A view from the frontlines: The battle against corruption

Since 2000, I have had the privilege of working with Dr. Mahar Mangahas and his team at Social Weather Stations on a project known as the Annual Survey on Corruption. It just completed its 12th run (2000-2009, 2012, 2013, 2014/15). The survey is unique for a number of reasons. First, it surveys only Filipino businessmen and entrepreneurs. Second, it surveys perception of and experience with corruption. Third, the respondents are from small and medium-scale enterprises (two-thirds of the sample) and large companies. Fourth, it asks about both public and private corruption. And fifth, it enables us to look at trends in selected cities.

We started with Metro Manila in 2000, progressively adding Cebu and Davao (2004), Cavite-Laguna-Batangas and Cagayan de Oro-Iligan (2005), and Angeles and Iloilo (2012).

This is the view from the frontlines in the battle against corruption.

Generally positive trends: 32 percent say they have personal knowledge of public sector corruption in the last three months. This is an all-time low for the series. It was 38 percent in 2013 and 44 percent in 2007. Among cities, Metro Manila, Cebu and Cagayan de Oro-Iligan reported the biggest declines, though Cavite-Laguna-Batangas has the overall low score (though it rose versus 2013).

A new low for companies, 39 percent of them claim that most enterprises in their line of business have to give bribes to win public sector contracts. That’s a significant number down from 52 percent in 2003 and 2004.

Of 36 public sector institutions, 21 were rated favorable, 9 neutral, and 6 unfavorable. In 2013 (the last survey period), the ratings were 14 favorable, 8 neutral, and 6 unfavorable. Of the 36 institutions, 8 received an upgrade from 2013, 19 recorded no change, and 7 were downgraded.

The top performing agencies in the battle against corruption (measured as sincerity in the fight against corruption) were: Securities and Exchange Commission (net rating of +63), Social Security System (+57), Philippine Securities Exchange (+55), Office of the President (+54), Department of Trade and Industry (+51). They were followed by Filipino business association (+49), Supreme Court (+42), Civil Service Commission (+41), Department of Education (+43), Sandiganbayan (+37), Ombudsman (+36), Commission on Audit (+36), and Department of Justice (+34). These institutions are classified as Very Good (if +50 or more) or Good.

Those classified as Moderate (+10 to +29 in scores) were the Department of Health (+28), Government Service Insurance System (+27), Department of Social Welfare and Development (+24), barangay (+19), Department of Finance (+15), Presidential Commission on Good Government (+12), city government (+12).

The Neutrals (+9 to -9) were the Department of Interior and Local Government (+9), trial courts (+6), Department of Environment and Natural Resources (+6), Armed Forces of the Philippines (+4), Department of Budget and Management (-7), Department of Transportation and Communications (-2), Senate (-2), Bureau of Internal Revenue (-4), and Commission on Elections (-6).

Moving down the scale from Poor to Very Bad, we see the Department of Agriculture (-10), Philippine National Police (-16), Department of Public Works and Highways (-21), House of Representatives (-25), Land Transportation Office (-26), and Bureau of Customs (-55).

Regardless of ratings, what is noteworthy is the movement—up or down—of agencies over time. For me, the standouts are the Ombudsman (-8 in 2011 to +36 today), COA (from 0 in 2012 to +36), DOJ (0 in 2012 to +34), GSIS (-5 in 2011 to +27), DOF (-4 in 2011 to +15), PCGG (-28 in 2011 to +15), BIR (-57 in 2011 to -4), and DPWH (-65 in 2011 to -21).

Attitudes point to optimism and hope. The survey is as important for its perceptions of and experiences with corruption as for its reflection of business attitudes toward corruption. The view generally points to hope and optimism but with some clear conditions.

Over 60 percent say “government can be run without corruption,” 79 percent say local government transactions are more transparent, and 59 percent say processing of local business permit renewals is easier now than three years ago. These are peak results in the time series, indicating that attitudes are shifting and progress in the fight against corruption is being made.

Moreover, the number of businesses who reported being solicited for a bribe fell from 50 percent in 2012 to 44 percent in 2013 and 2015. That may be progress but hardly anything to cheer about at this stage.

But the business community is looking for more teeth in the law and more tools for uncovering corruption. Less than half believes our laws to fight corruption are adequate and only 11 percent feels the government regularly punishes corrupt government officials. More significantly, 90 percent feels that a strong law institutionalizing freedom of information will help reduce corruption.

More action needed. But for all the shift in attitudes, the walk still doesn’t match the talk in many ways. Many businesses still suspect that peers in their sectors keep multiple sets of books, don’t issue receipts and don’t pay the right taxes. While businesses have been generally better than government in punishing their own corrupt executives, few have joined anticorruption groups or funded campaigns outside of their own businesses. The interest to support or fund groups has been dropping. Finally, only 13 percent of businesses that have been solicited for a bribe actually report it, which makes it difficult for government to punish its own officials.

Bottom line: The trend in the battle against corruption is moving in the right direction. What more should we do to accelerate it?

Guillermo M. Luz ([email protected]) is the private-sector cochair of the National Competitiveness Council.