Running a country requires control of all sorts of things, including those we may not like to admit to. Well, corruption has certainly hit the headlines recently. People are talking about it openly, and it seems from some of the comments on the various news articles about corruption that people are becoming angry. In the fairly recent past as I have said in this column before, corruption was not something that was talked about, any mention of it or questions, particularly by foreigners, was met with mumbling, and a quick change of subject. It is just the way things are and nothing can be done to change it, corruption is ingrained and endemic, so just keep quiet and accept it.
What seems to be becoming apparent now is that such mega corruption as there at least appears to be; “pork barrel” funds unaccounted for, the Bureau of Customs, the rumors of $30-million bribes for the supply of trains, the “missing” Malampaya production share for Palawan and Batangas, etc., takes enough money out of the economy as to affect gross domestic product (GDP). The value of goods smuggled and on which payment of import tax is avoided is reportedly about $20 billion a year, assuming an average tax liability of say 30 percent that is $6 billion a year gone from the economy, which together with the missing P10 billion [about $2.5 billion]from the Priority Development Assistance Fund, or “pork barrel” together represent 4 percent of reported GDP gone into people’s pockets. No doubt these exposés are only the tip of the iceberg, the amounts of money involved in corruption in the Philippines are enormous and have been increasing steadily, even dramatically over the last few years and are more widespread.
Anybody trying to do business in the Philippines is exposed to the unavoidable risk of corruption. It is a cancer in society and like cancer often does, it has metastasized—it has spread and grown. There has always been corruption and people will say that in the time of President Ferdinand Marcos for example, there was at least some level of control over corruption, amounts that had to be added on to prices to cover facilitation were “reasonable” and if paid brought the desired result. This holds true in Indonesia today, the cost of facilitation is reasonable and if paid everything goes smoothly. Today in the Philippines, it is very difficult to estimate the cost of facilitation, the amounts are huge as a percentage of anticipated profits from a business undertaking, no longer is it a standard 20-percent mark up on prices to the Department of Public Works and Highways for example, the people who require the payment are looking at mark up’s for themselves of anything up to 100 percent. Corruption is out of control, and this is evidenced by the amounts of money now being talked about in connection with the few instances I have cited above. To make things worse, there is no certainty at all that if a corrupt payment is made that it is going to bring about the desired result, the amount can change and more payments be required from one stage in a business venture development to the next—no honor among thieves.
The good thing about the current exposes, and undoubtedly the more yet to come, is that big time corruption is now out in the public arena and the public through the newspapers and social media have the opportunity, which they are taking, to comment on it and the comments are very negative showing clearly that most Filipinos do not like corruption and see it for the cancer that it is. This combined with the mindless flaunting of great wealth; videos of extravagant birthday parties in posh hotels in California being posted on Facebook, Lamborghinis and Maseratis being parked ostentatiously around Manila by certain members of the “big-time corrupt society” bring about a justifiable public anger hitherto uncharacteristic.
In the Transparency International league table of perceptions of corruption, the Philippines now stands at position 104 out of 134, while Indonesia is at 115. With the current bad press on the topic, it is almost certain that the Philippines will drop in “the charts” when they are next issued, and what hope then to attract foreign investment to lift the 28 percent and more out of grinding poverty?
Corruption in the Philippines needs to be brought under control as a step toward its eradication; we see now that by pretending it doesn’t exist and not wanting to talk about it just show it has grown to the outrageous level that it is now at. That there should even be suspicions that senior members of government are acting as “Godfathers” over smuggling to the value of $20 billion a year is an unprecedented situation other than in the most despotic states.
Mike can be contacted at email@example.com