DPWH cuts budget for foreign-funded flood control works
All the foreign-funded flood control projects under the Department of Public Works and Highways (DPWH) suffered major budget cuts under the proposed 2026 national budget as a consequence of broader cuts made to foreign-assisted projects (FAPs) in general.
A comparison of the National Expenditure Program (NEP) prepared by the Department of Budget and Management (DBM) and the 2026 General Appropriations Bill (GAB), approved by Congress last month, showed that four of the 10 projects under the DPWH’s foreign-funded flood projects were cut by more than half, while the rest lost a quarter of the original budget.
The biggest loser among the 10 projects is the Cavite Industrial Area Flood Risk Management Project, which was to be funded by the Japan International Cooperation Agency (Jica). Its budget was slashed from P3.961 billion to P566.5 million.
The Integrated Flood Resilience and Adaptation Phase 1 Project, funded by the Asian Development Bank, also saw its budget go down from P1.484 billion in the NEP to P648.9 million in the GAB, or a P835.2 million cut.
The project aims to establish a strategic flood risk management plan of the DPWH to reduce the flood risks of the selected major river basins and enhance flood and climate change resilience.
The Metro Manila Flood Management Project Phase 1, which is supposed to see the construction of 20 new pumping stations in Manila, will only be getting P470.4 million next year, or P783 million lower than the proposed P1.253 billion.
This World Bank-funded project was supposed to have been finished in 2024, but was delayed partly because of the lack of counterpart government funding, and therefore has incurred at least P27 million in commitment fees (late penalty fees).
Phase IV of the Pasig-Marikina River Channel Improvement Project, also funded by the Jica, saw its budget go down from P7.4 billion to P1.8 billion, or a P5.6 billion cut.
Only P17.7B left
In total, these funds are part of the P17.7 billion funding for FAPs under the DPWH, which was cut down from the original P70 billion proposed by the House.
While locally funded projects were completely slashed from the DPWH funding at the start of the budget cycle in response to the multibillion flood control scandal, the DPWH retained its funding for foreign-funded projects, including flood control, which require cofinancing from the government to complement the foreign loan to meet the total project cost.
In a previous interview with the Inquirer, former Budget Secretary Florencio “Butch” Abad stressed that FAPs were supposed to be the “hardest target for cuts” because they’re covered by loan agreements with multilateral agencies, such as Jica, the World Bank and the Asian Development Bank.
Not giving them the counterpart government funding, Abad added, not only risked reneging on the country’s international commitments, but also brought great economic costs as delays in implementations incurred higher commitment fees, which are usually around 0.25 percent of the loan.
In both 2024 and 2025, funding for these projects was slashed even though the Department of Budget and Management requested P246 billion and P215.6 billion for each year, respectively. For 2026, the NEP proposed P283 billion for FAPs.
