Erring contractors must be blacklisted for life, public officials who facilitated and got kickbacks from multibillion-peso anomalous deals must be held accountable, and procurement loopholes that allow contract splitting must be shut down.

MANILA – Peasant group Kilusang Magbubukid ng Pilipinas (KMP) challenged Ferdinand Marcos Jr.’s newly formed Independent Commission for Infrastructure (ICI) to investigate alleged anomalies in multibillion-peso flood control projects in Region II, particularly those involving EGB Construction Corporation. The group said that this company is linked to substandard works, contract splitting, and political patronage.

“Erring contractors must be blacklisted for life, public officials who facilitated and got kickbacks from multibillion-peso anomalous deals must be held accountable, and procurement loopholes that allow contract splitting must be shut down. All those involved must be held accountable,” KMP chairperson Danilo Ramos said in a statement. 

The EGB Construction Corporation, listed as the country’s fifth top contractor in Sumbong sa Pangulo list, has been awarded billions of pesos worth of flood control projects despite a history of poor performance ratings, substandard work, and blacklisting attempts by local governments. 

EGB Construction Corporation, owned by Engr. Erni G. Baggao, reportedly bagged 97 flood control projects worth P7.98 billion ($143.64 million) between 2022 and 2025 across Isabela, Aurora, Kalinga, Ilocos Sur, Ilocos Norte, Bataan, Oriental Mindoro, and Zambales. While Cagayan ranks 18th nationwide with 167 flood control projects, Isabela remains among the top provinces receiving billion-peso allocations for such works.

“Cagayan and Isabela receive some of the largest funds for flood control, but why is it that every time there’s a storm and flooding, farmers’ livelihoods are still destroyed? The answer is clear: the funds are not going to the projects but into the pockets of corrupt contractors and politicians,” Ramos said. “We cannot allow another catastrophe like the collapse of the P1.8-billion ($32.4 million) Cabagan–Sta. Maria Bridge in Isabela. That 990-meter bridge that is considered a vital link between Region II and the Cordillera Autonomous Region collapsed in February 2025. It was supposed to boost economic activity in Northern Luzon and ease the transport of corn, rice, and vegetables. Instead, its collapse represents a corrupt system that rewards political patrons and rogue contractors at the expense of the people.”

Billions have been allocated to flood control in Cagayan and Isabela, with DPWH completing major projects such as a P77.1-million ($1.39 million) revetment along the Cagayan River in Angadanan, a 372-meter flood protection wall in San Mariano, riverbank defenses in Cauayan City, Benito Soliven, and Nanguilian, as well as slope protection works in Sto. Niño, Cagayan.

An updated master plan for the Cagayan River Basin, developed with JICA, was also launched to strengthen long-term flood management. However, despite these investments, communities continue to suffer from flooding, with key infrastructure failures raising alarm, most notably the collapse of the P1.8-billion ($32.4 million) Cabagan–Sta. Maria Bridge in Isabela and the cave-in of a 60-meter flood wall in Reina Mercedes, blamed partly on quarrying activity.

EGB Construction, led by Engr. Erni G. Baggao, has faced repeated issues over substandard work, such as Ilocos Norte’s 2019 move to blacklist the firm and a poorly rated drainage and road project in Baguio City in 2020. Despite its low scores in the Constructors’ Performance Evaluation System (CPES), the company managed to win nearly P8 billion ($144 million) in flood control contracts from 2022 to 2025 under the Marcos Jr. administration, including projects along the Magat River in Nueva Vizcaya. Baggao also stepped down recently as a member of the Philippine Contractors Accreditation Board.

“Billions of pesos are being wasted on overpriced and defective projects while farmers continue to suffer from flooding and the absence of genuine rural support,” Ramos said.

A report by Kodao said that from 2022 to 2025, Cagayan’s P6.7-billion ($120.6 million) flood control program showed recurring signs of corruption, including project costs suspiciously pegged just below the P50-million ($900,000) audit threshold, “cookie-cutter” contract amounts, and repeated awards to a small circle of politically connected contractors such as EGB Construction, APS Construction, CMG Jr. Builders, Megay Construction, and JLL Pulsar Construction, which is linked to Rep. Joseph Lara. Many projects were split into smaller packages or rotated through joint ventures to favor allies, while even minor contracts appeared engineered as test bids for bigger deals. Audit experts and watchdog groups warned these patterns suggest bid rigging, contract splitting, and collusion, raising doubts about whether funds were spent for real flood protection or siphoned off through pre-arranged pricing schemes.

“Funds intended for disaster resilience and agricultural development are being siphoned off through rigged contracts,” Ramos warned. “Instead of protecting communities from floods, these projects are enriching a cartel of contractors. Farmers and the people of Region II deserve genuine rural development, not more monuments to corruption,” KMP concluded. (AMU, DAA)

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