South Korea cancels support for flagship Marcos bridge project
This comes amid a political scandal in Korea, corruption concerns
MANILA, Philippines — South Korean President Lee Jae-myung has halted proceedings for a multi-billion development loan for a bridge project in the Philippines after it was revealed the loan had been revived under political pressure despite being initially rejected over its risk for corruption.
The suspension came a day after South Korean investigative outlet Hankyoreh 21 reported that a Korean lawmaker now embroiled in a political funds scandal had pressured the country's finance minister to approve the loan, overturning the Ministry of Economy and Finance's rejection of the project in February 2024.
"It has been ordered to immediately stop proceedings for the business in question that has been identified as a fraudulent business," Lee wrote on Facebook in Korean. "The most fortunate thing is that the business has not yet been completed, so business expenses such as supporting the Foreign Economic Cooperation Fund have not been spent."
The South Korean president’s order to halt proceedings for the bridge project follows the South Korean government’s earlier decision not to support the project in February 2024 due to corruption concerns linked to a local Filipino contractor with a history of faulty construction and graft in similar projects.
The project in question is formally called the "Pang-agraryong Tulay para sa Bagong Bayanihan ng mga Magsasaka (PBBM Bridges)", and its implementing agencies are the Department of Agrarian and Reform and the Department of Public Works and Highways.
To finance the project, the Philippines' Department of Finance in 2023 originally sought a $439-million (approximately P25 billion) loan from Korea’s Economic Development Cooperation Fund (EDCF) to build 350 permanent steel bridges across the Philippines by 2028. The total project cost was pegged by the government at P28.24 billion.
The Ministry of Economy and Finance rejected the loan application in February 2024, citing concerns about the project being prone to corruption and its "low probability of success," according to the Hankyoreh 21 investigation published Monday.
The ministry formally notified the Philippine government in April 2024 that it would not support the project, but later backed the project following pressure from lawmaker People Power Party Representative Kweon Seong-dong directed at then-Finance Minister Choi Sang-mok, according to Hankyoreh 21.
The Korean Export-Import Bank re-commissioned a feasibility study in October 2024, reducing the project scope from 350 bridges to 70 and the budget from $510 million to $80–100 million (approximately P4.5 to P5.7 billion), according to the report.
The Department of Finance on Wednesday released a statement saying there is no P28 billion ODA loan between South Korea and the Philippines.
"With regard to the supposed PHP 28 billion official development assistance (ODA) loan between South Korea and the Philippines, the Department of Finance categorically clarifies that no such loan exists," it said. "Nevertheless, we reaffirm to our bilateral partners that the Philippine government will match their trust and confidence with full transparency and accountability."
(The South Korean Embassy in Manila has yet to respond to questions as of posting. We will update this article with their response.)
Corruption concerns, unusual process
According to the report, the ministry's rejection was driven by corruption concerns involving a local Philippine company participating as a consultant for the project.
The company — unnamed in Hankyoreh's report — reportedly had a history of poor construction and corruption in similar bridge projects. This includes a 1996 project to install 200 bridges that sparked controversy over high-priced deliveries and poor construction, with some bridges built that were not connected to roads and were, therefore, unusable.
The investigative report also detailed how the project itself went through an unusual application process.
The Philippine government submitted the loan application without prior consultation between governments, which Hankyoreh 21 reported is typically required for EDCF applications.
Philippine officials, specifically "the Secretary of Agrarian Reform and the Vice Minister," visited South Korea in December 2023 to meet with economy and finance ministry officials and lawmakers, including Representative Kim Hak-yong of the People Power Party, according to Hankyoreh's report.
During meetings, Philippine officials said they wanted Korean companies to participate in the project. The Philippine conglomerate LCS Group — whose president and chairman is Luis Chavit Singson — was also set to participate, according to the report.
The ministry held meetings with Korean companies operating in the Philippines in December 2023 to identify interested parties, but no companies expressed interest, the investigation found.
Low probability of success
South Korean officials earlier concluded the project had low success probability primarily due to the difficulty of managing 350 separate construction sites, according to Hankyoreh 21.
The report cited the challenge of obtaining permits from multiple local governments and the Philippines' inadequate road and transportation infrastructure management system as additional factors.
"The high cost of obtaining separate permits from each local government was cited as a factor lowering the project's chances of success," the investigative report stated.
"Even if all these processes were completed, the Philippines' inadequate road and transportation infrastructure management system would likely hinder the project's successful implementation," it added.
The South Korean president praised the media investigation in his Facebook post, saying: "I express my deepest gratitude to the courage and efforts of the media for spreading the truth and ensuring the people's right to know through this investigative report."
The Korean lawmaker implicated in the investigative report — Kweon Seong-dong — has been ordered arrested for allegedly receiving $72,000 in illegal political funds from the Unification Church, a controversial religious organization, in violation of South Korea's political funding laws, according to a report by the Yonhap News Agency.
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