The new SWS survey on corruption

Since 2000, Social Weather Stations has surveyed top executives of Filipino enterprises, on matters of public and private corruption, 12 times. This survey series is far superior to that of Transparency International, producer of the Corruption Perceptions Index (CPI), which is based on surveys of expat executives by private foreign consulting firms that do not open the underlying data for specific questionnaire items in any country. The CPI is adequate for comparing countries’ corruption for the benefit of multi-country investors and international agencies, but not for assessing movements in a single country’s corruption over time.

The new SWS Survey of Enterprises on Corruption did interviews of Filipino executives at 966 companies over Nov. 14, 2014 to May 12, 2015, in the National Capital Region and six other major business areas. It used a random sample, two-thirds from lists of small and medium companies, and one-third from lists of large companies.

The new survey of 2014/15 is the third during the P-Noy administration so far, after one in President Estrada’s time, and eight in President Arroyo’s time. It was supported by the Integrity for Investments Initiative with funding from the US Agency for International Development. The findings were presented to a multisectoral audience at Hotel JEN Manila last Thursday, in cooperation with the National Competitiveness Council.

Experiences of corruption have declined. On the whole, the 2014/15 survey shows continued progress against corruption since 2013, after the quantum leap in 2012. This is based on corruption as experienced, and not merely as perceived, by the responding business executives.

• A new record-low 32 percent of respondents said they had personal knowledge of a corrupt transaction with government, in their own line of business, that happened in the last three months.
• A new record-low 39 percent of respondents said that most companies in their own line of business give bribes to win public sector contracts.
• A repeated record-low 44 percent said that they had been solicited for a bribe, in the past year, in at least one of seven itemized transactions with the government. This equaled the 44 percent in 2013, which was down from 50 percent in 2012 and 60 percent in 2009.
• However, only 13 percent of those who were solicited for a bribe reported it.

Sincerity in fighting corruption, based on businessmen’s judgment calls, has generally improved. The respondents gave mostly favorable ratings of the sincerity of institutions—all government agencies, except for “Filipino business associations” and the Philippine Stock Exchange—in fighting corruption.

Out of 36 ratings, 21 are favorable, 9 are neutral, and 6 are unfavorable. Top-rated is the Securities and Exchange Commission; bottom-rated is the Bureau of Customs (BOC). (In 2013, there were 24 institution-ratings; of these, 14 were favorable, 8 were neutral, and 6 were unfavorable. Top-rated was the Office of the President; bottom-rated was the BOC.)

Compared to their last ratings, 8 institutions are upgraded, 7 are downgraded, and 19 have stayed the same; 2 are rated for the first time. (In 2013, 5 were upgraded, 10 were downgraded, and 9 stayed the same; 2 were rated for the first time.)

The most notable upgrade is that of the Presidential Commission on Good Government, up from a Poor -38 in 2009 to a Moderate +15 in 2014/15. The Bureau of Internal Revenue has climbed steadily to a Neutral -4 in 2014/15, after having been mired in Very Bad grades below -50 in 2008 and 2009.

The Office of the President got a Very Good +54 in 2014/15, after an Excellent +77 in 2013; this is like becoming silver medalist after being the sole gold medalist. None of the new downgrades went to an unfavorable category.

Attitudes about the prospect of defeating corruption are strong:

• A new high 62 percent of respondents agree that “the government can be run without corruption.”
• 78 percent disagree that “to prosper in business in the Philippines today, one has to be corrupt.”
• 68 percent say that cheating the government for the benefit of the company is always wrong.
• A new high 51 percent disagree that “present laws to fight corruption are already adequate.” In particular, 90 percent agree that “corruption will be reduced by the passage of a strong law on the right of the people to information from the government.”
• However, those who say that corrupt government officials are often/always punished are a record low 11 percent.

But honesty in business practices still leaves much to be desired. Referring to companies in their own line of business—

• Only 48 percent of the respondents say that almost all of them demand receipts for all their payments.
• Only 32 percent say that almost all of them issue receipts for all their revenues.
• Only 20 percent say that almost all of them keep only one set of accounts.
• Only 17 percent say that almost all of them pay their taxes honestly.

Conditions are right for businesses to do more to help fight corruption.

• 64 percent are satisfied (after a record 70 percent in 2013) with the national government, and a new high 68 percent are satisfied with their city government, with respect to promoting a good business climate.
• 72 percent (after a record 76 percent in 2013) expect business to be good or else excellent in the next two years.
• Yet, a new high 84 percent did not contribute any money in the last two years to any private anticorruption program. When will the private sector put its money where its mouth is?

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