genocide and famine, the Philippines has continued longstanding arms dealings with Israel, including contracts for air defense systems and armored vehicles, although some pending transactions have reportedly been put on hold. This duality, that is, voicing humanitarian concern while continuing defense links, exposes the contradictions in Philippine policy and underscores complicity with Israel’s war machine.

The more decisive trend, however, is the Philippines’ deepening integration into the U.S. security architecture in Asia. In August 2025, the country and Australia (a key US ally) launched their largest-ever joint military exercises in the South China Sea / West Philippine Sea. Branded “Exercise Alon,” the drills brought together more than 3,600 troops, including 1,600 Australians, in live-fire, air, and naval operations. The exercise underscored Philippine-Australian defense ties but drew sharp rebukes from China, which accused the Philippines of “courting influence from outside powers.”

Even more sweeping are the planned 500 military activities between the US and the Philippines in 2026, confirmed in late August. These include large-scale Balikatan (shoulder-to-shoulder) and Salaknib (shield) exercises and involve the integration of Japan and Australia into military drills. This indicates that the US has been further tightening its regional military network to confront China. The US has already deployed the Typhon mid-range missile system in Northern Luzon, placing Chinese installations within range.

The Philippines is also drawing attention from US defense contractors (also known as military-industrial complex or MIC), who in recent months have intensified lobbying for expanded deals, technology transfers, and joint production arrangements in the country – all in the name of profit. These developments suggest a long-term embedding of the Philippines in Washington’s military-industrial complex.

Recent maritime confrontations near Scarborough Shoal and Second Thomas Shoal, where Chinese and Philippine vessels clashed dangerously, illustrate the volatility of the situation. While the Marcos administration has chosen not to trigger the Mutual Defense Treaty (1951 MDT) after these incidents, the sheer volume of exercises, deployments, and encounters increases the risk of miscalculation.

Critics warn that Marcos Jr. is gambling Philippine sovereignty and security by placing the country squarely at the frontline of U.S. containment and encirclement strategy, without guarantees that U.S. commitments will hold in the event of a major armed conflict.

U.S. ‘Deep State’ and the Philippines

The term "deep state" has gained prominence in global geopolitical discourse, particularly in the United States and even among progressive analysts. While its popular usage often evokes a sinister, conspiratorial power set-up, the concept has a more grounded meaning in political science: unelected pressure groups, often involving the military, intelligence agencies, or entrenched bureaucracies, that maintain institutional continuity and influence government policy regardless of the elected leadership. 

In the United States, the concept of a deep state is most often associated with covert networks and unaccountable government – that is, a shadow power, or a “government within a government”. While some view this as a conspiracy theory, others point to the historical presence of entrenched power within the intelligence community, defense contractors (the "military-industrial complex"), and the federal bureaucracy. Events like Watergate, COINTELPRO, and post-9/11 surveillance programs illustrate how unelected institutions can shape national policy.

Three out of four Americans now believe a hidden network of unelected officials secretly shapes U.S. policy. Donald Trump blames the “deep state” for his impeachment. To conservatives, it is a bloated administrative bureaucracy steadily eroding individual liberty. To liberals, it is the military-industrial complex—generals, defense contractors, and lawmakers who profit from perpetual war, from Iraq to U.S. maneuvers in the South China Sea.

Every president from Carter to Trump has locked horns with Congress, the CIA, or the FBI, shadowed by constant suspicion of leaks and political sabotage. The cumulative effect is corrosive: mounting distrust of politicians, bureaucrats, and the press, and the gravest crisis of legitimacy in American democracy in half a century.

The record is damning: CIA abuses exposed by the Church Committee; the Iran-Contra scandal; fabricated intelligence on Iraq’s weapons of mass destruction (see Scott Ritter’s expose on the farcical WMD, he is also a former UN weapons inspector); and the vast surveillance state unmasked by Edward Snowden. In the Trump era, these wounds widened, conspiracy theories multiplied, counter-accusations hardened. Trump cast himself as the victim of an entrenched “deep state.” Democrats, in turn, accused him of constructing his own, informal shadow network of loyalists bent on smearing rivals and evading institutions.

Eisenhower’s farewell warning in 1961 still echoes: the military-industrial complex is not a passing threat but a permanent fixture of American politics. War remains good business. The deeper question is whether U.S. democracy can survive when so many citizens believe the real levers of power lie forever beyond their reach.

In the Philippine context, discussions of a “deep state” intersect with both domestic and international dynamics. Analysts note that unelected power centers (military elites, entrenched dynasties, the bureaucracy, and oligarchs) have long influenced governance regardless of administrations. More importantly, foreign powers like the U.S. government have had an enduring, although hidden, influence on local Philippine governance.

Here, the “deep state” is not primarily seen as a secret, conspiratorial entity, but as a form of “neopatrimonialism” where personalized networks of power operate through formal institutions.

Some political theorists in the Philippines argue that the country’s deep state is not hidden, but as a system of social and bureaucratic control that perpetuates inequality. Commentators argue that dynasties and bureaucratic red tape suppress political participation, economic opportunity, and social mobility. From administrative hurdles (e.g., clearances, paperwork) to the coercive presence of police and barangay enforcers, governance is experienced less as public service and more as a tool of discipline and containment.

This system keeps citizens “small” while ensuring elites retain their privileges across administrations, from Aguinaldo to Marcos Jr. In this sense, the Philippine “deep state” is not hidden but normalized through everyday governance that stifles ambition and reinforces dependency.

This concept of a deep state is highly relevant to the current political climate. The public and highly visible conflict between the Marcos and Duterte family dynasties can be seen as a power struggle over control of the state apparatus and its resources. This is further complicated by recent public outcry over corruption allegations, particularly concerning flood control and infrastructure projects.

These revelations, which are not new, reinforce the public's perception that the government is a source of private wealth for a select few. This systemic corruption, critics argue, is a core feature of the Philippine deep state, sustained by a network of politically connected families and bureaucrats who benefit from the status quo.

The deep state in the Philippines also interacts with foreign policy, particularly given the country's strategic location. The increasing U.S. military presence in the South China Sea, often framed as a response to Chinese aggression, involves close collaboration between the U.S. and the Philippine military. The military is a key component of this deep state, operating independently of civilian leadership on matters of national security. On US dictat, they also have a capability of regime change. (Historical note: The 1963 assassination of Kennedy was a plot of the CIA using Mafia rogues as a conduit.) 

To conclude

The post-SONA landscape of August 2025 is defined by sharpening contradictions: a ruling elite split between the Marcoses and Dutertes, corruption scandals that expose systemic decay, reinforce an already deeply-rooted power of a deep state, worsen economic hardship, and make even more dangerous a foreign policy alignment that risks dragging the Philippines deeper into external conflicts. Traditional opposition figures oscillate between compromise and token resistance, while progressive forces remain steadfast in raising people’s issues despite parrying attacks. The coming months (especially the ICC hearings on Duterte and the run-up to the 2028 presidential elections) will likely sharpen these contradictions further, shaping Philippine politics and damaging the economy in the years ahead. #