Cayetano Exposes DPWH’s Extra 3.5% Cut in Projects
Senator Alan Peter Cayetano has raised concerns about the Department of Public Works and Highways (DPWH), revealing that up to 3.5% of the budget for every infrastructure project is taken by the agency through what is known as the Engineering and Administrative Overhead (EAO) fund. This allocation is meant to cover essential activities such as testing, quality control, project management, and pre-construction work.
However, Cayetano questioned the effectiveness of the fund, noting that despite its existence, many projects still fail to meet proper standards. He also linked the issue to so-called “ghost projects” that allegedly exist only on paper. According to him, the fund becomes a waste of taxpayers’ money if it cannot ensure the quality and integrity of government projects.
The senator further highlighted the imbalance in government priorities, pointing out that while the EAO fund has grown to ₱94 billion, the education sector continues to face a ₱55 billion budget shortfall. He stressed that such resources would be better spent on more urgent needs, such as education.
Cayetano urged Senator Sherwin Gatchalian, chair of the Senate Finance Committee, to conduct a thorough review of the EAO fund to determine whether it is truly serving its purpose.
Meanwhile, the DPWH is under heavy scrutiny over alleged “ghost” flood control projects—some poorly built, others never constructed at all. The controversy began in Bulacan, where projects worth millions were found incomplete despite being marked as finished.
In response, President Marcos froze ₱80 billion in infrastructure funds and ordered a fraud audit by the Commission on Audit (COA). Senators warned the problem could extend beyond Bulacan, with critics calling it large-scale corruption that wasted public funds meant to protect communities. The scandal has fueled public outrage and calls for accountability from DPWH officials and contractors.
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