The Philippine’s national road improvement and management programme, which is partly financed by the World Bank, is described by the bank’s vice president Jim Adams as “the country’s main tool for modernizing infrastructure” (The Associated Press). “The World Bank said 382 km (237 miles) of roads had been built or upgraded across the Philippines in the first phase of the project and 975 km of existing road had been resurfaced and maintained across the archipelago,” writes Reuters. While according to AFP, “The second phase of the project would have involved improvements on 450 kilometres (279 miles) of national arterial roads and bridges.”

World Bank spokesman Peter Stephens explained that the postponement on making a decision for the second phase is because, “board members wanted to read a report into the first stage of the project by the World Bank’s internal investigation unit, whose findings were published on the same day phase two went for approval to the board” (Reuters). On 19 November Mr Stephens told The Associated Press that “he expects the board to discuss the projects again in the next few weeks because it wants “to be sure that all safeguards and precautions are in place.” Mr Stephens is quoted in Reuters highlighting the work the World Bank has already done with the government and civil society organisations to “put in place a number of pretty tough anti-corruption measures.” The Wall Street Journal though writes that the bank’s governing board blocked the loan, “because it felt bank staff hadn’t fully handled corruption issues in reviewing the loan – and hadn’t briefed Mr. Zoellick [the World Bank’s new president] on the proposal.”

According to The Wall Street Journal a bank official revealed that, “From 2003 to 2006 the World Bank rejected three successive rounds of bidding involving China State Construction because of “strong signs of collusion and excessive pricing.” The three rounds of bidding were for two World Bank financed projects, the contracts for which were worth US $33 million (Voice of America).

Ricardo Saludo, President Gloria Macapagal Arroyo’s cabinet secretary, said “the government was committed to curbing corruption and was working with the World Bank to address the issues of transparency in all projects” (The Associated Press). Although finance secretary Margarito Teves said that the Philippines “could also look elsewhere for loans,” according to AFP.

Meanwhile, the Financial Times reports that “the Department of Public Works and Highways says it will not be able to start many of the projects on time if the World Bank fails to approve the loan this year”.

Another issue apparently facing the World Bank is “whether to begin debarment proceedings against China State Construction and other firms accused of bid rigging, and recommend to their home countries that criminal charges be brought against them” (The Wall Street Journal).