Finance secretary: Flood control scandal cost PH credit rating upgrade

Finance Secretary Ralph Recto believes the multibillion-peso flood control scandal prevented the Philippines from achieving a credit rating upgrade from S&P Global Ratings.

Recto stated that S&P was prepared to upgrade the country's credit rating until the flood control issue arose.

The controversy involves "ghost" projects and fund misuse in government flood control programs, triggering investigations by Congress, the Commission on Audit, the Ombudsman, and the Independent Commission for Infrastructure.

The Marcos administration faces scrutiny over flood control projects where billions of pesos in public funds were diverted through padded contracts and shell companies.

The scandal highlighted spending inefficiencies and governance lapses that credit agencies closely monitor.

Recto expressed regret over the missed opportunity and is confident the government will address these governance concerns.

Despite the potential setback, S&P maintained the Philippines' 'BBB+/A-2' rating in November and revised the outlook to positive from stable.

A better credit rating generally leads to lower borrowing costs and attracts more investors to the country.