Graft and Corruption

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A. INTRODUCTION
In 1988, graft and corruption in the Philippines was considered as the "biggest problem of all" by Jaime Cardinal Sin, the Archbishop of Manila. Then President Corazon C. Aquino likewise despaired that corruption has returned. In 1989, public perception was that "corrupt government officials are greater threat to the country" than the communist guerrillas. In 1992, former President Fidel V. Ramos considered graft and corruption as the third major hindrance towards attaining his development strategy for the country. A decade later, in 1998, the country got good marks from Transparency International and the Political and Economic Risk Consultancy (PERC), LTD. The Philippines then placed 6th out of the 11 Asian countries surveyed under the PERC corruption perception index (CPI), a measure of lost development opportunities in terms of investment. However, while the anti-corruption landscape in the Philippines has improved, its low score of 6.5 still placed the Philippines as highly prone to corruption. In general, national and international opinion depict the Philippine as still corrupt and being unable to effectively fight this problem. Indeed, today, graft and corruption in the Philippines remains. About 30 % of the national budget is reportedly lost to graft and corruption every year. Thus, the 1999 budget of P 590 billion pesos (approximately US$15.5 billion) will stand to lose about P 170 billion pesos (approximately US $ 4.47 billion). The administration of President Joseph Ejercito Estrada has vowed to reduce graft and corruption by 80 % before the end of his term. B. SPECIFIC TYPES OF CORRUPTION IN THE PHILIPPINES

There are 8 types of corruption frequently practiced in the Philippines namely: tax evasion, ghost projects and payrolls, evasion of public bidding in awarding of contracts, passing of contracts, nepotism and favoritism, extortion, protection money and bribery. Tax Evasion

This is very rampant, particularly in the private sector due to the refusal of those engaged in private businesses to honestly declare their annual income and to pay the corresponding taxes to the government. Ghost Projects and Payrolls

This is done by high officials of the government whereby non-existing projects are financed by the government while non-existing personnel or pensioners are being paid salaries and allowances. This practice is rampant in government agencies involved in formulation and implementation of programs and projects particularly in infrastructure and in the granting of salaries, allowances and pension benefits. Evasion of Public Bidding in the Awarding of Contracts

Government offices, particularly bids and awards committees forego the awarding of contracts through public bidding, or award these contracts to favored business enterprises or contractors. Sometimes, members of bids and awards committees are very subjective of awarding the contract to those who can provide them with personal benefits. To legally evade public bidding, purchasing government agencies would embark on a “piece-meal purchasing strategy” whereby small amount of supplies and materials will be bought in a continuous process. In which case, internal agreements between the buyer and the supplier is done whereby a certain percentage of the price value will be given to the buyer which sometimes result to overpricing and the purchase of sub-standard supplies and materials. The practice of passing contracts from one contractor to another In the construction of infrastructure projects, contractors have that practice of passing the work from one contractor to another and in the process certain percentage of the project value is retained by each contractor and sub-contractors resulting to the use of substandard materials or even unfinished projects. Nepotism and Favoritism

Government officials particularly those occupying high positions tend to cause the appointment or employment of relatives and close friends to government positions...
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