WB laments reports of widespread corruption in RP

The World Bank (WB) has expressed concern over reports of widespread corruption in the Philippine bureaucracy as well as the military, a top official said.

WB managing director Peter Woicke cited studies which proved that corruption, particularly in developing countries such as the Philippines, has been depriving the economy of much-needed revenues which could have been channeled instead to poverty alleviation.

The London-based Transparency International reported recently that the Philippines ranked 11th among countries worldwide in terms of the prevalence of corruption, the same ranking it held for the past two years.

A United Nations report estimated that graft and corruption result in revenue losses of at least P100 billion annually. In the case of the Philippines, the country lost between P160 billion to P240 billion yearly, or more than 20 percent of its annual national appropriations, according to an independent survey made by the Economic Intelligence Unit (EIU).

"In a hobbling economy, this scenario is alarming if not outright discouraging. News accounts during the past weeks appear to validate this picture," the EIU report said. "With shams and exposes becoming daily fare, every man on the street has a ready word or two on corruption. And all too often, their views reflect an indictment of government, in general and of those who work in government, in particular."

Woicke, who was in Manila for a brief visit to sign critical agreements for the International Finance Corp. (IFC) – the WB’s private sector investment arm – and several government and private financial entities, noted that revenues lost through corruption do not enter the official economy.

The WB official cited the close correlation between corruption and the difficulties of starting or doing business in the country. "The more procedures and stages required to start doing business always invites opportunities for corruption," he stressed.

The Philippines has been regarded as among the countries which still impose a high cost for doing business both for local and foreign companies.

Based on a WB-funded study on doing business in different nations, which benchmarked the regulatory performance and reforms in 145 nations, one of the findings indicate that poor nations, through administrative procedures, still make it two times harder than rich nations for entrepreneurs to start, operate, or close a business, and businesses in poor nations have less than half the property rights protections available to businesses in rich countries.

On average, it takes a business six procedures, eight percent of per capita income, and 27 days to get started in high-income OECD (Organization for Economic Cooperation and Development, the group of the most industrialized nations in the world) countries.

In East Asian countries, the same process takes nine procedures, 60 percent of income per capita, and 61 days to get started. Among the worst performers in time of business registration were Cambodia (94 days), Indonesia (151 days), and Lao PDR (198 days).

On a positive note, the Philippine government said it is prepared to push for the immediate ratification of the United Nations Convention Against Corruption (UNCAC) as a major tool in promoting a graft-free country.

By pushing for the ratification of the UNCAC, the government hopes to be one with the international community in strengthening global efforts to fight corruption.

Through the convention, governments would be required to criminalize bribery, promote integrity among public officials and increase participation of civil society in the fight against graft and corruption.

Presidential Anti-Graft Commission (PAGC) commissioner Teresita D. Baltazar said the government is already convening a technical working group to draft the Philippine position for the UNCAC.

The Interagency Anti-Graft Coordinating Council (IAAGCC) will be composed of the PAGC, the Office of the Ombudsman, Department of Justice, National Bureau of Investigation, Civil Service Commission, and the Commission on Audit.