Philippines Country Profile

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. The country has a well-developed legislative framework aimed at fighting corruption, described by Global Integrity 2008 as 'very strong'. The Anti-Graft and Corrupt Practices Act 1960 defines 11 types of corrupt behaviour among public officials. It also requires that public officials file Statements of Assets and Liability and Networth (SALN) every two years. According to Global Integrity 2008,corrupt practices are addressed by the Anti-Graft and Corrupt Practices Act 1960 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 Constitution 1987 also includes articles on accountability of public officials and SALN (Art. IX, sect. 1-18). An Act Establishing a Code of Conduct and Ethical Standards for Public Officials and Employees was passed in 1989 and formulated standards for personal integrity and accountability of civil servants. Rules on gifts are included in the code of conduct and explicitly forbid 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). 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. The Senate has passed the second reading of the Freedom of Information Act of 2009 which concerns the Right of the People to Information on Matters of Public Concern. Moreover, the Anti-Money Laundering Act was enacted in 2001, which criminalises persons who become involved in money laundering activities. While the Philippines may have a solid framework to combat public sector corruption, the latter is still rampant among public officials, as indicated by Transparency International Global Corruption Barometer 2009. Consult 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. As formulated in the Medium-Term Philippine Development Plan 2004-2010, the government has declared an all-out fight against graft and corruption. 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 and turn it into an efficient, independent and transparent body. However, many of the reforms in the programme were not implemented, and the programme did not generate the government's desired effect. The tax system was another area that was chosen to be a target of reforms. In order to improve governance, reduce corruption and increase tax revenues, the World Bank stepped in with a loan to support the Board of Internal Revenues' programme to modernise the tax administration system in 2007. As an anti-corruption measure, the government has established a reward scheme where the tax agencies that meet their targets or surpass them are rewarded, while those that do not meet their quotas are punished.

  • Anti-Corruption Agencies: The Office of the Ombudsman (see below) serves as the main anti-corruption agency authorised to investigate and prosecute corruption cases involving public officials. It also takes care of corruption prevention measures, such as awareness-raising campaigns and analysing anti-corruption measures. A Presidential Anti-Graft Commission has also been established to support the President in coordinating and supervising the government's anti-corruption efforts and to investigate and hear administrative cases regarding civil servants appointed by the President that function in the executive branch and government-owned and government-controlled companies.

  • Office of the Ombudsman: The Office of the Ombudsman has existed for several decades and is today the main anti-corruption body in the Philippines with a mandate to investigate and prosecute corruption cases. It was strengthened in 2003 by a doubling of its budget that increased its investigative and prosecutorial capacities. According to a 2009 news archive from the United Nations Development Programme, the government announced the Office of the Ombudsman as the country's leading anti-corruption agency in 2006. Corruption cases are brought before the Sandiganbayan, a special court for handling such cases. Criticism of the Office of the Ombudsman has focused mainly on its overemphasis on targeting petty corruption instead of targeting the 'big fish'. This is further supported by the Bertelsmann Foundation 2010, which reports that the current Ombudsman has been accused by CSOs of turning a blind eye to a series of corruption complaints against individuals who are closely tied to the President. Another point of criticism refers to the political appointment of the Ombudsman (former President Arroyo appointed a law school classmate of her husband's) and the political interference in the work of the Ombudsman. Nonetheless, Global Integrity 2008 assesses the Office of the Ombudsman as 'strong'.

  • Anti-Money Laundering Council (AMLC): Congress established the AMLC financial intelligence unit in 2001. 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 Ombudsman as well as the Department of Justice (DOJ) in order to get money laundering offenders prosecuted or start civil forfeiture proceedings in cooperation with the Office of the Solicitor General (OSG). According to the US Department of State 2009, some of the criticism of the AMLC is that casinos are currently excluded from the list of institutions that the AMLC can monitor, as well as a 2008 court ruling that made it more difficult for the AMLC to get information about suspicious bank accounts. However, the AMLC itself is pushing for increased authority in these areas. Currently, the governor of the central bank is the head of the AMLC and both the chairman of the SEC and the commissioner of the IC sit as members of the AMLC.

  • Commission on Audit (COA): The COA was established in accordance with the Constitution 1987. It not only monitors government financial operations, but 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 an 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 2008, although the COA has helped expose corruption and illegal practices, it does not have the authority to prosecute and punish corrupt civil servants, a task which is left to other relevant offices. These offices, however, are not obliged by law to follow up COA recommendations. Furthermore, COA officials often face harassment and threats as a result of exposing corrupt practices.

  • Lifestyle Check Coalition: The Lifestyle Check Coalition, comprised of 16 government agencies and NGOs, was established in order to investigate the ethics and lifestyles of government officials. However, this measure has not yet proven effective in exposing high-level corruption, as only low-level officials have been investigated. The coalition has also not succeeded in getting organisational insiders to serve as whistleblowers to report on the questionable lifestyles of high-level officials.

  • Commission on Elections (COMELEC): The COMELEC dates back to 1940, when it was established as an independent body to conduct and supervise elections in the Philippines. It 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. One of the most famous scandals involves a taped conversation between former President Arroyo and the COMELEC commissioner during the presidential election vote-counting in 2004. It is unclear whether the conversation was a serious attempt to rig the votes or whether the conversation was 'merely' an example of conflict of interest. According to Global Integrity 2008, there are no indications of any reduction in the level of election-related corruption and irregularities.

  • Anti-Corruption Fund (ACF): The ACF consists of two parts. The first part consists of a USD 21 million anti-corruption support programme set up by the US government's Millennium Challenge Corporation (MCC) and implemented through USAID. The programme delivers material and training to the Philippine anti-corruption efforts, and the MCC has specified where the air should be directed. Among these are requirement to reach certain targets, such as a 40% increase in conviction rates for all cases brought before the Sandiganbayan as well as a significant increase in the case successfully mediated by the Ombudsman. The second part of the ACF consists of PHP 1 billion in funds added by the Philippine Government as the counterpart fund and is managed by the Presidential Anti-Graft Commission (PAGC). The PAGC-controlled part of the Anti-Corruption Fund is given to five primary agencies: the Philippine Drug Enforcement Agency (PDEA), the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC), the Presidential Council for Values Formation (PCVF) and the Philippine National Police (PNP). All the funds are aimed at programmes within these agencies that deal with anti-corruption. All the five primary recipients of funds from the ACF are thus government agencies.

  • 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 (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 as well as NGOs.

  • E-Governance: Development of e-governance has been slow in the Philippines, primarily because so few people have Internet access. The Bureau of Internal Revenues (BIR) has become more transparent with the use of electronic information exchange to connect to the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center. Despite the number of payments and cost of paying taxes in the Philippines, the time spent dealing with the tax authorities amounts to only 195 hours annually, which is only slightly above the OECD average, indicating that e-registration and e-payment of taxes has had a positive effect. The Bureau of Customs has also set up web-enabled clearance and payment service. The Department of Budget and Management has launched the Philippine Government Electronic Procurement System (PhilGEPS), which serves as the central portal for all government procurement.

  • Public Procurement: The Government Procurement Reform Act 2003 stipulates that preference in purchasing be given to companies with at least a 60% Filipino ownership, thus favouring local suppliers. A government e-procurement system has been implemented in most government departments as well as government-controlled companies and organisations in order to help reduce graft and corruption in procurement. Global Integrity 2008 describes public procurement in the Philippines as 'strong'. Procurements are mandated by the Procurement Law to be published to the general public. However, there have been some cases where some major tenders, especially foreign-funded projects, were published just before the closing date for bids, which gave bidders insufficient time to react and submit their bids. According to the law, tenders have to be made public in the national media or the Internet. 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 within government procurement procedures. 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. 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 officials; these officials are regularly rotated.

  • Whistle-Blowing: The Philippines does not guarantee protection of whistleblowers in its legislation even though the government's Medium Term Philippine Development Plan 2004-2010 advocates the development of such legislation and, according to AIMS-Hills Governance Research 2006, there were eight pending whistle-blowing bills in Parliament. Once it is passed, the whistleblower protection legislation will be viewed as an important part of anti-corruption framework. In 2007, Congress drafted legislation to protect public and private sector whistleblowers. The hope is that this legislation will help to reduce corruption across all sectors. According to the whistleblower bill, it will be the Ombudsman who will be responsible for setting up the whistleblower programme. Until a specific law is passed, whistleblower protection is, according to Global Integrity 2008, covered in laws that deal with witness and complainants protection (R.A. 6981 and P.D No. 749). Whistleblowers are frequently subject to harassment and intimidation. According to Global Integrity 2007, prospective whistleblowers typically use the media, the church or political figures to shield themselves and their families from possible retaliation by the people they expose. In the beginning of 2008, a high-profile case of a whistleblower feeling threatened and harassed broke in the media. According to news reports, police officers sent by the government kidnapped Jun Lozada, a government official, in order to prevent him from testifying in the Senate on the overpricing of a government contract for national broadband. This case directly implicated former President Arroyo's husband and the chairman of the COMELEC. The government allegedly sent the police as protection against death threats against Lozada. In 2009, Lozada was arrested on charges of perjury filed by one of former President Arroyo's close associates. In sum, whistleblower protections in the Philippines are still very weak. The COA has launched a Fraud Alert Form to which whistleblowers can easily report fraudulent use of funds. However, the website states that they are unable to guarantee anonymity of the whistleblower (see above).

  • General Comments on the Public Anti-Corruption Initiatives: Former President Arroyo promised that Congress would pass an anti-corruption law in 2008, but this has still not happened. It remains to be seen how President Aquino can tackle the country's corruption problem. Although the government declares that anti-corruption measures are of the highest priority, public sentiments on corruption issues in the country suggest that there is a mismatch between the proclaimed commitment to counter corruption and the actual effects of these measures. The government has shown commitment to e-governance as an attempt to increase transparency and to stamp out much of the corruption caused by face-to-face interactions with public officials, but one of the obstacles is that many Filipinos have no Internet access. Many anti-corruption initiatives are conducted in cooperation with international donor organisations. However, even though there is a large number of anti-corruption measures and initiatives, implementation of and compliance with such measures still lag behind.