‘Potential for corruption’: South Korea pulls the plug again on $510M loan to Philippines
South Korea has once again cancelled a $510 million loan to the Philippines meant to build agricultural infrastructure, after it was revived last year despite concerns over corruption and feasibility.
The 700 billion-won loan, under the Economic Development Cooperation Fund (EDCF), was intended to finance the construction of 350 bridges across the archipelago.
The scheme was to be branded Ang Agraryong Tulay para sa Bagong Bayanihan ng mga Magsasaka — the PBBM Bridges — a nod to President Ferdinand “Bongbong” Marcos Jr.
The project was first rejected in February 2024, when South Korea’s Ministry of Economy and Finance warned it was prone to corruption and had a “low probability of success,” according to an investigation by South Korean news outlet Hankyoreh 21.
Sharing the investigative report, President Lee Jae-myung said on social media that he had “ordered an immediate halt to the proceedings,” adding it was fortunate the project had not commenced.
“There is significant meaning in preventing the unnecessary waste of 700 billion Korean won in taxpayer money and preemptively blocking risks that could lead to poor management and corruption,” he added.
South Korea’s Ministry of Economy and Finance formally informed Manila in April 2024 that it would not support the scheme, but the plan was later resurrected after pressure from People Power Party lawmaker Kweon Seong-dong on then-finance minister Choi Sang-mok, the investigation found.
Following a request for reconsideration, the Export-Import Bank of Korea commissioned a new feasibility study in October 2024 that pared the programme back from 350 bridges to 70 and cut the budget to about $80–100 million.
Even so, South Korean officials concluded the project remained difficult to manage and vulnerable to graft because of the challenge of overseeing dozens of separate construction sites.
Responding to backlash following President Lee’s post, the Philippine Department of Finance said “no such loan exists,” adding it was committed to “full transparency and accountability” with bilateral partners.
These developments unfold against corruption scandals rocking both countries — South Korea has been shaken by allegations involving former first lady Kim Keon-hee, while the Philippines faces scrutiny over anomalous flood-control projects allegedly tied to dozens of lawmakers.
This story is written and edited by the Global South World team, you can contact us here.
