Pinoy Solutions to Corruption by jimwes

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By: Prof. Leonor Magtolis Briones, Team Leader
    Prof. Danilo R. Reyes, Member
    Prof. Ma. Oliva Z. Domingo, Member
(With research and administrative assistance from Ms. Ligaya P. Castor and Mr. Nonnie G. Jeruta)

Contracted under Cooperative Agreement 492-A-00-09-00032-00

The Integrity Project

The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency
for International Development or the United States Government.
                TABLE OF CONTENTS

Chapter   1   Why the Filipino Solutions to
              Graft and Corruption?                           1
              By: Prof. Leonor Magtolis Briones (Ret.)

          2   Gararap and Corarap Pinoy Style                12
              By: Prof. Leonor Magtolis Briones (Ret.)

          3   Chronicling Corruption in the Philippines:
              A Brief Historical Background Up to 2004       19
              By: Prof. Danilo R. Reyes

          4   Chronicling Corruption in the Philippines,
              2005–May 2011:The Road to Perdition..?         62
              By: Prof. Ma. Oliva Z. Domingo

          5   Learning from Pinoy Successes                  99
              By: Prof. Leonor Magtolis Briones (Ret.)

          6   Framework for a National Anti-Corruption
              Program                                       110
              By: Prof. Leonor Magtolis Briones (Ret.)

          7   From Pinoys to P’noy: Specific Solutions to
              Corruption                                    124
              By: Prof. Leonor Magtolis Briones (Ret.)


                                       CHAPTER I

                      By: Prof. Leonor Magtolis Briones

   “Recorded in the history of human sufferings is a cancer of so malignant a
character that the least touch irritates it and awakens in it the sharpest pains. Thus,
how many times, when in the midst of modern civilizations I have wished to call thee
before me, now to accompany me in memories, now to compare thee with other
countries, hath thy dear image presented itself showing a social cancer like to that

   Desiring thy welfare,…. seeking the best treatment, I will do
with thee what the ancients did with their sick, exposing them on the steps of the
temple so that every one who came to invoke the Divinity might offer them a

     …I will strive to reproduce thy condition faithfully, without discriminations; I
will raise a part of the veil that covers the evil, sacrificing to truth everything…

               --Jose P Rizal, from the dedication of “Noli Me Tangere/
                  The Social Cancer: Charles Derbyshire English translation
                  Europe, 1886

Graft and corruption has been considered endemic in Philippine governance since the
Spanish era. National Hero Jose P. Rizal described it as a ―social cancer‖. A popular TV
program during ‗80s, ―Sic O‘clock News‖, derisively referred to graft and corruption as
―gararap and korarap.‖ In the current language of the bureaucrats it is referred to as
―S.O.P.‖ (standard operating procedures), implying that corruption is a built-in feature of
government operations. It is also described as ‖for the boys‖ but in these days of gender
equality, I prefer to refer to it as ―for the boys and the girls.‖ Academics and students of
corruption refer to it as ―negative or deviant bureaucratic behavior‖. However, cynics
counter that it is corruption which is normal and honesty which is deviant.

Graft and corruption has been so ingrained in governance and so embedded in society
that words peculiar to Philippine practice have emerged. These were compiled by in a
―Corruptionary: Natatanging Diksyonaryo ng mga Salitang Korapsyon‖ by the Center for
People Empowerment and Governance (CenPEG).

Is corruption as Pinoy as adobo and as endemic as dengue?

After nearly five centuries, graft and corruption now threatens to be as Pinoy as lechon,
adobo, sinigang and paksiw. It seems to be as endemic as dengue, tuberculosis and
cholera. The solution to this national blight can only come from Filipinos themselves.


Considering the fact that efforts to control corruption go all the way from Spanish
colonialism to the present, can it be said that everything has been done to cure this social

Legal and administrative reforms; capacity building, public events

All laws regulating government activities, whether national, agency specific, or local in
application inevitably contain provisions penalizing corrupt acts. The Anti-Graft and
Corrupt Practices Act (Republic Act 3019) and related laws, the Presidential Decrees
creating the Sandiganbayan and the Tanodbayan and subsequent laws, as well as Civil
Service Commission rules and regulations are just a few of the range of laws, rules and
regulations prohibiting corruption.

As for administrative reforms, the Philippine Administrative System undergoes periodic
comprehensive as well as agency reorganization. Former President Gloria Macapagal
Arroyo triggered a continuing program of reorganization by executive order which is in
effect until now.

When there is a surge of anti-corruption public sentiment, capacity-building activities and
workshops, conferences, public hearings and fora profusely bloom like Mato-Tse-Tung‘s
―hundred flowers.‖

Corruption studies

There is no lack of knowledge on why corruption occurs, where it occurs, and what can
be done to keep it under control. Corruption is perhaps the most studied phenomenon in
Philippine governance- by scholars, journalists, multilaterals, bilaterals, think-tanks and
by government itself. All the studies on corruption in the Philippines can easily
constitute a specialized library. These studies and analyses always contain
recommendations and proposals for eradicating corruption.

Obviously, under the formal system of government, corruption is not tolerated. There is
a rule for every public activity. Ironically, these laws, rules and regulations are
periodically bypassed, ignored and violated with impunity.

Filipinos cannot profess ignorance of corrupt activities in the Philippines. The most
sophisticated explanation and the simplest moral arguments are at their fingertips.

The donor community: only Filipinos can solve corruption

For decades, multilateral institutions, bilateral donors, international academic institutions
and civil society organizations have expended hundreds of millions of dollars in anti-
corruption projects. Ironically, corruption has not abated even as they pour more
resources to help clean up the governance system of the country.

Perhaps the most extensive current anti-corruption project is the United States Agency for
International Development (USAID)‘s ―Enhancing Anti-Corruption Efforts at the
National and Local Levels,‖ otherwise known as the Integrity Project, or iPro. This is a
two-year project which started in December 2009 and will end by September 2011.
iPro works very closely with the Office of the Ombudsman, the Commission on Audit,
the DILG and related institutions. Their activities range from reengineering of
procedures, intensive capacity building, organizational analyses and extensive
consultations. These are enhanced by foreign experts who are brought in from time to

After one year of focused and targeted activities, iPro ended with the following

       ―To date, international and bilateral donors have supported almost every
       conceivable activity to fight corruption, yet it has continued to expand
       exponentially since the time of the Marcos dictatorship…. It is unlikely
       that external assistance can do any more to combat corruption in the country
       than what has already been done.

       We believe that only Filipinos will be able to find a solution to the present
        corruption eruption. We believe that the present government has a unique
        heritage-based opportunity to change the path of the country from downward
        into further corruption to upward in a more wholesome form of governance
        that gradually acts to diminish the degree of success of corrupt activities and
        individuals.‖ (The Integrity Project Final Annual Work Plan for Year 2 October
       1, 2010 through September 16, 2011)

So there.

The search for Filipino solutions: the U.P.CPA/de Guzman/Carino studies

 iPro has stated that only Filipinos will be able to find a solution to corruption. The
earliest and probably the most comprehensive search was launched in 1975 by the
University of the Philippines College of Public Administration under the leadership of
Dean Raul de Guzman, and Ledivina V. Carino.

To be sure, corruption had been studied much earlier but focus was largely on legal and
administrative aspects. This is the first comprehensive study which examines corruption

as a multidimensional phenomenon—involving not only the legal, administrative and
economic aspects but also historical, sociological and cultural dimensions as well.

The study was conducted by Filipino researchers from the U.P. College of Public
Administration. The first studies were fully Filipino-funded until the project was made
part of a comparative study of corruption in Asia. The Philippine project was entitled,
―Negative Bureaucratic Behavior in the Philippines—Consequences and Control

Because of the multidimensional character of the project, the study was conducted by a
multidisciplinary team consisting of a political scientist, two sociologists, two public
administration experts, and a fiscal administration expert.

Pervasive corruption in the Philippine Administrative System was examined in terms of :
1. a definition of graft and corruption by Ledivina V. Carino; 2. historical notes on graft
and corruption by Jose N. Endriga; 3. negative bureaucratic behavior in a revenue-raising
agency—the Bureau of Internal Revenue by Leonor Magtolis Briones; 4. bureaucratic
behavior in a spending agency—the Bureau of Supply Management by Raul de Guzman; and 5. negative bureaucratic behavior in a regulatory agency- the Board of
Transportation by Victoria Bautista.

Each agency study detailed how corruption happens, what has been done and what more
can be done. The project ended with a review of administrative measures against
corruption by Maria Concepcion Alfiler and a final summary report on negative
bureaucratic behavior in the Philippines by Ledivina Carino and Raul de Guzman.

This is a project conducted by a Filipino team with minimal external financial support
and participation, based on the ground studies at the agency and national levels, leading
to successful solutions.

Yes, the Filipino can, if he wishes to.

Corruption in Philippine history

The study entitled ―Historical Notes on Graft and Corruption‖ by historian Jose N.
Endriga gives us our first clue that the Filipino can solve the social cancer of corruption.
It is part of the U.P. CPA de Guzman/Carino studies and traces the historical roots of
corruption in the country.

Endriga looks at three periods: the pre-conquest period by Spain; three centuries of
Spanish rule; the American colonial period; and the Commonwealth period under a
Filipino president.

The pre-conquest period

Technically, it can be said that there was no bureaucratic corruption during the pre-
conquest period because the Philippines was composed of small barangays and was not
yet under a national bureaucratic system. However, he pointed out to the system of
tributes and fines imposed by datus and the classification of inhabitants into maharlikas
(nobles), timagwas (commoners) and the alipin (slaves) as possible sources of corruption.
Unfortunately, there are no records of such incidents.

The Spanish and American regimes

According to Endriga, ―the Spanish regime in the Philippines, which lasted for over three
centuries, is generally regarded as a period characterized by the prevalence of graft and
corruption. There are those who trace the current culture of corruption to the ―reign of
greed‖ during that period.

Among the practices which Endriga detailed was the practice of bidding out positions,
especially those concerning the collection of taxes and fees. Even positions like those of
judges, which were supposed to be by appointment, were also up for sale. As for
compensation, certain positions allowed holders to charge fees for their services; other
positions had very little entitlement or none at all; other positions were sought for power
and influence.

When one considers that these practices took place under conditions of subjugation and
conquest, it is very easy to see that corruption was the norm and honesty the deviant

To be sure, there were proclamations urging the Spanish officials to ―protect‖ the Indios
from harm; there was also the practice of the Visita and the Residencia. In the former, a
high official was sent to the colonies to conduct investigations of erring officials and
recommend punishment. In the latter, bureaucrats were required to render an accounting
of their term of service upon retirement. These mechanisms did not work and became the
source of more corruption.

When the Americans conquered the Philippines and installed their regime, they
introduced the civil service system—replete with examinations, regular salaries, and
penalties for the erring. Nevertheless, Endriga cited a number of cases of graft and
corruption, as well carryovers of practices from the Spanish regime.

The Philippine Commonwealth under a Filipino president

Endriga says that it was during the period of the Philippine Commonwealth, under a
Filipino president where the civil service system was further strengthened with more
innovations, some of which were embedded in the Constitution.

He concludes, ―Nor was the bureaucracy clean only on paper. Except for some instances
of graft and corruption, the image of the civil service in the Philippines, remained much

in accord with the conventional picture: clean and prestigious. It remains for another
period in Philippine history to tarnish an image it still has to recover from.‖

The Commonwealth period under a Filipino president is proudly and fondly remembered
as the cleanest during the colonial period. This is the period Filipinos go back to in their
memories, when civil servants were as clean and white as the starched white shirts and
pants they wore.

History tells us that corruption was rampant during the time of one foreign conqueror;
traces of it remained under another conqueror; it took a Filipino president to bring about a
shining moment, no matter how brief, when Filipinos had a clean and honest government.

Surely, history can be repeated by Filipinos!


Looking back, one of the most significant findings of that study was on the impact of
cultural norms and values on corrupt behavior. Corruption has always been considered as
a legal and criminal issue. The behavioral aspects of corruption were largely ignored.
The assumption has always been that what is legally forbidden is likewise morally
reprehensible. It is not necessarily so. Dr. Carino pointed out that certain forms of
behavior which are acceptable in terms of cultural norms and values are not allowed by
government regulations.

Take nepotism. It is considered admirable for a person to take care not only of his family
but also his extended family. Thus, family members expect their more successful
relatives in government to provide jobs, extend favors, award contracts, or share the fruits
of corruption with them.

The culture of strong kinship ties can be extended to classmates, fraternity brods and
sorority sisters, townmates, village mates and schoolmates. In these modern times, it can
euphemistically be called ―networking.‖

Nepotism is forbidden by government regulations because it is not democratic and results
in an uneven playing field. Nonetheless, the practice is culturally acceptable and even

Dr. Betty Ventura of the U.P. Psychology Department says that corruption is rooted in
group-centeredness. ―If something has been done, our tendency is to protect the group.‖
This is clear in the behavior of family members, and of fraternity brothers who cover up
for each other. ―Our family-orientedness can give room for corruption…. It can benefit
family members who don‘t ask where huge amounts of money are coming from.‖ She is
quick to point out that group orientation is not totally bad but contributes to perpetuating

Ironically, love and loyalty for family which is enshrined in our culture and values can
push people in government to corruptive behavior.

Generally, love of family ranks second only to love of God in the hierarchy of Filipino
values. One who abandons and betrays his or her family is considered as belonging to
the lowest form of humanity. A non-Filipino observed that he has seen close family ties
in many countries but none as strong and binding as that of the Filipino family.

Other cultural norms and values

Another powerful Filipino value is ―utang-na-loob‖ or debt of gratitude. This is a
beautiful trait which is cherished by Filipinos. When a favor is granted and assistance is
given, gratitude lasts even for generations among families. Usually, there is no mention
of expected return of favors but this is assumed.

Utang na loob becomes complicated when the return of favor is not only expected for the
giver of the favor but also for his or her family and extended ties. Furthermore, payment
of utang na loob for public officials can involve either the breaking of rules, going
around the law and granting of special favors or concessions.

Beautiful as it is, utang na loob can be abused to further selfish objectives. The practice
of giving away publicly-funded goods and cash during calamities, start of the school year
or just before elections can be used to accumulate goodwill which can be collected during
election periods. An official can tweak rules or ignore them to give away jobs, public
services, contracts and other favors to build up collectible utang na loob.

Wealth as indicator of success; ostentatious lifestyles

Sociologists have identified a whole array of norms and values which might encourage
corruption. One value which has direct monetary implications is the Filipino‘s love of
ostentation and the obsession with wealth as an indicator of success.

The popular belief is that we got our taste for the ostentatious from the Spaniards. After
all, they ruled us for over three hundred years. However, social anthropologist Dr.
Michael Tan says that even before the Spanish era we were already very fond of jewelry
and other visible displays of wealth.

Aspirations for lifestyles way beyond the humble salaries of government functionaries
can push them to corruption. Carino/de Guzman state that ―since success is conceived in
terms of conspicuous consumption and other economic indicators, successful
practitioners of corruption find that they are not ostracized, although suspicions about the
source of their wealth may be gossipped about. Adulation may even be forthcoming
because they now have success on two counts: in amassing wealth, and in not being
caught in the process.‖ (p.363)

When does corruption become endemic? Carino/de Guzman answer, ―negative
bureaucratic behavior appears to be endemic in a society where the profit motive is
primary, where political leadership is weak, and where the culture honors economic
success more than any other.‖ (p.368)


The preceding section has shown that certain aspects of our culture, norms and values can
encourage corruption. James Fallows considers our culture ―damaged.‖ So, is culture to
blame for all corruption troubles?

Tony Kwok, former head of Hongkong‘s very successful Independent Commission on
Anti-Corruption (ICAC) doesn‘t think so. He says that Chinese and other cultures also
value the family. Gift-giving is common in Asia but it is strictly regulated.

Filipino social scientists who warn that culture has been damaged and abused also say
that it can be utilized and ―engineered‖ to prevent corruption. Betty Ventura has proposed
―behavioral reengineering,‖ as successfully implemented by former Mayor Fernando of
Marikina. Among others, Michael Tan advices making anti-corruption as a normative,
and not just an organizational tool. Among others, he suggests restoring the original
meaning of words which we have corrupted, e.g. salvaging, S.O.P., etc. and making
simple lives as the norm and not the deviant.

In one of my columns I have proposed that the concept of ―utang na loob‖ can be
expanded to mean ―utang na loob‖ to the community, society and country, which should
be larger and broader than utang na loob to individuals.

Early studies of anthropologist F. Landa Jocano indicate that Filipinos can differentiate
kinship, friendship and utang na loob to individuals from their duties to the government.


Thirty-two years ago, Carino/de Guzman emphasized the need to ―disturb the ethico-
cultural system as a means to attack systemic corruption.‖(Carino/de Guzman p.383).
They identify ―the church, school, and family as major molders of the child and the adult
and the source of their ethical norms and behavior. ― They focus attention on education
which is under the direction and control of the government. Thus, they advocated an
educational thrust towards ethics which should be manifested at all levels. Their efforts
led to policy of emphasizing ethics in the entire public administration curriculum, as well
as undergraduate and graduate courses in ethics and accountability.


―…no hits, no runs, all expenses, no convictions!‖ No, these are not the remarks of an
exasperated corruption-buster in 2011. These were statements made forty-nine years ago
by Cesar Climaco who headed the Presidential Anti-Graft Committee of his time.

On the other hand, a successful effort in reducing graft and corruption in the Bureau of
Internal Revenue in 1979 has been the focus of a case study and cited extensively in the
landmark book, ―Controlling Corruption‖ by Robert Klitgaard, formerly of Harvard

Another favorite success story is that of the 1978 DPWH plunder case which can perhaps
be compared in scope and magnitude to that of the current ―conversion‖ scandal in the
Armed Forces of the Philippines. The case involved 11 of the 14 Engineering Districts of
Region 7, 200 of its officials and employees, as well as central office personnel. It
resulted in 130 cases affirmed by the Supreme Court, the incarceration of the master
mind, and the downfall of the Minister of Public Highways.

The case traces the discovery of the anomaly, the painstaking and detailed forensic audit,
the close cooperation among the affected agencies: the Commission on Audit, Bureau of
the Treasury, Tanodbayan and Sandiganbayan, and the bulldog tenacity of the entire team
which ended in conviction.

Unlike current cases which hardly go beyond public hearings and newspaper headlines,
the DPWH case shows it can be done.

Both the BIR and the DPWH cases will be summarized in Chapter 5 as examples of
Filipino-driven anti-corruption initiatives.

While it is true that corruption is now considered ―endemic and systemic‖ there were
periods in public administration history when successes were achieved both at the
national and agency level. The secrets of these successes can be examined and replicated.

Yes, the Filipino can solve corruption.


This study is divided into seven chapters and is written by a 3-person research team
composed of Prof. Leonor Magtolis Briones (Ret.) as team leader, with Prof.Danilo R.
Reyes and Prof. Ma. Oliva Domingo as team members. Prof. Briones has been studying
corruption since the seventies and has done extensive research as well as given
presentations and lectures on the subject. Professors Reyes and Domingo have published
researches on the subject as well.

This chapter, written by Prof. Briones introduces the study and gives the reason for the
study: the search for Filipino solutions to the persistent problem of corruption. Chapter 2,
also by Prof. Briones, focuses on the definition of corruption.

Chapter 3, written by Prof. Danilo R. Reyes, examines anti-corruption efforts up to 2004.
Prof. Reyes notes that these initiatives ―have been anchored on organizational and drawn-
out procedures where cases tend to be clogged up in a pattern of long investigations and
drawn-out trials marked by slow and tedious processes… He describes these
―institutional or classical modes of fighting corruption.‖ Prof. Reyes identified twenty-
three anti-corruption agencies which were created from 1950 – 2001. He also listed
sixty-six anti-corruption legislation and issuances in the Philippines from 1932 – 2004.

On the other hand, Chapter 4, written by Prof. Ma. Oliva Domingo seeks to answer the
question raised by MSI Chief of Party Jim Wesberry: ―After all the resources contributed
by bilateral and multilateral partners, why there was a palpable increase in levels of
corruption since 2005. Her chapter is aptly titled, ―The Road to Perdition,‖ and ends with
the resignation of Ombudsman Merceditas Guttierez on May 6, 2011. Prof. Domingo
chronicled the travails of the Office of the Ombudsman from its creation to the present.

Chapter 5 is tackled by Prof. Briones. While Chapters 3 and 4 chronicle long decades
spent in tackling corruption, with perhaps more failures than successes, Chapter 5
reminds the reader that there have been periods of success in anticorruption campaigns.
This chapter is significant because there is widespread cynicism and belief that like
cancer, corruption is incurable. Many Filipinos also believe that corruption is already
comprehensive, systemic and built into the warp and woof of Philippine society and
public administration.

In Chapter 2, three definitions of corruption were identified: market-centered or supply-
demand definition; public office-centered definition and public interest definition.
Chapter 5 cites successful strategies viz-a-viz these three types or levels of corruption.
Actual agencies are cited for market-centered or ―divisoria model‖ corruption. The
public may already have forgotten that we have had dramatic instances where corruption
at the agency level was controlled. Finally, we have had successful campaigns against
public interest-centered corruption, as exemplified by the case of the Public Highways
case in 1978 where an entire region and all of its engineering districts were involved in
massive corruption. The Bureau of the Treasury of the Department of Finance would
have been drained of resources had the corruption continued. On the other hand,
cooperation and coordination between and among the Commission on Audit, the National
Bureau of Investigation, the Ministry of the Budget, the Offices of the Tanodbayan and
the Sandiganbayan. Furthermore, this case went beyond investigation and ended with
conviction of the accused.

Chapter 6 builds on the successes cited by Chapter 5 and proposes a framework for a
national anti-corruption campaign. This framework is based on what has worked before,
did not rely on foreign funding, and utilizes existing structures of government without
creating new organizations.

The proposed framework is an expansion of the ―Cory Model‖ which was used
successfully. Pres. Cory Aquino utilized the cabinet system to control corruption at
market and agency levels. The new framework proposes tight coordination with the other
two branches of government, namely the legislature and judiciary. It also recommends
more effective coordination with the constitutional bodies involved in corruption control.

The last chapter, written by Prof. Briones, combines suggestions culled together with
Prof. Reyes and Prof. Domingo in consultations, focused group discussions and dialogues
conducted all over the country. The chapter ends with a brief synthesis reiterating the
message of the research study.

                                           CHAPTER 2

                       GARARAP AND CORARAP PINOY STYLE
                           By: Prof. Leonor Magtolis Briones


Because graft and corruption in the Philippines has been extensively studied for nearly
four decades, it is assumed that everyone know what it is all about. The tendency is to go
directly to solutions.

Because this social cancer is complex and multidimensional, remedies will not
necessarily work without identifying the category of corruption targeted. As in medicine,
there are medications which are broad-spectrum in nature and can attack multiple
diseases; there are also medicines which will only work for specific medical conditions
under strict monitoring and regulation.


        My own definition of graft and corruption would constitute any act of a
government official which unlawfully converts public goods and services into
commercial commodities, utilizes public funds and property, violates existing laws, rules
and regulations for pecuniary and other personal benefits, to the detriment of public
interest . This combines three best known concepts of graft and corruption.

The classic approaches to the concept of graft and corruption

As a long student of negative bureaucratic behavior or corruption, many definitions have
emerged. These have been shaped by historical experience, laws and administrative
requirements and concepts of what is ethical and moral.

For purposes of this paper, I am utilizing classic approaches to the concept of graft and
corruption as formulated by Arnold Heidenhemer and applied to Pinoy Gararap
corruption by Carino/de Guzman.*

The market-centered or supply-demand approach

This definition of corruption leans heavily on economic concepts of the market. Simply
stated, corruption is a phenomenon which occur when there is an undersupply of publicly
funded goods and services which are supposed to be for all, and a heavy demand for such

___________________ _
.* Arnold J. Heidenheimer, Political Corruption: Readings in Comparative Analysis, New York, 1970, pp.
4-6, in Carino, Ledivina ―Definition of Graft and Corruption‖, Philippine Journal of Public
Administration, Special Issue on Graft and Corruption, 1979.

services. Obviously, when demand exceeds supply, the cost of these services go up.
Services which are usually given free but urgently needed can be obtained by paying for
them. This is especially true of medical services, enrolment in public schools, rooms in
hospitals and so on.

Corruption is exacerbated by the fact that oftentimes, government has a monopoly of
services and the public has nowhere else to go. This is particularly true in the case of
licenses, permits and clearances, and even copies of official documents. Only the
government can issue them; if they are in short supply or not readily available, then the
citizen/client willingly pays, whether it is demanded or not.

This definition can apply to specific national and local government agencies, as well as to
the public administration system in general.

When publicly funded services are in short supply, the question of legality and ethics
hardly comes to mind. The citizen/client pays for a good or service because he or she
needs it; there is no guilt and loss of sleep, and that‘s that. Public service then becomes a
commodity for sale on the market with the customer paying for something that he or she
has paid for through taxes, while the financial return goes privately to the public official.

Certain government agencies and local government units have acquired notoriety for
converting their agencies into markets. The impact is worse when this type of corruption
becomes systemic.

In a country where even the most basic of services such as health, education and social
justice are in such short supply, bribery and corruption are market driven. Of course this
practice goes against public interest because only those who have money can pay for such
services and the many who are impoverished wait in vain. Furthermore, double payment
can occur because the client/customer ends up paying.

Under the market-centered definition, corruption is the sale and purchase of public goods
and services, including favors, by a public official in exchange for monetary and other
personal consideration.

A Pinoy variant of market-centered approach: the divisoria model

So what is so Pinoy about the market-centered definition? It can be argued that it
happens in all developing countries, anyway. The law of supply and demand works in all
economies although we are applying the definition on public goods and services.

I have reflected on a variant of the market-centered definition which I describe as the
―Divisoria Model.‖ The Divisoria is the largest market in the country, with goods ranging
from the smallest button to food, groceries, clothing materials, gift items, animals and the
largest machines. In the Divisoria, everything is negotiated and bargained for.

The poor Filipinos are not the only ones who go to Divisoria. All who are looking for a
bargain and love to negotiate go to Divisoria. For the upper classes, it is considered the
height of ―chi-chi‖ to shop in Divisoria which has been described as ―La Rue Div‖.

How the Divisoria model works

The Philippine public administration system is like a huge flea market where public
goods are bought and sold—from food to drugs, medical and hospital services, court
decisions, licenses, clearances, admission to public schools, free housing, multi-billion
infrastructure and mostly likely, election returns.

Now the Filipinos are incurable bargainers. They can‘t accept ―fixed prices‖ especially
penalties, fines and punishment already specified by law. The errant car driver negotiates
with the policeman; the businessman with the tax assessor; the landowner with the
agrarian reform official; the accountant and budget officer with the auditor; and even the
criminal with the judge, or horror of horrors the justice himself; the voter with the
politician; and the congressmen and senators with the president.

In the Divisoria model of public administration, everything has a price but it is not a fixed
price and must be negotiated. In such a situation, corruption is inevitable.

Did the son of a high official run over a child? Easy, just negotiate with the police
officials! Did the BIR assess a businessman for several millions? No problem, bring it
down to a few hundred thousands! Is an importer slapped with a huge fine? Relax, just
falsify the documents and share in the ―savings‖! Does a contractor need a sponsor or
endorser for a huge project? No worry, get a politician or someone close to the head of
the agency and negotiate the sharing!

In the Divisoria model, corruption is enhanced because of the drive to negotiate for lesser
costs, lower penalties, bigger shares, more favors and more power. Thus, the general
market-driven model is exacerbated by a Pinoy bargain-driven culture.

The public office-centered definition of corruption

This definition is the most widely known and used by policy analysts and experts
formulating anti-corruption strategies. It is focused on the public office and the norms
which are binding on the official.

The constitutional provision that a ―public office is a public trust,‖ emphasizes this
concept. It is largely based on law, administrative procedures, rules and regulations and
requirements. When a public office is defined, the functions of the official are likewise

Thus, a public official who misuses his power and authority for monetary and other
considerations is considered corrupt. In other words, corruption is defined in terms of the

functions of a public office, and the norms attached to it. Betrayal of such functions and
norms for financial benefit is corruption.

A stricter Pinoy public-centered definition

Most of the provisions of the Anti-Graft and Corrupt Practices Act (R.A. 3019) define
corruption from this perspective. It needs to be mentioned, however, that R.A.3019 is
considered to be even more strict than the general public office-centered definition.
Section 3 (g) explicitly defines as graft ―entering on behalf of the government, into any
contract or transaction manifestly and grossly disadvantageous to the same, whether or
not the public officer prohibited or will profit thereby.‖

It is interesting to speculate why such a stringent definition was included in the law. It is
perhaps linked to culture and favor corruption. A public official may scrupulously avoid
or refuse financial consideration to protect himself or herself if the going gets rough. He
or she may not accept money but he will be accumulating utang na loob and favors which
in the future may just be as good as money!

It must also be remembered that the author of RA 3019 was no less than Sen. Jovito R.
Salonga who is widely known not only for his strict adherence to the law but also for his
strong sense of righteousness and morality.

Most instances of public-centered corruption occur at the agency level. This is because
the functions of the agency, as well as of the officials are stipulated in detail. Regulations
are scrupulously spelled out in manuals and rules of procedure.

Recent spectacular cases of corruption are agency-based, like the fertilizer scam
involving the Department of Agriculture; the cash conversion scandals of the Armed
Forces of the Philippines; the ZTE contract which dragged into the mud the National
Economic Development Authority; and the ―hello, Garci‖ scandal exposing the
COMELEC. In all these cases, the mandates of the agencies involved were wantonly
ignored and betrayed.

The public interest definition of corruption

Of the three classic definitions of corruption, the ―public interest‖ definition of corruption
is the broadest and most comprehensive. While the market-centered and public office
definitions focus on the actors—namely, the public official and the citizen/client, public
interest focuses on the consequences of the corrupt act.

During the seventies, studies of corruption usually concluded with the impacts and
consequences of corruption. When I wrote my case study on the Bureau of Internal
Revenue in 1977, I pointed out that:

               ―It appears that the effect of corruption in the BIR on the tax burden
       is to encourage the regressive tendencies of the present tax structure.

               Substantial tax payments that have not reached the government
       coffers because willful avoidance and malicious evasion were supposed to
       have been made by people who belong mostly to the middle and upper
       classes, particularly those of the business sector. This could not have been
       made possible with their collusion with BIR agents.‖ (Briones, p. 277)

I also pointed out that inadequacy of revenues compels the government to turn to
borrowings to finance the national budget, thus,

              ―Financial planners admit that the level of borrowings in the
       country is increasing because locally generated revenue is not enough to
       finance escalating level of governmental expenditures. Government losses
       through corruption add to the level of these borrowings.‖ (Briones, p. 277)

Finally corruption impacts on the citizens‘ trust in government,

               ―As proven in the past, corruption in the BIR, as in other
       government agencies has bred cynicism and doubts on the sincerity of the
       government in bringing about promised reforms. Two responses from
       interviews illustrate this attitude. One respondent has stated: ‗Why should
       not a BIR man commit graft and corruption? Anyway, much of the money
       that he collects will just be stolen later by other officials. He might as well
       get his share of the booty!‘ Another has commented: ‗But the corruption
       in BIR is nothing compared to what goes on in high places and in other

               ―Rampant corruption has contributed to the public alienation from
       the government and government officials. Such a situation will definitely
       hamper development efforts because cooperation from the citizenry would
       be difficult to obtain.‖ (Briones, p. 278)

These observations which I made 35 years ago still hold true.

Public office and public interest definitions of corruption often flow into each other. As
what happened during the past administration, when cases of agency corruption explode
one after the other, when public institutions are destroyed with impunity, corruption
tramples on public interest. The ordinary citizen becomes the victim of corruption and
not just the client.

Is there a distinction between graft and corruption?

I was originally under the impression that graft and corruption were synonymous until I
studied the Bureau of Internal Revenue and listened to the language of ―practitioners‖
and fellow researchers.

My understanding is that graft can be done as individual or group, without having to deal
with a citizen/client. This involves manipulation of accounting records and receipts, for
example. A clever accountant can transfer accounts, move monies and falsify documents
all by himself or herself. If done over a period of time, a grafter can accumulate a
sizeable fortune. Before the advent of electronic bank transfers, just by the mere ploy of
delaying remittances and kiting, a BIR collector could accumulate millions.

Graft is akin to stealing directly from the public kitty. A contemporary term would be
―pangungupit‖. It sounds like loose change but considering the enormity of the national
budget (Ph1.6 trillion for 2011), loose change can run to millions.

On the other hand, corruption happens between a public official and a citizen/client,
between a politician and a constituent. In other words, there is a buyer and there is a
seller; there is a corrupt official and there is a victim.

Corruption involves collusion among one or several officials, one or several offices, and
one or several private persons, whether contractors or suppliers. Papers have to pass
through several desks, with payoffs along the way. Signatures are required. Sharing is

Other definitions

Other definitions of graft and corruption include individual, agency-wide, comprehensive
and systemic. These definitions are self-explanatory. Individual corruption includes
demanding bribes—the BIR inspector, the Customs collector, the traffic policeman, the
water bill collector, the security guard all the way up to the politician demanding a fee
for passing a law or changing a regulation.

Agency-wide corruption combines market-centered and public office corruption with
organizational culture. Thus, certain organizations are described as ―flagships of
corruption.‖ A practice tolerable in the Bureau of Internal Revenue may be reprehensible
for the University of the Philippines; sharing of bribes in another agency might be
shocking in other organizations; S.O.P. can be normal in an infrastructure agency and
forbidden in a hospital.

Systemic or comprehensive corruption means that the entire public sector is already
infected. There might be division of territories, as what happened during the Marcos
administration. Sectors of the public administration system were divided into ―his and
hers,‖ referring to the president and the First Lady. Government corporations were
identified with particular ―cronies‖ of the president.


It is clear from the above array of definitions that to be effective, an anti-corruption
strategy must be clear as to which type of corruption is addressed.

For example, if the market-centered or Divisoria-driven type of corruption is the target,
the strategy should be all about increasing and making available more goods and services
and raising the supply side. The response here is not legal and administrative as MORE
SERVICES made available efficiently—more schools, hospitals, and faster release of
licenses, clearances, and documents. The challenge is not only to increase the supply of
public goods but also the responsiveness of such goods to the needs of citizens.

If public-office corruption is the issue, the successful initiatives which have been
undertaken in government agencies can be replicated. There are good things which are
happening in the Bureau of Internal Revenue, Bureau of Customs, the Department of
Public Works and Highways, and other agencies.

Public interest corruption tends to be comprehensive or systemic. If the Philippines has
reached this level of corruption, then no less than the President himself has to oversee the
formulation of strategies because it will not involve only Divisoria-driven and public
office strategies but also a massive attack on distorted and abused aspects of culture,
norms and values.

Yes, definitions do matter because these will shape strategies and solutions.

                                      CHAPTER 3

                          By: Prof. Danilo R. Reyes


        Corruption persists today as a scourge among both developed and developing
societies. The issue is a staple challenge that has imposed a remarkable and overpowering
impact on the credibility, viability and stability of civilizations spanning from ancient
times to the present. Corruption and its various manifestations - bribery, extortion,
influence-peddling, nepotism, fraud, smuggling, embezzlement, larceny and other forms
of flagrant misuse or abuse of power, office or authority – have exacted severe impact on
the growth and development of nations, particularly in the Third World.

         To begin with, there are no reliable or conclusive data on the scale and magnitude
of corruption across nations in the world today, especially those that can be reasonably
quantified in monetary terms. The World Bank Institute maintains however that informed
estimates can be made, which it calculate roughly to around US$ 1 trillion in bribes
alone; it does not say however how this figure was arrive although it can be assumed that
this is the estimate annually (

        Similar updated World Bank report reinforces this, whereby it is estimated that
anywhere from US$ 1 to US$ 1.6 trillion are lost to corruption including tax evasion and
other crimes annually, half of which reportedly come from developing countries

        Another study puts an even higher estimate at US$2.6 trillion or the equivalent of
5 per cent of the global gross domestic product or GDP (Prakash, 2009). It was also
estimated that approximately US$50 billion of the proceeds or fruits of corrupt activities
and similar illegal transactions are deposited annually into Western banks and tax havens
and that about US$250 billion are laundered into US banks from both developed and
transitional (

        A fairly recent estimate contained in the 2010 Report of the Asian Development
Bank‘s Office of Anti-Corruption and Integrity puts world wide loss to corruption in the
vicinity of US$ 3.61 trillion annually, noting the cross border flow of proceeds from the
fruits of corruption, criminal activities and tax evasion amounts to around 3 to 5 per cent
of the world‘s gross domestic product.

       The Report also added that bribery alone already accounts an estimated $1 trillion
a year worldwide and that the proceeds of corruption in bribes received by public

officials from developing and transition economies are estimated to be between $20
billion to $40 billion per annum, roughly equivalent to 20 to 40 percent of official
development                                                               assistance

       Be that as it may, the estimated losses and cost brought about by corrupt activities
for developing nations are both staggering and disconcerting.

        The impact cannot simply be seen or viewed however in simple or specific
monetary terms because the spiraling incidences of widespread and endemic corruption
among developing societies have been known to have impaired efforts to alleviate
poverty conditions while at the same time eroding development, weakening the
credibility and effectiveness of public leaders and institutions. A fairly recent World
Bank study puts the impact more succinctly:

               ―Theft of assets by corrupt officials, often at the highest
               levels of government, weakens confidence in public
               institutions, damages the private investment climate, and
               divests needed funding available for core investment in
               such poverty alleviation measures as public health,
               education,                and                infrastructure‖

       Developing nations reportedly lose from US$ 20 to US$40 billion each year due
to corruption and this may represent a conservative estimate because the magnitude
cannot be ascertained conclusively since corrupt dealings are generally shrouded in
secrecy. It is thus possible that these estimates can be considered as tentative and
conservative because they are based on or limited to cases that have been exposed and
somehow quantified.

        The estimates of losses are disconcerting especially to poor or poverty-stricken
countries where corruption takes a toll on the delivery of basic services or those programs
that are supposed to alleviate poverty conditions. Roughly 25 percent of GDP of African
nations or about US$ 148 billion are lost yearly to corruption from those ranging from
petty bribes to anomalies discovered in major public transactions.

        About 50 percent in allocated health funds are siphoned off from legitimate users
such as hospitals, clinics and health centers. Corruption in developing countries has also
been reported as having increased the cost of connecting a household to a water network
by as much as 30 percent, inflating the cost of water and sanitation by more than US $48
billion or nearly half of the annual global aid outlays according to a Transparency
International Study in 2008 (

       Corruption has also been reported to have caused severe damage to the
environment and the ecology as well as in jeopardizing the livelihood opportunities of
poor communities dependent for their subsistence on natural resources.

        A UNDP Report in 2008 on accelerating human development in Asia and the
Pacific for instance indicated the deterioration and depletion of natural resources, notably
of primary forests and inshore fishing grounds, where many communities rely on for their
livelihoods in Indonesia. The Indonesian government has estimated that lost forest
revenue costs the nation up to US $4 billion a year or around five times the annual budget
for the Indonesian department of health (

        Much more can certainly be added to this distressing litany of incidences and
cases. These brief and revealing accounts and studies and their data merely digest the
extent and magnitude of the corruption problem. The more disturbing problem is that
cases continue to multiply so as to corrode the sensibilities and the moral fabrics of
nation states and their populace. Corruption somehow continues to thrive and seemingly
untrammeled by efforts and initiatives by upright leaders of countries and of the
international community. What is being done to address the address and minimize
corruption? To be sure, there have been many responses among nations and the
international community.


         Over the years, various efforts, movements and institutions have been launched in
modern times to combat corruption in all its forms and manifestations. Upright
governments and leaders have struggled to contain the evils of corrupt practices in their
societies even as various penalties and sanctions have been devised to curb corrupt

         For the most part, many governments of nation states today have provided for the
enactment of varying statutes and legislations, as well as policies and procedures
designed to contain corruption in their respective societies. Public organizations and
institutions dedicated to the investigation, prosecution and prevention of corrupt
practices, among others, have likewise been established as part of the anti-corruption

        Anti-corruption measures have not just proliferated among nation states; they
have also brought a growing collection of regional and international agreements designed
to institutionalize collective action among nation states against corrupt activities. In
recent years, international accords, protocols and conventions, both plurilateral and
multilateral, have been conceived and initiated by governments, business or civil society
organizations. These agreements have multiplied through the years, embodying anti-

corruption principles, commitments, advocacies, measures and counter measures
characterized by cooperation made among participating member nation states.

        Thus, cooperation agreements to fight corruption at the global and regional levels
were launched to underscore and reflect the continuing and collective concern among the
international community of the untrammeled rise of corruption incidences among nation

        The more significant ones include: the European Partners Against Corruption
(EPAC), 2004; the United Nations Convention Against Corruption (UNCAC, 2003); the
Financial Action Task Force on Money Laundering (FATF): The Forty Financial Action
Task Force Recommendations, as revised in 2003; the African Union Convention on
Preventing and Combating Corruption and Related Offences, 2002; the Global
Organization of Parliamentarians Against Corruption (GOPAC) launched in 2000 and
supported by its regional networks, namely, the African Parliamentarians Network
Against Corruption (APNAC), the Southeast Asian Parliamentarians Against Corruption
(SEAPAC) and the Latin American Parliamentarians Against Corruption (LAPAC); the
Council of Europe Criminal Law Convention on Corruption, 1999; the Council of Europe
Civil Law Convention on Corruption, 1999; the Stability Pact Anti-Corruption Initiative
(SPAI) in South Eastern Europe, adopted in 1999; the Anti-Corruption Initiative in the
Asia-Pacific organized by the Asian Development Bank in 1999; the Group of States
Against Corruption (GRECO), 1999; the OECD Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions, 1997 and the companion
OECD Revised Recommendation on Combating Bribery in International Business
Transactions; the European Union Convention on the Fight against Corruption Involving
Officials of the European Communities or Officials of Member States, 1997; the
Organization of American States (OAS): Inter-American Convention against Corruption,
1996; and the WTO Plurilateral Agreement on Government Procurement, 1994.

        If these agreements entered into among member nation states highlighted the
growing concern and apprehension about the unabated rise of corruption incidences in
many societies today, the rise in the number of international and regional organizations
and movements monitoring, observing or reporting on corrupt activities have likewise
increased. This growing list of international and regional agreements, conventions, or
protocols has somehow spawned an equally growing number of conferences,
conventions, meetings, seminars and other similar for a organized by nation-states,
regional associations or civil society organizations operating at the national, regional and
international levels.

        The alarming increase in incidences of corrupt practices has likewise spurred the
rise of organizations dedicated to combating corruption. Thus, the proliferation of anti-
corruption institutions such as the Transparency International founded in 1993, the
International Association of Anti-Corruption Authorities organized in Merida, Mexico in
2003, the Asia-Pacific Economic Cooperation Anti-Corruption Transparency Experts
Task Force, organized in 2007, the European Anti-Corruption Contact Points Network set
up in 2008 and the International Anti-Corruption Academy based in Luxembourg,

Austria established in 2011, among others, reflect the growing concern on the seriousness
of the corruption problem in the world today.

       Along these initiatives, several international organizations have likewise
embarked in anti-corruption projects such as the United Nations and its organizations, the
USAID with its Anti-Corruption strategy Program, the World Economic Forum and its
Partnering Against the Corruption Initiative (PACI) and the International Chamber of

        The challenge remains daunting as ever in spite of these initiatives. Transparency
International‘s Managing Director Cobus de Swardt laments for instance that ―only seven
of 38 countries signed up to the OECD anti-bribery convention are actively investigating
and prosecuting companies for bribing foreign officials,‖ and that the ―situation has
shown no signs of improvement for two years.‖ He adds that ―bribery is becoming
sophisticated‖ and that confirms the fact that corruption results in ―the denial to public
services, to economic opportunity, to a voice and to justice – that it cannot be seen as
anything but a criminal act of whom the victim is society at large…‖ (de Swardt, 2011:

        The corruption phenomena and measures to counteract them have also brought
about a rich and fertile stock of country and cross-country researches and studies.
Through the years, public administration scholars and academics, researchers and
experts, commentators and practitioners, as well as institutions in the public and private
sectors have grappled with the mysteries and mystiques of corruption, the problematic of
accountability and the issues of inefficiency in government in their respective
governments and societies.

        The list of these efforts can be long yet not exhaustive for they may cover only
certain nationalities where corruption has been acknowledged and accepted.1 In fact,
           The literature discussing, exploring, analyzing and explaining accountability and the problematic
of corrupt practices and the measures to contain them is vast and proliferating. The entries indicated here
are partial listings and certainly not comprehensive enough because they represent only those studies in the
Asia-Pacific Region and does not cover other regions or continents (i.e., Latin America, Europe, Africa and
Australia) to which this study did not have access to. The point however is that there are indeed initiatives
that have evolved thru the years with a burgeoning mass of literature so much so that the twin issues of
accountability and corruption can be treated as a specialized courses or fields of specialization in public
administration, political science, management or law degree programs. Thus, some of these studies include:
Gonzalez, 2011; Scott, 2011; Kwong, 2011; Beh, 2011; Vichit-Vadakan, 2011; Domingo and Reyes, 2011;
Transparency and Accountability Network, 2011; Brillantes and Fernandez, 2009; Co, 2009; Ocampo,
2009; Prakash, 2009); Reyes, V.C., 2009; Reyes, D.R., 2009; 1989; 1987; 1982; UNDP, 2008; Boncodin,
2007; Holmes, 2007; Constantino-David, 2007; Cabo, 2007; Osborne, 2007; AIM, 2006; Ursal, 2006;
Fernandez, 2004; Office of the Ombudsman, Republic of the Philippines, 2004; Balogun, 2001; Vinten,
1999; 1994; 1992; WB, 2000; ADB, 1998; Alfiler, 1995; 1979; 1977; 1975; Chua and Gould, 1995; Chee,
1991; Dhungel and Goutam, 1991; Hayllar, 1991; Le Herrisier, 1991; Quah, 1991; Tangcangco, 1991;
1989; Yan, 1991; Richter, Burke and Doig, 1990; Bacani and Cailao, 1990; Lee, 1989; O‘uchi, 1989;
Pradhan, 1989; Raksasataya, 1989; Ro, 1989; Simms, 1989; Carino, 1986; 1979; 1977; 1975; Carino and
de Leon, 1983; Bok, 1980; Carino and de Guzman, 1979; Bautista, 1979; Briones, 1979; Endriga, 1979;
Abueva, 1970; Iglesias, 1963).

early cross country studies for instance undertaken by academics and scholars in Asia had
to use euphemistic labels or ―scholarly sounding‖ terms such as ―deviant bureaucratic
behavior‖ or ―negative bureaucratic behavior‖ to study and analyze bureaucratic
corruption in Asia and the Pacific.

        The use of these terms were resorted to or adopted by academics to disguise their
efforts and be able to conduct unimpeded studies on the phenomena of corrupt behavior
in participating countries which may not be tolerant in exploring or exposing the presence
of corruption in their bureaucracies. They were also resorted to in order to avoid
harassment or disapproval by governments of the involvement of their academics in the
project (Carino and de Guzman, 1979; Bautista, 1979; Briones, 1979).


        The Philippines has struggled against the menace of graft and corruption in
government since colonial times. Spanning from the colonial periods marked by the
occupation of three colonial rulers – Spain, the United States and Japan - and moving up
to the independence period in 1946, the country has endured continuing bouts and
accounts of corrupt administrations committed by colonial regimes and even by its own

        In 1986 and in 2001, the country‘s people power revolutions toppled and ousted
two presidents accused of corruption. Impeachment proceedings were likewise filed
against the president of the previous administration as well as other officials impeachable
under the Constitution.2

        In 2010, the Ombudsman, accused of selective prosecution and inability to fairly
investigate and charge leaders and personalities associated with the previous
administration of Gloria Macapagal Arroyo (2001-2010), chose to resign from office
after being threatened with impeachment in Congress.

      As pointed previously, corruption seriously impairs the quality of life in Third
World settings because the limited resources allotted for the delivery of basic services are
compromised when siphoned off from their intended purposes.

         The Philippines represents a critical case where corrupt activities have weakened
the capacity of government to respond to pressing needs in various functions – from such
activities as the build-up of infrastructure facilities such as irrigation, road networks and
bridges, airports and marine ports to the delivery of basic services in health, education,
social welfare, sanitation, and many others.

  For background information on the history of the Philippines, its government and bureaucracy, the
interested reader may refer to the following materials: Reyes, 2011;2003; Francia, 2010; Abinales and
Amoroso, 2005; Corpuz, 1989; 1957; and Agoncillo, 1977.

       Corruption has also eroded the credibility of leaders and institutions causing for
the most part, alienation, disenchantment, disaffection or even outright anger against
government. The incidences of corruption has likewise brought about frustration and
hopelessness among upright and well-meaning citizens, who in some cases, have chosen
to avoid paying taxes ―since these will be just stolen, so I might as well be the one to steal
the money I earn.‖

         To be sure, various political leaders, several administrations and their
bureaucracies, political parties, civic organizations and society in general have taken
initiatives to suppress corruption in the Philippines. Unfortunately, corrupt activities
continues to thrive, partly as legacies of the colonial periods following independence and
partly as adopted practices by newly installed administrations and their leaders to
perpetuate power and enrich themselves.

        This perhaps maybe understandable because as in other colonial systems, the
periods of colonial regimes had demonstrated that corrupt activities committed by
colonial masters were somehow rewarded instead of sanctioned in spite of periodic anti-
corruption proclamations, edicts and other issuances, as well as structures intended to
fight corruption.

       Conceivably however, colonial legacies may only be among the numerous
reasons advanced by studies as to the causes of corruption or why they continue to thrive.
But these are not the only reason for there have been numerable analyses and
explanations as to why corruption persists in third world countries in the post-
independence era. Such factors as low salaries and poor working conditions of
bureaucrats, poverty, dishonest leadership, the culture of patronage, opportunities to
commit graft and the low risk of detection, lack of political will, weak and slow
administration of justice have been cited by experts and analysts as among the reasons
why corruption in the Philippines continue to thrive (Quah, 2009; 2003; Reyes, V. Jr.,
2009; Obejas, 2008; Ursal, 2006; World Bank, 2000).


       Apparently, as in the global perspective, there are also no reliable and quantified
data as to how much is lost to corruption and related anomalies in the Philippines
annually. As the Philippine Transparency Reporting Project maintains, an accurate figure
is impossible to gauge for obvious reasons (
GB/facts.aspx). As pointed out earlier, exact figures as to annual losses to corruption
cannot be accurately gauged because the activities are enshrouded in secrecy and
estimates can only be speculative or derived from calculated or informed estimates based
on certain assumptions. Information and data sources such as surveys, publications,
commentaries, anecdotes and government data can only provide an indication of the
prevalence of systematic corruption (World Bank, 2000)

        The data as to the figures can also vary from time to time when inflation values
are factored in over time in the estimates. Data for estimates made two or three decades
ago may appear to be not that alarming when compared to current values of whatever
currency or denomination is used.

          Likewise, the estimates can sometimes be reflected only as part of other crimes
(i.e., illegal drug dealing, robberies, kidnap for ransom, etc.) and may not be exactly
categorized as ―corruption.‖ But the estimates can be revealing when one views it from
the point of view of opportunities lost or of services denied because of leakages in the
disbursement of public funds or in the collection of revenues legally accruable to the

        There is however some certainty that a sizeable amount due the government out
of taxes (tax evasion, under-reporting of tax liabilities, corruption in tax collecting
agencies, etc.), duties and tariffs (smuggling, under-reporting of tax liabilities) and
similar forms of government revenues and income are misappropriated. Likewise,
disbursements and expenditure (purchases, contract of services, etc.) are also
systematically pilfered. Thus, it could be safely assumed that funds entering the public
coffers and those being disbursed are embezzled thru various corrupt activities.

        In the 1980s for instance, former Assemblyman Vicente Millora was cited as
calculating the Philippines‘ annual loss to corruption to about 10 per cent of the country‘s
gross national product. A Commission on Audit appraisal from 1980 to 1985 claimed that
some US$ 117.5 million was lost due to malversation of public funds and cash shortages
of accountable officers.

       The Sandiganbayan, or the Philippine anti-graft court made operational in 1978
during the martial law period, noted that the government was defrauded by as much as
130.4 million pesos in some 3,395 graft cases filed over a three year period alone from
1979 to 1981 (de Guzman, Brillantes and Pacho, 1988; de Guzman, 1988).

         In a 2000 World Bank Report, reports on corruption loss in the country made by
the Ombudsman in the Philippines were cited as amounting to as much as US$48 billion
over the last 20 years. The figure was reported to be larger than the country‘s foreign debt
at that time, which was pegged at about US$40.6 billion. The Commission on Audit also
estimated around that time that the country‘s loss to corruption can roughly be 2 billion
pesos annually (WB, 2000).

         The World Bank calculates likewise that about 20 per cent of the annual budget of
the Philippines is lost to corruption or the equivalent of as much as 3.8 per cent of the
country‘s gross national product. From 1995 to 2000 alone, the estimated loss to
corruption was valued at about 609 billion pesos or about US12 billion
(; Transparency and
Accountability Network, 2011).

        Expanded and extrapolated however for a 20 year period from 1977 to 1997,
World Bank estimates reached about US$48 billion or roughly 1.968 trillion pesos

       The Office of the Ombudsman has also estimated in 1999 that the amount lost to
corruption in the Philippines could go as high as US$31.5 billion (at the then prevailing
exchange rates) or Ph 1.2 trillion during the last twenty five years (as cited in World
Bank, 2000: 35).

        Likewise, another estimate made by a Civil Service Commission official in 2004
cited a report of the Department of Budget and Management that claimed that the loss to
corruption due to fraudulent practices alone could amount to as much as US$382 million
from the previous year alone, and that leakages in road projects transactions could reach
to about US$1.3 billion (Fernandez, 2004: 92).

       Put in more operational perspectives, based on a claim by Senator Edgardo J.
Angara in 2002 in a speech at the Philippine Senate, losses to corruption in the
Philippines can amount to an average of 22 billion pesos annually which is twice the
budget of the Department of Health that year. The loss could also be translated, claims
Senator Angara, to 520 million textbooks for public school children, 63,000 new
classrooms or 1,500 kilometers of concrete farm to market roads (Angara, 2002).

       On the other hand, former President Fidel Ramos, in his keynote address to the
Fletcher School of Law and Diplomacy in 2001 at Tufts University in Massachusetts
claimed that 20 per cent of the government budget of the Philippines is ―lost to corruption
every year‖ ( as cited in Abinales and Amoroso, 2005: 258).

       The Transparency and Accountability Network also cited the Ombudsman in a
paper as gauging that 30 per cent of government contracts are diverted to corruption
annually (Transparency and Accountability Network, 2011).

      As it is, the 2010 Corruption Perceptions Index of the Transparency International,
which measures the perceived levels of public sector corruption in 178 countries around
the world, has listed the Philippines as no. 134, along with Azerbaijan, Bangladesh,
Honduras, Nigeria, Sierra Leone, Togo, Ukraine and Zimbabwe (de Swardt, 2011).

        It is perhaps in this light that recent estimates have increased loss to corruption in
the Philippines to be reaching to about 30 per cent of the annual budget, which would be
about US$11 billion of the US$34 billion national budget for 2010. This would be lost, if
not already lost to such corrupt practices as ghost projects and manipulated payrolls,
rigged biddings of public contracts, protection money, extortion, tax evasion and bribery,
among       many      other     forms      or    manifestations    of    corrupt     practices

       As can be seen from these varying calculations, the estimates of losses to
corruption have practically grown thru the years, from around 10 percent of GNP in the

1980s to 20 percent of the national budget in 2001, and rising to the estimated levels of
30 percent of the budget in the present period. The point is clear and apparent. Corruption
has persisted and remains to be a growing industry in the Philippines that has impaired
the capacities and credibility of various institutions of government, has also toppled
leaders and impoverished the people who have been systematically and habitually denied
access to basic services and opportunities.

        On top of these, corruption has likewise weakened the government‘s capacity to
deal decisively with the separatist movements in Mindanao, a rebellion that has been on-
going for over thirty years, as well as with communist rebels, which has persisted for
over fifty years. Continuing corruption within the Armed Forces of the Philippines has
denied those in the front-lines with needed weaponry and supplies because funds have
been diverted by unscrupulous ranking military officers and which later would be
highlighted and exposed in the so-called ―conversion funds,‖ which are still the subject of
a senate investigations. Budget appropriations for the military have been diverted to
private accounts so as to compromise the modernization program of the AFP.

         There are also unverified comments suggesting that military officials would time
and again provoke skirmishes with rebels or with bandits to catch the attention of national
officials and justify increases or releases of funds. As such, the Philippines has now
engaged in a protracted war of attrition, particularly in the South, that has not just
resulted in the killing of civilians, soldiers and rebels, but has dislocated communities,
displaced households and likewise discouraged investments that should bring economic
activities and provide employment and livelihood opportunities.

        This is not however to suggest that corruption as phenomenon can be claimed as
the reason for rebellion or for the continuing state of conflict. To be sure, this is attended
by various other complex explanations but it cannot be denied however that corruption in
the ranks of military and civilian officials is a major contributing factor that exacerbates
the already critical situation. As had been pointed out earlier, corruption hinder and
undermine the delivery of basic services in subject areas of conflict, and this certainly can
be considered as an outstanding reason why alienation and frustration with government
are evoked from the populace and foments rebellion.

        Likewise, the unabated increase or rise in crime incidences in the country can also
somehow be attributed to corruption in the ranks of police officials in the Philippine
National Police. Investigations on police corruption and involvement in crime syndicates
or in individual criminal cases have become part and parcel of continuing investigations
in the Philippines as evidenced by such cases as the purchase of second helicopters
passed off and paid for as brand new. Horror stories of police officers caught involved in
drug dealing, carjacking and kidnap for ransom cases, as well as bribery and extortion
have practically become common.

       Corruption in the Philippines is however not entirely a recent phenomenon that
has emerged in the independence era. It has been the bane and blight that has afflicted
Philippine society since colonial times. Similarly, efforts and initiatives to contain and

curb corruption had been a prominent fixture in the colonial story of the country as
governors after governors introduced various anti-corruption approaches only to discover
that the rapacity continues to grow. If only to highlight the long and hard history that has
characterized the country‘s experiences with corrupt practices, a discussion is provided
here to chronicle at least important though passing accounts of corruption and the
measures established in the Philippines to address them.


        Corruption and its various manifestations and practices have been prominent
fixtures in the development and evolution of the Philippine nation-state. As a colony of
three major colonial powers – Spain, the United States and Japan – the country and its
people have grappled and endured with corrupt policies and practices instituted by its
colonizers during these colonial periods. It is therefore no surprise that these habits
spilled over to the period of independence.

        It is perhaps a given fact that the subjugation of the islands were not exactly
inspired by benign objectives of converting heathen lands into Christianity or of altruistic
motives of civilizing backward settlements. These are but part of the justifications of
conquest since ultimately, the objectives are dictated by the need to explore opportunities
in new territories which can be exploited to support the coffers of the colonizers (Reyes,
2011b; Francia, 2010; Abinales and Amoroso, 2005; Endriga, 2003; Corpuz, 1989; 1957;
Veneracion, 1988).

        Corrupt practices could just the same be said as part of the legacies of colonial
times, transmuted or adjusted in time to suit the ethos of the newly independent states and
its leaders. Such practices as bribery, extortion, embezzlement of funds and properties,
and similar rent seeking practices marked the colonial periods and carried on to the
independence era.

       It must be emphasized however that this reasoning only partly explains the
prevalence of corruption in the Philippines for corrupt activities have become ―a way of
life‖ among corrupt bureaucrats and politicians where new methods and practices of
corrupt behavior have evolved freely.

Corruption in the Spanish Era (1521-1896)

        Corruption and mismanagement had characterized the more than 300 hundred
years of Spanish rule in the Philippines. Spanish colonial objectives and the attendant
policies instituted to govern the islands brought about motivations and tendencies that

tolerated corrupt practices. While the Spanish conquest was invariably attended by
positive and idealistic aims of religious crusades, it was also a colonial venture for
―political and private aggrandizement‖ (Corpuz, 1957: 10).

        The noble objectives of converting so-called ―heathen lands‖ into Christianity
were counterbalanced by what Endriga asserts as ―the practical objective of increasing
the royal estate through tributes, monopolies, fees and fines,‖ bringing about what he
refers to as ―[a] huge body of laws and a plethora of institutions …built up through the
centuries to uphold the economic aims of the colonial enterprise, which nevertheless were
not realized, the colonies being consistently losing propositions‖ (Endriga, 2003: 394).

        For one, the philosophy regarding the colonies was based on the belief that they
were the Crown‘s personal possessions and thus could dispose of as he pleased. Public
offices were part of these possessions in the colonies and were regarded either as
positions of the King to be dispensed with either as grants or favors (―merced‖) to loyal
subjects including their heirs who were rewarded for their services, or as merchandise
sold to highest bidders. The sale of public offices to claimants helped financed the wars
and lavish lifestyle of the king and of the elite (Reyes, 2011b; Endriga, 2003; Veneracion,
1988; Corpuz, 1957).

       In these arrangements, public office positions were thus treated as opportunities to
earn or as investments for private gain. It was therefore understandable that those
appointed in this manner resort to corrupt practices to recoup investments or make the
most out of the favor. Corruption was thus the natural consequence in this dynamic.3
Corpuz described the impact of the sale of offices more vividly as follows:

                  ―…What is important is that the moral aims and the
                  Christian responsibility which the colonial regime
                  professed as its foundations were tossed as so much
                  eyewash into the discard by the brazen immorality of
                  bureaucrats and the criminal collaboration of their
                  superiors. Public office became a commodity to be bought
                  and exploited, for the lackey turned alcalde viewed the new
                  position as an investment. He had a limited period of time
                  in which to make the office pay for the expenses he had
                  incurred in the process of securing it, to pay off any official
                  attempts to penalize his frauds and crimes, and to yield him
                  a sizeable fortune at the end of it all…‖ (Corpuz, 1957:

  Veneracion (1988:39-43), citing Nicolas Cushner, 1971, provides a tabulation of some sold offices in the
Philippines during the Spanish era from 1589 to 1826. The listing reflects the records of the buyers, the
public offices bought, the prices paid for and the dates of confirmation to the position by the Council of the
Indies (Consejo de Indias), which was the highest policy-making office in the colonies during the Spanish

        This pernicious practice of selling public offices was not only tolerated. It was
legitimized because various laws regulated the sale of offices and even advertised every
week by the governor with the assistance of the fiscal of the Audiencia, which is an entity
to be discussed later.

        Once a position was sold by bidding, no ―allegation of deceit or
misrepresentation‖ was allowed to be made by either vendor or vendee, whereby a report
of the evaluation and sale was to be submitted by the governor (Veneracion, 1988: 37).4

        Compounding the situation is the marked corruption in the Church which held
sway even with secular officials. The interdependence of secular and clerical religious
officials contributed to the mismanagement and corrupt practices were quite prevalent as
plunder of the islands were committed to support not only the crown, but religious orders.
It was estimated that friar estates owned, according to some accounts, ―nearly 40 percent
of the surface area in the four Tagalog-speaking provinces‖ surrounding Manila
(Abinales and Amoroso, 2005: 80).

        A more specific record provided that ―[b]y the end of the nineteenth century, the
drive of the friars for the acquisition of land is suggested by the control of 24.3 per cent
of arable land in Bulacan, 28.8 per cent in Laguna, 82 per cent in Cavite, and nearly 100
per cent in Rizal‖ (Abueva, 1988: 27).

        During this long period of Spanish colonial rule, several institutions and positions
were established to address the problems of corruption, inefficiency and mismanagement,
among others, by the Spanish government. Foremost among these was the Audiencia of
Manila, which performed the functions of a superior judicial tribunal, assuming the role
of what is known in the contemporary period as a supreme court. Originally established
by royal decree in 1853, it was abolished six years later in 1589, only to be reconstituted
again in 1595, and functioned till the end of the Spanish regime.

       The Audiencia was composed of the governor and captain-general, acting as
presidente-gobernador; four oidores as members (or a magistrate, although there are
rough translations referring to it as ―auditor‖); a fiscal who served as prosecutor; an
alguacil mayor or chief constable; a teniente del gran chanciller or assistant to the grand
chancellor; and a roster of subordinate clerks and notaries (Corpuz, 1957).

        To monitor the provinces and localities, the Audiencia would name an oidor as a
visitador who was tasked to inspect not only local administration but the system of
religious instruction, the tributes assessed, the state of the natives, among other functions.

         The internal corruption that plagued this body however weakened and impaired
its efficiency and its authority. Reports of misconduct in the colony had necessitated the
administration in Madrid to introduce reforms by establishing agencies and policies that

  For the interested reader, Veneracion, 1988 provides a more detailed discussion of the process of sale and
furnishes examples or incidences involving the sale of offices during the Spanish regime.

would introduce better governance and at the same time check on corruption in the

        As Corpuz accounts, in 1774, in an effort to systematize colonial administration,
an executive ministry was established in Spain vested with authority to direct matters
involving war, finance, navigation and commerce. In 1790, this new ministry was
abolished but restored in 1814 with the name ―Ministerio universal de las Indias,‖ which
would again be abolished the following year only to be reestablished again in 1817 with
the label ―Secretaria del despacho universal de las Indias.‖

        During the years 1820, 1824, 1832, 1834, 1835, 1836 and 1851, this body would
be abolished and restored with different titles and functions, and then to be reconstituted
as the ―Ministerio de Ultramar‖ or the Ministry to supervise the colonies (Corpuz, 1957:

        Veneracion also reveals in a treatise on the history of the Philippine Civil Service
that ―[e]xtant documents at the Philippine National Archives are packed into 106 big
bundles of 6 to 8 cases, investigated and litigated by various offices throughout the
Philippines‖ and which presumably contained reports and notes of corruption cases
during the Spanish period (Veneracion, 1988: 56).

        It is instructive to note that the constant changes in establishing and abolishing,
naming and renaming, organizing and reorganizing agencies to effect reforms and fight
corruption that characterized the Spanish period continue to be prevalent in the present
day, as will be shown in succeeding discussions.

The American Colonial Era and the Commonwealth Period (1900-1941)

       The excesses and abuses of the Spanish colonial regime fomented several revolts
that began as early as 1574 with the uprisings led by Lakan Dula and Sulayman and
followed by several attempts that culminated in the Philippine revolution of 1896, which
served as the occasion for the Filipinos to declare independence from Spanish rule and
accordingly ratified a constitution and proclaimed the establishment of a Philippine
Republic. But this was truncated with the occupation of the Islands by the Americans
following a short-lived Spanish-American war in 1898 (Reyes, 2011a; 2011b; Francia,
2010; Abinales and Amoroso, 2005; Corpuz, 1989; Agoncillo and Guerrero, 1977).

        The American occupation of the Philippines was swift. While Filipino resistance
was manifested itself in a brief Filipino-American war, the Americans were able to
effectively contain the rebellion circa 1902. A military government was initially created
but this was soon replaced by a civil government which provided for a Philippine
Commission in 1900 that assumed legislative and executive functions.

        In time, the American regime adopted a policy of ―Filipinization‖ of appointments
to its colonial government, a clear departure from the Spanish practice of limiting
Filipino involvement in administration. The American colonial regime consequently
established a civil service system based on merit and fitness patterned after its own and
opened up appointments to the bureaucracy its created by way of open competitive
examinations (Reyes, 2011a; 2011b; Endriga, 2003; Corpuz, 1957).

        It should be pointed out as part of this narrative that the Americans have just gone
over a long period of corruption and discontinuities in its own system of government
during this period. The American government of the early and mid-nineteenth century
was characterized by partisan politics and the dominance of the spoils and patronage
system. The policy of appointing partisans of the party in power not based on merit and
fitness became a major feature in American public administration beginning with the
administration of President Andrew Jackson (1829-1837) and continuing on until the
assassination of President James Garfield in 1881 by a disgruntled office seeker.

        It was acknowledged that the five decades of what is now known in public
administration study as ―Jacksonian democracy,‖ ushered in a period of corrupt practices
as office holders, knowing that their stay in office depended on the political party in
power, enriched themselves and took advantage of their positions.

       As a result, reforms to address patronage politics and the corruption it spawned
was consequently instituted, resulting in the enactment of the Pendleton Act of 1883
which established a civil service system in the American federal bureaucracy based on
merit and fitness, and promptly insulated it from partisan politics.

        It is perhaps within this context that the Americans, upon taking control of the
Philippines in 1899, immediately adopted a system of administration patterned after their
own. The establishment of a civil service system based on merit and fitness in the
Philippines, provided under Act No. 5 in 1900, was one of the early pieces of legislation
in the American colonial regime.

        The Bureau of Civil Service in the Philippines was established on November 21,
1900 and given the mandate that the ―greatest care should be taken in the selection of
officials for civil administration‖ and that all recruits, both American and Filipino, were
to be ―men of the highest character and fitness‖ who would perform their functions and
duties unaffected by ―partisan politics‖ (Abinales and Amoroso, 2005: 119).

        The fight against corruption in the pre-Commonwealth period was however
pursued, and one narrative by American Governor-General Dwight Davis reported in
1930 that a total of 150 employees were dismissed or required to resign while
disciplinary action was taken against 1, 173 others (as quoted in Veneracion, 1988: 116).

       Endriga also pointed out that during this period high ranking American officials
were likewise involved such as William Cameron Forbes, who was Secretary of
Commerce and Police, and later on Governor-General. Forbes was accused of purchasing

choice lots in Baguio City for which it was alleged that a ridiculously low price was paid.
In his capacity as Secretary of Commerce and Police, Forbes had jurisdiction over the
then Bureau of Public Works which supervised expenditures of public money in Baguio
(Endriga, 1979: 252-253).

        Two other ranking American officials, Dean C. Worcester, then Secretary of the
Interior, and Executive Secretary Frank Carpenter were also reported as having taken
advantage of their positions to purchase real property at low prices and at the same time
had roads built in these sites to raise their values. These ranking officials were the subject
of investigations including other lesser ranking municipal officers such as treasurers,
chief clerks, and police chiefs (Endriga, 1979: 253).

       Compared however to the Spanish regime, prosecution was swift and sanctions
were imposed accordingly. It is perhaps for these reasons that corruption during the early
days of the American colonial administration was more or less contained even if there
were continuing reports of anomalies.

        As Filipinization of the American colonial administration expanded owing
primarily to the difficulty and costs of transporting and hiring American citizens, Filipino
leaders began to assume important positions in the legislature and executive departments
of the regime.

        The legislature, according to Abinales and Amoroso (2005) had its share of
landed interests derived and sustained into the period from the Spanish era. In time, the
menace of spoils and partisan politics attended by corruption began in earnest to creep up
into the regime. Abinales and Amoroso provide a telling description:

               ―…With their control of the colonial state vastly expanded,
              these leaders began to use it as an instrument of ‗primitive
              accumulation.‘ There were two sources of largesse. First
              was the state itself. Through the ‗spoils‘ system, Filipino
              politicians distributed offices (and their corresponding
              budgetary allocations) to relatives and supporters. Political
              appointment of kin, allies, and cronies became standard
              practice, with entry into government assured by the backing
              of a powerful politician. In exchange, an appointee
              facilitated the business success of his patron and protected
              other members of his network within the bureaucracy‖
              (Abinales and Amoroso, 2005: 141).

       The accounts also suggested that state corporations that were established to
promote colonial development were used as vehicles to material enrichment through
corrupt acts. As an example, it was claimed that the state owned Philippine National
Bank (PNB), which was created then by the Philippine Assembly to finance sugar
production and exportation was taken over by a Filipino leader, Sergio Osmena,
apparently ―in violation of every principle which prudence, intelligence and even honesty

could dictate‖ (Abinales and Amoroso, 2005: 141, citing Golay, 1998: 220). It was
alleged that Osmena used appointments to the PNB to repay political debts and that these
appointees authorized extravagant loans to companies in which they themselves were

       There were accounts that identified Manuel Quezon, who was to become the
President of the Philippine Commonwealth in 1935, as controlling the Manila Railroad
Company (MRC), another state owned corporation, and using it as a source of
employment for supporters, although he chose to hire professionals (Abinales and
Amoroso, 2005).

        It was also around this time when the evils of spoils and patronage again
resurfaced as President Quezon ―appropriated and tightened control over such vital
executive agencies as the Civil Service Bureau, the Bureau of the Budget, and the Bureau
of Audit – critical instruments in the disbursal of patronage because they administered the
flow of personnel and use of government monies‖ (Abinales and Amoroso, 2005: 153).

       These remain as scattered incidences of corruption that can be attributed to the
leadership, much in the same way as that of Marcos and Arroyo several decades later.
There may be other allegations or pockets of corrupt activities during the commonwealth
ear which was adopted by the American Colonial administration in 1935 to prepare a ten
year period to prepare the Philippines for independence.

       The accounts however are not as numerous as they were during the Spanish era,
as the initiatives for reforms perhaps placed them in check especially within the
bureaucracy where the merit and fitness policy was strictly observed. The
Commonwealth era was a time of consolidation with Filipino leaders, inspired with the
prospects of delivering an independent nation, sought to prove them as capable, and
perhaps, the significant proof would be a government freed of corruption and the
prevalence of the spoils practice of partisan politics.

The Japanese Interregnum (1941-1944)

        If corrupt practices flourished and were institutionalized during the more than 300
hundred years of Spanish rule, the reforms adopted in the Philippine bureaucracy during
the American era practically vanished during the almost five years of Japanese rule. The
Japanese launched an air raid on the Philippines in December 8, 1941, barely a day after
the attack on American installations in Pearl Harbor in Hawaii.

       By then the Japanese invasion of the Philippines was on, forcing the
Commonwealth government of Manuel Quezon and its leaders to flee and subsequently
go in exile in the United States. An ailing Quezon, along with Vice-President Osmena
and a number of their staff were whisked out of the country and brought to Australia
where they temporarily sought sanctuary to be able to proceed to the United States to

establish a government in exile. American military and civil officials led by Gen.
Douglas MacArthur also fled the Philippines and retreated to Australia (Abinales and
Amoroso, 2005).

        By 1943, the Japanese had instituted a ―second republic‖ in the Philippines and
Filipino leaders led by Jose P. Laurel were compelled to serve to show a semblance of
legitimacy for the Japanese sponsored puppet regime. In the process of constituting a new
government, the civil servants who served in the Commonwealth administration were
practically conscripted to assume their functions on the pain of sanctions.

        For pragmatic reasons, the members of the bureaucracy cooperated half-heartedly,
but saw in it the opportunity to secretly undermine the regime by committing acts that
would create discontinuities and inefficiencies in their offices. These involve such habits
as tardiness, absenteeism, officiousness, committing red tape to slow down government
processes, and more significantly, corrupt activities which were, for all intents and
purposes, considered then as heroic or patriotic acts because it reflected disguised
resistance to Japanese rule. Unfortunately, the over-all effect of this brief interlude was
that these nefarious practices were carried over to the independence period in 1946, and
was compounded by a nation in disarray where economic activities were at a standstill
(Reyes, 2011b; Corpuz, 1957).


The Post World War II Administrations in the Philippines

        Like any other country in the Third World that gained independence in the post
World War II era, the Philippines experienced severe dislocation with the granting of
independence in July, 1946. Manila, the country‘s capital, was declared by American
Senator Millard Tydings as the most completely devastated capital city anywhere in the
world next only to Warsaw in Poland (Reyes, 2011b; Shalom, 1986). By the time,
Philippine bureaucracy suffered in prestige and traumatized by war, prompting Corpuz it
as being ―characterized mainly by low prestige, incompetence, meager resources, and a
large measure of cynical corruption‖ (Corpuz, 1957: 222). Sub-standard salaries
compounded by an economy in shambles resulted in corrupt behavior, even with
assistance and grants in aid coming from the United States.

       But corruption in post-war and post-independence Philippines was not limited to
the bureaucracy. The succeeding administrations of the five Presidents after the war of
Presidents Manuel Roxas, Elpidio Quirino, Ramon Magsaysay, Carlos Garcia and

Diosdado Macapagal were hounded and plagued by continuing reports of corrupt
practices among politicians.5

        President Quirino who as Vice President succeeded Manuel Roxas in 1948 when
the latter died in office, was described as being controlled and dominated by cacique-
landlord interests, and was perceived to be ―corrupt and inept‖ (Abaya, 1967: 56). In this
milieu, cronyism and the spoils system again emerged, coupled with perennial allegations
of election fraud. For instance, war-damage claims and payment benefited only a small
sector of the country, as funds were distributed to ―those closest to the regime.‖ Military
―back pay‖ and related compensation for example raised a ―rich source of largesse,‖ both
genuine and fraudulent that went into the hands of well connected personalities
(Abinales and Amoroso, 2005: 171).

        The succeeding administrations of Magsaysay, Garcia and Macapagal saw a
series of anti-corruption agencies that were constituted and re-constituted but did not
appear to stem the tide of corrupt practices. It was also during this period that the major
legislation against corruption, Republic Act 3019 or the Anti-Graft and Corrupt Practices
Act, was enacted. But these were not enough, even if each administration vowed to
institute reforms and fight corruption in government.

        President Garcia and his administration, which assumed the presidency upon the
death of Magsaysay in a plane crash in May 1957, was besieged and tainted by reports
and accounts of corrupt practices. As economic growth failed to contain social inequity,
state corporations became what Abinales and Amoroso labeled as ―havens of corruption,
bribery, fraudulent transactions, and favoritism.‖ Businesses which supported Garcia‘s
ascendancy to power were accused as ―business buccaneers‖ who ―were rewarded with
easy access to dollar allocations and credits, import privileges, tax exemptions, and, if
they faced bankruptcy, government bailouts‖ (Abinales and Amoroso, 2005: 183).

        Scandals and scams began to pile up such malversation of funds allotted for
government owned corporations such as the National Marketing Corporation, favoritism
in the disbursement of Japanese reparation funds, the privatization of public lands and the
private use of government retirement accounts, among others (Abinales and Amoroso,

       It is interesting to note that even Garcia himself was reported to have candidly
remark that when it came to cronyism, his administration had become ―a ship that has
gathered a lot of barnacles along the way; [and] I cannot shake them off…‖ (Abinales
and Amoroso, 2005: 183).

        Thus, by the end of Garcia‘s second year in office, Filipinos perceived not much
difference between the Garcia and Quirino administrations in terms of corruption
(Abinales and Amoroso, 2005: 183). In his run for reelection in 1961, Garcia was

 For a brief account of the background of the Philippine presidency, the reader may refer to Brillantes,
1988 as well as to Abinales and Amoroso, 2005)

defeated by his rival, Diosdado Macapagal, who like him, ran on the platform among
others of combating corruption in government.

       Macapagal‘s term as president can perhaps be credited with being the first
administration to have given special attention to national development planning, which
was given impetus with the establishment of a Program Implementation Agency tasked
with creating and executing a comprehensive national economic development plan.

        Macapagal early on vowed to go after tax evaders and corrupt businessmen,
targeting specifically the well-entrenched Lopez family which had controlling interests in
sugar, media and power utilities. Media exposes of government corruption however
stymied Macapagal‘s efforts and stories of conspicuous consumption amid growing
poverty, presidential vindictiveness, and growing nepotism undermined his presidency.
Sweetheart deals in smuggling operations and agricultural interests plagued the

       But these issues gained striking significance and attention with the dismissal of
Macapagal‘s Justice Secretary, the crusading Jose W. Diokno, who investigated dealings
of American business kingpin Harry Stonehill that was widely believed as close to the
President‘s inner circle.

        The dismissal of Diokno, who was perceived as a committed and
uncompromising official against corruption, was described by the influential publication
the Philippine Free Press as a ―major setback in the administration‘s crusade against graft
and corruption‖ Abinales and Amoroso, 2005: 186, citing the Philippine Free Press, May
26, 1962).

       Like Garcia before him, Macapagal‘s term ended with the stigma of rampant
corruption and paved the way to the administration of Ferdinand Marcos who won the
presidential election of 1965.

The Marcos Era and the Martial Law Period (1965-1986)

        Any incisive discussion of corruption in the Philippines would have to inevitably
give attention to the more than two decades of Marcos rule. Marcos ascended to the
presidency mainly through backroom wheeling and dealing, switching from his party, the
Liberal Party to the opposing Nacionalista Party when it became evident that Macapagal,
who was elected under the aegis of the Liberals, declared his intention to run for

        Marcos was readily ―absorbed‖ as the presidential candidate of the Nacionalista
Party in 1965 and run on the slogan that ―this nation can be great again.‖ The corruption
that plagued the previous administrations was a prominent issue in the campaign trail and

Marcos, even if stories of corruption in his stint at the Senate roundly circulated,
promised ―to fight corruption and reform the bankrupt political system.‖

        The early years of the Marcos administration witnessed initiatives towards
economic liberalization, the pursuit of productivity based on comprehensive land reform,
and the use of executive and military agencies to restructure society. But in the same vein
with that of its predecessors, it likewise suffered from a corrupt image although Marcos
managed to deflect corruption charges. It was also during his first term that government
deficit more than doubled and stories of corruption started to circulate (Abinales and
Amoroso, 2005).

        In 1969, Marcos became the first President of the Philippines to win reelection
which was reported to have reached U.S. $50 million much of which were derived from
public funds. Money was spent and was used to finance disbursements to the patronage
network streaming down to the level of the barrios while millions were also spent in
advertising, billboards, propaganda materials, campaign gifts and the ―virtual monopoly
of radio and television time‖ (Abinales and Amoroso, 2005: 198).

        The reelection of Marcos practically plunged the country into crisis with the
deficit exacerbated and reaching one billion pesos – substantial amount at the time.
Inflation reached an all-time high and the value of the peso dropped from two pesos to
the dollar to six. These developments brought about increasing militancy and soon
protests against the Marcos administration became widespread, as stories of corruption
and extravagance of Marcos‘ influential wife Imelda continue to be a prominent item of
gossip and media accounts (Abinales and Amoroso, 2005).

        1n September, 1972, Marcos, barred under the 1935 Philippine Constitution from
seeking a third term, declared martial law under Presidential Proclamation 1081 using the
guise of growing radicalism and communist insurgency. Marcos abolished Congress,
arrested and put to jail his right wing and left-wing critics and opponents and assumed
legislative powers under what he termed as ―constitutional authoritarianism.‖ In so doing,
Marcos effectively ended the country‘s two party system and fashioned out a monolithic
political bloc under his ―Kilusan ng Bagong Lipunan‖ (or KBL, roughly translated as
New Society Movement).

        During this period, Marcos ruled by Presidential Decrees which were issued in
unremitting fashion and consolidated wealth and power with the support of his inner
circle and trusted aides and supporters. It was during this time that the term ―crony
capitalism‖ became a byword in the Philippine economy and which was based not on
competition, but on monopoly, special access, manipulation of loans and credits,
favoritism, and plunder of the state coffers.

        The Marcos martial law era can be termed as having reached among the high
point of corruption in the Philippines with crony intervention, involvement or control of
industries as diverse as sugar, agriculture, automotive, hotel and entertainment, banking,
construction and infrastructure, media and other businesses. While Marcos issued decrees

to combat corruption, he abetted and tolerated that of his own and of his family and
cronies. Prosecution of corruption was thus selective and applied only to those outside
Marcos‘ circle or to the enemies of the regime. When the Marcos regime ended with the
February, 1986 EDSA people power revolution, it was estimated that around U.S. 10
billion was plundered by the Marcoses and his cronies.

        As corruption and extravagance in the Marcos regime continued unabated,
poverty in the country became more widespread and endemic. And so did protest and
resistance to the regime, highlighted by the growing strength of student protests, left-
wing and right-wing opposition and disaffection within segments in the military.

       On August 21, 1983, Marcos‘ major critic and opponent, Senator Benigno Aquino
Jr. was shot at the airport tarmac upon returning from exile in the United States.
Surrounded by military escorts, Aquino was shot from behind by what the government
claimed as a lone assassin. The incident galvanized the opposition to the Marcos regime
which soon collapsed because of serious internal and external factors.

        In 1986, following a snap presidential election called by Marcos for the purpose
of legitimizing his mandate as President, a peaceful people power revolution, also known
as the EDSA (after Epifanio de los Santos Avenue where the revolution started), installed
Marcos‘ opponent, Benigno Aquino‘s widow, Corazon C. Aquino as President. Marcos‘
ouster was conditioned by a number of factors, the most prominent of which was the
corruption and scandals that marked his regime, and which were deemed unprecedented
in the history of the country. Marcos went into exile in Hawaii where he died in 1989.

The Corazon C. Aquino Presidency: Years of Redemocratization

         Corazon C. Aquino ascended to the Philippine presidency in the shadow of her
late husband. As President, Aquino restored democracy in the country after inheriting a
corrupt regime that had been excessively centralized and alienated from the people. In
1987, a Constitution was ratified signaling the return to democratic rule. Aquino also
went about dismantling the well-entrenched Marcos apparatus and proceeded to recover
ill-gotten wealth of the Marcoses and their cronies. The Corazon Aquino presidency has
been recognized as an era of redemocratization in the Philippines which went about
restoring democratic institutions that had been eroded during the fourteen years of martial

        Businesses believed to have been acquired fraudulently were sequestered and a
Presidential Commission on Good Government (PCGG) was created in 1986 by virtue of
President Aquino‘s Executive Order No. 1 and which were authorized under the
legislative powers that were assumed by her following the EDSA Revolution and prior to
the ratification of the 1987 Constitution. The PCGG was given the mandate of
recovering some U.S. $10 billion which was believed looted during the more than two
decades of the Marcos regime. Jovito Salonga, who served as the first Chairman of the

PCGG reports that from 1986 to 2000, some 83.13 billion pesos had been recovered, or
amounting at that time to about US$2 billion.6

        Aquino sought to establish reforms within the framework of the democratic
system but was weakened by internal bickering within her allies and compounded by a
restive and rebellious military some of whom were remnants and redoubts of the Marcos
regime. Aquino inherited pillaged institutions and while her administration was able to
bring about some measure of normalcy, political transition and electoral democracy, her
administration was saddled with a huge foreign debt that created a vicious cycle of
restructuring and heavy borrowing.

        While Aquino was generally considered as incorruptible, her term was however
also encumbered by charges of corruption from her relatives (labeled condescendingly as
―kamag-anak, inc‖) as well as corrupt acts committed by her allies. She was accused of
turning ―a blind eye‖ to charges of corrupt or improper behavior among relatives, friends
and allies (Greenwold, 1990: 1)

       Critics of the administration had often targeted Aquino‘s powerful and influential
brother, Jose ―Peping‖ Cojuangco Jr. Among the allegations made against her
administration included the claim of a U.S. 1 million bribe from an Australian
businessmen in exchange for a gambling casino license (Greenwold, Branegan and
Sendayen, 1990). No charges were however filed because it was claimed that the
Australian was duped by a woman impersonating Cojuangco‘s wife.

        Another allegation made however were the abuses committed by the PCGG in the
sequestration of companies believed to have been acquired fraudulently. An Aquino
brother in law, Ricardo ―Baby‘ Lopa was assailed as having been able to buy back a
profitable auto plan and 38 companies seized by the Marcos government in the early
1970s a measly U.S. $227,000 within days from Aquino‘s assumption to power. The
PCGG re-examined the deal but found no evidence that would suggest improper
behavior,           to         the         disappointment          of        critics.

The Ramos Administration

       Fidel V. Ramos was Vice Chief of Staff of the Armed Forces of the Philippines
when he joined then Defense Secretary Juan Ponce Enrile to rebel against the Marcos
regime which resulted into the successful EDSA people power revolution that toppled the
Marcos regime in February, 1986. Ramos was the successor anointed by President

 Salonga, (2000: 42; 256). In his account narrating the process and experiences of recovering illegally
gotten wealth of the Marcoses and their cronies, Salonga provides incisive analysis and penetrating details
of the plunder committed by the Marcos regime.

Aquino to succeed her and was elected by a slim majority in 1992 amidst charges of
election cheating and fraud.

        Ramos pledged to build a ―strong state‖ committed to the propagation of a strong
culture of people empowerment characterized by reform in government. He spearheaded
the initiatives towards economic liberalization geared and conditioned to make the
Philippines a favored investment destination that promoted a leveled playing field and

        As President, Ramos embarked on an ambitious development plan under a
program his government labeled as ―Philippines 2000,‖ which among other aspired to
deliver a tiger economy by the end of the millennium, a period that goes well beyond his
term of office. Pledging a commitment to continue the fight against corruption started by
his predecessor, Ramos launched a moral recovery program which sought to mobilize the
different sectors of society in reinforcing good moral values and renouncing corruption.

        The Ramos administration also pursued a comprehensive privatization program of
public enterprises that were absorbed by government during the Marcos era. Ramos
intensified the asset privatization program started by his predecessor with the sale of
government owned and controlled corporations acquired during the martial law regime
crony owned companies defaulted from their obligations, rendering it necessary for
government to assume the debts under the terms of the sovereign guarantee provisions.

         Ramos was able to somehow restore confidence in the economy, embarked on
several public infrastructure projects, and was able to put an end to the crippling power
crisis that brought periodic long hour blackouts, which caused severe discontinuities in
the industrial and commercial sectors, including ordinary households.

        But his administration however was likewise also not free from scandals and
charges of corruption. Prominent among these was the PEA-AMARI deal forged in 1995
as part of the Manila Bay Master Development Plan. The transaction involved the
acquisition of 158 hectares of reclaimed land in the Manila Bay area, which displaced
3,000 fishing and coastal families. The Public Estates Authority (PEA), which managed
the project, allegedly sold the property to a favored buyer, the Amari Coastal Bay
Resources and Filinvest Development at a price disadvantageous to the government.

         It was claimed that the property was sold for 1.9 billion pesos at the rate of Ph
1,200 per square meter when the market values of properties in the adjacent areas were
estimated to be at least Ph90,000 per square meter. It was claimed that certain PEA
officials received kickbacks amounting to over one billion pesos. The opposition claimed
that the deal cannot push through without the consent of President and which then
Senator Ernesto Maceda referred to in a privilege speech in 1996 at the Senate as the
―grandmother                        of                    all                      scams.‖

        A report from the Philippine Center for Investigative Journalism (PCIJ) claimed
that based on its independent investigation, ―as much as P3 billion in bribes and
commissions was paid by Amari to a cast of brokers, government bureaucrats and
politicians, making this the single biggest scam in memory, dwarfing the amounts made
in single transactions by the most avaricious of Marcos's cronies‖ (Coronel and
Tordesillas, 1998: 1).

        In 2003, the PEA-AMARI deal was declared null and void by the Supreme Court
and Amari on the grounds that Amari, being a Thailand based corporation, is a foreign
company and under the Philippine Constitution, foreigners are not allowed to own real
estate property in the country. In 2008, the Sandiganbayan ordered the suspension of five
PEA officials and 4 auditors involved in the transaction. Graft charges were also filed
against the PEA General Manager, as well as the Chairman and members of the PEA
Board of Directors including the two PEA Deputy General-Managers.

        Another scandal that hounded the Ramos administration was Centennial Expo
project which was to be the centerpiece of the celebrations of the centennial anniversary
of the Philippine Independence in 1998. Allegations of corruption were hurled at the
Ramos administration for extravagance and over-pricing of the project which amounted
to Ph9 billion or roughly 1.7 percent of the 1998 national budget. No officials were
however convicted and all involved officers in the Centennial Commission were
eventually exonerated (

       A recent Wikileaks expose likewise alleged that Ramos received US$200,000
from the Libyan government of Moaamar Gaddafi as contribution to Ramos‘ presidential
campaign in the Philippines in 1992.

The Short-Lived Estrada Presidency

       Joseph Estrada succeeded President Ramos as President on the platform of a pro-
poor agenda and giving distinct attention to the problems of peace and order brought
about by criminality, the secessionist movement in Mindanao and the long running
communist rebellion.

        Estrada, a movie actor by profession who went to politics to become Mayor of the
then Municipality of San Juan located in the greater Manila area, Senator, and Vice-
President, won handily in the presidential elections of 1998. Estrada‘s victory was
remarkable in the sense that he garnered a wide and overwhelming majority over his
opponents, and which can be recorded at that time as among the cleanest presidential
election in the country that had not been marred by allegations or accounts of widespread
fraud, intimidation, vote-shaving, vote-buying and other cases of cheating.

        The Estrada Administration was received with much optimism, especially among
the poor who saw in him deliverance from abject poverty conditions. His nickname
―Erap,‖ which is a reverse spelling of the Filipino word ―Pare‖ which roughly is the
Filipino equivalent for buddy or pal, identified with the simplicity and camaraderie with
ordinary citizens. With his popularity as a movie icon used as political capital, Estrada
portrayed the street-smart leader and projected as a college drop-out who mangled the
English language, which is the medium of the elite. Estrada readily identified with his
mass base, the masses and was cast as a tough, swaggering hero of the poor who are
oppressed by the rich.

       As promised, Estrada launched a campaign against criminal syndicates which he
began in earnest as Vice-President in the Ramos government which assigned him the role
of crime-buster under an agency established for that purpose, the Presidential Anti-Crime
Commission (PACC). In time, he turned his attention to the separatist movement in the
South being waged by the Moro Islamic Liberation Front (MILF), the successor and
break-away faction of the Moro National Liberation Front (MNLF).

        Estrada activated his peace panels to enter into peace negotiations and agreements
with the secessionists. But once broken, Estrada launched an all-out war by ordering a
full-scale military action into to rebel controlled areas. By 1999, the Armed Forces of the
Philippines under Estrada as Commander-in-Chief had overran 13 major rebel camps and
33 other minor installations including the MILF flagship headquarters Camp Abubakar.

       But like the Presidents before him, Estrada was embroiled in a series of corruption
scandals that precipitated into his being impeached in 2000 in the House of Congress. In
December, 2000 the impeachment charges was forwarded to the Senate, which under the
Constitution, is the one vested with authority to try impeachment cases.

       Unlike other public officials however, Estrada did not go after public funds with
the exception of the charge that he conspired to skim portions of the share of tobacco
excise taxes for Ilocos Sur, he was accused of manipulating the stock market and
securing protection payoffs from illegal gambling operators. Abinales and Amoroso
provide the following description of the corruption scandals in Estrada‘s presidency
involving corporate deals:

               ―Corruption under Estrada was distinct in ‗the leveraging of
               government assets and authority to undertake deals that
               were ultimately mediated by the market.‘ Examples of such
               innovative, market-oriented corruption include the use of
               funds from government-controlled financial institutions to
               support corporate takeovers, to rescue ailing banks and
               corporations, and to buy into companies coveted by the
               president and his family‖ (Abinales and Amoroso, 2005:

         Estrada‘s impeachment trial in the Senate lasted for 2 months until late January,
2001 when the impeachment trial was aborted because the prosecutors walked out when
the majority of senator jurors rejected the opening of a sealed document or ―the second
envelope‖ alleged to prove Estrada‘s ownership of the controversial Jose Velarde bank
account. The majority of the senator jurors agreed with the contention of defense lawyer
that the second envelope was not in anyway part of the charges against Estrada. As a
result, a second people power revolution started again at EDSA which resulted in Estrada
vacating Malacanang but vehemently denying that he resigned as President. His Vice-
President, Gloria Macapagal Arroyo took her oath of office as ―acting President‖ but
soon assumed the presidency officially when the Supreme Court declared that Estrada has
resigned by virtue of vacating his office under a principle referred to as ―constructive

        Estrada was then arrested and incarcerated at Camp Crame, later put under
hospital arrest at the Veterans‘ Memorial Medical Center in Quezon City, and soon
transferred to Camp Capinpin in Tanay, Rizal and eventually relocated under house arrest
in his estate also in Tanay, Rizal adjacent to Camp Capinpin.

        Estrada was tried before the Sandiganbayan for criminal offenses involving a
string of charges which the accusers and prosecutors elevated to the crime of plunder as
provided under R.A. 7080, which is a non-bailable crime. Estrada was accused of using
his office to accumulate what prosecutors contended as an aggregate amount of Ph4
billion that he amassed by himself or with his family and business associates, and thereby
―unjustly enriching himself or themselves at the expense and to the damage of the
Filipino people and the Republic of the Philippines‖ (Sandiganbayan, 2007: 5, in People
of the Philippines vs. Joseph Ejercito Estrada,

        These involved Estrada‘s alleged links and pay-offs in jueteng operations, an
illegal number‘s game popular among the poor, whereby Estrada was accused of
collecting some Ph545 million from gambling operators; the manipulation of the stock
market by ordering two government agencies involved in pension benefits, the
Government Service and Insurance System (GSIS) and the Social Security System (SSS),
to purchase and buy shares of stock of private company, the Belle Resources Corporation
in the aggregate value of one billion pesos and to be able to collect commissions from the
transactions in the amount of Ph189 million; by using government funds, the
misappropriation of Ph130 million representing a portion of collections from the tobacco
excise tax share allocated for the Province of Ilocos Sur; and by unjustly enrich himself
in the amount of Ph3 billion comprising unexplained wealth deposited under the name of
Jose Velarde.

       In the jueteng and tobacco excise tax, Estrada‘s long-time friend, Luis ―Chavit‖
Singson, the Governor of the Province of Ilocos Sur, served as the main prosecution
witness and whistleblower of corruption in the Estrada administration.

       In September, 2007, Estrada was convicted by the Sandiganbayan of the crime of
plunder after six years of trial. His co-accused present, his son, Jose ―Jinggoy‖ Estrada

and lawyer Edward Serapio were however acquitted. He was however subsequently given
pardon by Gloria Macapagal Arroyo.


        Much of the efforts and measures against corruption in the Philippines have been
structured within the framework of the establishment of anti-graft institutions based on
executive issuances and legislation. These have been revised and amended time and again
by a steady stream of new legislation and executive issuances that seek to plug whatever
loopholes in the legitimacy and the mandates for the operation of these entities. As such,
much of the approaches have been incremental and legalistic. The laws may either have
limited application which may cover only certain officials and employees or of a general
nature that would apply to both elective and appointive officials.7

        Embodied within the framework of these issuances are a veritable collection of
complex and legalistic punitive and preventive provisions and measures designed to
punish or frustrate identified or defined corrupt officials and employees. In so doing,
these issuances at the same time may establish procedures that are intended to prevent or
curb corrupt practices. They are also incremental, as can be seen in constant revisions and
amendments on their provisions. This present discussion does not capture the many
complicated and legal ramifications that accompany these revisions or amendments.
These however signify continuing efforts and adjustments to combat corruption, which
are, for all intents and purposes, tend to be incremental, piece-meal, desultory and not
comprehensive enough so as to capture the many convoluted and often cumbersome
nature of corrupt practices.

       Like any other government agency, bureau or departments, the actions and
operations of anti-corruption agencies in the Philippines are subject to the restraints and
constraints of existing laws and judicial processes that begins first and foremost with the
guarantees found in the Philippine Constitution, whether one looks at the 1935 Charter
which became operational from the Commonwealth period up to 1973, or of the existing
1987 Constitution that was ratified after the collapse of the Marcos dispensation, and
brought the assumption to power of Corazon Aquino in 1986.

        The basic law that embodies the spirit of an honest government and of
accountability is of course reflected in the 1987 Philippine Constitution which provides a
set of extended provisions on the accountability of public officers under Art. XI, Sections

 For an incisive discussion on laws and agencies against corruption, see also Moratalla. n.d. ―Graft and
Corruption: The Philippine Experience‖

1-18. This section begins under section1 with the oft quoted dictum that has resonated in
government since the commonwealth era: ―Public office is a public trust.‖

        The 18 sections enshrined on the Constitution on accountability specifies the
accountability of public officials from the President, Vice-President to the legislative and
judicial branches, the impeachable officials, and manner of impeachment proceedings,
while at the same time reaffirming the establishment of the Sandiganbayan as a
specialized graft court and of the Office of the Ombudsman as constitutional bodies. The
provisions also included aspects of the qualifications, manner of appointment and
removal of the Ombudsman, as well as its powers, duties and functions.

        Over the years, various agencies have been established and re-established to fight
corruption. The earliest know agency in the post-independence period is that of the
Integrity Board which was established in 1950 by the Quirino Administration in a time
when bureaucratic corruption has become a major public issue. As described by Alfiler,
―[p]ublic uproar and criticism against this practice was so sharp that President Quirino
was compelled to start a clean-up campaign‖ (Alfiler, 1979: 323).

        Through the years, several anti-corruption units have been established and
functioned to address the corruption issues. These entities were created by various
Presidents who had to deal with the issue and resorted to mollifying criticisms by
establishing anti-corruption bodies.

        As can be gleaned in Table 1, there has been a total of 23 anti-corruption agencies
(to include the special anti-graft court, the Sandiganbayan) established by both legislative
and executive fiats, as well as by the provisions of the 1987 Constitution in the
Philippines from the independence era in 1950 to 2001.8 The list reflects only corruption-
specific offices and does not include regular government units that are, directly or
indirectly, also involved in the fight against corruption as part of their respective
functions and mandates such as the Department of Justice (DOJ), the National Bureau of
Investigation (NBI), the Commission on Audit (COA), the Bureau of Internal
Revenue(BIR), the Bureau of Customs (BOC), and the Civil Service Commission (CSC).

        Like those created during the Spanish era to fight corruption, these entities were
constituted and reconstituted to adapt to certain legal or judicial realities and demands.
Some of the changes have been in terms of nomenclatures as with the Presidential
Complaints and Action Commission (PCAC) which was eventually downgraded to a
Presidential Complaints and Action


     Anti-Corruption Agency                          Philippine                   Period of

 This is the list of national anti-corruption agencies established in the Philippines thus far gathered. It is
possible that there may be other anti-corruption units that may have been established in local government
units such as provinces, cities and municipalities. See also the accounts of Alfiler, 1979 and Quah, 2010).

                                            President at Time   Establishment/
                                            of Operation        Operations
1.    Integrity Board                       Quirino             1950
2.    Presidential Complaints and Action    Magsaysay           1953-1954
3.    Presidential Complaints and Action    Magsaysay           1954-1958
4.    Presidential Committee on             Garcia              1958-1961
      Administrative Performance
5.    Presidential Fact Finding Committee   Garcia              1958-1961
6.    Presidential Anti-Graft Committee     Garcia/             1960-1966
                                            D. Macapagal
7.    Presidential Agency on Reforms and    Marcos              1966-1970
      Government Operations
8.    Presidential Complaints and Action    Marcos              1966-1967
9.    Complaints and Investigation Office   Marcos              1970-1986
10.   Special Committee on Backsliding      Marcos              1973-1986
11.   National Prosecution Service,         Marcos              1978 to present
      Department of Justice
12.   The Sandiganbayan                     Marcos              1978 to present
13.   Tanodbayan (Office of the             Marcos/             1978-1988;
      Ombudsman)                            C. Aquino           Reorganized 1988
14.   Presidential Commission on Good       C. Aquino           1986 to present
15.   Presidential Committee on Ethics      C. Aquino           1986-1988
      and Accountability
16.   Presidential Complaints and Action    C. Aquino           1991
17.   Presidential Action Center            C. Aquino           1991
18.   Presidential Commission Against       Ramos               1994-2000
      Graft and Corruption
19.   Inter-Agency Anti-Graft               Estrada             1999 to present
      Coordinating Council
20.   Presidential Committee on Effective   Estrada             1999 to present
21.   National Anti-Corruption              Estrada             2000-2001
22.   Presidential Anti-Graft Commission    Arroyo              2001 to 2010
23.   Governance Advisory Council           Arroyo              2001 to present

Compiled and culled based on data from Quah, 2010; World Bank, 2000; and Alfiler,

Committee during the Magsaysay presidency since commissions perhaps cannot be
created by executive action but by legislative enactments.

        Other entities were creations of different administrations that did not want to
continue with the entity established by its predecessor such as the replacement of the
Quirino Integrity Board by Magsaysay‘s PCAC, which in turn, was abolished by
Magsaysay‘s successor, President Garcia, who reincarnated it to become the Presidential
Committee on Administrative Performance and Efficiency ((PCAPE). President Garcia
also created the Presidential Fact Finding Committee (PFFC) in 1958 with the objective
of recommending measures to effect better administration of the Bureau of Customs, and
which contributed to the enactment of the country‘s major Anti-Graft and Corrupt
Practices law under R.A. 3019 which was signed into law in 1960.

       Garcia also established on top of these bodies the Presidential Anti-Graft
Committee (PAGC) in 1960 with the primary purpose of enforcing and implementing
another anti-corruption legislation, R.A. 1379 or the Forfeiture Law on Illegally Acquired
Properties enacted in 1955. The PAGC however was replaced during the administration
of President Macapagal and reconstituted into becoming the PAGCOM but retaining its
name of the Presidential Anti-Graft Committee.

        Upon Marcos‘ assumption to the presidency, the PAGCOM was abolished and
supplanted by the Presidential Agency on Reforms and Government Operations
(PARGO) which essentially absorbed the PAGCOM‘s personnel, records, properties,
equipment and unexpended balance (Alfiler, 1979). When he assumed office, Marcos
also established the Presidential Complaints and Action Office (PCAO) which received
complaints from citizens on a wide range of problems.

        The declaration of Martial Law by Marcos in 1972 provided for the creation of
several anti-corruption agencies such as the Complaints and Investigation Office and the
Committee on Backsliding. Foremost of these however was the establishment of the
Office of the Ombudsman, (also known as the Tanodbayan when it was created in 1978
until 1987 when it was renamed as the Special Prosecutor) and of the special anti-graft
court, the Sandiganbayan in 1978.

       These two institutions represent today the centerpiece structures of the
Philippines‘ continuing efforts to curb corruption. They are constitutional bodies that
cannot be abolished by any law passed by Congress. As provide by the 1987 Constitution
and under R.A. 6770 enacted in 1989, otherwise known as the Ombudsman Act of 1989,
and which is the prevailing law governing the functional and structural organization of
the Office, the Ombudsman is an independent body that has been enjoys a specified term
of seven years without reappointment and can be removed from office only by
impeachment for, and conviction of the offenses of culpable violation of the Constitution,
treason, bribery, graft and corruption, betrayal of public trust and other high crimes.

      The Office of the Ombudsman is also supported an Over-all Deputy Ombudsman,
with Deputies for Luzon, the Visayas, Mindanao, and a special deputy for the Armed

Forces. A Special Prosecutor which is vested with the power to conduct preliminary
investigations and the prosecution of criminal cases within the jurisdiction of the
Sandiganbayan, among others, has also been established as a constitutional office under
Sec. 6, Art. XI of the 1987 Charter. Under this provision, the position of the Tanodbayan
as created in 1978 is now known as the Office of the Special Prosecutor. Like the
Ombudsman, the Deputies and the Special Prosecutor are authorized to serve a term of
seven years and may be removed from office by the President of the Philippines for any
of grounds provided for the removal of the Ombudsman and which must be done with
due process.

         The Sandiganbayan was established during the Marcos era under Presidential
Decree No. 1486 and amended by P.D. No. 1606 in the same year. The Sandiganbayan is
a special anti-graft and corruption Court and is at the same level as the Court of Appeals.
The Court is headed by a Presiding Justice and eight Associate Justices sitting in five
divisions. The Sandiganbayan is mandated to exercise jurisdiction over violations of R.A.
3019 or the Anti-Graft and Corrupt Practices Act, as amended, crimes committed by
public officers and employees embraced within the Revised Penal Code, with specific
reference to Title VII (Crimes Committed by Public Officers), and other such crimes and
offenses committed by public officers and employees in relation to their respective

         Over the years, amendments, changes and other revisions were made on the
structure and power of the subsisting agencies. Some changes were also brought about by
the clarification of duties and functions, as with the case of the Tanodbayan where
amendments were made to fine tune its operations and to become as the Ombudsman or
that of the anti-graft court, the Sandiganbayan, where a flurry of amendments were made
to clarify coverage, powers, duties and jurisdiction.

        On top of these agencies are various executive agencies continue to be constituted
and re-constituted such as the Presidential Commission Against Graft and Corruption
during the Ramos Administration, the Inter-Agency Anti-Graft Coordinating Council, the
Presidential Committee on Effective Governance and the National Anti-Corruption
Commission during the Estrada presidency, and Presidential Anti-Graft Commission and
the Governance Advisory Council, which were both established upon the assumption to
office by Gloria Arroyo in 2001.

        In November 2010, President Benigno Aquino III formally abolished the PAGC
under Executive Order No. 10 and transferred its investigation, adjudication and other
functions to the Office of the Deputy Secretary for Legal Affairs (ODESLA) under the
Office of the President. An Investigation and Adjudication Division was subsequently
created in the ODESLA by virtue of Executive Order No. 13

       In 1997, an Inter-Agency Anti-Graft Coordinating Council was also formed based
on a voluntary alliance and agreement of agencies engaged in the fight against corruption
and the promotion of integrity and efficiency in government. The Council, consisting of

the Civil Service Commission, the Commission on Audit, the Presidential Commission
Against Graft and Corruption and the National Bureau of Investigation. The heads of
these Agencies entered into a Memorandum of Agreement at the COA building binding
their respective agencies to cooperate by sharing information, setting up measures
towards the prevention, detection, investigation and prosecution of graft cases, and
creating ad-hoc inter-agency task-forces to investigate cases involving substantial losses
of government resources. The Inter-Agency Council organized skills training in fraud
investigation and symposia on graft prevention and other capability-building seminars
(Ursal, 2006).

        In 2004, a joint anti-corruption plan was also forged by the Ombudsman, the CSC
and the COA called the Solana Covenant of 2004. The Covenant aspired to engage in a
collective effort in establishing a database of the Statement of Assets and Liabilities and
Net Worth (SALN) of government officials and employees and the establishment of a
joint task force in major investigations, as well as self-cleansing and the setting up of a
clearing house on the status of administrative cases and other information relative to
corruption within government agencies. A second covenant, the Solana II was forged
again in 2005 which outlined the accomplishments and performance of the first covenant
(Ursal, 2006).

       For all intents and purposes, the Covenant was able to improve the system in asset
disclosure by revising the SALN format and in the establishment of a preliminary SALN
database by the CSC in the BOC, the BIR and the DPWH.

        One major issue that continues to surface in the analysis of the fight against
corruption in the Philippines is that of the capacity of anti-corruption agencies in
performing its functions (Quah, 2010). Thus, the question arises as to whether the budget
appropriated for the Office of the Ombudsman (OMB) and of the Special Prosecutor, as
well as for that of the Sandiganbayan are sufficient for them to satisfactorily fulfill their
duties. This is one of the causes identified as to why corruption in the Philippines
continues to thrive instead of being checked by the establishment of periodic anti-
corruption agencies and pertinent legislation.

       A comparison of the number of personnel and the budgets appropriated between
the OMB and the Independent Commission Against Corruption in Hong Kong shows a
gross disparity that indicates severe limitations in terms of resources made available to
the Philippine Ombudsman. Table 2 shows this comparison presented first by Marcelo
(2005) and later cited by Quah (2010):

       Table 3: Comparison of Personnel and Budgets of OMB and ICAC, as of

ITEM                           OMB Philippines                Independent Commission
                                                              Against Corruption
                                                              (ICAC) Hong Kong
No. of Field Investigators     88                             837
Total No. of Staff             1,141                          1,326
Size of the Bureaucracy        1.5 million                    174,175
Field Investigator-            1: 17,045                      1:208
Bureaucracy Ratio
Budget                         480 million pesos              4.94 billion pesos
Population of the Country      82 million                     7.1 million
Per-capita Expenditure         6 pesos                        696 pesos
Staff-Population Ratio         1: 71,340                      1: 5,354

Adopted from Quah, 2010 and Marcelo, 2005.

        The above comparison presents a grim picture of how the anti-corruption
campaign in the Philippines is constrained by limitation in funds, facilities and
manpower, especially in terms of field investigators who may need to move from one
case to another. Thus, data as of 2004, a team of 88 field investigators is suppose to cover
a bureaucracy of about 1.5 million in the Philippines, while in the case of Hong Kong,
837 investigators are assigned for a bureaucracy of less than 200,000. The disparity on
the budget is likewise glaring for while only 480 million is appropriated for the
Philippines, the equivalent of almost 5 billion pesos.

        It is not difficult to argue that funding remains an important factor in the fight
against corruption. The campaign against corruption is not and cannot be treated simply
as a cocktail of good intentions, commitment, skill and patriotism. It needs to be
strengthened with capacities and capabilities that will build confidence among those who
seek to investigate and prosecute corrupt acts.

       The funding appropriation dimension figures considerably in the entire equation,
mainly because salaries and other emoluments may be limited because of severe budget

limitations, and which, for all intents and purposes, may not motivate investigators, or at
worst, allow them to succumb to bribery and such other offenses they are supposed to

        The process of establishing a prima facie case so as to file the information in court
after investigation creates another hurdle in combating corruption. Investigators may turn
in weak cases not supported by evidence and which prosecutors may find inadequate to
be able to file them and prosecute them in court. Prosecutors may not be well-equipped
with the necessary evidence or may be restrained because of funding limitations in
gathering evidence or ensuring that material witnesses would come to testify in court.
Evidence gathering can conceivably be a tedious process requiring time, effort and
energy, motivation, commitment and dedication, as well as funds.

       Another issue that complicates the whole process is that prosecutors may be
preoccupied with several on-going cases that they have to attend and prepare for
simultaneously mainly because of the lack of manpower. As a result, the tendency to
prepare haphazardly in prosecuting cases may be severely impaired, especially when
confronted by a battery of well-paid, well-funded and prominent defense counsels of
accused officials who may have accumulated much wealth so as to be able to finance a
good legal defense.

        Complicating the whole process is the reality that even judicial authorities
themselves may be the subject of criminal and administrative proceedings. Corruption
has also been perceived as having tainted the Judiciary. A Social Weather Station survey
released in 2000 revealed that at least 62 percent of respondents were convinced that
there are significant levels within the institution with around 65 percent believing that
‗many‘ or ‗most‘ lawyers could be bribed while 57 percent thought the same for judges
(World Bank, 2000)

         Corruption in the judiciary has been reported in such cases as the celebrated and
controversial impeachment proceedings filed against former Supreme Court Chief Justice
Hilario Davide with regards to the use of more than 800 million pesos of the Judiciary
Development Fund (JDF) in 2003. The JDF represents collections from legal and other
fees litigants paid to the courts including bar examination fees and which was established
in 1984 to augment the judiciary‘s meager budget.

         Davide was accused by then Congressman Felix William Fuentebella of
Camarines Sur of misusing the fund instead of the purpose for which it was intended,
which is eighty percent for allowances of court employees and twenty percent for
facilities. An impeachment complaint was filed against Davide in the House of
Representatives but was ruled by the Supreme Court (which Davide headed) in
November 2003 as unconstitutional because it was the second impeachment complaint
filed against the same official within a year. The first was an impeachment complaint
filed by Joseph Estrada against Davide and seven other Associate Justices who ruled that
Gloria Macapagal Arroyo was the legitimate President.9
    For a more detailed discussion on the case, see Danguilan-Vitug, 2010.

        A fairly recent case involved the scandal in 2008 in the Court of Appeals (CA)
involving the Government Service Insurance System and MERALCO where a sitting
Justice in the CA alleged that his colleagues removed him from the case in the courts 9th
Division. He was likewise in turn accused of asking a 50 million peso bribe for a
favorable ruling for the GSIS.

Pertinent Legislation and Statutes on Corruption

        Similarly, several corruption-specific laws and executive issuances have likewise
been enacted to combat corruption. The list on Table 3 presents an inventory of at least
66 such major legislations, executive orders, presidential decrees and proclamations and
their respective dates of promulgations. These issuances have been promulgated from the
Commonwealth period up to the present time to fight corruption. Not included here are
several administrative orders issued by the Office of the Ombudsman on such agency-
specific matters such as rules and procedures clarifying and governing handling of
complaints, grievances, or requests for assistance in criminal and administrative cases
(A.O. Nos. 07 and 08, s. of 1990); the guidelines on the installation of non-organic
Resident Ombudsmen in different agencies and offices of the government (A.O. No.10, s.
of 2001; and the creation of Internal Affairs Board within the Office of the Ombudsman
(A.O. No. 16, s. of 2003), among others.

                     TABLE 3: SUMMARY OF ANTI-CORRUPTION
                          LEGISLATION AND ISSUANCES
                                IN THE PHILIPPINES

     LAWS/PROCLAMATIONS               TITLE/DESCRIPTION                                    DATE OF
     /AOs/Eos/PDs10                                                                        PROMULGATION/
1.   Act No. 3815                     The Revised Penal Code of the                        1932
                                      Philippines, as amended

    Administrative Orders, Executive Orders and Presidential Decrees. The list is by no means
comprehensive but it roughly covers the major anti-corruption or corruption-specific issuances in the form
of laws, presidential decrees, and executive orders that have been released to combat corruption.

2.   Republic Act No. 455   Amending the Revised Administrative                            1950
                            Code, Relative to Fraudulent Practices
                            Against Customs Revenues
3. Executive Order No. 1    Creating the Presidential Complaints and                       1953
                            Action Commission
4. eExecutive Order No. 19  Renaming the Presidential Complaints                           1954
                            and Action Commission as the
                            Presidential Complaints and Action
5. R. A. No. 1379           An Act declaring Forfeiture in Favor of                        1955
                            the State Any Property Found to Have
                            Been Illegally Acquired by Any Public
                            Officer or Employee
6. Executive Order No. 306 Creating the Presidential Committee on                          1958
                            Administrative Performance and
7. Administrative Order No. Presidential Fact Finding Committee                            1958
8. Executive Order No. 378 Creating the Presidential Anti-Graft                            1960
9. R.A. No. 3019            Anti-Graft and Corrupt Practices Act                           1960
10. R.A. No. 3456           Internal Auditing Act of 1962                                  1962
11. R.A. No. 4177           Amending the Internal Auditing Act of                          1965
                            1962, Relative to the Establishment of
                            Independent Internal Audit Services in all
                            Branches, Subdivisions and
                            Instrumentalities of Government
12. Executive Order No. 4   Presidential Agency on Reforms and                             1966
                            Government Operations
13. R.A. No. 6028           The Citizen‘s Counselor Act of 1969                            1969
14. Executive Order No. 208 Creating the Complaints and Investigation                      1970
15. R.A. No. 6583           Liability of Government Employees in                           1972
                            Anti-Carnapping Act
16. P.D. No. 611            Amending P.D. No. 1 (Integrated                                1972
                            Reorganization Act) on Certain Rules on
                            the Discipline of Government Officials
                            and Employees
17. P. D. No. 46            Making it Punishable for Public Officials                      1972
                            to Receive, and for Private Persons to
                            Give Gifts

  Upon the declaration of martial law in the Philippines in 1972, then President Marcos arrogated upon
himself law-making powers by issuing presidential decrees. These issuances therefore have the force of law
until repealed.

18. P. D. No. 133             Prescribing a Heavy Penalty for the Theft    1973
                              of Any Material, Spare Part, Product, or
                              Article by Employees and Laborers
19. P.D.No. 677               Amending R.A. No. 3019, The Anti-Graft       1975
                              and Corrupt Practices Act, relative to the
                              Filing of Statements of Assets and
                              Liabilities of Public Officers
20. P.D. No. 749              Granting Immunity from Prosecution in        1975
                              Graft Cases to Givers of Bribes If They
                              Testify Against Public Officials
21. P.D. No. 1275             Reorganizing the Prosecution Staff of the    1978
                              Department of Justice and Creating the
                              National Prosecution Service
22. P.D. No. 1445             The Government Auditing Code of the          1978
23. P.D. No. 1487             Creating the Office of the Ombudsman, to     1978
                              be Known as the Tanodbayan
24. P.D. No. 1464             The Tariff and Customs Code of the           1978
25. PP.D. No. 1486            Creating a Special Court to be Known as      1978
    .                         the ―Sandiganbayan‖ (Anti-Graft Court)
26. P.D. No. 1606             Revising Presidential Decree No. 1486        1978
                              Creating a Special Court to be Known as
                              the ―Sandiganbayan‖ (Anti-Graft Court)
27. PP.D. No. 1607            Revising Presidential Decree No. 1487        1978
    .                         Creating the Office of the Ombudsman, to
    D                         be Known as Tanodbayan.
28. PP.D. No. 1629            Amending Presidential Decree No. 1486,       1979
    .                         Creating a Special Court to be Known as
    D                         the ―Sandiganbayan,‖ as Revised by
                              Presidential Decree 1606
29. P.D. No. 1630             Further Revising Presidential Decree No.     1979
                              1487, as Revised by Presidential Decree
                              No. 1607, Creating the Office of the
30. Batas Pambansa Blg. 129   The Judiciary Reorganization Act of 1980     1980
31. P.D. No. 1759             Penalizing Contractors for Violating         1981
                              Public Works Contracts
32. Batas Pambansa Blg. 195   Amending R.A. No. 3019, The Anti-Graft       1982
                              and Corrupt Practices Act, relative to
                              prima Facie Evidence of and Dismissal
                              Due to Unexplained Wealth
33. Batas Pambansa Blg. 242   An Act Prescribing the Period for Public     1982

                            Officers May Bring Action Against False
                            or Malicious Testimony
34. P.D. No. 1860           Amending the Pertinent Provisions of                         1983
                            P.D. No. 1606 and Batas Pambansa Blg.
                            129 Relative to the Jurisdiction of the
                            Sandiganbayan and for Other Purposes
35. P.D. No. 1861           Amending the Pertinent Provisions of                         1983
                            P.D. No. 1606 and Batas Pambansa Blg.
                            129 Relative to the Jurisdiction of the
                            Sandiganbayan and for Other Purposes
36. Executive Order No. 112 Creating the Presidential Commission on                      1986
                            Good Government
37. Executive Order No. 2   Regarding the Freezing of Funds,                             1986
                            Moneys, Properties and Assets Illegally
                            Acquired or Misappropriated by Former
                            President Ferdinand Marcos, et. al.
38. Executive Order No. 14  Vesting the Sandiganbayan Original and                       1986
                            Exclusive Jurisdiction Over All Criminal
                            and Civil Suits Filed by the Presidential
                            Commission on Good Government
39. Executive Order No. 14A Clarifying the Provisions of E.O. No. 14                     1986
                            with Respect to Scope and Meaning
40. Executive Order No. 101 Further Amending P.D. 1486, as                               1986
                            Amended by P.D. 1606 Creating a Special
                            Court to be Known as Sandiganbayan
41. Executive Order No. 184 Amending Sec. 3 of P.D. 1606                                 1987
42. Executive Order No. 292 The Administrative Code of 1987                              1987
43. R.A. No. 6713           The Code of Conduct and Ethical                              1989
                            Standards for Public Officials and
44. R.A. No. 6770           The Ombudsman Act of 1989                                    1989
45. R.A. No. 6713           The Code of Conduct and Ethical                              1989
                            Standards for Public Officials and
46. Executive Order No. 442 Creating the Presidential Complaints and                     1991
                            Action Office in the Office of the
47. Executive Order No. 447 Renaming the Presidential Complaints                         1991
                            and Action Office as the Presidential
                            Action Center
48. Executive Order No. 479 Strengthening and Streamlining the                           1991
                            Presidential Complaints and Action Office
   With the ouster of Marcos in the now historic EDSA People power revolution in 1986, his successor,
President Corazon C. Aquino proclaimed a revolutionary government and issued executive orders deemed
to have the force of law. This was until a Constitution was ratified in 1987 and a legislative body was

49. R.A. No. 6981             The Witness Protection, Security and        1991
                              Benefits Act
50. R.A. No. 7080             An Act Defining and Penalizing The          1991
                              Crime of Plunder
51. R. A. No. 7160            The Local Government Code of 1991           1991
52. R.A. No. 7659             Imposing the Death Penalty for Certain      1993
                              Crimes Committed by Public Officers
53. R.A. No. 7651             An Act to Revitalize and Strengthen the     1993
                              Bureau of Customs, Amending Certain
                              Sections of the Tariff and Customs Code
54. R.A. No. 7650             An Act Repealing Sec. 1404 and              1993
                              Amending Sections. 1401 and 1403 of the
                              Tariff and Customs Code Relative to the
                              Physical Examination of Imported
55. Executive Order No. 151   Creating a Commission to Investigate        1994
                              Administrative Complaints Involving
                              Graft and Corruption
56. R.A. No. 7975             An Act to Strengthen the Functional and     1995
                              Structural Organization of the
                              Sandiganbayan, Amending P.D. No. 1606
57. R.A. No. 8249             Amending P.D. No. 1606, Creating the        1997
                              Sandiganbayan, Further Defining the
                              Jurisdiction of the Sandiganbayan
58. R.A. No. 8424             The Tax Reform Act of 1997, otherwise       1997
                              known also as The National Internal
                              Revenue Code
59. Proclamation No. 189      Declaring War Against Graft and             1999
                              Corruption and Authorizing the Philippine
                              Jaycees Senate to Institutionalize Public
                              Awareness About a Clean, Efficient and
                              Honest Governance
60. Executive Order No. 317   Prescribing a Code of Conduct for           2000
                              Relatives and Close Personal Relations of
                              the President, Vice-President and
                              Members of the Cabinet
61. Executive Order No. 268   Creating the National Anti-Crime            2000
                              Commission and Abolishing the
                              Presidential Commission Against Graft
                              and Corruption
62. Executive Order No. 12    Creating the Presidential Anti-Graft        2001
63. R.A. No. 8294             The Anti-Money Laundering Act of 2001       2001
64. R.A. No. 9135             Amending Certain Provisions of P.D. No.     2001
                              1464 Otherwise Known as the Tariff and
                              Customs Code

65. R.A. No. 9184                 The Government Procurement Reform             2003
66. Executive Order No. 327       Amending E.O. No. 12, Relative to the         2004
                                  Powers, Duties and Functions of the
                                  Presidential Anti-Graft Commission

As compiled and culled by the study from various sources. See also Quah, 2010; Ursal,
2006; Office of the Ombudsman, 2004.

       Again, there may be other provisions in other laws that may not have been
included here and may not have been captured in this listing. These laws and issuances
provide a bulky and massive collection of pertinent measures that aspire to punish,
prevent or contain corruption. The earliest legislation can be found in the Revised Penal
Code enacted in 1932 as Act No. 3815. Under Title 7, (Chapters 1-6), the Code stipulates
the provisions for crimes committed by public officers such as malfeasance and
misfeasance in office, frauds and illegal exactions and transactions, malversation of
public funds or property, infidelity of public officers, and such other offenses as
disobedience, usurpation of powers and unlawful appointments.

        From that period, other significant legislations had been enacted to fight graft and
corruption. The most significant of these is Republic Act No. 3019, approved in 1960
when the Garcia Administration was besieged by allegations of corrupt practices and
when graft and corruption became a national issue in political campaigns. Prior to this, an
earlier piece of legislation was also enacted in 1955 which provided for the forfeiture in
favor of the state those properties found to have been unlawfully acquired by any public
official and employee.

        Since then a flurry of statutes have been passed, either as corruption-specific
legislations or those that incorporate provisions that address certain specific acts that are
deemed as corrupt. Executive Orders had been issued establishing what appear to be ad-
hoc bodies that were intended to fight corruption, as we have discussed earlier. It was in
the martial law period when two institutions, the Office of Ombudsman and the anti-graft
Court, the Sandiganbayan were created to specifically address the worsening problem of
corruption in the country.

        As pointed out earlier, this twin agencies were not only established by law or by
decrees, but are now constitutional bodies that cannot be abolished or changed by
legislation from acts of Congress. The laws against graft and corruption are further
enhanced with the enactment of significant statutes such as Republic Act 6713 signed
into law in 1989 and which provides for a code of conduct and ethical standards
governing public officials and employees including the uniformed service and granting
incentives and rewards for exemplary service. Unfortunately, not many have been
convicted under this law because of vagueness in certain provisions.

        Another significant law is that of Republic Act No. 7080, enacted in 1991, which
defines and penalizes the crime of plunder, or big ticket corruption of government
officials amounting to an aggregate sum of at least 50 million pesos.

       These fragmented issuances represent today a bewildering labyrinth of statutes
and orders that may now need to be consolidated and codified into one single document
or what Ursal calls as an Omnibus Anti-Graft Code. As Ursal decries,

               ―The multifarious pieces of legislations, including statutes
               not specifically denominated as anti-graft laws but
               containing provisions to curb graft, have been enacted
               separately in a span of nearly seventy-five (75) years
               starting with the 1930‘s. Some of these laws are almost
               unknown to many, while others contain antiquated
               provisions that need updating to keep up with new
               developments in governance. If most recent indictments of
               graft cases are based almost solely on the Anti-Graft and
               Corrupt Practices Act (R.A. No. 3019) and the Code of
               Conduct and Ethical Standards for Public Officials and
               Employees (R.A. No.6713), it is possible that the
               provisions of other lesser known anti-graft laws, especially
               the Revised Penal Code (Act No. 3815, s. of 1932) on
               crimes against public officers, are not given much
               attention‖ (Ursal, 2006: 159-160).

       It is important therefore begin codifying anti-corruption laws into an all-
embracing statute that can serve as a handbook or a manual not only for lawyers but for
government officials and employees who may need a quick reference material on what
acts and behavior would constitute graft and corruption, what are the rights of the
accused, what action can be taken, administrative or otherwise, what sanctions can be
imposed and what charges can be made.

        It may also be pertinent to say that there may be a need to now relax the highly
focused legalistic approach towards curbing corruption while at the same time rendering
measures that can be made compatible with the demands of due process. Under existing
laws, the prosecution and trial of an accused for corrupt pacts must be put within the
bounds and constraints of a legal framework, where such constitutional guarantees of the
rule of law, of due process and of the presumption of innocence unless proven otherwise
must prevail and given much weight. In spite of the outpouring of a spate of legislations,
decrees, executive and administrative orders and similar issuances to curb corrupt
practices, corruption in the Philippines has worsened so as to afflict major institutions,
crime-fighting agencies included.

        Thus, in recent years, cases of corruption have been uncovered not only in
government departments and agencies that implicate politicians and high ranking public
officials in the executive branch to include the president, but also in such institutions as

the Judiciary, including the Supreme Court and lower trial courts, the Armed Forces of
the Philippines, the Philippine National Police, local government units and even
constitutional bodies such as the Commission on Elections and the Commission on Audit.


        From these discussions, it could be cited that the Philippines has not been lacking
in the establishment of entities and the enactment of laws to address the menace of
corruption. As one commentator candidly remarks, ―Philippine anti-graft institutions
exist, but integrity is lacking‖ (Elliot, 2008: 1). This perhaps echoes the sentiment and
frustration on corruption in the Philippines expressed by the head of the Presidential
Anti-Graft Committee (PAGCOM) under President Macapagal, Cesar Climaco, who said
after one year holding office, he had nothing much to offer, saying: ―no hits, no runs, all
expenses, no convictions!‖ He lamented ―his failure to jail a single crook because of
cumbersome procedures, congressional and judicial interferences and the lack of teeth‖ of
the Agency (PAGCOM) he headed (Carino and de Guzman, 1979: 364.

        Why then does corruption in its various shades and manifestations continue to
bedevil Philippine society? Is the country now in the brink of suffering from a policy
burn-out in dealing with corrupt practices? From all indications, the Philippines and its
long history of combating corruption reflect today a continuing struggle as incidences and
cases of corrupt activities continue to unravel.

        Much of the measures taken up have been anchored on organizational and legal
procedures where cases tend to clogged up in a pattern of long investigations and drawn-
out trials, marked by slow and tedious processes that seek to uphold due process even if
evidence have been palpably indicative of guilt. This tedious process can be described for
the moment as the traditional or classical modes of fighting corruption. Can a package of
―out-of-the-box‖ measures be designed which will establish a more decisive and resolute
response without necessarily violating the due process clause that are guaranteed for

                                      CHAPTER 4

                 THE ROAD TO PERDITION…?
                            By: Prof. Ma. Oliva Z. Domingo

       ―I’ve sometimes wondered why corruption is the word used for acts of
       dishonesty committed by people in positions of trust. Corruption means
       debasement, decay, deterioration, weakening. These terms are usually
       applied to metal and, in particular, to living matter. So, what is it that
       decays, deteriorates, or weakens in corrupt people? . . . I think that what
       corruption signifies when applied to human behavior is the weakening of
       instincts—in this case, the instinct for honesty. On this simple instinct
       depends many of our social institutions. Instincts are sources of energy, and
       corruption is energy in decline.‖
                                                        Professor Randolf S. David
                                        Philippine Daily Inquirer, 5 December 2004

       ―Why be honest, when it pays to be dishonest? Why fight for others, when
       they won’t fight for you?—or even for themselves?...The answer I think lies
       in what life means to you. If life means having a good time, money, fame,
       power, security—then you don’t need principles, all you need are
       techniques. On the other hand, if happiness counts more than a good time,
       respect more than fame, right more than power, and peace of soul more
       than security; if death doesn’t end life but transforms it, then you must be
       true to yourself and to God and to love the truth and justice and freedom
       that are God’s other names.‖

                                                             Senator Jose W. Diokno
                 in a letter written to his son Jose Manuel (Cel), from his prison cell


Why do we often liken corruption to cancer? Could it be because diseased cancer cells
within a person‘s body destroys the body, just as corrupt behavior in a society where it
thrives debases society? Is it because like cancer, the cure for corruption has yet to be

There have been many studies on corruption in the Philippines that define the causes,
assess or propose solutions, identify the actors involved, and describe the laws and
institutions created. This chapter is part of a study that attempts to search for Filipino
solutions and remedies that could possibly address the problem of corruption more
effectively. It begins by describing the anti-corruption efforts in the country from 2005

onwards to find out why these seem not to have met with success so far. Specifically, it
takes off from the end of the term of Ombudsman Marcelo and the years thereafter,
describing the initiatives pursued the forces at play, and the context within which these
occur. It ends with an exploration of possible directions for the future. The preceding
years are discussed in a separate chapter.


It was his first two-and-a-half years of a seven-year term when Ombudsman Simeon V.
Marcelo addressed the conference of the Global Organization of Parliamentarians
Against Corruption (GOPAC) on 31 March 2005. The fight against corruption in the
Philippines was clearly an uphill climb given that anticorruption forces were grossly
insufficient and massively underfunded. The immediate need then was for no less than
200 prosecutors to handle the backlog of almost 2,000 cases pending before the
Sandiganbayan. To gather evidence for these cases there had to be at least 500 field
investigators, and if Hong Kong was used as the standard, the need of the Office of the
Ombudsman (OMB) would have ballooned to over 7,000 field investigators (Marcelo,
The resources allocated to the OMB reflect the Philippines‘ seriousness, or lack of it, in
grappling with the ages-old scourge. When compared with Hong Kong‘s Independent
Commission Against Corruption (ICAC), one of the most successful anti-corruption
agencies in the world, the resources allocated to the OMB seemed miniscule and pathetic.
Table 1 compares the resource of these two agencies in 2004, which partly explains why
the OMB‘s anticorruption efforts never seemed to be enough.

Table 1. Comparison of ICAC and OMB Anti-Corruption Resources (2004)
                       Hong Kong’s ICAC                The Philippines’ OMB
Personnel     1,326 for a bureaucracy of 174,175 1,141 for a bureaucracy of
              officials and employees and a      approximately 1,500,000 officials
              population of 6.8 Million          and employees and an estimated
                                                 population of 82 Million
Field         837 for a bureaucracy of 174,175,  88 for a bureaucracy of
Investigators with a ratio of1:208.              approximately 1,500,000 officials
                                                 and employees: the ratio is
Budget        $90 Million or P4.94 Billion for   P480 Million (2004 Re-enacted
              1,326 personnel, watching 174,175  budget) for1,141 personnel,
              public sector officials and        watching a bureaucracy of
              employees.                         approximately 1,500,000 officials
                                                 and employees.
(Marcelo, 2005: 7-8; Office of the Ombudsman, 05: 2)

Independent assessments confirmed the OMB‘s urgent need for resources. The Feliciano
Commission created to investigate the Oakwood mutiny emphasized that the OMB
should be ―given the budgetary and other support that it needs, with all possible
dispatch.‖ In its evaluation report, the Asia Pacific Group on Money Laundering referred

to the OMB as ―severely under-resourced.‖ The Political and Economic Risk
Consultancy Ltd. (PERC), a Hong Kong firm specializing in providing strategic business
information and analysis for companies doing business in East and Southeast Asia, noted
that the OMB was ―ill-equipped‖ and did ―not have the financial resources‖ to do its job
effectively   (Office    of    the   Ombudsman,      2005:     2-3);   http://www.abs-

In 2004, the United Nations Development Programme (UNDP) estimated that the
staggering amount of P100 billion was at risk of being lost to corruption (UNDP
Common Country Assessment cited in Marcelo, 2005: 4; also cited in the Office of the
Ombudsman, 2005: 21), and yet for that year, only P480 million was allocated to the
OMB to prevent this from happening. In 2005, the OMB sought bigger funding and got a
boost from Congress, which appropriated P647.5 million, roughly one-third more than its
previous year‘s budget ( The amount was still very
much short of the ideal but it was a clear indication that Congress was supportive of the
OMB‘s anti-corruption drive. The budget increase meant that the OMB could hire 48
more prosecutors, 13 lawyer-investigators, and 187 field investigators (Marcelo, 2005:

The lack of resources did not deter the OMB from pursuing its mandate under Marcelo‘s
watch. The reforms he introduced included the augmentation of personnel, upgrading of
competencies, organizational restructuring, and the implementation of an integrity
program, among others. By 2005, Marcelo had added 30more prosecutors to the original
32 at the start of his term in 2002, but the total of 62 prosecutors was a far cry from the
minimum of 200 that was urgently needed at that time. Besides not having enough
vacancies for the number of staff required, the salary levels for prosecutors could not
attract applicants for the job. Many of the cases before the Sandiganbayan were complex
and demanded extra effort from senior and experienced lawyers who, however, were
receiving only the equivalent of what new lawyers earned from private practice, or
perhaps even less (Marcelo 2005: 22). To say then that the prosecutors were overworked
and underpaid would be a gross understatement.
When Marcelo started his term in 2002, there was no systematic training program for
prosecutors, no system of supervision or monitoring of cases and performance of the
prosecutors, not even a docketing/case management system. By 2005, regular training
programs for prosecutors, field investigators, and other employees of the OMB had been
institutionalized. There was a system for monitoring prosecutors, and a docket and
records management system was in place (Marcelo 2005).              With various partners,
including the United States Agency for International Development (USAID), the
American Bar Association, the United States Federal Bureau of Investigation (FBI), the
United States Department of Homeland Security, and others, including local partners,
OMB staff were able to upgrade their skills in financial investigation, forensic
accounting, surveillance, corruption detection, entrapment operations, computer literacy,
and other programs to enhance performance (Office of the Ombudsman, 2005: 5-7).
Accompanying these changes was the adoption of the Integrity Development Review
(IDR) Program developed earlier by the Development Academy of the Philippines
(DAP). The program focused on measuring the vulnerabilities to corruption of

individuals and the organization, and to help foster integrity among OMB officers and
employees. The OMB was among the first to pilot the IDR tools and named it Pursuing
Reforms through Integrity Development or PRIDE. The program led to the development
of a specialized Code of Conduct and the adoption of stricter policies on receiving gifts,
whistle-blowing, and internal reporting. (Office of the Ombudsman, 2005: 3-8). PRIDE
would later become a standard program for government agencies.
The usual criticism against the OMB was that it had failed to successfully prosecute the
―big fish‖ in its 15 years of existence. The OMB thus directed its prosecutors to focus on
what it had earlier identified as 50 high-impact cases. These included the President
Diosdado Macapagal Boulevard case; the RSBS Pension Fund case; the PEA–AMARI
Scam; the Tax Credit Scam cases; the Department of Public Works and Highways
((DPWH) Vehicle Repair Scam case; the PCGG cases; the cases against Major Gen.
Carlos F. Garcia for plunder, perjury, and forfeiture of unexplained wealth; the case
against Lt. Colonel George A. Rabusa, General Garcia‘s former aide, for perjury and for
forfeiture of unexplained wealth; and the case against Armed Forces of the
Philippines(AFP) Chief of Staff, General Lisandro C. Abadia for forfeiture of
unexplained wealth and perjury, among others (Marcelo 2005: 22; Office of the
Ombudsman, 2005: 11-13).
High-ranking government officials facing charges at the Sandiganbayan are usually
represented by the best lawyers that money could buy. Unable to hire more prosecutors,
Marcelo turned to private lawyers for help The plan was to have at least two competent
volunteer lawyers complementing the OMB prosecutors in handling each of the 50 high-
impact cases, or at least 100 volunteer lawyers. This was the model used in the Estrada
plunder case, where private prosecutors shared their time and expertise pro bono to help
research difficult legal issues, gather evidence, and interview witnesses. To pursue this
strategy, the OMB entered into a Memorandum of Agreement with the Philippine Bar
Association (PBA) on 15 June 2004, and 16 lawyers volunteered. The OMB further
signed an agreement with the Coalition Against Corruption on 25 February 2005, for the
latter to assist in recruiting private lawyers for ―Project Case Assist‖ or ―Operation Big
Fish.‖ Part of the plan was to ask the Sandiganbayan to have continuous trials as soon as
it could muster sufficient legal support from volunteer lawyers (Marcelo 2005: 22; Office
of the Ombudsman, 2005: 12-13).
Marcelo hired 51 additional field investigators to augment the 37 when he started his
term. By 2005,the total of88 field investigators comprised the Field Investigation Office
(FIO) of the OMB that was created in 2004(Marcelo 2005; Office of the
Ombudsman,2005: 1-2), inspired by the ICAC model. This was still a far cry from the
minimum of 500 investigators it needed at that time but the OMB had to make do with
whatever was available.
In partnership with the private sector and civil society organizations, the OMB embarked
on a lifestyle check program to identify corrupt public servants and their ill-gotten wealth
and assets. It focused on corrupt-prone agencies such as the Bureau of Customs (BOC),
Bureau of Internal Revenue (BIR), and the DPWH. This initiative led to the dismissal of
high-ranking officials from these agencies and the filing of charges against others (Office
of the Ombudsman, 2005: 10-12).

The OMB continued to expand its network of partners by entering into agreements with
various private and civil society organizations, including the following, among others
(Office of the Ombudsman, 2005: 13-18):
    Procurement Watch, Inc. (PWI)         - as volunteer observers for government bids
                                              and awards committees (BACs)
    G-Watch                               - to monitor the implementation of awarded
    Barug! Pilipino                       - to help in the conduct of lifestyle checks
    Integrated Bar of the Philippines     - for the prosecution of environment-related
                                              graft cases
    The Philippine Province of the Society of Jesus – for the conduct of the Ehem! Aha!,
                                              values formation programs in government
    Coalition Against Corruption          - to assist in the textbook count at the
                                              Department of Education; medicine
                                              monitoring at the Department of Health;
                                              internal revenue monitoring at the BIR;
                                              advocacy on election cases; pork barrel
                                              monitoring; lifestyle checks; and support for
                                              volunteer lawyers prosecutors, among
The powerful Makati Business Club; CODE-NGO, the biggest coalition of civil society
federations and organizations in the country; the influential Catholic Bishops‘ Conference
of the Philippines (CBCP); Transparency and Accountability Network (TAN); and the
National Movement for Free Elections (NAMFREL), the government-accredited election
watchdog, were among the members of the Coalition. The partnerships with CSOs
further snowballed into other anti-corruption initiatives in the regions.
The OMB faced formidable challenges not only in the home front but in the international
scene as well. In 2004, Transparency International (TI), a Berlin-based politically non-
partisan, non-profit organization set up to help curb corruption in international
transactions, ranked the Philippines 102 in the Corruption Perception Index (CPI),
lagging far behind most of its Asian neighbors, and ahead only of Pakistan, Indonesia,
Myanmar, and Bangladesh. Table 2 presents the CPI ratings for selected Asian countries
in 2004.
In a scale of 1 (―highly corrupt‖) to 10 (―highly clean‖), the Philippine score of 2.6 was
indeed an embarrassment since there were more than enough laws and structures to
address the corruption issue. Although largely based on perceptions, the CPI is a
measure that cannot simply be brushed aside since it is derived from a number of surveys
assessing the country‘s performance and expert assessments. For a country to be
included in the CPI, a minimum of three surveys is required.
                                           Table 2.
                                   Corruption Perception Index,
                                   2004 (Selected Countries)
                                     COUNTRY             2004
                                                    Rank    Rating
                                   Singapore         5      9.3

                                    Hong Kong       16    8.0
                                    Japan           24    6.9
                                    Taiwan          35    5.6
                                    Malaysia        39    5.0
                                    South Korea     47    4.5
                                    Thailand        64    3.6
                                    China           71    3.4
                                    India           90    2.8
                                    Vietnam        102 2.6
                                    Philippines    102 2.6
                                    Pakistan       129 2.1
                                    Indonesia      133 2.0
                                    Myanmar        155 1.8
                                    Bangladesh     158 1.7
                                   (Transparency International)

Despite this negative perception, however, international donor agencies were only too
willing to lend their assistance in the fight against corruption. In 2005, the European
Commission (EC)/European Union (EU)gave a grant of 2.9 million euros to the OMB
spread over two years to boost OMB‘s anti-corruption drive (Rufo, 2008). The USAID,
UNDP, World Bank-Asia Europe Meeting Trust Fund (WB-ASEM), and The Asia
Foundation (TAF)all pitched in to support the reform initiatives of the OMB.
It was necessary to join forces with other government agencies as well to fight the
growing menace of corruption, thus on 16 March 2004, Guillermo Carague, Chair of the
Commission on Audit (COA), Karina Constantino-David, Chair of the Civil Service
Commission (CSC), and Marcelo, as Chair of the OMB, signed what is now known as the
Solana Covenant I. It embodied the anti-corruption initiatives their institutions would
jointly and individually undertake (COA, OMB, and CSC, 2004). As constitutional
commissions, the COA, CSC, and OMB endeavored to assert their independence from
the executive, legislative, and judicial branches of government and undertake bold anti-
corruption measures.
The Solana Covenant I resulted in a number of reforms within these three agencies. The
OMB and the CSC established their respective Statement of Assets and Liabilities
(SALN) database taskforces. The CSC created the preliminary SALN database of the
BOC, BIR, and DPWH, and issued a memorandum to all government agencies to all
government agencies to ensure that officials and employees strictly comply with the
requirement to submit their SALNs each year. The OMB and the COA created joint task
forces to investigate, prosecute, and monitor high-profile corruption cases, such as the
General Garcia case of four counts of perjury and forfeiture of ill-gotten assets amounting
to more than P143 million (Marcelo 2005: 19), the Pestaño case in the Philippine Coast
Guard, and the Ninoy Aquino International Airport (NAIA) case (COA, OMB, and CSC,
2005: 2-3).
Meanwhile, the COA, OMB, and CSC instituted self-cleansing measures by filing cases
and imposing sanctions on their erring personnel. Within a year of the Solana Covenant
I, the OMB had dismissed three employees; the COA dismissed 20 employees, and the
CSC penalized 19 employees for corruption and integrity violations. Some of those

affected were high-ranking officials. The OMB strictly implemented the code of
conduct, and policies on whistle-blowing, internal reporting, gifts and benefits, and
personnel and financial management. It made it a policy to conduct background
investigations on applicants for career positions. Meanwhile, the CSC prepared
guidelines for vetting presidential appointees and selected third level officials of the
OMB, COA, and CSC. With OMB assistance, a bill on whistle-blowing was filed in
Congress to protect whistleblowers, as well as a bill on the waiver of bank secrecy rights
of the subjects of corruption investigations (COA, OMB, and CSC, 2005: 3-7).
The signatories of the Solana Covenant I subsequently inked a Solana Covenant II during
the 2nd Anticorruption Summit of Independent Accountability Institutions on 15 July
2005. Among others, Solana II would continue the commitments of the three agencies in
Solana I, such as the monitoring of unliquidated cash advances, joint task forces for
investigations, self-cleansing, and integrity vetting prior to the conferment of rank to
career executive officers. New initiatives included the sending of a joint letter to the
President emphasizing the importance of integrity in the appointment of senior officials
and the offer to assist the President in the vetting of proposed appointees in terms of
personal reputation and commitment to uphold integrity in the agency they will be
appointed to. The three agencies likewise committed to work together towards the
rationalization of the compensation structure, the development of a complete
performance management system, and other anti-corruption measures (COA, OMB, and
CSC, 2005: 2-13).
On 25 January 2005, President Arroyo signed into law Republic Act No. 9335 known as
the Attrition Act of 2005. The law provides a system of rewards and incentives for
personnel of the BIR and the BOC to encourage them to be more efficient in collecting
taxes. The Act holds officials, examiners, and employees of these two agencies liable if
they violate the Act or ―are guilty of negligence, abuses or acts of malfeasance or
misfeasance or fail to exercise extraordinary diligence in the performance of their duties‖
(Section 8, R.A. No. 9335).


The record of the Philippines in fighting corruption may have been dismal but the mood
was upbeat with Marcelo at the helm of the OMB and the reforms he instituted. Before
his appointment as Ombudsman, he caught the public eye for the successful handling of
the Marcos ill-gotten wealth case where the Supreme Court rendered a decision forfeiting
these in favor of the government. The public must have noticed and appreciated the anti-
corruption efforts of the OMB and this was reflected in the gradual but steady climb in its
Social Weather Stations (SWS) ratings—from 16% in 2002-2003 to 22% in 2003-2004 to
24% in 2005.

To everybody‘s surprise, however, Marcelo unexpectedly resigned from his post as
Ombudsman on 30 November 2005, without finishing his seven-year term. It was only
eight months since he addressed the GOPAC where he gung-ho about the efforts that
were starting to take root in the anti-corruption arena. Commentators expressed concern
over the resignation of Marcelo because he was in the midst of efforts to promote
lifestyle checks and assessments ( He cited health reasons

but speculations were rife that the real reason for his decision to quit a job he was doing
so well was that he got tired of getting too many phone calls from high places in
government asking him to keep off the controversial cases involving family and allies of
those in power. Arroyo appointed Marcelo but his independence and single-mindedness
in pursuing justice and truth must have given her the jitters.

President Arroyo appointed Merceditas N. Gutierrez as the first woman and fourth
Ombudsman of the Philippines to serve a seven-year term effective 1 December 2005.
She came in with a severe handicap because her appointment did not sit well with the
public, which believed that she would not be independent-minded but rather would be
protective of Arroyo and her key officials. She also happened to be the classmate of First
Gentleman Jose Arroyo in law school. To be fair, Ombudsman Gutierrez rose from the
ranks in government service but the public could not shake the thought that she was
appointed Ombudsman in order to protect the interests of the Arroyos and their allies.
Sectors of society have questioned the legitimacy of Arroyo‘s assumption to power in
2001 after Estrada‘s ouster. The ―Hello Garci‖ incident and her ―I am sorry‖ admission
of indiscretion for calling up Commissioner Garcillano of the Commission on Elections
(COMELEC) during the 2004 Presidential elections further dammed her before the
public eye, and the public simply could not trust her actions nor her appointees.

As if to bid her critics wrong, within a few months after taking her oath, Ombudsman
Gutierrez launched the National Anti-corruption Program of Action (NACPA) during the
Anti-Corruption Convergence Summit on 17 March 2006. A mix of representatives from
the executive, legislature, judiciary, constitutional bodies, local government units
(LGUs), business sector, civil society, academe, youth, interfaith groups, and media
signed the Covenant to Support NACPA and vowed to integrate their anti-corruption
programs under it. The objectives of the NACPA are 1) to streamline and strengthen
anti-corruption commitments of the various sectors under a comprehensive strategic
framework, 2) to serve as an avenue for consultations and coordination among them, and
to 3) adopt an anti-corruption performance measurement system. Initial funding for this
initiative came from the USAID, TAF, and UNDP (Altez, 2007: 8). The OMB and the
DAP were going to work with anti-corruption stakeholders to develop clear indicators for
tracking and measuring performance in the fight against corruption (ADB/OECD
Anticorruption Initiative for Asia and the Pacific, 2006).

The NACPA is guided by the Medium-Term Philippine Development Plan (MTPDP), the
Millennium Development Goals (MDGs), and the United Nations Convention Against
Corruption (UNCAC). The Senate ratified the UNCAC in November 2006, making the
Philippines the second Southeast Asian country to have done so. A Multi-Sectoral Anti-
Corruption Council (MSACC) serves as the advisory and consultative arm of the NACPA
(Garcia, 2006: 8; OMB Brochure on NACPA). The MSACC went on road shows around
the country to promote awareness and generate public support in fighting corruption.

The OMB continued to increase the number of personnel, implement professionalization
programs, and sustain and expand its partnerships with government, business, and civil
society organizations. For instance, together with the Department of Education (DepEd),

the OMB developed the Graft and Corruption Prevention Education Teaching Exemplars
to inculcate the values of honesty, integrity, and discipline among students, and the
pursuit of the common good (Sanchez, 2007: 7).

Ombudsman Gutierrez introduced innovations at the OMB to bring the OMB closer to
the people and promote transparency. There was the ―Meet with the Ombudsman‖
program where she and other OMB officials personally attended to requests from the
public for assistance. In August 2006, the OMB launched the ―OMB Social Service
Caravan‖ to extend medical and dental assistance in communities around the country, in
partnership with the Philippine Air Force, PAGCOR, PCSO, MMDA, DOH and
government hospitals, the National Statistics Office, Department of Environment and
Natural Resources (DENR), Department of Foreign Affairs (DFA), and other
government, business, and civil society organizations (Mañalac-Calderon, 2008: 10).
The OMB likewise organized task forces to undertake specific activities. To run after
government officials and employees using official vehicles for private purposes there was
Task Force Red Plate. To investigate education-related anomalies there was Task Force
SAPAK (for Samasamang Pagkilos Laban sa Katiwalian). Task Force Green Lane
focused on lifestyle check complains (Sanchez, 2007: 7; Sanchez, 2008: 4).

For the first time, too, the OMB opened its hearings to the public in 2006. The public
and media were given the opportunity to observe the preliminary investigation on the
highly controversial Mega-Pacific case involving violations of the bidding process in the
procurement of the automated counting machines for the 2004 elections (Sanchez, 2007:

Like their predecessors, Ombudsman Gutierrez and her counterparts at the CSC and the
COA, Chairpersons Cesar Buenaflor and Reynaldo Villar, respectively, signed a compact
similar to the Solana Covenants titled, ―Memorandum of Agreement of the Constitutional
Integrity Group.‖ They bound their institutions to actively engage in collaborative
projects and activities necessary for institutional reforms, support each other‘s respective
mandates and collaborate in integrity enhancement efforts, and build on each other‘s
strengths in developing and implementing programs for good governance (COA, OMB,
and CSC, 2009: 1-2).
On 2 June 2007, President Arroyo signed into law Republic Act No.9485, or the Anti-
Red Tape Act (ARTA) of 2007. The Act requires national agencies and LGUs to set up
their respective service standards, or Citizens‘ Charters, simplify procedures, expedite
transactions, set standard timetable for the completion of transactions, and regularly
assess frontline services to improve the service delivery, reduce red tape, and prevent
graft and corruption. The law further provides for the imposition of penalties for
violations. It requires government front-line services to display prominently their
respective Citizens‘ Charters, now informally referred to as their ―ARTA.‖ By August
2010, the OMB reported that 4,253 of 5,716 offices, or 74%, had developed and installed
their Citizens‘ Charters (Office of the Ombudsman, 2010).
As part of the EU project the OMB engaged the services of Tony Kwok, former head of
Hong Kong‘s ICAC, as consultant. Among others, he recommended the hiring of more

              prosecutors and investigators. He gave advice to the OMB and conducted capacity
              building activities.


              Resources for OMB‘s anti-corruption operations grew exponentially. Support from
              Congress came in terms of budgetary allocations.     Table 3 presents the total
              appropriations of the OMB from 2005 to 2011.

              The budget for 2005 was almost one-third more than that of 2004, but failure of Congress
              to pass a new budget for 2006 resulted in a reenactment of the 2005 budget. This was
              more than made up for in the OMB‘s 2007 budget, which was 44% more than the
              previous year. Personal services grew by more than 46% and MOOE increased by 56%.
              The total increase from 2007 to 2008 was minimal, but the appropriation for 2009
              reflected an increase of almost 40% over the previous year. This was due to the
              substantial increase for capital outlay, a budget item that was not repeated in succeeding
              years, thus the dramatic decrease in the 2010 budget, although personal service and
              MOOE increased. The decline in the OMB budget for 2011 was largely because there no
              longer is any allocation for capital outlay.

   Table 3. Total Appropriations for the Office of the Ombudsman, 2005-2011 (in thousand pesos)
               2005          2006*           2007          2008          2009            2010                                        2011
              Amount      %     Amount     %      Amount     %      Amount     %       Amount      %       Amount      %       Amount        %
Services      455,108   70.28   455,108   70.28   686,619   73.33   689,308   72.28   741,994     55.96   772,604     72.59   843,548       81.75
and Other
Operating     102,083   15.76   102,083   15.76   159,427   17.03   169,303   17.75   194,866     14.70   204,866     19.25   188,353       18.25
Outlays        90,348   13.95   90,348    13.95   90,348    9.65    95,016    9.96    389,095     29.34    86,800     8.16       0           0
TOTAL                    100              100               100               100                 100                 100                   100
              647,539           647,539           936,394           953,627           1,325,955           1,064,270           1,031,901
                          %                %                 %                 %                   %                   %                     %

              * reenacted budget.

              In itself, the OMB budget might be considered a drop in the bucket of what it takes to rid
              the country of corruption, but the international donor agencies flooded the OMB with
              funds. The general impression is that Ombudsman Gutierrez did not lack for funds but
              rather ―enjoyed access to more money than any of her three predecessors combined. The
              estimate is that the ―OMB received at least P316 million from foreign grants between

2005 and 2009, ―including funds committed to her predecessor‖ (Mangahas and Ilagan,
2011: 1-2).

On 26 July 2006, the Philippines signed an agreement with the Millennium Challenge
Corporation (MCC) to receive a Threshold Program grant of US$20,685,000, which
covers the period 2006 to 2009. The U.S. Congress created the MCC in January 2004, as
a mechanism for delivering foreign assistance to developing countries to reduce global
poverty and promote sustainable growth. The USAID is the lead implementing agency
for the MCC (

The Millennium Challenge Account (MCA)—Philippines Threshold Program, like other
MCC threshold program, is designed to help improve performance on specific indicators
and enable countries to eventually become eligible for Compact status. The Compact is
a multi-year agreement between the MCC and an eligible country to fund specific
programs to reduce poverty and stimulate economic growth. The Philippines Threshold
Program allocated US$6.5 million of thetotal grant, or more than 31% of the account, to
enable the OMB to reduce opportunities for corruption throughout the government
through capability-enhancement programs for its employees and the establishment of an
information management and investigation surveillance capacity. The program provided
assistance to the Department of Finance (DOF) to train staff and provide equipment to
improve revenue collection, develop stronger incentives to be honest, and to support the
DOF‘s Revenue Integrity Protection Service (RIPS), the BIR‘s Run After Tax Evaders
(RATE), and the BOC‘s Run After the Smugglers (RATS) programs. The RIPS, RATE,
and RATS were organized to increase government resources, expose violators, and
increase compliance with the laws by both taxpayers and officials of the revenue
collection agencies(

The DOF established the RIPS unit on 17 December 2003, by virtue of Executive Order
259. The RIPS is the anti-corruption arm of the DOF that is empowered to investigate
allegations of corruption in the DOF and its attached agencies—the BIR, BOC, Bureau of
Local Government Finance (BLGF), Bureau of Treasury, Central Board of Assessment
Appeals (CBAA), Insurance Commission, National Tax Research Center (NTRC), Fiscal
Incentives Review Board (FIRB), and the Privatization and Management Office (PMO).
If warranted the RIPS files with the OMB the necessary charges against erring officials
and employees (

The BIR instituted the RATE program to run after delinquent taxpayers and tax cheats
and to investigate tax fraud cases. It is mandated to investigate violations of the National
Internal Revenue Code of 1997 and assist in the prosecution of criminal cases The BOC
implements the RATS program to strengthen its capacity to run after smugglers and
erring BOC personnel. To strengthen its ability to prosecute customs-related cases, it
hired additional lawyers for deployment at the Finance Department of the Office of the
Solicitor General (

Funds from the MCA, the USAID, and the EU enabled the OMB to print and distribute
the Teaching Exemplars to elementary and secondary schools (Sanchez, 2007: 7).
Funding for the Center for Asian Integrity (CAI), a joint effort of the OMB, the
Australian Institute of Ethics, Governance and Law (IEGL), and other local partners
would come from the MCA, through TAF. Besides the $6.5 million from the MCC, the
OMB received a US$716,000 grant from the EU, or about P32 million at that time. The
fund was managed by the WB-ASEM Trust Fund and was earmarked to help set up the
OMB‘s case management software system to complement the hardware funded from the
MCC Philippines Threshold Program. The software developed for the case management
system had significant defects, however, that prevented its use. At the end of the project
in 2007, after already spendingUS$521,761.04, the donors cancelled the third tranche of
US$194,838 becausethe OMB could not use the software (Quitain, 2007: 13, 18;
Mangahas and Ilagan, 2011: 2).

The Philippines-Australia Human Resources Development Facility (PAHRDF), an
Australian government-funded initiative, likewise provided support for capability
building programs of the OMB (Tatytayon-Padios, 2008: 18).

Executive Order No. 12 issued in 2001 created the Presidential Anti-Graft Commission
(PAGC) to investigate violations of anti-graft laws by presidential appointees and
recommend their suspension to the President. It superseded the Presidential Commission
Against Graft and Corruption (PCAGC) created in 1994, and the National Anti-
Corruption Commission (NACC) created in 2000. In 2005, the PAGC launched the
Integrity Development Action Plan (IDAP) as its national anti-corruption program. The
executive branch adopted the IDAP as the framework for 135 government agencies and
LGUs. In 2009, the World Bank approved a US$250,000 grant under its Institutional
Development Fund (IDF) to strengthen the capacities of the OMB and the PAGC,
specifically to support the IDR of the former and the IDAP of the latter.

In 2008, the EC excluded the OMB from among its beneficiaries. When interviewed, the
EC Head of Delegation in the Philippines explained that this was simply a result of the
review that the EC conducted on the programs it funded in the past few years. The
delisting of the OMB from the list of beneficiaries of the EC, however, could be
interpreted as an indication of dissatisfaction over the results of the OMB‘S performance
in the projects it funded (Rufo, 2008).

In September 2010, President Benigno Aquino signed in New York an agreement with
the MCC for a US$484 million MCA-Philippines Contract Program. The OMB failed to
qualify for further funding under this program because its performance failed to meet the
MCC criteria. The final program report of the Philippines Threshold Program cited
various reasons behind the ineffective performance of the OMB, which were mostly
internal. The report indicated that the OMB‘s weaknesses begin with Ombudsman
Gutierrez‘ own performance as a leader and manager. Among the weaknesses of the
OMB cited in the report were poor evidence security, poor information sharing within the
agency, ―severe internal tensions‖ between and among individuals, ―turf tensions,‖ and a

leadership that is highly personalized. While the report acknowledged the ―dramatic
increase in the reported conviction rate‖ that complies with the project‘s indicator, this
did not relate to work on the fundamental reforms and institutionalization of sound
practices that would really improve the performance of the OMB. The report indicated
the continuing slide in controlling corruption from 76% in 2007, to 57% in 2008, and
47% in 2009 (Rufo, 2008; Mangahas and Ilagan, 2011: 2-3).

Sources from within the OMB confirm these observations and consider Ombudsman
Gutierrez to be deficient in organizational skills. She is reported to have dispensed with
the annual assessment and planning conference that would have provided an opportunity
to take stock of the OMB‘s performance and institute appropriate measures to address
weaknesses. She prohibited all team-building activities to prevent unnecessary expenses.
She centralized the review and action on decisions, resolutions, issuances and orders
issued by the OMB (OMB Office Order No. 007, 27 January 2006), which resulted in the
piling up of pending cases submitted to her office for review and action. There were
reported instances when she was not accessible to her staff, including her Deputies, who
on occasion had to barge into her office just to have an audience with her. She consulted
only a few persons. She was known to entertain or even was perceived to sometimes
encourage one-sided reports on officials and employees and to react to these without first
verifying the truth, thus developing personal enemies among subordinates. She appeared
to be sensitive to criticism and sometimes could not control her emotions in the office.

These notwithstanding, the OMB derived significant benefits from the MCC Threshold
Program which include the following (Mangahas and Ilagan, 2011:8:

      Wireless connectivity with 12 servers, 253 computers, and peripherals, all
       networked into a series of local area networks (LANs) and a wide area network
       (WAN) connecting the main OMB office in Quezon City to its regional offices in
       Cebu and Davao;

      Renovation of server rooms and management information (MIS) rooms;

      An integrated capability building program for prosecutors, investigators, and
       lawyers, here and abroad, or with foreign consultants;

      A secured and shared information system used for inter-office communication and
       case research, with access to a centralized case inventory database developed
       through the OMB-Department of Justice (DOJ) corruption case study;

      Ten surveillance equipment kits for all investigation units, including digital still
       and video cameras, portable printers, laptops, portable scanners, digital audio
       recorders, and both covert and overt surveillance equipment; and

      A set of counter-surveillance equipment, including long-range day-and-night
       camera, tactical audio surveillance equipment, and a covert handheld mobile
       phone jammer for the field investigation unit of the main office.

While the OMB engaged in various programs and took pride in its achievements, the
public did not seem to appreciate its efforts. At the same time, donor agencies were
rethinking their funding support for the country‘s anti-corruption efforts through the
OMB. Frustration, despair, and cynicism were snuffing out the ray of hope that once
sparked over the anti-corruption initiatives of the country. What could have caused the
loss of steam and the public‘s loss of faith in the country‘s anti-corruption efforts?


Despite increases in the OMB‘s budget and the infusion of funds from donor agencies,
the country‘s corruption ratings went on a steady decline rather than improve.

The SWS Surveys of Enterprises on Corruption measures, among others, the sincerity of
agencies in fighting corruption. It classifies the sincerity ratings as follows:

           Over +50      =   Very Good                    -10to -29     = Poor
           +30 to +49    =   Good                         -30 to -49    = Bad
           +10 to +29    =   Moderate                     -50 and lower = Very Bad
           -9 to +9      =   Neutral

Table 4 presents the ratings of selected government agencies in fighting corruption from
2005 to 2009. It might partially explain why international donor agencies were becoming
more cautious with their financial commitments to the country‘s anti-corruption efforts.

Table 4. Sincerity of Agencies in Fighting Corruption, 2005-2008 (Selected Agencies)
                   2005           2006            2007          2008           2009
              Scor Rati Scor Rati Scor Rati Scor Rati Scor Rati
                 e     ng       e      ng       e     ng      e     ng       e     ng
OMB            +22      M      +5       N     +9       N     +4      N      -8      N
               +19      M     +13      M     +14      M      +5      N      +8      N
COA             +5      N      +5       N    +20      M     +23     M       +8      N
DOF                                                         +15     M       -4      N
BIR            -59     VB      -58    VB      -49      B     -56    VB     -57    VB
BOC                            -75    VB      -69    VB      -72    VB     -69    VB
Office of the
               +10      M      -15      P      -3      P     -27     P     -37      B
PAGC                                                                       -33      B
               +48      G     +40       G    +45       G    +37      G     +40      G

Senate          -13    P     -17     P      -7    N                  -6       N         -1           N
House of
Representati -28       P     -40     B     -32    B                 -41       B         -34          B
AFP             -38    B     -19     B      -9    B                 +6        N        +10           M
Dept.      of
                                                  P                              P      -5           N
COMELEC                      -59   VB      -36    B                 -27          P      -8           N
(various sources and SWS, 2009; SWS, 2008; SWS, 2007)

Table 4 reveals that the best rating that the agencies expected to address the corruption
issue— such as the OMB, Sandiganbayan, COA, or the Department of Justice (DOJ)—
could get was a Neutral rating. This indicates that these agencies are not perceived to be
sincere enough in pursuing anti-corruption efforts. What is worse is that agencies that
have been receiving substantial support, both from domestic and international sources,
are perceived to be insincere in fighting corruption, such as the BIR, which is consistently
getting scores below -50 (except in 2007), and the BOC, which was getting much lower
scores. Among the selected agencies included in the table, only the Supreme Court is
perceived to be sincere in fighting corruption, while the Department of Justice (DOJ) and
the AFP were able to improve their ratings in 2009 to move from Poor to Neutral (for
DOJ) and Neutral to Moderate (for the AFP).

Table 5 presents Transparency International‘s Corruption Perception Index (CPI) of
selected countries in Asia from 2005-2010. The CPI score relates to perception of the
degree of corruption as seen by business people and country analysts, and ranges for 0
(highly corrupt) to 10 (highly clean).

Table 5. Corruption Perception Index, 2005-2010 (Selected Countries)
   COUNTRY            2005           2006            2007            2008               2009                2010
                  Rank   Rating   Rank   Rating   Rank   Rating   Rank    Rating     Rank     Rating     Rank   Rating
  Singapore         5     9.4       5     9.4       4     9.3       4      9.2         3       9.2         1     9.3
  Hong Kong        15     8.3      15     9.3      14     8.3      12      8.1        12       8.2        13     8.4
  Japan            21     7.3      17     7.6      17     7.5      18      7.3        17       7.7        17     7.8
  Taiwan           32     5.9      34     5.9      43     5.1      40      5.6        39       5.5        33     5.8
  Malaysia         39     5.1      44     5.0      43     5.1      47      5.1        56       4.5        56     4.4
  South Korea      40     5.0      42     5.1      43     5.1      40      5.6        39       5.5        39     5.4
  Thailand         59     3.8      63     3.6      84     3.3      80      3.5        84       3.4        78     3.5
  Laos             77     3.3     111     2.6     168     1.9     151      2.0       158       2.0       154     2.1
  China            78     3.2      70     3.3      72     3.5      72      3.6        79       3.6        78     3.5
  India            88     2.9      70     3.3      72     3.5      85      3.4        84       3.4        87     3.3
  Vietnam         107     2.6     111     2.6     123     2.6     121      2.7       120       2.7       116     2.7
  Philippines     117     2.5     121     2.5     131     2.5     141      2.3       139       2.4       134     2.4
  Cambodia        130     2.3     151     2.1     162     1.7     166      1.8       158       2.0       154     2.1
  Indonesia       137     2.2     130     2.2     143     2.3     126      2.6       111       2.8       110     2.8
  Pakistan        144     2.1     142     2.4                     134      2.5       139       2.4       143     2.3

  Myanmar        155 1.8 160 1.9 179 1.4                    178      1.3          178    1.4        176   1.4
  Bangladesh     158 1.7 156 2.0 162 2.0                    147      2.1          139    2.4        134   2.4
(Source: Transparency International, various reports, various years)

Table 5 shows that in 2005, the Philippines ranked 11th among the 17 selected Asian
countries, tied with Vietnam and ahead of Cambodia, Indonesia, Pakistan, Myanmar, and
Bangladesh. It was then the 5th most corrupt in the APEC region. It moved down to 12th
place in 2006 while Vietnam moved ahead. It remained in 12th place in 2007. It slid
down to 14th place in 2008, with Indonesia and Pakistan getting better scores. It tied for
13th place with Pakistan and Bangladesh in 2009, while Indonesia‘s rating improved to
take the 11th place. In the 2010 CPI ratings, the Philippines tied with Bangladesh for the
13th place, ahead only of Pakistan, Cambodia, Laos, and Myanmar.

Other ratings confirm this negative perception about the Philippines. Table 6 presents the
PERC ratings of selected countries from 2005 to 2010.

The PERC ratings are the reverse of the CPI. The score of 10 refers to the most corrupt
while the score of 1 refers to the cleanest. The ratings are derived from middle and senior
expatriate business executives working in Asia, the US, and Australia who were asked to
rate the country/city where they work, their city of origin, and the extent to which their
business has been affected (

Table 6. PERC Corruption Rating, 2005-2010 (Selected Countries)
              2005        2006         2007        2008         2009                         2010
              Ran   Grade   Rank   Grade   Rank   Grade   Rank   Grade   Rank   Grade
Singapore     1     0.65     1     1.30     1     1.20     1     1.13    1      1.07     1      0.99
Japan         2     3.46     2     3.01     3     2.10     3     2.25    3      3.99     3      1.75
Hong Kong     3     3.50     3     3.13     2     1.87     2     1.87    2      1.89     2      2.63
Taiwan        4     6.15     6     5.91     5     6.23     6     6.55    6      6.47     5      5.62
South Korea   5     6.50     5     5.44     8     6.30     4     5.65    4      4.64     4      4.88
Malaysia      6     6.80     7     6.13     6     6.25     5     6.37    7      6.70     6      6.05
Thailand      7     7.20    10     7.64    11     8.03    10     8.00    11     7.63     9      7.33
China         8     7.68     9     7.58     7     6.29     9     7.98    5      6.16     7      6.70
India         9     8.63     8     6.76     9     6.67     7     7.25    10     7.21    10      8.23
Vietnam       10    8.65    12     7.91    10     7.54     8     7.75    9      7.11     8      7.13
Philippines   11    8.80    11     7.80    12     9.40    11     9.00    8      7.00    11      8.25
Indonesia     12    9.10    13     8.16    11     8.03     9     7.98    12     8.32    12      9.07
(various sources)

Table 6 shows that the Philippines ranked 11th among the 12 selected Asian countries in
2005. Its rating drops to the bottom of the heap in 2007, and again in 2008 (Rood, 2008)
and is named the ―most corrupt‖ country in Asia, a label that has been difficult to erase,
even when its ratings improved in 2009 and 2010.

Global Integrity is an organization incorporated under 501(c)(3) of the United States
Internal Revenue Code, meaning that it is a non-profit, non-stock corporation. It receives
support from a mix of charitable foundations, governments, multilateral institutions, and

    the private sector. It prepares the Global Integrity Report (GIR) as a tool for
    understanding governance and anti-corruption mechanisms at the national level.

Table 7. Global Integrity Report on the Philippines (2007, 2008, 2010)*
                                    INDICATORS                                               2007             2008             2010
                                                                                        Score   Rating   Score   Rating   Score   Rating

   Overall                                                                              67       W       71       M       57      VW
   Legal Framework                                                                      86       S       90       S       84       S
   Actual Implementation                                                                50      VW       53      VW       31      VW
   Civil Society, Public Information and Media                                          69       W       68       W       53      VW
      Civil society organizations / Anti-corruption CSOs                                84       S       73       M       59      VW
       Media/ Media‘s ability to report on corruption                                   68       W       72       M       58      VW
       Public Access to Information                                                     53      VW       58      VW       42      VW
   Elections                                                                            57      VW       59      VW       46      VW
       Voting, Citizen Participation, Party formation                                   87       S       79       M       61       W
       Election Integrity                                                               71       M       74       M       59      VW
       Political Financing Transparency                                                 14      VW       25      VW       16      VW
   Government Accountability /Government Conflicts of Interest Safeguards,
                                                                                        71          M    70          W    53      VW
   and Checks and Balances
       Executive Accountability/Conflicts of Interest safeguards and checks and
                                                                                        75          M    70          M    34      VW
       Legislative Accountability/Conflicts of Interest safeguards and checks and
                                                                                        75          M    81          S    61          W
       Judicial Accountability/Conflicts of Interest safeguards and checks and
                                                                                        61          W    58      VW       45      VW
       Budget Processes / Budget Process Oversight and Transparency                     72          M    69          W    71          M
   Administration and Civil Service/
                                                                                        73          M    82          S    71          M
   Public Administration and Professionalism
       Civil Service Regulations/Civil services conflicts of interest safeguards and
                                                                                        73          M    74          M    58      VW
           political independence
       Whistleblowing Measures/Whistleblowing protections                               53      VW       79          M    67          W
       Procurement / Government procurement: Transparency, Fairness, and
                                                                                        81          S    88          S    95          S
           Conflicts of Interest safeguards
       Privatization / Privatization of public functions: Transparency, Fairness, and
                                                                                        84          S    86          S    63          W
           Conflicts of Interest safeguards
   Oversight and Regulation                                                             65      W        76       M       57      VW
       National Ombudsman                                                               73       M       87       S       45      VW
       Supreme Audit Institution                                                        93      VS       93      VS       57      VW
       Taxes and Customs: Fairness and Capacity                                         60       W       58      VW       50      VW
   Oversight of State-Owned Enterprises                                                 28      VW       83       S       78       M
       Business Licensing and Regulation                                                72       M       58      VW       54      VW
   Anti-corruption and Rule of Law/Anti-corruption Legal Framework,
                                                                                        66          W    71          M    64          W
   Judicial Impartiality, and Law Enforcement Professionalism
       Anti-corruption law                                                              89       S       100     VS       89       S
       Anti-corruption agency or equivalent mechanism                                   66       W       73       M       53      VW
       Rule of law                                                                      52      VW       51      VW
       Law Enforcement : Conflicts of interest safeguards and Professionalism           58      VW       60       W       52      VW
Legend: VS= Very Strong; S = Strong;M = Moderate; W = Weak; VW = Very Weak
   *The Philippines was not included in the countries rated in 2009.

The Report evaluates both anti-corruption legal frameworks and the practical
implementation and enforcement of those frameworks. Local researchers and journalists
participate in writing the Report, which uses an award-winning research methodology.
The results are peer-reviewed and the report is characterized by transparency from start to
finish (

Table 7 summarizes the GIR on the Philippines for the years 2007, 2008, and 2010. The
Philippines was not included among the countries rated in 2009. The descriptions for the
indicators of integrity might seem to vary for different years but they are meant more to
clarify rather than change what the indicators stand for.

Table 7 confirms what is commonly acknowledged in the country. It shows that while
the Philippines consistently gets a Strong rating for Legal Framework its rating for actual
implementation is Very Weak, thus its overall integrity assessment for 2007 was Weak
and slides to Very Weak in 2010. Indeed, the Philippines has enacted laws, issued
executive orders, and other rules and regulations to address graft and corruption but it is
in the enforcement of these legal instruments where it fails miserably. It is only under the
category ―Administration and Civil Service/Public Administration and Professionalism‖
that the Philippines gets a consistently Moderate rating. Otherwise, the ratings for the
other categorise are either Weak or Very Weak.

The CPI, PERC, and GIR ratings almost unanimously reflect the Philippines‘ inability to
enforce the many laws enacted to address corruption, and the attempts to fight the
scourge are perceived to be insincere or ineffective.

One of the indicators measured by the Worldwide Governance Indicators (WGI) is a
country‘s control of corruption, which captures the perception to which public power is
exercised for private gain, including petty and grand forms of corruption, as well as
―capture‖ of the state by elites and private interests.

Table 8 presents the estimated governance score of the Philippines and selected Asian
countries from 2004 to 2008, in terms of the indicator ―control of corruption‖
(Kaufmann, David. Aart Kraay, and Massimo Mastruzzi, 2008). The governance score
ranges from -2.5to +2.5.

The WGI aggregates the views of a large number of enterprises and expert survey
respondents gathered by survey institutes, think tanks, civil society organizations, and
international organizations. Although supported by the World Bank, the WGI does not
reflect the official views of the World Bank nor its officials (Kaufmann, Kraay, and
Mastruzzi, 2010).

The data shows that the Philippines experienced a continuous decline in its control of
corruption, from a score of -0.62 in 2004 to a low of -0.79 in 2006 and 2007, recovering
only very slightly in 2008 for a score of -0.75. Meanwhile, Indonesia had a much lower
score of -0,91 in 2004, as compared with the Philippine score of -0.62, its performance in

controlling corruption gradually improves such that the picture is reversed by 2008, that
is, it has a better score than the Philippines.

            Table 8. World Governance Indicators:
            Control of Corruption, 2004-2008 (Selected Countries)
                                       2004    2005     2006     2007 2008
             Singapore                 2.31    2.17     2.19     2.22 2.34
             Japan                     1.16    1.23     1.34     1.17 1.25
             South Korea               0.38    0.63     0.39     0.46 0.45
             Malaysia                  0.42    0.32     0.36     0.23 0.14
             Thailand                  -0.21   -0.13    -0.24   -0,41 -0.38
             Philippines               -0.62   -0.64    -0.79   -0.79 -0.75
             Vietnam                   -0.80   -0.80    -0.76   -0.68 -0.76
             Indonesia                 -0.91   -0.87    -0.77   -0.69 -0.64
             Bangladesh                -1.42   -1.31    -1.32   -1.08 -1.10
             Cambodia                  -1.05   -1.18    -1,21   -1.11 -1.14
             Laos                      -1.10   -1.16    -1.12   -1.04 -1.23
            (Kaufmann, David., Aart Kraay, and Massimo Mastruzzi, 2008)

The ARTA is supposed to speed up frontline services and eliminate red tape. As
mentioned earlier, the OMB reported that most government agencies had implemented
the ARTA by 2009. Table 9 shows, however, that in 2009 the Philippines ranked 144 out
of 183 economies surveyed in terms of Ease of Doing Business (World Bank and
International, 2009: 2), lagging behind its neighbors in Asia—Singapore, Thailand,
Malaysia, Hong Kong, China, Timor Leste, and Indonesia. Except for ―Trading Across
Borders‖ where it gets a score of 68, the Philippines can hardly reach the middle range
among the 183 countries surveyed. This is an indication that Philippine government
agencies have to further improve procedures and processes to make them faster and
easier to navigate and to eliminate red tape. It is only by doing so that the country can
increase its comparative advantage and become an attractive investment destination.

Companies usually make their decisions to invest in a country on the basis of economic,
political, social, and other data. They look at facts but they consider perceptions as well.
They refer to the different perception ratings, such as the CPI, PERC, GIR, WGI, and
Ease of Doing Business scores.

                       Table 9. Philippines‘ Ranking in Doing
                       Business 2010 (183 economies surveyed)
                        Ease of doing business                    144
                        Starting a business                       162
                        Dealing with construction permits         111
                        Employing workers                         115

                       Registering property                    102
                       Getting credit                          127
                       Protecting investors                    132
                       Paying Taxes                            135
                       Trading across borders                   68
                       Enforcing contracts                     118
                       Closing a business                      153
                      (World Bank and International Financing Corporation, 2009: 2)

While the perceptions and ratings on the state of corruption in the country and the efforts
to stamp it out generally paint a negative picture on the one hand, the OMB had been
reporting positive accomplishments on the other. What could explain this discrepancy?
What is the real picture?

Case Loads and Accomplishments: A Question of Numbers?

The OMB proudly reported that the 55% conviction rate of the Office of the Special
Prosecutor (OSP) in 2007, was more than double its conviction rate in previous years (it
was only 26% in 2005 and again in 2006).

The Office of the Special Prosecutor (OSP) was gaining ground. For example, it was
able to get a plea of guilty from Charlie ―Atong‖ Ang, co-accused with former President
Estrada in the plunder case, who agreed to return P25 million to the government. On 12
September 2007, with former Ombudsman Marcelo as part of the prosecuting team, the
OSP succeeded in getting Estrada convicted for the crime of plunder involving the return
of P569 million to the Philippine government (Funelas, 2008: 5). These are definitely
positive accomplishments.

While the OMB enjoyed continuing support from Congress in terms of its budget,
however, it was not spared questions about its performance. For instance, Senator
Francis Pangilinan once challenged the Ombudsman to be transparent in reporting its
conviction rates, citing differences in the reports of the OMB and the Sandiganbayan. He
noted that the discrepancies were because the OMB failed to factor in the cases
dismissed, withdrawn, or archived when computing the conviction rate (Rufo, 2008).

A closer look at the reports from the OMB about its performance shows why questions
are raised about the OMB‘s performance data. Table 10 summarizes the reports on case
loads and accomplishments of the OMB from 1995 to 2009.

Table 10. OMB Administrative and Criminal Case Loads and Accomplishments, 1995-
      YEAR       Total        Total Number of Case       Number of         Percentage
               Number of            Workload           Cases Disposed     of Disposition

                   Cases                                              of           of Cases Against
                  Received                                                         Total Work load
       1995        6,122                 19,899                    7,864                39.52%
       1996        8,117                 21,337                    9,263                46.55%
       1997        8,150                 20,651                    11,492               55.64%
       1998        8,551                 17,728                    10,816               61.01%
       1999        9,824                 16,802                    9,235                54.96%
       2000        9,739                 17,929                    12,184               67.95%
       2001        7,770                 13,585                    9,324                68.63%
       2002        8,265                 12.923                    6,306                48.79%
       2003        9,310                 16,030                    7,302                45.55%
       2004        8,448                 17,303                    7,556                43.66%
       2005        8,576                 18,859                    7,727                40.97%
       2006       13,602*        No data in Annual
                                                              “8,000 plus” ***
       2007        11,651        No data in Annual                  3,540
       2008        13,223        No data in Annual                  8,526
       2009        12,736        No data in Annual             “almost 8,000”
(Data culled from Annual Reports.)
    *As reflected in the 2008 Annual Report. The “unofficial tally” from the Community Coordination
       Bureau (CCB) puts the number at 8,230.
    ** The “unofficial tally” from the CCB puts the number at 19,511.
    *** The “unofficial tally” from the CCB puts the number at 1,311.

The table shows that during the term of Ombudsman Gutierrez (data included here is only
from 2006-2009), information on actual case work load and the number of cases disposed
of invite speculation because they are either unavailable in official records or not specific,
e.g., in 2006 the data for total number of cases disposed of is―8,000 plus,‖ and in 2009
the records indicate ―almost 8,000.‖ The percentage of disposition of cases for a given
year depends on the total case workload for that year, thus when the total case load is not
given or revealed, the percentage of disposition of cases cannot be ascertained or

Table 10 further shows that information on total case workloads was clear and specific
for preceding years. It also reveals some discrepancies in the figures reported. For
instance, there is a big discrepancy between the data in the official report of the OMB for
the total number of cases received in 2006. The ―official‘ record puts the number at
13,602 while the ―unofficial‖ record of the Community Coordination Bureau (CCB) puts
the number at only 8,230. The CCB traditionally generates these statistics but for some
reason they were not used in official reports during the term of Ombudsman Gutierrez.
The integrity of OMB statistics is a reflection of the seriousness of its integrity campaign.

Computing the conviction rate on the basis of the decisions of the Sandiganbayan is
likewise not without problems. The OMB reports on conviction rates have in fact been
criticized by various sectors. An analysis of the data in Table 11 shows why.

              Table 11: Information Filed Before the Sandiganbayan (December 2005-
                GUTTIER        Informati     Decide Acquitte       Convictio    Convicti
                EZ TERM         on filed       d       d              ns        on Rate
                 Dec 2005           1           7          6           1         14.29%
                   2006            511         121        90           31        25.62%
                   2007            75          185        82          103        55.68%
                   2008            416         553       147          406        73.42%
                   2009            189         250       166           84        33.60%
                   2010            281         125        83           42        33.60%
                 TOTAL            1475        1241       574          667        53.75%

Take the year 2007, for instance, the Sandiganbayan decided 185 cases, 103 of which
resulted in convictions. It is general knowledge, however, that cases take years before a
final decision is made. This means that convictions in a given year may involve many
years of effort by the prosecution.

Referring to Table 11, the cases resulting in convictions may have been filed even before
the term of Ombudsman Gutierrez but were decided only in a given year. Convictions in
a given year do not therefore necessarily reflect the performance of the OMB for the
same year. It can also happen that the some of the cases decided involve the same person
(for different charges), thus increasing the total number of cases resulting in convictions.
Computing the performance of the OMB on the basis of Sandiganbayan convictions for a
given year can therefore be problematic.
If the reported accomplishments of the OMB indicate positive strides in the fight against
corruption, why then is there a lingering perception that anti-corruption efforts are not

Dr. Steven Rood (2008) provides two explanations for this seeming contradiction. First
reason is that ratings, such as the PERC ratings, he says, are based on the perception of
expatriates. It should be noted, however, that the Global Integrity Report is prepared
with the participation of local researchers and journalists and the results are peer-
reviewed. The process is also transparent and it uses an award-winning research
methodology. The second explanation that Dr. Rood proffers is that a permanent feature

of assessments on the progress in anti-corruption efforts in the Philippines tends to be
highly politicized. This could be the more likely explanation.

Dr. Rood cites the observation of former Chairman Eufemio C. Domingo of the
Presidential Commission Against Graft and Corruption (PCAGC) that ―every corruption
complaint forwarded to his office was politically motivated‖ thus making the public
believe that ―all officials are alike and nothing will change.‖ People want the ―big fish‖
convicted as an indication of the seriousness of anti-corruption efforts, but cases against
Undersecretaries, or Deputy Commissioners, or provincial governor do not seem to
qualify as ―big fish‖ either, Dr. Rood continues. When anti-corruption agencies conduct
hearing or file cases against corrupt officials, the public views this as grandstanding.
When their activities are not in the media, the verdict is that the agencies concerned are
not doing anything. It is case of damned if you do, damned if you don‘t, Dr. Rood
concludes (2008).

Similarly, the 2008 PERC assessment attributes the image problem of the Philippines vis-
à-vis corruption to its being ―politicized‖ and being ―openly discussed in the media,
unlike in authoritarian countries like China and Vietnam‖ where there is no such freedom
of the press (Agence France-Presse, 2008).

Given these insights, it is therefore imperative to locate the corruption problem within the
context of the political realities of a period in the country‘s fight against corruption.


Despite the combined efforts of government, business firms, and civil society
organizations, as well as the infusion of funds from international donor agencies, it
seemed like the scourge of corruption could not be contained. It seemed difficult to turn
the tide of public opinion and convince it that the government was sincere in addressing
the problem.
The Pulse Asia survey on corruption conducted on 20-21 October 2007 included an item
that asked respondents which administration had the most intense allegations of
corruption. Table 12 shows that in 2007, on the average, 45% of Filipinos perceived the
Arroyo administration as having the most intense allegations of corruption while only
31% thought that the Marcos years were worse. When broken down according to
location, only the respondents in Mindanao thought that the Marcos administration had
more allegations of corruption (45%) than the Arroyo administration (35%). Except for
this, however, whether classified by location or economic class, the survey indicates that
Filipinos believed that the Arroyo administration had the most intense allegations of

Table 12. Pulse Asia Survey on Corruption, 20-21 October 2007 (in percent)
In your opinion, in which
administration has there been the
                                                  LOCATION                          CLASS

most intense allegations of
Base: Total interviews, 100%                   RP      NC      LUZ      VIS   MIN   AB   D     E
                                                        R                           C
   Arroyo Administration                       45      56        50     39    35    50   47    37
   Marcos Administration                       31      21        25     38    45    25   29    40
   Estrada Administration                      14      11        15     19     9    13   14    12
   Ramos Administration                         7       8         8      3     9     8    6    10
   Aquino Administration                        1       2         2      0     1     1    1     1
   None/refused to say/can‘t say                1       2         2      1     1     3    1     0

The February 2009 Pulse Asia survey further revealed that the number of Filipinos who
were critical of the government‘s fight against corruption had increased by 4 percentage
points from 49% in the October 2008 survey to 53% in the 2009 survey(Pulse Asia,

Pulse Asia conducts its Ulat ng Bayan surveys ―without any party singularly
commissioning the research effort‖ and therefore cannot be accused of promoting the
interests     of    any     party    or     being    biased    against any    party

The cynicism and desperation in the anti-corruption efforts of the country during the term
of Ombudsman Gutierrez should, however, be viewed within the context in which it
operated—the circumstances, events, and scandals that seem to have plagued the Arroyo

The 1987 Constitution grants the OMB the power, among others, ―to investigate on its
own, or on a complaint by any person, any act or omission of any public official,
employee, officer or agency, when such act or omission appears to be illegal, unjust,
improper, or inefficient.‖ Meanwhile, Republic Act No. 6770, or the Ombudsman Act of
1989, compels the OMB to ―give priority to complaints against high ranking government
officials or those occupying supervisory positions, complaints involving grave offenses
as well as complaints involving large sums of money and/or properties (Section 15).
Thus, when no ―big fish‖ is prosecuted, public perception is that the OMB is not fulfilling
its mandate and is ineffective.

The Ombudsman is empowered to take action without need for any complaints from
external parties. The public perception, however, is that Ombudsman Gutierrez did not
take advantage of these powers. She either did not initiate action or was slow to move on
the numerous allegations of corruption linking the President, her family, or her political
allies, or the ―big fish‖ that the public was waiting for her to do something about. The
public was thus convinced that Ombudsman Gutierrez was protecting the interest of the
Arroyos and so did not act in haste to file charges and prosecute them. When asked why
she did not respond to the public‘s demand to file cases against the Arroyos, she replied

that she could not single them out given the many other cases that the OMB faced;
otherwise she might be accused of discriminating against them. She further explained
that prosecutors and investigators had their hands full with the many cases before the
OMB and it takes time to gather evidence to build up a strong case before the OMB files
a case before the Sandiganbayan.

Meanwhile, the OMB, law enforcement agencies, the courts, and even Congress seemed
to be no match to the large-scale corruption, small-scale bribery, unethical behavior, and
misconduct that characterized the Arroyo administration.

The Senate and House of Representatives conducted many hearings on allegations of
corruption, but no ―big fish‖ was convicted either. President Estrada was convicted for
the charge of plunder after the many years and untiring efforts invested by prosecutors.
To the dismay of the prosecutors, President Arroyo granted him pardon even before he
could start serving his prison sentence. This was demoralizing for the prosecutors who
spent long years pursuing justice and for the public as well who confirmed what they had
believed all the time—that nothing positive will ever come out of all the efforts to fight
corruption. It should be noted, however, that the decision to pardon was a political act
rather than an act of justice.

This made the public more cynical about anti-corruption efforts. The hearings and
investigations were ―entertaining‖ but were considered to be just ―moro-moro‖ (play
acting). It gave the solons an opportunity for grandstanding. In the end, the people
thought, personal interests and political expediency always prevailed. To be sure, there
were individuals and groups that filed cases, organized rallies, issued statements, wrote
critical opinion columns, or made representations in appropriate forums to denounce
corrupt officials and their activities, but there were more who were just fence sitters,
merely watching events as they unfolded, and an even greater proportion of the
population that seemed to have turned numb or indifferent to corruption and anti-
corruption efforts.

In an essay on the cultural dimension of corruption, Caiden noted that scandals have no
limit, meaning that it affects ―all walks of life‖ and that ―the corrupt rise to the apex, and
the higher they go, the more damage they can do.‖ Citing a 19th century comment of
Lord Acton, Caiden explains that ―whenever authorities exercise their power over others,
they are often tempted to put their interests first (2011:8-9).

It is therefore helpful to situate the anti-corruption efforts of government in light of the
temptation that officials and employees succumbed to during the same period. There
were a number of high profile cases involving prominent figures during the Arroyo
administration, many of which allegedly led to the Arroyos themselves. Although the
public concluded that Ombudsman Gutierrez was reluctant to act on these cases with
dispatch because she was protecting the interests of the Arroyos it is likely that the odds
were stacked against her as the scope, complexity, and frequency of cases turned out to
be. A brief summary of some cases illustrate the temptations and political developments
of the Arroyo years, which occurred during Ombudsman Gutierrez‘ watch.

The IMPSA Case—This case has a relatively long history. In the 1990s, the Ramos
administration invited the Argentine firm Industrias Metalurgicas Pescarmona Sociedad
Anonima (IMPSA) to invest in the power sector in the Philippines, specifically the
rehabilitation of the Caliraya, Botocan, and Kalayaan (CBK) power plants under a build-
operate-transfer arrangement.       The project could not commence due to legal and
financial difficulties. IMPSA requested the government to guarantee the undertaking to
enable it to raise funds for the project. Three deadlines had come and come but it could
not produce the required security deposit.

Very soon after Arroyo came into power in 2001, then Justice Secretary Hernando Perez
signed a ruling in which the government was guaranteeing the financial obligations of the
CBK project, something that previous secretaries carefully reviewed and took a long time
to do. The ruling removed all legal obstacles for the implementation of the US$470
million contract (Pabico, 2007). Malacañang reporters referred to Perez as the ―First
Boyfriend‖ of President Arroyo but in reality he was more of the ―First Mentor‖ who
advised her in real politik (PCIJ, 2002). The link between Perez and the President was
therefore very close thus people concluded that she was not far behind the IMPSA deal,

On 23 December 2002, Mark Jimenez, broker of the IMPSA project, filed plunder and
other cases before the Ombudsman against Perez. He accused Perez of extorting US$2
million so Perez would stop badgering him to execute damaging affidavits against
individuals in the Estrada administration. He also claimed that he released US$14
million in kickbacks for the approval of the CBK deal, with US$2 million going to Perez,
US$4 million to ―residents‖ of Malacañang, and US$1 million ―for the boys. ‖What
happened to the balance of US$7 million is anybody‘s guess.
It was only six years later, in April 2008, that Ombudsman Gutierrez filed charges
against Perez before the Sandiganbayan for robbery, graft, and other cases
( ). Because the
alleged bribery was coursed through a Hong Kong bank and First Gentleman Arroyo was
reported to have gone to Hong Kong around the time the funds were released, this fanned
rumors that the Arroyos were linked to the scandal. Ombudsman Gutierrez‘ foot
dragging on the case led then Senator Manuel Roxas to say that she ―has lost the mantle
of judicious impartiality and is perceived as a willing tool of Malacañang to prevent its
allies from being brought to justice…Sira na ang Ombudsman sa mata ng taumbayan, at
ito'y dahil inupuan ni Ombudsman Gutierrez ang lahat ng mga kaso na sabit ang mga
kaibigan at nagging kasama niya sa administrasyong ito‖ (Ombudsman Gutierrez has
lost credibility because she has let known allies of this administration off the hook),"
Roxas said (Lazaro, 2008).

The Fertilizer Fund Scam—In 2004, former Solicitor General Frank Chavez filed a
plunder case against former Agriculture Undersecretary Jocelyn ―Joc-Joc‖ Bolante for his
role in the P728 million fertilizer fund scam. The funds were purportedly intended for
distribution to farmers for the purchase of fertilizer but did not reach the intended
beneficiaries. In 2005, the PCIJ reported that the Department of Agriculture released
nearly P3 billion to political allies of Arroyo during the 2004 campaign. The Senate Blue

Ribbon Committee and the Committee on Agriculture and Food reported that testimonies
during the hearings they conducted revealed that the fund was used to ensure the election
victory of President Arroyo and therefore she should be held accountable. Many farmers
claimed that they never received any financial or material support for fertilizers in 2004.
The fact that the supposed fertilizer distribution happened during an election year made
the transaction all the more suspicious. All allegations and testimonies indicating that
Arroyo benefitted from the fund are in legislative records, and they have not been
contested nor has a categorical denial been presented (Olarte, 2006). Bolante fled to the
United States where he sought political asylum. His request was, however, denied. There
has been no final resolution to the case.

Until her resignation from her position, Ombudsman Gutierrez had not been filed before
the Sandiganbayan the case against Bolante or others involved in the fertilizer scam. The
investigators did not recommend the charge of plunder because plunder has higher
evidentiary requirements. There must be ―predicate crimes‖ involved. It seems,
however, that Ombudsman Gutierrez had prejudged the case with her statement that
Bolante was the mastermind and no higher authority was authorizing the flow of funds.
If this argument is pursued then it presupposes that President Arroyo was not involved at
all and had nothing to do with the distribution of funds. This is another instance when the
public feels certain that the Ombudsman is out to protect the Arroyos (Dizon, 2011).
This would later become one of the issues raised in the impeachment charge against

―Hello Garci‖—President Arroyo appointed Virgilio Garcillano as COMELEC
Commissioner in February 2004, barely three months before the 2004 presidential
elections. A surveillance operation was able to tape a conversation between President
Arroyo and Commission Garcillano right before the elections and the tape was later made
public. President Arroyo made a public apology to the nation for her indiscretion but she
did not admit that the call was to get Commissioner Garcillano to ensure her victory. The
tapes of the conversation were repeatedly aired over radio and television programs
leading the public to conclude that the election results were rigged in favor of President
Arroyo. There was mention of a desired margin of one million votes in the tapes, and
when the election results came up with a margin of approximately one million votes over
her closest rival, the public was quick to conclude that cheating occurred and that
Garcillano masterminded the cheating upon the instructions of Arroyo. This put the
legitimacy of her election as President in question.

There were also allegations that First Gentleman Arroyo was distributing large amounts
of money in his sorties around the country during the campaign period. The recent
scandal involving the discovery by the AFP that two of the three helicopters it purchased
were not new but had previous flight records remind the public that the First Gentleman
used helicopters during his sorties. Could the choppers used during the campaign and the
used choppers sold to the AFP have come from the same source? Witnesses point to First
Gentleman Arroyo as the owner of the choppers but his brother, Negros Occidental
Representative Ignacio ―Iggy‖ Arroyo, was quick to claim ownership of the helicopters.
This is the second time that his brother Iggy has come to the rescue. The first time was

the ―Jose Pidal‖ case where Iggy claimed that the bank account belonged to him and not
his brother Mike. An expert witness later admitted that he testified to the authenticity of
the signature of Iggy Arroyo during the investigation of the Jose Pidal account because
the signature was not being compared to any other signature. The Hello Garci case has
not been fully investigated and no one has been convicted for involvement in it.

General Garcia plunder case—The plunder case against General Garcia identified as
one of the 50 high-impact cases during the term of Ombudsman Marcelo had not
progressed during the term of Ombudsman Gutierrez. In 2010, however, the public just
woke up one day to learn that the prosecution had entered into a plea bargaining
agreement with the accused. The argument was that the case was ―weak‖ and the plea
bargain was the best deal for the government. This prompted former COA auditor Heidi
Mendoza to come out and testify before Congress that there was sufficient evidence to
bolster the case against General Garcia. Mendoza was the COA representative to the
multi-agency task force organized during Ombudsman Marcelo term and she poured
through the documents and followed the paper trail in connection with the Garcia case.

Lt. Colonel Rabusa, General Garcia‘s former aide, likewise later blew the whistle on his
former boss. He described in detail, on live television broadcast, how the ―pasalubong‖
(welcome gift) and ―pabaon‖ (sendoff gift) running into millions and millions of
government funds was made possible in the AFP. The revelations about the staggering
amounts given to AFP top brass when they assume office and upon retirement, and the
―conversions‖ that were taking place within the AFP, shocked the entire nation. It
demoralized the soldiers who risk their lives in the battlefront making do only with the
barest protective gears, poor quality helmets, the cheapest combat shoes, arms that are no
match to the enemy‘s firepower, and meager provisions that do not even get delivered to
the field on time. As the Commander-in-Chief of the AFP, the President must account
for the scandalous breakdown of order and discipline in the AFP and the ―creative
accounting system‖ that made the ―conversions‖ possible.

The plea bargaining agreement was forged presumably to enable the government to
recover at least half of what was lost to corruption rather than lose everything if the case
was not won. The public could not understand this line of argument at all. If Garcia was
willing to return one-half of the amounts involved, was this not in effect an admission
that he was guilty of taking what did not rightfully belong to him?

In July 2011, President Benigno Simeon C. Aquino appointed retired SC Associate
Justice Conchita Carpio-Morales as the fifth Ombudsman of the Philippines. Barely two
months in office, she wrote a position paper on 16 September 2011, asking the
Sandiganbayan to set aside the plea bargain between General Garcia and her predecessor.
Her position paper noted that the prosecution had not yet rested its case therefore it was
premature to conclude that the evidence against Garcia was weak. She argued that the
Office of the Solicitor General has no authority to intervene in the plunder case in behalf
of the AFP. Furthermore, she noted that the Sandiganbayan has not yet rendered a ruling
on the prosecution‘s June 2009 offer of exhibits, thus the government can still present
additional evidence (Calonzo, 2011). The public eagerly awaits the results of this case.

The Jueteng Payola—This is an issue founded on rumors that First Gentleman Arroyo,
his son Mikey Arroyo, and his brother Iggy have been receiving bribes or ―payola‖ from
operators of the numbers game in Bicol. The First Gentleman has vehemently and
repeatedly denied this but the rumors have not died down. Accusations about jueteng
payolas are tossed every now and then. They are difficult to prove because there is
hardly any paper trail. The only successful case about a jueteng payola was the case
involving President Estrada. This was only because the courier of the payola, Chavit
Singson, admitted his role in the crime. Although hard to prove, however, the suspicions
about payola bribes to First Gentleman Arroyo have not died down.

The Mega-Pacific Case—The case involves the bidding of poll automation machines for
the 2004 elections. The Supreme Court voided the contract between the COMELEC and
Mega-Pacific due to the failure of the COMELEC to observe the bidding process
provided by law. The contract involved P1.3 billion. In 2006, the Ombudsman issued a
resolution identifying COMELEC officials liable for the case, it but would reverse its
own resolution months later for ―lack of probable cause.‖ This would be cited as another
ground for impeachment against Ombudsman Gutierrez.

The ZTE-NBN Scandal—In April 2007, the government entered into an agreement with
the Zhongxing Telecommunication Equipment Co. (ZTE), a corporation backed by the
Chinese government, to set up a nationwide broadband network (NBN). The network
would connect all government agencies and offices through a nationwide
telecommunications structure of telephones and computers thus facilitating
communication among government agencies throughout the country. Within hours after
its formal signing in China in April 2007, the media reported that the contract had been
―lost,‖ raising eyebrows on how something like this could happen. Many months later,
the media still could not get hold of copies of the contract.

The ZTE-NBN deal was worth US$329.4 million and President Arroyo and her husband
were being linked to the scandal surrounding the deal. The testimony of Joey de
Venecia, son of House Speaker Jose de Venecia, during the Senate hearing on the deal
confirmed speculations that there was indeed something fishy about the ZTE-NBN deal.
Besides claiming that the deal was overpriced to the tune of US$197 million, de Venecia
also charged COMELEC Chair Benjamin Abalos, a political ally and appointee of
President Arroyo, as the broker of the deal and the First Gentleman Mike Arroyo as the
―backer.‖ Abalos was alleged to receive US$120 as commission, while the First
Gentleman would get US$70 million. This case added ―tongpats‖ (a play on the Filipino
term ―patong‖ referring to overprice) to the growing lexicon on corruption.

In follow-up hearings, Romulo Neri, then the Director-General of the National Economic
and Development Authority (NEDA), testified that Abalos tried to bribe him to get the
project approved. NEDA approval was required because it had to certify that the project
was part of the country‘s priority development plans. Neri claimed that he informed
President Arroyo about the bribe offer of US$4.8 million and testified in the Senate
hearings that the President simply advised him not to accept it. This indicated that the

President was aware that the deal involved very sizable ―kickbacks‖ but did not do
anything about it except to advise Neri not to accept it.

Months later, another witness would surface, Rolando ―Jun‖ Lozada, technical consultant
of the NEDA on the NBN project. He testified that during a meeting where he and Mike
Arroyo were present, Abalos assured ZTE officials that the project would be approved.
He implicated Neri who approved the agreement in exchange for P200 million. Abalos
would later resign from his position as Chairman of the COMELEC as a result of the
scandal. President Arroyo cancelled the contract on 3 October 2007, six months after it
was signed.

In 2010, or three years later, the OMB ruled that the actuations of Abalos as ―power
broker‖ were ―highly suspect, reprehensible and should in no manner or measure be
countenanced by those in public service‖ and it recommended the filing of information
for violation of Article 212 of the Revised Penal Code. In the case of Neri, the OMB
ruled that ―the chain of circumstantial evidence linking Neri to the deal between Abalos
and the ZTE officials cannot be broken‖ and that it ―cannot close its eyes to the conduct
or misconduct‖ of Neri and likewise recommended the filing of information against him
(Manzanero, 2010: 7).

The Pulse Asia survey conducted in October 2007 indicated a very high level of
awareness among citizens about the ZTE-NBN deal (68% average), and 70% believed
the allegations about bribery. The survey indicated that three out of five (59%) Filipinos
thought that the President should resign for merely tolerating corruption among
government officials, 22% believed that the President was involved, while 19% thought
that members of her family were involved directly or indirectly. Majority (58% average),
however, thought that the witnesses were ―equally not believable,‖ but 75% said that the
Senate              should             continue              its             investigations

2007 Malacañang brown bag bribery to buy support vs. GMA impeachment—Local
officials belonging to the ruling party were invited for breakfast in Malacañang in 2007
where they were each given brown bags containing P500,000. Although she was not
present during the distribution of the brown bags, the solons got the message—and that is
to ensure that the impeachment charge against President Arroyo would not prosper. The
―pabaon‖ (or send off gift) was also to solicit support for charter change or Cha-Cha. A
few of the congressmen confirmed the brown bag gift of P500,000 while some floated the
idea that they contained only P200,000 so that when barangay officials came to them for
assistance they could claim that they did not get P500,000. It was also announced during
the meeting that pork barrel amounting to P70 million would soon be released

These are but a few of the scandals that broke out during the Arroyo years. These and
other cases reflect the political culture that prevailed during the period, which might have
made the task of Ombudsman Gutierrez more difficult. Finding solid evidence and

credible witnesses, and conducting preliminary hearings before filing the case before the
Sandiganbayan really take time, but the public did not sense that the Ombudsman was
keen to pursue these cases.

The maneuverings of the Palace also complicated Congressional investigations. On 26
September 2005, President Arroyo issued Executive Order No. 464, which prevented
Cabinet members, police and military generals, senior national security officials, and
"such other officers as may be determined by the President" from attending congressional
hearings unless the President gives permission to such proceedings. The order was issued
during the Hello Garci hearings of the Senate Committee on National Defense and about
the time when National Security Adviser Norberto Gonzales was summoned to appear in
Senate hearing in relation with the government‘s entering into a contract with a
Washington-based                                  lobby                            group
EO-464-scrapped). Agriculture Secretary Arthur Yap and other Department of
Agriculture (DA) officials invoked E.O. 464 during the Senate hearings on the fertilizer

A number of lawyers and groups challenged the constitutionality of the E.O. and filed
cases with the Supreme Court (SC). On 20 April 2006, the SC ruled that Congress could
compel the appearance of public officials in inquiries ―in aid of legislation‖ but at the
same ruled that E.O. 464 was constitutional insofar as forbidding executive officials from
appearing during the ―question hour‖ or when Congress conducts investigations as part of
its oversight function over the implementation of laws. The SC also ruled that only the
President could revoke the order (
464-backgrounder). Under intense pressure from all fronts, Arroyo finally revoked the
order on 5 March 2008.


The low compensation levels of government workers are sometimes identified as one of
the reasons for the vulnerability of individuals to unethical methods to augment their
salary, or simply to engage in corruption. The gap between the salaries of government
workers and their counterparts in the private sector had widened and inflation had
reduced the buying power of the peso. The pay of a government worker was simply not
sufficient to cover basic needs. The time for adjustments has long passed.

The Constitution provides for the standardization of salaries for government workers.
Before 1987, there were many salary scales existing in the bureaucracy such that
government workers occupying similar positions were not receiving the same pay. In
1987, Congress passed Republic Act No. 6748, or the Compensation and Position
Classification Rationalization Act, better known as the Salary Standardization Law (SSL-
1), which standardized salaries and did away with the different salary scales existing
then. Congress amended the law through the passage of Joint Congressional Resolution

No. 1, or SSL -2, in 1994, to further adjust government pay levels upward. Although pay
in the lowest positions were doubled and higher level positions received increases, these
were eventually outpaced by private sector compensation levels and were therefore were
not competitive. A case in point was the salaries of OMB prosecutors in relation to their
counterparts in the private sector. As mentioned earlier, this was one of the reasons why
the OMB had difficulty filling up these positions.

There are three levels in the bureaucracy: the First Level includes the trades and crafts
and those positions requiring only a sub-professional eligibility; the Second Level covers
professionals and requires a professional eligibility; and the Third Level refers to the
executive class, the managerial group of the Philippine bureaucracy.

One of the advocacies of the Solana II signatories was the development of a new pay
scale that would reduce the gap between the pay in the private sector and government
compensation levels. Towards this direction, the CSC and the Department of Budget and
Management (DBM)) worked hard to come up with a revised scale. A survey revealed
that compensation in the First Level was comparable with pay in equivalent positions in
the private sector. There was a 30% gap between the Second Level compensation levels
and equivalent positions in the private sector. The gap was biggest in the Third Level
where comparable positions in the private sector received up to 70% more.

SSL-3 responded to the need to make government service more attractive and
competitive. Congress passed Joint Resolution No. 4 on 17 June 2009, which introduced
a new salary scale that made government pay approximate its private sector counterparts.
Not only would this make government workers earn a decent pay commensurate to their
work but it could address the temptation to engage in corrupt practices to augment salary.
Due to fiscal constraints, SSL-3 had to be implemented over four years and will be fully
implemented by 2012. By 2012, the salary of the President of the Republic would be a
princely sum of P120,000 a month.


Public personnel administration operates in a very political environment. Appointments
to the bureaucracy enable the President to exercise great influence over officials and
employees. President Arroyo‘s almost ten-year reign provided her the opportunity to fill
important positions in the bureaucracy with her chosen people. She not only appointed
officials in the non-career service but made appointments to career service positions as
well, including appointments to the Third Level.

Third Level positions require Career Executive Service Eligibility. The Career Executive
Service Board (CESB) confers eligibility to candidates who pass a four-stage process:
passing a written exam, passing the simulation exercises in the assessment center,
completing the documentary requirements, including training, and field validation. The
CESB then recommends to the President the eligibles for conferment of the rank of
Career Executive Service Officer (CESO). The four-stage process is challenging and

takes time. Table 13 shows the Career Executive Service (CES) positions as of August

CESE refers to Career Executive Service Eligible while CSEE refers to Career Service
Executive Eligible. The two different eligibilities came about when the CSC
administered a career executive eligibility system simultaneous with the one administered
by the CESB. Today, however, the two eligibilities have been integrated and only the
CESB administers the Third Level eligibility process.

                              Table 13. Career Executive Service Positions
                                    (as of August 2010)
                                  Positions/Eligibility Status   Number
                               Total CES positions                6,613
                               Vacant CES positions               1,850
                               Occupied CES positions             4,763
                                   CESOs                          1,535
                               Eligibles: CESEs                     508
                                               CSEEs                466
                                   Non-eligibles                  2,254
                               CESEs in non-CES positions         1,005
                               CSEEs in non-CES positions           275
                              (Sartillo, 2010)

Table 13 shows that there were 6,613 Third Level positions in August 2010, but only
4,763 were occupied. Of the occupied positions, only 1,535 positions were occupied by
CESOs, or those who are not only eligible but have been conferred the CESO rank by the
President. This represents only 32.22% of the occupied positions. They are the only
ones who enjoy security of tenure because only those who fulfill all the requirements of
the position they occupy can be tenured. The CESE and CSEE eligibles have passed the
exams but have not yet been conferred the CESO rank by the President. If the CESEs
and the CSEEs are included in the counting of occupants of CES positions then the
percentage would go up to 52.67%, still an embarrassing statistic considering that there
are 974 who can be conferred the rank, and another 1,280 who can be appointed to CES
positions and conferred the CESO rank, or a total of 2,254. This would increase the
percentage of CESO occupants to almost 80%. The other occupants of CES positions
who are not CESOs were appointed for reasons other than the satisfaction of the
qualifications standards for their positions.

The CESB attempted to ask President Arroyo to help professionalize the bureaucracy by
refraining from appointing non-eligibles to the Third Level but the advice seems to have
fallen on deaf ears given the figures presented in Table 13 above.

The Constitution sets the terms of office of officers of constitutional commissions. Many
vacancies occurred during the 10-year administration of President Arroyo so she had the
opportunity to appoint many of the members of these commissions. Among those she

appointed were Chairperson Abalos and most of the commissioners of the COMELEC.
The COMELEC was responsible for the election machinery that was marred by
allegations of cheating in the 2004 elections.

At one point, all the 15 members of the Supreme Court were appointees of President
Arroyo. Table 14 shows the members of the SC appointed by President Arroyo from
2001 until 2010. It shows that Arroyo appointed three Chief Justices during her term of
office: Artemio V. Panganiban, Reynato S. Puno, and the incumbent Chief Justice,
Renato C. Corona, whom she appointed after a new president had been elected and was
due to take over in less than two months. Why she could not wait for the incoming
President to make the appointment raised eyebrows but she went on with it anyway. For
that reason, the incoming President chose not to be sworn into office by the Arroyo-
appointed Chief Justice but chose an Arroyo appointee, just the same, but someone who
had exhibited independent judgment and fair play in her decisions.

         Table 14. Appointees of Arroyo to the Supreme Court
          Current                             Appointment Retirement
                      Arroyo Appointees                                                Birthday
          Justices                                Date       Date
                       ARTEMIO V.                    2005 Dec 21        2006 Dec 6
                             As Chief Justice
                       PUNO, REYNATO S               1993*
                             As Chief Justice       2006 Dec 7         2010 May 16
              1        CARPIO, ANTONIO T             2001 Oct 26
                       CORONA, RENATO C.             2002 April 9
                             As Chief Justice       2010 May 17
                       CARPIO-MORALES,               2002 Sept 3        2011 June
                       AZCUNA, ADOLF S.              2002 Oct 17        2009 Feb 15
                       TINGA, DANTE O                2003 July 4        2009 May 11
                       CHICO-NAZARIO,                2004 Feb 10        2009 Dec
                       VELASCO, PRESBITERO,          2006 Mar 31                       1948 Aug 8
                       J. JR.
                       NACHURA, ANTONIO              2007 Jan           1941 June 13
                       LEONARDO                –DE   2007 Dec 3
                       CASTRO, TERESITA J.
              5        BRION, ARTURO D.              2008 Mar 17                       1946 Dec 29
                       PERALTA, DIOSDADO             2009 Jan 14
              7        VILLARAMA, MARTIN             2009 Nov 3
              8        BERSAMIN, LUCAS P.            2009
                       DEL             CASTILLO,     2009 July
                       MARIANO C.
              10       ABAD, ROBERTO                 2009 Aug
                       VILLARAMA, MARTIN             2009                              1946 April
                       S.                                                              14
              12       PEREZ, JOSE P.                2009 Dec 26                       1946 Dec 14
                       MENDOZA, JOSE C.              2010 Jan                          1947 Aug
         *not appointed by Arroyo to the SC butappointed as Chief Justice by Arroyo

Among the, Arroyo appointees, four have retired, including Associate Justice Conchita
Carpio-Morales, who has been appointed Ombudsman by President Aquino. Thirteen of
the current members of the SC are Arroyo appointees, including Chief Justice Corona.
This is why the SC is sometimes referred to as the ‗GMA Court‖ (Transparency and
Accountability Network, 2011: 20). This is also why the public fears the possible
outcome of corruption and other cases involving the Arroyos when these reach the high

It is of course not fair to conclude that appointees of the President will always decide in
favor of Arroyo. For instance, a number of SC justices have shown their independence in
their decisions on controversial issues and voted against the administration (see
Transparency and Accountability Network, 2011: 20-21 for more details).

Presumably to gain the trust and loyalty of lawyers appointed in government positions,
before stepping down from her position, President Arroyo issued on 8 May 2010,
Executive Order No. 883 Granting Career Executive Service Officer Rank to Lawyers in
the Government Executive Service and Other Purposes. Talk was that Arroyo was just
making sure that when cases are filed against her or her allies in any agency of
government after her term as President, these would have limited chance of success
because the legal officers owe her their CESO rank. President Aquino has revoked this
Executive Order.

There are reports that Ombudsman Gutierrez issued her own ―midnight appointments.‖
The OMB plantilla provides for 14 assistant ombudsmen. Before she resigned from her
position, insiders say that she appointed eight new assistant ombudsmen (Dizon, 2011).


The first in a series of impeachment cases that the Arroyo administration faced was filed
in March 2005, but the House of Representatives was not able to muster enough votes to
send the complaint to the Senate. In 2006, opposition leaders and civil society
organizations filed eight impeachment complaints against Arroyo accusing her of abuse
of power and corruption, among others (Olarte, 2006a). Again, her allies in Congress
made sure that the impeachment complaints would not prosper. The impeachment
charges did not stop and again in October 2007, lawyer Alan Paguia filed another
impeachment complaint against Arroyo for the brown bag bribery in Malacañang.

Ombudsman Gutierrez suffered a similar fate. In March 2009, Senate President Jovito R.
Salonga led civil society leaders in filing impeachment charges against her for gross
violation of the Constitution and betrayal of public trust when she sat on several graft
cases during the Arroyo administration. The House Committee on ___ found the
complaint insufficient in form and dismissed it in September 2009 (Torres, 2011;


Ombudsman Gutierrez was accused to ―inaction, mishandling, or downright dismissal‖ of
high-profile cases, including the P1.3 billion Mega Pacific case; the extortion case against
Justice Secretary Hernando Perez related to the IMPSA; the fertilizer scam; and the case
of the euro generals

On 22 July 2010, former Akbayan party-list representative Risa Hontiveros, together with
former army General Danilo Lim, and spouses Felipe and Evelyn Pestaño filed
impeachment charges against Ombudsman Gutierrez for culpable violation of the
Constitution and betrayal of public trust for inaction on the alleged murder of Navy
Ensign Philip Pestaño, the arrest of Representative Hontiveros during a rally in 2006, and
the ZTE-NBN payoffs.

A month later, in August 2010, another impeachment case was filed by various civil
society leaders—Renato Reyes of the Bagong Alyansang Makabayan (BAYAN); Sister
Mary John Mananzan of PAGBABAGO; Danilo Ramos of the Kapisan ng mga
Magbubukid ng Pilipinas; Edre Olalia of the National Union of Peoples‘ Lawyers;
Ferdinand Gaite of COURAGE, the confederation of government unions; and James
Terry Ridon of the League of Filipino Students (LFS). The complainants accused
Ombudsman Gutierrez of the following (Torres, 2011):

      Failure promptly act on cases filed against former president Gloria Macapagal-
       Arroyo, her husband Jose Miguel Arroyo, and other officials linked in the botched
       national broadband network deal;
      Inexcusable delay in the investigation on the death of Ensign Philip Pestaño, a
       case that even the United Nations Commission on Human Rights concluded as
      Failure to look into the P1-million dinner for the presidential entourage at the Le
       Cirque restaurant in New York;
      Repeated failure to take prompt action on various cases involving Arroyo, such as
       the Mega-Pacific scam, among others; and
      Refusal to grant ready access to public records such as the Statement of Assets,
       Liabilities, and Net Worth of former Pampanga representative Juan Miguel
       Arroyo; and
      failure to act promptly on the anomalous transactions, such as the 2004 fertilizer
       scam, the Euro Generals case, and other cases of irregularities filed by citizens.

In March 2011, after protracted hearings, the House of Representatives, for the first time
in history, voted to impeach the Ombudsman. On 10 March 2011, the Senate Blue
Ribbon Committee recommended the impeachment and resignation of Ombudsman
Gutierrez and the firing of members of the Office of the Special Prosecutor for
―neglecting, weakening and complicating‖ the plunder case against General Garcia and
his family. It recommended the nullification of the agreement that allowed Garcia to

plead guilty of lesser offense in exchange for the return of P135 million in assets. Garcia
was accused of pocketing P303 million from the military coffers. On 22 March 2011, the
House of Representatives voted to impeach Ombudsman Gutierrez with 210
representatives voting for impeachment, 46 against, and 4 abstaining.

Gutierrez submitted her resignation to President Aquino on 29 April 2011, which would
be effective 6 May 2011. In view of this development, the Senate cancelled its
impeachment trial The resignation of Gutierrez benefits Arroyo because the latter is
involved in at least four of the charges filed against the former (http://www.abs-

                                      CHAPTER 5

                       By: Prof. Leonor Magtolis Briones (Ret.)


Fighting corruption is a favorite campaign line of many presidential candidates. Most
presidential candidates promise to eliminate corruption. The latest to make this promise
is President Aquino himself. One year after the euphoria of his election, accusations of
corruption among those close to the President are surfacing.

Public attitudes towards corruption range from weary acceptance to outright cynicism.
The international donor community has been concerned about corruption for decades.
Because they have committed to support the Aquino administration, leading donors like
the World Bank, Asian Development Bank and the United States of America have a keen
interest on anti-corruption developments in the country.

A bilateral donor has observed, ―…favoritism and bribe seeking within the Philippine
government has both dissuaded foreign investment and crippled the government‘s ability
to improve the country‘s competitiveness.‖(Dialogue on Partnership for Growth between
the United States Government and the Philippine Government, June 22, 2011)

However, it has not always been ―all misses and no hits.‖ There have been periods when
anti-corruption campaigns succeeded, whether directed towards market-centered, public
office, or public interest corruption. Most, of these initiatives are by Filipinos—
government officials, civil society organizations, private business and client/citizens.


In Chapter 2, it was pointed out that market-centered corruption occurs because the
supply of public goods and services is low, relative to increasing demand. Public goods
become commodities which are sold and bargained for.

The practice of giving bribes, ―padulas‖ and making ―palusot‖ while competing for
public services is so prevalent and commonplace no one gives a second thought to it.
However, small bribes can lead to bigger and bigger bribes. One can start with a security
guard or private secretary of an official and go all the way up to the cabinet secretary or
head of agency.

Market-centered corruption is clearly undemocratic because only those with money can
participate in the Divisoria market which is Philippine public administration. The very
poor for whom public services are intended end up being excluded.

The Bureau of Quarantine

Since the sixties, the Bureau of Quarantine has been known for its fast and efficient
services in giving immunization shots. With globalization and Filipinos going abroad by
the hundreds of thousands to ―remote‖ countries, the volume of its clientele has
increased. Nonetheless, the Bureau has kept up the high level of efficiency which has
been its hallmark.

During my last visit for a trip to Africa, I was delighted to see things had not changed.
Queuing was orderly and the staff operated like clockwork. Applicants were quickly
vaccinated, assembly line fashion. Instructions were very easy to follow and staff from
the nurses to the cashiers and clerks worked with no fuss and idle talk. I completed my
shots including forms and receipts in ten minutes!

Because of the speed with which they work, there is no time or opportunity for
negotiating, getting ahead of the queue, and demanding special treatment.

Traffic enforcement in Makati City

Makati City has built up a reputation for strict enforcement of traffic rules and
regulations. Car owners tend to be extra careful when they go to Makati because they
know they can‘t get away with violations. Cars which park illegally are towed away
within minutes and there are no ifs and buts about it. No negotiation either.

Since the Divisoria mentality doesn‘t work and everyone is treated equally, pedestrians
and vehicle owners tend to obey traffic rules and regulations.

Bureau of Census and Statistics, and National Bureau of Investigation

Every citizen sooner or later needs a copy of his or her birth certificate. A certificate of
clearance from the National Bureau of Investigation is needed by citizens for the purpose
of getting employment, travel abroad, court cases and official transactions.

A citizen who goes to the Bureau of Census and Statistics and the National Bureau of
Investigation expects to stand in a queue, fill up forms, pay the fees, and be informed
what day he or she can expect the birth certificate or clearance.

When government rules and procedures are efficient and predictable, there are lesser
chances of corruption.

The National Kidney and Transplant Institute

There are many horror stories about public hospitals. Since it is difficult to avail of
public hospital services, medicines and hospital beds, the temptation to demand and
accept bribes is always there. The temptation for clients themselves to volunteer and give
bribes is even greater.

The NKTI is often mistaken as a private hospital because of its reputation as a leader in
kidney transplants, its first rate laboratory services and its efficient hospital operations.
The NKTI is the first hospital in Asia to perform successful kidney transplants. This was
as early as the ‘70s. It also pioneered in liver transplants.

At present, many hospitals, both public and private, perform kidney dialysis and
transplants. Nonetheless, NKTI remains the leader in this field.

NKTI is ISO-certified and constantly strives to improve its services. Because of the
efficiency of its operations, it is hardly associated with graft and corruption.

Public hospitals and clinics are often criticized because of their inability to attend to the
basic health needs of citizens. On the other hand, more and more citizens are turning to
public health facilities because of high costs of medicine. Such a situation can easily lead
to a corruptive situation.

NKTI and other modern public health facilities have shown that public services need not
be inefficient and corrupt.

Other efficient agencies

Other agencies which operate efficient public services include the Department of Foreign
Affairs‘ Passport Division for the issuances of passports, Land Transportation Office for
the issuance of drivers‘ licenses and car registration permits. These agencies have
established procedures which are convenient and fast for the citizens/clients. Again,
bribery is not necessary to access these services.

Combating public office corruption

As noted in Chapter 2, market-centered corruption occurs because of the lack public
goods and services in relation to increasing demand from the public. On the other hand,
public office-centered corruption focuses on the public office itself and the norms which
are binding on the public official. This is the best-known definition and is usually the
focus of anti-corruption strategies at the level of agencies.

Many anti-corruption strategies have been successfully initiated by heads of government
agencies themselves without external assistance. Interestingly, some of the best known
success stories occurred during Martial Law. The best known ones are the Bureau of
Internal Revenue, and the Commission on Audit. At present, the initiatives of the
Department of Public Highways and the Department of Finance are noteworthy.

The Bureau of Internal Revenue

The Bureau of Internal Revenue is one of the oldest agencies of the government and goes
all the way back to the days of the American occupation and later, the Commonwealth
government, and on to the present public administration system

For centuries, the function of tax collection has traditionally been associated with bribery
and corruption. The Philippine BIR has not been spared from this unflattering image.
Nonetheless, thirty-six years ago, reforms initiated in the BIR were documented and
hailed as an example of a successful reform program.

The reform program in the BIR was triggered by a ―massive purge‖ of the public
administration system initiated on September 21 1975 by then Executive Secretary
Alejandro Melchor. This was during the Martial Law period under the late Pres.
Ferdinand E. Marcos.

In one fell swoop, the entire governmental system was swept clean—officials and
employees with records of corruption were ―purged‖ out of government. In just one day,
thousands were summarily removed from government service. Agencies publicly
perceived as hotbeds of corruption were reorganized.

Among others, the BIR was one of the agencies which were decimated by the purge.
Justice Efren I. Plana was plucked from the Court of Appeals and appointed as
Commissioner. Justice Plana then initiated wide-ranging reforms which won international
renown. He proved that it is possible for Filipinos to initiate public office-centered

I had the good fortune to be assigned by Drs. Raul de Guzman and Leddy Carino to look
at corruption from the revenue-raising side by writing a case study on BIR reforms.
Eventually the BIR experience under Justice Plana was featured in the book,‖ Fighting
Corruption‖ by Dr. Robert Klitgaard, which is considered a landmark book on corruption.

       What Justice Plana did

Most of what Justice Plana did can be done by a determined and committed head of
agency. First, he studied the operations of the agency and identified the areas where BIR
staff are vulnerable. Second, he reorganized the structure and operations of the Bureau
to plug areas of weakness. Third, he developed a system of monitoring BIR personnel
and imposed sanctions, even as he strengthened capacity building programs.

In less than two years, Justice Plana fired 88 personnel, with 39 reorganized out; 15
required to resign and 34 were dismissed. At the same time key officials were removed
or demoted: 11 regional directors, 5 assistant regional directors, and 9 revenue district

The Fiscal Control Division under Justice Plana‘s direction developed criteria for
selecting employees for audit. In addition to the usual work-related criteria, the
following were added: (l) those who engage in high living or lavish consumption;
(2) those who gamble regularly; (3) those who frequent nightclubs; (4) those who
maintain luxurious houses and accumulate properties; (5) those who maintain queridas or
paramours; (6) those who enjoin exclusive clubs with expensive membership dues.

Justice Plana worked very closely with the Commission on Audit in auditing the
accountabilities of erring BIR personnel.

Finally, Justice Plana embarked on a massive recruitment program to recruit fresh
employees who are not yet tainted with corruption.

The crucial ingredient in the success of the BIR reforms was the quality of leadership and
example provided by Justice Plana.

It should be emphasized that the BIR reforms were undertaken totally under Filipino
leadership and under Filipino funding.

The Commission on Audit

Like the Bureau of Internal Revenue, the Commission on Audit (COA) was one of the
public institutions which was subjected to a thoroughgoing ―purge‖ and shaken from top
to bottom in 1975.

Like Justice Plana, Justice Francisco Tantuico Jr. was handpicked from the Court of
Appeals and appointed as Chairman of COA.

To this day, the reforms implemented by Chairman Tantuico are considered the most
wide-ranging and long-lasting reforms in government accounting and auditing. The
present COA owes much of its structure, operations, professionalism and international
stature to Chairman Tantuico and his team.

       Reforming COA

The process of reforming the Commission on Audit led by Chairman Tantuico can be
undertaken by a head of agency. He studied the organization with the help of a group of
professionals whom he met outside of COA. With their help, he formulated his reform
strategy. Then, he launched simultaneous reform actions: he reorganized the entire
Commission on Audit from top to bottom, with the participation of COA officials. At the
same time, he organized a group of lawyers to put together all existing laws on auditing
and integrate these into an Audit Code. He also launched a massive recruitment
campaign which drew to COA young and idealistic lawyers and accountants. These new
recruits replaced erring personnel who were purged out of the organization.

Chairman Tantuico organized the State Accounting and Audit Center (SAAC) for higher
and advanced training for senior auditors to compliment training programs for new
auditors. SAAC also handled international training programs for regional and
interregional participants.

Another aggressive step which Chairman Tantuico undertook was to initiate the
organization of the Asian Organization of Supreme Audit Institutions (ASOSAI) and
occupy the highest position in the International Organization of Supreme Audit
Institutions (INTOSAI). By bringing COA to the international community of audit
institutions, Philippine auditors were exposed to modern techniques of auditing and share
their country‘s experience in audit reforms.

Among many features of the COA reform experience, the policy of summary dismissal
stands out. In certain cases, Chairman Tantuico would confront an erring auditor with the
documents and evidence against him or her. He would be given a choice: to resign or to
undergo the prolonged and expensive process of being the subject of a case.

The Commission on Audit and the Bureau of Internal Revenue exemplify public office-
centered reforms which were successfully implemented. These can be done by
determined and committed heads of agencies without foreign funding and assistance.

The Philippine National Police

In the public mind, the Philippine National Police is associated with graft and corruption.
Recently when the scandalous web of corruption in the AFP was exposed and reported to
the public through newspapers, radio, TV and public hearings, an AFP official reportedly
complained ―Bakit kami? Mas masahol pa ang PNP!‖ or ―Why us? The PNP is worse!‖

There was a time when the PNP was thoroughly swept clean and regained its image of
discipline, incorruptibility, as well as protector of the citizens. This was when General,
now Senator Lacson was head of the PNP.

When Lacson took over the PNP, he was given a credit card with a limit of up to Ph15
million a month. This was for him to use for his personal expenses. He returned the
credit card. Obviously, funds from the PNP budget were skimmed off for the private use
of its officials, practice which is also associated with the Armed Forces of the

Lacson decentralized the direct release of funds to the regional units. These enabled the
regional offices to plan their disbursements and utilize their funds without the usual
delays, corruption and bureaucratic red tape associated with overcentralization.

Over the years, the ordinary policeman had acquired the habit of mulcting, or extracting
money from people by accusing them of violating the law. This is popularly known as
―kotong‖. When asked how he put a stop to it, Lacson answered: through strict

enforcement of discipline, penalties and shaming incorrigibles by reporting them to the
public. Punishment was swift.

Because he put a stop to it, Lacson gained the admiration of the public, especially taxi,
jeepney and bus drivers who were the favorite ―kotong‖ victims of policemen.

Rogue policemen were themselves engaged in extortion, thievery and even kidnapping.
Because of his training in intelligence, he was able to track the activities of the
notoriously undesirable among the policemen and remove them from the service.

The appointment of Lacson as head of PNP was not a lateral one. He started as a young
lieutenant and worked his way up. He knew the organization very well and knew what
needed to be done. During the early part of his career, the public already knew him for
his fearlessness in tracking down kidnapping syndicates and rescuing victims. Two of his
well known rescue operations as a young official involved the young son of a mall owner
from Cebu and the daughter of one of the richest ―taipans‖ in the Philippines.

Public office-centered reforms are always associated in the public mind with one
particular feature. The public associates Lacson with his edict requiring policemen to
have 30-inch waistlines. The logic was that policemen have to be fit enough to chase after
miscreants and hooligans. He then initiated a series of physical fitness programs which
were covered by media and watched avidly by the public.

The above requirement was an ―out-of-the-box‖ solution but it worked and gave a better
image of a fit and trim policeman in contrast to the tired image of a pot-bellied officer
mulcting citizens and skimming off public funds.

The reform of the PNP caught public imagination and support, eventually catapulting
Lacson to the Senate.

Once again, this is one reform program which did not require foreign funding and advice.

The Department of Public Works and Highways

If the BIR is traditionally considered as a flagship of corruption in the revenue-raising
side of the public finance equation, the Department of Public Works and Highways is
considered as the veritable vipers‘ nest of corruption in the expenditure side.

Two years ago, the World Bank Washington disqualified two big contractors in a DPWH
road-building program. The move attracted public attention and become the subject of a
Senate inquiry. The case highlighted once more the vulnerability of DPWH to corruption,
particularly during the bidding and procurement process.

The current DPWH secretary, Rogelio ―Babes‖ Singson, has a reputation for being
squeaky clean. He is associated with former secretary of the Department of

Transportation and Communications, Jose ―Ping‖ de Jesus whose public career has never
been tainted with corruption.

During the DPWH anniversary last June, Singson reported to the President on the reforms
he had initiated, especially in bidding and procurement. He has set up a transparent
system for the bidding process. The feedback from DPWH, especially the professionals,
is favorable. The President himself had nothing but praises for Singson.

What is happening at present in the DPWH is still another example of public office-
centered reforms conducted with local financing.


In Chapter 2, it was explained that while market-centered corruption and public-office
corruption focus on the activities of public officials and other participants, public interest-
centered corruption looks at the effect or impact of corruption. In other words, it goes
beyond individual and agency corruption and examines its implications for national

In the Philippine experience, several cases can be cited which have wide-ranging
implications for national interest and public administration in general. Perhaps the most
comprehensive of such cases would be the situation of the public administration system
in 1975. The extent of corruption was such that it was considered comprehensive,
systemic and endemic. It was determined that nothing less than a total purge of the entire
government system was required to clean up the bureaucracy. Under the direction of the
Executive Secretary Alejandro Melchor, thousands were removed, ranging from ordinary
staff to heads of agencies, with just one decree. Newly installed heads of agencies were
given blanket authority to institute reforms as necessary.

Then, there was the case of the then Ministry of Public Highways in 1978 where an entire
region and all of its engineering districts were discovered to be engaged in massive fraud.
If it was not detected in time, the Treasury would have been driven to bankruptcy,
according to Chairman Francisco S. Tantuico of the Commission on Audit.

This case can be considered public-interest centered because while the corrupt operations
were conducted in the Ministry of Public Highways, it was the Treasury which was
systematically drained of cash without corresponding public benefits. Investigation of the
case initially involved the Commission on Audit which discovered the preparation of fake
vouchers and documents, the Bureau of the Treasury which discovered the fake checks,
the National Bureau of Investigation and the Ministry of the budget. Eventually, the
Office of the Tanodbayan and the Sandiganbayan entered the picture.

Another case involved the recovery of the late Ferdinand Marcos‘ wealth and the
utilization of these funds. It is a public-interest centered case because the funds which
were recovered were supposed to fund agrarian reform programs, which will in turn
benefit the landless rural poor. The case involved the Department of Agriculture, the

Department of Agrarian Reform, as well as all other agencies involved in agricultural
development. The amount involved over Ph400 million pesos. It was about a major
program of government for several administrations from Presidents Corazon Aquino to
Fidel V. Ramos, to Joseph Estrada, to Gloria Macapagal-Arroyo, and now Benigno
―Noynoy‖ Aquino. This is the land reform program of the government which is intended
to solve agrarian problems which go all the way back to the 1930s.

Still another case which is public-interest and is still fresh in the memory of the public is
the fertilizer scam involving more than Ph700 million in public funds. The case involved
the release of funds from the Department of Budget and Management which were used to
distribute vastly overpriced fertilizers, pesticides and farm implements. This time,
involved agencies included the Department of Agriculture, local government units and

The 1978 Ministry of Public Highways case

Of all the public interest-centered cases mentioned above, I believe that the 1978
Ministry of Public Highways case is perfect. Unlike all the other cases which did not go
beyond senate and congressional hearings, the MPH case ended in conviction and
imprisonment for the perpetuators, as well as caused the resignation of a ranking and
trusted minister.

Fortunately for the present generation, this case was documented and written in a book,
―Raiders of the Treasury‖ by Cesar S. Bacani, Jr. and Bernardino L. Cailao in 1990. It is
written in a non-technical style which the average reader can understand. For purposes of
this study, I asked Bootes E. Lopos, a lecturer at the U.P. National College of Public
Administration to make a summary of the book.

The discovery of the biggest scam of the 1970‘s started with an anonymous letter
addressed to Sofronio Flores, COA Region VII director reporting ―massive anomalies‖
in the MPH Regional Office. This was in July 1978. It was followed by four more letters
describing how fake Letters of Allotments (LAA‘S) and fake Sub-advices of Cash
Disbursements ceilings resulted in ghost deliveries, non-existent projects and cash drawn
out of the Treasury.

Flores organized a Fact-Finding Team which confirmed the tips of the anonymous letter.
This triggered a massive investigation which uncovered the entire scheme covering the
entire Region VII and all of its engineering districts. COA Chairman Tantuico submitted
a report to President Marcos who supported the investigation.

The investigation widened with the discovery in October 1978 of fake checks in the
Bureau of the Treasury. On the suggestion of NBI Director Mison, the Bureau of the
Treasury and the Commission on Audit joined forces. Basic documents were
simultaneously retrieved and brought to the Commission on Audit for examination. The
members of the team were cajoled with bribes and later received death threats regularly.

The challenge was to make sure that the findings and the charges would stand in court.
Thus, NBI agents and the Tanodbayan lawyers had long sessions with the Commission
on Audit where they were briefed on the nuances and details of the audit evidence which
had to be converted into legal evidence.

The final result: The mastermind of the scam was meted a total sentence of 3,946 years
plus fines. Convicted along with him were contractors and MPH personnel.

While there was no evidence directly linking the Minister of Public Highways, Mr.
Baltazar Aquino, to the case, the magnitude and scale of the corruption was such that he
had to take command responsibility. Mr. Aquino resigned.

       Thirty-three years later: lessons for 2011

   1. Sustaining a case from investigation, building up the case, to trials and final
      conviction. At present, many cases are not sustained up to their logical
      conclusion. After media hype, headlines, television appearances and political
      mileage, high profile cases don‘t go beyond publicity.

       The above case shows that it can be done.

   2. Unity and cooperation among the concerned government offices. The case shows
      how teamwork and cooperation can assure victory against corruption. Under
      the leadership of the Commission on Audit, the NBI, Bureau of the Treasury,
      the Ministry of the Budget, and the Tanodbayan, worked as a team.

       Countless hours were spent in preparation for the case. COA officials thoroughly
       briefed the team on the ramifications of the accounting and auditing system which
       enabled the crooks to perpetuate their crime.

       Intensive preparation for the court trials was crucial in insuring conviction.

   3. The role of leadership. The role of leadership cannot be discounted. The
      Commission on Audit under the leadership of Chairman Tantuico initiated
      the investigation, gathered and collated the evidence, worked closely with
      the other agencies and kept the morale of the team high. The heads of the
      other agencies were equally committed and determined to see the case through.
      One phrase and can be used to describe the determination of the Chairman:
      ―bulldog tenacity.‖

   4. High morale of the team. The level of professionalism and personal courage of
      all the team members is amazing and admirable. No one wavered in spite of
      death threats, and other risks that the team was exposed to.

       According to the authors of ―Raiders of the Treasury,‖ …‖the men and women
       here were heroes in every sense of the word. They, too, lived dangerously and

       finished their assigned task with valor.

At this time when trust in the government has been diminished and severely eroded,
when citizens cynically say that nothing ever happens to corruption cases beyond media
hype, the above case proves that big, public-interest cases can be pursued up to

Can the Filipino fight successfully against corruption? My answer is, whether it is
market-centered, public office, or public interest-centered, the Filipino can tackle the

Can the Filipino solve corruption? YES.

                                       CHAPTER 6

                  By: Prof. Leonor Magtolis Briones


President Benigno Aquino won the last presidential elections on an anti-corruption
platform. The call for action against corruption is a recurring theme in his administration.

At present, government agencies are making their own anti-corruption initiatives. The
legislature is attracting much public attention with the public hearings, particularly in the
Senate. Civil society organizations and the private business sector are also undertaking
their own programs. Media covers these initiatives as they occur, report instances of
corruption as these are uncovered, and come out with special reports and documentaries.
Academics and analysts continue doing research on corruption and make
recommendations on how this intractable scourge on good governance can be stopped.

The results of these initiatives tend to be uneven. Agencies which do not get the attention
of media, citizens groups and the private sector tend to be unnoticed, while those with the
most dramatic public revelations get the lion‘s share of reform efforts.

Thus, the need for a national anti-corruption program to ensure comprehensive coverage
of the public administration system.

Corruption is already comprehensive and systemic

Researchers and students of corruption talk about flagships of corruption and agency-
specific corruption viz comprehensive and systemic corruption. Yes, there are so-called
flagships of corruption like the big revenue agencies and those with huge expenditure

However, it is now recognized that corruption has become systemic. It has permeated the
entire public administration system, namely the three branches of government—the
legislature, executive and the judiciary—as well as the three levels of the executive
branch—national government, government corporate sector, and local governments.

Corruption is now so pervasive that people accept it as a given; public officials accept it
as a must.

Corruption which is comprehensive and systemic needs a response from a national anti-
corruption program.
Corruption is complex—it has many dimensions and occurs at different

It is generally accepted that corruption is a complex phenomenon and has many
dimensions and levels. Sociologists relate it to aspects of our culture and value system
which tend to encourage corrupt behavior. Historians blame it on our colonial heritage
and our historical experience with different conquerors. Management experts say
corruption feeds on                .Economists say it is a market phenomenon.

Researchers also write about bureaucratic corruption and political corruption. They also
point out to internal corruption as well as external corruption.

All of these dimensions of corruption are interrelated and interconnected. A national
anti-corruption program can capture and attack these different aspects.

Government has to take the lead in anti-corruption efforts because of its vast powers

One important question which is frequently raised in conversations about controlling
corruption is: which institutions would be most effective in fighting corruption?
Researchers like Andy Guth believe that the private sector has the better capacity to fight
corruption. He points out to professional associations in particular.

I agree that professional associations are important partners in fighting corruption.
Large-scale agency level corruption happens largely because of manipulation of
accounting systems and accounting records, falsification of documents, and changing
procedures and processes. This can only be done by professionals in government who
are members of different professional organizations. At the same time, those who
uncover these anomalies are also professionals.

Professional organizations can go a long way in regulating behavior of their members as
well as imposing sanctions for unprofessional conduct. They can cooperate with
government agencies in ensuring that professionals follow generally accepted standards
as well as norms of behavior for professional work.

Nonetheless, I believe that at the end of the day, a national anti corruption program
should still be coordinated by the government. In the first place, the primary targets are
government agencies and officials. With its vast powers of suasion and coercive might,
government can see to it that laws are enforced and sanctions are applied. It can pass
laws, reorganize agencies, create new ones and fire erring officials. It also has the
enormous resources which are required to conduct such a campaign.

Government has the clout to mobilize, summon and obtain the support of all branches of
government and all sectors of society.

Of course, the role of the private sector is indispensable. More so, civil society and
media can generate public outrage and push government to take action.

A national anti-corruption campaign will take no less than the president to lead it.

Again, there is much debate on this issue. It has been pointed out that while presidents
all over the world win on anti-corruption platforms, they end up being accused of
corruption themselves. While this is true, we also have historical experiences of anti-
corruption campaigns led by Presidents who remain unsullied and uncorrupted during
their term.

Obvious examples are the administrations of Pres. Ramon Magsaysay and the president‘s
mother, Pres. Corazon Aquino. Both presidents ended their terms (untimely in the case
of Pres. Magsaysay) without a single whisper of personal corruption.


This issue has also been debated. My position is that there is no need to create a new
anti-corruption agency.

There are more than enough existing institutions and agencies.

The usual practice is for each new administration to reorganize government, abolish some
agencies, create new ones -- and end up with a much heavier and overcrowded
organizational structure. The result is overlapping of functions, increased problems of
coordination and rivalry. This is true for anti-corruption bodies. One can even say there
are too many of them. The point is to strengthen and utilize them.

Anti-corruption initiatives can be built in, in every agency, especially in the so-called
flagships of corruption.

Aside from national level anti-corruption institutions like the Civil Service Commission,
Ombudsman and the Sandiganbayan, each office, department and agency has its own
internal system of monitoring, investigating and disciplining employees. All major
offices have representatives of the Civil Service Commission and the Ombudsman. Thus,
actions can already be undertaken at the level of the office.

At present, the Department of Public Works and Highways and the Bureau of Internal
Revenue are undertaking initiatives to clean up their own backyards under the leadership
of Secretary Rogelio Singson and Commissioner Kim Henares.

The Cory Model shows that it can be done.

As will be shown later, during the administration of Pres. Corazon Aquino, significant
anti-corruption results were attained without creating a new agency. She utilized the
existing cabinet structure and government arrangements which were already in place
without putting up a new organization, and without creating new items of expenditures.


During a round table discussion on corruption in the Philippines, Visiting Researcher
Andrew Guth from Harvard University pointed out that in the space of 60 years, more
than 40 organizations, institutions and other anticorruption bodies were created in the
Philippines. Prof. Danilo R. Reyes who is currently doing research on corruption stated
that he identified 19 formal institutions which were created during the same period.
Whether it is forty or nineteen –the fact remains that many agencies have been created to
fight corruption. Current debates on corruption focus on whether additional government
reform is the right path or a more powerful and effective Anti-Corruption Commission.
Comparisons are often made with the Hongkong‘s Independent Commission Against
Corruption in terms of budget, coverage and effectiveness.

After more than thirty years of studying corruption, I have come to the conclusion that it
is possible to make substantial inroads against corruption without creating a new agency.
It is possible to be work within the existing framework of government institutions. Most
important, only Filipinos can solve corruption in the Philippines. This was done during
the administration of the current president‘s mother, the revered President Corazon
―Cory‖ Aquino.

The environment against corruption in Pres. Cory’s time

In an earlier paper about the Philippine experience in recovering ill-gotten wealth, I wrote
that ―President Corazon C. Aquino was catapulted to power by overwhelming public
revulsion against martial law and rage over the plunder of national wealth.‖ (Briones: The
Unfinished Quest, 2007, page 2)

The mood of the people was totally against corruption. When the magnitude and extent
of plunder of the country‘s wealth was reported to the public, it triggered shock and
indignation. Thus anti-corruption initiatives were welcomed by citizens.

Cory’s Way: Utilizing the Cabinet System

The anti-corruption ―strategy‖ of Pres. Cory Aquino is so simple it does not even have to
be called a ―strategy‖. The only new anti-corruption agency she created was the
Presidential Commission on Good Government (PCGG) which was tasked with the
mission of recovering ill-gotten wealth. Otherwise, she simply used the cabinet system.

Pres. Cory Aquino could have brought in foreign consultants, especially since she was
adored not only by the Filipinos but also by the international community. She could have
asked for huge grants to reorganize the government and engage in massive capacity
building (it was simply called ―training‖ then). She could have called for Summits,
national conferences, and symposia. She could have asked for funding for research to
look into the nature of corruption and how to prevent its recurrence. She could have
delivered stirring speeches and inspiring statements. She did none of these.

It is likely she did not see the need for foreign expertise and assistance because studies
and recommendations had already been made about controlling corruption. As noted in a
previous chapter, the most comprehensive of these was the pioneering work done by the
then U.P. College of Public Administration under the leadership of Dr. Raul P. de
Guzman and Dr. Ledivina V. Carino.

How Pres. Cory utilized the cabinet system. Instead of creating a separate campaign,
Pres. Aquino integrated anti-corruption initiatives into the regular structure of the
Executive branch, particularly the cabinet system. She simply ordered all her cabinet
members and heads of agencies to study their own organizations and formulate anti-
corruption plans. They were required to report regularly. These reports were compiled
and monitored by the Cabinet Secretary, Jose ―Ping‖ de Jesus.

During cabinet meetings, each cabinet member would report on the status of his or her
department‘s campaigns while their peers gave advice/and or criticism. Those with
interrelated or interconnected problems would pool their resources and work jointly.
Thus, while the cabinet members were working individually on their organizations, they
knew they were also a team under the President herself.

Since each department and agency was different from the others, the Secretaries had
different strategies and reported varying results.

At the end of Pres. Cory‘s term, the University of the Philippines initiated a series of
lectures and reports from the cabinet members on their accomplishments. These self-
assessments were critiqued by a panel mainly composed of academics, columnists and
other media personalities. The last to deliver a presentation was no less than the president

The assessment of Pres. Cory‘s accomplishment was published in four volumes. The
first volume is a collection of the lectures of the President and her cabinet. The second
volume contained the alternative assessment by the panels assigned to each department.
The third volume contained the assessment of the Vice-Presidency, the Senate and House
of Representatives, Ombudsman and Sandiganbayan, and the Commission on Human
Rights. The fourth volume compiled the assessments of the Civil Service Commission,
Commission on Audit, Commission on Elections, and the Presidential Commission on
Good Government.

Most of the cabinet reports contained a section on accomplishments in the anti-corruption
front. The reports varied. Some reported on officials charged and dismissed. Others
reported on organizational changes and improvements in efficiency which limited
opportunities for corruption.

A number of departments reported comprehensive reorganization, formulation of new
policies, improvement of policies and procedures, creation of new programs, monitoring
of personnel, and bringing in qualified, competent personnel. Among these are the

Department of Justice, National Economic and Development Authority, and Department
of Finance.

Other departments were more explicit. The Department of Budget and Management
under Secretary Guillermo Carague reported on promoting transparency and
accountability, as well as promoting government productivity and efficiency. On the
other hand, the Department of Education, Culture and Sports‘ report had a section
entitled ―Fight Against Corruption,‖ with the statement, ―the DECS has launched a
campaign to rid the agency of the grafters and the corrupt. It is a goal to make the DECS
the model for other government agencies to emulate.‖ Dismissals and cases filed were
reported in detail. Secretary Isidro Carino stated that the Legal Office reported weekly
on the status of all pending cases and investigations.

The Department of Health also had a section in its report entitled, ―The Continuing Fight
Against Graft and Corruption.‖ The department proudly cited its improvements in the
procurement and warehousing systems in the Visayas and Mindanao as examples of
successful battles against corruption. Another strategy adopted was the effective use of
public information.

The department also tapped foreign assistance in modernizing its system. Nonetheless,
Secretary Alfredo Bengzon noted that ―money works where there are capable people and
functional systems to utilize it.‖ On foreign assistance, he said, ―you can‘t throw money
at a problem.‖

In its report, ―Cleaning Up Corruption,‖ the Department of Environment and Natural
Resources claimed that its campaign against corruption resulted ―in the largest number of
cases filed and won against undesirable personnel. The creation of a Personnel
Investigation Committee resulted in 443 cases filed against erring personnel, reported
Secretary Fulgencio Factoran, Jr.

The Department of Public Works and Highways had two secretaries during the term of
Pres. Cory Aquino—Jose P. de Jesus and Fiorello R. Estuar. Their report contained a
long list of innovations to improve efficiency and limit opportunities for corrupt
behavior. One of these was the creation of a technical post-audit system which served as
an effective mechanism against field collusion and laxity in the implementation of
standards. Their concluding statement, ‖On Graft and Corruption‖ stated that ―this
malaise has to be attacked on three fronts: at the organizational culture level, at the
syndicated and big-scale level, and at the pervasive but low level.‖ The DPWH campaign
was waged on these three fronts.

Cory’s Way: her cabinet and her government’s ―fundamental integrity‖

The assessment reports on Pres. Cory‘s fight against corruption show very clearly that the
successes attained were largely due to the integrity of her cabinet members who fought
the war in their own departments. Under her leadership, her cabinet members fought graft
and corruption, each in his own way. A clear lesson is that the quality of each cabinet

member is crucial in an anti-corruption campaign. To quote her own words in her
valedictory lecture at the University of the Philippines,

       ―You may not always agree that I always had the best people in my Cabinet,
       but I think we can agree that my appointments would have been disasters
       if they merely reflected the preferences of power groups. I hope you will
       grant me this, that my government will exit at least with a sense of pride
       in its fundamental integrity (italics supplied).‖ Pres. Corazon C. Aquino and her
       Cabinet, The Aquino Administration: Record and Legacy, 1986-1992.
       1992: page 10.

Fundamental integrity. This is what Pres. Cory and her cabinet bequeathed to the country.
This is what presidents including the present one, should also bequeath to the future
generations, including the present one.


This study has embarked on a search for Pinoy solutions to corruption. After reviewing
our historical experience with corruption; examining corruption in all its forms,
dimensions and definitions; and searching for instances of success, however brief, I have
come to the conclusion that only the Filipino can solve corruption.

We have studied, we have analyzed, we have launched campaigns; we had successes; we
had failures—all these show that the Filipino can do it.

Features of an anti-corruption framework

   1. The government shall lead the campaign; all other sectors of society will be
      mobilized and invited to participate.

       As pointed out earlier, only the government has the resources and powers to
       initiate the campaign and bring it to its successful conclusion.

   2. No less than the President will be at the helm of the campaign.

       In other countries, a government agency is sufficient. The failure of so many
       specialized agencies to stem the tide of corruption is the best argument for
       making the president lead it.

       The Constitution grants more powers to the president of the Philippines than most
       other countries. Historically and culturally, Filipinos look to the President for
       leadership and inspiration.

   3. All the three levels of the executive branch of government will be covered
      by the campaign—national, local government, and the corporate sector.

       The focus of earlier campaigns was primarily on the national government. It
       has been shown that the magnitude of corruption in local government units
       is just as intense as that of national government. It has also been shown that
       the resources of government corporations all together can even exceed that
       of national government.

   4. The two other branches of government will be invited to join the campaign—
      namely Congress and the Judiciary.

       While it is true that each of the three branches of government are co-equal and
       independent of each other, it cannot be denied that their activities are intercon-
       nected and interdependent. One reason why earlier efforts were not as effective
       is because anti-corruption efforts were mainly concentrated in the executive
       branch. Recent events have shown that the two other branches of government
       are as vulnerable as the Executive.

   5. All other sectors will be mobilized –business, professional organizations, civic
      associations, schools, civil society organizations and faith-based organizations.
      Academics and academic institutions will also be mobilized, as well as media.

       I believe that active participation of the non-government sectors will be a crucial
       factor in the anti-corruption campaign. Many of the steps undertaken by
       government to expose, investigate and to charge corrupt officials were triggered
       by non-government institutions and media.

       Many civil society organizations have initiated their own anti-corruption
       programs. On the other hand, only last September 14 more than seven hundred
       private business corporations signed an ―Integrity Pledge‖ during the historic
       Integrity Summit. They were joined by heads of government agencies.

       It is increasingly recognized that corruption is not a do-it-yourself activity of the
       government sector. The private business sector and even ordinary citizens are
       participants—whether reluctant or otherwise.

The organizational structure for the national anti-corruption campaign

There is no need for a sophisticated organizational structure for the national anti-
corruption campaign. As President Cory Aquino has shown, the campaign can be built
into the existing structure of government itself. Thus, there was no need for massive
funding and long debates over organizational structure. The two charts in the following
page show that the Executive Branch is the center of the campaign, with the President
leading it.

                                                            CIVIL SOCIETY ORGANIZATIONS


                                       IZ SE

                                   AN -BA



                                 RG TH



                                                                                                          PR SIN



                                                                                                            IV ES
                                                                                                              AT S

                                                                 PMS       CABINET
                                  LEGISLATURE                                               JUDICIARY
                       HE RG

                         R N AN

                            ON IZAT
                                OV IONS

                                                                                                                 TIO L
                                                                                                               ZA NA

                                                                                                             NI IO

                                                                                                           GA SS
                                                                                                         OR OFE

                                                                 COMMISSION ON



                                                    SOCIAL & POLITICAL INSTITUTIONS (including family)



                                    PMS                        CABINET

                                                                  NATIONAL ANTI-
                                                                  PROGRAM STAFF


The Office of the President as the nerve center of the campaign.

As explained earlier, the Executive Branch headed by the President will lead the
campaign. During the time of Pres. Cory Aquino, the Cabinet Secretary served as the
Secretariat of the campaign. At this time, it can either be the Cabinet Secretary or the
Executive Secretary himself.

Since the Cory campaign was focused on the cabinet members, it was logical for the
Cabinet Secretary to assist the President and serve as the Secretariat. However, since the
present campaign proposes the involvement of the two other levels of the Executive
Branch, as well as the Legislature and the Judiciary, the Executive Secretary might be
more appropriate, considering his broad powers and linkages with the different
instrumentalities of government.

Furthermore, the Executive Secretary has linkages with the other two levels of the
Executive Branch, namely the Local Government Units and the Government Corporate

A small team can be under the Office of the President or the Executive Secretary can be
created to collate anti-corruption plans from Departments and agencies, coordinate with
other government instrumentalities, monitor anti-corruption activities and link up with
non-government institutions, including media. This will not involve heavy funding and
will not disrupt regular activities.

The various departments and other agencies of the Executive Branch will report to the
President through the Executive Secretary. As in the Pres. Cory administration, progress
of ant-corruption campaigns can be discussed during cabinet meetings.

The Legislature and the Judiciary

While the two other branches of government will be encouraged to initiate their own
campaigns, coordination will be crucial. For example, the hearings conducted by the
Legislature normally result in recommendations. These can be implemented by the
Executive. Also, proposals for the filing of cases can immediately be attended to.

It is said that the wheels of justice are exceedingly slow. Coordination of activities will
surely speed up the judicial process and respond to the oft-repeated complaint that
nothing happens after fact-finding forays and investigations.

The Constitutional Bodies

Constitutional bodies are also considered autonomous and independent from the other
three branches of government. Three of them are directly linked to transparency and
accountability. These are the Ombudsman and the Sandiganbayan, the Civil Service
Commission and the Commission on Audit.

One reason why certain cases which were filed did not result in conviction is due to lack
of coordination among the regular agencies of government and the constitutional bodies.
The crusade led by then COA Chairman Francisco Tantuico Jr. in the DPWH anomaly
would not have prospered without coordination among the Bureau of the Treasury, the
Commission on Audit, the Ombudsman and the Sandiganbayan.

The non-government institutions and the private business sector

The Chart shows the non-government institutions and the private sector surrounding and
interacting with government instrumentalities. They are engaged in various activities—
some deal with the Executive while others deal with the two other branches of
government and the constitutional bodies.

The environment of anti-corruption

The environment at this time is somewhat similar to that during Pres. Cory Aquino‘s
time. There is widespread revulsion against corruption. At the same time, there is also
widespread trust in the President, whatever critics might say about his administration.

The environment is shaped by our history, our political institutions, our culture and
attitudes toward corruption, as well as our expectations from the President on this
dreadful plague. It can be said that now is the time to launch a massive, comprehensive
anti-corruption campaign.


Using the three definitions of corruption as expounded in Chapter 2, and examples of
success stories cited in Chapter 5, the anti-corruption campaign can be conducted at three
levels: at the level of the individual, based on the Divisoria model; at the level of the
agency or the department, based on the public agency definition; and at the national,
comprehensive level, based on the public interest definition.

From the ―Divisoria model‖ to the department store

As pointed out in Chapter 2, in the ―Divisoria model‖, corruption occurs at the individual
level. It is also called the ―market-centered‖ definition of corruption because it is a
reaction to the availability of goods and services, in relation to demand. At the same time,
the culture of bargaining and haggling is very powerful. Thus, government service is
subjected to bargaining because supply is low in relation to demand.

Fines and penalties are subjected to haggling; it is customary for many clients to try to
squeeze a bargain out of a government service.

The obvious solution to this level of corruption is to move from Divisoria to the
department store. In other words, increased efficiency will result in more government
goods and services, thereby reducing the pressure to pay a higher price and to haggle.

I believe that market-type corruption can be solved by greater efficiency, better systems,
clear rules and procedures, as well as strict imposition of fines and penalties. The
correlation between efficiency and adequacy of services viz-a-viz reduced corruption is
shown in the examples I cited.

A national campaign for greater efficiency and increased delivery of services can be
launched parallel to the anti-corruption campaign.

The department head and agency-centered corruption

We have had instances of present and past successful campaigns at the level of the
agency. As detailed in Chapter 2, the battle against this type of corruption can be waged
by the agency head himself.

Public interest corruption, culture and the President

The third definition of corruption focuses on its impact on the country. This happens
when it is already comprehensive and systemic. This is where the national campaign is

When not only the government sector is infected, but the whole of society, the President
should come in, and come in strong.

The highly publicized efforts of a few departments are not enough. Corruption is
prevalent at the level of the individual, the agency, and finally the country. The entire
government system has to be cleaned up, and not just the so-called flagships.

Public interest corruption has reached a point when it is tolerated by society and becomes
embedded in Filipino culture. Thus, aside from strategies aimed at reducing individual
and agency corruption, campaigns aimed at enhancing and strengthening positive culture
and values while negating those which tolerate corruption need to be launched. This can
be attained through formal education as well as through music, literature and the arts.

Some strategies which might work

Aside from the tried and tested approaches which have been used in successful
campaigns, what will likely work with Filipinos?

The fear factor

Why is it that drivers who enter Makati or Clark and Subic automatically behave and then
revert back to their old habits once they are in Manila or Quezon City? This is because
they know they will be penalized if they disobey traffic rules and regulations. It has been
repeatedly asked: why is it that Pinoys who go abroad follow the smallest rule while they

blithely ignore the biggest laws when they return to the Philippines. This is because they
know they can‘t get away with it and will be jailed.

The fear factor—fear of fines and penalties, fear of bad publicity, fear of imprisonment
just might work! It all boils down to enforcement.


The average Filipino loves dramatics. Government is show business and entertainment.
Campaigns must appeal to the Filipino‘s sense of drama in order to have an impact. The
recent hearings of the Senate Blue Ribbon Committee are excellent examples. The
revelations were not only surprising. They were dramatic, straight out of a Filipino
movie, complete with temper tantrums and walkouts, tears and even moments of laughter
and hilarity. Nonetheless, these dramas have to result in conviction. The case of Gen.
Carlos Garcia is an excellent example.

Sustaining public interest

It has been said that Filipinos have short attention span. One reason why some
campaigns have fizzled out is because the public got bored and lost interest. Again, the
DPWH anomaly during the 1970s is an example of a huge anti-corruption case which
captured the attention of the public from start to finish.

The trick is not to allow cases to drag on and on until the public dozes off from sheer
boredom. The asset recovery program for the Marcos wealth is an example. The public
had all but forgotten about it until after 18 years when more than $688 million was
recovered. There was followed by silence until news broke out that part of it was utilized
in the fertilizer scam. Efforts have to be made to ensure that cases end with a bang and
not a tired whimper.


How should the national anti-corruption campaign be implemented? It can be done with
a public event or Summit with all players participating. This will provide the hoopla and
the drama which never fails to catch the public‘s attention.

The other approach is to do it in stages. The president can start, like his mother, with the
cabinet system and the Executive Branch. He can bring in the other players, especially
those who are already active, at later stages.

Timing? The timing is NOW! As they say, strike while the iron is hot!


Are there Pinoy solutions to corruption? Definitely yes. We only have to examine our
history and learn from successful anti-corruption campaigns. We have success stories for
all types of corruption—from individual corruption to comprehensive venality.

We can add new features. We can move from the Executive Branch to the other
instrumentalities of government. We can bring in the other constitutional bodies. Finally,
we can bring in non-government organizations and private business. We can try new
techniques. YES, THE PINOY CAN!

                                       CHAPTER 7

                By: Prof. Leonor Magtolis Briones (Ret.)


When this project was first started, Mr. Jim Wesberry, Chief of Party of MSI/USAID
challenged the team to look for ―out-of-the-box‖ solutions to corruption. In the process,
the team amassed a vast array of material, interviewed knowledgeables, spoke in
numerous for a all over the country. The team members also had long discussions on
their findings. All throughout the conduct of the study, the team members were conscious
of the challenge. Whenever a strategy was proposed, two questions were always asked:
Is it a Pinoy solution? Is it out-of-the-box?

In Chapter 6, a framework for a national anti-corruption program was presented with the
President himself leading the campaign. So what is out of the box about this framework?
Many of the campaigns conducted by recent administrations were led by specific
institutions like the Ombudsman. In other countries, a specialized body leads the
campaign. For example, Hongkong‘s Independent Commission Against Corruption is
much admired for its accomplishments.

However, in the Philippines, the team believes it will take no less than the President to
conduct an effective anti-corruption campaign. This is because corruption is believed to
have reached the systemic or comprehensive stage. The ―Cory Model‖ has shown that it
can be done by simply utilizing the existing government structures and institutions
without creating new organizations and expending huge amounts of money. The model
also proved that external assistance is not necessary. The Filipinos know best why
corruption occurs and how it can be minimized.

While the proposal starts with the ―Cory Model‖, it is expanded to include the legislature
and the judiciary, as well. Furthermore, the three constitutional bodies directly involved
in anti-corruption—The Ombudsman and Sandiganbayan, Civil Service Commission and
the Commission on Audit are brought in. There is also explicit recognition of the role of
civil society organizations, the private business sector, faith-based organizations and
professional associations, in the campaign.

Finally, it is recognized that all these efforts take place within the context of our unique
history, culture and values, political and social institutions, especially the family. We do
not agree that culture is the cause of corruption. We believe that culture is a formidable
tool against corruption.

Unlike earlier anti-corruption campaigns, this proposal will not require a new
organization, excessive funding and external assistance.


In their search for ―out-of-the-box‖ solutions, the team went all over the country, gave
lectures, made presentations and consulted many groups. These included schools and
universities from north to south, as well as symposia, classes, public forums and focus
group discussions.

Not surprisingly, the suggestions were very similar, whether coming from students, civil
society, academics or ordinary citizens. Prof. Domingo classified them according to the
three categories of corruption earlier identified in the previous chapters: solutions which
can be implemented nationally to reduce public-interest or comprehensive corruption;
solutions which can be implemented by specific departments and agencies to curb
agency-centered corruption and third solutions which can be undertaken by individuals.
The last solution can be a response to market-centered or Divisoria corruption.

             Table 1. From Pinoys to P’noy: Anti-Corruption Strategies

                                       National Level
                  What we need is a leader with the political will. Somebody who is not
                  afraid to do what he thinks is right regardless of what the effects would
                  be to his political career
                  Highest officials should not appoint friends, families, or those related to
Penalties/        More strict punishment for the corrupt; more stiff penalties; severe
Sanctions         punishment for those caught in corruption;
                  Stiffer punishment to corrupt leaders
                  Impose death penalty; Death penalty to set an example; ibitay lahat ng
                  corrupt; Bring back firing squad for erring politicians
                  Firing squad as punishment
                  Put to jail corrupt people/officials
                  Impose sanctions strictly;
                  Impose penalties properly and not ―ningas cogon‖ only
                  Penalize; penalize corrupt officials if proven guilty
                  Dismiss corrupt people from their position
                  Strengthen the law against bribery
                  Punish not only the government employees but the givers of the bribe
                  Those found guilty of corruption should be able to seek employment in
                  both government and private companies after summary dismissal
                  Publish the offense and the punishment in the agency newsletter
                  Live hearing of drug, murder, and corruption cases

               Big officials to be sampled/punished as a result of corruption
               Public execution for those who will get caught
               Serving penalty should be actual and implementation real
               Use the Malaysian strategy by publicly punishing corrupt officials and
               Expose through media all those involved in corruption
Rewards        Commending honesty
               Commending offices that run after and convict acts of corruption
               Give incentives to those who can identify corrupt ways
               Guard one another and give reward to the one who will report the crime
Whistleblowers Whistle blowers should be given a share of the corruption money they
               divulge as an incentive (e.g., 3%), apart from the protection program,
               on a proven, successful case
               Give whistle blower 100,000 pesos the moment one is found guilty
Private sector Encourage participation of the private sector in the government‘s drive
role           against corrupt practices particularly in allocating funds to sustain
               campaign activities
                                Organizational Level
               Organize an anticorruption task force with a special fund from the
               government but NGO-based
               Educate the Filipino people about the pros and cons of corruption.
               Everyone should be aware how damaging it is to the economy and lives
               of our countrymen.
School system Inculcate discipline and strict implementation of laws; Teach people to
               discipline themselves
               Value formation; educate the children about core values;
               Craft teaching modules that could translated to cultivate honesty and
               advocate anti-corruption
               Anti-corruption must be taught in school, maybe include a curriculum
               for tertiary level
               Teach good Filipino values of honesty and Christ-centeredness to the
               family to have self-awareness to do good in everything
               Re-evaluation of values
               Assist in capability-building of teachers/school heads
               Brainwash children with the values of honesty and integrity to raise a
               generation that will believe that a corruption-free government is
DepEd          Include anticorruption lessons in the curriculum from kindergarten up
               to high school
               Include in the school curriculum as early as in grade school
               Establish ―Schools of Integrity‖ where pupils value honesty and
               Institutionalize anticorruption awareness in schools (elementary and
               high school)
               Include anticorruption laws, prevention measures, and anticorruption

                activities in the elementary and high school curricula
                Principals are not prepared to monitor the projects undertaken in their
                school but knowledgeable persons will be in the system to look into
                infra projects.
DILG            Conduct LGU training by different training providers
                     o Formulation of Capability Development Agenda by LGUs
                       identifying training needs
                     o DILG audit of training expenditures
                Help in the development of learning modules for IPs
Leaders         Teach ideal Filipino values to our children and make it a way of life
                Include Filipino values in the elementary curriculum
                A good leader is a good follower
Employers/      Encourage employees to earn additional income after office hours to
Offices         support their families, rather than ask their clientele for money or
                things in exchange for their help/services
                Value formation of government officials/leaders/employees
                Include value-enhancement training during the pre-employment
                recruitments of new recruits
                Conduct value-formation seminars for all government workers,
                especially the new entrants. It must be clarified that it is the acceptance
                not the practice of negative values in the workplace that is wrong
                Gift-giving is common in government institutions, especially when
                favors have been received. This invites corruption. Post notices like:
                ―Bawal ang Regalo‖; ―Bawal ang Lagayan‖; ―Ang mapagsilbihan
                kayo ay aming kasiyahan.‖
                Discipline yourself before disciplining your subordinates;
                Ending corruption should start within an individual‘s values and self-
Employees       Report/expose the corrupt person
                Be brave to inform concerned person/agency about corrupt
                Do not be afraid to expose any wrong doing of a government
Law Enforcers   Strict implementation of the law (have political will); implement laws,
                regulations, ordinances, guidelines; serious implementation of law;
                Lesser laws but strict implementation of existing laws
                Fair treatment, justice for everyone; Equal treatment for everyone;
                Prosecute/Penalize all: No exceptions
                Strictly implement laws on prohibited drugs (Attention PNP, NBI, etc.)
                Drugs that are seized should be disposed of properly and not be sales
                agents of seized drugs
                Enforcers must do their job effectively not ningas cogon
                Proper dissemination of existing laws
                Strictly enforce the law and sanctions
Procedures/     There must be transparency/be transparent in all

Processes     transactions/documents
              Transparency of accounts
              Transparency of purchases
              Offices should be open (windows) to avoid bribery or padulas
              Good governance
              Transparency—be more transparent in all government dealings by way
              of publication (e.g., top taxpayers to indicate their declared income as
              against the taxes they have paid, to check if the taxpayer is paying the
              correct amount of taxes and avoid graft.
              Increase transparency of financial transactions in government
              (committed watchbodies)
              Reduce the number of signatures needed; shorten number of steps
              No following up of cases
              Monitoring of associates of employees transacting in the office
              Centralize procurement of goods from government
              Have a simple ―customer satisfaction‖ monitoring tool to assess the
              performance of the office and the agency as a whole. Include questions
              that will touch on graft and corruption and it will become a deterrent
              because they know that their performance are being assessed.
              Minimize requirements for licenses (one-stop-shop) (kulang ang
              Simplify the system/process by making sure that services are delivered
              within the day
              All transactions of the government should be publicly available
Procurement   Publication of performance and budget utilization or costs per agency
              in national dailies in a manner easily understandable to people and to
              be done by a third party (NGOs, academe, private sector)
Technology    Install CCTV cameras even in places/offices where corruption is likely
              to happen, and the CCTV camera can be seen at random on national
              television; install camera focused on every table of government
              employees and every transaction; more CCTV cameras
              CCTV camera in offices like the accounting office, comptroller, etc.
              Install hidden cameras in all offices so transactions can be monitored
              on a daily basis
              Paperless transaction
              Computerize agencies, especially GOCCs to avoid under the table
              Install video camera in every office
              Cashless payments (payment through banks)
              On-line collection of taxes/collectibles, especially in big establishments
              Computerize financial transactions (kulang ang implementation);
              computerize all transactions to avoid ―extra-curricular‖ activities
              Upgrade and secure all computer systems
              File on-line—less people interaction
              Make applications available on-line, in the website, for transparency

Buildings        Modernize buildings, offices, schools to add prestige and pride
Personnel        Increase salary of employees to avoid corruption; increase salaries to
matters          reduce graft and corruption; increase compensation and benefits of
                 government workers
                 Reduced the number and the salaries of confidential personnel of
                 selective officials
                 Familiarity breeds contempt! Avoid familiarity by rotation of
                 Rotate sensitive positions regularly
                 Strictly observe hiring by virtue of merit and fitness. Publish
                 vacancies, the minimum requirements so everyone can see for all levels
                 of government positions
                 Remove from office anyone who is guilty of any crime, instead of
                 suspending them or transferring them to another office
                 No padrino system
                 Government should invest in its employees—fewer government
                 employees who are knowledgeable, multi-tasked, dedicated who are
                 given all the resources they need (higher commensurate salaries,
                 scholarships for higher learning, and peripherals like computers
                 (laptops) that will make tasks more efficient and effective)
                 Hiring and promotion of personnel should be based strictly on merit
                 and fitness, not from recommendations of politicians or who are related
                 by affinity or consanguinity
                 Appointment to third level positions should not be based on political
                 recommendations or backings
                 Increase in salary; Give reasonable salaries to government officials
                 comparable to the private sector
                 Professionalization of the civil service
                 Security of tenure
                 Remove/do not tolerate fixers in government offices (NSO, LTO, etc.)
                 Have enough appropriations for proper uniform/gear/tools of
                 policemen, traffic enforcers, firefighters
Bidding          Bidding procedures must be genuine and not only for formality‘s sake
Rules/ policies/ Have guidelines for all services
                 Lessen the rules and regulations/be specific so that anyone, even those
                 who do not have good educational background can understand
                 Flexibility begets corruption so just follow procedures/instructions as
                 Minimize red tape
                 Transact business only with officials within the department
                 Transactions should be made directly to the office of the approving
                 Initiate a ―No to corruption‖ policy and post a sticker in every office
                 Government thrust‖ ―Honesty is the Best Policy‖
                Tough disciplinary rules with corresponding penalty
                Intensify check and balance mechanism
                Filipinos are obedient when they are abroad; design strategies that
                could make them obedient in their own country
Special Court   To fast track litigation of corruption cases
DOJ/Judicial    Improve the justice system
                Strengthen the moral fiber of the judicial branch and the DOJ to
                enforce the law
Congress        Require liquidation for PDAF utilization
                Spend only on what is important to the agency
                Remove PDAF of legislators
                Regulate PDAF of legislators
                Whistle blower bill—give protection to people who witness corruption
COA             Audit the auditors
                There should be an agency to check the work of COA
                Transparent rules and procedures with timelines for each step, with
                police power to the auditor or watchdog
DPWH            On the DPWH side, the bidders (such as contractors/consultants)
                should not bribe the employees to do away with corruption
                Do not permit single bidding for the project
                Non-publication of the ABC for the contract
                In the construction of infra projects, to ensure that the output is of
                quality, the monitoring should include the different sectors of the
                community where the project is located. Monitoring should include the
                amount and type of materials used, but first, the monitoring team
                should be acquainted with the standards
                Look into the authentic cost of materials that are used in projects.
Ombudsman       The Ombudsman should be more serious in prosecuting those found
                guilty of corruption
                Swift and expeditious prosecution and resolution of cases involving
                Open judgment for corrupt officials—no white wash, no cover-ups
                Life-style check; checking of assets
MMDA            less interaction with traffic violators reduces corruption
                MMDA—to install CCTV on the choke points and pedestrian crossing
                and other crucial parts of the road
DOH             DOH has a MOA with NAMFREL to send an observer to the DOH
                central office during biddings, evaluate the warehouse, how to handle
                stocking and distribution of medicines. NAMFREL submits its
                evaluation to the Secretary after presentation to the Integrity
                Development Committee (of which NAMFREL is also a member),
                which is in charge of all graft and corruption-related complaints. Other
                members of the IDC are TAN, TUCP, Procurement Watch,

All officials   Series of campaigns, seminars, retreats to inculcate the true spirit of the
and employees concept of Filipino and the concept of nationhood, which means that
                Filipinos are not really corrupt
                Reintegrate in our bureaucracy ―values‖
                Retraining on value formation once in a while
NGOs            To serve as guardians and whistleblowers
Media           To serve as vehicle and partner in society‘s fight against corruption
                Maximize the use of media to teach values to citizens to become
                empowered to report irregularities they witness
                                   Individual Level
Citizens      Follow rules and regulations; start with oneself—follow rules and
              Filipinos must learn how to follow laws and policies
              Do not give any kind of gift to a person in uniform (like police officers)
              Pay the correct tax to prevent corruption
              Vote wisely (to elect those who are not corrupt)
Drivers       Drivers should allow themselves to be given a ticket when they commit a
              violation to eradicate ―Kotong Cops‖
Employees     Avoid accepting gifts from suppliers
              Do not be afraid to speak or talk about corruption cases that you witness.
              Be a model to others even if the offer is too tempting. Always think of
              what you want for the future generation to enjoy
Parents       Teach children strong Filipino values; Start at home; start them young
              Be good parents
              Parents should teach values of honesty and truthfulness to their children
Self          Do not give bribes/ No to bribery/ Never allow yourself to give grease
              money or ―lagay‖; Huwag tumanggap ng lagay; huwag magbigay ng
              lagay sa mga transaction para mapabilis and proseso
              Get rid of bad habits and embrace the more positive beliefs and ideals;
              Change behavior from bad to good, not greedy of power and wealth
              Be afraid of God/Fear God if you do evil; God fearing attitudes
              Seek the guidance of the Divine Providence to enlighten the mind and
              heart (spiritual way)
              Pray as a nation to end corruption
              Be God-centered
              Do away with personal desires/greed and learn to be contented with
              simple way of living
              Reorient self
              Sumunod sa batas na walang pag-iimbot at alinlangan (religiously and
              The head of the agency should not accept SOP from suppliers
              Education and values formation start from the home
              Pre-marriage counseling should include all the Philippine data on
              competitiveness and corruption and these should be impressed upon

                  them that these will affect their family and their lives
                  Focus on programs geared towards the family
Public            Reach out and provide a solid support system for honest, dedicated, and
                  competent public servants
                  Help work for the election of good governors, good mayors and even
                  good barangay captains and kagawads so that if we are not satisfied with
                  the people at the top, there are still the local governments to rely on
                  feel offended and disgusted with the wrong things happening
                                        Cultural Level
                 Shame campaign (publish lahat ng corrupt)
                 Love for the family shall extend to patriotism and nationalism--
                 Reject graft and corrupt practices
[Llaneta, Celeste Ann Castillo. 2011. Whistleblowers and the Culture of Corruption. Forum.(March-
April). P.13]


On the other hand, Prof. Reyes has compiled advice from experts (including himself) on
how to minimize corruption. These solutions focus on two of the three categories of
corruption: proposals which can have national impacts, and solutions which are
prescribed for specific agencies.

Over the years, various anti-corruption measures and proposals have been offered to fight
the worsening corruption problem in the Philippines while analytical and comparative
studies have likewise been made to uncover or unravel the dynamics of corruption (Quah,
2010; 2003; Brillantes and Fernandez, 2010; Ocampo, 2010; Ursal, 2006; Obejas, 2008;
World Bank, 2000).

Much has therefore been written and said on the state of corruption in the country, so
much so that analyses and critiques have continued to ebb and flow while incidences of
corruption continued to proliferate. For years, the Philippines undertook extensive anti-
corruption campaigns; And yet, for years, corruption endured. Is there a ―pinoy‖ solution
to corruption or one that is uniquely Filipino in approach and orientation? Perhaps, yes
and again, perhaps, no for the fight against corruption transcends culture and country
ethos. Invariably, leadership from the top, beginning with the President and his Cabinet
would command a major significance in fighting corruption. A corrupt leadership can
only spawn corrupt leaders operating within a corrupt bureaucracy and which in turn can
likewise lead to the corruption of the moral fabric of society as it begins to spread out to
other institutions and sectors.

But then again, there may be some idiosyncratic approaches that can be derived tempered
according to the unique needs and demands of Filipino psyche, which can be said

responds can respond to the certainty of penalties and sanctions which can be a complex
of elements, from the realities of fear of apprehension, outright incarceration and jail time
to such aspects of personal shame and guilt, family and social pressures, and such other
factors that militate against deviant behavior. Many proposals have been advanced today
in the fight against corruption. This study recommends what it considers as ―out-of-the-
box‖ anti-corruption recommendations which can be adopted in the present system of
measures. It thus outlines a set of national strategies, a localized and agency-specific
measures, and individualized approaches to hopefully be added or incorporated into
existing measures:


   1. Enactment of a comprehensive whistleblower law. The proposal for a law
      governing the handling and management of whistleblowers or those who expose
      corrupt practices either as a participant or one who has direct knowledge of
      corrupt activities has been already filed in the 13th and the 14th Congress of the
      Philippines in both the House of Representatives and the Senate. Unfortunately,
      the bills have not been passed into law in spite of the fact that there had been a
      number of whistleblower who decided to expose corruption during the Arroyo
      administration. Whistleblowers have often complained of the lack of support
      particularly in terms of issues involving their personal safety and of their families
      as well as of their careers and future (Reyes, 2010). The lack of support for
      whistleblowers discourages other potential whistleblowers to come out because of
      the lack of a comprehensive program to protect them. It is thus incumbent for
      Congress to pass now a law protecting and providing safeguard provisions for

   2. Building of a whistleblower culture in various government departments and
      agencies with appropriate incentives. Of a law is indeed passed to protect
      whistleblower, it must not incorporate whistleblower protection only for
      prominent cases such as those exposed in the media or investigated in the Senate
      and in the House of Representatives. A whistleblower law must seek to bring
      down the spirit of a whistleblower law down to every agency of government and
      local government units, where a mandate specifically requiring all government
      departments and agencies, as well as local government units (LGU) to adopt and
      support specific whistleblower programs that will help build a whistleblower
      culture. In this respect, coordination with civil society organization at the agency
      and local levels may further strengthen the program so as to inspire and embolden
      whistleblowers to expose anomalies that they have direct knowledge of.

   3. The Enactment of an Omnibus Anti-Corruption Code. As pointed out in earlier
      discussions, the Philippines today has fragmented laws and orders scattered in
      various issuances such as executive orders, presidential decrees and other such
      directives which, fractionalized as they are, may not be readily accessible to anti-

   corruption units. It may thus compelling to compile and codify these laws into one
   ready compendium as a resource guidebook in the fight against corruption.

4. Establishment of parameters to determine size of anti-corruption personnel at
   the national and local levels vis-à-vis totality of the Philippine civil service. As
   discussed in this study and several other researches on problems in corruption
   dilemma, there is a prominent gap in the number of anti-corruption personnel vis-
   à-vis the size of Philippine bureaucracy. It would do well for us to establish
   parameters governing the mandated size of field investigators and prosecutors
   tasked with fighting corruption in government.

5. Establish parameters of budget allotted to anti-corruption programs at the
   local and national levels. In relation to the above, there must be prescribed
   parameters that must be established in the budget to support anti-corruption
   agencies and programs so as to strengthen the capabilities of these agencies. This
   must also be made to support the installation of non-organic Resident
   Ombudsmen and its staff in the various agencies of government under
   Administrative Order No. 10, series of 2001, and which reports to the OMB. The
   non-organic resident Ombudsmen can facilitate a whistleblower program in the
   agency where they are assigned.

6. Decentralization of anti-corruption investigation and prosecution by building
   up of anti-corruption units based on sectoral considerations (i.e., public works,
   local government units, finance, revenue generating agencies, etc.)., As part of
   the anti-corruption campaign, there is thus a need to further build anti-corruption
   watchdogs on another level, which would have a sectoral focus. These units, once
   strengthened can serve as anti-corruption units replicated incarnations of those at
   the anti-corruption agencies operating at the agency and local levels but
   transmuted to operate within a sector.

7. Adoption of a ―strike 3‖ policy by way of legislation of removal/dismissal,
   suspension or ban from government service (determined according to severity of
   offenses) of government officials and employees who have been involved or
   charged with corruption cases in at least three cases whether conviction is made
   or not and as long as an information is filed. This approach would be preventive
   action against officials and employees deemed to be ―recidivists‖ in corruption

8. Adoption of ―strike 3‖ policy in summary blacklisting of suppliers/contractors
   (including members of their board and officials) involved or accused as having
   engaged in corrupt practices (i.e., bribery, bid-rigging, etc.). As in the above,
   contractors that have continuing records in being involved in corrupt practices
   should be blacklisted and which Resident Ombudsmen can initiate.

   9. Stringent review of the Rules of Court and possibly the adoption of corruption-
      specific rules that would be more stringent while not compromising the due
      process clause.

   10. Periodic evaluation of the performance of Resident Ombudsmen assigned in
       government agencies by an oversight body based at the OMB.

Specific Prescriptions

   11. Enforcement of requirement for resolution of cases in preliminary investigation
       and before Sandiganbayan within the prescribed period.

   12. Fielding of decoys (shills) reporting to the Ombudsman or DOJ to transaction-
       intensive agencies to undertake transactions to test the integrity of public service
       employees (similar to the citizens report card except that investigators are fielded
       secretly to engage in transactions to ferret out or monitor corrupt practices both at
       the national and the local levels).

   13. Strengthening of the powers of the PNP Internal Affairs Unit in investigating
       corruption in police agencies and placing them under the jurisdiction of the
       DOJ/Ombudsman or OP instead of the PNP Director-General.

   14. Strengthening of an Internal Affairs Unit in the AFP to be under the jurisdiction
       of the DOJ/Ombudsman or OP.

   15. Development of a more sophisticated evidence oriented method of forensic

   16. Installation of CCTV equipment in transaction-intensive areas of the bureaucracy
       on a pilot basis, and under monitoring by the unit of the Resident Ombudsman or
       any other specialized unit that can be created for that purpose.


For months, the team leader had been reflecting on the successes and failures of anti-
corruption efforts over the years. Why did most of these initiatives either fail or were not
sustained? One reason is because anti-corruption was considered a responsibility of
government. The public merely watched, kibitzed and criticized. This explains the
number of laws and regulations passed and anti-corruption agencies created. This also
explains the never-ending cycle of reorganizations.

At present, byword is governance, not government. Governance includes public
participation. The battle against the cancer of systemic corruption cannot be resolved by
government alone. Corruption is not only the sickness of government; it is a disease
which is consuming our entire society, both government and non-government.
In order to curb corruption, the public must participate. They are part of the solution.
Thus, the proposed framework for the national anti-corruption program emphasizes the
importance of public participation.

Civil society organizations. In recent times, CSOs have been very active in monitoring
corruption in the government. While there are organizations which specifically target
corruption like the Transparency and Accountability Network, most issues advocated by
CSOs whether economic, social or moral, are related to corruption. While the Alternative
Budget Initiative of Social Watch focuses on public finance and the MDGs, governance
issues and corruption are directly linked.

An anti-corruption program will not be complete without public participation.

The private business sector. I have often observed that corruption is not a do-it-yourself
activity. It involves private citizens and the private sector. Only last September 14, more
than seven hundred business companies, organizations and associations signed the
Integrity Pledge and committed themselves to maintaining integrity and honesty in their
operations. When one party says NO, a corrupt transaction cannot occur.

Academics and academic institutions. The role of academic institutions and academics
cannot be gainsaid. Next to training which a child receives from his or her family, the
school exerts a major influence from pre-school to university. In the small province of
Negros Oriental, many have commented that Silliman University and four other
universities have exerted profound influence on the culture and values of the province.
Academics and their research work have helped shed light on the phenomenon of
corruption and led the search for effective solutions.

Faith-based organizations. These organizations do not trumpet their accomplishments
but they are very effective in combating corruption as a moral and religious issue. No
religion teaches corruption, whether Christian, Muslim, Buddhist, Indian and all their
variations. Because these organizations are driven by moral objects, they are usually
very committed, courageous and consistent.

Media. Media has been very effective in chronicling shenanigans in the government.
Hearings, trials and investigations have been brought to living rooms by media. The
public has faithfully followed congressional hearings with almost the same devotion
accorded to telenovelas and teleseryes. Media can also be a powerful weapon in
projecting anti-corruption campaigns and sending messages of honesty and integrity.


During one of the sessions of the Integrity Summit, this question was raised: is integrity
determined by culture? The implication is that corruption is cultural. This is a long-
standing debate among scholars studying corruption. James Fallows has written a biting
article on the Filipinos‘ ―Flawed Culture.‖ While some sociologists admit there are
certain aspects of Filipino culture which might lead to corruptive behavior, they insist
that our culture and value systems do not condone dishonesty and corruption.

I myself do not agree that our culture tolerates corruption. It has been used as an excuse
to justify corruptive behavior. The team does not agree with this view. On the contrary,
culture is a powerful weapon in combating corruption.

One reason why many of the earlier anti-corruption efforts did not gain ground is because
they were focused on laws, organizations, procedures and rules.           The matter of
inculcating the values of integrity was not given much attention. At this time, using
culture as a weapon was not given much attention.

Transmitting anti-corruption values through faith, culture and the arts

During one of the colloquiums on anti-corruption held at the Ateneo University, Chief of
Party Jim Wesberry thought of inviting the Manila Concert Choir to sing nationalist
songs. The songs were very well received. The colloquium at Silliman University did
not only include songs. The main speaker, Sen. TG Guingona invited professional actors
to illustrate through skits how corruption works. He also brought Noel Cabangon who
brought the house down with his call to the youth to fight corruption.

It is common practice in public events to include a cultural number or two to serve as
breather in serious topics. These ―breaks‖ can be used not only to give relief entertain
but also to transmit positive messages which enhance the culture of honesty.

I personally believe that music, literature (novels, short story, poems, essays), film, plays
and other art forms can be much more effective than a lecture. Remember Noli Me
Tangere which sparked a revolution?

Are there Pinoy solutions to corruption?

The research team started this journey to find out if Jim Wesberry‘s statement that only
the Filipinos can solve corruption in the Philippines, is possible. The journey is not yet
complete but the answer is obvious. The solutions are just under our nose but we do not
see them. For decades, public participation in anti-corruption was not taken seriously.

Culture was considered flawed and contributory to corruption. Now, we see they are part
of the solution. As Antoine de Saint-Exupery wrote in The Little Prince, ―It is only
with the heart that one can see rightly, what is essential is invisible to the eye.‖

The heart of the Filipino is against corruption.

Appendix 1

Raiders of the Philippine Treasury
By Bacani and Cailao
(Short version by Bootes Esden Lopos)

In June 1978, Sofronio Flores, a 36 year-old CPA-lawyer, was newly assigned as COA
Regional Director in Region VII. Starting his first day and throughout his first week in
office, he began receiving anonymous letters, albeit vague, denouncing ―massive
anomalies‖ in the Ministry of Public Highways (MPH) in Region VII. It was signed by
Mr. Concerned Citizen.

The following week, Mr. Concerned Citizen was more specific: the anomalies were being
done through fake Letters of Allotments (LAAs) and fake Sub-Advices of Cash
Disbursement Ceilings (SACDCs). The latter letters (five in all) gave more details: ghost
deliveries, non-existent projects, collusion by COA auditors.

Flores became greatly disturbed and on June 21, 1978, ordered a two-woman team to
conduct a fact-finding investigation: Victoria Quejada and Ruth Paredes. Both women
were CPAs and intelligent (Quejada graduated magna cum laude from San Carlos
University), young and newly recruited from Sycip, Gorres, and Velayo. Paredes has
been with COA for 5 months and Quejada barely a month. Upon receiving the order, they
conferred with Flores about the assignment and began studying the flow of transactions
in the MPH, particularly as it relates to allotment advices and CDCs.

They then went to the different offices to discreetly look for clues. They first found these
at the Mandaue City Highways Engineering District‘s (HED) file of LAAs. Quejada‘s
eye was caught by an illegible signature in blue ink. All the LAAs they saw before were
signed in black ink, and the name of Finance Officer Escano could be clearly read.
Quejada could not decipher the signature in blue ink, and she found other LAAs featuring
the illegible signature. These LAAs could not also be traced in Alexander Tan‘s (the
COA officer assigned to MPH Regional Office VII) file, neither were they recorded in
the Journal and Analysis of Obligations (JAO). These LAAs were later found to be
signed by Regional Chief Accountant Rolando Mangubat with some being countersigned
by Assistant Regional Director Jose Bagasao while others by Regional Highways
Engineer Adventor Fernandez.

The obligation number ―8-81-400‖ were written on the faces of the irregular LAAs and
the code stands for ―Accounts Payable – Unliquidated Prior Years‘ Obligations.‖ This
means that although the LAAs were dated 1978, they were used to support payments for
obligations of prior years – an irregular transaction.

The pair continued their investigation, looking for more clues, and then presented their
initial report to COA Regional Director Flores. It was obvious to them that something

irregular was going on. Flores expanded the scope of the investigation, and also directed
the team to dig deeper into the records. COA auditor Alexander Tan was assigned to
assist Quejada at some point when Paredes was given another special audit. Tan is
another magna cum laude graduate, an SGV alumnus, and has been with COA less than
two years at the time. He proved a big help since he is familiar with the procedures in the
HEDs and the Regional Office.

The pair discovered that in the Trial Balance, Account 8-81-400 as of year end of 1977
totalled P2,735,181.98 – an impossibility given the findings of the team of monthly
charges averaging P2 M so that the Trial Balance should show a total of P24M. Upon
digging deeper, it came out that Chief Accountant Mangubat has been making
adjustments in the entries in the books. The entries taking up payments for accounts
Payable-Unliquidated Prior Years‘ Obligations (8-81-400) were cancelled through red
entries, making it appear that no such payment to accounts payable were made. At the
same time, the entries to the Cash – TCAA Account (8-79-790) were also cancelled,
making it appear that no such disbursements were made to pay for accounts payable. The
account for Obligations Obligated (0-83-000) was then debited, although this is only to
be used for payments or liquidations made during the current year of obligations incurred
during the same year. The end effect was to understate the reported payments and
disbursements to accounts payable in the Trial Balance.

By August 31, 1978, Quejada, Paredes, and Tan were able to finalize an initial report on
their two-month fact-finding assignment. Quejada and Tan reported in person to Flores in
Manila. The three of them briefed COA Chairman Tantuico of their findings, who also
called in Performance Audit Office Manager Athena Flores who is very competent
(magna cum laude from FEU, CPA) and has had vast experience in audit work since the
1950s. Being convinced with the evidence that it was possible for such an anomaly to be
committed, Chairman Tantuico directed Mngr. Flores to assist Quejada and Tan in
preparing a formal report for the President and in carefully gathering the needed
supporting documents. Director Flores was directed to retrieve important documents from
the MPH Regional VII and its HEDs as soon as possible. The auditors in the implicated
districts were put under preventive suspension and administrative charges were filed
against those in COA involved in the anomaly.

On September 18, 1978, Chairman Tantuico sent then President Marcos the report
prepared by the team, which was a more detailed and documented amplification of the
initial report submitted to him earlier, the main highlights being:
     1) Doubtful allotments issued as of June 30, 1978 to ten eng‘ng districts (HEDs) =
     2) Fictitious accounts payable liquidated as of August 25, 1978 = P32,432,397.36.
     3) Payments on the doubtful allotments/fictitious obligations = P23,272,999.42.
     4) Excess of checks issued over cash disbursement ceilings/allotment =

The Chairman‘s memo also mentioned other findings: manipulation of accounts by
means of journal vouchers to conceal irregularities, non-recording of LAAs in the

logbook, changing to Unliquidated Obligations disbursements made on the basis of
doubtful allotments, and making monthly adjustments to conceal the overcharges to the
account and to cancel the checks issued in payment thereof, though the checks have
actually been issued.

Aside from the President, the Treasurer of the Philippines was also furnished a copy of
the report and was requested to update the reconciliation of Treasury Checking Account
with Agencies (TCAA), which was highly centralized then, so that disbursements beyond
the authorized ceilings could NOT be immediately detected.

On September 29, 1978, Highways Minister Baltazar Aquino issued an administrative
order creating a joint MPH and Criminal Investigation Service (CIS) investigating Team
to probe the irregularities cited in COA‘s first report to the President. COA Chairman
Tantuico commented on how ―the hare wanted to join the hounds in the hunt.‖

October 2 Operation

Manager Flores and Director Flores (not related) planned a very important operation: the
retrieval of vouchers and other needed documents from all the engineering districts in
region VII. These would be needed to determine signatories and serve as basis for
prosecution of the guilty party. They knew that the operation must be carried out with
speed and secrecy and with the element of surprise. Otherwise, these might be burned or

On September 30 and October 1, 1978 (Saturday and Sunday), the two Floreses met with
COA auditors assigned to local governments, organized them into teams and briefed
them on their special mission. On October 2, Monday, at 10 AM, the teams
simultaneously hit all the district offices and retrieved the documents. Thousands and
thousands of vouchers and other records were taken into custody that transportation
became a problem. The teams had to use their ingenuity to move these.

Storage was another major problem. Some of the documents were kept in the vault of the
Provincial Treasurer, some at the COA Regional Office Staff house, where two guards
were posted, and yet others were stored at the PNB Cebu vault (after Chairman Tantuico
requested its use from PNB President Domingo).

Working on the documentary evidences was very tedious and laborious. Everything was
meticulously checked, counter-checked, and documented in working papers for the
evidences must stand up to the close scrutiny of the courts. Security was another problem
as strange men was reported prowling in the area where the documents were kept. Death
threats were delivered to the members of the team, affecting even their families.

NBI-Treasury-BII-COA cooperation

In the meantime, in the early part of October 1978, a special investigator of the Bureau of
Treasury, Felicio Aurelia, stumbled on a 200-page computer listing of around 2,000
checks having the uniform amounts of P49,500.00. When told of this unusual discovery,
the Bureau‘s OIC, Atty. Meliton Reyes, ordered him to get the original copies of these
checks. These were then all traced to the various HEDs of the MPH Office in Region VII.
Reyes filed a report to then National Treasurer Gregorio Mendoza, who in turn, referred
the matter to then Finance Minister Cesar Virata. Shortly after, Reyes and his team went
to Cebu and were told to seek the assistance of the Bureau of Intelligence and
Investigation (BII) Cebu Office. Atty. Marcelo Guinto of the BII (late 30s and describes
himself as ―very, very idealistic) was assigned to the case. Together, Reyes and Guinto
pored over the checks and established that the signatures were genuine.

They met with PNB Cebu officials and were informed that during a meeting in June
1978, the head of the Treasury Bureau in Region VII informed them that as long as the
signatures of the signing and countersigning officers of the TCAA checks were the same
as the specimen signatures on file, the bank did not have to bother with the funding of the
checks. Seemingly, the documents are all in order.

It was at this point that Reyes, by coincidence, met Mison and the two discussed the cases
they are working on and agreed to work together. Mison was quoted to tell Reyes, ―Why
don‘t we work together? You have the checks, COA has the vouchers and other vital
documents…‖ By October 25, Mison met with NBI Acting Director Jose De Los Reyes
and COA Chairman Francisco Tantuico, and the NBI-Treasury-BII and COA cooperation
began to take shape.

On October 29, Mison met with Reyes and Guinto back in Cebu. They chose the Danao
City Highways Engineering District as a pilot case because it has the shortest road span
in its jurisdiction – only eleven kilometers of national road, making it easier to gather
evidences that can stand in court.

On November 7, Mison met Jun Flores of COA to lend assistance to the investigation. At
this stage, the joint team agreed to concentrate on completing the evidence for one
engineering district – Danao – in order to file a pilot case. Mison pointed out that with
this approach, subsequent cases will become proporma because by then, the procedure
has been systematized based on the previous experience.

On November 8, Reyes went to Manila and submitted an Investigation Progress Report
from the joint teams‘ examination of records, interview of concerned officials and barrio
folks, ocular inspections, and affidavits of stakeholders. It gave a general overview of the
results throughout Region VII, i.e. total amount of CDCs illegally issued by Mangubat
from January to August 2008 is P42,754,216.14 and the total amount disbursed is
P16,311,063.03 for only five Engineering Districts in Cebu with the July and August
figures not yet included. The Report then focused and gave details of the results of

investigation of Danao City HED where P6,273,943.69 were made in payment for

On November 10, COA‘s Director Flores, together with Mangubat and Auditor
Alexander Tan, were ordered arrested on the strength of an Arrest, Search, and Seizure
Order (ASSO) issued by the President! The ASSO was based on a memo sent by MPH
Minister Aquino dated October 26, recommending the three to be arrested and detained,
―there being probable cause for malversation.‖

The investigations had been done discreetly and the national dailies have not yet gotten to
it. But the arrest order took the media‘s attention and it was headline news. The news had
56 employees of COA Region VII, 40 of them newly recruited, resigning en masse over
the ASSO for Flores and Tan.

On November 12, Chairman Tantuico hand carried to Malacanang a letter seeking
reconsideration of the inclusion of Flores and Tan in the ASSO. He wrote that the ―two
were included for the purpose of stunting our investigation… It is ironic that the very
man who is responsible for the discovery of this fraud would himself be included in the
order.‖ Within hours, the arrest of Flores was rescinded. This also made the resigning
employees change their minds. The President went further. He ordered the dismantling of
the MPH-CIS Investigation Committee and directed it to turn over all previously gathered
documents and evidences to the NBI.

Special Cabinet Committee and Special Task Force

Prior to this, on November 11, the President issued a directive creating a Special Cabinet
Committee that will ―conduct an immediate investigation and undertake a review and
improvement of the systems and procedures governing the accounting and auditing of
special funds.‖ This is composed of COA Chairman Tantuico, Chief State Prosecutor
Juan Sison, National Treasurer Gregorio Mendoza and Deputy Minister of the Budget
Juan Agcaoili.

This Committee has a Special Task Force to serve as its technical and investigating arm.
The COA Team, headed by Sofronio Flores, was assigned the task of collating and
analyzing the evidence, explaining the intricate accounting and auditing procedures, and
turning over to the Justice Ministry all documents needed for prosecution. The NBI
Team, headed by Director Mariano Mison, and assisted by the Finance Ministry
Intelligence Bureau (led by Guinto), was to conduct and coordinate the investigation. The
Bureau of Treasury, led by Reyes, was also tasked to assist in the investigation and to
turn over to the Ministry of Justice Photostat copies of all paid TCAA checks based on
fake CDCs. Four composite teams with 8-12 members from the four agencies were also
formed to cover all 14 HEDs scattered in Region VII.

On November 14, Mison was ordered by the Committee to proceed to Cebu and
interview people suspected to be involved in the anomaly. He was also directed to get
from MPH Region VII Director Manuel de Veyra vital documents which the latter has

adamantly refused to turn over, despite various subpoena by COA and NBI. Faced to
faced with Mison, de Veyra said he could not turn over the documents because these had
already been taken by Avelino Nieto, a representative of Minister Aquino.

De Veyra only handed the documents when Chairman Tantuico went to Cebu (despite
warnings by Mison that his life might be in danger if he did) and personally talked to
him. It was a confrontational and heated meeting, with Tantuico exploding in rage when
de Veyra still refused at first and strongly warning him to cooperate. The Chairman‘s
actuations, plus the President‘s directive personally written and signed on the Chairman‘s
letter, was convincing.

The toll on those involved was heavy. Aside from the heavy workload, death threats were
given the members, including their families. The COA staffhouse where the auditors
worked was continuously threatened to be burned. Mison had been receiving death
threats since October. Reyes received death threats in his hotel room every five minutes.
He would also see his car tires slashed where it was parked. When the harassments got
frequent enough, he and his staff moved out of the hotel and transferred to the office of
the FMIB, and later on, at the Treasury office in Cebu. Atty. Guinto also received death
threats not only for him but for his family. Eventually, his wife suffered a heart ailment
because of these.

Other means were also employed to stop the people from effectively doing their job.
Aside from the threats, bluffs, rumours, suspicions, offers of bribes, insinuations and
black propaganda, were some of the means employed. One example is that Mison‘s
superiors in Manila received letters claiming Mison received P50,000.00 to stop pursuing
some cases.

In all these difficulties, including lack of budgetary support for the team, they continued
on with the work. The investigation work proceeded rapidly. The COA representatives
prepared working papers from the documents retrieved during the October 2 operation,
including lists of names likely to be involved in the anomaly as culled from the signatures
in the vouchers, checks, inspection report, etc. Based on these lists and information, the
NBI and FMIB representatives invited the suspects for questioning. The teamwork was
exemplary. Says Mison, ―The organizational set-up facilitated the work. We did not
encounter any serious problem. The teams were highly motivated and inspired because
they were aware that they enjoyed the full support of higher officials.‖

The Courts and the First Cases of the Sandiganbayan and Tanodbayan

By late November, the Special Task Force filed formal charges against 20 persons,
involving 126 cases in the Danao City Highways projects anomalies. The Justice
Ministry, anticipating the workload, assigned 2 more state prosecutors to assist District
State Prosecutor Benicio Arzadon who received the complaints.

But there is a problem. The Task Force was also raring to file charges against those
involved in the other districts, which they did later, one after another. It was simply too
much for the Cebu Court to handle.

In early December, President Marcos named three judges to a graft court called
Sandiganbayan. These are Manuel Pamaran as presiding Judge, and Bernardo Fernandez
and Romeo Escareal as associate justices. Soon after, former Supreme Court justice
Salvador Esguerra was appointed to head the Tanodbayan, the prosecuting arm for erring
government officials . Manuel Herrera was appointed as Director of Prosecution in the
same office.

Also in December, the Special Cabinet Committee submitted its report to the President,
which includes the extent of the fraud, how the irregularities were committed, who were
the personalities involved, and the mechanics of the anomalous disbursements. The
Committee recommended the arrest and detention of Rolando Mangubat (Chief
Accountant), Adventor Fernandez , and Jose Bagasao (Asst. Regional Director of MPH-
RO VII) ; the relief or dismissal without prejudice to criminal prosecution of Director de
Veyra for gross negligence as head, to say the least; immediate relief or suspension of 11
highway district engineers and the immediate designation of OICs not from Region VII;
and the immediate purge without prejudice to criminal prosecution of all employees who
participated in the massive fraud.

Early in 1979, the cases were filed in the Sandiganbayan, and the trials began. Since at
that time, there were only 3 Tanodbayan prosecutors, Mison, Modina, and Reyes were
deputized as Tanodbayan prosecutors.

The Danao City Cases

There were 17 defendants in the Danao City HED cases which included Asst. Regional
Director Bagasao, Finance Officer Escano, Chief Accountant Mangubat, assistant chief
accountant Preagido, and several district engineers and administrative officers of the
HED, COA auditor, and private contractors and suppliers. At the outset, Bagasao et al put
up a stiff fight, vehemently denying all charges. The accused maintained that all
transactions were regular, that the projects were actually undertaken, and that they did not
fake any document for the purpose of defrauding the government.

The prosecutors did their job well so that when the Sandiganbayan handed down its
decision on November 29, 1979, Bagasao, Escano, Mangubat, Preagido, Danao City
Asst. District Engineer Sucalit, and COA auditor Toledo were found guilty of all 126
cases of estafa. Some of the defendants were only convicted in some of the cases, three
were acquitted for insufficiency of evidence, and two were discharged for turning state
witnesses. In all, the 12 convicted drew a collective sentence of 10,565 years of
imprisonment. A total of around P441,000 was slapped in fines, in addition to the P6.2M
in indemnity the convicted were ordered to pay the government.

The Tagbilaran City and the Lapu-lapu City Cases

The 6 counts of estafa in the Tagbilaran City HED were almost identical to the Danao
City cases, except for some minor details. The main cast was almost identical with
Bagasao, Mangubat, and Preagido heading the list, with different supporting characters
from the district. The same is true for the 10 estafa cases allegedly committed in the
Lapu-Lapu City HED.

Barely two months after the decision on the Danao City cases, on January 4, 1980, the
Sandiganbayan handed down its verdict, finding all of the accused, except two, guilty. 9
were sentenced to prison terms of 64 years each while the others serving from 21-32
years. The fines imposed totaled P21,000 and indemnities amounted to P240,958.

Less than a year later, on December 19, 1980, the Sandiganbayan came out with its
decision on the Lapu-lapu City cases, finding 14 of the 15 accused guilty and sentencing
them to prison terms ranging from 8-80 years, with fines totaling P35,000.00 and
ordering them to pay indemnities amounting to P1,53,081.

The speed seemed to have petered out for the rest of the cases, however, notwithstanding
that all essentially followed the modus operandi of the decided cases. The snail‘s pace
has been attributed to budgetary problems and legal maneuvers and delays.

It was on May 30, 1989 when the Sandiganbayan handed its decision on the Siquijor
Highways Case, sentencing 14 officials and employees of the Public Works Department
and a private contractor to, at least 200 years in prison.

In July 1989, the Sandiganbayan decided the Bais City HED case.

Thus, the tally for disposed cases on these anomalies as of September 1989 is as follows:
       Total Number of Disposed of Cases = 224
       Total Number of Cases Filed = 1400
       Total Number of Pending Cases (including revived cases) = 1184.

All in all, the cases filed with the Tanodbayan involving 11 HEDs in Region VII
amounted to P65.7M which covers transactions in 1977 and 1978.

Appeals to the Supreme Court

Decisions of the Sandiganbayan, which is of the same rank as the Court of Appeals, can
be appealed only to the Supreme Court, and appealed Mangubat and Escano did,

On January 30, 1987, the Supreme Court handed down its final decision fully adopting
the findings of the Sandiganbayan on Mangubat in the Danao City cases. The trial court

said, ―Mangubat started the whole scheme.‖ The Supreme Court opined that ―Mangubat‘s
role was indispensable.‖

On April 15, 1988, the Supreme Court reversed and set aside the decision of the
Sandiganbayan regarding Escano. She was acquitted of the 126 cases of estafa in the
Danao City cases, because, said the court, ―it was based purely on circumstantial
evidence.‖ Escano may be faulted for negligence of her duties but it is different from
connivance. The Court pointed out that these are 2 different things and that connivance
cannot arise from negligence. This acquittal laid the thin but clear line between
complicity or non-involvement of a finance officer even when his subordinates are in
cahoots with others to rob the government. It may have taken 9 years for Ms. Escano to
be vindicated but it is not too late because many cases involving the other districts are
still pending and the decision here could impact on her inclusion or non-inclusion in the
other cases.

A Plea of “Guilty”

On September 21, 1989, having been imprisoned for more than 10 years and shuttling
back and forth from prison to court during the hearing of his many other cases,
Mangubat, together with convicted private contractors Gabison and Echavez, pleaded
guilty to criminal cases 1143 to 1341. It was the first of several pleas of guilty. By
November 1989, he has pleaded guilty to a total of 392 cases in the 1978 public highways
funds anomaly. One reason he cited for his change of plea is ―convenience.‖

Mangubat was meted a total sentence of 3,946 years and a fine of P44.96M. He has now
a much different lifestyle from the flamboyant life he led in 1978. At that time, he was
only in his mid-thirties, smooth-talking, inoffensive-looking, and a well-known ―padrino‖
in Cebu. People talk of his contributions to this or that charity or fiesta celebrations, and
they invite him to crown beauty queens or address graduation programs. He allegedly
owned a big mansion and many cars. Some said he is a huge tipper to porters, and when
he is in Manila, he reserves the entire Eduardo‘s Restaurant in Roxas Blvd. for his
cronies and drinking buddies. Said one prosecutor, ―He was a towering authority, the
architect of these anomalies – the biggest swindle in the government in 1978.‖

The rest of those convicted are also serving time in jail.

Other Ramifications of the Cases

The loopholes in the Treasury and Budgetary System was highlighted and investigated.
This prompted National Treasurer Gregorio Mendoza to put in place measures designed
to prevent frauds. Changes in the procedure in the encashment of checks by various
agencies were introduced. Strict coordination among the Budget Ministry, Treasury, and
various ministries concerned was required in the issuance of CDCs to avoid fake CDCs
resulting in the padding of vouchers or illegal disbursements.

The scandalous results of the investigations precipitated the downfall of a minister –
MPH Minister Baltazar Aquino. The investigators found no strong evidence to link him
to the cases but it was well known in the Cabinet that instead of cooperating with the
Special Cabinet Committee, Minister Aquino was out there pitching in for the
beleaguered engineers and seemingly coddling and even promoting the guilty ones. He
resigned and his resignation was accepted.

The fact that there are many government officials who are true to their oath of office was
also highlighted in these cases. Despite the many difficulties, death threats, lack of
budget, and even lack of support from various quarters, the members of the Special Task
Force kept on. They lived dangerously and yet finished their assigned tasks with valor.
The foot soldiers were the young professionals in the civil service who, even when
misunderstood and maligned, still kept the courage to pursue their mission in office. The
commanding officers were the older, more experienced hands in government who have
kept away from the maddening malaise of an opportunistic bureaucracy and could
distinguish between public duty and private interest. They have proved to the nation that
there are still many public officials imbued with a true sense of public service, that they
understand and live the precept ―public office is a public trust.‖

Appendix 2

                                   [REPUBLIC ACT NO. 3019]


      Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

         Section 1. Statement of policy. — It is the policy of the Philippine Government,
in line with the principle that a public office is a public trust, to repress certain acts of
public officers and private persons alike which constitute graft or corrupt practices or
which may lead thereto.

          Section 2. Definition of terms. — As used in this Act, the term —
          (a) "Government" includes the national government, the local governments, the
government-owned and government-controlled corporations, and all other
instrumentalities or agencies of the Republic of the Philippines and their branches.
          (b) "Public officer" includes elective and appointive officials and employees,
permanent or temporary, whether in the classified or unclassified or exempt service
receiving compensation, even nominal, from the government as defined in the preceding
          (c) "Receiving any gift" includes the act of accepting directly or indirectly a gift
from a person other than a member of the public officer's immediate family, in behalf of
himself or of any member of his family or relative within the fourth civil degree, either
by consanguinity or affinity, even on the occasion of a family celebration or national
festivity like Christmas, if the value of the gift is under the circumstances manifestly
          (d) "Person" includes natural and juridical persons unless the context indicates

         Section 3. Corrupt practices of public officers. — In addition to acts or
omissions of public officers already penalized by existing law, the following shall
constitute corrupt practices of any public officer and are hereby declared to be unlawful:
         (a) Persuading, inducing or influencing another public officer to perform an act
constituting a violation of rules and regulations duly promulgated by competent
authority or an offense in connection with the official duties of the latter, or allowing
himself to be persuaded, induced, or influenced to commit such violation or offense.
         (b) Directly or indirectly requesting or receiving any gift, present, share,
percentage, or benefit, for himself or for any other person, in connection with any
contract or transaction between the Government and any other party, wherein the public
officer in his official capacity has to intervene under the law.
         (c) Directly or indirectly requesting or receiving any gift, present or other
pecuniary or material benefit, for himself or for another, from any person for whom the
public officer, in any manner or capacity, has secured or obtained, or will secure or
obtain, any Government permit or license, in consideration for the help given or to be
given, without prejudice to Section thirteen of this Act.
         (d) Accepting or having any member of his family accept employment in a
private enterprise which has pending official business with him during the pendency
thereof or within one year after its termination.
         (e) Causing any undue injury to any party, including the Government, or giving
any private party any unwarranted benefits, advantage or preference in the discharge of

his official administrative or judicial functions through manifest partiality, evident bad
faith or gross inexcusable negligence. This provision shall apply to officers and
employees of offices or government corporations charged with the grant of licenses or
permits or other concessions.
          (f) Neglecting or refusing, after due demand or request, without sufficient
justification, to act within a reasonable time on any matter pending before him for the
purpose of obtaining, directly or indirectly, from any person interested in the matter
some pecuniary or material benefit or advantage, or for the purpose of favoring his own
interest or giving undue advantage in favor of or discriminating against any other
interested party.
          (g) Entering, on behalf of the Government, into any contract or transaction
manifestly and grossly disadvantageous to the same, whether or not the public officer
profited or will profit thereby.
          (h) Directly or indirectly having financial or pecuniary interest in any business,
contract or transaction in connection with which he intervenes or takes part in his official
capacity, or in which he is prohibited by the Constitution or by any law from having any
          (i) Directly or indirectly becoming interested, for personal gain, or having a
material interest in any transaction or act requiring the approval of a board, panel or
group of which he is a member, and which exercises discretion in such approval, even if
he votes against the same or does not participate in the action of the board, committee,
panel or group.
Interest for personal gain shall be presumed against those public officers
responsible for the approval of manifestly unlawful, inequitable, or irregular transaction
or acts by the board, panel or group to which they belong.
          (j) Knowingly approving or granting any license, permit, privilege or benefit in
favor of any person not qualified for or not legally entitled to such license, permit,
privilege or advantage, or of a mere representative or dummy of one who is not so
qualified or entitled.
          (k) Divulging valuable information of a confidential character, acquired by his
office or by him on account of his official position to unauthorized persons, or releasing
such information in advance of its authorized release date.

         The person giving the gift, present, share, percentage or benefit referred to in
subparagraphs (b) and (c); or offering or giving to the public officer the employment
mentioned in subparagraph (d); or urging the divulging or untimely release of the
confidential information referred to in subparagraph (k) of this section shall, together
with the offending public officer, be punished under Section nine of this Act and shall be
permanently or temporarily disqualified in the discretion of the Court, from transacting
business in any form with the Government.

          Section 4. Prohibition on private individuals. — (a) It shall be unlawful for any
person having family or close personal relation with any public official to capitalize or
exploit or take advantage of such family or close personal relation by directly or
indirectly requesting or receiving any present, gift or material or pecuniary advantage
from any other person having some business, transaction, application, request or
contract with the government, in which such public official has to intervene. Family
relation shall include the spouse or relatives by consanguinity or affinity in the third civil
degree. The word "close personal relation" shall include close personal friendship, social
and fraternal connections, and professional employment all giving rise to intimacy
which assures free access to such public officer.
          (b) It shall be unlawful for any person knowingly to induce or cause any public
official to commit any of the offenses defined in Section 3 hereof.

         Section 5. Prohibition on certain relatives. — It shall be unlawful for the
spouse or for any relative, by consanguinity or affinity, within the third civil degree, of
the President of the Philippines, the Vice-President of the Philippines, the President of
the Senate, or the Speaker of the House of Representatives, to intervene, directly or
indirectly, in any business, transaction, contract or application with the Government:
Provided, That this section shall not apply to any person who, prior to the assumption of office of any
of the above officials to whom he is related, has been already dealing with
the Government along the same line of business, nor to any transaction, contract or
application already existing or pending at the time of such assumption of public office,
nor to any application filed by him the approval of which is not discretionary on the part
of the official or officials concerned but depends upon compliance with requisites
provided by law, or rules or regulations issued pursuant to law, nor to any act lawfully
performed in an official capacity or in the exercise of a profession.

         Section 6. Prohibition on Members of Congress. — It shall be unlawful
hereafter for any Member of the Congress during the term for which he has been elected,
to acquire or receive any personal pecuniary interest in any specific business enterprise
which will be directly and particularly favored or benefited by any law or resolution
authored by him previously approved or adopted by the Congress during the same

         The provision of this section shall apply to any other public officer who
recommended the initiation in Congress of the enactment or adoption of any law or
resolution, and acquires or receives any such interest during his incumbency.

          It shall likewise be unlawful for such member of Congress or other public officer,
who, having such interest prior to the approval of such law or resolution authored or
recommended by him, continues for thirty days after such approval to retain such

         Section 7. Statement of assets and liabilities. — Every public officer, within
thirty days after assuming office, thereafter, on or before the fifteenth day of April
following the close of every calendar year, as well as upon the expiration of his term of
office, or upon his resignation or separation from office, shall prepare and file with the
office of the corresponding Department Head, or in the case of a Head of department or
Chief of an independent office, with the Office of the President, a true, detailed sworn
statement of assets and liabilities, including a statement of the amounts and sources of
his income, the amounts of his personal and family expenses and the amount of income
taxes paid for the next preceding calendar year: Provided, That public officers assuming
office less than two months before the end of the calendar year, may file their first
statement on or before the fifteenth day of April following the close of the said calendar
year. (As amended by RA3047, PD 677, January 24, 1978).

         Section 8. Prima facie evidence of and dismissal due to unexplained wealth.
— If in accordance with the provisions of Republic Act Numbered One thousand three
hundred seventy-nine, a public official has been found to have acquired during his
incumbency, whether in his name or in the name of other persons, an amount of
property and/or money manifestly out of proportion to his salary and to his other lawful
income, that fact shall be a ground for dismissal or removal. Properties in the name of
the spouse and dependents of such public official may be taken into consideration, when
their acquisition through legitimate means cannot be satisfactorily shown. Bank deposits
in the name of or manifestly excessive expenditures incurred by the public official, his

spouse or any of their dependents including but not limited to activities in any club or
association or any ostentatious display of wealth including frequent travel abroad of a
non-official character by any public official when such activities entail expenses
evidently out of proportion to legitimate income, shall likewise be taken into
consideration in the enforcement of this section, notwithstanding any provision of law to
the contrary. The circumstances hereinabove mentioned shall constitute valid ground for
the administrative suspension of the public official concerned for an indefinite period
until the investigation wealth is completed. (As amended by BP Blg., 195, March 16,

         Section 9. Penalties for violations. — (a) Any public officer or private person
committing any of the unlawful acts or omissions enumerated in Sections 3, 4, 5 and 6 of
this Act shall be punished with imprisonment for not less than six years and one month
nor more than fifteen years, perpetual disqualification from public office, and
confiscation or forfeiture in favor of the Government of any prohibited interest and
unexplained wealth manifestly out of proportion to his salary and other lawful income.

          Any complaining party at whose complaint the criminal prosecution was
initiated shall, in case of conviction of the accused, be entitled to recover in the criminal
action with priority over the forfeiture in favor of the Government, the amount of money
or the thing he may have given to the accused, or the fair value of such thing.

         (b) Any public officer violating any of the provisions of Section 7 of this Act shall
be punished by a fine of not less than one thousand pesos nor more than five thousand
pesos, or by imprisonment not exceeding one year and six months, or by both such fine
and imprisonment, at the discretion of the Court.

         The violation of said section proven in a proper administrative proceeding shall
be sufficient cause for removal or dismissal of a public officer, even if no criminal
prosecution is instituted against him. (Amended by BP Blg. 195, March 16, 1982).

        Section 10. Competent court. — Until otherwise provided by law, all
prosecutions under this Act shall be within the original jurisdiction of the
Sandiganbayan. (As amended by BP Blg. 195, March 16, 1982)

         Section 11. Prescription of offenses. — All offenses punishable under this Act
shall prescribe in fifteen years.

          Section 12. Termination of office. — No public officer shall be allowed to resign
or retire pending an investigation, criminal or administrative, or pending a prosecution
against him, for any offense under this Act or under the provisions of the Revised Penal
Code on bribery.

         Section 13. Suspension and loss of benefits. — Any incumbent public officer
against whom any criminal prosecution under a valid information under this Act or
under Title Seven Book II of the Revised Penal Code or for any offense involving fraud
upon government or public funds or property whether as a simple or as complex offense
and in whatever stage of execution and mode of participation, is pending in court shall
be suspended from office. Should he be convinced by final judgement, he shall lose all
retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled
to reinstatement and to the salaries and benefits which he failed to receive during
suspension, unless in the meantime administrative proceedings have been filed against

         In the event that such convicted officer, who may have been separated from the
service has already received such benefits he shall be liable to restitute the same to the
government. (As amended by BP Blg. 195, March 16, 1982).

         Section 14. Exception. — Unsolicited gifts or presents of small or insignificant
value offered or given as a mere ordinary token of gratitude or friendship according to
local customs or usage, shall be excepted from the provisions of this Act.

         Nothing in this Act shall be interpreted to prejudice or prohibit the practice of
any profession, lawful trade or occupation by any private person or by any public officer
who under the law may legitimately practice his profession, trade or occupation, during
his incumbency, except where the practice of such profession, trade or occupation
involves conspiracy with any other person or public official to commit any of the
violations penalized in this Act.

         Section 15. Separability clause. — If any provision of this Act or the application
of such provision to any person or circumstances is declared invalid, the remainder of
the Act or the application of such provision to other persons or circumstances shall not
be affected by such declaration.

         Section 16. Effectivity. — This Act shall take effect on its approval, but for the
purpose of determining unexplained wealth, all property acquired by a public officer
since he assumed office shall be taken into consideration.

        Approved, August 17, 1960.

Appendix 3

  A Social Contract with the Filipino People

               BENIGNO S. AQUINO III

A National Leadership in Need of
Transformational Change

A People Crying out for Change

Then finally, the gift of Light

A People’s Campaign of Renewed Hope…

The Vision for the Philippines:

A country with…

Our Mission:

A Commitment to Transformational Leadership:


Government Service

Gender Equality

Peace & Order


                    BIBLIOGRAPHY - Chapters 1, 2, 5, 6, & 7


Alejo, Albert, SJ. EHEMPLO. Spirituality of Shared Integrity in Philippine Church
       and Society. Quezon City: Institute of Spirituality in Asia, 2010

Amorado, Ronnie V. KAKISTOCRACY: Rule of the Unprincipled, unethical and
     unqualified. Davao City, Philippines: Research and Publication Office, Ateneo
     de Davao University, 2011

Aquino, Belinda A. Politics of Plunder, The Philippines Under Marcos. Quezon City:
      College of Public Administration, University of the Philippines, 1987

Abueva, Jose V. and Roman, Emerlinda R. (eds.). Corazon C. Aquino: Early
      Assessments of Her Presidential Leadership and Administration and Her
      Place in History. Quezon City: University of the Philippines Press, 1993.

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Batas Pambansa



      PUBLIC OFFICERS." November 11, 1982

Executive Order

       SYSTEM. October 8, 2001

       November 9, 2000.


      NOTE: Executive Order No. 12 repealed Executive Order No. 268 (below)

       UNDER EXECUTIVE ORDER 151, S. 1994, AS AMENDED. July 18, 2000.

Executive Order No. 327. AMENDING EXECUTIVE ORDER NO. 12 DATED 16

       GRAFT COMMISSION. August, 23, 2006.

Presidential Decree

Presidential Decree No. 677. AMENDING SECTION 7 OF REPUBLIC ACT NO.
       AND CORRUPT PRACTICES ACT. March,31, 1975.

       PUBLIC OFFICERS. July18, 1975.


       November 10, 1972.

       October 6, 1975.

       CONTRACT. June 11, 1978.



Republic Act


      OTHER PURPOSES. September 29, 2001

Republic Act No. 9194. AN ACT AMENDING REPUBLIC ACT NO. 9160,
      2001. March 7, 2003.

Republic Act No. 6770. THE OMBUDSMAN ACT OF 1989

      OTHER PURPOSES. February 5, 1997

      AS AMENDED. March 30, 1995

Republic Act No. 3019. ANTI-GRAFT & CORRUPT PRACTICES ACT. August 17,

      PUBLIC OFFICIALS AND EMPLOYEES. February 20, 1989.

      PLUNDER. July 12, 1991


Republic Act No. 6028. CITIZEN'S COUNSELOR ACT OF 1969


April 6, 2011

Dr. Betty Ventura
Department of Psychology
College of Social Sciences and Philisophy
University of the Philippines
Diliman, Quezon City

April 12, 2011

Dr. Michael Tan
Dean, College of Social Sciences and Philisophy
University of the Philippines
Diliman, Quezon City

May 2, 2011

Sen. Panfilo Lacson (1st Part)
Senate of the Philippines
Pasay City

May 26, 2011

Sen. Panfilo Lacson (2nd Part)
Senate of the Philippines
Pasay City

July 11, 2011
Sec. Rogelio “Babes” Singson
Department of Public Works and Transportation
Port Area Manila

Nat debt, Nat budget, PPP, CCT etc
As of July 20,11

Agcaoili, Lawrence. BF officers mismanaged 15 bil deposits-BSP. Phil Star, March 28,
Alave, Kristine L. At long last, plunder raps filed vs Cito, Joc-joc. PDI, April 16, 2011.
______________. Rice overimported in last 3 years of GMA. PDI, May 18, 2011.
Alentajan, Bonifacio A. Glaring crimes call for quick govt action. PDI, April 13, 2011.
Alipala, Julie S. 8 LTO men face charges for extortion. PDI, May 10, 2011.
Aning, Jerome. BIR files 23M tax case vs ex-GSIS execs. PDI, May 27, 2011.
____________. DOJ calls GMA to probe. PDI, May 27, 2011.
Antonie, Raymund F. Customs to probe organized smuggling activities. Manila
       Bulletin, March 30, 2011.
Avendano, Christine O., Tubeza, Philip C. & Balana, Cynthia D. Top govt Execs slam
       Sandigan decision. PDI, May 10, 2011.
Balana, Cynthia D. Merci ―midnight‖ order ‗invalid‘. PDI, May 13, 2011.
Bondoc, Jarius. Arroyo visit to Merci shows ‗dark politics‘. Phil Star, March 25, 2011.
____________. Govt must recover LWUA‘s 5000 million. Phil Star, April 13,2011.
____________. Other senate invitees can imitate Ligots. Phil Star, March 23, 2011.
Brago, Pia Lee. Drug trafficking, corruption prime sources of criminal activities in Phil-.
       Report. Phil Star, March 5, 2011.
Burgonio, TJ, Esguerra, Christian V., Dizon, Nikko. Blunders in plunder case. PDI,
       April 20, 2011
Burgos, Nestor P. Jr, Roxas slams Ombudsman for belated filing of charges in fertilizer
       scam. PDI, April 16, 2011.
Businessworld. Philippines‘ corruption score worsens. March 29, 2011.
Cabacungan, Gil C. Jr. Morato: Stop ―trial by publicity‖. PDI, June 28, 11.
Cabacungan, Gil C. Jr., Uy, Jocelyn R., & Morelos, Miko. PCSO checking
        Reports 7 bishops got Pajeros. PDI, June 28, 2011.
Cabacungan, Gil C. Jr., & Salaverria, Leila B.. PCSO bares ad kickbacks. PDI, June 28,
Cabreza, Vincent. Danding upheld on SMC. PDI, April 13, 2011.
Calonzo, Andreo C. House oks bill limiting GOCC execs‘ salaries, perks. GMA News,
       March 24, 2011.
De Quiros, Conrado. Can you handle the truth. PDI, May 3, 2011.
________________. Target‘em. PDI, April 11, 2011.
________________. Possible dream. PDI, April 5, 2011.
________________. Beyond impeachment. PDI, March 24, 2011.
________________. What you wish for. PDI, March 23, 2011
________________. Missing Link. PDI, March 8, 2011.
Diaz, Jess, & Romero, Paolo. Tupas claims Ombudsman asked her to go easy on impeach
       case. Phil Star, March 5, 2011.
Dizon, Nikko. Big steel firm faces 3.52 Billion smuggling rap. PDI, Jan 9, 2011.
___________. BIR claims Neri owes 18.6M in unpaid taxes. PDI, May 13, 2011.

Doronila, Amado. Gutierrez on the dock. PDI, March 11, 2011.
Echeminada, Perseus. PCSO scandal just the tip of iceberg, says palace adviser. Phil
        Star, July 11, 2011.
Editorial. More than money. PDI, May 16, 11.
Editorial, Court upside down. PDI, May 13, 11.
Editorial. Accountability. PDI, May 3, 2011.
Editorial. Overdue charges. PDI, April 16, 2011.
Editorial. Twilight Zone. PDI, April 16, 2011.
Editorial. Tree of injustice. PDI, April 13, 2011.
Editorial. Overwhelming. PDI, March 24, 2011.
Editorial. Political, and fair. PDI, March 11, 2011.
Editorial. Citizens vs corruption. PDI, March 7, 2011.
Esplanada, Jerry E. PH named one of top drug money-laundering countries. PDI, March
        23, 2011.
Esposo, William M. How a person loses a sense of shame. Phil Star, March 31, 2011.
Fernandez, Butch. Food crisis looms -senators. PDI, March 7, 2011.
Habito, Cielito. Is corruption really worse? PDI, April 5, 2011.
Ho, Abigail L. MAP calls for better anti-corruption measures. PDI, Feb 10, 2011.
Mangahas, Mahar. The poor don‘t live by bread alone. PDI, March 4, 2011.
Mendez, Christina. Senators calls for lifestyle check on Uriarte. Phil Star, July 11, 2011.
Mercado, Juan L. Going into the night. PDI, May 3, 2011.
______________. A 29 year old question. PDI, April 16, 2011.
______________. Go, tell the judge. PDI, April 12,2011.
Monsod, Solita C. Who got the facts wrong? PDI, April 16,2011.
Montelibano, Jose Ma. Hunger shames us all. PDI, April 14, 2011.
__________________. Missions of truth vs tentacles of corruption. PDI, Jan 28, 2011
Napallacan, Jhunnex. NFA Central Visayas backs 8 Cebuano rice traders. PDI, May 18,
Nery, John. Crooks in the ―daang matuwid‖. PDI, April 12, 2011.
Osorio, Ma. Elisa P. Lack of transparency deters foreign investment-Report. Phil Star,
        April 4, 2011.
Pangalangan, Raul C. Faqustian plea bargain. PDI, May 13, 2011.
_________________. Passion for reason. PDI, March 11, 2011.
Pedrosa, Carmen N. What‘s behind Merci impeachment: the leftist adviser. Phil Star,
        March 27, 2011.
Punay, Edu. DOJ forms panel to probe 73 M tax evasion raps vs Mikey, Mikey, wife.
        Phil Star, April 26, 2011.
_________. Banco Filipino files graft complaint vs BSP officials. Phil Star, April 2,
PDI. Globe asiatique used ―Ponzi‖ scam- Pag-Ibig. April 7, 2011.
Ramos, Marlon. Mikey, wife seek dismissal of tax evasion case. PDI, June 28, 2011.
_____________. FVR: 3R‘s could lick corruption in AFP. PDI, April 13, 2011.
_____________. Sandigan asked to reverse self on tax credit scam. PDI, March 24, 2011.
Remo, Michelle V. Regulator tightens watch on pawnshops. PDI, Feb 4, 2011.

Romero, Paolo. House comm. Okays bill simplifying corporate taxation. Phil Star, April
       4, 2011
____________. Lawmaker warns of ‗severe food situation‘. Phil Star, March 11, 2011.
Romualdez, Babe G. One life, nine passport checks. Phil Star, April 5, 2011.
Romulo, Ricardo. People power against corruption. PDI, April 9, 2011.
Ronda, Rainier Allan. Fraud recruiter in London uses fake govt job orders-DFA. Phil
       Star, April 4, 2011.
_________________. PCGG audit bares new anomalies. Phil Star, March 7, 2011.
Salaverria, Leila B. Lozada: GMA wanted NBN for Abalos. PDI, May 18, 2011.
_______________. NFA lost 100B in 10 years-COA. PDI, May 18, 2011.
_______________. Court OKs Garcia dea. PDI, May 10, 2011.
_______________. Joey de v testifies at Neri trial. PDI, Feb 4, 2011.
Santos, Tina G. PCSO voids 42-B deal with Australian firm. PDI, June 9, 2011
Sy, Martin. AMLC wants return of power to freeze assets. Phil Star, March 9, 2011.
Tiongson-Mayrina, Karen. PNoy to have 1.2 billion in unedited intel funds. GMA News
       Research, Dec 25, 2010.
Tubeza, Philip C. Salonga et al. urge SC to overturn its ruling on Danding. PDI, May 3,
Tulfo, Ramon. Office of the Ombudsman a cannibal. PDI, April 4, 2011.
Villanueva, Marichu A. Welfare state. Phil Star., July 11, 2011.

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Act No. 3815 The Revised Penal Code of the Philippines. 1932.

Republic Act No. 3456. Internal Auditing Act of 1962

Republic Act No. 6028. Citizen‘s Counselor Act of 1969.

Republic Act No. 7659. Imposing Death Penalty for Certain Crimes by Public Officers.

Presidential Decree 749 Immunity from Prosecution in Graft Cases. 1975.

Presidential Decree No. 46. Making it Punishable for Public Officials to Receive and
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Presidential Decree No. 1759. Penalizing Contractors for Violating Public Works

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