Philippine President Ferdinand Marcos Jr.’s family gained global notoriety four decades ago for the extensive corruption of his late father’s dictatorship. Now, he’s set in motion an anti-graft drive that could boost his popularity and investor sentiment.

A teary-eyed Marcos appeared in a podcast over the weekend, saying he’s very upset about corruption in flood control projects. “I have sleepless nights thinking about this. How did we end up this way?” he said.

It’s a surprising campaign for a politician who has faced questions over his family’s alleged hidden wealth for decades. He started with a warning in his annual speech to Congress in July, then named companies he said benefited from flood mitigation projects such as dikes and river walls.

Now, he has ordered checks on the lifestyles of government officials, personally inspected projects and vowed to go after corrupt officials through a new independent body. He also plans to remove P250.8 billion ($4.4 billion) for flood infrastructure — or a fourth of the public works department’s proposed budget — from next year’s spending plan.

Mr. Marcos is tapping into anti-elite anger in a typhoon-prone nation where infrastructure often fails to hold up, making it even more vulnerable to the impact of climate change. Citizens have vented their angst on social media, slamming public officials, contractors and their relatives with possible links to graft-ridden projects who flaunt lavish lifestyles with Rolls-Royce and Cadillac cars as well as Chanel and Birkin designer bags.

Corruption has been a perennial problem in the region, but even more so in the Philippines, which ranked lower compared to peers in last year’s Transparency International Corruption Perceptions Index.

Street protests themselves have generally been small, and financial markets so far unaffected. But Marcos, whose popularity has waned, will be attuned to the recent violent unrest in neighboring Indonesia over what were seen as excessive perks for lawmakers even as ordinary Indonesians struggle to make ends meet.

Mr. Marcos’ anti-corruption drive is a “populist project” that could both help clean up his family’s name and potentially give him ammunition against his ally-turned-rival, Vice President Sara Duterte, said former presidential political affairs adviser Ronald Llamas.

“He has to see this through towards a logical conclusion, which is to charge and imprison corrupt officials of the public works department, contractors, and even politicians,” Mr. Llamas said.

But Mr. Marcos will also need to show he’s willing to target politicians aligned with him. “Marcos opened Pandora’s box, and there’s no turning back,” he said.

At a hearing at the House of Representatives on Tuesday, a former assistant district engineer at the public works department accused Senators Jinggoy Estrada and Joel Villanueva of receiving kickbacks from flood mitigation projects. Both denied the allegations, with Mr. Estrada describing them as “outright lies,” and Mr. Villanueva saying these are part of a “demolition job” against him.

A day earlier at a Senate investigation, a contractor tagged Mr. Marcos’ allies — including the president’s cousin House Speaker Martin Romualdez — as among the lawmakers allegedly involved in corruption in flood control projects. Mr. Romualdez and other Congress members denied the accusations.

Shortly after, the Senate changed its leadership, with Senator Vicente Sotto III — who was backed by Mr. Marcos in midterm elections in May — becoming the chamber’s new chief. He replaced Senator Francis Escudero, who earlier said that a private contractor donated to his 2022 election campaign, but denied helping the company secure government projects.

The president’s corruption crackdown has led to the resignation of his public works chief. Investigations by local media have also shown that lawmakers, including those aligned with Marcos, have ties to major contractors that bagged flood control projects.

‘POLITICAL THEATRICS’
For Mr. Marcos, who is limited to a single, six-year term that expires in 2028 under the Constitution, the challenge is to turn the public angst into an anti-graft legacy, and to convince investors that he’s serious about plugging leakages in government spending. The president’s trust rating remains under 50% despite recovering from a low of 36%, according to a June survey by pollster Social Weather Stations.

Scoring a win is even more crucial now for Mr. Marcos in the tussle against his vice president.
Duterte fended off the risk of an impeachment trial that would’ve put her possible 2028 presidential bid in jeopardy, and her supporters outperformed in the midterm elections.

There are already warnings though that the anti-corruption drive is causing tensions within Mr. Marcos’ political circles, particularly between his Cabinet and the House. Executive Secretary Lucas Bersamin, the president’s chief administrator, said the Cabinet will not tolerate “any effort to hold the budget process hostage by political theatrics.”

“All our investigations into the anomalies will be futile if the sources of corruption remain unchecked,” Mr. Bersamin said over the weekend. “Hence, we urge the House of Representatives to heed the demand of the people for full accountability: Clean your House first.”

The statement followed a report that House lawmakers were considering tossing the 6.793-trillion peso national expenditure program for 2026 back to the budget department to fix some problematic entries. The move, which was eventually dropped, could’ve delayed the budget approval.

The heightened scrutiny on flood control projects will likely slow disbursements in the short term as agencies tighten approval processes and review ongoing works, Union Bank of the Philippines chief economist Ruben Carlo Asuncion said.

“While this could temporarily temper infrastructure spending, the intent is to restore credibility and ensure funds go to high-impact, shovel-ready projects,” Mr. Asuncion said. He estimates that if disbursements slow by 10% for a quarter, the annualized impact on gross domestic product would be around 0.13 percentage point.

Mr.Marcos’ resolve to pull the plug on corruption could show most visibility in his upcoming appointment of a new ombudsman, who has to be truly independent if he wants his campaign to succeed, according to Michael Henry Yusingco, a research fellow at the Ateneo School of Government. Otherwise, “the president’s outburst against corrupt officials and politicians will eventually be dismissed as simply political bluster,” he said.

“It may give him a temporary boost in the surveys, but this will eventually fizzle out as the people realize that the president is just performing for the peanut gallery,” Mr. Yusingco added. — Bloomberg