Cost of Corruption
The Philippine Daily Inquirer
(June 15 , 2000)
THE WORLD Bank last week released a report quantifying the economic costs of corruption in the Philippines over the past 25 years. The report said that corruption is a "systematic" problem that had bled the government of more thanP1 trillion during that period.
The report went on to say that at least 20 percent of the government funds for projects in 1998 alone ended up as "kickbacks" with P241.1 billion out of the P546.7 billion total budget (or 4.4 percent of the budget lost to corruption. The bank cited a 1998 Civil Service Commission report which estimated losses of approximately Pl.96 trillion over the past 20 years due to corruption. The amount exceeded the country's entire foreign debt of $40.6 billion.
"Whatever the exact figure is, the direct costs are likely to be dwarfed by the indirect costs such as opportunities lost to substandard education, poor farm-to-market transportation, or lives lost to shoddy construction, subverted building and fire inspection, and absence of essential medical supplies," the report also pointed out.
A World Economic Forum report on the competitiveness of economies across the world described the Philippines as among the countries where "irregular, additional payments are common." The study listed the Philippines as the 45th among the 53 countries in terms of competitiveness. The bank said that the Philippines has been cited as a country where corruption inhibited foreign and domestic investments, as well s eroded the country's competitive position.
The costs cited above are certainly staggering. But it should be noted that the corruption on which the bank focused its investigative efforts is what it calls "systemic," or institutionalized, corruption. It is a corruption that is different from the thievery of the Marcos regime whose colossal plunder, driven by executive power rather than economic competitiveness, went beyond bureaucratic chicanery. The most conservative estimate puts the Marcos's' ill-gotten wealth at $10 billion. This is the kind of corruption directed from the top that is beyond the ken of the World Bank's study.
The bank is not talking about grand larceny directed from the commanding heights of power. It pinpoints corruption in revenue-generating agencies, in the disbursement and use of the "pork barrel" and "patronage" exchange. It identifies patronage as a major area of corruption where elected officials seek to reward their supporters through political favors such as appointment to government positions and cited as a source a study made by the Philippine Center for Investigative Journalism.