Will President Marcos light his own ‘Blazing Furnace?’

In April 2024, a Vietnamese court handed down a death sentence to businesswoman Truong My Lan in what became the country’s — and possibly Southeast Asia’s — largest-ever financial fraud case. As head of the Vạn Thịnh Phát conglomerate, Lan secretly concealed her stake in the Saigon Commercial Bank (SCB), which was then Vietnam’s fifth-largest bank. Beginning in the early 2010s, she embezzled an estimated $12 billion in loans using fake documents, shell companies, and her control over key executives.

When the scheme unraveled in 2022, it triggered a bank run that forced the State Bank of Vietnam (SBV) to mount a $24-billion bailout to prevent wider financial collapse. The fallout led to the conviction of 85 defendants, from Lan’s niece to SBV officials tasked with supervision and inspection of the banking system. Her death sentence was later commuted to life imprisonment, in line with Vietnam’s treaty commitments on sentencing standards.

Though Lan’s crimes were rooted in the private sector, the scale of the bailout and the near collapse of a major bank rattled Vietnam’s political and financial establishment. For Communist Party leaders, it brought back memories of the late 2000s, when state-owned enterprises squandered billions in stimulus funds and loans — undermining both economic stability and threatening systemic collapse.

The Vạn Thịnh Phát scandal has become the defining episode of Vietnam’s decade-long “Blazing Furnace” anti-corruption drive, launched in 2014 by then General Secretary Nguyen Phu Trong. By one estimate, nearly 10% of all Party cadres have faced disciplinary action, while 60,000 public employees resigned between 2021 and 2023. Among those forced out were two presidents (Nguyen Xuan Phuc and Vo Van Thuong), two deputy prime ministers (Pham Binh Minh and Vu Duc Dam), and a health minister (Nguyen Thanh Long).

One of the campaign’s architects, Minister of Public Security To Lam, succeeded Trong as Communist Party chief last year and — barring missteps — appears set to be reelected early next year as Vietnam’s top leader for another five years. Yet speculation lingers that both Trong and Lam used the Blazing Furnace not only to fight corruption but also to sideline rivals. That suspicion is hardly surprising: around the world, anti-corruption crusades often double as political weapons.

The campaign has also had negative side effects. It made bureaucrats risk-averse, slowed project approvals, and left billions in public funds undisbursed. It had a palpable effect on the economy. Still, the prevailing view is that Blazing Furnace has been a net positive. For a country chasing long-term growth of 8% or more, leaving corruption unchecked would have carried far greater risks — financial, political, and institutional.

The broader lesson is simple: corruption doesn’t just waste money; it corrodes governance and erodes the rule of law. Those who benefit from it burrow deep into the political system to undermine oversight, avoid scrutiny, co-opt anti-corruption agencies and the courts, and silence critics. This weakening affects foreign investor perceptions, who rely on the rule of law, impartial courts and competent bureaucracies.

Over time, corruption seeps deep into political and social life, leaving citizens disillusioned. People grow less willing to pay taxes or obey laws when they see officials flaunting stolen wealth without consequence. The result is a society where the rule of law feels abstract, and survival reduces to a dog-eat-dog mentality. For many, the question becomes: are you the first dog, or the second?

In the Philippines, voters still care about clean government, but decades of broken promises have left them cynical. Lofty pledges of reform are dismissed as being worth no more than “the spit on their lips.” Reformers who succumb to corruption are quickly branded with the familiar phrase “Nilamon na” — swallowed whole by the system.

This erosion of trust ultimately threatens the credibility of the political order. Ironically, Vietnam’s communist leaders appear to grasp this more clearly than many of their democratic counterparts in Manila.

That is why figures like Pasig City Mayor Vico Sotto stand out. For now, he remains an outlier — a well-known political name, successful in Metro Manila, yet still untainted by scandal. His currency is credibility, and that makes him valuable in a landscape where voters are tired of politics as usual. Still, his path to the presidency may be a decade away and he will inevitably be targeted.

For President Ferdinand Marcos, Jr., the issue is far more fraught. His family’s association with corruption is, to put it gently, complicated. As BBC journalist Gareth Evans wrote during the 2022 campaign: “Mr. Marcos Sr., his wife Imelda and their cronies plundered an estimated $10 billion while millions of Filipinos lived in poverty. Only $4 billion has ever been recovered.” Yet Marcos Jr. still won 60% of the vote.

He will never acknowledge his family’s checkered past — that much is certain, as he is, after all, his father’s son, and it is only human nature. But he has begun to take aim at today’s corruption, particularly in flood-control projects where the money lost translates directly into suffering. In his recent State of the Nation Address, his most striking moment came when he denounced graft in the public sector. He has now staked his name on this fight. Skeptics see it as performance — an attempt to reclaim moral ground from the Duterte family while still depending on politicians who feed off the same corrupt system.

But whatever his motives, results will matter more than rhetoric.

The harder question is where to begin. When corruption permeates every level of governance, the system itself, like some autonomous, self-preserving artificial intelligence such as the Terminator movies’ Skynet — fights back against reform. From manipulating public perceptions in the media to hidden maneuvers inside institutions, the resistance to prosecution and reform by those who profit from corruption is relentless.

The solutions are not a mystery: finish ongoing investigations, strengthen the framework for prosecution, break the nexus between campaign donors and government contracts, and empower civil society to hold officials accountable from local budgets to national programs. The challenge is how to perform the triage against corruption, which is essentially pursuing the corruption investigations, while not losing sight of the systemic reforms that are needed.

Marcos may not wield the iron grip of Vietnam’s Communist Party. But he has something else — an angry public, weary of wholesale corruption and ready to rally behind a leader willing to risk political capital to confront it.

The president has lit the spark of this campaign. The question now is whether he will, as Trong and Lam did, allow it to burn into a fire that destroys the structure of Philippine corruption, or let it die and leave Filipinos to again curse the darkness.

Bob Herrera-Lim is a managing director at Teneo, a New-York based consulting firm that advises companies and investors globally. He covers all of Southeast Asia for the firm’s clients. He is also a fellow of the Foundation for Economic Freedom.