The Bangko Sentral ng Pilipinas (BSP) has stepped into the widening flood-control corruption controversy, using its newly granted powers under the Anti-Financial Account Scamming Act (AFASA) to investigate suspicious bank accounts tied to the scandal.
The move marks the first time the central bank is invoking Republic Act No. 12010, also known as AFASA, which took effect in June 2025. The law was designed primarily to combat scams and money muling schemes but is now being applied to scrutinize high-profile corruption allegations.
BSP introduces fresh tool against financial crime
According to BSP General Counsel Roberto Figueroa, the central bank’s action underscores its determination to protect the financial system from being exploited by criminal actors.
“The BSP is using AFASA for the first time to join and assist other agencies in investigating and prosecuting the persons alleged to be involved in these crimes,” Figueroa said.
AFASA criminalizes the use of financial accounts to obtain, deposit, transfer, or withdraw funds that are known to come from illicit activities — conduct referred to as “money muling” under Section 4(a) of the law. Convictions carry penalties of six to eight years in prison and fines ranging from ₱100,000 to ₱500,000, along with possible civil liabilities and forfeiture of assets.
Importantly, the law allows regulators to bypass long-standing bank secrecy laws and certain provisions of data privacy, giving the BSP and other authorities greater access to financial information critical to investigations.
The BSP has issued a reminder to banks and other regulated entities to strictly comply with AFASA’s provisions, particularly the temporary holding of funds mandated under BSP Circular No. 1215, series of 2025.
How flood-control projects became hotbeds for corruption
The controversy that prompted this probe is not new to many Filipinos.
Infrastructure projects — especially flood-control initiatives — have long been vulnerable to misuse of public funds.
Audit reports in past decades have frequently flagged overpricing, substandard construction, and ghost projects within the Department of Public Works and Highways (DPWH). Billions of pesos in taxpayer money have been allocated for river dikes, drainage systems, and floodgates intended to protect communities, yet many projects remain incomplete or ineffective.
Critics have noted that because these projects often involve emergency allocations or multi-year contracts, they can become lucrative opportunities for kickbacks, bid-rigging, and fund diversion. In 2019, for instance, the Commission on Audit (COA) reported irregularities in hundreds of millions worth of flood-control projects in several regions, citing defective work and questionable contracts.
The current controversy, which led DPWH Secretary Vince Dizon to request BSP’s involvement, is part of a broader effort by government agencies to trace whether illicit profits from such projects are being laundered through the banking system.
Coordination with other watchdogs
The BSP’s probe complements recent actions by the Anti-Money Laundering Council (AMLC), which secured a freeze order from the Court of Appeals (CA) against bank accounts suspected of holding illicit funds linked to the scandal.
While the AMLC’s mandate focuses on detecting and preventing money laundering, AFASA gives the BSP a more direct role in cracking down on the financial conduits of corruption. By examining transaction histories and identifying money-mule activities, the BSP can provide evidence to strengthen ongoing investigations and possible prosecutions.
Raising the stakes
Authorities stress that the fight against corruption in flood-control projects is not just about punishing wrongdoers, but also about restoring public confidence in government spending.
“These funds are supposed to protect Filipinos from floods and disasters,” one DPWH insider noted. “When they are stolen or misused, communities remain vulnerable and lives are put at risk.”
The combination of AFASA’s new powers, AMLC’s oversight, and COA’s audits could signal a tougher stance against corruption, especially in infrastructure projects where billions in public funds are at stake.
Looking ahead
With AFASA now in force, regulators and law enforcement agencies have sharper tools to pierce the veil of financial secrecy that has historically shielded corruption. The BSP’s first use of the law may set a precedent for future cases involving not only scams and fraud, but also large-scale misuse of government funds.
For many observers, the real test will be whether these investigations lead to concrete accountability. If successful, the BSP’s intervention could mark a turning point in the country’s long struggle to clean up its flood-control programs — and by extension, the public works sector as a whole.
