What is blockchain and how is it expected to stop corruption?

For transparency and to discourage corruption, the Department of Public Works and Highways (DPWH) the past week partnered with the Blockchain Council of the Philippines (BCP) to develop a publicly accessible blockchain-powered digital ledger initially for foreign-assisted infrastructure projects.

The partnership involves the creation of an “Integrity Chain” —a real-time dashboard that tracks project spending and progress, enabling citizen feedback and anomaly reporting, and providing tamper-proof records to deter corruption.

As part of efforts to promote transparency in the government, the Department of Budget and Management (DBM) also recently partnered with BayaniChain and ExakIT Services to create blockchain.dbm.gov.ph, the country’s first blockchain-backed budget transparency platform.

The portal records Special Allotment Release Orders (SAROs) and Notices of Cash Allocation (NCAs) as verifiable, on-chain entries allowing the public to inspect how funds are authorized and released.

But, what exactly is blockchain and how can it actually help quell corruption in the government?

The IBM defines blockchain as an immutable or unchangeable and tamper-proof digital ledger or record of all transactions within a network.

Scam Watch Pilipinas co-founder Art Samaniego, an IT expert and technology journalist, described the appeal of blockchain.

He said that with the technology, “budget entries become permanent, auditable, and public” and “journalists, civil society, or citizens could trace the path of a fund from allocation to completion (if appropriately recorded).”

The World Economic Forum (WEF), in a blog entry, explained that blockchain has the potential to protect public procurement process against weaknesses such as corrupt acts both on public and private sides.

“In the planning stage, public officials create evaluation criteria by which bidding companies will be judged. In the bidding evaluation stage, public officials assign scores to companies using the evaluation criteria as their rubric," the WEF said.

"Without transparency, there are many opportunities for compromised public officials to rig the outcome of the evaluation process. Evaluation criteria could be retroactively changed or company bids altered, for example," it added.

"Blockchain can guarantee any change is public, the original information is retained and there is a record of who made the change,” according to WEF.

Department of Information and Communications Technology Secretary Henry Aguda, in a statement, expressed confidence in blockchain's potential to curb corruption.

“Naniwala po ako na sa blockchain, may forever. Ibig sabihin, bawat transaksyon ay nakatala at hindi na pwedeng baguhin—isang matibay na sandigan para sa transparency at accountability,” Aguda said.

(There is forever with blockchain. Each transaction is recorded and couldn't be changed. This is a strong basis for transparency and accountavity.

Public Works Secretary Vince Dizon said blockchain technology could prevent tampering of records since the digital ledger is immutable.

“Using this technology… hindi mo na mado-doktor (one can no longer manipuate data),” Dizon said.

What’s the catch?

Samaniego, however, warned that while blockchain is indeed tamper-proof it is “blind to truth… it preserves what’s entered, but cannot verify whether it’s honest.”

“If a padded project, ghost spending, or false invoice is uploaded, the system immortalizes the lie. Garbage in, permanent record out,” he said.

The IT expert also raised the issue of validators who “in theory… are the ones who check records before adding them to the chain.”

“But who are they? Which agency? Which company? The real power in a blockchain system rests with whoever controls the validators. If a single agency or private provider controls who becomes a validator, decentralization collapses," Samaniego said.

"Rules can be changed behind closed doors. Access can be restricted,” she added.

“Blockchain is not a silver bullet. Let’s be clear. Blockchain can make cover-ups harder. It can create audit trails. It can make it obvious when someone tries to alter records. But it cannot detect collusion," the Scam Watch Pilipinas co-founder said.  

"It cannot expose ghost projects hidden in plain sight. It cannot replace auditors, whistleblowers, or independent oversight,” she added. –NB, GMA Integrated News