"I'll go back to our campaign slogan. Government has lost its power to positively
affect our people's lives because of corruption. Therefore, the first priority has to be to address the issue of corruption.
Get government's power back so that they can empower the people, and empower them in so many areas -- education, in health,
in having a judicial system that works and so on and so forth."
"I will not only not steal,
but I will run after thieves. We lead by example."
2009 SWS Surveys of Enterprises on Corruption: Most
managers say renewal of local business permits is getting easier; 31% expect companies to donate to election campaigns
renewal of local business permits and licenses is easier now compared to three years ago, according to 70% of enterprise managers
in Metro Davao, 67% in Cagayan de Oro/Iligan City (CDO-I), 61% in Metro Cebu, 48% in CALABA, and 47% in Metro Manila, based
on the 2009 SWS Surveys of Enterprises on Corruption, conducted from November 3 - December 5, 2009 [Chart 1].
This is reported
in a new section on Transparency of Local Government Procedures in the 2009 SWS Surveys of Enterprises on Corruption.
special section of the survey, dealing with the 2010 elections, 31% of managers expect companies to donate to political campaigns.
of the 2009 SWS Surveys of Enterprises on Corruption, presented today by SWS President Mahar Mangahas at the"Forum
on the SWS 2009 Surveys of Enterprises on Corruption and Anti-Corruption Strategies"organized
by The Asia Foundation, Social Weather Stations, and the Hills Program on Governance- Asian Institute of Management at the
AIM Conference Center in Makati City, include:
consider public sector corruption to be high and stagnant. The farther from the local level, the more that corruption happens.
across agencies. It was notably up in trial courts, Armed Forces of the Philippines (AFP), Department of Justice (DOJ), Government
Service Insurance System (GSIS), Commission on Elections (Comelec), and Presidential Commission on Good Government (PCGG).
On the other hand, it was notably down in Commission on Audit (COA), Department of Finance (DOF), Department of Budget and
Management (DBM), Department of Transportation and Communication (DOTC), Presidential Anti-Graft and Corruption (PAGC), Department
of Environment and Natural Resources (DENR), and Office of the President.
3. On government
efforts to fight corruption, half of managers see improvement in transparency in bidding for a government contract.
4. The proportion
of enterprises solicited for a bribe was below the 2008 peak, but still a high 60%.
of managers find transparency in local government procedures. At least two-thirds do not use intermediaries in local business
of managers sense improvement in public access to information; three-fourths support passage of a strong law on right to information.
consider private sector corruption to be less than public corruption. However, the trend is flat.
of enterprises to fund an anti-corruption program is back to 5% of net income, similar to 2005 and 2006 after a slump in 2007.
reporting honest business practices in their sector remain few.
10. In voting
for President,"fighting corruption"and"creating jobs"are first and
second priorities of both managers and the public. Third priority is"promoting
a good business environment"for managers, but"eradicating poverty"for the public.
consider the business climate to be better than 2008.
also featured Prof. Michael Johnston, who presented his ideas on key strategies in fighting corruption in the country. (Prof.
Johnston's recent book, Syndromes of Corruption: Wealth, Power, and Democracy, won the 2009 Grawemeyer Award for Ideas Improving
World Order. He was also cited as one of the '100 Most Influential People in Business Ethics 2008'.)
to election campaigns
2004, donations from companies to the 2010 election campaigns are expected to come from fewer contributors, to be smaller
in size, and to be more voluntary.
In 2009, 31%
of managers expect that enterprises will donate to political campaigns, consisting of 17% saying companieswill
donate to more than one candidate for a single positionand 14% saying theywill donate to only one candidate for a single position[Chart
In 2004, 45%
of managers expected companies to donate to political campaigns, consisting of 33% saying theywill
donate to more than one candidate for a single positionand 12% saying theywill donate to only one candidate for a single position.
In 2009, 44%
of managers estimated the amount of company donations to political campaigns to beless
than Php50,000, 15% estimated it atPhp50,000-99,000, 19% atPhp100,000-499,000, 6% atPhp500,000-999,000,
and 12% atPhp1 million and above[Chart
In 2004, 41%
estimated it to beless than Php50,000, 15% estimated it atPhp50,000-99,000,
25% atPhp100,000-499,000, 6% atPhp500,000-999,000, and 9% atPhp1 million and above.
In 2009, 24%
of managers say the company donations to political campaigns arevoluntary,
64% say they arepartly voluntary and partly solicited, and 12% say they areall
In 2004, only
11% say these donations arevoluntary, 75% say they arepartly
voluntary and partly solicited, and 14% say they areall solicited.
that the two most important reasons for companies to donate to political campaigns are"the company believes in a candidates'
company might need help from a candidate in some future problems"(50%).
Two problems, in particular, have plagued the civil service: corruption (especially in the
Bureau of Customs and the Bureau of Internal Revenue) and the natural tendency, in the absence of a forceful chief executive,
of cabinet secretaries to run their departments as independent fiefdoms. Bribes, payoffs, and shakedowns characterized Philippine
government and society at all levels. The Philippine Chamber of Commerce and Industry estimated in 1988 that one-third of
the annual national budget was lost to corruption. Corruption also occurred because of cultural values. The Filipino bureaucrat
who did not help a friend or relative in need was regarded as lacking a sense of utang na loob, or repayment of debts.
Many Filipinos recognize this old-fashioned value as being detrimental to economic development. A 1988 congressional study
concluded that because of their "personalistic world view," Filipinos were "uncomfortable with bureaucracy, with rules and
regulations, and with standard procedures, all of which tend to be impersonal." When faced with such rules they often "ignore
them or ask for exceptions."
The Philippine Constitution
of 1987 and subsequent laws created anti-corruption agencies that, with other government and non-government initiatives, battle
Graft and corruption in the Philippines have been “decried since the Spanish colonization in the 16th century”, but much
has been done in the past five decades to combat the problem.
Anti-Graft and Corrupt Practices Act of 1960
This Act enumerates corrupt practices by public officers, declares them unlawful, and provides penalties including
prison terms and perpetual disqualification from public office. This law also requires a statement of assets and liabilities
every two years from all government personnel, and provides for confiscation or forfeiture of unexplained wealth.
Constitution of 1987
The Constitution holds public trust as the fundamental principle of office, and requires full integrity and accountability
of public officers and employees. The President, Vice-President, and members of the Supreme Court may be impeached for bribery,
graft, corruption, and betrayal of public trust. Other public officials can be prosecuted and removed from office under existing
The Constitution establishes four special anti-corruption bodies to foster the principles of honesty, integrity,
The Office of the Ombudsman serves as the people’s watchdog and protector by promptly investigating and
acting on complaints filed against public officials and employees. The primary institution for preventing graft and corruption,
it provides Deputy Ombudsmen for the military and three geographical subdivisions.
The Civil Service Commission promotes efficient and responsive public service as a career, strengthens the merit
system, and develops human resources. Its anti-corruption functions include promoting public accountability, enforcing ethical
standards and behavior, and conducting values orientation workshops.
The Commission on Audit examines government income and revenues,
as well as expenditures and performance in handling funds. Aside from ensuring financial accountability, the Commission may
also explore the economy, efficiency, legality, and regularity of government operations, along with effectiveness and impact
The Sandiganbayan, literally “pillar of the nation,”
is a special court with jurisdiction over civil and criminal cases involving graft and corruption. Subsequent legislation
placed the Sandiganbayan on par with the Court of Appeals, with the Supreme Court the only higher authority.
Constitution grants these organizations fiscal autonomy, so their commissioners can act independently to fulfill their duties
without fear of reprisal from other government agencies. The actions of these special bodies can be appealed only to the Supreme
Presidential Agencies and Non-Government Organizations (NGOs)
Each president has appointed agencies to investigate anomalous members of the administration, swiftly prosecute
accused executive department officials, coordinate efforts inhibiting graft and corruption, decentralize graft-busting, etc.
Examples are the President’s Committee on Public Ethics and Accountability (PCPEA) of President Aquino, and President
Arroyo’s Presidential Anti-Graft Commission (PAGC).
The National Coalition of Transparency, launched in 1989, was composed of over thirty anti-corruption NGOs, and
was significant in recognizing the private sector’s culpability in governmental corruption. Some organizations are
specialized, like National Citizens Movement for Free Elections (NAMFREL) focusing on election irregularities, and the Anti-Police
Scalawag Group (APSG) concerned with police corruption.
Other initiatives address the socio-cultural environment which permits graft and corruption. Examples include the
1987 Senate resolution to study strengths and weaknesses of Filipino character, with a view toward strengthening anti-corruption
values and attitudes in society, the Aquino administration’s Values Educational Program begun in public schools in 1988, and President Ramos’ Moral Recovery Program of 1992. The Ramos program called for active participation by all sectors of society, with the focus on individuals
and values formation.
The Philippines has government and NGO structures, agencies, and programs to win the war. Judging from the number
of cases filed by the Ombudsman and high conviction rates in the Sandiganbayan, there seems to be progress. However, judging
from national public opinion and international assessments, there is a long way yet to go.[6,7]
The long-term remedy for corruption
in the Philippines is individual character development, but existing institutions must be aggressively used in the short-term
The Philippines’ anti-corruption institutions are only as good as the individuals who administer them, and
integrity is the real problem. While development of honest citizens and public servants through values formation is the key
to long-term victory, existing institutions must be employed for the short term.
Short Term: Demonstrate Crime Doesn’t Pay
Anti-corruption laws and agencies must be used to fight theft from the government. Public officials and private businessmen must be convinced, by increasing
risks and decreasing benefits of dipping into public coffers, that such crime doesn’t pay.
Strict Accountability and Oversight
The Commission on Audit, responsible for financial accountability and legality of government operations, must diligently
uncover corruption. Individuals of the highest integrity and fortitude must be positioned to expose graft at every level,
and withstand pressure from individuals or syndicates trying to protect illicit dealings. The Office of the Ombudsman targeted
graft-prone agencies based upon several criteria, and classified as graft-prone 9 of 19 Departments, plus 7 other national
bureaus, boards, and administrations.
Prosecution and Punishment
The Ombudsman, responsible for graft prosecution, must work closely with the Commission on Audit to investigate
suspect officials and employees. Corrupt practices and corresponding terms of imprisonment are legislated, and the government
must zealously prosecute and punish offenders. The Sandiganbayan, a special court with jurisdiction over civil and criminal
graft cases, should grant leniency sparingly.
Restoring Stolen Assets
According to the Philippine National Police, public money lost to graft is usually not recovered. However, anti-graft
law provides for confiscation of unexplained wealth, and the Philippines must aggressively pursue recovery of public funds,
whether within the country or funneled to North America, Europe, etc. Allowing offenders to keep their illicit gains sends
the message that the benefits of corruption are worth the risk.
Long Term: Values Formation
The long-term solution to corruption is reforming socio-cultural norms by instilling new values. Conflict exists between traditional values relating to “obligation toward kinship,
friendship, and primary groups”, common in the rural and tribal contexts, and values necessary for nation building.
Values formation, or reformation, must engender a view of government posts as positions to serve, not personally profit. Citizens
need to understand that motorists who bribe the traffic cop with 50 pesos, instead of taking the 500-peso ticket, are fostering
Values Educational Program
The Aquino administration tasked the education ministry to develop values education, and the Values Educational
Program was established in 1988 for public elementary schools. In 1989, values education expanded and became a daily subject
for all four years of secondary education, and in 2002 the new "Makabayan (Love for the country)" program was introduced,
integrating social studies and other subjects with values education. Research indicates that Philippine youth educated
under these programs place much higher value on honesty than did traditional culture.
The Civil Service Commission enforces a code of ethics, and undertakes anti-corruption “values orientation”
workshops. The Ramos administration’s “Moral Recovery Program” called upon all sectors of society to reinforce
values, and the media, church, and other culturally valued sources denounce corruption. Organizations such as Rotary Club,
with its motto “Service Above Self” and four-point code of ethics posted in many Philippine towns, with the object
of fostering “high ethical standards in business and profession”, serve to reinforce new values. The growth
of evangelical and biblical Christianity is also impacting values reformation and reinforcement.[7, 8, 9]
The long-term remedy to corruption is being applied, as the first Filipinos to complete the entire values education
program are now reaching their mid-20s, and hopefully entering professions and positions where they will begin to change society.
However, metamorphosis will not occur overnight, and anti-corruption institutions must be used in the interim to continue
rooting out influential, well-entrenched individuals and syndicates with big stakes in the culture of corruption.
From 2007 TI Regional Overview - Philippines: Despite
efforts by the government and civil society corruption remains a serious problem in the Philippines. According to a recent
country report, the National Integrity System in the Philippines faces two major problems. Firstly, legislation tends to under-legislate
(as in the lack of protection for whistleblowers) or over-legislate (like, for instance, in government regulations). The second
problem is ‘more disturbing’: the study found that all the integrity pillars are ‘tainted by internal corruption
and are therefore heavily compromised’, ‘unable to perform their functions and operate effectively’. For
example, the constitutional commissions are not independent and the public procurement system is plagued with misappropriation
"The Pera ng Bayan website provides a feedback mechanism from the citizens to the Department of Finance
and its attached agencies utilizing relevant social network tools. The citizens should be able to report exemplary performance
of civil servants under the department as well as send information relevant to graft, improper action, negligence, lavish
lifestyle and other illegal practices of the same,"
An alliance of the academe, business sector, civil society organizations, and Church
that fights corruption. CAC's mission is to implement and support counter-corruption projects in the area of procurement reforms
and delivery of essential public services.
TRACE International, Inc. is a non-profit membership association that pools resources to provide
practical and cost-effective anti-bribery compliance solutions for multinational companies and their commercial intermediaries.
Transparency, corruption and governance matters, evidence-based
Does Corruption Create Poverty?
By Walden Bello Created: Apr
IGNORING CORRUPTION: Thai anti-riot policemen form a
line facing the 'Red Shirted' anti-government protesters in central Bangkok on April 22, 2010. Despite his corrupt dealings,
the ousted leader continues to enjoy widespread support. (Roslan Rahman/AFP/Getty Images)
The issue of corruption resonates in developing countries. In the Philippines, for instance, the slogan of the coalition
that is likely to win the 2010 presidential elections is “Without corrupt officials, there are no poor people.”
surprisingly, the international financial institutions have weighed in. The World Bank has made “good governance”
a major thrust of its work, asserting that the “World Bank Group focus on governance and anticorruption (GAC) follows
from its mandate to reduce poverty—a capable and accountable state creates opportunities for poor people, provides better
services, and improves development outcomes.”
Because it erodes trust in government, corruption must certainly
be condemned and corrupt officials resolutely prosecuted. Corruption also weakens the moral bonds of civil society on which
democratic practices and processes rest. But although research suggests it has some bearing on the spread of poverty, corruption
is not the principal cause of poverty and economic stagnation, popular opinion notwithstanding.
World Bank and Transparency
International data show that the Philippines and China exhibit the same level of corruption, yet China grew by 10.3 percent
per year between 1990 and 2000, while the Philippines grew by only 3.3 percent. Moreover, as a recent study by Shaomin Lee
and Judy Wu shows, “China is not alone; there are other countries that have relatively high corruption and high growth
Limits of a Hegemonic Narrative
The “corruption-causes-poverty narrative” has become so hegemonic that it has often marginalized policy issues
from political discourse. This narrative appeals to the elite and middle class, which dominate the shaping of public opinion.
It’s also a safe language of political competition among politicians. Political leaders can deploy accusations of corruption
against one another for electoral effect without resorting to the destabilizing discourse of class.
Yet this narrative
of corruption has increasingly less appeal for the poorer classes. Despite the corruption that marked his reign, Joseph Estrada
is running a respectable third in the presidential contest in the Philippines, with solid support among many urban poor communities.
But it is perhaps in Thailand where lower classes have most decisively rejected the corruption discourse, which the elites
and Bangkok-based middle class deployed to oust Thaksin Shinawatra from the premiership in 2006.
While in power, Thaksin
brazenly used his office to enlarge his corporate empire. But the rural masses and urban lower classes—the base of the
so-called “Red Shirts”—have ignored this corruption and are fighting to restore his coalition to power.
They remember the Thaksin period from 2001 to 2006 as a golden time. Thailand recovered from the Asian financial crisis after
Thaksin kicked out the International Monetary Fund (IMF), and the Thai leader promoted expansionary policies with a redistributive
dimension, such as cheap universal health care, a one-million-baht development fund for each town, and a moratorium on farmers’
servicing of their debt. These policies made a difference in their lives.
Thaksin’s Red Shirts are probably right
in their implicit assessment that pro-people policies are more decisive than corruption when it comes to addressing poverty.
Indeed, in Thailand and elsewhere, clean-cut technocrats have probably been responsible for greater poverty than the most
corrupt politicians. The corruption-causes-poverty discourse is no doubt popular with elites and international financial institutions
because it serves as a smokescreen for the structural causes of poverty, and stagnation and wrong policy choices of the more
The Philippine Case
The case of the Philippines since 1986 illustrates the greater explanatory power of the “wrong-policy narrative”
than the corruption narrative. According to an ahistorical narrative, massive corruption suffocated the promise of the post-Marcos
democratic republic. In contrast, the wrong-policy narrative locates the key causes of Philippine underdevelopment and poverty
in historical events and developments.
The complex of policies that pushed the Philippines into the economic quagmire
over the last 30 years can be summed up by a formidable term: structural adjustment. Also known as neoliberal restructuring,
it involves prioritizing debt repayment, conservative macroeconomic management, huge cutbacks in government spending, trade
and financial liberalization, privatization and deregulation, and export-oriented production. Structural adjustment came to
the Philippines courtesy of the World Bank, the IMF, and the World Trade Organization (WTO), but local technocrats and economists
internalized and disseminated the doctrine.
Corazon Aquino was personally honest—indeed the epitome of non-corruption—and her contribution to the reestablishment
of democracy was indispensable. But her acceptance of the IMF’s demand to prioritize debt repayment over development
brought about a decade of stagnation and continuing poverty. Interest payments as a percentage of total government expenditures
went from 7 percent in 1980 to 28 percent in 1994. Capital expenditures, on the other hand, plunged from 26 percent to 16
percent. Since government is the biggest investor in the Philippines—indeed in any economy—the radical stripping
away of capital expenditures helps explain the stagnant 1 percent average yearly growth in gross domestic product in the 1980s,
and the 2.3 percent rate in the first half of the 1990s.
In contrast, the Philippines’ Southeast Asian neighbors
ignored the IMF’s prescriptions. They limited debt servicing while ramping up government capital expenditures in support
of growth. Not surprisingly, they grew by 6 to 10 percent from 1985 to 1995, attracting massive Japanese investment, while
the Philippines barely grew and gained the reputation of a depressed market that repelled investors.
During the long
Arroyo reign, the debt-repayment-oriented macroeconomic management policy that came with structural adjustment stifled the
economy. With 20-25 percent of the national budget reserved for debt service payments because of the draconian Automatic Appropriations
Law, government finances were in a state of permanent and widening deficit, which the administration tried to solve by contracting
more loans. Indeed, the Arroyo administration contracted more loans than the previous three administrations combined.
the deficit reached gargantuan proportions, the government refused to declare a debt moratorium or at least renegotiate debt
repayment terms to make them less punitive. At the same time, the administration did not have the political will to force
the rich to take the brunt of bridging the deficit, by increasing taxes on their income and improving revenue collection.
Under pressure from the IMF, the government levied this burden on the poor and the middle class by adopting an expanded value
added tax (EVAT) of 12 percent on purchases. Commercial establishments passed on this tax to poor and middle-class consumers,
forcing them to cut back on consumption. This then boomeranged back on small merchants and entrepreneurs in the form of reduced
profits, forcing many out of business.
The straitjacket of conservative macroeconomic management, trade and financial
liberalization, as well as a subservient debt policy, kept the economy from expanding significantly. As a result, the percentage
of the population living in poverty increased from 30 to 33 percent between 2003 and 2006, according to World Bank figures.
By 2006, there were more poor people in the Philippines than at any other time in the country’s history.
Policy and Poverty in the Third World
The Philippine story is paradigmatic. Many countries in Latin America, Africa, and Asia saw the same story unfold. Taking
advantage of the Third World debt crisis, the IMF and the World Bank imposed structural adjustment in over 70 developing countries
in the course of the 1980s. Trade liberalization followed adjustment in the 1990s as the WTO, and later rich countries, dragooned
developing countries into free-trade agreements.
Because of this trade liberalization, gains in economic growth and
poverty reduction posted by developing countries in the 1960s and 1970s had disappeared by the 1980s and 1990s. In practically
all structurally adjusted countries, trade liberalization wiped out huge swathes of industry, and countries enjoying a surplus
in agricultural trade became deficit countries. By the beginning of the millennium, the number of people living in extreme
poverty had increased globally by 28 million from the decade before. The number of poor increased in Latin America and the
Caribbean, Central and Eastern Europe, the Arab states, and sub-Saharan Africa. The reduction in the number of the world’s
poor mainly occurred in China and countries in East Asia, which spurned structural readjustment policies and trade liberalization
multilateral institutions and local neoliberal technocrats imposed other developing economies.
China and the rapidly
growing newly industrializing countries of East and Southeast Asia, where most of the global reduction in poverty took place,
were marked by high degrees of corruption. The decisive difference between their performance and that of countries subjected
to structural adjustment was not corruption but economic policy.
Despite its malign effect on democracy and civil society,
corruption is not the main cause of poverty. The “anti poverty, anti-corruption” crusades that so enamor the middle
classes and the World Bank will not meet the challenge of poverty. Bad economic policies create and entrench poverty. Unless
and until we reverse the policies of structural adjustment, trade liberalization, and conservative macroeconomic management,
we will not escape the poverty trap. FPIF columnist Walden Bello is a representative of the party-list Akbayan
in the Philippine House of Representatives. Foreign Policy In Focus, www.fpif.org.
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that are indispensable for effective advocacy and action, on a global and national level.
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