The Department of Finance (DOF) has firmly denied that the Philippines has a ₱28.8 billion loan agreement with South Korea, pushing back against claims by South Korean President Lee Jae-myung that he halted the deal due to corruption risks.
In a statement released Wednesday, the DOF stressed, “With regard to the supposed PHP 28 billion official development assistance (ODA) loan between South Korea and the Philippines, the Department of Finance categorically clarifies that no such loan exists.”
Earlier this week, President Lee announced on Facebook that he ordered the immediate termination of a 700-billion won (about ₱28.8 billion) project in the Philippines, describing it as a “substandard project with potential for corruption.” He emphasized the move was crucial 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.”
Lee’s announcement was first carried by The Hankyoreh, followed by reports from The Chosun Daily. According to Korean media, the halted loan was tied to Seoul’s Economic Development Cooperation Fund (EDCF) and connected to a program under President Ferdinand Marcos Jr. to build around 350 modular bridges in rural areas across the Philippines. The plan had been flagged by South Korea’s Ministry of Strategy and Finance as a “poorly performing project” with suspected involvement of corrupt actors.
The controversy comes at a sensitive time for Manila, as Philippine lawmakers continue to probe alleged anomalies in multibillion-peso flood control projects. These investigations have highlighted possible collusion between politicians and contractors in diverting funds from infrastructure projects meant to protect communities from destructive typhoons.
Despite Lee’s assertions, the DOF reiterated that no such loan deal with South Korea currently exists.
