TAN Paper On Corruption and Anticorruption in The Philippines (March 2011)

Transparency and Accountability Network
Corruption and
Anti-Corruption in the Philippines
A Paper Prepared by
Transparency and Accountability Network
for GTZ Philippines
March 2011
TABLE OF CONTENTS
ACRONYMS 3
LIST OF TABLES, FIGURES AND BOXES 4
EXECUTIVE SUMMARY 5
I. Forms of Corruption 7
II. Scale of Corruption 11
III. The Political Economy of Corruption in the Philippines 15
IV. Anti-Corruption Efforts 26
V. Recommendations 33
REFERENCES 35
Corruption and Anti-Corruption in the Philippines 2

Transparency and Accountability Network, March 2011
ACRONYMS
AFP Armed Forces of the Philippines
BIR Bureau of Internal Revenue
BOC Bureau of Customs
CHR Commission on Human Rights
COA Commission on Audit
COMELEC Commission on Elections
CSC Civil Service Commission
DA Department of Agriculture
DBM Department of Budget and Management
DENR Department of Environment and Natural Resources
DEPED Department of Education
DILG Department of the Interior and Local Government
DOF Department of Finance
DOH Department of Health
DOJ Department of Justice
DOTC Department of Transportation and Communication
DPWH Department of Public Works and Highways
DSWD Department of Social Welfare and Development
DTI Department of Trade and Industry
GSIS Government Service Insurance System
HOR House of Representatives
KBL Kilusang Bagong Lipunan (New Society Movement)
Lakas Lakas ng Bansa (Nation’s Power)
LAMP Laban ng Masang Pilipino (Strugge of the Pilipino Masses)
LDP Laban ng Demokratikong Pilipino
LP Liberal Party
LTO Land Transportation Office
NAPC National Anti-Poverty Commission
NP Nacionalista Party
NPC Nationalist People’s Coalition
NSA National Security Adviser
NTC National Telecommunications Commission
NUCD National Union of Christian Democrats
OMB Office of the Ombudsman
OP Office of the President
PAGC Presidential Anti-Graft Commission
PAGCOR Philippine Amusement and Gaming Corporation
PCGG Presidential Commission for Good Governance
PCSO Philippine Charity and Sweepstakes Office
PDIC Philippine Deposit Insurance Corporation
PDP-Laban Partido Demokratikong Pilipino-Lakas ng Bayan (Philippine Democratic
Party-People’s Power)
PMP Partido ng Masang Pilipino (Party of the Philippine Masses)
PnM Pwersa ng Masa (Force of the Masses)
PNP Philippine National Police
PPC People Power Coalition
PRP People’s Reform Party
Reporma-LM Partido para sa Demokratikong Reporma-Lapiang Manggagawa (Party for
Demcratic Reforms-Workers’ Party)
SSS Social Security System
SWS Social Weather Stations
TAN Transparency and Accountability Network
TI Transparency International
UMDP Union of Muslim Democrats of the Philippines
UNIDO United Nationalist Democratic Organization

LIST OF TABLES, FIGURES AND BOXES
Table 1. Summary of Philippine Anti-Corruption Laws 7

Table 2. The Philippine Anti-Corruption Agencies 10
Table 3. How Much Corruption Is there in the Public Sector 13
Table 4. Do Companies in your line of Business Need to 13
Give Bribes in Order to Win Government Contracts
Table 5. Estimated Financial Losses Due to Corruption, 1995-2000 14
Table 6. 2005 Budgetary Allocations of Different Agencies 15
of the Philippine Government, Total Re-enacted
Budget Php907.56 Billion
Table 7. 2001 Arroyo Appointees 17
Table 8. Corruption Scandals that Challenged the 19
Arroyo Government’s Legitimacy
Table 9. Select Cases with Arroyo’s Interest and the Supreme Court 20
Table 10. Select ‘Big Fish’ Cases Before the Office of the Ombudsman 21
Table 11. Arroyo Appointees to Constitutionally Independent Bodies 22
Table 12. Political Party Coalitions in 2001, 2004, 2007, and 2010 23
Table 13. Public Perception of the Arroyo Presidency and 24
Political Wins in the 2001, 2004, 2007, 2010 Elections
Table 14. Government Anti-Corruption Efforts 27
Table 15. Philippine UNCAC Roadmap 28
Table 16. Summary of CSO Initiatives by Objective 29
Table 17. List of CSO Initiatives by Objective 30
Table 18. Summary of Donor Initiatives related to Anti-Corruption 31
Figure 1. Philippine Corruption Perception Index rating, 2001-2010 11

Figure 2. Philippine CPI Ratings and Other Asian Countries, 2001-2010 12
Figure 3. Public Perception of the Arroyo Presidency and 24
Political Wins in the 2001, 2004, 2007, and 2010 Elections
Box 1. NBN-ZTE Controversy 25

Box 2. OMB’s Lack of Funds? 26

EXECUTIVE SUMMARY
The Philippines has a fairly advanced anti-corruption legal framework. The Philippine
government has passed nine anti-corruption laws and established ten institutions designed to
fight corruption. Even with this, however, the Philippines’ corruption record is a dismal high,
according to international and local perception surveys.
According to the Political and Economic Risk Consultancy (PERC 2010), the Philippines is
the fourth most corrupt country in Southeast Asia, next to Vietnam, Cambodia, and Indonesia
respectively. The Philippines was considered to be at its most corrupt state in 2008, hitting its
lowest mark of 2.3 (10 being least corrupt and 1 being most corrupt) on Transparency
International’s (TI) Corruption Perception Index. On TI’s Global Corruption Barometer, the
Philippine government’s anti-corruption efforts are seen to be ineffective (48%), and some
69% think that corruption has, in fact, increased (Global Corruption Barometer, 2010).
Local perceptions also confirm these findings. The Social Weather Stations (2008) said three
out of five Filipinos perceive ‘a lot of corruption’ in the public sector. The business sector
shares the same opinion. In a 2007 SWS enterprise survey, 44% of those surveyed said that
he/she has personal knowledge of a corrupt transaction with government (2007 SWS
enterprise survey).
Corruption has taken its toll on the country’s development. The World Bank (2001) estimated
that more than 20 per cent of the national budget is annually lost to corruption. In money
terms, this is an estimated US$12 billion from the period 1995-2000. The Ombudsman adds
that an estimated 30 per cent of government contracts are diverted to corruption annually.
Corruption in the country has deep roots in the political economy. Political and economic
powers are monopolized by the elites of Philippine society. This consolidation of power blurs
the public-private divide through the interplay of public and private interests, an environment
conducive to corruption. Corruption becomes an accumulation strategy that the elites adopt to
entrench their private interests in the public sphere.
The Philippine government system is a considerably important factor in the configuration of

corruption in the country. The Philippines has a strong presidential system that affords the
president wide and vast powers, including and most importantly the power of the purse and
the power to appoint. This makes the presidency a most sought after position of power among
elite groups. Institutionally, the President (or the executive branch) is balanced by the
legislature and the judiciary. In reality, however, this system of checks and balance is not
functional.
The legislature is unable to balance competing interests of society because of its current
configuration. It is captured by local elites. Further, the legislature’s behavior towards the
President is weakened by weak party discipline and budgetary needs. The President, on the
other hand, is tied to local interests because of his/her dependence on local elites to muster
electoral support. This is attributed to weak political parties.
Other constitutionally independent bodies, including the judiciary, have also been weakened
by “unchecked/ unbalanced” appointments, apparent in President Gloria Macapagal-Arroyo’s
nine-year administration. Arroyo maximized her use of the power to appoint to dispel
opposition, legitimize government policies, strengthen power hold and protect her political
and economic interests.
The dysfunctional system of checks and balance has allowed some individuals and
institutions to freely pursue rent-seeking activities as “independent monopolists.” This has

increasingly happened as globalization and democratization (including decentralization and
devolution) efforts began. New sources of and opportunities for corruption appeared and new
players emerged.
Corruption has far-reaching impact on the country’s development (political, socio-economic,

and societal). To address this, government, civil society groups and the donor community
have pursued ways to minimize the effects of corruption.
Government’s anti-corruption efforts in the past decade have mostly focused on improving its
prosecutorial function. The donor community has also supported government programs with
capacity-building efforts and the introduction of information technology aimed at improving
government systems and processes. Civil society efforts, also donor-supported, on the other
hand, are focused at opening or expanding spaces for public participation. These efforts range
from direct participation such as monitoring (ex: procurement, budget, project
implementation) to indirect participation such as campaigns for greater transparency in
government systems and process (ex: appointments).
President Benigno Aquino III and his government could draw lessons from the political
economy and the ‘corruption’ footprints left by the Arroyo government. An analysis of the
political economy has shown the critical role of the Office of the President to rein in power
and power abuses. The interplay of political and economic forces in Philippine society and its
impact on government institutions (e.g. legislature) may be tempered by the tactical use of the
President’s budgetary powers to negotiate for difficult reforms that require legislative support.
The President should also use his appointment powers more carefully to strengthen
constitutionally independent institutions, specifically the Supreme Court, Office of the
Ombudsman, Commission on Audit, and the Commission on Elections. Further, Aquino
could initiate institutional safeguards to make the appointments process more transparent and
accountable. These institutional safeguards could survive even beyond the Aquino
government, as it sets a precedent difficult to reverse.
Anti-corruption efforts necessary to reduce corruption significantly:
1. Strengthening the prosecution of corrupt individuals and institutions. Improving the

conviction rate of the Office of the Ombudsman would send the message to public
officials that corruption is a high risk, low reward activity. Lifestyle check
investigations should continue as a strong deterrent against corruption; this would
entail the appointment of a credible Ombudsman, and
2. Strengthening partnerships and engagements between government and civil society

groups. This includes, of course, expanding spaces for public participation and
increasing transparency of government systems and processes.
The passage of the Freedom of Information Law is critical in so many levels. Not only would
an FOI law give life to the constitutional right of the people to access public information; it
would also help strengthen democratic and political accountability of government.

FORMS OF CORRUPTION
Corruption comes in different forms and functions. As Robert Klitgaard puts it, corruption
“embraces a wide array of illicit behaviors, including bribery, extortion, fraud, nepotism,
graft, speed money, pilferage, theft, embezzlement, falsification of records, kickbacks,
influence-peddling, and campaign contributions.”1
In the Philippines, corrupt practices range from as simple as “lagay” (bribery) or speed
money for faster release of a government license to a convoluted system of rent-seeking
activities in politics and such other practices that abuse public office and functions. The
culture of patronage in the country has been embedded in its governance systems and
institutions with public office abuses committed from low ranking government officers to the
highest levels of public authority. This has thus resulted in a “weak state engaged in rent-
seeking activities that cause corruption and mismanagement of the Philippine political
economy”. (Abad, 2010: 3-4)
The Legal Environment
The Philippines suffers from a long history of corruption entrenched in its governance
systems and institutions. Despite efforts to counter corruption through various legislation, the
lack of enforcement and application of these laws remain a gargantuan task and enormous
challenge for government. According to Abad, “While there is no dearth of laws and
institutions, they have been reduced to mere formalities. Clientelism and bureaucratic capture
continue to characterize governance institutions in the country.” (Ibid: 13) Instead of public
interest in mind, governance institutions “are not driven by public good but are captured by
their own political and economic interests.”(Ibid)
The 1987 Philippine Constitution provides the framework for accountability in public office
with Article XI defining public office as a public trust and that “public officials and
employees must at all times be accountable to the people, serve them with utmost
responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead
modest lives.” The same Article provides that the President, Vice President, members of the
Supreme Court, Members of the Constitutional Commission, and the Ombudsman may be
removed from office for graft and corruption or betrayal of public trust.
Various Philippine laws define acts considered as corrupt practices ranging from receiving of
gifts to acquisition of ill-gotten wealth. The corresponding penalties for committing these
corrupt acts and practices range from aresto mayor (imprisonment of one month and one day
to six months), to perpetual disqualification from public office, to forfeiture of properties, to
reclusion perpetua (lifetime imprisonment). Some of the anti-corruption laws in the country
include the Ombudsman Act of 1989, Anti-Graft and Corrupt Practices Act, Code of Conduct
and Ethical Standards for Public Officials, Forfeiture Law, Plunder Law, and the Anti-Red-
Tape Act. The Philippine anti-corruption laws are summarized in the following table:
Table 1. Summary of Philippine Anti-Corruption Laws2

Philippine Law Summary Penalty/Sanction
Republic Act 6770 This Law provided the powers and structure of the Office of
(The Ombudsman Act the Ombudsman. The Law states that as “protectors of the
of 1989) people”, the Office shall “act promptly on complaints filed
1
See Robert Klitgaard, “Strategies Against Corruption”,
http://unpan1.un.org/intradoc/groups/public/documents/CLAD/CLAD0035403.pdf
2
This table is based on the Compilation of Anti-Corruption Laws in the Philippines as primary reference. Other
references include the Chan Robles Virtual Library and the LawPhil Project of the Arellano Law Foundation

in any form or manner against officers or employees of the
Government, or of any subdivision, agency or
instrumentality thereof, including government-owned or
controlled corporations, and enforce their administrative,
civil and criminal liability in every case where the evidence
warrants in order to promote efficient service by the
Government to the people”
Republic Act 3019 This law enumerates all corrupt practices of any public Imprisonment of not less than
(Anti-Graft and Corrupt officer. Some of which includes influencing another public six years and one month nor
Practices Act) officer to perform an act constituting violation of rules/laws; more than 15 years
direct or indirect request or receiving of any gift/benefit in
connection with any government contract which the public
Perpetual disqualification from
officer in his official capacity has to intervene; causing any
undue advantage to any party or giving any party public office
unwarranted benefits in the discharge of his official
capacity, evident bad faith, or gross inexcusable Confiscation or forfeiture in favor
negligence; entering on behalf of the government, into any of the government of any
transaction grossly disadvantageous to the government; prohibited interest and
divulging confidential information, etc. unexplained wealth manifestly
out of proportion to the public
official’s salary and other lawful
The same Law also provides prohibition on private
individuals and certain relatives to capitalize on their income
family or close personal relation to any public official.
Furthermore, spouse or any relative either by
consanguinity or affinity within the third civil degree of the
President, Vice President, Senate President, Speaker of
the House, is prohibited to intervene, directly or indirectly,
in any business, transaction, contract or application with
the Government.
Republic Act 1379 The Law provides that any amount of property acquired by a Unlawfully acquired properties
(Forfeiture Law) public officer during his incumbency which is manifestly out shall be declared property of the
of proportion to his salary and other lawful income shall be State
presumed prima facie to have been unlawfully acquired.
Title Seven (7), Crimes The Code provides the crimes and corresponding penalties Arresto Mayor3, Prison
Committed by Public for crimes committed by public officers that include Correccional4, Prison Mayor5,
Officers, Revised Penal Dereliction of Duty (i.e., Knowingly rendering unjust Reclusion Perpertua6 (depending
Code judgment, judgment rendered through negligence, on the seriousness of the
malicious delay in the administration of justice, betrayal of offense)
trust by an attorney, solicitor), Bribery, Fraud against the
Public Treasury, Malversation of Public Funds or Property.
Republic Act 6713 This Law promotes a high standard of ethics in government Fine not exceeding the
(Code of Conduct and office. It requires all government personnel to make an equivalent of six (6) months
Ethical Standards for accurate statement of assets and liabilities, disclose salary or suspension not
Public Officials and network and financial connections. It also requires new exceeding one (1) year, or
Employees) public officials to divest ownership in any private enterprise removal depending on the
within 30 days from assumption of office to avoid conflict of gravity of the offense
interest.
Republic Act 7080 The Act penalizes any public officer who by himself or in Reclusion Perpetua
(Plunder Act) connivance with members of his family, relatives by affinity
or consanguinity, business associates, accumulates or
Lost of all retirement and
acquires ill-gotten wealth, through a combination of series
gratuity benefits
of criminal acts with an aggregate amount to total value of
at least fifty million pesos (P50,000,000).
Presidential Decree 46 The Decree declares it unlawful for government personnel Penalty of imprisonment for not
to receive gifts and for private persons to give gifts on any less than one (1) year nor more
occasion including Christmas, regardless of whether the gift than five (5) years and perpetual
is for past or future favors. disqualification from public
office
Presidential Decree The Decree grants immunity from prosecution to givers of

749 bribes and other gifts and to their accomplices in bribery
charges if they testify against the public officials or private
3
Imprisonment of one month and one day to six months
4
Imprisonment of six months and one day to six years
5
Imprisonment of six years and one day to 12 years
6
Lifetime imprisonment, not exceeding 40 years

persons guilty of those offenses.
Republic Act 9485 The Law aims to promote integrity, accountability, proper Penalties under this Act range
Anti-Red Tape Act7 management of public affairs and public property as well as from suspension to dismissal
to establish effective practices aimed at the prevention of and perpetual disqualification
graft and corruption in government. It is the policy of the from public service
State to maintain honesty and responsibility among its
public officials and employees, and shall take appropriate
measures to promote transparency in each agency with
regard to the manner of transacting with the public, which
shall encompass a program for the adoption of simplified
procedures that will reduce red tape and expedite
transactions in government.
Republic Act 9160 The Act criminalizes money laundering; creates a financial The penalty of imprisonment
(Anti-Money intelligence unit (FIU); imposes requirements on customer ranging from six (6) months to
Laundering)8 identification, record-keeping and reporting of covered and one hundred thousand to three
suspicious transactions; relaxes strict bank deposit secrecy million pesos depending on the
laws; provides for freezing/seizure/forfeiture recovery of seriousness of the offense.
dirty money/property and; provides for international
cooperation
The Philippines’ Anti-Corruption Agencies
The Office of the Ombudsman
The Office of the Ombudsman (OMB) serves as the lead anti-graft government agency tasked
to: 1) investigate anomalies and inefficiency in government, 2) prosecute graft and corruption
cases, 3) conduct administrative adjudication of cases involving government excesses, 4)
provide public assistance, and 5) implement graft-prevention programs. (Ombudsman, 2008)
Certain Constitutional provisions were made to insulate the Office of the Ombudsman from
political interference and ensure the Ombudsman’s independence. The 1987 Constitution
provides that the appointment of the Ombudsman needs no congressional confirmation. The
Constitution further provides that the Ombudsman has a fixed term of seven years and can
only be removed from office through impeachment. The Office likewise enjoys fiscal
autonomy. (Ibid.)
The Republic Act 6770 or the “Ombudsman Act of 1989” which spells out the powers and
structure of the Office of the Ombudsman states that as protectors of the people the
Ombudsman shall “act promptly on complaints filed in any form or manner against officers or
employees of the Government, or of any subdivision, agency or instrumentality thereof,
including government-owned or controlled corporations, and enforce their administrative,
civil and criminal liability in every case where the evidence warrants in order to promote
efficient service by the Government to the people”. (Section 13)
While directed to “give priority to complaints filed against high ranking government
officials,” (Section 15 of RA 6770), the current Ombudsman has been constantly criticized
for her inefficiency and inability to prosecute high profile cases. The OMB likewise suffers
from low public confidence due to the current Ombudsman’s perceived close ties with the
Arroyo family, which has been implicated in major corruption cases in the last several years.
Because of these apparent loyalties to the appointing power, Ombudsman Merceditas
Gutierrez has been under fire almost from the beginning of her term. She has faced constant
calls for resignation and continues to be the subject of impeachment complaints. In a recent
decision, the Supreme Court has given Congress the go signal to begin impeachment
proceedings against the Ombudsman.
7
See http://www.chanrobles.com/republicacts/republicactno9485.html
8
See http://www.lawphil.net/statutes/repacts/ra2001/ra_9160_2001.html

Other Anti-Graft Government Agencies
Apart from the Office of the Ombudsman, several bodies were created under the Philippine
Constitution to effectively ensure accountability in government. These agencies include the
Civil Service Commission (CSC), Commission on Audit (COA), and the Sandiganbayan.
These institutions all have fiscal autonomy to ensure independence and their actions can only
be appealed to the Supreme Court.
Table 2. The Philippine Anti-Corruption Agencies

ANTI-CORRUPTION AGENCIES
Constitutionally Independent Bodies Other Agencies
Office of the Ombudsman Department of Justice
Civil Service Commission National Bureau of Investigation
Commission on Audit Philippine National Police
Sandiganbayan Presidential Commission on Good Government
Department of Finance-Revenue Integrity Protection
Service
Anti-Money Laundering Council
The Civil Service Commission is the central human resources agency of the government
mandated to establish a career service and promote moral, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the civil service as well as strengthen public
accountability in government services. The CSC has jurisdiction over administrative cases
including graft and corruption brought before it on appeal.9
The Commission on Audit, on the other hand, is the Philippines' supreme audit institution.
The Philippine Constitution grants it powers to audit all accounts pertaining to all government
revenues and expenditures of government resources and to prescribe accounting and auditing
rules, gives it exclusive authority to define the scope and techniques for its audits, and
prohibits the legislation of any law which would limit its audit coverage.10
The Sandiganbayan, the country’s anti-graft court, has jurisdiction over civil and criminal
cases involving graft and corrupt practices and such other offenses committed by public
officers and employees.11
Other government offices involved in ensuring public accountability are the Department of
Justice, National Bureau of Investigation and Philippine National Police, Presidential
Commission on Good Government, Anti-Money Laundering Council, etc.
The Revenue Integrity Protection Service (RIPS) being the anti-corruption program of the
Department of Finance created by Executive Order 259 (December 17, 2003) investigates
allegations of corruption in the Department of Finance and its attached agencies such as the
Bureau of Internal Revenue and the Bureau of Customs, the Bureau of Local Government
Finance, Bureau of Treasury, Central Board of Assessment Appeals, the Insurance
Commission, the National Tax Research Center, the Fiscal Incentives Review Board, and the
Privatization and Management Office. RIPS then files the necessary charges against erring
officials and employees with the proper government agencies (e.g., Office of the
Ombudsman).12
9
www.csc.gov.ph
10
www.coa.gov.ph
11
www.sb.judiciary.gov.ph/about.html
12
www.rips.gov.ph

SCALE OF CORRUPTION IN THE PHILIPPINES
Despite a fairly advanced legal framework and the existence of independent commissions and
accountability bodies, the Philippines suffers from a very high perception of corruption as
reflected in international and domestic surveys.
The Transparency International’s Corruption Perception Index (CPI), which measures the
perception of the degree of corruption as seen by business people and analysts, constantly
shows the Philippines as one of the worst in the Asia-Pacific region. From 2001-2010, the
country’s performance shows a downward trend with the highest score of 2.9 in 2001, to its
lowest in 2008 with a rating of 2.3.13
Figure 1. Philippine Corruption Perception Index Rating, 2001-2010

4
Philippines
3
2
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
The CPI14 in 2008 was 2.3, down from 2.5 in the previous year. Among more than 180
countries surveyed, the Philippines ranked 141st in 2008, lagging behind most of its
neighboring countries such as Singapore which ranked 4th place with an index of 9.2,
Malaysia in 47th place with 5.1; and Thailand in the 80th spot with 3.5. The neighboring
countries closest to the Philippines were Vietnam in the 121st spot with a score of 2.7 and
Indonesia that landed on the 126th place with a score of 2.6.15
The 2009 Philippine CPI rating improved slightly after having scored 2.4 and ranked 139th
among 180 countries. Despite the slight improvement however, the country continues to
perform behind most of its Asian neighbors. Indonesia for example, which ranked lower than
the Philippines from 2001 to 2003, overtook the Philippines in 2008 and has been rating
better than the country since then with a score of 2.8 in 2010. Thailand and Malaysia have
been performing better than the Philippines with an average rating of 3.4 and 4.9 respectively
for the past ten years as compared to the Philippine average of 2.5.16
13
www.transparency.org
14
Rates countries from 0 to 10 where a grade of 10 means the country is perceived as very clean while a rating of
0 means the country is perceived as very corrupt.
15
See http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_table
16
www.transparency.org. 2.5 is the Philippine average based on 2001-2010 computation.

Figure 2. Philippine CPI Ratings and Other Asian Countries, 2001-2010
10
Singapore
9
8
7
6
South Korea
Malaysia
5
Thailand
4 Thailand
3 Philippines Vietnam
2 Indonesia
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
The Philippine corruption image reflected in the CPI findings seems to be validated by other
survey findings such as that of the Political and Economic Risk Consultancy (PERC). In a
PERC survey released in March 2010, the Philippines is 4th most corrupt country in Southeast
Asia with a score of 8.06 next to Vietnam with 8.07, Cambodia with 9.10, and Indonesia with
9.27. This annual survey conducted by PERC uses a scoring system ranging from 1-10 with
10 being the worst in terms of corruption.17
The Global Corruption Barometer 2010 on the other hand reports that 48 percent of
respondents believe that the Philippine government’s action against corruption is ineffective.
Furthermore, only six percent of those surveyed think that corruption in the country declined,
25 percent think it is the same, while 69 percent think corruption has increased. The 2010
Global Corruption Barometer reflects the views of more than 91,500 people in 86 countries
and territories surveyed.18
Local Findings Confirm CPI and PERC Results
International surveys are commonly criticized for reflecting mere perceptions rather than
actual levels of corruption. Additionally, these surveys reflect the perceptions of foreign
respondents. In the Philippines however, the findings of international perception surveys are
well corroborated by local surveys that try to capture levels of corruption as viewed and as
experienced by people in their dealings with the government. An example of which is the
Social Weather Stations’ Survey of Enterprises where Filipino business managers are survey
respondents.
In addition to considering perceptions of corruption, SWS Enterprise surveys attempt to

capture business managers’ actual experience with corruption such as bribery. In 2007 for
example, forty-four percent of those surveyed have personal knowledge of a corrupt
transaction with government by a company in their own line of business (in the last 3 months
from the conduct of the survey). (Social Weather Stations, 2007: 7) When asked “how much
corruption do they think there is in the public sector”, 65.7 percent 19of the business managers
17
See http://www.mb.com.ph/articles/247016/corruption-worsens-indonesia
18
19
This is based on the average ratings from 2000-2007.

surveyed think that there is “A lot”, from 2000 to 2007. The highest perception of corruption
was recorded at 77 percent in 2001 and lowest in 2002/03 with 60 percent during the 8-year
period (2000-2007). (Ibid)
In 2008, the perception of corruption in the public sector also did not improve with three out
of five seeing “a lot” of corruption in the public sector, according to SWS. (Social Weather
Stations, 2008)
Table 3. How Much Corruption is there in the Public Sector?

2000 2001 2002/03 2003/04 2005 2006 2007
A lot 63% 77% 60% 66% 66% 67% 61%
Some 25 19 29 26 28 28 33
A little 10 4 10 6 5 5 5
None 2 0 1 2 1 1 .3
(Source: The 2006-2007 SWS Surveys of Enterprises on Corruption)
The Survey also shows that bribery is still believed to be highly pervasive in government
transactions with a great percentage of Filipino managers thinking that “almost all/most
companies need to give bribes in order to win government contracts” (from 2000-2007). The
following table shows that most number of managers who think that almost all/most
companies in their line of business need to give bribes to win government contracts was at
record high of 57 percent in 2002/03 and 2003/04 during the eight-year period and lowest in
2006 with 47 percent.
Table 4. Do companies in your line of business need to give bribes in order to win
government contracts?
2000 2001 2002/03 2003/04 2005 2006 2007
Almost All Companies 23% 15% 22% 23% 21% 17% 18%
Most Companies 32 41 35 34 33 30 30
“Almost All/Most” Sub-total 55 56 57 57 54 47 48
Few Companies 24 25 23 24 25 27 27
Hardly Any Companies 8 8 7 7 7 8 9
None of the Companies 11 10 12 11 13 17 14

(Source: The 2006-2007 SWS Surveys of Enterprises on Corruption)
As to how much of a public sector contract is allotted for bribery, the 2007 Enterprise Survey
is said to have a median response of 20 percent. Bribery-allotment is also said to vary with 37
percent of managers putting it at 10 percent or less, 25 percent putting it between 11-20
percent, and 32 percent of those surveyed putting it at 21 percent or more of a government
contract. (Ibid) Furthermore, the government transactions where bribes are prevalent includes
local and national government permits and licenses, payment of income taxes, compliance
with import regulation, and supplying government with goods and services, among others.
(Ibid: 10)
The Survey of Enterprises also rates the sincerity of government agencies in fighting
corruption. In 2008, agencies with good net sincerity included the Social Security System
(SSS), Department of Trade and Industry (DTI), Supreme Court, and city/municipality
governments while Department of Health (DOH), Commission on Audit (COA), Department
of Finance (DOF) had moderate ratings. Agencies with poor net sincerity included
Government Service Insurance System (GSIS), Department of Agriculture (DA), Department
of Justice (DOJ), Philippine National Police (PNP), Department of the Interior and Local
Government (DILG), Presidential Anti-Graft Commission (PAGC)20, Department of the
20
PAGC was dissolved by President Benigno Aquino III in November 2010

Environment and Natural Resources (DENR), Commission on Elections (Comelec),
Department of Transportation and Communication (DOTC), and Office of the President (OP)
and agencies with bad/very bad ratings were Land Transportation Office (LTO), Presidential
Commission on Good Governance (PCGG), House of Representatives (HOR), Bureau of
Internal Revenue (BIR), Department of Public Works and Highways (DPWH), and Bureau
of Customs (BOC).21
Agencies that were classified as mediocre in terms of sincerity were Department of Education
(DepEd), Armed Forces of the Philippines (AFP), Sandiganbayan, Office of the Ombudsman,
Trial Courts, Senate, and Department of Budget and Management (DBM).22
Cost of Corruption
Over the years, a number of studies have tried to measure the amount of public funds lost due
to corruption. Former Ombudsman Aniano Desierto in 1999 declared that about P1.4 trillion
has been lost due to graft and corruption or about P100 million everyday since the creation of
Tanodbayan in 1988. (Batalla, 2000: 7) The World Bank on the other hand estimated that
about 20 percent of the national budget is lost to corruption. Following the Bank’s estimate, it
could be concluded that about 3.8 percent of the country’s GNP yearly is lost due to
corruption from 1995-2000. (Ibid: 8)
Table 5. Estimated Financial Losses Due to Corruption, 1995-2000

Particulars 1995 1996 1997 1998 1999 2000
Total Budget, Php Billion 372.1 445.7 476.2 506.1 593.7 651.0
Nominal Gross National Product, PhP 1,958.9 2,261.3 2,522.9 2,794.1 3,100.8 3,478.4
billion
Total Budget as % of GNP 19.0% 19.7% 18.9% 18.1% 19.1% 18.7%
Losses Due to Corruption, % based on WB 20% 20% 20% 20% 20% 20%
Estimate
Estimated Losses Due to Corruption, PhP 74.4 89.1 95.2 101.2 118.7 130.2
Billion
Six Year Total Losses, Php billion 609.0
Estimated Losses as % of GNP 3.8% 3.9% 3.8% 3.6% 3.8% 3.7%
Average Annual Loss as % of GNP 3.8%
(Source: De-institutionalizing Corruption in the Philippines: Identifying Strategic Requirements for Reinventing
Institutions by Eric Batalla, 2000, p. 8)
The country’s losses due to corruption however “cannot be simply quantified in financial
terms” because it also affects other economic factors and indicators such as prices and
productivity, incomes and employment, etc. (Ibid) Corruption likewise adversely affects the
country’s development because of the diversion and misuse of government funds meant to
develop national systems crucial to economic development such as transportation systems,
infrastructure, etc. (Ibid)
Another important point Batalla raised is how corruption damages the national psyche. (Ibid)
The extent to which corruption is prevalent in the country generates apathy among the
citizens backed up by the fact that public officials seldom get sanctioned for corrupt practices.
This also results in “weakened trust relationships between government and citizens that
constitute the basis of all social interaction.” (Abad, 2010: 13)
21
See http://www.tag.org.ph/pdf/2008SWS%20_entSurvey.pdf.
22
See http://www.tag.org.ph/pdf/2008SWS%20_entSurvey.pdf.

THE POLITICAL ECONOMY OF CORRUPTION IN THE
PHILIPPINES
Corruption in the Philippines, especially under the government of Gloria Macapagal-Arroyo,

is fittingly and easily characterized by “state capture.” Corruption is systemic, political and
grand in nature where at center-stage are powerful elites who mold and direct policies that
favor specific private interests.
The competing elites in Philippine society draw their power from interweaving political and
economic positions. Those who have the wealth have better access to political power and
those who have political power improve their access to wealth. These interweaving interests
blur the lines between the private and public spheres, an environment conducive to
corruption. Philippine elites also subscribe to a culture of neopatrimonialism that is
“decentralized.” The powerful families and clans are spread across the regions and have well-
established constituencies in their respective bailiwicks. In a sense, the state has become
“merely a façade that masks the realities of deeply personalized political relations” (Andvig,
Fjeldstad, et al. 2000: 55) and “the ultimate organizer and defender of the long-term interests
of the ruling class.” (Ibid: 29) Corruption activities are just part of the accumulation strategy
of the ruling elites.
Political contests in the Philippines have been mostly set around the Presidency. The vast
powers of the president and the resources23 (see Table 6) attached to the executive branch
make the presidency a most sought after position for power accumulation among various elite
groups. Since the restoration of democracy in 1986, each presidential election has had no less
than five candidates24. These electoral contests are even made more intense with the multiple-
party system, where parties and coalitions are organized and reorganized along lines of vested
private interests and not on party ideologies and/or platform.
Table 6. 2005 Budgetary Allocations of Different Agencies of the Philippine Government,

Total Re-enacted Budget Php 907.56 Billion
Sub-Institution Amount (in PHP) % of Total Government
Budget
Executive All departments, bureaus 416.8 billion 45.93
and units
Office of the President 3.4 billion 0.38
PAGC 18.5 million <0.01
PNP 35.2 billion 3.88
Legislature 4.51 billion 0.50
COMELEC 1.3 billion 0.14
COA 3.65 billion 0.40
Judiciary 7.52 billion 0.83
Ombudsman 647 million 0.07
Regional and Local 158 billion 17.44
Government
Internal Revenue Allotment 152 billion 16.71
ARMM 6.69 billion 0.74
CSC 472 million 0.05
CHR 197 million 0.02
Debt Service Fund – 302 billion 33.24
Interest Payments
Net Lending 7.6 billion 0.84
TOTAL 902.696 billion 99.46
(Source: Quimson, 2006:19)
23
The National Integrity Study (Quimson, 2006) shows that the President has at his/her disposal some 46% of the
national budget. Data used is from the 2005 General Appropriations Act.
24
In the 1992 elections, there were seven candidates vying for Presidency; in 1998, ten; 2004, five; and in 2010,
nine candidates.

The Philippines has a strong presidential system. The president has monopoly of executive
power and “orchestrates the execution of policy and allocation of spoils.” (Llanto 2007: 6)
The president controls budget making25 and implementation. The president also has sole
jurisdiction over ordinary policy implementation and regulations. The president’s control and
access to state resources attract politicians from different parties to align themselves with
him/her post-elections “to have a share in patronage resources of the government.” (Ibid.;
Mendoza, 2001; DAP). Party switching is often observed in Congress just right after
elections, a showing of weak party discipline. This feature of Philippine politics facilitates the
‘compromise exchanges’ between the executive and legislative branches of government.
(Kawanaka, 2010)
The legislature is generally captured by elite interests (Bernardo & Tang, 2008). Ideally, the
legislature provides check and balance on the president’s vast powers through general
legislation. At the onset, however, because of interests to access state resources, Congress
lines are tilted in favor of the President. Either party-switching activities take place or
opposition members agree to negotiate their positions on specific interests of the president.
These negotiations happen through the exercise of “reverse power balance in policymaking
processes.26” (Kawanaka, 2010: 9) “Through offering compromises,…each player
[President/Congress] seeks concessions from the opponent in other [policy] areas where the
opponent is dominant.” (Ibid: 1) Pork barrel fund releases, for instance, have been used by the
president to “persuade” Congress to approve the president’s priority bills.
Weak party discipline also makes the president (pre-election) dependent on local elites to
mobilize electoral support. As a consequence, the president is tied to local elite interests. This
symbiotic and gridlock relationship between local and national politicians tie down the
executive-legislative branches to personal vested interests that tend to result in entrenching
the incumbents’ powers. The legislature becomes ineffective in balancing competing interests
in society. (DAP)
De Dios and Esfahani, on the other hand, see the co-equal branches of government as
‘independent monopolists.’ With a dysfunctional system of checks and balance, the
governance system has become vulnerable to state capture. (DAP) At play are elite interests
that find expression in official state functions.
Like most colonized countries, the form and system of government of the Philippines is a
legacy of its colonizers (the Americans), transplanted to Philippine society and deplete of
socio-cultural context. Social norms of gift-giving and networks of solidarity, including
extended families, common in Philippine society are “corruption-inclined” under the
Weberian model of public administration. Even the “notion of public office is essentially a
western concept,” (Andvig, Fjeldstad, et al. 2000: 65) transferred to the Philippines albeit the
personalized political relations. Of course, the Philippine political modernization process –
through a shared social experience of corruption by the people and a shared struggle for
reform – has brought society to a closer understanding of the public-private divide and of the
social malady called corruption.
The phenomena of globalization and democratization have also contributed to the current
political economy of corruption. This was particularly observed in the post-Marcos era.
Harris-White and White (1996) noted that corruption in the Philippines became more
decentralized and uncoordinated. (Andvig, Fjeldstad, et al. 2000)
25
While the budget requires approval from Congress, the initiation of the budget process (budget proposal) lies
with the Office of the President.
26
This includes the legislative inquiries conducted by Congress in aid of legislation.

The relationship between the level of corruption and the level of democracy is not linear but
bell-shaped. “When authoritarian control is challenged and destroyed through economic
liberalizations and political democratisations, but not yet replaced by democratic checks and
balances, and by legitimate and accountable institutions, the level of corruption will increase
and reach a peak before it is reduced with increasing levels of democratic governance.” (Ibid:
57)
During the dictatorship of President Ferdinand Marcos, Marcos centralized rent opportunities;
Marcos controlled corruption activities. When democratization efforts set in, along with
decentralization and devolution, new opportunities for corruption and rent-seeking also arose;
and new players (local chiefs executive) emerged. Globalization and democratization actually
increased the sources and scales of corruption, at least in the short and medium term. Andvig,
Fjeldstad, et al. (2000) note that countries with at least 40 years of consecutive democracy, on
the other hand, are able to enjoy more “significant, although small corruption dividend.”
(Ibid: 59)
The Arroyo Story.
Then-vice president Arroyo’s rise to power in January 2001 was triggered by the politicized
process of ‘impeachment,’ which culminated in a people power uprising (“People Power 2”)
leading to the ouster of Estrada. Arroyo was later on elected President in a hotly contested
and controversial election in 2004. Issues of the legitimacy of her government continued
when a year later allegations of cheating arose in the so-called “Hello Garci” incident. Arroyo
and a top Commissioner that she appointed in the election commission were allegedly caught
on tape talking inappropriately about Arroyo’s votes27. This is further compounded by
allegations that the President used government programs and funds (health cards and fertilizer
funds) for campaign purposes. This and her other decisions (appointments to independent
institutions, support for charter change) were highly suspect as part of a grand scheme to keep
Arroyo in power much longer and/or to protect her interests even beyond her term as
president.
Arroyo began her presidency in 2001 with enough political capital – public support28 and
backing from politicians and the military – but also with too much political debt. It is not
surprising that in less than a month of holding office, President Arroyo already made payback
appointments involving personalities known to have supported People Power 2 (Table 7).
Table 7. 2001 Arroyo Appointees

Appointees in 2001 Government Post Other Details
Congressmen who supported the impeachment trial
Pantaleon Alvarez DOTC Secretary Davao del Sur Cong
Simeon Datumanong DPWH Secretary
Mike Defensor General Manager of NHA Quezon City Congressman
Feliciano Belmonte, Jr. House speaker (with the endorsement Head of prosecution panel during
of the President) impeachment
Leonardo Montemayor Department of Agriculture
Nani Braganza Department of Agrarian Reform Pangasinan Congressman
Roilo Golez Replaced Abadia as NSA Paranaque Congressman
Military supporters
Lisandro Abadia National Security Adviser and Dir. AFP Chief of Staff during Aquino and
General of National Security Council Ramos administration
Renato De Villa Executive Secretary Former Defense Secretary (Ramos
administration)
Ret. Gen. Eliseo Rio, Jr. NTC Commissioner
Eduardo Ermita Defense Secretary Batangas Congressman
KOMPIL supporters
Dinky Soliman DSWD Secretary Supported People Power 2
27
The inappropriateness is attributed to the fact that Arroyo was both a contestant in the elections and incumbent
President who had direct access to an official charged with election management and administration.
28
Arroyo began with a net satisfaction rating of +24 (www.sws.org.ph).

Vicky Garchitorena Presidential Management Staff Supported People Power 2
Ging Deles NAPC Supported People Power 2
COPA supporters
Lingoy Alcuaz PCSO Director Supported People Power 2
Pastor Boy Saycon PIDC Supported People Power 2
Marine Gen. Edgardo Manila Economic Coordinating Office Supported People Power 2
Espinosa
“Ramos Boys”
Arturo Valdez Usec. Of DOTC
Ret. Maj. Gen. Leo Alvarez Presidential assistant for military
affairs
Rene Villa Presidential assistant for Western
Mindanao
Jesus Dureza Presidential assistant for Eastern
Mindanao; OIC of Mindanao Economic
Development Council
Avelino Cruz Chief Presidential Legal Counsel The Firm29; Ramos’ lawyer in 1992
elections
Antonio Carpio Supreme Court Justice The Firm
Simeon Marcelo Solicitor General The Firm; Principal private prosecutor in
the impeachment trial; Ramos’ lawyer in
1992 elections
Other supporters
Ephraim Genuino PAGCOR Behind the production of records used
against Estrada
Mar Roxas DTI Secretary Quit with GMA in Estrada’s cabinet amid
jueteng scandal
Chavit Singson DILG ‘unofficial’ consultant on Whistleblower on Estrada’s involvement in
jueteng30 jueteng
Howard Dee Presidential Adviser for Indigenous Leader of a business group who supported
People EDSA 2
Renato Corona Presidential spokesperson; Chief Arroyo’s chief of staff when VP
Justice of the Supreme Court
Supreme Court personalities*
Hilario Davide United Nations envoy Swore her into office
Artemio Panganiban Chief Justice succeeding Davide Talked Davide into swearing Arroyo as
President of the Philippines
(Source: TAN31) *These appointments were made in 2005 when Davide retired as Chief Justice of the
Supreme Court.
The political environment was polarized and became further intensified because of the
elections in May 2001. Arroyo immediately replaced over 4,000 Estrada appointees amidst
preparations for the May 2001 contest32. She was juggling both reorganizing government and
organizing her political team for the elections. At the height of public clamor for reform and
change, Arroyo was held back by political debts.
The May 2001 election results showed a divided nation. In the senatorial race alone, votes
were closely split between administration and opposition candidates – 50.8% (administration)
vs. 45.8% (opposition)33. Nine hundred of 1500 municipal mayors withdrew their support for
the Arroyo government34. Even the military was split between Philippine Military Academy
batch 1969 and batch 197035. With only three years away from national and presidential
elections, Arroyo had to consolidate her hold of government through stern policies and key
appointments.
29
Carpio, Villaraza, Cruz, Marcelo & Angangco law firm was dubbed “The Firm” because of its perceived
influence with those in power. (Pazzibugan, 2010)
30
Later on, this ‘consultancy’ post of Singson was denied by DILG Secretary Lina, when news reports came out
that Singson was ‘negotiating’ with jueteng lords in behalf of the department.
31
Various news stories from www.newsflash.org
32
Echeminada, P. (2001) ‘4,000 Estrada appointees to be replaced’ Retrieved January 29, 2011 from
http://www.newsflash.org/2001/02/hlframe.htm
33
Teehankee, J. Undated: 175
34
Vanzi, S. (2001) ‘900 mayors shift support to Estrada’ Retrieved January 29, 2011 from
35
Vanzi, S. (2001) ‘Military split confirmed by AFP Brass’ Retrieved January from
http://www.newsflash.org/2001/01/hlframe.htm; Lopez, J.P. (2001) ‘Infighting among brass in Armed Forces
ominous’ Retrieved January from http://www.newsflash.org/2001/01/hlframe.htm

Stern policies. The Arroyo government met destabilization plots with a firm hand. On May 1,
2001 protesters, mostly supporters of former President Estrada, were forcefully dispersed and
the alleged protest organizers were arrested without warrants. The so-called Oakwood
mutineers (July 2003) were forced to surrender after hours of standoff with government. Even
after the May 2004 elections, the government maintained an all-out war policy against
destabilization plots, such as the coup d’etat attempt in 2006 and the Manila Peninsula
rebellion in 2007. The government declared a state of rebellion in 2006 and a state of
national emergency in 2007. It also issued a calibrated preemptive response policy (CPR),
which meant that government had limited tolerance for mass demonstrations and protests.
Nostalgic of the Martial Law days, these actions received much flak from the opposition and
the general public.36
Politics of survival. The kind of corruption scandals that broke out in the Arroyo government
is characteristic of a government scrambling for control and bent on staying in power. The
first corruption scandal faced by the Arroyo government was of a typical rent-seeking
activity. The First Gentleman Mike Arroyo was accused of receiving bribe money (P50
million) to get the President to recall her veto of a telecommunications franchise37. As this got
public attention as with other related controversies (military-Abu Sayyaf collusion,
government legitimacy) Arroyo’s trust ratings dipped38. Corruption controversies that
followed reflected a government caught in its own web of traps. (Table 8)
The politics of survival set in.
Table 8. Corruption scandals that challenged the Arroyo government’s legitimacy

Corruption scandals Details
“Hello Garci” (2004) Arroyo appointed (ad interim) Virgilio Garcillano in 2004 as
Commissioner of Comelec. Garcillano, allegedly, ensured
Arroyo’s victory in the May 2004 elections
Fertilizer Fund Scam (2004) Department of Agriculture Undersecretary Jocelyn Bolante is
accused of diverting P728 million fertilizer fund to the
election campaign of Arroyo in the 2004 presidential
elections.
Brown bag bribery (2007) Malacanang allegedly distributed brown bags of monies
(P20,000 to P500,000) to local officials (mayors, governors
and Congressmen) after a meeting. The money is meant to
‘buy’ their support for GMA (vs. impeachment; for charter
change).
39
(Source: TAN )
These scandals illustrate the Arroyo government’s alleged efforts to secure power. These also
show the thin ice on which the Arroyo government’s legitimacy stood.
The Power of Appointments. In a politically tactical manner, Arroyo shrewdly used her
appointment powers to maintain a ‘hold’ on constitutionally independent institutions.
Arroyo was sworn to office by Supreme Court Chief Justice Hilario Davide, Jr. in January
2001. The court became embroiled in politics, with the Chief Justice sanctioning Arroyo’s
36
37
Vanzi, S. (2001) ‘‘First Gentleman a liar’ says former Malacanang Secretary’ Retrieved February 1, 2011 from
http://www.newsflash.org/2001/07/hlframe.htm; Vanzi, S. (2001) ‘Senate building Mike’s case’ Retrieved
February 1, 2011 from http://www.newsflash.org/2001/07/hlframe.htm; Romero, P. (2001) ‘GMA willing to face
Congressional probe’ Retrieved February 1, 2011 from http://www.newsflash.org/2001/07/hlframe.htm; Arquiza,
R. & M. Villanueva (2001) ‘Mike ready to face accusations; was in U.S. for back problems’ Retrieved February 1,
2011 from http://www.newsflash.org/2001/08/hlframe.htm
38
Arroyo began her Presidency with a net satisfaction rating of +24. This fluctuated in the following months and
reached a negative rate in March 2003 (-14). (www.sws.org.ph)
39

takeover of government and the court deciding on the Arroyo government’s legitimacy. The
Supreme Court’s ‘political’ disposition became key in installing the Arroyo government.
In her power to appoint members of the high court, Arroyo carefully picked individuals
commonly perceived to be allies. Amongst the first appointments made by Arroyo to the high
court was Antonio Carpio from “The Firm.” By perhaps a stroke of luck, Arroyo in her nine
years in power appointed all fifteen justices of the high court save one, earning the court the
name “GMA court.” Just days before the end of her term, Arroyo insisted on naming the
replacement for the retiring Chief Justice, triggering the controversy of ‘midnight
appointments’. Because of controversies surrounding the GMA appointees to the Supreme
Court, the court’s independence has been questioned as it decided cases involving Arroyo -
constitutionality of Proclamation 1017, Executive Privilege, People’s Initiative, Midnight
Appointments, Calibrated Preemptive Response, among others. (Table 9)
Table 9. Select cases with Arroyo’s interests and the Supreme Court
CASES Arroyo appointees who voted in Arroyo appointees who voted
favor of GMA position against the GMA position
Presidential Proclamation 1017 – Arroyo appointees: Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr.,
Government declared a state of Azcuna, Chico-Nazario, Garcia (7); Tinga, Corona, Velasco, Jr. (3)
national emergency and rendered
warrantless arrests. [11 concurring (complete list): Sandoval-Gutierrez, CJ Panganiban, Puno,
Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Carpio-Morales, Callejo,
Ruling: PP1017 is constitutional Sr., Azcuna, Chico-Nazario, Garcia]
insofar as it constitutes a call of the
President on the AFP to suppress [3 dissenting - Tinga, Corona, Velasco, Jr.]
lawless violence. Enforcement of laws
not related to lawless violence is Puno (on leave)
unconstitutional.
Calibrated Preemptive Response – Azcuna, CJ Panganiban, Austria-
This policy replaced the ‘maximum (0) Martinez, Corona, Carpio- Morales,
tolerance’ policy towards rallies and Callejo, Sr., Tinga, Garcia, Velasco, Jr.
mass demonstrations. (8)
[13 - Azcuna, CJ Panganiban, Puno,

Ruling: CPR and ‘no permit, no rally’ is Quisumbing, Ynares-Santiago,
unconstitutional Sandoval-Gutierrez, Austria-Martinez,
Corona, Carpio-Morales, Callejo, Sr.,
Tinga, Garcia, Velasco, Jr.]
On leave - Chico-Nazario, Carpio

Executive Order 464– This policy Carpio-Morales, CJ Panganiban, Carpio, Austria-Martinez, Corona, Callejo, Sr.,
required heads of departments to Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr.
secure the consent of the President
before appearing in Congressional (10)
hearings. Heads of departments may
also invoke ‘executive privilege’ which [14 - Carpio-Morales, CJ Panganiban, Quisumbing, Ynares-Santiago, Sandoval-
is a rule of confidentiality for Gutierrez, Carpio, Austria-Martinez, Corona, Callejo, Sr., Azcuna, Tinga, Chico-
conversations with the President. Nazario, Garcia, Velasco, Jr.]
Ruling: EO 464 partly valid (Sections 1 Puno (on leave)

and 2a). Sections 2b and 3 are void –
prior consent needs to be secured
from the President before officials
can show before Congressional
hearing;s.
People’s Initiative – This is one of the Corona, Tinga, Chico-Nazario, Velasco, Carpio, CJ Panganiban, Austria-
modes in which the Constitution can Jr., Garcia (5) Martinez, Carpio-Morales, Callejo, Sr.,
be amended. The government pushed Azcuna (6)
for this method to be allowed by the
Supreme Court even in the absence of
an enabling law
Ruling: People’s initiative is dismissed [Puno, Quisumbing, Corona, Tinga, [Carpio, CJ Panganiban, Ynares-
Chico-Nazario, Velasco, Jr., Garcia (7)] Santiago, Austria-Martinez, Carpio-
Morales, Callejo, Sr., Azcuna (7)]
Midnight Appointments – This is on Bersamin, De Castro, Brion, Peralta, Carpio- Morales
the controversy on whether Arroyo Del Castillo, Abad, Villarama, Perez,
can appoint the Chief Justice during a Mendoza (1)
period prohibited by the Constitution (9)

[Bersamin, Velasco, Jr., Nachura, De
Castro, Brion, Peralta, Del Castillo,
Ruling: Petition for certiorari and Abad, Villarama, Perez, Mendoza (9)]
mandamus is dismissed. There is no
midnight appointment. Nachura, Velasco – Case is premature
Carpio, Corona – inhibited
Puno did not vote
(Source: TAN40)
From the select cases shown above, it appears that Arroyo appointees ‘delivered' for Arroyo
in the midnight appointments issue. One case showed a split position between Arroyo
appointees. Two cases showed partial victories for the Arroyo government – PP1017 and EO
464. In the calibrated preemptive response case, the Arroyo appointees were united and struck
down the CPR and the no permit/no rally policy of government.
Arroyo also made key appointments to the Office of the Ombudsman in 2002 and 2005. In
2002, the much distrusted Aniano Desierto retired and was replaced by Solicitor General
Simeon Marcelo, also from “The Firm.” Unexpectedly, Marcelo exhibited independence and
true to the mandate of his office, he seriously pursued big fish cases, including the Garcia
plunder case41. After just three years in office, Marcelo resigned reportedly due to health
reasons. Marcelo was replaced by the former Department of Justice Secretary and Chief
Presidential Legal Counsel, Merceditas Gutierrez.
Gutierrez displayed amicable relations with key personalities in the Arroyo administration.
“Big fish” cases involving close affiliates of the Arroyos were dropped, if not weakly
pursued. (Table 10) With a ‘friendly’ Ombudsman in place, many accusations of corruption
and/or impropriety against people perceived to be close to the president simply did not
prosper. Because of her constitutionally protected term,42 Gutierrez will stay in office a few
years beyond GMA’s term as president, which strategically places her in a position to
‘protect’ her principal even when she (Arroyo) is no longer in office.
Table 10. Select ‘big fish’ cases before the Office of the Ombudsman
Case (Personality/ies) Ombudsman Action/Inaction (Updates)
Sec. Nani Perez bribery case 2006 – The Ombudsman recommended filing of extortion, graft
and falsification charges against Perez before the Sandiganbayan
for the $2-million bribe (of the $14 million bribe) of Manila Rep.
Mark Jimenez.
The Sandiganbayan dismissed the case because the information

(DOJ Secretary Hernando Perez, First submitted by the Office of the Ombudsman was found fatally
Gentleman Mike Arroyo, President defective. Robbery charge against Perez was also dismissed for
Gloria Macapagal-Arroyo) violation of Perez’s right to speedy trial.
NBN-ZTE case April 21, 2009 resolution recommending the filing of graft charges
against NEDA Sec-Gen. Romulo Neri and Comelec Chair Benjamin
Abalos. The Ombudsman cleared the First Gentleman Mike Arroyo
and President Gloria Macapagal-Arroyo. Neri was ordered
suspended six months without pay.
(NEDA Sec-General Romulo Neri,
Comelec Chairman Benjamin Abalos, Ombudsman also filed cases against whistleblower Jun Lozada –
First Gentleman Mike Arroyo, malversation and graft cases while Lozada was with the Philippine
President Gloria Macapagal-Arroyo) Forest Corporation.
Fertilizer Fund Scam Task Force Abono was created to investigate the 181 transactions
related to the fertilizer project.
(DA Undersecretary Jocelyn Bolante, In July 21, 2010, the Ombudsman ordered the suspension (six
DA Secretary Luis Lorenzo, President months) of 8 provincial government officials for their involvement
Gloria Macapagal-Arroyo) in the purchase of P5M worth of fertilizers in 2004.
General Carlos Garcia Plunder Case The Ombudsman entered into a plea bargain agreement with
General Garcia, reducing his plunder case into direct/indirect
bribery with forfeiture of properties. The plea bargain agreement is
(General Carolos Garcia, AFP generals before the Sandiganbayan, awaiting approval. It is currently the
40
http://sc.judiciary.gov.ph/jurisprudence/decisions/index.php
41
Ombudsman Simeon Marcelo initiated the investigation of General Carlos Garcia’s plunder case.
42
The Ombudsman can only be removed from office by impeachment.

including General Angelo Reyes, ) subject of Congressional inquiry (as of February 23, 2011).
Comelec-MEGAPACIFIC case January 13, 2004 – Supreme Court nullified the Comelec-
MEGAPACIFIC case for illegal and grave abuse of discretion.
September 27, 2006 – The Ombudsman in a resolution absolved

all respondents to the Comelec-MEGAPACIFIC controversy for all
administrative and criminal liabilities for lack of probable cause.
(Top Comelec officials including October 13, 2006 - Nine senators submitted a petition for review
Chairman Benjamin Abalos) to the Supreme Court to annul the Ombudsman resolution
(Source: TAN43)
Clearly, the public is short-changed in the way the Ombudsman handled the select cases
above. The Ombudsman’s soft stance towards ‘Arroyo and Friends, Inc.’ has led to the
exoneration of public officials, as in the COMELEC-Megapacific case, and pursuit of smaller
fish, as in the Nani Perez bribery, NBN-ZTE, and fertilizer fund scam cases. The plunder case
of Garcia as it now unfolds, could also lead to his exoneration or an unjust diminution of the
case.
The Commission on Elections, charged with election management and administration, has
also been meddled with, in fact, early in the Arroyo administration through the power to
appoint. The most controversial appointments made to Comelec were just before the May
2004 elections, when the President herself was a candidate. The appointments of Virgilio
Garcillano and Manuel Barcelona were made only months before the 2004 presidential
elections. Crucially, their appointments were made ad interim, automatically allowing them
to sit and perform their functions without the need of a Commission on Appointments
confirmation. Garcillano and Barcelona exercised their powers and authority until Congress
adjourned44, which directly affected the operations and results of the May 2004 elections. The
circumstances surrounding this appointment served as a backdrop to the “Hello Garci”
controversy, which allegedly involved the President and Commissioner Garcillano.
The Civil Service Commission and the Commission on Audit have likewise been ‘touched’
by the hand of the President through her appointments to these offices.
The table below summarizes the appointments made by the President to constitutionally
independent bodies.
Table 11. Arroyo Appointees to Constitutionally Independent Bodies

Appointees Date Appointed Date to Retire/ Retired
Commission on Elections – management and administration of elections
Chairman Alfredo Benipayo February 19, 2001 June 4, 2002
Commissioner Resurreccion Borra February 16, 2001 February 15, 2008
Commissioner Florentino Tuason February 21, 2001 February 15, 2008
Chairman Benjamin Abalos June 5, 2002 October 1, 2007*
Commissioner Virgilio Garcillano February 10, 2004 June 11, 2005**
Commissioner Manuel Barcelona February 10, 2004 June 11, 2005**
Commissioner Romeo Brawner September 18, 2005 May 25, 2008***
Commissioner Rene Sarmiento April 7, 2006 Present
Commissioner Nicodemo Ferrer June 9, 2006 February 2, 2011
Commissioner Moslemen Macarambon November 5, 2007 Present
Chairman Jose Melo January 26, 2008 January 15, 2010
Commissioner Lucenito Tagle July 8, 2008 February 2, 2015
Commissioner Gregorio Larrazabal October 14, 2009 February 2, 20011
Commissioner Armando Velasco November 8, 2008 February 2, 2013
Commissioner Elias Yusoph October 14, 2009 February 2, 2015
Supreme Court – court of last resort
Chief Justice Renato Corona April 9, 2002 (as Associate October 15, 2018
Justice)
May 17, 2010 (as Chief
43
Various news stories. See References.
44
The CA did not confirm the appointment of Garcillano and Barcelona. Though reappointed several times, they
were not reappointed by Arroyo after the “Hello Garci” controversy broke out in mid-2005.

Justice)
Senior Associate Justice Antonio Carpio October 26, 2001 October 26, 2019
AJ Ma. Alicia Austria-Martinez April 12, 2002 April 30, 2009 ****
Associate Justice Conchita Carpio-Morales September 3, 2002 June 19, 2011
AJ Romeo Callejo, Sr. September 3, 2002 April 27, 2007
AJ Adolfo Azcuna October 24, 2002 February 15, 2009
AJ Dante Tinga July 4, 2003 May 10, 2009
AJ Chico-Nazario February 10, 2004 December 5, 2009
AJ Cancio Garcia October 6, 2004 October 19, 2007
AJ Presbitero Velasco Jr. March 31, 2006 August 8, 2018
AJ Antonio Eduardo Nachura January 22, 2007 June 13, 2011
AJ Teresita Leonardo-de Castro December 3, 2007 October 8, 2018
AJ Arturo Brion March 17, 2008 December 29, 2016
AJ Diosdado Peralta January 14, 2009 March 27, 2022
AJ Lucas Bersamin April 3, 2009 October 18, 2019
AJ Mariano del Castillo July 29, 2009 July 29, 2019
AJ Roberto Abad August 7, 2009 May 22, 2014
AJ Martin Villarama November 6, 2009 April 14, 2016
AJ Jose Perez December 26, 2009 December 14, 2016
AJ Jose Mendoza January 4, 2010 August 13, 2017
Chief Justice Artemio Panganiban December 20, 2005 December 7, 2006
Chief Justice Renato Puno, Jr. December 8, 2006 May 17, 2010
Ombudsman – investigates, prosecutes government officials who are guilty of crimes
Simeon Marcelo October 10, 2002 September 30, 2005*
Merceditas Gutierrez December 1, 2005 October 10, 2009 / December
1, 201245
Commission on Audit – examine, audit, and settle all accounts and expenditures of public funds and properties
Chairman Reynaldo Villar February 7, 2004 (as February 2, 2011
Commissioner)
April 15, 2008 (as Chairman)
Commissioner Juanito Espino, Jr. May 5, 2006 February 2, 2013
Commissioner Evelyn San Buenaventura January 5, 2010 February 2, 2011
Chairman Guillermo Carague February15, 2001 February 2, 2008
Civil Service Commission – deals with civil service matters; oversees integrity of government actions and processes
Chairman Karina David February 23, 2001 February 2, 2008
Chairman Ricardo Saludo April 21, 2008 September 30, 2009**
Chairman Francisco Duque III January 11, 2010 February 2, 2017
Commissioner Mary Ann Fernandez-Mendoza May 5, 2006 February 2, 2013
Commissioner Cesar Buenaflor February 2004 February 2, 2011
(Source: TAN46)*Resigned, **Bypassed/Rejected by the Commission on Appointments, ***Deceased,
****Retired early
In the Supreme Court alone, Arroyo was able to make a total of 22 appointments. Three of
these appointments were for the Chief Justice post. Eight of the 22 appointees were short-
lived. The appointees’ tenures were shorter than the President’s nine-year stay in office – on
the average, the eight transients of the Supreme Court served for only 4.5 years.
Weak Party Discipline
In the Arroyo administration, political party coalitions constantly changed as the popularity
ratings of the President dropped. From 2001 to 2010, coalition-switching was apparent,
showing a habitual realignment of interests among political groupings (Table 12).
Table 12. Political party coalitions in 2001, 2004, 2007, and 2010
Election year Administration Coalition Opposition Coalition Other coalitions/
unattached
2001 (8) Lakas-NUCD-UMDP, LP, Reporma-LM, (2) LDP, PMP (1) PDSP
AD, PDP-Laban, NPC, NP, PROMDI
2004 (5) Lakas-CMD, LP, NPC, PRP, NP (3) PDP-Laban, LDP, PMP (2) Alyansa ng Pagasa
(AD, PROMDI,
Reporma), LDP Aquino
wing
45
Ombudsman Merceditas Gutierrez’ stay in office is subject for debate. It is not clear whether she already
finished Marcelo’s term in 2009 or she is granted a full term and ends her term in 2012. This issue has not been
submitted to the Supreme Court for resolution.
46
http://sc.judiciary.gov.ph, www.coa.gov.ph, www.csc.gov.ph, www.comelec.gov.ph, www.ombudsman.gov.ph

2007 (5) Lakas-CMD, NPC, LP-Atienza wing, (5) UNO, AD, PDP-Laban, NP,
LDP, PDSP PMP, LP, NP, KBL-Marcos
wing
2010 (1) Lakas-Kampi-CMD (1) LP NP, PMP, etc.
(Source: TAN47)
Notably in the 2007 elections, the LDP-PMP opposition group at the start of the Arroyo
government split. LDP affiliated with the administration party. On the other hand, a close ally
of the administration, the Liberal Party, joined the opposition PMP, as with AD, NP and PDP-
Laban. The opposition coalition in 2007 drastically expanded.
In the 2010 elections, when Arroyo’s popularity ratings reached a historic low, her own party
(Lakas-Kampi) suffered the most in terms of defections. Many of the defectors transferred to
the Liberal Party coalition.
Arroyo’s unpopularity also hurt administration candidates during elections (Table 13).
Table 13. Public perception of the Arroyo presidency and political wins in the 2001, 2004,
2007, and 2010 elections
2001 2004 2007 2010
Public net +19.67A +17.67B -9.33C -38D
satisfaction rating of
Arroyo
Administration candidates
Senate seats won 8 7 3 2
(% change) -12.5% -57% -50%
House seats won 141 176 142 107
(% change) +25% -19% -25%
(Source: TAN48)
A. Average rate (March 2001, April 2001, May 2001)
B. Average rate (January 2004, February 2004, March 2004)
C. Average rate ( September 2006, November 2006, February 2007)
D. Average rate (September 2009, December 2000)
Figure 3. Public perception of the Arroyo presidency and political wins in the 2001, 2004,
2007, and 2010 elections
200 30
190 25
180
170 20
160 15
150
140 10
130 5
120
110 0
100 -‐5
90 -‐10
80
70 -‐15
60 -‐20
50
40 -‐25
30 -‐30 House seats
20
10 -‐35
0 -‐40 Senate seats
Satisf. Rating
2001 2004 2007 2010
47
Information was gathered from http://en.wikipedia.org/wiki/Philippine_general_election,_2001,
http://en.wikipedia.org/wiki/Philippine_general_election,_2004,
http://en.wikipedia.org/wiki/Philippine_general_election,_2010.
48
Information from www.sws.org.ph, http://en.wikipedia.org/wiki/Philippine_general_election,_2001,
http://en.wikipedia.org/wiki/Philippine_general_election,_2010.

The figure above illustrates clearly how the administration candidates experienced Arroyo’s
kiss of death. At the Senate, the decrease in votes had been consistent starting 2004 – 12%
drop (2004), 57% drop (2007), and 50% drop (2010); at the House, the kiss of death was only
felt in the 2007 and 2010 elections. In 2004, votes increased by 25%. This was later on
reduced by 19% in 2007, and another 25% in the 2010 election.
Independent Monopolists.
De Dios and Esfahani (2001) explain that a dysfunctional system of checks and balance
makes the different branches of government and its other instrumentalities vulnerable to
corruption. Individuals and institutions act like independent monopolists, beyond government
scrutiny and oversight, thus the abuses. (DAP) Of course, there is the additional dynamics of
a principal’s ‘blessing,’ which further emboldens (by tolerance or sanction) erring officials
and offices. Different corruption scandals that have troubled the country illustrate different
levels of monopolistic exercise of power and authority, bordering on ‘corruption,’ either as
direct or indirect participants. A case study in point is the NBN-ZTE controversy.
Box 1. NBN-ZTE Controversy
The NBN-ZTE controversy was a questioned deal between the government of the Philippines
and the Chinese company ZTE. It was an overpriced contract, which involved top
government officials, including Comelec Chairman Benjamin Abalos, NEDA Secretary
General Romulo Neri, DOTC Secretary Leandro Mendoza and the First Gentleman Mike
Arroyo. Allegedly, even the President herself is implicated in the case.
The ‘independent monopolist’ in this case is Comelec Chairman Benjamin Abalos. Allegedly,
Comelec Chairman Benjamin Abalos brokered this deal and ensured the awarding of the
contract to ZTE. The agreed price of the deal was $329 million, which included kickbacks.
Abalos, who had no ‘official business’ whatsoever with the contracting process, was able to
represent the government in dealing with the Chinese business firm and even skirted through
government processes with a seemingly free hand.
Testimonies of witnesses and actors involved in the controversy indicate knowledge of a

higher authority. Unfortunately, the full story behind the controversy was not uncovered.
Public discussion on the issue was cut short when President Arroyo herself cancelled the
contract.

Anti-Corruption Efforts of Government, Funding Institutions,
and Civil Society Organizations
Curbing corruption in the country has been the focus of various efforts by government and
civil society organizations (CSOs) over the past decades. International funding institutions
have also provided grants and funding support to government and CSOs for projects aimed at
countering corruption. The following tables will present the different anti-corruption efforts
made by government, international donors, and civil society.
A. Government Initiatives
The government’s initiatives to counter corruption are centered on prosecution with Office of
the Ombudsman as the lead government agency.
According to the Ombudsman, the anti-corruption campaign in the country is actually

“gaining ground”. (Ombudsman, 2009: 7) In 2009, the Ombudsman proudly reported a
conviction rate of 33.6 percent with Sandiganbayan convicting mayors, municipality
treasurers, registers of deeds, among others (Ibid: 54). The Ombudsman has also completed at
least 2,000 fact-finding investigations with 17 officials from DPWH formally charged for
preliminary investigation for involvement in the anomalous bidding for World Bank-funded
road projects for violations of R.A. No. 3019 and R.A. No. 6713. (Ibid: 8)
The Ombudsman also reported almost 8,000 criminal and administrative cases acted on in
2009 and the dismissal from service of a number of government officials that includes a
finance undersecretary, assistant secretary, provincial administrator, mayors, BIR regional
director, postmaster general, police superintendents, university president and principals of
public high schools. (Ibid: 10)
Lifestyle check investigations is also a continuing program of the Office of the Ombudsman.
In 2009, the OMB reported that select investigators were trained on forensic accounting,!
complex financial investigation, and investigating and prosecuting kleptocracy. (Ibid: 51)
During the same year, the OMB received around 328 new lifestyle check complaints and has
finished investigating 217 complaints. Based on their report, a total of 775 lifestyle check
complaints nationwide are still being investigated by the OMB as of December 31, 2009.
(Ibid: 52)
Other government anti-corruption efforts are centered on prevention through systems review
and reform. These include the integrity development reviews of agencies, establishment of
agency integrity development committees, and anti-corruption scorecards. Anti-corruption
promotional activities are also undertaken by government to include trainings and education
campaign to raise awareness about anti-corruption laws and regulations and the different
agencies mandated to promote accountability in government.
Box 2. OMB’s Lack of Funds?
To defend the OMB from critics, the Ombudsman has constantly enumerated reasons for its inefficiency and some of which point to
lack of resources. It is said that the OMB only gets 0.065 percent of the total national budget that prevents the Office from hiring
competent staff to help ensure successful prosecution of corrupt public officials. (based on GTZ briefing paper)
Based on a research conducted by the Philippine Center for Investigative Journalism however, the OMB under Gutierrez’s term
(beginning 2005), “has enjoyed access to more funds than any of her three predecessors combined”. (Mangahas and Ilagan, 2010)
In fact, the OMB’s budget tripled from 392.08 million in 2003 to P1.33 billion in 2009 apart from the foreign grants directed to the
institution such as that of the Philippine Threshold Program with the US Millennium Challenge Corporation of about $6.5 million. The
OMB likewise got a $716,600 grant from the European Union to set-up a case management software that the OMB never used until
the Project closed in 2007. It has also received funding support from Australian Agency for International Development’s Philippine-
Australia Human Resource Development facility and United States Agency for International Development. (Ibid)

Table 14. Government Anti-Corruption Efforts49
Agency Prosecution Prevention Promotion
Office of the Investigation and Conduct of Integrity Development Review Ombudsman Citizens’
Ombudsman prosecution (IDR)50 to agencies such as Department of Charter
Environment and Natural Resources
(DENR), Department of Agrarian Reform
(DAR), Light Rail Transit Authority (LRTA),
National Irrigation Authority (NIA),
Philippine Veterans Affairs Office (PVAO),
Philippine Navy (PN), Bureau of
Corrections (BuCor), Bureau of Fire
Protection (BFP), Land Registration
Authority (LRA), Procurement Service (PS)
under the Department of Budget and
Management, and the Department of
Health (DOH)
Conduct of lifestyle The OMB, through its Bureau of Resident OMB Social Service
check investigations Ombudsman, also facilitated the Caravan
establishment of sixteen (16) agency
based tripartite committees called
Integrity Development Committee (IDC)
that will monitor the progress of the
implementation of the recommendations
of the IDR
Institutionalization of OMB created a Task Force to monitor the Nationwide trainings to

mediation system for procurement of ballot counting machines educate the people about
non-graft cases and other election technologies to be the Ombudsman and its
used in the fully automated 2010 efforts; Public
elections. Duties of the task force include Accountability Seminars;
observing the procurement proceedings Ehem! Aha! Seminars;
from bid submission to awarding of the eight-day Executive
contract to monitoring of contract Course on Strategic
implementation. (Ombudsman 2009) Planning and
Management of an
Effective Corruption
Prevention Program.
Magsumbong sa
Ombudsman (radio
program) and
Ombudsman: Kakampi
Laban sa Katiwalian (TV
show)
Presidential Anti- Integrity Development Action Plans of
Graft Commission national government agencies
Anti-Corruption Scorecard51
Revenue Integrity Investigates

Protection Service allegations of
corruption in the
Department of
Finance
Civil Service Mamamayan Muna, Hindi
Commission Mamaya Na52
Values Orientation
Workshop on the Code of
49
Sources: GTZ paper on Corruption in the Philippines "Corruption and Anti-Corruption in the Philippines:
Possible entry-points for German development cooperation” (September 2009), OMB Annual Report 2009,
websites of CSC, PAGC, and RIPS
50
IDR is a tool that aims to “determine the level of integrity development within a government agency and
identify the agency’s vulnerability to corruption and also assesses the adequacy of agency safeguards to prevent
corruption…” (Ombudsman, 2009: 64)
51
The ACS is a “tool for assessing the impact and effectiveness of the anti-corruption efforts carried out by the
agencies in the Executive Branch with special focus on the four perspectives of the Integrity Development Action
Plan (IDAP): Prevention, Education, Investigation/Enforcement and Strategic Partnership”.
(www.pagc.gov.ph/Project.htm )
52
Launched in 1994 to “address the need for behavioral reforms in government service, specifically the manner
state workers deal with clients. Mamamayan Muna, Hindi Mamaya Na is said to be both a courtesy campaign and
a client satisfaction mechanism, it hopes to promote among civil servants prompt, courteous and efficient service.”
(http://www.csc.gov.ph/cscweb/ethics.html)

Conduct and Ethical
Standards for Government
officials and Employees
Dangal ng Bayan Award53
The United Nations Convention Against Corruption (UNCAC)
One of the breakthrough accomplishments of the Philippine government in recent years is the
ratification of the UN Convention Against Corruption in 2006. UNCAC employs a
comprehensive approach to anti-corruption by addressing prevention, criminalization and law
enforcement, international cooperation, asset recovery and technical assistance. The
UNCAC’s ratification in the Philippines is said to have been an instrument in consolidating
and streamlining the various anti-corruption efforts of government through the National Anti-
Corruption Program of Action, the body created in 2007 with the objective of integrating and
eradicating overlaps in the anti-corruption efforts of the Ombudsman, other government
agencies, and civil society groups. The Multi-Sectoral Anti-Corruption Council represented
by government and civil society serves as the coordinating body of NACPA.54
A Roadmap for UNCAC’s implementation in the Philippines was presented during the
UNCAC Philippine Summit in May 2009. This Roadmap was based on the validated results
of a series of focus group discussions on the assessment of the country’s compliance with the
Convention (Table 15).55
Table 15. Philippine UNCAC Roadmap

Approach Actor Activity
Integrity Development Reviews, anti-corruption research, revisiting the gifts

Ombudsman policy under RA 6713, bids and awards committee observers’ feedback
handling capacity-building through the Center for Asian Integrity
Restoration of selective pre-audit and comprehensive audits of government

offices, enhanced risk-based audit approach, electronic national government
COA
accounting system and promulgation of the Philippine Government
Accounting Standards
Prevention Initiatives to promote integrity and accountability such as the PMS-OPES,

implementation of ARTA, stakeholders’ dialogue, rules on transparency,
CSC
database for the statement of assets, liabilities, and networth (SALN), values
formation
Harmonization of the IRR of the Government Procurement Reform Act to

OP cover foreign-funded procurement, cascading of national guidelines on
internal control system, tripartite code of conduct on public procurement
Moral renewal action program and the integrity development action plan on
PAGC
internal control, internal audit, integrity check and agency code of conduct
Adoption of legislative agenda for enactment of a law criminalizing bribery of

foreign public officials and officials of public international organizations,
Criminalisation MSACC
amendment of the Anti-Money Laundering law to broaden the list of
predicate offenses that give rise to laundering of corruption proceeds
Amendment of Extradition Law (PD 1069); enactment of law on MLA, forging

International more extradition treaties and MLA treaties, conduct of activities to increase
DOJ
Cooperation awareness among judges on the importance of international legal
cooperation
Asset Recovery
Bangko Sentral Issuances on measures to prevent and detect the transfers of proceeds of
53
The Dangal ng Bayan Award is conferred annually to government employees who have been paragons of the
highest standards of ethics. (http://www.csc.gov.ph/cscweb/ethics.html)
54
Based on the GTZ Briefing Paper, "Corruption and Anti-Corruption in the Philippines: Possible entry-points for
German development cooperation", September 2009
55
Based on the GTZ Briefing Paper, "Corruption and Anti-Corruption in the Philippines: Possible entry-points for
German development cooperation", September 2009

ng Pilipinas corruption
Amendment of RA 0160 and enhancement of cooperation with foreign and

AMLC
domestic law enforcement agencies and financial investigation units
Source: "Corruption and Anti-Corruption in the Philippines: Possible entry-points for German development
cooperation", September 2009
A number of government agencies have also opened their systems through partnerships with
civil society such as DPWH with Bantay Lansangan (Road Watch); DepEd with Ateneo
School of Government; DBM with various civil society organizations engaged in budget
advocacy, among other partnerships.
B. Civil Society Initiatives
Civil society initiatives promoting social accountability have flourished over the past years. In
a scoping study commissioned by the Affiliated Network for Social Accountability East Asia
and the Pacific (ANSA-EAP), social accountability practices in the Philippines were
categorized under three major themes/objectives: 1) political/democratic accountability56; 2)
financial accountability57, and; 3) accountability for performance58. The following table
provides a quick summary of the various practices based on the three major
themes/objectives:
Table 16. Summary of Social Accountability Practices in the Philippines

Objective Public Sector Function SAc Practice Methods and Tools
Political/Democratic Policies and plans that Political and electoral Policy advocacy
Accountability builds or strengthens the reforms
enabling environment for Self-awareness workshops
democaric practice and Campaign for a graft-
accountable institutions sensitive culture Engaging and empowering
communities for service
Participatory policy-making improvement
and planning
Financial Accountability Revenue, appropriations, Informed budget advocacy Budget advocacy and
allocations, expenditures budget analysis
Tracking public expenditure
Training workshops
Participatory budgeting
Accountability for Delivery of goods and Public monitoring and Monitoring by public
Performance services oversight watchdogs
Citizens’ charter
Social covenants
Report Cards
Opinion polls
(Source: Abad, Henedina (2010) , Social Accountability Practices in the Philippines: A Scoping Study, Affiliated
Network for Social Accountability in East Asia and the Pacific, Ateneo de Manila University, p. 28)
Many of the anti-corruption and social accountability initiatives of civil society focused on
expanding spaces for public participation ranging from direct participation such as monitoring
of agencies’ budget implementation to indirect participation such as campaigns for greater
transparency and accountability in government systems and processes (appointments
monitoring, advocacy work for the passage of Freedom of Information Bill, etc.).
56
“involves actions that creates and strengthens the societal institutions to actualize social accountability and in the
process, increase the citizens’ trust in government” (Abad, 2010: 19)
57
Concerned with how government “allocates, disburses and utilizes financial resources… can be differentiated
into subcategories such as 1) informed budget advocacy; 2) public expenditure tracking; and 3) participatory
budgeting”. (Ibid: 21)
58
Focuses on the “delivery of public goods and services and how public sector actors fulfill their roles and
responsibilities”. (Ibid)

The ANSA-EAP study clustered anti-corruption/social accountability initiatives of civil
society organizations by objective as shown in Table 17.59
Table 17. List of CSO Initiatives by Objective

Type by Objective Social Accountability Practice Implementing Organization
(Past and Present)
Political/Democratic Access to Information Network
Accountability Freedom of Information Bill Campaign (ATIN), Right to Know! Right
Now! Network
Advocacy for the for the passage of Government
Procurement Reform Act, Anti-Money Laundering Act, and
Anti-Red Tape Act
Philippine Center for
Lifestyle Check Investigative Journalism
Transparency and
Citizens’ Participation in Lifestyle Check Accountability Network (TAN)
Consortium for Electoral
Electoral Reform Reforms (CER)
Center for People Power and
Automated Election System Watch Governance (CenPEG)
PCIJ, TAN, CER, Lawyers’
Monitoring of Campaign Finance League for Liberty (Libertas)
Ateneo de Davao
Ehem! Aha!
National Center for Public
Social Artistry approach to the localization of Millennium Administration and Governance
Development Goals and in fighting corruption
TAN, Alternative Law Groups
Key Appointments Watch (Office of the Ombudsman, (ALG), Philippine Association of
Supreme Court, Commission on Elections) Law Schools (PALS), Libertas
Institute for Popular Democracy
Co-financing and Co-production of Basic Services (IPD)
Financial Accountability Caucus of Development NGO
Department of Agriculture Budget Analysis Networks (CODE-NGO)
Action for Economic Reform
Education Watch
InciteGov, the Budget Network
Philippine National Budget Monitoring Project
CODE-NGO
Priority Development Assistance Fund (PDAF) Watch
MODE
Official Development Assistance (ODA) Watch
Freedom from Debt Coalition
Debt and Public Finance Campaign
WAND
Local Gender Budgeting
CBCP-NASSA
Internal Revenue Allotment Watch
Procurement Watch, Bishops-
Businessmen’s Conference,
Evelio B. Javier Foundation,
CSO Participation in Monitoring Public Procurement Inc., Parish pastoral Council for
Responsible Voting, National
Movement for Free Elections,
Bantay Lansangan
Social Watch Philippines
Alternative Budget Initiative
Government Watch – Ateneo
Textbook Count and Textbook Walk School of Government
National Movement for Free
Medicines Monitoring Elections-Makati Business Club
Citizens Network for Good
Building Bridges towards Good Governance with LGUs and Governance – Negros
Other Agencies
La Salle Institute of
Participatory Local Governance Governance
Coalition Against Corruption –
Counter Corruption in Procurement and Delivery of Makati Business Club
Services
Evelio B. Javier Foundation, Inc.
Capacity-Building for BAC Observers
Performance Naga People’s Council and City
Accountability Participatory Planning and Budgeting Government
59
Note that TAN also tried to include other CSO initiatives not included in the original table.

Development Academy of the
Philippines, Up National College
Report Card Survey of Public Administration and
Governance, TAN
Concerned Citizens of Abra for
Monitoring Infrastructure Projects for Good Governance Good Government
CODE NGO
Localized Anti-Poverty program 2
Bantay Lansangan
Road Projects Monitoring
SWS
SWS Surveys
Iloilo CODE
Transparency and Accountable Governance
PAJDGG
Participatory Monitoring of Barangay Infrastructure
Projects and Procurement of Medicines in the Province of
Isabela
(Source: Abad, Henedina (2010), Social Accountability Practices in the Philippines: A Scoping Study, Affiliated
Network for Social Accountability in East Asia and the Pacific, Ateneo de Manila University, pp. 23-24)
C. International Donor Initiatives
The donor community is supportive of the anti-corruption campaign in the country. Some of
the projects use information technology to improve government processes and systems. These
include the call center and complaint handling systems of BIR and DPWH respectively, the
electronic procurement system, the case filing system of Sandiganbayan and the
Ombudsman’s database of Statements of Assets, Liabilities, and Networth. Donors also gave
particular attention to the judiciary, DPWH, COA, and the Ombudsman in improving
institutional capacities among others. They are also supportive of CSO participation and
partnership with government that aims to improve latter’s accountability and public service
delivery. (Table 18)
Table 18. Summary of Donor Initiatives related to Anti-Corruption

Donor Anti-Corruption Effort/Initiatives
Strengthening the Anti–Money-Laundering (AML) Regime and designing and developing a

transaction monitoring system for the Financial Intelligence Unit
Asian Development Bank
Providing advice on areas requiring legislative reform
Strengthening the independence and defining judicial accountability
ADB works with the Office of Auditor General, Integrity Division (OAGI) to protect and
maintain confidentiality of whistleblowers and staff who fear reprisals. The OAGI is also
designated as the initial point of contact for allegation of fraud, corruption, and abuse
among ADB-financed projects
Enhancing the efficiency and accountability in the trial courts
Training for Supreme Court and appellate justices, court administrators and presiding
Australian Agency for executive judges
International
Development (AusAID) Developing an automated audit tool in the conduct of financial audit to enhance the Public
Accountability Programme of the Philippine Commission on Audit
Institutional support provided to Bantay Lansangan
Establishing BIR Call Centre Systems Support Project

Canadian International Promoting the Government Electronic Procurement System (GEPS)
Development Agency
(CIDA) Reviewing and consolidating BOC rules and regulations nationwide
Supporting Workshops on Guidelines and Inter-Agency Coordination in Fighting Corruption
European Commission Supporting EU-OMB Corruption Prevention Project

(EC)
Strengthening the Anti–Money Laundering Council by providing training

Assisting the Judiciary Programme Access to Justice for the Poor
Supporting EU-OMB Corruption Prevention Project Component Winning the Cooperation of

the Wider Public
Assisting Graft and Corruption Prevention Education (GCPE) Teaching Exemplars
Building capacity for investigation and prosecution for Anti–Money Laundering in judicial and
law enforcement agencies and civil society
Transforming the PNP into a more capable, effective and credible work force
United Nations
Development Programme Pursuing enhanced capacities of oversight agencies for change management and
(UNDP) bureaucratic reforms complementing efforts of the Presidential Committee on Effective
Governance (PCEG)
Making government procurement more transparent
Adopting the Integrity Development Review
United States Agency for Making transparent and accountable management at the Bureau of Internal Revenue
International
Development (USAID) Strengthening Judiciary and Media Relations
Promoting Rule of Law Effectiveness (ROLE) through Work Shops, training sessions for Court
of Appeals and prosecutors
Campaign and Electoral Reform
Supporting the Government’s Procurement Policy Board (i.e. mapping capacity of internal
audit units in each agency nationwide)
Mapping capacity of internal audit units in each agency nationwide
Supporting DPWH Complaints and Action Centre (CAAC)
World Bank Supporting Judicial and Civil Service Reform Project
Promoting education in corporate governance for boards of directors
OMB computerized data base and integration of statement of assets and liabilities
Supporting Sandiganbayan in computerization of court record management system
Millennium Challenge Account-Philippines Threshold Program Technical Assistance project –

provided support to OMB for trainings, acquisition of surveillance equipment, information
management, distribution of GCPE Teaching Exemplars, and the institutionalization of
mediation for non-graft cases from 2006-2008
Strengthening collaboration between civil society and government on anti-corruption efforts

Millennium Challenge in the Philippines
Corporation
Support to MSACC/NACPA through a full-time expert in strategic planning and awareness-
raising activities
Support to OMB in introducing alternative dispute resolution to reduce the backlog of inor
graft cases, establishing an integrity development institute, a “virtual” learning institute for
personnel development of the OMB, and other government personnel performing
investigative, prosecutorial, and public assistance functions.
Source: GTZ paper on Corruption in the Philippines "Corruption and Anti-Corruption in the Philippines: Possible
entry-points for German development cooperation” (September 2009) and Quimson, Gabriela (2006), National
Integrity Systems, Philippines

RECOMMENDATIONS
PNoy’s Context
Benigno Aquino III was elected president in the May 2010 elections with a wide margin lead
against his closest opponent. Aquino received aproximately 15 million votes (42%) against
the deposed President Joseph Estrada who received 9 million votes (26%). Aquino won on a
platform of good governance with the campaign slogan “Kung walang corrupt, walang
mahirap!” (“If there’s no corruption, there’s no poverty.”) This resonated well among the
ordinary Filipinos. In the beginning of his government, Aquino received a very high trust
rating (+83),60 the highest in history.
Aquino’s political party (the Liberal Party) also improved its hold of key government posts.
In the beginning of the 2010 elections, the Liberal Party emerged as the strongest opposition
party. Defectors from other camps gravitated towards the Liberal Party. The Liberal Party
also produced significant political wins in the elections, beginning with the President. At the
Senatorial race, three of the LP candidates came through – Senators Franklin Drilon, Ralph
Recto, and Teofistio Guingona III.61 The LP produced the most victories at the Senate
compared to other political parties/coalitions. At the House of Representatives, after a few
more defections for the Liberal Party post-elections, the Liberal Party secured the
Speakership, including chairmanships of key committees.
Simply put, Aquino starts off with high political capital – a strong public support and political
party advantage. This is a political advantage that could shield him and his government from
unnecessary influence from other interest groups.
Lessons from the political economy and Arroyo’s mark
The center of power and power abuses in the Philippine political economy is the president.
There are many powers available to the president that may be used to institute reforms or
wipe them out. It is important therefore to know the president’s circumstances and the
invisible ties (including those that he makes along the way), which define his actions. The
political economy and the imprints of President Gloria Macapagal-Arroyo’s nine-year rule are
a rich source of knowledge and lessons from which President Aquino can learn.
Power of the purse. Opposition in the House, history has shown, usually dissipates at the
beginning of a President’s term. The President’s choice for House Speaker often wins.
Kawanaka (2010) explains that this is because the Congress seems to be at the mercy/end of
the President’s power of the purse. The president could prudently use this power to pursue his
reform agenda, especially the difficult ones that need the extra push – e.g. freedom of
information, political party reform. It should not be used to string along personal political
loyalties but rather pull in reform program allies.
Power to appoint. The power to appoint is a delicate power that has serious and far-reaching
repercussions on institutions. Like the power of the purse, the power to appoint should be
prudently used to strengthen institutions and the reform agenda of the government. Again, it
should not be used to create personal loyalties but coordinate the reform agenda of
government. The good governance reform agenda of government would require functional
institutions and a functional system of checks and balance. A government that has any one of
its institutions dysfunctional will be slowed down significantly in its quest for good
60
88% of adult Filipinos had high trust of Aquino while 4% had little trust, resulting in a net trust rating of +83.
61
The Senate composition is currently as follows: Independents (5), Lakas-Kampi (4), LP (4), NP (4), NPC (2),
PMP (2), PRP (1), LDP (1).

governance. The Aquino government should be conscious about correcting mistakes of the
past by making the right appointments.
The power to appoint is a personal and political power available to the president. While it is a
personal political choice and relies heavily on the political will of the President, there are
institutional safeguards that can be put in place to insulate the president from the damaging
politics of appointments. One such safeguard that the President can help institutionalize and
initiate is setting a standard and transparent search process at the Office of the President.
Institutions that have been tainted by the politics of the past that should be closely watched
are the Office of the Ombudsman, Commission on Elections, Supreme Court, and the
Commission on Audit. Appointments to these offices should be made very carefully and with
transparency to regain public trust in the institutions.
Lessons from anti-corruption efforts
There is need to continue strengthening the prosecution function of government, whether that
be in capacity-building efforts or through systems reforms. This will lead to an improved
conviction rate of the Office of the Ombudsman and will consequently send the message that
corruption is a high risk, low reward exercise for government officials. Lifestyle check
investigations should also continue to be implemented to deter excessive lifestyles, often a
strong indication of corruption activities among high-level government officials.
Government should also continue to partner with civil society organizations in improving
transparency and accountability mechanisms in government systems and processes. Direct
and indirect participation openings should be further improved.
A critical measure that will improve anti-corruption efforts in the country is the Freedom of
Information law. The passage of the FOI will not only give life to the constitutional right of
the people to access public information, it will be centrally instrumental to strengthening
democratic and political accountability of government.

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Transparency and Accountability Network

LIST OF TABLES, FIGURES AND BOXES 4

Corruption and Anti-Corruption in the Philippines 2

Corruption and Anti-Corruption in the Philippines 3

Table 1. Summary of Philippine Anti-Corruption Laws 7

Figure 1. Philippine Corruption Perception Index rating, 2001-2010 11

Box 1. NBN-ZTE Controversy 25

Corruption and Anti-Corruption in the Philippines 4

The Philippine government system is a considerably important factor in the configuration of

Corruption and Anti-Corruption in the Philippines 5

Corruption has far-reaching impact on the country’s development (political, socio-economic,

Anti-corruption efforts necessary to reduce corruption significantly:

1. Strengthening the prosecution of corrupt individuals and institutions. Improving the

2. Strengthening partnerships and engagements between government and civil society

Corruption and Anti-Corruption in the Philippines 6

The Legal Environment

Table 1. Summary of Philippine Anti-Corruption Laws2

Corruption and Anti-Corruption in the Philippines 7

Presidential Decree The Decree grants immunity from prosecution to givers of

Corruption and Anti-Corruption in the Philippines 8

The Philippines’ Anti-Corruption Agencies

The Office of the Ombudsman

Corruption and Anti-Corruption in the Philippines 9

Table 2. The Philippine Anti-Corruption Agencies

Corruption and Anti-Corruption in the Philippines 10

Figure 1. Philippine Corruption Perception Index Rating, 2001-2010

Corruption and Anti-Corruption in the Philippines 11

Local Findings Confirm CPI and PERC Results

In addition to considering perceptions of corruption, SWS Enterprise surveys attempt to

Corruption and Anti-Corruption in the Philippines 12

Table 3. How Much Corruption is there in the Public Sector?

Hardly Any Companies 8 8 7 7 7 8 9

None of the Companies 11 10 12 11 13 17 14

Corruption and Anti-Corruption in the Philippines 13

Table 5. Estimated Financial Losses Due to Corruption, 1995-2000

Corruption and Anti-Corruption in the Philippines 14

Corruption in the Philippines, especially under the government of Gloria Macapagal-Arroyo,

Table 6. 2005 Budgetary Allocations of Different Agencies of the Philippine Government,

Corruption and Anti-Corruption in the Philippines 15

Corruption and Anti-Corruption in the Philippines 16

The Arroyo Story.

Table 7. 2001 Arroyo Appointees

Corruption and Anti-Corruption in the Philippines 17

Corruption and Anti-Corruption in the Philippines 18

The politics of survival set in.

Table 8. Corruption scandals that challenged the Arroyo government’s legitimacy

Corruption and Anti-Corruption in the Philippines 19

[13 - Azcuna, CJ Panganiban, Puno,

On leave - Chico-Nazario, Carpio

Ruling: EO 464 partly valid (Sections 1 Puno (on leave)

Corruption and Anti-Corruption in the Philippines 20

The Sandiganbayan dismissed the case because the information

Corruption and Anti-Corruption in the Philippines 21

September 27, 2006 – The Ombudsman in a resolution absolved

Table 11. Arroyo Appointees to Constitutionally Independent Bodies

Corruption and Anti-Corruption in the Philippines 22

Weak Party Discipline

Corruption and Anti-Corruption in the Philippines 23

Corruption and Anti-Corruption in the Philippines 24

Box 1. NBN-ZTE Controversy

Testimonies of witnesses and actors involved in the controversy indicate knowledge of a

Corruption and Anti-Corruption in the Philippines 25

According to the Ombudsman, the anti-corruption campaign in the country is actually