District engineers of the Department of Public Works and Highways (DPWH) held “too much power” over public fund releases for infrastructure projects, a loophole that may have allowed kickback schemes to persist over time.
This key finding emerged during the Independent Commission for Infrastructure’s (ICI) first livestreamed hearing on Tuesday, where Land Bank of the Philippines officials explained how long-established government payment systems gave district engineers unchecked control over contractor disbursements.
ICI Chair Andres Reyes Jr., a former Supreme Court justice, highlighted the magnitude of the vulnerability after Landbank representatives described the List of Due and Demandable Accounts Payable and Advised Debit Account (LDDAP-ADA) system. Under this framework, DPWH district engineers could both request and authorize electronic transfers to contractors. Established in 1990 and digitized by 2013, the system processes payments through Notices of Transfer Allocation (NTAs) that require only the signatures of the assigned district engineers.
Reyes pointed out during the hearing that there was a clear imbalance in authority within the DPWH, noting that district engineers could both request funds and approve their release. He described this concentration of power, without additional oversight, as a systemic problem in the infrastructure disbursement process.
Landbank president and chief executive officer Lynette Ortiz, testifying alongside senior officials, noted that the bank verifies signatories and conducts integrity checks, including “hash totals,” within 24 to 48 hours of receiving a payment instruction. But she also admitted that the bank’s review historically operated under a “presumption of regularity,” given that the funds originate from the national budget and the requesting agency is presumed to have completed all internal validation.
Ortiz maintained that the system itself showed “no red flags,” but acknowledged that enhanced due diligence measures are now being applied. “The assumption has always been that government funds are clean,” she said. “But we recognize the need to strengthen scrutiny moving forward.”
The explanation drew a sharp response from ICI Commissioner Rogelio Singson, who served as DPWH secretary during the Aquino administration. Reacting to the repeated reliance on presumed regularity, he remarked, “Everything is assumed regular.”
The hearing also highlighted another procedural gap: the absence of real-time independent audits. Not even the Commission on Audit, Reyes noted, examines contractor payables at the implementation stage, when funds are released in tranches as projects progress. This lack of contemporaneous oversight has long been cited by reform advocates as a vulnerability that makes infrastructure projects susceptible to manipulation.
The session took a political turn when Laguna Rep. Benjamin “Benjie” Agarao Jr. appeared to answer allegations from contractor couple Curlee and Sarah Discaya, who previously linked him to alleged kickbacks in anomalous flood control projects. Agarao denied knowing the couple and pointed out that he was not a member of the 19th Congress from 2022 to 2025, the period in which the transactions allegedly occurred. His daughter, Jam Agarao, held the seat at the time.
Agarao admitted knowing a contractor named Alvin Mariano, identified by the Discayas as a supposed intermediary, but said the relationship was limited and denied receiving any ₱9-million advance payment or an “exotic bulldog” allegedly offered in exchange for projects. When asked whether he would submit his phone records to verify communications, he declined, citing privacy concerns.
Tuesday’s hearing represented a change in the ICI’s approach following months of private sessions. Starting December 2, the commission began livestreaming its proceedings to enhance transparency while probing alleged irregularities in flood control and other infrastructure projects over the past ten years. Additional lawmakers, including Bulacan Rep. Danilo Domingo, Davao City Rep. Paolo “Pulong” Duterte, House Majority Leader Sandro Marcos, and Benguet Rep. Eric Yap, are slated to appear between December 3 and 5.
As the inquiry widens, the commission is expected to recommend structural reforms aimed at limiting unilateral authority within DPWH field offices, strengthening audit protocols, and sealing fiscal loopholes that have compromised public trust. The ICI said it will continue its hearings in the coming days, with findings to be consolidated into a full report for the Office of the President.
