GRAFT AND CORRUPTION

Chosen T. Tabanas
Alethia Grace T. Ongue
 What is Graft and Corruption?

Graft – Acquisition of gain or advantage by dishonest, unfair or sordid means especially through the abuse of
one’s position or influence in politics and administration.

Corruption – Dishonest or fraudulent conduct committed by those in power.

 “the misuse of public power for private profit”(U.N. Congress)
 “the abuse of public power for private benefit”(The World Bank)
Political Corruption

 exemplified when politicians and state agents tasked to pass and enforce laws in the name
of the people use their political power to sustain such power, including their status and
wealth.
 Political corruption results in misallocation of resources and greatly affects the manner in
which decisions are made. It often results to institutional decay as systems, rules of
procedure, laws and regulations are systematically abused, ignored or even tailored to fit
the interest of the ruling elite.
Bureaucratic Corruption

 Bureaucratic corruption occurs in the public administration or the implementation end of

politics. This kind of corruption has been branded low level and street level. It is the kind
of corruption they encounter daily at places like the hospitals, schools, police stations,
immigration offices and other public offices
GRAFT AND CORRUPTION IN THE
GOVERNMENT

 In 1988, graft and corruption in the Philippines as “the biggest

problem of all” by Jaime Cardinal Sin, the Archbishop of Manila
 In 1989, public perception was that “corrupt government officials
are greater threat to the country” than the communist guerrillas.
 In 1992, President Fidel V. Ramos considered graft and corruption
as the third major hindrance towards attaining his development
strategy for the country.
 An August 1990 survey conducted in Metro Manila, stated that graft and corruption is
big in the Presidential Commission on Good Government (PCGG), the Bureau of
Internal Revenue (BIR), the Cabinet as a whole, the courts of justice, the Bureau of
Customs (BOC), and in the police force.

 In November 1991, 41 percent of those polled agreed that most high-ranking

government employees are not suited to their positions based on their knowledge and
capabilities, and 62 percent noted that the performance of government employees has
not improved from 1986 (SWB, July1993).
 In 1998, the country got good marks from Transparency International and the
Political Economic Risk Consultancy (PERC),Ltd. However while anti-corruption
landscape in the Philippines has improved, its low score of 6.5 still placed the
Philippines as highly prone to corruption.

 Transparency International has ranked the country 141 st out of 180 in its 2008
corruption index.

 The Heritage Foundation and the Wall Street Journal placed the Philippines as 104 th
out of 179 countries in its Index of Economic Freedom for 2009, with a general
description of “mostly unfree”, and underscored corruption as one of the major
reasons for the citation.
 The CPI is used to measure how corrupt is
a country’s public sector, based on experts
and businesspeople.

 The higher your CPI, the better – 100

means a country is perceived to be clean
while 0 means you’re seen as highly
corrupt

 Right beside the Philippines in the list are

Algeria, Egypt, Zambia, and Nepal, all
with a 33/100 score in the index. Thirty-
three is the Philippines’ lowest score on the
index since 2012.
 In general, national and international opinion depict the Philippines
as still corrupt and being unable to effectively fight this problem.
8 Types of Corruption in the Philippines

There are Eight(8) Types of Corruption frequently practiced in the Philippines namely:

1. Tax Evasion
2. Ghost Projects and Payrolls
3. Evasion of public bidding in awarding of Contracts
4. Passing of Contracts
5. Nepotism and Favoritism
6. Extortion
7. Protection Money
8. Bribery
 Tax Evasion
 The act of reducing taxes by illegal and fraudulent means. The common practice
include: under-reporting of income, over-statement of expenses, use of fictitious
receipts, the keeping of double sets of books, and others.

This is particularly rampant in private sector due to the refusal of those engaged in
private businesses to honestly declare their annual income and to pay the corresponding
taxes in the government.

E.g. The Duterte administration has caught the biggest tax evader in the Philippines –
namely, tobacco firm Mighty Corp., which has just paid the government P30 billion to
settle its tax liabilities

Read more: https://business.inquirer.net/243784/govt-caught-biggest-tax-evader-says-dominguez#ixzz7RvNXNNdd

 Ghost Projects and Payrolls

This is done by the high officials of the government whereby non-existing

projects are financed by the government while non-existing personnel or
pensioners are being paid salaries and allowances.

This practice is rampant in government agencies involved in formulation

and implementation of programs and projects particularly in infrastructure
and in the granting of salaries, allowances and pension benefits.

e.g. PDAF or pork barrel scam in 2013 involved the funding of "ghost projects" that were
funded using the PDAF funds of participating lawmakers.
Evasion of public bidding in the awarding of
Contracts
Government offices particularly, Bids and Awards Committees (BAC) forego the
awarding of contracts to favored business enterprises or contractors. Sometimes,
members of bids and awards committees are very subjective of awarding the
contract to those who can provide them with personal benefits.

e.g. For the automation of the counting and canvassing of the ballots in the 2004
elections, Comelec awarded the Contract to “Mega Pacific Consortium” an entity
that had not participated in the bidding. Comelec awarded this billion-peso
undertaking with inexplicable haste, without adequately checking and observing
mandatory financial, technical and legal requirements. It also accepted the
proffered computer hardware and software even if, at the time of the award, they
had undeniably failed to pass eight critical requirements designed to safeguard the
integrity of elections
 Passing of Contracts

In the construction of infrastructure projects, contractors have the practice of passing the
work from one contractor to another and in the process certain percentage of the project value
is retained by each contractor and subcontractors resulting to the use of substandard materials
or even unfinished projects.
 Nepotism and Favoritism

Government officials particularly occupying those high positions tend to cause

the appointment or employment of relatives and close friends to the government
positions even if they are not qualified or eligible to discharge the functions of that
office. This is one of the root causes of inefficiency and the overflowing of the
government employees in the bureaucracy.
 EXTORTION

This is done by government officials against their clients by demanding

money, valuable items, or services from ordinary citizens who transact
business with them or their office. This is rampant in agencies issuing
clearances, and other documents, those involved in the recruitment of
personnel, or those performing services that directly favor ordinary citizens.
 “TONG” or PROTECTION MONEY
This is form of bribery which is done by citizens performing illegal activities
and operations. They deliver huge amount of money to government officials
particularly those in- charge of enforcing the law in exchange for
unhampered illegal operation. The law enforcement officer who receives the
money will be duty – bound to protect the citizen concerned together with
his illegal activities from other law enforcement authorities. This is practiced
mostly by gambling lords and those engaged in business without the
necessary permits.
 “LAGAY” SYSTEM or BRIBERY

The “lagay” system or the act of citizens to bribe government officials

occupying sensitive positions in government is perpetuated due to bureaucratic red
tape. The most frequently employed method is offering a considerable amount of
money to a government official who can facilitate the issuance of the desired
documents in agencies issuing licenses, permits, clearances, and those agencies
deputized to make decisions on particular issues.
 COSTS OF CORRUPTION ON POLITICS,
ADMINISTRATION, & INSTITUTION

 Economic effects
 Environmental & Social effects
 Effects on Humanitarian Aid
 Other areas, health, public safety, education, trade
 Since corruption weakens the state’s capacity to raise revenue and
perform its core functions, it increases tax evasion. According to the 2017
UNU-Wider report (2013 data), tax evasion costs Philippines almost $7.4
billion annually, or 2.7% of its GDP. 
 By inflating costs in the public procurement process, corruption
undermines the quantity and quality of public spending. In addition to
procurement abuses, the pork barrel scam (PDAF) illustrates such
challenges. In the Philippines, the history of such funds began already in
the American colonial period but seems to have intensified following
President Corazon Aquino’s creation of the Countrywide Development
Fund in 1990.
 Because of lower public revenues, countries tend to rely more on central
bank financing, which creates an inflation bias. In the Philippines,
examples include recent inflation concerns that seem to have been fueled
by supply abuses and hoarding of rice and the consequent destabilized
prices (rice smuggling had soared already in the Benigno Aquino III era).
 In the domestic front, corruption is seen as a serious human rights issue as it affects

development, undermines the rule of law, impedes efforts to reduce poverty, and demonstrates

bad governance.  It has become extremely debilitating that the continuing budget deficit, seen

lately as largely due to corruption, has resulted to cutbacks in expenditures for much needed

social services. 

 Education for example is in dire need of budget augmentation as lack of classrooms and

qualified teachers abound amidst the growing student population.  Infrastructure development

has been plagued by poor quality and substandard materials, thereby endangering the safety

of the public at large.  Programs to alleviate poverty and mitigate environmental degradation

have been sacrificed as a growing proportion of the budget ends-up in the pockets of public

officials.  As a result, crime rates are increasing and peace and order have been compromised.

Stunting the development of the nation: Combating political corruption in the Philippines , Danny M. Valenzuela, 2009
 End
Thank You
MEAURES EMPLOYED TO
CONTROL GRAFT AND
CORRUPTION
The government employs legal measures and anti-corruption bodies to combat
the problem of graft and corruption.

1. LEGAL MEASURES

 The 1987 Philippine Constitution

Article XI of the 1897 Philippine constitution, titled "Accountability of Public
Officers", states in Section 1 that "public office is a public trust", public Officers
and employment 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.
Section II of the same article states that the President, Vice President,
members of the constitutional commissions and the ombudsman may be
removed from the office from impeachment for bribery and graft and corruption.
 Republic Act No.. 3019 also known as the Anti-Graft and Corrupt
Practices Act of 1960
This law enumerates all corrupt practice of any public officer, declares them
unlawful and provides the corresponding penalties of imprisonment (between 6 -
15 years) perpetual disqualification from public office, and confiscation of
forfeiture of unexplained wealth in favor of the government.

 Executive Order No. 292 of the Administrative Code of 1987

This order reiterates the provisions embodies in Section 1, Article XI of the

1987 Constitution. It also gives the President the power to institute proceedings
to recover properties unlawfully acquired by public officials and employees.
 Republic Act No. 6713 also known as the Code of Conduct and Ethical
Standards for Public Officials and Employees of 1989

This act promotes a high standard of ethics and requires all government
personnel to make an accurate statement of assets and liabilities, disclosure of
net worth and financial connections. It also requires new public officials to
divest ownership in any private enterprise within 30 days from assumptions of
office to avoid conflict of interest.

 Republic Act No. 6770 also known s the Ombudsman Act of 1989

This provides the functional and structural organization of the Office of the
Ombudsman.
 Republic Act No. 7055 also known as An Act Strengthening
Civilian Supremacy over the Military
This law creates two avenues for trying erring members of the Armed Forces of the
Philippines & other members subject to military laws. Crimes penalized by the Revised
Penal Code and other special penal laws and local government ordinances shall be
tried in civil courts. Military courts shall take cognizance of service-oriented crimes
only.

 Republic Act No. 7080 also known as the Act Defining and
Penalizing the Crime of Plunder

This act penalizes any public officer who by himself or in connivance with
members of his family, relatives, by affinity or consanguinity, business associates,
accumulates or acquires ill-gotten wealth, through a combination of series of event
criminal acts, an aggregate amount to total value of at least fifty million pesos
(P50,000,000.00)
 Republic Act No. 8249 also known as the Act Further Defining the
Jurisdiction of the Sandiganbayan
This classifies the Sandiganbayan as a special court and places it at par with the Court of
Appeals.

 Presidential Decree No. 46

declares it unlawful for government officials to receive gifts and for private
persons to give gifts on any occasion including Christmas, regardless of whether
the gift is for past or future favors. It also prohibits entertaining public officials and
their relatives. (Enrile distributed saved budget of last year to the senator and was
objected by Santiago)
 Presidential Decree No. 677 requires the Statement of Assets and Liabilities to
be submitted every year.
 Presidential Decree No. 749 grants immunity from prosecution to givers of
bribes and other gifts and to their accomplices in bribery charges if they testify
against the public officials or private persons guilty of those offences.
Constitutional Anti-corruption Bodies
The 1987 Constitution has created constitutional bodies to deal on graft &
corruption and to effectively implement provisions of public accountability. These
bodies are granted fiscal authority to ensure their independence and their actions are
appealable only to the Supreme Court. These constitutional bodies are:

a. The office of the Ombudsman (OMB)

The Office of the Ombudsman investigates and act on complaints filed against
public officials and employees, and serve as the “people’s watchdog” of the
government.
The Ombudsman and his deputies (Overall Deputy Ombudsman, Deputy
Ombudsman for Military, One Deputy Ombudsman each for Luzon, Visayas, and
Mindanao) are the “protectors of the people.” This Office:
 i. Oversees the general and specific performance of official functions so that laws are
properly administered;
ii. Ensures the steady and efficient delivery of public services;
iii. Initiates the refinement of public procedures and practices; and
iv. Imposes administrative sanctions on erring government officials and employees, and
prosecute them for penal violations.

b. The Civil Service Commission (CSC)

The CSC is the central personnel agency of the government which is mandated
to establish a career service and promote moral, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the civil service. It shall also
strengthen the merit and rewards systems, human resource development, and
public accountability. It has jurisdiction over administrative cases including graft &
corruption brought before it on appeal.
c. The Commission on Audit (COA)

The COA is the watchdog of the financial operations of the government. It is

empowered to examine, audit, and settle all accounts pertaining to the revenue
and receipts of, and expenditures or uses of funds and property under the
custody of the government agencies and instrumentalities. It shall promulgate
accounting and auditing rules and regulations for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable
expenditures, or use of government funds and properties.

d. The Sandiganbayan
The Sandiganbayan is the Anti-graft court of the Philippines. It has
jurisdiction over civil and criminal cases involving graft & corruption and such
other offenses committed by public officers and employees. It is in charge of
maintaining morality, integrity, and efficiency in the public service.
 Other Government Anti-corruption Bodies
 The Department of Justice (DOJ)
The DOJ conducts preliminary investigations on complaints of a criminal nature against
public officials that are filed with the Department, subject to the approval of the OMB if the
offense investigated was committed by the public official in relation to his office. The DOJ also
prosecutes in these cases if the public officials involved belong the ranks lower than salary
grade 27.

 The National Bureau of Investigation (NBI) and the Philippine National Police (PNP)

These law enforcement agencies conduct fact-finding investigations on graft cases.

They conduct entrapment operations which, if successful, result in the arrest and filing
of criminal complaint against the perpetrators in the courts. It may issue subpoena and
serve warrants of arrest issued by the courts. The NBI agents or policeman who
conducted the investigation also acts as witness for the prosecution during journal
preliminary investigation and the prosecution of the case by the ombudsman.
 The Presidential Commission on Good Government (PCGG)
This was created primarily to go after ill- gotten wealth. It is also tasked to adopt safeguards
to ensure that corruption shall not be repeated and institute measures to prevent the occurrence
of corruption.

 The Presidential Commission against Graft & Corruption

This was created under Executive Order No by then President Ramos to investigate graft and
corruption cases in the executive department. It has jurisdiction over corruption cases if the crime
involves:
1. Appointees with rank of or higher than Assistant Regional Director,
3. An Offense that may threaten grievous harm to national interest; and
4. Cases specifically assigned by the president.
5. The Inter-Agency Anti-Graft Coordinating Council

The council coordinates the government anti- corruption efforts. It is composed of the COA,
CSC, the Ombudsman, DOJ, NBI, and the Presidential Commission against Graft & Corruption.
IMPEDIMENTS TO THE ANTI-
CORRUPTION EFFORTS
 Specific culture of Filipinos is enhancing the proliferation of graft and corruption.
The strong family ties justify giving benefits to unqualified recipients which are very
evident in employment and awarding of contracts. This societal phenomenon is
adversely affecting professionalism, efficiency, and effectiveness in the government
service as well as in the construction of public infrastructure and procurement of
government supplies and materials that are sometimes substandard & overpriced.

 The Filipino culture of gift giving justifies bribery and extortion thereby making it
hard for law enforcement and anti-corruption agencies to arrest the problem. This
social practice renders inutile the law prohibiting gift giving thereby further
enhancing this corrupt practice.

 Agencies deputized to fight graft & corruption are not well funded by the
government. There is also lack of recognition, merits, awards, and rewards given by
the government for the efforts of anti- corruption bodies. Personnel of these
agencies mandated to go against corrupt public officials are vulnerable to bribery
because of lack of financial support, integrity, and professionalism.
 Transparency is not religiously observed particularly in government transactions. The
public is denied access to activities of government officials. The people are not informed,
in detail, of the share of each executive department, the legislature and the judiciary, in
the national budget and how these departments spend their financial requirements.
 Effective monitoring of government programs and projects as well as expenditures are
not being seriously undertaken by those tasked to monitor them. They are also
vulnerable to bribery and do not actually conduct thorough inspection but merely rely
on information gathered.
 The statement of assets and liabilities, which is an effective mechanism to curb graft and
corruption is religiously submitted yearly by all public officials. However, no agency of
government is deputized to examine the veracity of the data entered in those
statements. Most public officials with unexplained wealth can successfully hide the same
by paying accountants to make accurate and official statements for them.

 Other anti-corruption provisions may work against getting good people in the
government.