MAPping the Future

(This is part of the author’s presentation in his DPI 543 Corruption: Finding It and Fixing It course at the Harvard Kennedy School under Prof. Jeeyang Rhee Baum.)

 

The Philippines is perceived to be one of the most corrupt countries in the world. Of the 180 countries in the world, the Philippines ranked 116 in terms of being least corrupt. This means that the Philippines is almost in the top one-third of being the most corrupt countries in the world. This ranking is based on the Corruption Perceptions Index (CPI) published by Transparency International.

According to CPI, the Philippines scored a total of 33 points out of 100. Even as far back as 2012, the Philippines has fluctuated around the same CPI score, with the highest score being 38 points in 2014 and the lowest being 33 points in 2021 and 2022. To further contextualize how low the Philippines scored, the regional average CPI score for the Asia Pacific region is 45, with 0 as highly corrupt. And of the 31 countries and territories in the Asia Pacific region, the Philippines placed 22nd (tied with Mongolia).

It must be noted, however, that the CPI measures perceptions of corruption and not necessarily the reality of the state of corruption. What the CPI reflects are the views of experts or surveys of business people on a number of corrupt behaviors in the public sector (such as bribery, diversion of public funds, nepotism in the civil service, use of public office for private gain, etc.). The CPI also measures the available mechanisms to prevent corruption, such as enforcement mechanisms, effective prosecution of corrupt officials, red tape, laws on adequate financial disclosure, and legal protection for whistleblowers. 

These data are taken from other international organizations, such as the World Bank, the World Economic Forum, and from private consulting companies and think tanks.

Of course, measuring actual corruption would be quite difficult, especially as it involves under-the-table activities that are only discovered when they are prosecuted, like in the case of the ill-gotten wealth of the Marcoses which was estimated to be up to $10 billion based on now deleted Guinness World Records as the ‘biggest robbery of a government.’ Nevertheless, there still exists a correlation between corruption and corruption perceptions.

Corruption does not come in a single form as well. In a 2007 study, Michael Johnston, a political scientist and professor emeritus at Colgate University in the United States, studied four syndromes (categories) of corruption that were predominant in Asia. He cited Japan, Korea, China, and the Philippines as prime examples of each category.

The first of these categories is Influence Market Corruption, wherein politicians peddle their influence to provide connections to other people, essentially serving as middlemen. The second category is Elite Cartel Corruption, wherein there exists networks of elites which may collude to protect their economic and political advantages. The third form of corruption is the Official Mogul Corruption, wherein economic moguls (or their clients) are usually the top political figures and face few constraints from the state or from their competitors.

Finally, there is the form of corruption that the Philippines is familiar with. The third category, Oligarch-and-Clan Corruption, is present in countries with major political and economic liberalization and weak institutions. Corruption of this kind has been characterized by Johnston as “disorderly, sometimes violent scramble among contending oligarchs seeking to parlay personal resources into wealth and power.” Other than the Philippines, corruption in Bangladesh, India, Malaysia, Nepal, Pakistan, and Sri Lanka fall under the same syndrome.

In the Philippines, Oligarch-and-Clan Corruption manifests itself in the political system. As Johnston noted, in this kind of corruption, there is difficulty in determining what is public and what is private (i.e., who is a politician and who is an entrepreneur). Oligarchs attempt to use their power for their private benefit or the benefit of their families. From the Aquinos, the Binays, the Dutertes, the Roxases and, most notoriously, the Marcoses, the Philippines is not a stranger to political families. In a 2017 chart by Todd Cabrera Lucero, he traced the lineage of Philippine presidents and noted them to be either related by affinity or consanguinity. 

Corruption in the Philippines by these oligarch families is not unheard of. In fact, the most notable case of corruption in the Philippines was committed by an oligarchic family – the Marcos family. The extent of the wealth stolen by former dictator Ferdinand Marcos and his wife has been well-documented. In fact, several Supreme Court cases clearly show the extent of the wealth that the Marcoses had stolen.

In an Oligarch-and-Clan system of corruption, oligarchs will also leverage whatever governmental authority they have to their advantage. Going back to the Marcos example, despite their convictions, the Marcoses have managed to weasel their way back into power, with Bongbong Marcos becoming the 17th President of the Philippines despite his conviction for tax violation. The Marcoses are not alone in this. Several politicians have also been convicted of graft and corruption (or have at least been hounded by allegations of corruption) and still remain in politics. As observed by Johnston in his article, though Ferdinand and Imelda Marcos are the popular images of corruption in the Philippines, he also noted that there are entrenched oligarchs throughout the country.

Finally, factions also tend to be “unstable and poorly disciplined.” The term “balimbing” is often thrown around in Philippine politics but, more than that, the Philippines is also familiar with politically-motivated violence and disorder.

All these features are characteristics of Oligarch-and-Clan corruption, where these oligarchic families continue to hold power and where politicians exploit their positions to enrich themselves or their families.

Corruption, no matter what kind, needs to be curbed. It results in the loss of government money, which could have been used to boost the economy and help ordinary citizens, especially those from the lower income sectors.

According to the 2007 study, the Office of the Ombudsman had, in 1999, pegged the losses arising from corruption at PHP 100 million daily, whereas the World Bank estimates the losses to be at one-fifth of the national government budget. For relatively more updated figures, former Deputy Ombudsman Cyril Ramos claimed that the Philippines had lost a total of PHP 1.4 trillion in 2017 and 2018. These estimates are in line with the World Bank estimates of one-fifth (or twenty percent) of the national budget.

So grave is the adverse effect of corruption that the international community recognized it as an international crime under the UN Convention Against Corruption (UNCAC) where perpetual disqualification of convicted officials is recommended.

But the question stands: can corruption be eradicated in developing countries like the Philippines? Many Philippine presidents promised to end corruption in their political campaigning, but none have achieved it so far. If the government truly wants to end corruption, it must implement policies directed against corruption, such as lifting the bank secrecy law, prosecuting and punishing corrupt officials, increasing government transparency, and more.

 

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.  The author is a MPA/Mason Fellow at Harvard Kennedy School. He is a member of MAP Tax Committee and MAP Ease of Doing Business Committee, Co-chair of Paying Taxes on Ease of Doing Business Task Force, and Chief Tax Advisor of Asian Consulting Group. Feedback at <map@map.org.ph> and <mon@acg.ph>.)