WASHINGTON?The World Bank said Wednesday it had barred seven firms?four from China and three from the Philippines?from bidding on its projects due to alleged corruption.

The companies were involved in a road project in the Philippines financed by the Washington-based bank.

Investigation by the bank ?uncovered evidence of a major cartel involving local and international firms bidding on contracts under phase one of the Philippines? National Roads Improvement and Management Program,? the Bank said in a statement.

The Chinese firms were China Road and Bridge Corp., China State Construction Corp., China Wu Yi Co., and China Geo-Engineering Corp.

The Philippine firms were E.C. de Luna Construction Corp., Philip-Cavite Ideal International Construction and Development Corp., and CM Pancho Construction Inc.

In Manila, Budget Secretary Rolando Andaya said the Public Works Department had suspended the three Philippine firms on President Arroyo?s orders.

The department would decide within 15 days whether to blacklist the three for being barred by the World Bank, he said.

Andaya, Finance Secretary Margarito Teves, and Public Works Undersecretaries Ramon Aquino and Manuel Bonoan met with World Bank country representative Bert Hoffman in Malaca?ang to discuss the World Bank?s report.

?It?s a learning experience,? Andaya said after the 20-minute meeting.

?We agreed that improvements must be made in the system, such as having an internal auditor, a procurement adviser, and a civil society member present in the bidding,? he said.

Andaya said only stage one of the road project was put on hold. Stage 2, which cost more, would push through.

?Hoffman told us that the World Bank remains confident of the system of the Philippine government, and we were glad to hear that,? he said.

The World Bank?s probe ?closely analyzed the procurement process the firms participated in and conducted numerous interviews before closing the investigations and initiating sanctions proceedings against the entities,? the Bank said.

No World Bank funds from the project were disbursed to the now-sanctioned firms, the statement said, adding that it had stopped about $33 million from being awarded.

?This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank?s investigative and sanctions process,? said Leonard McCarthy, World Bank vice president for integrity.

?As the World Bank Group continues to ramp up its anti-corruption work, [it] will remain vigilant in investigating allegations and holding wrongdoers accountable,? he said.

The Bank was also in the process of conducting a worldwide review of its activity in the roads sector, McCarthy said. He did not elaborate.

China Road and Bridge Corp. was barred for eight years, China State Construction Corp. and China Wu Yi Co. for six years, and China Geo-Engineering Corp. for five years.

Philippine firm E.C. de Luna Construction Corp. and its sole proprietor, Eduardo de Luna, were both barred indefinitely?the first permanent debarments since 2004, the Bank said.

Philip-Cavite Ideal International Construction and Development Corp. and CM Pancho Construction Inc., were each barred for four years.

Another South Korean firm, Dongsung Construction Co., was separately barred in August 2008 for four years for alleged fraudulent and corrupt practices in relation to the project, the Bank said. AFP with Joyce Pangco Pa?ares and Lawrence Agcaoili