'Parking' and 'Sagasa': How are funds inserted in flood control projects?

Nearly every step of the national budget's journey allegedly becomes an opportunity for some government officials to "insert" funds, and later collect a percentage for themselves, Maki Pulido looks into how corruption begins in flood control projects.

According to the report in “24 Oras” on Tuesday, there are already insertions at the National Expenditure Program (NEP) as there is an alleged collusion among politicians, the Department of the Public Works and Highways (DPWH), and contracts, some civil society organizations said. 

“Yung ibang congressman matatalino o mauutak. Siguro ang gagawin nila ay para hindi mahalata na through insertion, sa NEP pa lang isasama na nila yung project,” said AJ Montesa of the People's Budget Coalition. 

(Some congressmen, who are probably clever or cunning, will not make it obvious that it's an insertion by including the project in the NEP.) 

The Department of Budget and Management will later submit the NEP to Congress where anomalies allegedly occur. 

Under House rules, once a bill, such as the national budget, has passed the plenary, it cannot be amended.

The ‘small committee’

However, in the House, even after passing the second and third readings, a so-called "small committee" was given the authority to modify the bill.

This is allegedly the second insertion.

The “small committee” for the 2025 national budget was composed of former House Committee on Appropriations chairperson Ako Bicol Party-list Representative Zaldy Co; former Marikina Rep. Stella Quimbo; former House Majority Leader Manuel Dalipe; and former House Minority Leader Marcelino Libanan. 

According to Navotas Representative Toby Tiangco, Co was the proponent of more than P13.8 billion worth of flood control projects in various districts under the 2025 national budget.

Tiangco has names for some of the techniques for funds to be inserted into the budget: “parking” and “sagasa” (crash). 

“Yung ‘parking’ po your honor, nakiusap ka sa district congressman, pumayag ang district congressman. Yung ‘sagasa’ po 'your honor is wala kang magagawa sa ayaw mo at gusto,” said Tiangco. 

(Your Honor, for ‘parking’, you plead with the district congressman and the district congressman agrees. Your Honor, for the ‘sagasa’, you can't do anything whether you like it or not.) 

From the House, the proposed budget will be sent to the Senate for another round of deliberations and amendments.

More anomalies

A Bicameral Conference Committee will be formed to consolidate the House and Senate versions of the budget. But Tiangco said that anomalies still happen even at this stage. 

“Kaya makikita mo siyang insertion kasi siningit tapos napunta sa ibang distrito na hindi naman ni-request ng congressman,” said Tiangco. 

(That's why you can see it's an insertion because it was squeezed in and went to another district that was not requested by the congressman.) 

Once passed by both the House and the Senate, it will be signed by the President and will be called the General Appropriations Act or GAA.

According to the House's own Congressional Policy and Budget Research Department, the final outcome of the process is that the DPWH budget in the GAA is significantly higher than what was originally requested in the NEP.

The same thing happened from 2021 to 2025. Under the 2025 budget, DPWH’s initially requested P900 billion under NEP became P1 trillion under the GAA.

Once it becomes a line item, the DPWH can start the bidding for the projects.

“Even before the bidding, alam na sino panalo,” said Baguio City Mayor Benjamin Magalong. “Ang unang qualification ng mananalong bidder is sino ba ang pinakamalaking magbigay ng porsyento…Ang next parameter sino sa inyo makakapagbigay ng pinakamalaking advance.” 

(Even before the bidding, it's already known who will win [...] The first qualification of the winning bidder is who can give the biggest percentage... The next parameter is who among you can give the biggest advance.) 

There are various methods for giving kickbacks. It's possible that the contractor gives the money to the proponent or politician. Or a DPWH staff member collects it to give to the politician.

A politician can also be the contractor themselves, or a DPWH staff member can act as a contractor, giving the politician a Standard Operating Procedure share and paying for the rented construction company license.

“Si Engineer Brice Ericson (Hernandez) po at Jaypee Mendoza, nagpapahiram po sila ng lisensya sa akin. So ako naman po, nagtiwala ako sa dalawa na ito na humanap po ng lisensya na gagamitin sa proyekto nila. Eh iisipin ko po ba na isa pong opisyal ng dpwh na nirerespeto ay gagawa po ng ghost project?” said contractor Sally Santos in a previous hearing. 

(Engineer Brice Ericson [Hernandez] and Jaypee Mendoza would lend their license to me. So for my part, I trusted these two to find a license that would be used for their project. Would I have thought that a respected DPWH official would create a ghost project?) 

Congressmen also receive a percentage for inserted projects that are "parked" in their districts, which is called a parking fee or a pass-through.

Due to this division of the people's money, the result is either ghost projects or substandard flood control projects, as they'd be lucky if even 30% of the budget is left to implement a single project.

“Maraming scheme eh,” said Magalong. “Kasi bulky ang peso minsan gusto ng funder is convert na deliver to dollars o euros kung ano denomination.” 

(There are many schemes. The peso is bulky, so sometimes the funder wants it converted and delivered in dollars or euros, whatever denomination.) 

According to the People’s Budget Coalition, insertions were what the government replaced the pork barrel with when it was removed during the Aquino administration.The insertions reportedly started to balloon in 2018.

“Yung pork barrel then nakalista yung amounts..Yung insertions hindi siya obvious…Sa ngayon, you really have to do like some forensic accounting,” said Montesa. 

(The pork barrel, back then, had listed amounts... The insertions are not obvious... Now, you really have to do some forensic accounting.) 

"Everyone is involved"

Former DPWH Secretary Rogelio Singson said that for corruption of this magnitude to occur, all branches of the government are involved.

“Lahat sila involved!” he said. 

“Lower shouse, senate, executive, let's face it. [Ang] liwanag naman 'di ba, nagtuturuan na ngayon. The contractor was the linchpin na pinagsama lahat 'yan,” Singson added. 

Magalong said that this is a highly organized crime syndicate in the government. He pointed to congressman Zaldy Co as one of the masterminds. 

Co’s family is the owner of Sunwest Construction and Development Inc., one of the 15 contractors that secured 20% of the total budget for flood control projects in the past three years. 

But Co said that it’s been a long time since he divested from the company. 

“Hirap na hirap silang banggitin pa yung isa sa mastermind, si Zaldy Co, hirap na hirap banggitin eh. For some reason ‘di ko rin alam kung bakit takot na takot,” said Magalong. 

(They find it so difficult to mention one of the masterminds, Zaldy Co, they find it so difficult to mention him. For some reason, I don't know why they are so scared.) 

For his part, Co was surprised that Magalong brought up his name. 

“I was surprised to hear Mayor Benjamin Maglong mention my name to the media in connection with the flood control projects without saying what exactly I did,” he said. 

“I strongly deny any wrongdoing with respect to his vague claim,” Co added. 

The lawmaker also said that he had heard that Magalong would be part of the independent commission investigating the flood control project, but the mayor was already speaking out against him based on gossip and speculation.

“...the investigation has not started but Mayor Magalong is already giving statement to the media on the subject and my alleged involvement based on rumors and hearsay,” said Co. — Vince Angelo Ferreras/RF, GMA Integrated News