TACLOBAN CITY, Philippines — The Department of Public Works and Highways (DPWH) is pushing for the restoration of funding in the 2027 national budget for the P3.2-billion Tacloban-Palo Diversion Road, popularly known as the “Grand Canal.”
The project, which is currently 49.3 percent complete, saw its 2026 funding stalled following a major overhaul of the agency’s project lineup. DPWH Eastern Visayas Regional Director Edgar Tabacon clarified that while no new funds were allocated for 2026, construction remains ongoing using the remaining 2025 budget.
“We are upbeat that the project will be funded next year, given its significant impact in curbing traffic congestion and flooding in this city and the nearby town of Palo,” Tabacon said.
The “Grand Canal” is a 3.2-kilometer, four-lane highway that features a unique 16 to 22-meter flood control and drainage system built directly along the center of the road. This design is intended to mitigate severe flooding in several low-lying villages in Palo and Tacloban, which often remain submerged for weeks during the typhoon season.
In addition to its drainage capabilities, the diversion road will include bike lanes, sidewalks, and solar streetlights. Local officials hope the infrastructure will transform idle, flood-prone lands into prime commercial areas, stimulating economic growth in the region. To date, the project has already received P2.3 billion in cumulative funding from previous budget cycles.