Marcos Jr. administration faces major political crisis in wake of corruption revelations

Political Briefer Center for People Empowerment in Governance (CenPEG)  October 2025

Introduction

From late September to the end of October 2025, the Philippines entered one of its most politically volatile periods since the post-EDSA transition. 

A massive corruption scandal involving billions of pesos in public funds (particularly for flood-control projects) ignited widespread outrage, triggered investigations, exposed patronage networks across political camps, and revived mass protest movements reminiscent of earlier periods of democratic crisis. What began as online indignation over contractors flaunting wealth evolved into a national reckoning over systemic corruption and impunity.

The political fallout has shaken the Marcos Jr. administration, further eroded public trust, and forced partial policy shifts and defensive political maneuvers. At the same time, the scandal intersected with worsening socioeconomic conditions — slowing consumer spending, increased job precarity, inflation pressures, and discontent over neoliberal social service and infrastructure policies. 

Meanwhile, the mounting crisis unfolded alongside escalating tensions in the South China Sea, where the administration doubled down on deeper security alignment with the United States and its allies, raising questions about sovereignty, regional stability, and the risks of being drawn into great-power conflict.

Taken together, these developments point to a Philippine state in a moment of profound crisis: confronting legitimacy challenges, political intramurals, and external geopolitical pressures – with a public increasingly unwilling to accept a political order resistant to structural changes.

Intensifying public scrutiny over revelations of systemic corruption

The political climate in the Philippines from late September to the end of October 2025 was marked by intensifying public scrutiny, not only of the Marcos Jr. administration but the entire political system. It has sparked huge protests, and indicates a profound governance crisis after revelations of systemic corruption in the government’s public infrastructure projects, but more notoriously in its flood-control projects, came to public light. 

By any metric, this can be considered as one of the most significant corruption scandals of the post-EDSA era. And the fallout has been far and wide, affecting government institutions, political elites of different cliques, civil society, and even the security sector. It began as viral reports of private contractors handling government flood-control projects displaying ostentatious wealth. But it gradually escalated into a full-blown national and institutional controversy involving billions of pesos in public funds. This has prompted official investigations and budget reconfigurations, as well growing public anger that has only started to spill over the streets.

The scandal exposed long-standing issues of the Philippine State: dominance of political dynasties, pervasive patronage in all levels of governance, regulatory manipulation, and the blatant abuse of public works funds for personal gain and power. 

Institutions such as the Senate and Congress, the Commission on Audit (COA), the Anti-Money Laundering Council (AMLC), and the newly-formed Independent Commission on Infrastructure (ICI) have initiated their probes, merely hinting at the scale of systemic wrongdoing. Philippine media have also contributed to bringing to light the extent of the abuses. New revelations have emerged almost on a daily basis. 

The Marcos Jr. administration has initiated a release of a matrix of flood-control projects called “Sumbong sa Pangulo” (“Report to the President”), and quickly revealed that hundreds of these are non-existent, substandard or delayed flood-control projects. The Department of Public Works and Highways (DPWH) itself, under Secretary Vince Dizon’s new leadership, admitted that out of nearly 8,000 reviewed projects, at least 421 were “ghost” undertakings. For its part, AMLC moved to freeze bank accounts, seize vehicles, and real properties of those involved. 

But as IBON Foundation’s executive director, Sonny Africa, pointed out, the Marcos Jr. administration only released 45 percent (or PhP 540.4 billion) of the PhP 1.2 trillion spent in flood control projects from 2022 to 2025. This indicates that the administration may be protecting some allies from public scrutiny, and that it may have weaponized the “Sumbong sa Pangulo” matrix against its main political rival – the Duterte clique. 

In the meantime, legislators like Sen. Panfilo Lacson used their investigative platforms to expose fellow senators who individually inserted at least PhP 100 billion into the national budget. This has further revealed how corruption of public funds for infrastructure has not been confined to district public works officers and engineers but implicates lawmakers and operators of both political cliques. 

Senator Francis Escudero accused former House Speaker Martin Romualdez of orchestrating kickback schemes, while Escudero himself has been exposed as allegedly receiving huge campaign funds from private contractors. Other senators like Joel Villanueva and Jinggoy Estrada have also been implicated in the scandal and accused of taking cuts for facilitating flood control projects. 

These developments strengthened the public realization that corruption has not been incidental but has always been structural. Commentators warned that the scheme demonstrated how procurement systems, auditing processes, and legislative budget prerogatives had become tools of predation.

Presidential responses attempted to contain public outrage and reframe the narrative. President Ferdinand Marcos Jr. denounced corruption as a threat to national development and promised accountability. His appeal to due process, however, drew mixed reactions, with sectors expressing impatience at the pace of action and suspecting selective accountability. Meanwhile, his administration has been quick to wield police brutality and file cases against young anti-corruption protesters in an apparent attempt to preempt more widescale – and more militant – protest actions similar to those that have recently rocked Nepal and Indonesia, among others.

Part of the President’s appeasement efforts were his order to realign PhP 255.5 billion in flood-control allocations for the 2026 budget to other social and infrastructure priorities. He also pledged to release his own Statement of Assets, Liabilities, and Net Worth (SALN) to “proper authorities,” and called a Cabinet meeting to discuss voluntary SALN disclosure. 

But these efforts are more than negated by the administration’s continued retention of unprogrammed funds for the 2026 national budget. According to the Makabayan Bloc, the proposed 2026 budget that was approved by the House of Representatives on third reading retained a total of PhP 243 billion in unprogrammed appropriations  – funds that, like before, will be vulnerable to abuse or misuse.  Makabayan described these funds as "presidential pork barrel" and "standby pork," arguing that they are discretionary, lump-sum funds with no clear line-item transparency and thus vulnerable to corruption.

It is not surprising, then, that despite the administration’s public relations efforts, the administration’s legitimacy in public eyes has been declining. Pulse Asia polling reflected sharp drops in approval and trust, particularly on governance issues like corruption and inflation. Mass demonstrations on September 21, coinciding with the anniversary of Marcos Sr.’s martial law declaration, drew hundreds of thousands calling for accountability. 

The acquittal of former senator Juan Ponce Enrile and “pork barrel queen” Janet Lim Napoles on plunder charges further eroded public faith in the justice system, prompting CenPEG and other groups to criticize the continuing impunity enjoyed by political elites. Many observers framed the Enrile ruling as symbolic of a broader pattern: those in power evade punishment while ordinary citizens suffer the consequences of corruption and governance failures.

Compounding political anxieties were rumors of destabilization within the military. Armed Forces of the Philippines (AFP) Chief of Staff Gen. Romeo Brawner disclosed that some retired military officers urged him and active personnel to withdraw support from the President and even establish a junta. Though Brawner rejected these overtures, his revelations confirmed simmering discontent within the security sector. Marcos downplayed fears, insisting that his administration remained on “solid ground” but also acknowledged the rumblings. 

The overall picture is one of a presidency caught between increasing public mistrust and elite maneuvering, seeking to preserve control mainly through loud promises of political reform that are yet unfulfilled. Yet civil society vigilance, business community pressure for reforms, continued confrontations with the rival political faction of the Dutertes, and emerging doubts within the security sector reveal vulnerabilities of the ruling Marcos clique.

Philippine economy in the wake of the corruption scandals

The economic dimension of this political period cannot be separated from the corruption scandal that defined it. 

Public investment, fiscal planning, and budget confidence faced significant pressures as revelations of systemic graft undermined the state’s ability to deploy limited resources efficiently. Legislators and government finance regulators scrambled to address questions about the 2026 budget, partly responding to public outcry and partly attempting to signal commitment to reform. 

But the entire budget process has once again shown the administration and the system’s inability to reform. For one, there is the continued practice of unprogrammed appropriations. Sen. Lacson, for one, disclosed at least PhP 100 billion in Senate insertions – that is, individual allocations by his fellow senators. 

Budget debates highlighted deficiencies in addressing climate change and disaster mitigation, even as climate-driven flooding reflected the cost of failed public infrastructure. The opposition pointed out that environmental protection was severely underfunded, with the Department of Environment and Natural Resources (DENR) receiving only a tiny fraction of the national budget. 

The critique that the majority of "climate-related" funds were channeled to infrastructure projects rather than environmental or mitigation programs highlighted a mismatch between public rhetoric and policy execution. In the context of catastrophic flooding, these budgetary allocations symbolized not only fiscal mismanagement but a deeper crisis in national development planning.

At the same time, the administration sought to address food sufficiency issues through targeted strategies, like the completion of 145 Rice Processing Systems as part of agricultural modernization. Progressive economists, however, cautioned that while these post-harvest facilities could help reduce losses and improve market supply, they do not address more entrenched problems like the centuries-old monopoly in landholdings, the adverse effects of rice importation and other effects of the Rice Tarriffication Law, price manipulation, and massively insufficient protection for farmers. It became clear that infrastructure alone cannot reverse structural decline unless embedded in genuine agrarian reform.

Meanwhile, the Marcos Jr. administration has portrayed housing as both social policy and economic stimulus. But housing programs continue to be implemented not as basic government service but as state-supported income-generating projects – a neoliberal approach to social services that has not departed from that of previous administrations. In these housing projects, critics like urban poor groups and advocates exposed the pattern of infrastructure corruption exposed in the DPWH scandals. 

The neoliberal approach to social services has also been reflected in the administration’s slashing of budgets for education and health services.

Meanwhile, in late October 2025, in response to reports of overpricing in construction materials in many infrastructure projects, President Marcos Jr. ordered all government agencies with infrastructure projects (including the Department of Education, Department of Health, and others) to follow the DPWH lead and cut their project costs by as much as 50 percent. But this wholesale order to cut costs also had its critics. They warned that unrealistic price-reduction mandates could lead to poorer quality, rushed procurement, and further corruption at decentralized levels. Without institutional reform, procurement transparency, and enforcement oversight, price controls may function as a political gesture rather than a structural solution.

In October, over thirty business groups issued a public call for the government to recover stolen public funds and pursue institutional reform. It was a rare moment of unified elite pressure signaling that corruption had reached a level disruptive not only to governance but also to business stability. 

But beyond the corruption scandals, oppositionists and progressive economists have continued to point out the fundamental problems of the Marcos Jr. administration’s management of the Philippine economy. 

Despite official claims of sustained economic growth, IBON Foundation highlighted several areas of weakness in the economy. There is, of course, household spending (a central driver of Gross Domestic Product) has slowed sharply, expanding by only one percent in the first quarter of 2025. At the same time, gross capital formation remains below its average over the past decade, while foreign direct investment has also been on a downward trend. These indicators point to a sluggish economic environment that contradicts the government's optimistic messaging.

On labor and employment, IBON raised concerns regarding the quality of jobs being created. While the government cited figures suggesting job expansion, IBON argues that these numbers are misleading. The increase in part-time and informal work reflects deteriorating job quality rather than genuine economic improvement or stability for workers.

IBON has also pointed out the continued implementation of neoliberal economic policies as the primary issue in the administration’s economic management. Of late, the Marcos Jr. administration acquiesced to the privatization of the Ninoy Aquino International Airport (NAIA). IBON pointed out that the San Miguel Corp.’s capture of the country’s main international airport has resulted in higher fees for ordinary Filipinos. 

They argue that essential public infrastructure, such as airports, should remain under strong public oversight to ensure accessibility, affordability, and integrity in its operations.

Doubling down on Western security dependence

Even as corruption scandals dominated public discourse, ongoing tensions in the South China Sea further exposed the Marcos Jr. administration’s increasing security dependence on its Western allies.

In October 2025, the Department of Foreign Affairs announced that it had filed 47 diplomatic protests against China since the start of the year, citing “escalating hostilities” and “increasingly aggressive maneuvers” by Chinese vessels within the Philippine maritime zone. President Marcos Jr., speaking during Association of Southeast Asian Nations (ASEAN) Summit engagements, condemned “dangerous and coercive actions” at sea.

Tensions escalated further following an incident in mid-October in which the Philippines accused a Chinese vessel of ramming and damaging the BRP Datu Pagbuaya near the Spratlys, amid continued reports of water-cannon attacks and harassment targeting Philippine ships. Despite China’s denials, Manila continued joint maritime patrols with allies toward the end of the month, prompting the Chinese government to publicly warn that such activities risked destabilising the region. 

Alongside these maritime engagements, Manila deepened defence cooperation with Western allies, especially the United States. On October 31, the US and the Philippines announced the formation of a new joint task force — “Task Force Philippines” — aimed at strengthening operational cooperation, improving combined planning, and enhancing interoperability, particularly in the South China Sea. 

At the same time, the Philippines has been advancing planned defense agreements with other US allies: the Philippines and Japan signed a Reciprocal Access Agreement (RAA) enabling greater military cooperation and access. China, of course, has criticized RAA. It argues that the RAA, along with other defense cooperation agreements, has been a part of a “China-containment agenda” by the US. It also calls for Japan and the Philippines to focus instead on genuine regional peace and stability rather than forming exclusive blocs.

This happens as the US continues to take a beating in its international reputation as a “global policeman”. Its active participation in the genocide of Gaza (despite the temporary ceasefire), the questionable maritime attacks and public threats against Venezuela, and its continued support for prolonging the Russian war in Ukraine – along with its spiraling towards authoritarianism domestically under the Trump administration – have only further undermined its reputation, and strengthened an increasing distrust of US in the international community.

In fact, the Philippine government should recognize that deepening dependence on the United States is more likely to intensify – not reduce – the militarization of the South China Sea. While China has undoubtedly accelerated its own military buildup, which it frames as defensive, Washington’s record of external intervention underscores a long-standing pattern of projecting power beyond its borders. 

Research led by Monica Duffy Toft, founder of the Military Intervention Project at the Center for Strategic Studies, shows that the United States has undertaken 393 military interventions abroad since its founding in 1776. More than 200 of these occurred after 1945, with 114 taking place in the post-Cold War period alone. Since 2000, the Military Intervention Project has documented 72 U.S. interventions, and in the Middle East and North Africa alone, the United States has engaged in 77 interventions, most of them beginning in the 1940s. 

This historical record highlights why greater reliance on US military partnership may risk drawing the Philippines deeper into geopolitical conflict rather than securing long-term peace and stability.

Conclusion: Entering a profound inflection point

From late September to late October 2025, Philippine governance entered a profound inflection point. 

The flood-control corruption scandal exposed not only individual wrongdoing but structural weaknesses in the state’s capacity to protect public resources from elite manipulation. Public trust declined sharply, protests gained momentum, business groups demanded restitution and reforms, and even the military became a venue for political anxiety. 

Meanwhile, the Philippine government has continued to lean on its Western allies in its doubling down on its confrontational stance with China regarding the South China Sea maritime dispute.

Overall, the Marcos Jr. administration has attempted to navigate the political and economic crises through performative measures and policy tweaks, as well as hamfisted response to militant protests. But so far, the protests appear to only be swelling. On top of these local issues, internationally it has carried on its problematic confrontational policy toward China regarding the maritime dispute.