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How to Find a Solution to Corruption in the Philippines

Corruption in the Philippines has been an accepted truth for many years. When running for a position, many politicians use the concept of being “clean” to separate themselves from the corrupt ones. However, politicians are just one of the many causes of corruption here in the Philippines.

Commonly associated with the act of giving or asking for money or bribes to win contracts or favors, for abusing political powers and diverting public funds, corruption is a common problem in all countries, developed or developing. One could truly say that corruption is a cancer of society. Indeed, even Pope Francis has called it a “gangrene of the people.”

From the everyday traffic enforcers to established institutions, corruption seems to be a mainstay here in the Philippines. These corrupt practices negatively impact economic growth as it deters investments too. In recent years, the adverse effects of the long-term corruption the country has been experiencing is felt more.

Cause of Corruption in the Philippines

Corruption in the Philippines, most unfortunately, has become a staple issue–one that seems to have no solution. The belief that politics is evil is further enforced by just how widespread it is. But why is corruption so widespread in the country?

The short answer is that there is a severe lack of transparency and accountability in the country. This is further worsened by monopoly on products and services. Coupled together, corruption becomes ever-present from a micro (such as small individual bribes in a private corporation) to macro-level (like the more problematic judicial corruption in the Philippines).

In fact, if we take a closer look we see many forms of corruption present in the Philippines.

The principal forms of corruption are extortion and bribery. Extortion happens when, say, a public officer explicitly demands or broadly hints for a payment in exchange for something he can grant. Bribery is the other side of the coin, and it is the one who seeks the favor who offers money.  Often this practice is called SOP or “facilitation.” This is achieved through the so-called envelope.

With money and gifts, one can buy deals, contracts and favors. Such payments, for example, can “encourage” a purchasing officer to buy one product instead of another. It can also convince a politician or a bureaucrat to award a contract, or to approve an administrative rule (such as building permits), or to release public funds to fictitious non-governmental organizations.

These bribe-taking incidents are also common among lesser public servants such as traffic enforcers. Many people have repeatedly reported being victimized at least once by a traffic enforcer for “swerving” (incidentally, there is no such offense in the law). When people try to argue their case without this knowledge, most enforcers would relent and say that they would not issue a ticket with the implicit understanding of a bribe. Corruption more easily spreads when there are opportunities, when risk is minimal in comparison to benefits obtained. In many cases, this happens when people have enormous autonomy to approve contracts to the bribe-giver.

Effects of Corruption in the Philippines

Corruption has many adverse effects on a state, most of which are especially felt economically.

First and foremost, it is a known deterrent to various investments because it can negatively affect assessments on the risks and returns associated with an investment. This is the reason we started the project “Integrity for Jobs”, creating Integrity Circles in LGUs that are committed to ethical operations.

Additionally, corruption will direct talent away from productive activities toward rent-seeking activities. More important, while corruption affects the whole economy, it seems to target the poor. It hurts the poor as it introduces costs and benefits that create a bias against the poor; corruption can causally be linked to the worsening of income distribution.

Solution for Corruption in the Philippines

The question of how to prevent corruption in the Philippines is always present, but the best way to answer it is by understanding its root causes.

Corruption flourishes when someone has monopoly power over a product or service and has discretion to decide how much to receive, and where accountability and transparency are weak. Incompetence and corruption are also closely linked together. So, to fight corruption, we—and that includes all of us—must reduce monopoly power, reduce discretion and increase accountability in many ways.

Reducing monopoly power means enabling competition; in this context we are so happy that the Philippines has competition legislation in place and has the Philippine Competition Commission (PCC) to implement the law. However, it would be great if the PCC would be allowed to do its job without court interference, in the interest of removing monopolies/duopolies so that corruption can be properly addressed, reduced and finally eliminated.

Limiting discretion means clarifying the rules of the game and making them available to everyone. This includes putting government contracts and procurement plans online, creating online manuals on what is required to obtain a permit, build a house, start a business and so forth. Making sources like these available deter corruption as it makes it easier to cross check these processes and ensure that everything is in order.

Finally approving the freedom of information (FOI) bills in both Houses of Congress would be another big step in the right direction. We have been talking about the FOI for too long already. In fact, it is arguable that corruption cases, such as Philhealth corruption, could have certainly been avoided if the FOI bill was already approved.

Another example for reducing discretion: Simplify the tax code, make it simpler to understand and thereby reduce discretion of BIR employees. This is how we can lessen corruption from private entities, as well as tax evasion. A clearer set of taxation laws helps people recognize what they need to contribute and potentially where their taxes should go as well.

Enhancing accountability means many things, and creative leaders in the government and the private sector use a remarkable variety of methods. One way to improve accountability is to improve the measurement of performance. Another method is listening and learning from businesses and from citizens. This includes mechanisms for public complaints, but it goes beyond the reporting of individual instances of abuse of corrupt systems.

Accountability is also increased by inviting outsiders to audit, monitor and evaluate. This is exactly the reason we created Integrity Circles as one of the main avenues to address accountability, transparency and integrity. We did this in the Integrity for Jobs (I4J) project, a project co-funded by the European Commission and the Konrad Adenauer Foundation. We started with nine LGUs and are happy to announce that 60 LGUs are now part of this endeavor. Allow me to add that Integrity Circles are composed of people working in the LGU, being involved in business, and representing civil society (in many cases the Church). But let’s not forget the press; the media can be and should be an important source of accountability.

Corruption, Morality, and Inclusivity

What about ethics and morality? Corruption has always been linked to dishonesty and “dirtiness”. In fact, one of the most prevalent effects of corruption in the Philippines is giving fuel to the belief that politics is inherently dirty.

Successful leaders in the government and the private sector must set a good example. As mentioned above, the key to fighting corruption are better systems that provide better incentives for imperfect human beings to perform in the public interest—and to avoid corruption.

Often it is said that corruption is unavoidable, that it is common practice, that those who refuse are ridiculed as “religious” or “scrupulous” or “holier than thou.” As many give in to it, a state of permissiveness arises. Integrity becomes harder to fulfill, especially when one is confronted with issues like career advancement, breaks in life, and earning of income, unless one is firmly rooted on solid principles and has been nurtured in an upright manner.

Corruption cannot be tackled without a strong civic society. The population must have powers to challenge politicians, bureaucrats and erring company managers. Governments must agree to introduce transparency in their operations and allow information to flow freely. The Right to Information Act in India that allows citizens to demand information from bureaucrats has given much hope to activists in India. In the Philippines the Freedom of Information bills are not moving in Congress.

Barriers to participation in the economic life of a society must be removed. Corruption has its losers—the population at large and those who are denied participation in economic activity. When those who are hurt by corruption are allowed to voice their discontent, the chances of a decline in corruption increase.

How to Stop Corruption in the Philippines?

Considering how ingrained corruption is in the country, finding the answers to this question can be quite difficult.

There are many studies concerning corruption, which tells us that it is a common phenomenon globally. Finding a solution to corruption in the Philippines will undoubtedly take time and it will take both institutional and cultural changes to enact it well. However, on a micro-level, staying morally upright is one of the best ways to combat the ever-growing corruption.

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