Philippines Country Profile

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Public Anti-Corruption Initiatives

  • Legislation: Corruption-specific legislation in the Philippines dates back to 1960, when the country passed its first anti-corruption law; although provisions for penalties for corrupt officials were originally established by the Act Revising the Penal Code 1930. The Philippines ratified the United Nations Convention against Corruption in 2006. However, according to the 2012 Civil Society Review of the Philippines’ compliance with the United Nations Office on Drugs and Crime (UNODC), the Philippines’ legal and enforcement regime is only “partially in compliance with the standards and principles of the UNCAC”, as stated in a 2012 report published by the Partnership for Research in International Affairs and Development (PRIAD). Corrupt practices are addressed by the Anti-Graft and Corrupt Practices Act and the Anti-Money Laundering Act of 2001, which criminalise attempted corruption, active and passive bribery, extortion, bribing a foreign official, using confidential state information for private gain, money laundering and organised crime. The Anti-Graft and Corrupt Practices Act requires public officials to file a Statements of Assets and Liability and Net Worth (SALN) every second year. In June 2012, the Act to Further Strengthen the Anti-Money Laundering Law and the Terrorism Financing Prevention and Suppression Act of 2012 were passed, according to a 2012 report published by PRIAD. These two laws are presented as a tool for the government to fight against transnational crime and terrorism, as well as granting additional investigatory authority and powers to improve transparency and accountability. According to a news article published by GMA News in February 2013, President Aquino signed a third amendment to the Anti-Money Laundering Act, which covers a bigger number of predicate crimes. The Constitution 1987 also includes articles on accountability of public officials and SALN (Art. IX, sect. 1-18). The Act Establishing a Code of Conduct and Ethical Standards for Public Officials and Employees was passed in 1989 and formulates standards for the personal integrity and accountability of civil servants. Rules on gifts are included in the code of conduct and explicitly forbids solicitations of gifts, favours, etc. The Revised Penal Code also defines gifts as bribes (Art. 210), and the Anti-Graft and Corrupt Practices Act forbids officials from receiving gifts (sect. 3). However, Global Integrity 2010 states that the regulations governing gifts and hospitality offered to civil servants are poorly enforced in practice. The Constitution 1987 (Art. 6, sect. 20, Art. 2, sect. 28 and Art. 3, sect. 7) stipulates that transparency must be upheld by requiring all records of Congress to be preserved and made open to the public and the Commission on Audit (see below) to annually publish a list of amounts paid and expenses used by each member of Congress. In September 2013, a substitute Freedom of Information Act 2013 was approved by the Senate and submitted to the House of Representatives, according to in September 2013. The government has not yet passed the Freedom of Information Act (FOIA) during the time of review. Access the Lexadin World Law Guide for a collection of laws in the Philippines.
  • Government Strategies: The government's anti-corruption activities are viewed as an integral part of the overall development strategy, which has been developed in cooperation with international organisations, such as the Asian Development Bank, USAID, the World Bank and others. According to Inguirer in January 2014, the most recent anti-corruption strategy undertaken by the government is the requirement for cashless and checkless government transactions, which is aiming to improve budget management and prevent misappropriate funds. The strategy will first target the armed force, the Department of National Defense and the Department of Budget and Management, and electronic purchase cards will be used for payments for meals, medical supplies, airline tickets and the like. According to AFTA Sources, in March 2011, President Aquino approved the Philippine Development Plan (PDP) for 2011-2016, whose overarching theme is good governance and anti-corruption while achieving inclusive growth, which would create substantial employment opportunities as well as reduce poverty. Furthermore, in January 2012, President Aquino approved the Good Governance and Anti-Corruption Cluster (GGAC) plan for 2012-2016, which includes measures aiming to promote transparency and accountability. According to a January 2012 article by Business Mirror, among the measures provided in the plan is the simplification and integration of various government databases and systems to make them more publicly accessible. The low-level of business confidence in the judicial system led to the implementation of the Action Programme for Judicial Reform, proposed and developed by a former chief justice and supported by several international donors, to rectify the deficiencies in the judicial system. However, the New York Times reports in August 2013 that the government’s anti-corruption reforms and strategies are perceived by some as being complicated and overwhelming; moreover, there is lack of cooperation between different government agencies, which results in poor implementation. 

  • Anti-Corruption Agencies: According to Global Integrity 2010, the Office of the Ombudsman (see below) serves as the main anti-corruption agency authorised to investigate and prosecute corruption cases involving public officials. The office is also in charge of undertaking corruption prevention measures, such as awareness-raising campaigns and analysing anti-corruption initiatives. However, Global Integrity 2010 suggests that anti-corruption agencies are subject to political interference, and do not usually carry out independent investigation. The Presidential Anti-Graft Commission (PAGC) was established in 2001 to investigate and to hear administrative cases and complaints against erring presidential appointees, as well as to assist the president in anti-corruption campaigns. However, in November 2010, President Aquino signed the Executive Order No.13 (EO No.13), which abolishes the Presidential Anti-Graft Commission (PAGC). According to a November 2010 news article by ABS-CBN News, the abolition is part of the policy on streamlining the government bureaucracy, as the PAGC’s functions are already covered by the Ombudsman’s Office. In January 2012, House Bill 2903 seeking to create a new Independent Commission Against Corruption (NICAC) is pending with the House Committee, and according to a senior administration lawmaker, cited in a January 2012 article by The Philippine Star, members for the NICAC will be selected from non-political sectors with 'untainted integrity'. As of March 2014, there is no further information regarding the establishment of the NICAC. Global Integrity 2010 evaluates the overall effectiveness of the anti-corruption agencies in the Philippines as very weak.

  • Office of the Ombudsman: The Office of the Ombudsman has existed for several decades and it was strengthened in 2003 by a doubling of its budget, which increased its investigative and prosecutorial capacities. According to Global Integrity 2010, the Office of the Ombudsman serves as the country's leading anti-corruption agency. Criticism of the Office has focused on it targeting petty corruption, instead of targeting the 'big fish'. This is further supported by Global Integrity 2010, which reports that the ombudsman has been turning a blind eye to a series of corruption complaints against individuals who are closely tied to the former President. The same report also states that the Office of Ombudsman is subject to political interference, and it infrequently makes investigations or reports public. In April 2011, Ombudsman Merceditas Gutierrez resigned after politicians voted to impeach her. Ms Gutierrez was accused of failing to probe corruption allegations against former President Arroyo and her administration, as reported in an April 2011 article by BBC News. In July 2011, President Aquino appointed former Supreme Court Associate Justice Conchita Carpio-Morales as the new ombudsman.

  • Anti-Money Laundering Council (AMLC): The AMLC's task is to carry out investigations into money laundering activities and analyse data from banks and financial institutions regulated by the Central Bank of the Republic of the Philippines, the Securities and Exchange Commission (SEC) and the Insurance Commission (IC). According to the House of Representatives, the AMLC can file complaints with the Office of the Ombudsman and the Department of Justice (DOJ) to prosecute offenerders of money laundering and start civil forfeiture proceedings in cooperation with the Office of the Solicitor General (OSG). The US Department of State 2013 reports that the government has been working on addressing the problems related to the AMLC pointed out by the Asia Pacific Group. According to a February 2012 article by Business Inquirer, Malacañang (the official Office of the President of the Philippines) has labelled urgent a bill amending the AMLA . Among the proposed amendments is the requirement of more entities, such as casinos, to report suspicious transactions to the AMLC. According to a 2012 report published by PRIAD, two amendments to the AMLA, the Act to Further Strengthen the Anti-Money Laundering Law and the Terrorism Financing Prevention and Suppression Act of 2012, have been passed. 

  • Commission on Audit (COA): The COA was established in accordance with the Constitution 1987. It not only monitors government financial operations, but also has the authority to examine and audit all public financial transactions. Furthermore, it plays an important role in promoting transparency and accountability in public financial transactions. In this capacity, the COA is currently engaged in implementing the electronic New Government Accounting System. In the pursuit of greater transparency, the COA has launched an interactive portal that has a Fraud Alert Form, with which whistleblowers can easily report fraud, mismanagement and waste of public funds. However, the portal cannot guarantee anonymity. According to Global Integrity 2010, although some COA reports offer very useful guidelines for checking corruption in specific government agencies, the COA does not have the authority to prosecute and impose reform measures on faltering agencies. Furthermore, the government does not always follow up on COA recommendations.

  • Lifestyle Check Coalition (LCC): The LCC was established in March 2003. It is comprised of 16 government agencies and NGOs that investigate the ethics, nightlife and lifestyles of government officials. According to The Philippine Information Agency's Rising to the Challenge of Good Governance 2009, over 200 lifestyle checks were conducted since it came into force. The president of the Anti-Graft Commission (PAGC) signed a memorandum of agreement (MOA) with 10 of the most corruption prone public agencies to mandate them to submit at least one ‘big fish’ case or lifestyle check to either the PAGC or the Office of the Ombudsman every three months.

  • Commission on Elections (COMELEC): The COMELEC represents an attempt to rid elections of irregularities, such as election-rigging, vote-buying and corruption. However, the COMELEC's reputation has been tarnished by several scandals. In order to combat electoral malpractice, a new e-election system overseen by the COMELEC was utilised in the May 2010 presidential elections. According to Freedom House 2011, although there were still some cases of fraud, the problems were far less common than in previous elections. The new system, however, did not stop vote buying, which was even more widespread and flagrant than before, according to the same source.

  • Centre for Asian Integrity (CAI): The CAI has been set up by the Office of the Ombudsman, the University of the Philippines, Australian universities and international donors in 2008. It is funded by the Millennium Challenge Corporation's (MCC) Philippine Threshold Program through the Asia Foundation. The CAI is a virtual academy that offers training courses on anti-corruption and governance. The main objective of the project is to enhance integrity of Philippine government agencies, companies and NGOs. 

  • E-Governance: The Bureau of Internal Revenues (BIR) has become more transparent with the use of an electronic information exchange to connect to the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center. The Bureau of Customs has also set up web-enabled clearance and payment service. The Philippine Government Electronic Procurement System (PhilGEPS) was launched by the Department of Budget and Management. According to a January 2012 article by Business Mirror, the government is planning to expand the operations of PhilGEPS to include e-bidding functions. The Official Gazette has also been transformed into a one-stop shop to provide government information. United Nation's E-Government Survey 2012 shows that the Philippine government's overall commitment to develop e-governmence is high at the regional level, yet the Philippines scored low at the global level in terms of e-governmence development. 

  • Public Procurement: The Government Procurement Reform Act 2003 grants preference to companies of at least 60% Filipino ownership, thus favouring local suppliers. A government e-procurement system has been implemented in most government departments and government-controlled companies and organisations to help reduce graft and corruption. Procurements are mandated by the Act to be published to the general public, and Global Integrity 2010 has determined that major public procurements are effectively advertised through agency websites or newspapers. The Philippine Government Electronic Procurement System (PhilGEPS) is the central online portal where all public procurement activities are posted. This is meant to be a vehicle to increase transparency of the government procurement process. If bidders are found to be providing false information, or otherwise violating bidding regulations, they may be blacklisted. The list of debarred bidders can be found on the Government Procurement Policy Board website. Procurement manuals and documents are also available on the website. However, Global Integrity 2010 reports that the system for blacklisting is not always effectively enforced, as there have been cases where companies found guilty of bribery were able to change their names and continue to participate in future bids. As a means of inhibiting opportunities for conflicts of interest within public procurement, decisions regarding procurement are made by a panel consisting of 5-7 regularly rotating officials. Another government initiative meant to improve procurement transparency is the creation of Procurement Transparency Group under the Executive Order 662-A. The group is led by the Government Procurement Policy Board, and its main tasks include evaluating and monitoring government procurements.
  • CoST Philippines: The Philippines was selected as one of eight pilot countries for the Construction Sector Transparency Initiative (CoST). CoST is a voluntary multi-stakeholder initiative designed to be applicable to any country and to any government department or agency with responsibility for public sector construction projects. The Philippine committee overseeing the implementation of CoST  consists of members from government, the construction industry, civil society, academia and development organisations. CoST aims at promoting the concepts of transparency and accountability in the construction sector and focuses specifically on public disclosure of information. The ultimate aim is to enhance the accountability of procuring bodies and construction companies for the cost and quality of public sector construction projects. Disclosure requirements in procurement proclamation and directives have since been integrated into the Philippines Government and Electronic Procurement System (PhilGEPS). Similarly, the CoST assurance process has been integrated into the Commission on Audit (COA). 
  • Whistleblowing: In 2007, Congress drafted legislation to protect public and private sector whistleblowers. The aim is that to reduce corruption across all sectors. According to the legislation, it will be the ombudsman who will be responsible for setting up the whistleblower programme. According to a 2011 news article by The Philippine Star, the House Committee on Justice has passed the Whistleblower Protection, Security and Benefit Act of 2011. As described in the Act, a whistleblower will be protected from all forms of retaliatory actions, and anyone who prevents a whistleblower from testifying can be punished by six months to six years in prison. On the other hand, the Act also imposes six to 12 year prison terms on whistleblowers that report false and misleading testimonies. Whistleblowers are frequently subject to harassment and intimidation. According to a February 2013 news article published by Inquirer News, people under the government's Witness Protection Program can even face threats. Overall, whistleblower protections in the Philippines remains very weak; however, a 2012 report published by the Partnership for Research in International Affairs and Development (PRIAD) states that the government strives to implement a stronger whistleblowing protection law, as part of its new Anti-Corruption Plan (2012-2016). As of March 2014, there are no information related to the implementation of a stronger whistleblowing protection law. Until a specific law is passed, whistleblower protection is, according to Global Integrity 2010, covered by Republic Act No. 6981

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