2010 Development Agenda: Good Governance and

Corruption
Movement for Good Governance1

The Philippines has been blessed with a variety of assets that can be
drawn upon for development, including a dynamic and well educated people,
a biologically rich and diverse environment, a location in the fast-growing
East Asia region, and a very active civil society2. It has great potential for
rapid development, but it has remained one that has yet to be fully realized.
The country has been overtaken by many East Asian countries in terms of
growth and development. Undoubtedly, improvements in the quality of life of
the people have lagged significantly behind other East Asian countries and
inequality remains high. The World Bank explained the contrast between the
country's potential and its actual development outcomes as a result of the
limited ability of public institutions to resist influence by special interests and
to work effectively for the common good. This has created a vicious cycle of
weak public services, lack of trust in the government, and an unwillingness
to provide adequate resources to it.

The Philippines faces a crisis of poor governance. In the political arena,

the country is in what has been described as a “democratic recession”
characterized by widespread corruption, abuse of power, lack of
transparency and accountability, inefficiency, constricting space for people
participation, and weakening of democratic institutions (such as the
COMELEC, Ombudsman, Judiciary, check and balance between the Executive
and the Legislative, etc)3.

This paper aims to provide an overview on the problem of governance

in the Philippines and present an agenda to strengthen public institutions
and the practice of governance.

Corruption in the Philippines: The Worst in East Asia

The country is ranked at the bottom of the list of East Asia’s 10 largest
economies on the matter of control of corruption4, i.e. “the extent to which

1
Draft prepared by Carmel Habito and Milwida M. Guevara
2
World Bank Philippines (2009), “Results: Supporting Islands of Good Governance in the
Philippines”.
3
CODE-NGO (2009), “Development and Reform Agenda 2010.”
4
2008 Worldwide Governance Indicators (WGI)
public power is exercised for private gain, including both petty and grand
forms of corruption, as well as capture of the state by elites and private
interests.”5 The Philippines edged out Indonesia which scored the worst in
the region in the 2007 survey.

The Philippines consistently fell below the average on political stability

and control of corruption in the ranking of neighboring countries.6 Corruption,
regulatory policy uncertainty, tax administration, and anticompetitive or
informal practices were cited by firms as major constraints in their
operations in the Philippines.7

The 2007 Global Integrity Report cited the anti-corruption agency in

the Philippines as weak; its rule of law, very weak, and the country’s law
enforcement as very weak.8

Local corruption monitors confirm that graft and bribery in the

Philippines remain rampant. Corruption has penetrated every level of
government, from the Office of the President down to traffic police officers
who pull over motorists to demand bribes. Estimates of revenues loss due to
corruption are staggering. DBM estimated that corruption costs the
government around P22.0 billion every year. The UNDP estimates nearly
US$2.0 billion dollars, or roughly 13 percent of the Philippines' annual
budget. The World Bank estimated that government lost US48.0 billion in
the last 20 years due to corruption. 9 Poor governance and corruption have
detrimental impact on development. They slow down GDP growth,
discourage investments, retard capital accumulation, and make it more
difficult for the poor and other disadvantaged groups to obtain adequate
public services.

Why is corruption so widespread?

Corruption is a product of poor governance and dysfunctional public

institutions. De Dios cites that “grand corruption occurs through the witting
or unwitting complicity of centrally placed politicians, notably the chief
executive….The channels for big-ticket national infrastructure are foreign
assistance and some form of build-operate transfer involving the private
sector, which are largely the prerogative of the executive branch and not

5
Dumlao, Doris (2008). “WB: Corruption in RP worst in East Asia,” Philippine Daily Inquirer,
25 June 2008.
6
Emmanuel De Dios, “Government, Institutions, and Political Economy”. The study used
data on governance outcomes that were collected by Kaufmann, Kraay and Mastruzzi, 2006.
7
Emmanued De Dios, ibid. citing the results of a survey conducted by the Asian
Development Bank, 2006.
8
Mahar Mangahas, “Philippines Rated Weak by Global Integrity Report ” February 2, 2008
9
Asian Development Bank. Country Governance Assessment, 2005
subject to congressional scrutiny. With weak institutions that can enforce
transparency and accountability, corruption can go unchecked.10

An Agenda for Good Governance

Governance consists of the norms, traditions, and institutions by which

power and authority in a country are exercised... These include institutions of
participation and accountability in governance, and the legitimacy,
credibility, and efficacy of the institutions that govern. 11 Governance is a
collective responsibility of the government, civil society and private sector in
improving the lives of all Filipinos, particularly the poor12.

Good governance is characterized by:

1. Participation: All men and women have a voice in decision-making,

either directly or through legitimate intermediate institutions that
represent their interests. Such broad participation is built on freedom
of association and speech, as well as capacities to participate
constructively.
2. Rule of law: Legal frameworks are fair and enforced impartially,
particularly the laws on human rights; public security and safety are at
a high level.
3. Transparency: Transparency is built on the free flow of information.
Processes, institutions and information are directly accessible to those
concerned, and enough information is provided to understand and
monitor them.
4. Accountability: Decision-makers in government, the private sector
and civil society organizations are accountable to the public and
specific constituencies, as well as to institutional stakeholders.13

The agenda on good governance consists of measures to promote

participation, rule of law, transparency, and accountability.

1. The Chief-Executive, the Vice President and major leaders in

government must demonstrate excellence and honesty.14

10
Emmanue De Dios, Ibid
11

12
NEDA, Philippine Medium-Development Plan for 2001-2004.
13
UNDP, “Global Campaign for Good Governance” as cited by G. Bulatao in his paper
“Introduction to Local Participatory Local Governance”. The paper cites 11 other factors.
14
Mayor Jesse Robredo in a speech before a World Bank Conference on Innovations in
Governance.
 2. “Change the balance of power in government away from the
executives and mainly towards congress and the local
governments.15 Key steps to implement this reform are to: 1)
Enlarge the legislature’s role in the selection of members of
constitutional bodies; 2) appointing members of regulatory bodies
to fixed terms; 3) systematically involve congress in year-round
review of national expenditures; 4) reduce lump-sum allocations
over which the President has discretion; 4) instituting congressional
oversight on prospective foreign borrowing; 4) removing
presidential discretion to withhold the release of funds appropriated
by Congress. The budget should be made more transparent and executive
discretion must be reduced.16

3. Make all appointments transparent and merit-based and reform the

civil service.17 The President has the power to appoint executive
officials, and in the Philippine experience, appointments are often
based on political patronage that in a very large scale undermines
the effectiveness of the bureaucracy. Thus it is necessary to
professionalize and depoliticize the civil service by limiting that
power of appointment only to the positions of Cabinet Secretary and
Undersecretary. Appointments to other positions should be done in
a transparent manner and should be based on a set of clear criteria
that stress integrity and competence. As CODE-NGO puts it: “A
professionalized and depoliticized civil service would create a more
transparent and accountable working environment within the
government system. Improved selection of department heads and
commissioners would promote a more credible government. It also
would also pave the way for a working environment that is less
prone to undue influence from corrupt government officials”.18

4. Strengthen performance evaluation of public officers, implement

related awards and sanctions that can enhance meritocracy in
appointments and promotions19. Public administration needs to be
refocused from inputs and immediate outputs towards outcome and
impact. Results-based management necessitates a service-oriented
public sector that makes civil servants accountable to their clientele
instead of their supervisors or organizations. This reform involves
developing performance measurement systems and using
performance information.

15
Emmanuel De Dios, op cit.
16
World Bank, ibid.
17
CODE-NGO (2009), “Development and Reform Agenda 2010”
18
Position Paper of the CODE-NGO
19
Bhargava, Vinay (2001), “Combating Corruption in the Philippines,” World Bank.
 Naga City demonstrates how this can be done its Citizens’ Charter.
The Charter defines the basic services that every resident is entitled
to and the office responsible for delivering the service. The Charter
further defines the steps to follow in availing a public service, the
person to approach, and the length of time that it would take the
service to be delivered. The charter further provides the steps, the
person who should receive and resolve complaints, as well as the
length of time that he is expected to act on the complaints. Those
who perform below par are given sanctions and a reward system is
instituted based on performance.

5. Enhance people’s access to and influence on public policy

processes. Development must be undertaken for and by the people
through participation of beneficiaries and affected groups, interface
between the government and the private sector, and cooperation
with non-government organizations. Again, Naga City is an
example of participatory governance. The city government
implements multi-level consultations in the formulation of its
policies, programs, and budget.

6. Institutionalize transparency by making information on government

policies, decisions, activities, and programs available to the public.
The Freedom of Information Bill should be certified urgent, legislated, and
implemented in order to promote transparency in government.20 Amend laws that
restrict transparency such as the Bank Secrecy Act.21

7. Appoint a competent and credible Ombudsman who, true to the

mandate of his/her office, will pursue unresolved cases of corruption
and human rights abuses committed by public officers during their
tenure. The Office of the Ombudsman should tackle selected high-
profile graft cases22, e.g. high-ranking officials involved in much-
publicized acts of graft and corruption23. “Short-term confidence
building measures…can build confidence in the government while
laying the groundwork for longer-term changes.”24

20
Code-NGO and World Bank Group in the Philippines,”Philippines Discussion Notes:
Challenges and Options for 2010 and Beyond.
21
The Comprehensive Tax Reform in 1995 introduced an amendment to lift the bank secrecy
act but Congress did not pass the amendment.
22
World Bank Group in the Philippines,”Philippines Discussion Notes: Challenges and
Options for 2010 and Beyond.
23
CODE-NGO (2009), “Development and Reform Agenda 2010”
24
World Bank, op. cit.
 8. Engage local civil society organizations, academe, media and
business sector to advocate, review and monitor government’s
performance. Like legal systems, civil society organizations can
provide checks and balances on the exercise of power and monitor
social abuses. Investments must be made on building capabilities of
local governments, and civil societies to manage community
meetings, to be able to speak intelligently about issues, make
decisions, raise funds, and draw systematic plans and programs, ….
everything that has to do with the formation of accountable leaders
suitable to a modern democracy. “Only the orderly guidance of the
masses by responsible politicians can break the irregular rule of the
street and the leadership of demagogues of the moment.”25

9. Organize a peer-group accreditation system for citizens’ watch-

groups and build their capabilities for monitoring and evaluating
impact of governments’ programs, public expenditure management,
and conduct of elections.

10. Promote electronic Governance which is the creative application

of information technology in government operations. Prior to this, a
government-wide effort must be made to simplify systems and
processes in delivering services, eliminating government layers and
unnecessary management through online transactions and
development of government websites.

11. Promote judicial independence and fiscal autonomy by

professionalizing the Judicial and Bar Council, improving the
disciplinary process of erring judges, e.g. allowing anonymous
complaints, and instituting a rewards process for judges based on
competence, efficiency, accessibility, and integrity.26

12. Strengthen and rationalize the regulatory function of the COMELEC.

Strengthen the party system through the legislation of a law that
25
Randy David, “Thoughts on New Politics” and quoting Max Weber,
<www.inquirer.opinion.net, February 2, 2008
26
Asian Development Bank, op. cit.
 would lay the framework for the operations of political parties
including their financing; review regulations regarding party
registration and amend the law on the party-list system.27

13. Strengthen local governments by redesigning the internal revenue

allotment formula to promote equity and efficiency by using
indicators of needs, resources and performance, such as income
and local tax effort, instituting a report card system for local
governments based on performance, and devolving more resources
and powers to local governments that score highly on
performance.28

27
Ibid.
28
Milwida M. Guevara, “Fiscal Decentralization, First Steps, Next Steps. “ There are several
studies that advocate for reforms in the IRA formula, notably those of Rosario G. Manasan.
Institute of Popular Democracy, “Local Governance Platform”.
 BIBLIOGRAPHY

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Asian Development Bank (2005), “Country Governance Assessment of the Philippines.” Available from
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Implementation”. Available from www.ausaid.gov.au/publications/pdf/good_governance.pdf

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David, Randy, Thoughts on new Politics” www. Inquirer.opinion. net. February 2, 2008.

De Dios, Emmanuel, “Government Institutions and Political Economy”

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Institute of Political Democracy, “Local Governance Platform”

Mangahas, Mahar, “Philippines Rated Weak by Global Integrity Report”, www. Inquirer.net. February 2,
2008

Naga City Citizens Charter

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The World Bank Group in the Philippines, “Philippine Discussion Notes: Challenges and Options for 2010
and Beyond