The Department of Finance (DOF) on Wednesday released a statement denying that a P28-billion official development assistance (ODA) from South Korea exists, which President Lee Jae-Myung reportedly suspended to avoid risks of corruption and mismanagement of public funds.
“The Department of Finance categorically clarifies that no such loan exists,” the DOF said following reports attributed to the South Korean leader.
“Nevertheless, we reaffirm to our bilateral partners that the Philippine government will match their trust and confidence with full transparency and accountability,” it added.
Lee, in a Facebook post on September 9, said he ordered the immediate suspension of a 700 billion won (P28.8 billion) infrastructure project loan in the Philippines due to its ‘potential for corruption.’
He announced the suspension after The Hankyoreh reported that the project was restarted following pressure from the Ministry of Economy and Finance.
“There is significant meaning in preventing the unnecessary waste of 700 billion Korean won in taxpayer money and preemptively blocking risks that could lead to poor management and corruption,” Lee said.
The suspension was linked to questionable flood control projects, which are currently under investigation by both the House and Senate. These ongoing inquiries have implicated various politicians and contractors.
Lee further emphasized the importance of this halt to prevent “unnecessary waste” of taxpayers’ money and avoid “the risk of corruption and mismanagement.”
The Hankyoreh also reported that the loan was in accordance with President Ferdinand Marcos Jr.’s program to build 350 modular bridges in rural areas nationwide.
The DOF later explained that the P28-billion Rural Modular Bridge Project is being considered for funding by the French government, not South Korea.
While the Philippine government often explores financing with multiple partners, the Department of Agrarian Reform (DAR) halted discussions with South Korea last year.
This decision was made because the project’s scope and technical specifications did not align with the proposed Korean financing.
“The government, as early as the last quarter of 2024, decided to look for other bilateral partners who can implement the full scope of the project,” DOF said.
“Hence, there is no existing loan for the said project with South Korea,” it aded.
DOF said that the government is now in advanced negotiations with the French Government to finalize the project’s technical and financial terms.
