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Fighting corruption in the Philippines

By Euney Marie Mata-Perez on August 3,2023.

I WAS invited by the Tax Accountancy Association Union of Chinese Taipei (Taauct) to speak during its Corporate Integrity and Sustainable Development Asia Regional Seminar recently held in Taiwan. Deputy ministers from the Ministry of Finance and Ministry of Justice were guest speakers, and other speakers included officers of the Asia-Oceania Tax Consultants Association and of the Tax Institute of Hong Kong. Around 200 participants attended the seminar.

Corruption perception index Taiwan ranked 25th in Transparency International’s 2022 corruption perceptions index (CPI), while Hong Kong ranked 12th. The Philippines ranked 116th. The CPI ranks 180 countries and territories around the world by their perceived levels of public sector corruption, scoring on a scale of 0 (highly corrupt) to 100 (very clean).

Other Asian countries in the top tier are Japan (18th) and Singapore (5th). The only other Asian nations which ranked lower than the Philippines are Laos (126th) and Myanmar (157th). Thailand ranked 101st, Indonesia 110th, Vietnam 77th and Malaysia 61st.

The Philippine’s latest CPI score was 33, unchanged from the previous year, and its lowest score in the index. It dropped from the 2014 score of 38, the country’s highest.

Corruption legal framework
The Philippines actually has several anti-corruption measures that collectively criminalize corruption, especially bribery, involving domestic government officials. These laws include: 1987 Constitution; Anti-Graft and Corrupt Practices Act of 1960; Code of Conduct and Ethical Standards for Public Officials and Employees and its implementing rules; Anti-Money Laundering Act of 2001 (AML Act); Anti-Red Tape Act of 2007; Ease of Doing Business Act; Executive Order (EO) 43 (forming the Presidential Anti-Corruption Commission) and EO 73 (expanding the powers of the Presidential Anti-Corruption Commission); and Anti-Plunder Act.

Our Revised Corporation Code, Republic Act (RA) 11232, which was enacted in 2019, also penalizes graft and corruption in the private sector and provides measures related to retaliation against whistleblowers.

We also have several enforcement agencies, namely, the Office of the Ombudsman, Office of the Special Prosecutor, Department of Justice, Presidential Anti-Graft Commission, and the Anti-Money Laundering Council.

However, despite our legal framework and enforcement agencies, the Philippines is severely lagging behind in the CPI, and, sadly, the perception that corruption flourishes in the Philippines continues. And the difference is in enforcement, an area where Taiwan and Hong Kong have been more effective and are much way ahead of us.

In any case, in my brief speech before the Taauct members in Taiwan, I cited a few measures that should help our country in the anti-corruption drive, as discussed below.

Digitalization BoC and BIR
The Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) are supposedly ramping up their respective anti-corruption campaigns by modernizing their operations through digitalization. Digitalization has been identified as the key in transforming and eradicating corruption within the government’s two main revenue agencies. The BoC is undertaking the Philippine Customs Modernization Program (PCMP), with support provided by the World Bank. The PCMP aims to streamline operations and processes and support the reform agenda by upgrading BoC systems, procedures and operational activities. The project focuses on transitioning from a largely manual and paper-based organization to a modernized BoC, achieving global standards and full modernization by 2024.

Ease of doing business
RA 11032, or the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018 (EODB Law),” is an act that aims to streamline the current systems and procedures of government services, and also to help curb corruption. The Act’s main features include the following: standard processing time for government transactions; requiring all concerned government agencies and offices to set up a Citizen’s Charter; a document containing a set of written standards; seeking to fast-track business registration and permit renewals; automating business registration process; zero contact policy; and accountability. Officials and employees who act against the EODB Law may face administrative and criminal liability. Some of the violations include: refusal to accept and process an application; imposition of requirements or fees not listed in the Citizen’s Charter; collusion with fixers; and missed deadlines.

Promotion of good governance in public sector: What should also not be missed is the promotion of good governance in the public sector, which can be done through the Governance Commission for Government-Owned or -Controlled Corporations (GCG). The GCG is seeking to strengthen its mandates through amendments to RA 10149 or the “GOCC Governance Act of 2011.”

Fight against corruption
The fight against corruption should be taken very seriously. Corruption is a curse that promotes discord, inequality and even exacerbates poverty. It is also a factor that affects peace and security. (The three-lowest ranking countries in Transparency International’s CPI rankings are Sudan, Syria and Somalia). It can never be justified.

In his second State of the Nation Address (SONA) on Monday, July 24, 2023, President Ferdinand “Bongbong” Marcos Jr. directly addressed corruption for the first time (he was silent on this in his first SONA address). This time, he said: “We cannot tolerate corruption or incompetence in government.” He vowed to “shut down the illegal activities” and “dismantle the network of operations” of drug rings in the country. He also warned smugglers and hoarders of agricultural products that their “days are numbered.” We hope that this message shall be taken and implemented seriously.

We know that the corruption problem in our country runs very deep. It is also brought about by many factors, including poverty and rampant vote-buying, where government officials recover their loot from overpriced procurement afterwards, among others. It is also brought about by the lack of integrity and moral values of some of our people.

Nonetheless, we continue to hope and advocate for effective anti-corruption measures. We, from the private sector, whether as business people or voters, have much to contribute. We also have the power to deter corruption. Thus, we cannot just sit by.

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Euney Marie J. Mata-Perez is a CPA-Lawyer and the Managing Partner of Mata-Perez, Tamayo & Francisco (MTF Counsel). She is a corporate, merger and acquisition, and tax lawyer, and has been ranked as one of the top 100 lawyers of the Philippines by Asia Business Law Journal.

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