Philippines turns to blockchain system to foil corruption after mass protests

The Philippines has launched a blockchain-based transparency system for its Department of Public Works and Highways (DPWH), after more than 100,000 citizens moved to the streets to protest corruption in flood-control projects worth billions of dollars.

Last Sunday, allegations of massive government corruption in flood infrastructure projects led to demonstrations in the country. Protesters accused officials and contractors of pocketing funds meant for communities that were vulnerable to the country’s deadly flooding.

According to the evidence viewed by the public, many of the projects funded under the program were defective, or in some cases, never built. President Ferdinand Marcos Jr. was forced to address a problem that has plagued the Philippines for decades, which includes a blockchain system to reveal how public funds are used.

Philippines taps blockchain technology in Public Works department

Integrity Chain, a blockchain-based accountability system developed by BayaniChain Ventures, was launched on Wednesday. The platform records contracts and project progress from the DPWH on a tamper-proof ledger, out of reach of manipulators.

“We are turning government records into digital public assets that are immutable, verifiable, and openly validated,” BayaniChain chief executive and co-founder Paul Soliman told reporters. He added that once the program is adopted beyond the DPWH, it could help safeguard the Philippines’ annual budget, which is nearly $98 billion.

According to Public Works Secretary Vince Dizon, losses from corruption in flood-control projects may exceed a trillion pesos, potentially eclipsing the $10 billion in ill-gotten wealth allegedly amassed by the late Ferdinand Marcos and his associates during his dictatorial rule four decades ago.

Soliman said Integrity Chain is part of the initiative to improve the Philippines’ government accountability in matters of public fund spending. He asserted that the blockchain system will make accountability “permanent, measurable, and unavoidable.”

Like earlier introduced at the Department of Budget and Management, the platform directly ingests data from DPWH systems. It then mints each contract, budget release, and tracks the progress of projects as a digital public asset.

Integrity Chain to use civic organizations as validators

According to the network’s developers, the blockchain system uses an orchestration layer that handles data management, encryption, and validation, dubbed Prismo. It runs on Polygon’s Proof-of-Stake network, an Ethereum-compatible scaling solution tailor-made for consensus and transparency.

Each record is cryptographically time-stamped and anchored on-chain before being passed to independent validators to thwart “any attempt to withhold or manipulate information visible rather than hidden,” as BayaniChain’s chief growth officer and co-founder, Gelo Wong confirmed.

Validators include civic organizations, non-governmental groups, universities, and media institutions, whose reviews and attestations are logged as public records. Their keys will be secured with hardware protections, rotated periodically, and distributed randomly for each review. 

Wong explained that every action by a validator is also recorded as its own public asset to spot misconduct or bias. Wong explained that the validation process will occur through a one-organization-one-vote model.

Corruption exposed by flooding incidents

Since President Marcos Jr. took office in 2022, his administration has rolled out 9,855 flood-control projects nationwide worth 546 billion pesos ($9.5 billion). 

Many other initiatives that predated his term were intended to help parts of the country battling typhoons and flooding, which have been devastating the Southeast Asian nation for decades.

However, persistent flooding this year, including in urban centers, has exposed the government’s response shortcomings. Citizens have voiced their frustration on social media, questioning how billions in public funds had been used when many flood-control systems failed to protect communities.

“There’s a Tree of Emptiness plaguing my country. It’s called ‘Corruption'”. It’s time we cut it down! I stand with my fellow countrymen,” said one disgruntled native.

Senate inquiries in September, and witnesses testified that government engineers, politicians, and private contractors have “skimmed” funds through kickbacks from flood-control contracts.

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