CORRUPTIO

N
AND
REAL
ESTATE
Presentors:
Yvony B. Dela Cruz
Jun Carlo F. Desconte
2

C OAnecdotal
o Some N T E N Evidence
TS
o The Principal-Agent Model

o Different Level of Corruptions

o Cost and Benefits of Corruption for Society at Large

o Alleged Benefits of Corruption

Crypto: investing & trading

Corruption is a form of dishonesty or a criminal offense which is
undertaken by a person or an organization which is entrusted in
a position of authority, in order to acquire illicit benefits or abuse
power for one's personal gain.
• Graft • Embezzlement
• Bribery • Extortion
• Favouritism • Racketeering
• Nepotism • Fraud
• Impunity • Tax Evasion
• Lack of Transparency
Investment in the real estate sector offers advantages for both legitimate
investors and for those who intend to misuse the sector for criminal purposes.

One of the goals of investing in real estate is to get a positive return on

the investment when the investor decides to sell the property in the future.
Criminals, however, abuse the facility of the sector while providing an
avenue for obscuring the true source of funds and the identity of the
ultimate beneficial owner of the real asset, which are the two key elements
of the money laundering process.
Principal-Agent Model

A Principal-Agent Model refers to the relationship between

an asset owner or principal and the agent or person
contracted to manage that asset on the owner's behalf.
Different Level of Corruptions
High Level Corruption

-refers to misconduct at the top and by leading politicians. Since these people are
generally well-off and have a lot of privileges associated with their high office, their
corrupt behaviour is not attributable to low pay and out of necessity to meet the living
expenses of their families. Instead, greed is considered a main motivating factor.

Low Level Corruption

-this case the general perception is that civil servants with insufficient salaries to meet the
living expenses of their families are driven by necessity to engage in corrupt practices.
There are other laws that penalize
corrupt acts/practices and prohibit the
giving of gifts to public officers under
certain circumstances.

• Republic Act No. 3019 (The Anti-Graft and Corrupt Practices Act) is the main anti-corruption
law. It enumerates certain acts of public officers that constitute graft or corrupt practices.
• Republic Act 6713 (The Code of Conduct and Ethical Standards for Public Officials and
Employees) prohibits public officials and employees from soliciting or accepting, directly or
indirectly, any gift, gratuity, favour, entertainment, loan or anything of monetary value from
any person: (a) in the course of their official duties; or (b) in connection with any operation
being regulated by, or any transaction which may be affected by, the functions of their office.
• Presidential Decree No. 46 (Giving of Gifts on any Occasion) punishes the act of giving, or
offering to give, to a public official or employee, a gift, present or other valuable thing on any
occasion, including Christmas, when such gift, present or other valuable thing is given by
reason of the public official/employee’s position, regardless of whether or not the same is for
past favour or the giver hopes or expects to receive a favour or better treatment in the future
from the public official or employee concerned, in the discharge of his official functions.