Graft Probe Weighs on Philippine Politics, Clouds Infrastructure Spending Outlook

A fresh graft complaint against Philippine Vice President Sara Duterte has intensified political tensions in the country, coming amid a broader scandal involving misused public funds. The complaint was filed by a group of civilians, including two former government officials, at the Office of the Ombudsman on Friday. It alleges misuse of over 612.5 million pesos in public funds through coordinated schemes during Duterte's tenure as head of the Department of Education and as vice president according to reports.

The vice president has been at the center of multiple legal and political challenges since aligning with President Ferdinand Marcos Jr. in the 2022 elections, but their partnership has since frayed. This latest accusation adds to existing scrutiny of Duterte, who is seen as a leading candidate for the 2028 presidential race. A conviction would not disqualify her from running for president unless it becomes final according to legal experts.

The graft complaint is also linked to the wider scandal involving flood mitigation projects, which has already led to arrests and charges within the Department of Public Works and Highways. The government has vowed to dismantle the so-called "syndicate" that has allegedly siphoned public funds for years. Secretary Vince Dizon of the department said he expects at least 100 officials to face criminal charges according to officials.

Why the Standoff Happened

The graft complaint against Duterte echoes previous allegations that were part of an impeachment attempt in August 2025, which was dismissed after the Supreme Court ruled it unconstitutional. This latest filing could serve as another avenue for political opponents to challenge her. The Ombudsman, Jesus Crispin Remulla, has the authority to refer the case to the Sandiganbayan, the anti-graft court. However, a conviction would not prevent Duterte from running for president in 2028 unless it becomes final according to legal experts.

The political climate in the Philippines remains tense, particularly as the country grapples with multiple corruption cases. The breakdown of the Marcos-Duterte alliance has led to increased friction between the two leaders, with Duterte previously hinting that she might not seek re-election in 2028 if the president continues to antagonize her. The graft complaint could become a new battleground in their ongoing political rivalry according to political analysts.

Risks to the Outlook

The ongoing graft investigations and political tensions are casting a shadow over the Philippine economy, which had been one of the fastest-growing in Asia. The corruption scandal has already led to a slowdown in infrastructure spending, as the government has taken steps to tighten financial oversight and investigate alleged misuse of public funds according to economic reports. Investors have also grown cautious, with concerns about the government's ability to maintain economic momentum.

Secretary Dizon has pledged to implement major reforms at the Department of Public Works and Highways to prevent further corruption. These include increasing local participation in identifying infrastructure projects and enhancing transparency. However, the effectiveness of these measures will depend on political will and the ability to break entrenched graft networks according to reform advocates.

The broader political implications of the graft complaint remain uncertain. If the Ombudsman decides to send the case to the Sandiganbayan, it could lead to prolonged legal battles that further delay economic reforms and public projects. For now, Duterte remains confident she will not be implicated in the broader scandal, but the political pressure continues to mount according to political observers.