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flag-philippines.png"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."

   President-Elect Benigno Aquino  

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11 February 2010

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

Social Weather Stations

The annual 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.

In another special section of the survey, dealing with the 2010 elections, 31% of managers expect companies to donate to political campaigns.

Highlights 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:

1. Managers consider public sector corruption to be high and stagnant. The farther from the local level, the more that corruption happens.

2. Sincerity in fighting corruption varies 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%.

5. Majority of managers find transparency in local government procedures. At least two-thirds do not use intermediaries in local business permit renewals.

6. Two-fifths of managers sense improvement in public access to information; three-fourths support passage of a strong law on right to information.

7. Managers consider private sector corruption to be less than public corruption. However, the trend is flat.

8. Willingness 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.

9. Managers 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.

11. Managers consider the business climate to be better than 2008.

The forum 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'.)

Donations to election campaigns

Compared to 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 companies will donate to more than one candidate for a single position and 14% saying they will donate to only one candidate for a single position [Chart 2].

In 2004, 45% of managers expected companies to donate to political campaigns, consisting of 33% saying they will donate to more than one candidate for a single position and 12% saying they will donate to only one candidate for a single position.

In 2009, 44% of managers estimated the amount of company donations to political campaigns to be less than Php50,000, 15% estimated it at Php50,000-99,000, 19% at Php100,000-499,000, 6% at Php500,000-999,000, and 12% at Php1 million and above [Chart 3].

In 2004, 41% estimated it to be less than Php50,000, 15% estimated it at Php50,000-99,000, 25% atPhp100,000-499,000, 6% at Php500,000-999,000, and 9% at Php1 million and above.

In 2009, 24% of managers say the company donations to political campaigns are voluntary, 64% say they arepartly voluntary and partly solicited, and 12% say they are all solicited [Chart 4].

In 2004, only 11% say these donations are voluntary, 75% say they are partly voluntary and partly solicited, and 14% say they are all solicited.

Managers reported that the two most important reasons for companies to donate to political campaigns are"the company believes in a candidates' platform" (68%) and "the company might need help from a candidate in some future problems" (50%).


Country Map
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."

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 problems.



"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,"

Pera Natin ‘to! (It’s Our Money!)

A coalition of multi-sectoral organizations, which seeks to contribute significantly to the reduction of corruption in the Philippines.

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.

Transparent Accountable Governance (TAG)


Ombudsman Act of 1989




Rules Implementing the Code of Conduct and Ethical Standards for Public Officials and Employees

Philippine Political and Legislative Structure




Presidential Anti-Graft Commission

Commission on Audit

Department of Justice

Department of Finance,Revenue Integrity Protection Service

Medium-Term Philippine Development Plan 2004-2010 >>> Chapter 21: Anti-Corruption

Department of Social Welfare and Development INTEGRITY DEVELOPMENT ACTION PLAN

Philippine Integrity Fund



Philippine Star

Manila Bulletin

Manila Standard Today



Business World

Business Mirror

All Manila Newspapers

All Philippine Newspapers

Philippine Center for Investigative Journalism (PCIJ)


Management Systems International (MSI)

MSI Integrity Project

MSI Budget Monitoring Project Summary

MSI Budget Monitoring Project Description

MSI Rule of Law Effectiveness Project

MSI Millennium Challenge Account- Philippines Threshold Plan Technical Assistance Project

MSI Millennium Challenge Account Philippines Threshold Program Summary

Millennium Challenge Corporation: Combating Corruption by Strengthening Government Institutions; Threshold Program Overview


USAID Anticorruption Assessment Handbook Summary

USAID Anticorruption Assessment Handbook Text

USAID Democracy & Governance - Fighting Corruption

General Country Profile (US State Department)

Public Anti-Corruption Initiatives - Philippines Profile (Business Anti-Corruption Portal)

Government Portal

Australia Philippines Development Assistance Program Anti-Corruption Plan 2008-2011 (PDF, 9 pp.)

Asian Development Bank - Anticorruption and Integrity

World Bank - Anticorruption

World Bank Institute - Governance & Anti-Corruption

World Bank Philippine Public Accountability Profile

OECD - Fighting Corruption

Anti-Corruption Initiative for Asia-Pacific

APEC Anti-Corruption and Transparency Experts' Task Force

Global Integrity Report 2008

Transparency International

Transparency International - Philippines Page

Transparency International Philippines Chapter Website

National Integrity Systems - Transparency International - Country Study Report

Business Anti-Corruption Portal Country Profile

Construction Sector Transparency Initiative - Philippines

Makati Business Club

Partnership for Transparency Fund...providing small grants to CSOs in developing countries to fight corruption

U4 Anti-Corruption Resource Centre assists donor practitioners in more effectively addressing corruption challenges through their development support. U4 serves eight development agencies.

More General Anti-Corruption Links


Losing the fight against corruption After more than nine years in power, the Arroyo administration has all but lost the fight against corruption. The World Bank-sponsored governance indicators show that in 2000, the year before Arroyo assumed power, the Philippines was better than 36.4% of all governments in the study. In 2008, that percentile rank on control of corruption was down to 26.1%.

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Transparency, corruption and governance matters, evidence-based

Does Corruption Create Poverty?

By Walden Bello
Created: Apr 25, 2010

Ignoring corruption���¢�¯�¿�½���¦Thai anti-riot policemen form a line facing the 'Red Shirted' anti-government protesters on Silom Road in the financial district of central Bangkok in the early hours of April 22, 2010. Despite Thaksin���¢�¯�¿�½�¯�¿�½s corrupt dealings, the ouste
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.”

Not 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 rates.”

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 transparent technocrats.

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.

When 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.




Restoring Trust
The International Anti-Corruption Conference is the world premier forum that brings together civil society, heads of state and the private sector to tackle the increasingly sophisticated challenges posed by corruption.  The IACC takes place every two years in a different region of the world, and attracts up to 1500 participants from over 135 countries. The conference serves as the premier global forum for the networking and cross-fertilisation that are indispensable for effective advocacy and action, on a global and national level.

The 14th IACC was held 10 - 13 November, 2010 jointly hosted by the IACC Council, the National Anti-Corruption Commission, the Royal Thai Ministy of Justice and Transparency Thailand and Transparency Internationalat  the Queen Sirikit National Convention Centre  located in the heart of Bangkok.


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