The multi-billion peso flood control projects’ scandal, originally exposed by President Marcos in his State of the Nation Address in July this year, has opened a can of worms, its ugly tentacles now casting a cloud of doubt on the government-owned bank – LANDBANK of the Philippines.
The bank, however, was quick to deny any irregularity in the disbursement of funds for the flood control projects that turned up to be either ghost, uncompleted, or substandard. “All transactions complied with law, above board, and in accordance with mandated procedures,” screamed the banner of Landbank’s official statement.
During a Senate hearing on September 25, 2025, Senators grilled the LANDBANK for allowing Syms Construction, contractor of government flood control projects, through its representative Sally Santos to withdraw nearly half a billion pesos in cash within just two days.
Sen. Francis “Kiko” Pangilinan raised concerns over possible lapses in banking safeguards and fund monitoring for a government flood control project because such huge amount of transactions would normally be subject to closer scrutiny.
Lawmakers questioned why the bank did not raise any red flags when Syms Construction, withdrew massive amounts — including PHP180 million, PHP141 million, PHP299 million, and PHP65 million — all in cash and all within single days.
“LANDBANK strongly refutes any insinuations that its handling of government contractor accounts, particularly those related to the Department of Public Works and Highways’ (DPWH) flood control projects, involved any irregular or unlawful activity,” said the bank.
According to the government-owned bank all transactions in question were carried out strictly within the bounds of Philippine banking laws and regulations, under full compliance with government mandates and oversight requirements.
It also pointed to the Department of Budge and Management (DBM) and DPWH, saying that the funds deposited in the account of DPWH contractors originated from the DBM, released pursuant to the General Appropriations Act (GAA) as passed by Congress, and disbursed by the DPWH. “These funds are legitimate government allocations, not private or unverified sources,” it added.
In releasing the funds within single days, it said that LANDBANK, or any other financial institution, has no legal authority to block or question duly appropriated government disbursements. To facilitate fulfillment of government contracts, all creditors/suppliers/payees (i.e. contractors), are enjoined to open and maintain deposit accounts with banks such as LANDBANK, pursuant to DBM Circular No. 2018-14 and Bureau of the Treasury (BTr) Circular No. 3-2018.
LANDBANK also claimed that it fully observed “Know Your Client” (KYC) protocols, risk management procedures, and documentation requirements for the opening of their LANDBANK accounts.
It further noted that as mandated by the Anti-Money Laundering Act (AMLA), all cash withdrawals exceeding ₱500,000 are automatically reported to the Anti-Money Laundering Council (AMLC) through a Covered Transaction Report (CTR), and that any transaction deemed “suspicious” at the time of execution is immediately flagged to AMLC via a Suspicious Transaction Report (STR).
In this case, it said, the legitimacy of the source of funds—government releases through DPWH, the lawful purpose of the payments, and the KYC account opening documentation of the contractors—have all been properly established and recorded.
“There was, therefore, no basis under the law to withhold the release of funds. LANDBANK reiterates that its role is to faithfully execute banking transactions in accordance with law and regulatory standards, and not to assume investigatory functions outside its legal mandate,” the statement added.
In conclusion, the bank said it stands ready to fully cooperate with the proper authorities and investigating bodies to help establish the truth and serve the ends of justice.
The Senate and the House are still investigating the multi-billion in government funds lost to corruption. President Marcos has also created an Independent Commission on Infrastructure, an independent body, to dig deeper into the corruption issue and bring the perpetrators to account.
