Flood control scandal causes P1.7 trillion market loss

The Philippine stock market has lost approximately P1.7 trillion in value over three weeks due to a flood control project scandal.

Securities and Exchange Commission (SEC) Chairperson Francis Lim stated that the scandal has eroded investor confidence, leading to massive sell-offs unrelated to the actual performance of companies.

Lim emphasized that investors are exiting the market due to a perceived lack of integrity, not weak corporate fundamentals, highlighting corruption's detrimental effect on wealth.

President Ferdinand Marcos Jr. revealed that only 15 contractors bagged 20 percent of nearly 10,000 flood control projects since 2022.

The Anti-Money Laundering Council (AMLC) has since frozen the bank accounts of contractors and former public works personnel allegedly involved in anomalous ghost and substandard flood control projects.

The SEC views compliance and good governance as essential steps to restore trust and stability within the capital markets.

The breakdown of trust, as noted by Lim, results in a drying up of capital, ultimately affecting the government, businesses, and the general public.