Corporate Governance and Firm Value: The Impact of Corporate Social ResponsibilityHoje Jo Maretno A. Harjoto Journal of Business Ethics (Impact Factor: 0.96). 01/2011; 103(3):351-383. DOI: 10.1007/s10551-011-0869-y

ABSTRACT This study investigates the effects of internal and external corporate governance and monitoring mechanisms on the choiceof corporate social responsibility (CSR) engagement and the value of firms engaging in CSR activities. The study finds theCSR choice is positively associated with the internal and external corporate governance and monitoring mechanisms, includingboard leadership, board independence, institutional ownership, analyst following, and anti- takeover provisions, after controllingfor various firm characteristics. After correcting for endogeneity and simultaneity issues, the results show that CSR engagementpositively influences firm value measured by industry-adjusted Tobin’s q. We find that the impact of analyst following forfirms that engage in CSR on firm value is strongly positive, while the board leadership, board independence, blockholders’ownership, and institutional ownership play a relatively weaker role in enhancing firm value. Furthermore, we find that CSRactivities that address internal social enhancement within the firm, such as employees diversity, firm relationship with itsemployees, and product quality, enhance the value of firm more than other CSR subcategories for broader external social enhancementsuch as community relation and environmental concerns.

Keywordscorporate social responsibility–corporate governance–analyst following–firm value

Exit Essay: Corruption in the PhilippinesPosted on December 6, 2013

                    Corruption is one of the most serious social issues the Philippines

faces today. It is the spiritual or moral impurity or deviation from an ideal.

Corruption may include many activities

including bribery and embezzlement. Government, or ‘political’,

corruption occurs when an office-holder or other governmental employee acts in

an official capacity for personal gain. Basically, it means the selfishness of one

individual in order to pursue his or her self-interest. This devious act may result

to harsh circumstances for the victims, like poverty.

                    In recent years, there have been evident discoveries of this act

executed within the Philippine government. The most recent and famous would

be the priority development assistance fund or the Pork Barrel scam. Each

Government official is given a certain amount of money in order to pursue their

desired projects to help financially challenged Filipino citizens in order to rise

out of poverty and for the development of the Philippines as a whole. But recent

discoveries have shown that these projects were never put into action and the

money would go to a bogus non-government organization led by Janet Lim

Napoles. It was then discovered that these officials spent the money for their

own personal desires. Billions of pesos were stolen from the Filipino people. The

money would have helped the country’s current situation but it all went to

unworthy government officials.

                    The Philippines has a history of corruption and it can be dated back

to the Spanish colonization. Spanish colonizers took control of the Philippines for

over three hundred years, during their reign they established a bureaucracy

headed by friars and other high positioned Spaniards. Business was set up

particularly for the greater good of Spain and the Philippines did not benefit

from these whatsoever. A good example would be the encomienda system

where Filipinos worked in a farm and an encomiendero (tax collector) was

tasked to collect money or the produced goods. The encomiendero would be

very corrupt and use the goods for himself. Latter, the system was abolished

because it was very corrupt.

                    The Philippines has a history of corruption and this may be the

reason why officials are still corrupt to this day. But history should not be an

excuse and citizens should find ways in order to end this act of fraud. There are

numerous ways of trying to prevent or totally eliminate this from happening.

One can be the transparency of the Pork Barrel or PDAF. It should be explained

to the people or credible representatives where the money goes and what

projects do officials pursue. Another can be the total eradication of the Priority

development assistance fund in order to eliminate this idea of corruption

completely. Solutions should be made in order for corruption to stop in the

Philippines. It has been going on in this country for more than a century and it is

unacceptable. The government should find ways to eradicate this for the

development of the Philippines. 

The Philippines is a republic with a presidential form of government wherein power is equally divided among its three branches: executive, legislative, and judicial.

One basic corollary in a presidential system of government is the principle of separation of powers wherein legislation belongs to Congress, execution to the Executive, and settlement of legal controversies to the Judiciary.

The Legislative branch is authorized to make laws, alter, and repeal them through the power vested in the Philippine Congress. This institution is divided into the Senate and the House of Representatives. The Executive branch is composed of the President and the Vice President who are elected by direct popular vote and serve a term of six years. The Constitution grants the President authority to appoint his Cabinet. These departments form a large portion of the country’s bureaucracy.

The Judicial branch holds the power to settle controversies involving rights that are legally demandable and enforceable. This branch determines whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part and instrumentality of the government. It is made up of a Supreme Court and lower courts.

The Constitution expressly grants the Supreme Court the power of Judicial Review as the power to declare a treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance or regulation unconstitutional.

Improving Efficiency in the Philippine Government – The Anti-Red Tape LawEntrepreneurs are exposed to government agencies in the usual daily grind of their

business. Most companies have to submit monthly forms to the Bureau of Internal Revenue

such as the 2550M (Monthly Value-Added Tax Declaration), or the 2551 M (Monthly

Percentage Tax Return) or the 1601-C (Monthly Remittance Return of Income Taxes

Withheld on Compensation). Employers have to file their reports with the Social Security

System, Philhealth and the Home Development Mutual Fund (Pag-ibig). Entrepreneurs have

to renew their business permits every January with the respective local government unit

where their business is located. Corporations have to file their financial statements with the

Securities & Exchange Commission within 120 calendar days after the end of the fiscal year.

Moreover, corporations also have to submit their General Information Sheet (GIS) with the

Securities & Exchange Commission within 30 days from the date of the annual actual

stockholders’ meeting. If no meeting is held, said GIS must be filed not later than January 30

of the next calendar year.

As such, exposure to government agencies is inevitable. However, most entrepreneurs

oftentimes find it frustrating to deal with government agencies because of the bureaucratic

red tape, corruption and slow delivery of services. In response to this prevalent sentiment,

Republic Act No. 9485, or the Anti-Red Tape Act, was enacted to improve efficiency in the

delivery of government service to the public by reducing bureaucratic red tape and

preventing graft and corruption. Thus, the policy of the Anti Red Tape Act is to promote

integrity, accountability, proper management of public affairs and public property as well as

to establish effective practices aimed at the prevention of graft and corruption in

government. The law aims 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.

The Anti-Ted Tape Act applies to all government agencies. However, those performing

judicial (such as courts), quasi-judicial (i.e. National Labor Relations Commission, Housing

and Land Use Regulatory Board) and legislative (Congress) functions are excluded from the

coverage of the law. However, their respective frontline services are deemed included.

The salient features of the Anti-Red Tape Act are as follows:

A. All government agencies which provide frontline services are mandated to regularly

undertake time and motion studies, undergo evaluation and improvement of their

transaction systems and procedures and re-engineer the same if deemed necessary to

reduce bureaucratic red tape and processing time.

B. All government agencies shall set up their respective service standards to be known as

the Citizen’s Charter in the form of information billboards which should be posted at the

main entrance of offices or at the most conspicuous place, and in the form of published

materials written either in English, Filipino, or in the local dialect, that detail:

(a) The procedure to obtain a particular service;

(b) The person/s responsible for each step;

(c) The maximum time to conclude the process;

(d) The document/s to be presented by the customer, if necessary;

(e) The amount of fees, if necessary; and

(f) The procedure for filing complaints.

C. More accessible frontline services such as:

1. All officers or employees shall accept written applications, requests, or documents being

submitted by clients of the office or agencies.

2. The responsible officer or employee shall acknowledge receipt of such application and/or

request by writing or printing clearly thereon his/her name, the unit where he/she is

connected with, and the time and date of receipt.

3. The receiving officer or employee shall perform a preliminary assessment of the request

so as to promote a more expeditious action on requests.

4. All applications and/or requests submitted shall be acted upon by the assigned officer or

employee during the period stated in the Citizen’s Charter which shall not be longer than

five (5) working days in the case of simple transactions and ten (10) working days in the

case of complex transactions from the date the request or application was received. “Simple

Transactions” refer to requests or applications which only require ministerial actions on the

part of the public officer or employee, or that which present only inconsequential issues for

resolution by an officer or employee of said government office. On the other hand, “Complex

Transactions” refer to requests or applications submitted by clients of a government office

which necessitate the use of discretion in the resolution of complicated issues by an officer

or employee of said government office, such transaction to be determined by the office

concerned.

5. Depending on the nature of the frontline services requested, the maximum time

prescribed above may be extended. The office or agency concerned shall notify the

requesting party in writing of the reason for the extension and the final date of release for

the extension and the final date of release of the frontline service/s requested.

6. No application or request shall be returned to the client without appropriate action. In

case an application or request is disapproved, the officer or employee who rendered the

decision shall send a formal notice to the client within five (5) working days from the receipt

of the request and/or application, stating therein the reason for the disapproval including a

list of specific requirement/s which the client failed to submit.

7. Any denial of request for access to government service shall be fully explained in writing,

stating the name of the person making the denial and the grounds upon which such denial is

based.

8. The number of signatories in any document shall be limited to a maximum of five

signatures which shall represent officers directly supervising the office or agency concerned.

9. Heads of offices and agencies which render frontline services shall adopt appropriate

working schedules to ensure that all clients who are within their premises prior to the end of

official working hours are attended to and served even during lunch break and after regular

working hours.

10. All employees transacting with the public shall be provided with an official identification

card which should be visibly worn during office hours.

11. Government agencies shall establish a public assistance/complaints desk in all their

offices.

D. If a government agency fails to act on an application and/or request for renewal of a

license, permit or authority subject for renewal within the prescribed period, said permit,

license or authority shall automatically be extended until a decision or resolution is rendered

on the application for renewal: provided that the automatic extension shall not apply when

the permit, license, or authority covers activities which pose danger to public health, public

safety, public morals or to public policy including, but not limited to, natural resource

extraction activities or when the license or permit has already expired.

E. All offices and agencies providing frontline services shall be subjected to a Report Card

Survey which shall be used to obtain feedback on how provisions in the Citizen’s Charter are

being followed and how the agency is performing. The Report Card Survey shall also be used

to obtain information and/or estimates of hidden costs incurred by clients to access frontline

services which may include, but is not limited to, bribes and payment to fixers.

Violation of the Anti-Red Tape Act is punishable by administrative penalties, fine and/or

imprisonment. For light offenses, the first offense is punishable by thirty (30) days

suspension without pay and mandatory attendance in Values Orientation Program; Second

Offense by three (3) months suspension without pay; and the third Offense merits dismissal

and perpetual disqualification from public service.

The following are considered as light offenses:

1. Refusal to accept application and/or request within the prescribed period or any document

being submitted by a client;

2. Failure to act on an application and/or request or failure to refer back to the client a

request which cannot be acted upon due to lack of requirement/s within the prescribed

period;

3. Failure to attend to clients who are within the premises of the office or agency concerned

prior to the end of official working hours and during lunch

4. Failure to render frontline services within the prescribed period on any application and/or

request without due cause;

5. Failure to give the client a written notice on the disapproval of an application or request;

and

6. Imposition of additional irrelevant requirements other than those listed in the first notice.

On the other hand, grave offenses are those considered as fixing and/or collusion with fixers

in consideration of economic and/or other gain or advantage. This is penalized by dismissal

and perpetual disqualification from public service. In addition, fixers shall suffer the penalty

of imprisonment not exceeding six years or a fine not less than Twenty Thousand Pesos

(P20,000.00) but not more than Two Hundred Thousand Pesos (P200,000.00) or both fine

and imprisonment at the discretion of the court.

The policy of the Anti-Red Tape Act is commendable. Such response by Congress shows a

glimmer of hope to the citizen’s ardent wish to have a more responsive government. As

such, everyone is watching closely if indeed, this policy can be properly implemented and

will eliminate the long-standing culture of government inaction and bureaucratic red tape.

Nicolas & De Vega Law Offices is a full-service firm located at the 16th Flr., Suite 1607 AIC

Burgundy Empire Tower, ADB Ave., Ortigas Center, Pasig City, Metro Manila, Philippines. You

may call any of our lawyers at +632 4706126 or visit our website www.ndvlaw.com.

Corrupt Philippines? Look at AmericaJustifying moving to the United States or refusing to go back home based on the

argument that the Philippines is thoroughly corrupted does not work. This condition is

equally endemic in the new home.

Patricio N. Abinales

Published 7:30 AM, Nov 18, 2014

Updated 7:30 AM, Nov 18, 2014

Thank God for the Internet and social media, public access to

information has grown by leaps and bounds. In the past, one waited for the daily rag to

be delivered at your doorstep or the monthly subscription to a newsmagazine sent by

slow mail. These days, all one needs is a WiFi connection and a fast computer to

download as much information about anything.

This also means that with all these information on hand, you’d expect the curious to

engage in the next step: to compare and contrast more substantively. However, as has

often been the case, the more one knows about something else, the less one is

interested in contrasting. The more information one acquires about issues other than

what he and his society face, the less curious he is about inquiring into whether these

have anything similar to his social settings.

Take the case of our elite's corruption and their plutomania. This issue has taken off of

late as a result of the Senate investigation into the alleged hidden wealth of Vice

President Jejomar Binay. If you add the scandal involving the distribution of largesse by

the Aquino administration to loyal allies, and the detention of 3 senators for helping

Janet Napoles siphon off millions of pesos in development funds, the depth of the

corruption appear unfathomable.

If you google "Philippine corruption" plus the specific issues mentioned above, you get

the following figures:

Category Hits on Google (November 7, 2014)

Philippine corruption 23,000,000

Binay and corruption 464,000

Aquino and PDAF 423,000

Enrile, Estrada, Revilla, Napoles45,000

Early this year, the Global Financial Integrity, a Washington, DC-based think tank,

reported that, from 1960 to 2011, the Philippine economy lost about $132.9 billion (P6

trillion-plus) to corruption. GFI broke down this total annually and came up with this

amount: P357 billion ($7.9 billion dollars, based on current exchange rates).

The magnitude of the amount lost have shocked many a Filipino-American. The most

notable response, among many, is to express anger but use this political filth to explain

and justify why moving to the United States was the sanest decision they have made in

their lives.

Well and good. However, if corruption is the main indicator for migration, Fil-Am critics

of Philippine politics and government might consider taking a look at their backyard. And

be surprised.

Using the same “method” – a Google search of corruption and political personalities and

institutions and the country in general – yields figures indicating that the Land of Gold

and Opportunity is not as politically pristine as it is imagined to be.

Category Hits in Google (November 7, 2014)

Political Corruption American Congress 117,000,000

Political Corruption United States 56,100,000

Political Corruption Pres. Barack Obama 32,900,000

Political Corruption Pres. George W. Bush12,900,00

Granted that the United States has a larger body politic compared to the Philippines, the

magnitude of corruption still suggests the same. In both countries, billions of public

funds (active and potential) have ended up in the pocket of a small elite.

One could also argue that this is the wrong comparison: the Philippines should be put

alongside developing countries (like Indonesia and Burma), while the United States’

place would be with the developed world.

Not so, says Transparency International, whose 2012 survey of “money politics” and

corruption shows that the United States “scores the worse than many of its partners in

the development world.”

Like Filipinos, Americans are aware of all this. The Sunlight Foundation website quotes

Transnational Institute as saying, “Americans believe there are continued transparency

and corruption issues in local, state, and national government institutions and

processes.”

And like Filipino elites, many in the United States elude jail. There are exceptions, of

course, but in general the corrupt and the rich get to keep the monies they tricked the

public into giving.

My point here is quite simple and straightforward: justifying moving here or refusing to

go back home based on the argument that the homeland is thoroughly corrupted does

not work. This condition is equally endemic in the new home.

The problem is that Fil-Ams are less acutely knowledgeable about their domestic

malaise. Going by what their foremost columnists write about, the tendency is to judge

the Philippines as a failed state, which is like turning a blind eye to their host country’s

venality.

For example, the opinion pieces of the recent issue of   The Filipino Express  are all

reprints of columns back home. The ones that explore American issues are mostly

about immigration-related issues . A similar pattern is evident in another editorial page

of the Filipino Reporter , where commentaries on the Philippines and its ails outnumber

trifling asides on the challenges of becoming American.

Put another way, one is quick to point out the waste of aid to the victims of Super

Typhoon Yolanda (Haiyan) and blame it on our politicos, but one says very little of the

same thievery that followed the blight Typhoon Katrina had brought down on Louisiana,

led by their own mayor. And we are not even talking about the monies going to the

pocket of corporations and individuals from the war in Iraq.

There ought to be other variables by which the Philippines can be contrasted with the

United States. Corruption will not do. – Rappler.com

Patricio N. Abinales is professor of Asian Studies at the University of Hawaii-Manoa.

Failed Anticorruption Mechanisms In The Philippines Politics Essay

Corruption has been universally characterized as the misuse or the abuse of public office for private

gain. Its manifestations come in different forms such as illegal enticements and pay-offs, extortion,

fraud, nepotism, graft, speed money, pilferage, theft, and embezzlement, falsification of records,

kickbacks, influence peddling and campaign contributions. Although corruption is known to be an

attribute of the public sector, it also exists in other facets of governance, like political parties, private

business sector and NGOs (USAID, 2005; World Bank, 2001).

Combating corruption is, evidently, important in its own right because when it is left unimpeded, it will

have an acerbic effect on a democracy and in the general well being of a nation. Similarly, fighting

corruption can serve as a switch or a tool resulting in wide-ranging economic reforms that can create

a level playing field on which businesses operate. These supplementary gains can become

significant components in the effort to marshal support for anti-corruption initiatives.

Basically, corruption is predominantly an issue of governance; it manifests a breakdown of

institutions, a dearth of competence and a lack of capability to direct society and manage its people

through a framework of social, judicial, political and economic checks and balances. When formal

structures and informal systems go kaput, it becomes tougher and more difficult to put into practice

and put into effect laws and policies that guarantee accountability and transparency. From an

institutional perspective, corruption crops up when public officials have extensive influence and

ubiquitous power, little accountability and vicious inducements, or when their accountability responds

to informal rather than formal forms of regulation (UNDP, 2004, p. 2).

Attempts to assail corruption have grown exponentially in the last decades. High-profile cases of

corruption in developing countries and emerging economies, within international organizations, and

in the advanced industrial democracies have resulted to a growing public demand to attack the

problem forcefully and with conviction.

Addressing the Issue

One could never get to the bottom of corruption by simply digging over and dig out corrupt

individuals, whether they are government officials, politicians, or business people. As it is, corruption

prospers in environments where legal structures are vague, the rule of law is not deeply entrenched

within cultural standards and where laws and the judiciary allow employees chances to exercise or

wield unrestricted authority and unlimited power throughout various levels of government. As

economies embark on liberalization, corruption can surface within the very process of change.

Example, privatization is a major strategy constituent in the conversion of a government-dominated

economy into one driven by private initiative. However, this changeover process can alter public

officials when it is merged with a blend of low government wages and economic stagnation. Clearly,

it is futile to get rid of leaders for governing a corrupt system if there are no changes made into that

system; simply educating government leaders would not be sufficient (Sullivan, 2000, pp. 3-9).

In the Philippines, extensive corruption continues rage. According to the international corruption

perception index, the Philippines is one of the most dishonest countries in the Asia-Pacific Region; it

ranked number 126 from a list of 163 countries (Transparency International, 2006). Distribution of

resources does not have transparency and many civil groups are kept out from taking part in the

process of drafting and consolidating the national budget. Corruption devours a substantial

proportion of government projects, with pay-offs and bureaucratic red tape being unconcealed

predicament. Similarly, there still exist countless problems in the bidding processes for government

projects. As it is, frail mechanisms for transparency and answerability promote bureaucratic

corruption and as can be observed, institutions given the task to investigate and resolve corruption-

related cases, like the Office of the Ombudsman and the Special Graft and Corruption Court or the

Sandiganbayan, have shown to lack efficiency and transparency. There have also been a number of

scandals involving top government officials, a good example of which is the bribery case involving a

China-based telecommunication firm (ZTE Corporation) and high-ranking government officials which

further stained government integrity (BTI, 2009, p. 21).

Institutions to Abolish Corruption

The creation and maintenance of institutions purposely dedicated to the eradication of corruption is

essential for the preservation of the rule of law as well as democratic institutions within countries. In

Asia, institutions that are distinctively committed to the abolition of corruption are found in most

countries of the region; however, the framework for which they base their operations has not been

designed to attain their apparent purpose. Majority of the agencies have extremely restricted powers

and work on diminutive budgetary allotments. These agencies frequently produce the idea of the

existence of initiatives for the purging of corruption but in reality these are only shallow schemes as

evidenced by the lack, and most of the times, total absence of genuine political will to produce

effectual institutions that would eradicate corruption. In effect, with the absence of political will, only

allegorical pronouncements are made about the purging of corruption while ruling regimes in fact

want to continue with the corrupt practices intrinsic within the system. Basically, the desire of people

and the will to effect change (who are the victims of corrupt practices) is strong, but unless people

who have this so-called ‘will to change’ can articulate such will in a vigorous manner and are

prepared to topple down political leaders who wish to carry on with fraudulent practices, change for

the better can never take place.

Institutions purposely intended to eliminate corruption should have the following attributes (ALRC,

2010, pp. 10-11):

Autonomy of mandate, powers and appointments— not solely for people who are at the helm but

also for all workers giving administrative support; personnel must be given security of tenure if their

independence in implementing constitutional functions is to be a reality, by creating stipulation in

significant legislation that they are not likely to be removed from office other than for transgression

and lack of decorum. In addition, constitutional safeguards are needed to make sure of the

trustworthiness of the individuals signed up to hold public positions in these institutions, as well as to

check their morality is intact.

Sufficient budgetary allocations to perform researches and inquiries, hearings, deterrence efforts,

education and trainings and all other related tasks necessary to attain effectiveness. A competent

law enforcement component to fight corruption must incorporate an investigation wing with adequate

training and resources.

Accessibility for people to air out grievances through diverse methods and must have other divisions

throughout the country.

Accountability to parliament and responsibility through appropriate methods that have been crafted

to thwart intrusions by the executive or any other branch of government.

Designed within the scaffold of the rule of law and the UN Convention against Corruption

Vigorous and credible programs and mechanisms are vital to combat corruption in the Philippines for

three reasons:

Through the media, business surveys and anti-corruption agencies, the Philippines is cited with

increasing regularity as a nation where foreign and domestic investments are hampered because of

corruption and whose competitive position is eroded because of its continued existence.

Corruption incontrovertibly depletes existing resources for development, obstructs the right of entry

to services for poor communities and destabilizes public confidence in the government’s resolve and

capability to serve the underprivileged.

Corruption has surfaced as a critical global measure for allocating scarce development aid reserves.

Strategies and Mechanisms Against CorruptionThe Philippines fight against corruption has lingered for decades. In this country, corruption is the

offshoot of a culture of personalism in politics, a Presidential structure which gives the President an

extensive range of powers and a fragile party-system incompetent in securing support through

programmatic politics. Such arrangement places public policy-making in the hands of specific

factions or “elite circles” that promote horse trading and spin fraudulent transaction within the

system. It has led to institutionalization of corruption as it filters through all of the political system

including official procedures and individual agencies (Balboa and Medalla, 2006, p. 12; Rocamora,

1997).

A good number of self-regulating entities and activist groups have embarked on investigations and

inquiries on Philippine corruption, with a common objective of upholding good governance,

accountability and to aid in anti-corruption efforts (Pacoy, 2008, p. 55). However, several studies

have revealed that it is not by chance why most government initiatives have been proven to be

unsatisfactory and even fail in its attempts to fight corruption (Larmour and Wolanin, 2001). Quite a

lot of factors pave the way and enable the “culture of corruption” to pervade which include the

governance environment and lack of political within frail institutions (Varela, 1996). Among the most

intense end results of corruption are: a) societal displacement triggered by warped economic growth,

poverty and income inequity; b) crushed political trustworthiness and reliability and deflated

bureaucracy; and c) jeopardized public order and safety (Larmour and Wolanin, 2001).

Figure 1 - Number of Anti-Corruption Programs

Source: Hills Governance Center. TI-Philippines (2001), Directory of Institutions,

Organizations & Agencies Involved in Combating Corruption in the Philippines.Diverse initiatives have been carried out to combat corruption in the country. On the government

side, these intercessions have been in the form of legal scaffolds, presidential pronouncements,

proclamations and other regulations, anti-graft and corruption bodies like presidential committees,

commissions, task forces and other committees and units created since the 1950s.

In the 1987 Philippine Constitution, the legal framework against corruption has been provided in

Article XI Section 1 which stipulates that, “Public office is a public trust. Public officers 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

abovementioned article equally affords an anti-graft court and an Ombudsman (Section 5). The anti-

graft court is called the Sandiganbayan and the Office of the Ombdusman is also known as the

Tanodbayan. The latter has the rank equivalent to that of a Constitutional Commission.

Almost each regime has a flagship committee created to respond to corruption issues and address

corruption-related cases in the country (Appendix-1). However, many of them, except for the

Presidential Commission against Graft and Corruption (PCAGC) that was instituted in 1994, were

short lived and were substituted by a new office or task force when the term of office of the

Presidents end.

Fundamentally, the Philippines is not lacking in efforts in curtailing corruption. Anti-corruption policies

and measures have been put in place to tackle diverse types of corrupt activities and conduct in the

government. In truth, observation has been made that there are just too many laws and regulatory

mechanisms and they ended up overlapping with each other. However, if just a few of them will be

implemented thoroughly, these laws are adequate and wide-ranging enough to put off fraudulent

practices.

Almost all government administrations designed anti-corruption efforts its catchphrases and in the

same way created new offices to perform these undertakings in order to produce the impression that

the new administration is strict and uncompromising in its anti-corruption initiatives. However,

creation of such bodies only led to superfluous functions and depletion of government resources.

While the Philippines has adequately fashioned the legal scaffold to respond to the issue and

address its concomitant problems and correspondingly created the institutions tasked to combat

corruption, perceptibly, effective implementation of these initiatives has been truly lacking. Absence

of a steadfast leadership and political will has made vulnerable these efforts to curtail corruption. It

appears that crooked politicians and government officials seemed to be very creative in their

methods of circumventing the safeguards that have been in place and get away with it. Hence, it

becomes imperative that policies targeted at thwarting acts of corruption and curtailing opportunities

for corrupt activities must be at the core of every reform initiative.

Weaknesses - FailureCurrent initiatives/mechanisms to combat corruption practices and catch fraudulent officials have

several limitations that eventually lead to their failure. Among these weaknesses are:

• Ineffectual and sluggish implementation of anti-corruption laws

• Incapability and poor coordination between anti-corruption agencies

• The low social awareness of and high tolerance for corruption

• Lack of institutionalization of government-business-civil society collaboration

• Lack of integrity and accountability in government-business transactions.

In addition, most anti-corruption campaigns are hampered by logistical problems. The Office of the

Ombudsman, the lead government body directed by the Philippine Constitution to combat corruption,

only gets 0.065% of the total national budget. These logistical problems avert the hiring of competent

staff to help guarantee the prompt and successful prosecution of corrupt public officials. On top of

this issue on logistics, prosecution of public officials in the Philippines has not been very effective in

putting off corruption because court procedures are so sluggish and wearisome. Currently, the

prosecution of corrupt public officials is exemplified by a very low conviction rate, in fact, according

to a former Ombudsman official, “a high-ranking government official accused of graft and corruption

has 94% chances of walking away” (Marcelo, 2006, p. 37).

In theory, the government’s high-status lifestyle check is an excellent anti-corruption program, in

practice, however, it has not been very efficient in unearthing irregularities and unlawful activities

committed by many top-level officials. To this point, it has not been able to push many organizational

insiders to report and provide evidence on the dubious standards of living and questionable sources

of wealth of many public bureaucrats. The most important weaknesses of existing anti-corruption

initiatives can be traced to derisory systems of putting into effect the code of transparency and

accountability of those who hold public power. As it is, government dealings are still veiled in

mystery, which increases the probability of abuse or misuse of power for personal gain. These anti-

corruption initiatives also depend greatly on mechanisms or instruments external to the agencies

being observed.

To address these weaknesses in existing anti-corruption strategies, organizational insiders or people

with reliable information must be persuaded to report shady practices that principally transpire in

organizational settings. Prompting the “silent majority” to report corrupt practices will generate

alternative cultures or behavior that will in due course eliminate individual and societal leniency for

corruption.

Strengthening Anti-Corruption InitiativesIn the Medium Term Philippine Development Plan (NEDA, 2004), the national government comes

clean with the fact that corruption is a key obstruction to continued growth and development of the

country and acknowledges that existing anti-corruption initiatives that include legislative actions and

administrative measures to improve transparency and effectiveness of sanctions against corrupt

behavior, have fallen short of expectations.

The Office of the Ombudsman, the constitutional body tasked to curtail, if not totally eliminate,

corruption, principally applies punitive and retributive procedures to in its anti-corruption approach. It

also supports the employment of forceful imposition of administrative sanctions, swift investigations

and prosecution of graft cases and responsive public assistance as instruments to fight corruption.

Concentrated graft watch over the system of government, values formation, collaboration with other

government agencies, and enhancements in systems and procedures are the other constituents of

its anti-corruption strategy. However, taken as a whole, the existing anti-corruption initiatives, which

include the then high-profile lifestyle checks of public officials and employees, continue to perform

below expectations (MTPDP, 2004).

ConclusionCorruption is actually a governance issue because it involves efficient implementation of institutions

and the well-organized and competent management of society via its political, economic, social and

judicial mechanisms. With the collapse or failure of these formal and informal institutions, laws and

policies that guarantee accountability and transparency of the government become harder to put into

operation.

It can be gleaned then that ruling groups, at their will, can lessen accountability, either by lack of

transparency or by affirming particular spheres of decision making off limits to inspection and

intercession. Therefore, it is imperative that mechanisms aiming to reduce and curtain opportunities

to dominate power are in place so that actions and activities that could undercut accountability are

instantaneously forestalled and obstructed. Ex-ante or preventive strategies should also be the core

element of reform.

Furthermore, since this issue is associated with the quality of leaders the country has, it is important

that the anti-corruption endeavor is focused on political reform and democratization. In the

Philippines, one of the root causes of corruption is tremendous personalism in Philippine politics and

the ‘winner takes all’ system of elections. Policies that will neutralize this structure must be

endorsed.

Likewise, the anti-corruption approach must be highlighted by a committed leadership and proficient

management to enable the execution of programs and make these programs and initiatives

sustainable in the long run. Additionally, continued reengineering of the bureaucracy is also a great

necessity, with reforms centered not only on attaining effectiveness and value, but also inculcating a

culture of rules in the system.

Lesson can be learned from Thai anti-corruption activist Pasuk Phongpaichit in curbing corruption.

According to this activist, the control of corruption demands three strategies -- first, the formal

machinery of monitoring officials and politicians needs to be drastically improved. There is a need for

political will to implement this; second, this will can be generated by popular pressure. We cannot

expect the bureaucrats and politicians who benefit from the political system to reform themselves;

and third, the public must be educated to exert moral and political pressure to outlaw corruption. The

mobilization of such public pressure depends on a clearer understanding of the modern concepts of

public office and public service and a more widespread awareness of the social costs and political

risks which corruption entails.

Six years (after 2001) since Transparency International accentuated the principal role of government

in anti-corruption initiatives and governance reforms, the same call for action is perceived by civil

servants today and is slowly but surely pervading the consciousness of Filipino constituents leading

to the implacable demand for civil service reforms, financial competence and authentic civil society

participation.

Since fighting corruption is everyone’s concern, forceful and potent crusades are needed aside from

passionate advocacy. The initiatives to diminish hoaxes and corruption in the government service no

longer sound as idealistic or impossible as they were decades ago as the Filipino youth and the

masses are fully conscious to the bleak reality that as long as corruption is left uncheck, integrity in

politics and in the civil service will remain tainted and while politics is tarnished with issues on

procurement and fiscal integrity, the civil service is perceived to have been constrained with public

service delivery. Moral profligacy is extensive because even those with the highest righteous

objectives are influenced to part with their morals into the politics of corruption.

“The fight against corruption should be more focused on state capture instead of defining it as an

agency problem. Right now the battleground should be shifted from small wars (principal-agent

problem) to a grand war (grand corruption, state capture). The challenge lies in the evolution of

strategies that are more creative and rigorous and because the challenges are greater the more

energy is needed. Due to the fact that the Philippines are a soft state, the country only has few

resources to do the battle. Therefore it makes sense to concentrate resources on strategies that

would make a big difference and provide the impetus for changes along a broad front. Said in other

words this would mean to do a lot for little instead of doing a little for a lot. Also, a shift should take

place from personal (patronage) to impersonal exchange (rules that are enforced impartially). The

country should come up with mechanism to develop constructs in which there are favorable

incentives to impersonal transactions. Concluding one could argue that a good starting point is to

devolve the power of discretion related through state capture, and to effectively reduce it by ensuring

that big ticket items are out of reach of the few big payers who hold concentrated authority. The

danger of course lies in the fact that this could lead to a decentralization of corruption. However, this

would at least deal with a greater numbers of rent seekers which would restrict any one faction to a

limited domain and prevents it from capturing regulations” (Gonzalez et al., 2006, pp.41-42).

Another matter of significance is that an enabling environment should must be created with

incentives and disincentives for change because this is a critical factor in the choice and stepwise

implementation of reform initiatives. And so as to obtain more insight into the problem of state

capture, the political culture must be explored well to see how it works. Undertakings that are

executed must be made sustainable because standalone endeavors are prone to be susceptible to

state capture. Likewise, in order to prevent that new initiatives are blocked by inefficiencies at other

levels, it is important that they transform into more comprehensive programs. Therefore, it is

imperative that while helpful windows of opportunity may crop up, there is a need to focus on the

long-term character of reform and to deal with existing expectations. To do this, actions that need to

be embarked upon must be commenced with the necessary budget resources as well as capable

and skillful manager to implement the targeted and programmatic anti-corruption campaign. This is

the part where civil society can play a vital role in the process because business associations and

NGOs can help identify and classify priorities and monitor outcomes. However, they cannot deploy

the political will and resources of the state that are needed in the end to create transparent and

accountable institutions.

Serious anti-corruption campaigns cannot only be commanded from the outside but also need

committed leadership from within, more specifically from the topmost levels of the state. While the

initial pressure for reform can come from below, any effective program should be supported from the

top. However, the downside is that any strategy that relies solely on high-level leadership will be

vulnerable to the many uncertainties related to the political process. A ‘convergence’ of strong

players would make for a breakthrough performance against corruption.

If leadership is broadly-based, this can make the difference in devising means for sustaining ends.

Broadening the number of stakeholders in various sectors and support their partaking in decision-

making can end policy biases while the decisions are made in all transparency, open to the scrutiny

of the public.

There is Hope

If corruption is assumed to arise from greed and the discretionary powers of public officials, there is

still fresh and enough hope for offering a vision of leadership and a strategic reform of the political

and bureaucratic system; and that of the people’s mind-set concerning public office and public

service. Let this be the battle cry of every Filipino.

ReferencesALRC. (2010). “A consultation on corruption and counter-corruption across Asia.”

Article 2, 9, 1, pp. 1-80

Balboa, J. and Medalla, E.M. (2006). “Anti-corruption and governance: the Philippine

experience.” Philippine Institute for Development Studies; Philippines APEC

Study Center Network

Bertelsmann Stiftung. (2009). BTI 2010 – Philippines country report. Gutersloh:

Bertelsmann Stiftung

Gonzalez, T. et al., (2006). Anti-corruption in the Philippines: creating virtuous circles of

integrity and accountability. The Development Academy of the Philippines,

Centre for Governance

Larmour, P. and Wolanin, N. (2001). Corruption and anti-corruption. Asia Pacific

Press. Asia Pacific School of Economics and Management & Australian Institute

of Criminology

Marcelo, S. (2006). “Combating Corruption in the Philippines.” ADB/OECD

Anti-Corruption Initiative for Asia and the Pacific.

Available:http://www.adb.org/Documents/Books/Controlling

Corruption/chapter1.pdf 18

NEDA. (2004). Medium Term Philippine Development Plan (2004-2010). Manila:

National Economic Development Authority

Pacoy, E. P. (2008). “Tracking anti-corruption initiatives: perceptions and experiences in

the Philippines, JOAAG, 3, 1, p. 55

Sullivan, J.D. (2000). Anti-Corruption Initiatives from a Business View Point. Center for

International Private Enterprise, US Chamber of Commerce

USAID. (2005 March 17). Fighting corruption. Retrieved November 25, 2010 from

www.usaid.gov/our_work/democracy_and_governance/technical_areas/anti-corruption/

Varela, A. (1996). “Administrative culture and political change.” College of Public

Administration, University of the Philippines

World Bank. (2001).Combating corruption in the Philippines: an update. Pasig City:

World Bank

Fighting Corruption to Improve Governance

http://www.undp.org/governance/docsaccount/fighting_corruption_to_improve_governance.pdf

UNDP/OECD Integrity Improvement Initiatives in Developing Countries

http://magnet.undp.org/Docs/efa/corruption/Corrupti.htm

What is corruption?

     “Our earth is degenerate in these latter days; bribery and corruption are common; children no

longer obey their parents; and the end of the world is evidently approaching.”[1]

     The word corruption has only been attached to politics. Corruption for us is only about the

money that politicians get from the government revenue. We have always believed that when a

person wants to be a politician or is a politician, that person is a corrupt one. But there are many

classifications and forms of corruption that we might not know, that not only revolves about

money, about politicians and in the government.

     According to lawyers, there are some broad classifications of corruption. Among these is

petty corruption that is practiced only on a smaller scale. It is the use of public office for private

benefit in the course of delivering a public service. It usually involves relatively small amounts

of money. Another one is grand corruption which is the most dangerous and underground type of

corruption. An instance is policy making where its proposal and implementation are

compromised by corrupt practices. It is usually practiced by public officers in high positions such

as councilors where they get kickbacks for ensuring contracts that are granted to specific

contractors. It usually occurs at financial, political and administrative centers of authority.

     A political corruption is usually associated with electoral procedure which includes voting

irregularities; nepotism and cronyism, the former means appointing friends to positions of

authority regardless of their qualifications, and the latter on the other hand means favoritism

granted to relatives or friends regardless of merit. Another form of corruption is on business. It is

often not regarded as a crime, rather as a means to accelerate business progression but still, it is

regarded as corruption.

    Under these classifications and forms of corruptions are bribery, inside trading, money

laundering, embezzlement which is the act of dishonestly taking or secreting assets by one or

more individuals to whom such assets have been entrusted, tax evasion and accounting

irregularities.

    Corruption is also being practiced by everyone roughly everyday. When somebody offers you a

woman and you do the work because of that offer, you are indulging in corruption. When you are just

delaying the matter and are not doing the work as per norms prescribed, the man is suffering, though

you did not take money, yet it is one item of corruption. When the people connected with you

entertains you, though you are not receiving any money from them, but they are spending money on

the occasion, that is regarded as a corruption. If you are not doing any work and are receiving monthly

pay without any break, this amount to corruption because your pay and wages are coming out of the

public revenues or out of the balances of your employer, you are indulging in corruption. When you are

not taking care of your children and spending that amount on other ladies who have got no connection

with the family, such expenses are regarded as corruption. When you work like a call girl, dancing girls

and a prostitute and are selling your body to others against money, you are violating the norms of the

society and all these items come within the scope of corruption. When you are deceiving the people and

pretending that you are a godly man and collecting money from them by misleading them, you are

indulging in corruption. All those who are living on charity, those who are not earning their own

livelihood and are dependant upon others without any cause and all those who are showing wrongly

that they are poor people and are taking something on concession rates from the state or from some

social welfare organizations are corrupt people. All those who are bringing children on this earth but are

not bringing them up properly and not giving them proper education, all those who are crossing

matrimonial bonds and are having extra matrimonial relations, and all those who are not taking care of

their parents are corrupt people.

Corruption in the government has always been there but the Filipinos are more stunned by the extent

of corruption in the military. Corruption among these people in authority is only known when some

brave hearted persons come out to speak the truth for all the people to know about their

practices. People would always say that public officials who have stolen from government treasury must

be punished with severely.But so much has been lost to unpunished theft.  The case of Maj. Gen. Garcia

is obviously a test to the Filipino people to wipe out this dirt in its society. This is a test of the

government’s determination to walk on President Aquino’s “the straight and narrow path”.

     The testimony of Heidi Mendoza, who sacrificed her job, her individual security and that of her family,

has brought to light the extent of corruption committed by Maj. Gen. Garcia and the powerful generals.

The nation is horrified by the extent of the greed and corruption that have been institutionalized in the

Philippine military. It is sickened at the difference between the badly equipped foot soldiers who brave

the war zones for the meager amount they receive for their families and the generals laze around in

their mansions and enjoying multiple-millions for their families.

On March 1, Heidi Mendoza and Retired Lt. Col. George Rabusa went to Adamson University to give a

speech on their involvement on AFP corruption cases and on the forum about speaking the truth. She

shared stories on how she teaches her children at least once every day by telling them what was right

and wrong, what cheating truly meant, at weekends they would help their maid in the smallest ways like

doing their own laundry. She said “by doing this she believes that she has at least molded her children to

be a good citizen”, she then added “you are the next generation who will continue for the people and

the country; I hope that you will never be the next corrupted people.”

Heidi’s words reflected on the Adamson’s Prayer especially on the line of “Just in the face of unfair

circumstances, true when the world's values contradict my own”. These lines tell about speaking the

truth and being not a corrupt which is what the institution is teaching their students.

Indeed, the world is worsening these days. Corruption does not only revolve in money, politics,

business and government but also among people and how we live our lives roughly everyday.

Corruption is everywhere and is now considered as a way of living not only of those who are in authority

but also of the ordinary people. Corruption nowadays has been part of our daily lives.

The pork barrel scam a perfect model of corruptionAS A MATTER OF FACT By Sara Soliven De Guzman (The Philippine Star) | Updated August 5, 2013 - 12:00am

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Every single solon or government official connected to the latest pork barrel scam is trying to make us (the

public) believe that he or she has got nothing to do with it at all! Sanamagan!

This scandalous pork barrel issue is history in the making. It is a problem and it is bigger than what it seems.

Imagine how many senators, congressmen and government agencies are allegedly involved in it? How can

they have processed the projects without knowing that they gave our money to a fake NGO that didn’t even

deliver? How could the Department of Budget and Management (DBM) and Commission on Audit (COA) have

approved the many transactions that took place under their very noses? Something smells fishy here – very

fishy.

So who should be held accountable? Why is everyone all of a sudden washing their hands on the issue? As a

matter of fact, there is even a strong effort to silence this whole issue because there are too many of them

involved. The naturally outspoken Napoles has also been silenced. Well, actually I think it is the other way

around. They don’t want her to speak because she might turn against all of them. So these imbeciles are not

hard on her.

This case is clearly a model of a perfect crime.  The perfect example of corruption and malversation of

government funds where every paper work and trail has been studied with the right connections in the different

agencies to get the processed approved, released and shared to the hogs. Nothing can beat this case.

Nothing! No one will ever be convicted because there are no traces of evidence that corruption has taken

place. It is the greatest deal yet so far in the history of this country.

The question of the hour is: Should the congressional Pork be stopped? The two houses are already divided on

the issue. Do they give up or not their Priority Development Assistance Fund (PDAF) and just concentrate on

legislative work?

Here’s my two-cents worth of opinion. The Countrywide Development Fund (CDF), established in 1990, is the

progenitor of PDAF. As the term implies, the fund was intended to bring development to every part of the

country by making sure that every congressman will have an assured allocation for his district even if he is a

member of the silent committee in congress. In 2000, the CDF was renamed PDAF to stress its use for priority

projects. But what’s in a name? The fund continues to be sarcastically referred to as “pork barrel” due to the

general perception that it is allocated to congressmen and senators, to be used, based on their unrestrained

discretion, to fund pet programs or projects in their districts without any accountability. In the guise of bringing

home the bacon to their constituents, the mind-boggling cut of up to 60%, as reported, would literally insure

them of re-election for the next batch of pork. What a wonderful world indeed. No wonder, a candidate could

risk spending millions during elections. With an annual pork of P70M for a congressman and P200M for a

senator, it is worth all the investment. And with pork, politics has become a lucrative family business in the

Philippines too.

Opinion ( Article MRec ), pagematch: 1, sectionmatch: 1In defense of pork, then Speaker Prospero Nograles and then Chairman of the Committee on Appropriations,

Rep. Edcel Lagman, reported that, “the Members of Congress neither handle the funds nor implement the

projects. Their authority is limited to the identification of projects and designation of beneficiaries, subject to a

specific menu. The implementation is undertaken by the appropriate government agency after an open public

bidding. Hence, the congressional allocations have definitive parameters, equal apportionments, built-in

accountability and clear transparency.”

So what really happened to the P10 Billion Pork Barrel in question? If the whistleblowers are telling the truth,

how was it possible for a private individual to have become the “mother of all scams” in relation to the release

and implementation of PDAF of senators and congressmen? Did they not say that the utilization of the PDAF

should have been strictly defined and limited by a shortlist or menu of qualified projects, tested by the

requirement of utility and relevance, subjected to stringent procurement and public bidding procedures,

reviewed by accountable implementing agencies and post-audited by the Commission on Audit (COA), among

other safeguards? Were not the people assured that – for further transparency and accountability, there shall

be a publication in a congressional website of all projects and programs identified by House Members under

their respective lists of “soft” and “hard” projects, which will also include the progress status and

accomplishment of the same?

When there was a call for the scrapping of PDAF, it has been touted as a defense “that since the advent of the

CDF in 1990 and the institution of the PDAF in 2000 up to the present, there has been no post-audit report by

the Commission on Audit (COA) directly associating any Member of Congress to a serious abuse, misuse

and/or infraction in the utilization and implementation of the much-maligned congressional funds.” Is this true?

Of course, none of the allegations have been proven yet. But I will not bet on a sacrificial lamb. PDAF cannot

be released and implemented without the knowledge and approval of the legislator concerned and the

complicity of the implementing agency. That much is clear. As a matter of fact, Agriculture Secretary Proceso

Alcala whose office has been implicated as a key facilitator in funneling government funds to at least two

dummy non-government organizations allegedly formed by Janet Lim-Napoles, explained that the DA had

practically no choice when given an endorsement letter from a lawmaker or local government officials to

allocate DA funds for a livelihood project.

When we acknowledge such undeniable fact, only then can we follow where the putrid smell is coming from.

Maybe our investigators should also consider the possibility of grandmothers or grandfathers of all scams.

Unless the men and women of congress will miraculously make a great sacrifice, one thing is sure, the

congressional pork (reportedly at P25B) is here to stay.

In the meantime, am I for the scrapping of pork? Unless we change the culture of political patronage and the

general perception that politics is a lucrative business, it is best to scrap the Pork and come up with a better

scheme of assuring the delivery of basic services to all corners of the country through executive line agencies.

At least, the cut of up to 60% will be spared. Let our legislators focus on the enactment of laws. Then we can

truly see who will vie for congress not for the Pork but for the greater interest of public service.

But then again, P-Noy has spoken. He has not only retained the controversial pork barrel in his proposed 2014

national budget, he has even increased it by more than P2 billion. I rest my case!

 

Essay on Political Dynasties in the PhilippinesRatings: (0)|Views: 958 |Likes: 2Published by Joanne FerrerPolitical DynastySee more

“Essay on the Political Dynasty in the Philippines” says Rep. Florencio Abad, “They want to stop others from being as progressive asthey are.”7 One thing for certain, that the 1987 Constitution frowns upon political dynasties.What is lacking is not the thought whether political dynasties should beprohibited, because the constitution clearly states that it should, rather the legaldefinition of the term “political dynasty.” If the term would be construed in itsplain and simple meaning, or general usage then we could safely presume thatrelatives within the fourth degree of consanguinity occupying the same ormultiple seats within the same jurisdiction would mean political dynasty. Thus,the State should make true its promise of equal opportunities for public serviceand make political dynasty in its layman’s term, illegal and unconstitutional. A famous quote from Aristotle goes like this, “When a democracy grows weak, itis supplanted by an oligarchy.”8Merriam-Webster defines an oligarchy asgovernment by the few. Let me elaborate on it more. Political dynasties are morelike oligarchy, in a sense that only a few people or families have control on thegovernment. In the Philippines, families, not parties, remain the most enduringfeature of Philippine legislature. Political parties are formed and disbanded but7Coronel, et.al, The Rulemakers: How the Wealthy and Well-Born dominate Congress (2007)8 Nestor Mata ‘Why Ban on Political Dynasties Failed’ Malaya Business Insights http://www.malaya.com.ph/index.php/column-of-the-day/9159-why-ban-on-political-dynasties-failed

“Essay on the Political Dynasty in the Philippines” the clans that make them up stay on.9

These clans root themselves into ournational and local governments for many decades. Almost every position in thegovernment has been posted either by relatives, or friends who are indebted tothe clan for appointing them into position. In a sense, they have alreadyestablished political kingdoms throughout the country.In the course of the rising and expanding political kingdoms ruling over thecountry, it has become hard to tell where democracy is to be found. With rulesdistorted and morality questioned, people can never tell if they deserve morethan what they are getting from the government. Political dynasties inhibitdemocracy, further adding instability and weakness of political institutions thatare supposed to be working on their sense of rationality and individualism for thecountry.1 With political dynasties, it is no longer a question on qualifications andslogans, it will now be a question on connections and guns.The establishment of political dynasties is an effective way of monopolizing andperpetuating power. With various seats in the government occupied by a singlefamily it would be easy to manipulate the system to benefit their family. Theconcept of check and balance will be thrown out the window. More often thannot, politicians get to be elected not because of their merit, but because they are9Coronel, et.al, The Rulemakers: How the Wealthy and Well-Born dominate Congress (2007)

“Essay on the Political Dynasty in the Philippines” born into political clans. In the same way, a ruling family can promote nepotism inthe government. Constituents are very lucky if they have a politician born out of political clans with genuine concern for public service. Politicians born intopolitical clans are usually in politics for the sake of their names. Former PresidentGloria Macapagal-Arroyo never ditched her middle name because she is alwaysremembered to be the daughter of Diosdado Macapagal. President NoynoyAquino got a boost of popularity after the death of his mother, former PresidentCory Aquino. The fact that his father is a hero didn’t hurt either. And so are otherswho got famous because of the legacy of their name.Consequently, the concept of governance by representation has been smudged.No longer is it true that the government is of the people, for the people, and bythe people. It is now replace by government of them, for them, and by them. Thepeople in the government are no longer for public service, but for personal gains.With them in constant possession of power, two saying comes into my mind; thefirst is “familiarity breeds contempt” and the other is “absolute power corruptsabsolutely.”

As a conclusion, political dynasty should be prohibited for good. It is neitherbeneficial to the country as a whole, nor it has a positive effect on the localities.The political families will not serve their constituents to the full extent but rather

“Essay on the Political Dynasty in the Philippines” serve them meagerly as to make them not revolt against them, but yet prioritizetheir interests. Most often than not, the political families get richer, while theirconstituent gets poorer, or stays the same.

Persuasive EssayGovernment transition in the political institution of the Philippines had always been drastic. We may pride ourselves for being a democratic country but amidst this system, programs are never really concrete enough hence there cannot be seen any continuity in the turn-over every 6 years. This causes our country to regress rather than progress.

Corruption is an undefeated enemy of our country. It is to blame for the death of thousands who cannot afford medical services, for the number of illiterate Filipinos and the crime rate that inflates as much as the population. Corruption is practically endemic and heavily ingrained in the Philippine system of government; it is that which Gloria Macapagal-Arroyo relied on and which President Noynoy Aquino vowed to eliminate by example.

In the last SONA she delivered, Gloria Macapagal-Arroyo boasted of her success both in protecting her administration from those who had aspired to destroy it, as well as in terms of economic growth. Truly, she had evaded attempts to convict her of the numerous anomalies that took place under her reign. One ought to admit that there is heft in the speculation that she did this with the help of cronies/allies who basked in Arroyo's prided economic accomplishment which we in the lower strata never had the chance to actually experience. Yet 2010 was a year of new experiences for the Filipino and we began to thrive with the hope which P-Noy embodied. We were ever more empowered and vigilant to act upon our rage and this is an apparent power which even the corrupt had recognized. Government officials have begun to give us due respect and corruption is less brazen.

We must give credit to the authenticity which Noynoy consistently exhibits in dealing with controversies. It may have inspired integrity and unity amongst the government and the people. The political institution must work towards maintaining this movement and we the constituents must

continue to be discerning and involved so as to afford a political institution that possesses continuity and the capacity to effectively fulfill its functions.

What are GOCCs?

Government-owned and controlled corporations (GOCCs) are stock or non-stock corporations established by a

special charter or law for the interest of everyone and subject to the test of economic viability. It is owned or

controlled by the government directly, or indirectly through a parent corporation or a subsidiary corporation.

The GOCCs are directly under the Government Corporate Monitoring and Coordinating Committee which is

responsible for monitoring, coordinating, and conducting performance of all GOCCs.

5 GOCCs scrapped, 7 more on way outBy Delon Porcalla (The Philippine Star) | Updated March 4, 2014 - 12:00am

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MANILA, Philippines - President Aquino approved last year the abolition of five underperforming government-

owned and controlled corporations (GOCCs), including three implicated in the pork barrel scam, and seven

more may be scrapped.

The Governance Commission on GOCCs (GCG) said in a statement released yesterday that in the last quarter

of 2013, Aquino had approved the abolition of the National Agribusiness Corp. (NABCOR), Zamboanga del

Norte Rubber Estate Corp. and Philippine Forest Corp., which were linked to the alleged misuse of the pork

barrel or Priority Development Assistance Fund (PDAF) of lawmakers.

The two other agencies abolished by the President were the Human Settlements Development Corp. and

Cottage Industry Technology Center.

All five firms were included in the 19 underperforming GOCCs that Reps. Rufus Rodriguez of Cagayan de Oro

and his brother Maximo of the party-list group Abante Mindanao have sought to abolish.

The GCG has also recommended the abolition or privatization of another seven out of the 19 GOCCs cited in

the Rodriguez bill. These are the Marawi Resort Hotel Inc., Philippine Aerospace Dev’t Corp., NDC-Philippine

Infrastructure Corp., Batangas Land Co., Kamayan Realty Corp., GY Real Estate Inc. and Pinagkaisa Realty

Corp.

The GCG has also recommended for abolition or privatization five more GOCCs: the Alabang Sto. Tomas

Development Inc., Tierra Factors Corp., Traffic Control Products Corp., DISC Contractors, and CDCP Farms

Corp.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1The Rodriguez brothers have filed House Bill No. 3807, which seeks to abolish 19 GOCCs that are either losing

money or have redundant functions with other agencies, especially those that have been linked to the

multibillion-peso pork barrel fund scam.

“We have to make sure that this is studied thoroughly by the GCG, which has the mandate to ensure that all

government companies are in shape,” Secretary Herminio Coloma Jr. of the Presidential Communications

Operations Office said yesterday.

Presidential spokesman Edwin Lacierda said the GCG is in charge of evaluating the performance of every

GOCC under its watch.

The other six GOCCs in the Rodriguez bill – Banaue Hotel and Youth Hostel, BCDA Management and

Holdings Inc., Masaganang Sakahan Inc., Northern Foods Corp., Tourism Promotions Board (also called the

Philippine Convention and Visitors Corp.) and Trade and Investment Development Corp. (now PhilEXIM) – are

part of the GCG’s regular sector-wide evaluation of GOCCs.

 

The evaluation is based on financial viability and relevance to current national development plans.

The Freeport Services Corp., a subsidiary of the Subic Bay Metropolitan Authority, is outside the jurisdiction of

the GCG.

The GCG said President Aquino also approved the abolition of six other GOCCs not appearing in the

Rodriguez bill. These are the Southern Philippines Development Authority, Philippine Fruits and Vegetables

Corp., San Carlos Fruits Corp., Philippine Agricultural Development and Commercial Corp., Bataan Technology

Park, Inc. and PNOC Shipping and Transport Corp.

The GCG said 14 more GOCCs were actually dissolved by expiration of corporate term or were rendered non-

operational or liquidated under the direction of the GCG.

These firms include the Manila Gas Corp., PNOC Malampaya Corp., Aviation Services and Training Institute,

Calauag Quezon Province Integrated Coconut Processing Plant, Clark Polytechnic Dev’t Corp., First

Centennial Clark Corp., GSIS Properties Inc., LBP Financial Services SpA, LBP Remittance Company, LBP

Singapore Representative Office, Paskuhan Development Inc., Phil. Centennial Expo ’98 Corp., Philpost

Leasing and Financing Corp. and Metro Transit Inc.

There are 116 GOCCs that are currently being monitored, which the GCG aims to reduce to fewer than 100 by

the end of the year through abolition, privatization or merger.

The streamlining of non-performing or unnecessary GOCCs is a key objective in the GCG’s roadmap to

improving efficiency and transforming the GOCC sector into a tool for economic growth and development.

Affected employees are given separation pay amounting to around one month’s salary for every year of

service, unless an administrative or criminal case is failed against them.

 

No need for legislation

 

Senate President Franklin Drilon said that there is no need for any congressional action to abolish non-

performing GOCCs because there are already mechanisms in place to accomplish this.

Drilon said that the GCG is tasked to go over the performance of the state-owned corporations and to take

appropriate action against those that are not performing well or are no longer relevant.

“We do not need legislation for that because that can be done under the GOCC Governance Act,” Drilon said.

He said that the GCG has a mandate to perform a technical evaluation of the GOCCs, so if ever there is a need

to abolish any one of them, the GCG would be able to recommend this to the President.

Bill 3807 filed by the Rodriguez brothers provides that all officers and employees of the abolished GOCCs

should be given separation pay equivalent to their salary for two and a half months. The funds should be

provided in the national budget.

The bill also sought to transfer the agencies’ functions to other government offices.

The departments of finance and budget and management, and the Commission on Audit would be mandated to

issue the implementing rules and regulations.

“Consistent with the Aquino administration’s austerity measures, it is high time that the government remove the

excess fat and spend only for things that are truly vital to the country,” the Rodriguez brothers said.

They said the government has around 120 GOCCs, many of which are unnecessary, underperforming and

losing money.

However, the lawmakers said taxpayers are still paying for the expenses of these GOCCs, including the

officers’ and employees’ salaries.

“This is aside from the P7.28 billion that the government extends to these state-owned subsidiaries as

subsidies from January to May, or P2.25 billion more than the P5.03 billion recorded in the same period in

2013,” they said.

The lawmakers said these subsidies are booked as expenses and continue to put a strain on the government’s

widening budget deficit.

Earlier, militant party-list groups led by Bayan Muna sought the abolition of the National Livelihood

Development Corp., a subsidiary of Land Bank of the Philippines, and Technology Resource Center for

involvement in the pork barrel scam. With Marvin Sy

P-NOY SIGNS GOVT-OWNED, CONTROLLED CORPORATIONS (GOCC) LAW

[PHOTO - The GOCC Governance Act of 2011 was pushed by Sen. Franklin Drilon, (photo) an ally of Aquino in the Liberal Party].

MANILA, JUNE 6, 2011 (STAR) By Delon Porcalla - President Aquino signed into law yesterday the bill standardizing the salaries and bonuses of executives in government-owned and controlled corporations (GOCCs), Malacañang said over the weekend.

“It (GOCC bill) will not be a policy anymore, but it will already be a matter of law,” said deputy presidential spokesperson Abigail Valte in an interview with government-run radio dzRB.

The GOCC Governance Act of 2011 was pushed by Sen. Franklin Drilon, an ally of Aquino in the Liberal Party.

Aquino earlier issued Executive Order 24 to standardize the pay and other benefits received by board members and trustees of GOCCs and government financial institutions (GFIs). The order was intended to limit the excessive pay and bonuses for board members and trustees of GOCCs and GFIs until a law mandating such is passed.

Malacañang said it consulted with the departments of Finance and Budget and Management before issuing the order.

The order covers board members and directors of GOCCs and GFIs regardless of classification. Their compensation shall be subject to the approval of the President.

It also covers representatives of GOCCs in the boards or private corporations in which the government has investments. The order stipulates that the compensation system for GOCCs and GFIs will be consistent with pay practices in private corporations and would depend on their size, strategic positioning, nature of operations and financial capability.

The maximum amount of performance-based incentives to be granted to members or trustees should depend on the size of the GOCC or GFI and should not exceed 50 percent of a board member’s annual compensation for outstanding performance. Reimbursable expenses cover those incurred in the performance of official functions such as transportation for meetings, travel cost for official trips, and communication and meal expenses for business meetings.

EARLIER NEWS REPORT FROM PNA

Senate ratifies GOCC Governance Act of 2011 31-May-11, 5:09 AM | Philippine News Agency

MANILA, Philippines – The Senate finally ratified on Monday the bicameral conference committee report on the GOCC Governance Act of 2011 aimed at putting an end to the alleged excessive salaries and other abuses in government corporations.

GOCC stands for the Government-Owned and -Controlled Corporations.

With only one negative vote from minority Senator Joker Arroyo, the lawmakers approved the report five days after the congressional bicameral conference committee reconvened to exclude the Manila Economic and Cultural Office (MECO) from the bill’s coverage.

Senator Franklin Drilon, chairman of the congressional oversight committee on public expenditures, said the bicameral panel members have agreed to remove MECO, Manila’s de facto embassy in Taiwan, for fear that its inclusion might affect the country’s bilateral relations with China and Taiwan.

However, Drilon clarified that although MECO has been excluded, he would still monitor the performance of MECO officials with regards to the use of public funds.

Though organized under the corporation code as a private corporation, Drilon said MECO has been collecting public funds in which the excess funds are not turned over to the National Treasury.

Drilon expects President Benigno Aquino III to sign the bill into law before the sine die adjournment of Congress next week.

Under the GOCC Governance Act of 2011, a Governance Commission for GOCCs (GCG) shall be created to oversee GOCCs and government financial institutions (GFI) totalling to 156.

The GCG shall be responsible for the determination of the compensation, per diems, allowances, and bonuses of the members of the board of directors or trustees of the GOCCs.

However, Arroyo opposed the composition of the GCG which he said “betrays the tayo-tayo character.”

”The Commission (GCG) would recommend a short-list of replacements to the President who perforce must limit his choice only to those on the list of the GCG,” he said.

The GCG will be composed of the Budget secretary as chairman, the secretary of Finance, the director-general of NEDA (National Economic and Development Authority) and two others to be chosen by the top three.

Arroyo also said that the bill “is a blanket authority for the mass lay-off of 157 CEOs and 1,570 directors of the 157 GOCCs in the country."

GOCC STANDS FOR GOVERNMENT-OWNED AND -CONTROLLED CORPORATIONS

These are corporations created or established by a special charter or law in the interest of the common good and subject to the test of economic viability.

They are directly under the Government Corporate Monitoring and Coordinating Committee, which has the primary responsibility to monitor, coordinate, and conduct performance evaluation of all Government-owned and Controlled Corporations (GOCCs). What's New ?? More than half of the national government's P5.34 billion financial assistance to GOCCs during the first half of 1996 went to basic services, such as food, electricity, water and transport.

Latest data show the national government extended P2.82 billion worht of cash advances, equity, and subsidy to six GOCCs -- National Food Authority (NFA), National Electrification Administration (NEA), Manila Waterworks and Sewerage System (MWSS), Local Water Utilities Administration (LWUA), Philippine National Railways (PNR), and Light Rail Transit Authority (LRTA).

NFA received P1.12 billion in equity and subsidy, the largest amount of assistance given to GOCC. NEA got P650 million in cash advances and subsidy, MWSS, P298 million; LWUA, P288 million; PNR, P264 million; and LRTA, P203 million.

CENTER FOR INTERNATIONAL TRADE EXPOSITIONS AND MISSIONS (CITEM) - UNDER DTICOTTAGE INDUSTRY TECHNOLOGY CENTER (CITC) - UNDER DTIDEVELOPMENT ACADEMY OF THE PHILIPPINES (DAP) - under the Office of the President EMPLOYEES COMPENSATION COMMISSION (ECC) -under DOLE FIBER INDUSTRY DEVELOPMENT AUTHORITY (FIDA) - under DA INTEGRATED BAR OF THE PHILIPPINES (IBP)INSTRUCTIONAL MATERIALS CORPORATION - DECS LAGUNA LAKE DEVELOPMENT AUTHORITY (LLDA) - under the DENR LIGHT RAIL TRANSIT AUTHORITY (LRTA) --under DOTC HOME INSURANCE AND GUARANTY CORPORATION (HIGC) -under the Office of the President LOCAL WATER UTILITIES ADMINISTRATION (LWUA) -- the DPWH LUNG CENTER OF THE PHILIPPINES - under the DOH NINOY AQUINO INTERNATIONAL AIRPORT AUTHORITY (NAIA) - under the DOTC 

MASAGANANG SAKAHAN, INC. (MSI) Main function -- To engage in trading of agricultural products. METRO MANILA TRANSIT CORPORATION (MMTC) - under the DOTC NATIONAL DEVELOPMENT COMPANY (NDC) - under the DTINATIONAL FOOD AUTHORITY (NFA) -under the DA NATIONAL HOME MORTGAGE FINANCE CORPORATION (NHMFC) - under the Office of the President NATIONAL HOUSING AUTHORITY (NHA) - under the Office of the President NATIONAL IRRIGATION ADMINISTRATION (NIA) - under the DA NATIONAL KIDNEY INSTITUTE (NKI) - under the DOH NATIONAL POWER CORPORATION (NPC/NAPOCOR) - under the DOE NATIONAL RESEARCH COUNCIL OF THE PHILIPPINES (NRCP) - under the DOSTNATIONAL TOBACCO ADMINISTRATION (NTA) - under the DA PHILIPPINE AEROSPACE DEVELOPMENT CORPORATION (PADC) - entry under the DOTC PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR) - under the Office of the President PHILIPPINE CHILDREN'S MEDICAL CENTER - under th DOH PHILIPPINE COCONUT AUTHORITY (PCA/PHILCOA) - under the DA PHILIPPINE COTTON CORPORATION (PCC) - under the DA PHILIPPINE CROP INSURANCE CORPORATION (PCIC) - under the DOF PHILIPPINE DAIRY CORPORATION (PDC) - under the DA PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION (PHILGUARANTEE) - under the DOF PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY (PFDA) - under the DA PHILIPPINE HEART CENTER (PHC) - under the DOH PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES (PIDS) - under the NEDA PHILIPPINE INTERNATIONAL TRADING CORPORATION (PITC) - under the DTI PHILIPPINE NATIONAL OIL COMPANY (PNOC) - under the DOE PHILIPPINE NATIONAL RAILWAYS (PNR) - under the DOTC PHILIPPINE PHOSPHATE FERTILIZER CORPORATION (PHILPHOS) - under the DTI PHILIPPINE PORTS AUTHORITY (PPA) - under the DOTC PHILIPPINE TOURISM AUTHORITY (PTA) - under the DOT PHILIPPINE VETERANS INVESTMENT DEVELOPMENT CORPORATION (PHIVIDEC) Main function -- To harness the talents and assets of the veterans and retired AFP personnel. QUEDAN AND RURAL CREDIT GUARANTEE CORPORATION - under the DA SECURITY AND EXCHANGE COMMISSION (SEC) - under the Office of the President SUGAR REGULATORY ADMINISTRATION (SRA) - under the DA TECHNOLOGY AND LIVELIHOOD RESOURCE CENTER (TLRC)

PHILIPPINE DEVELOPMENT PLAN 2011-2016The Philippine Development Plan 2011-2016 adopts a framework of inclusive growth,

which is high growth that is sustained, generates mass employment, and reduces

poverty. With good governance and anticorruption as the overarching theme of each

and every intervention, the Plan translates into specific goals, objectives, strategies,

programs and projects all the things that we want to accomplish in the medium term.

Through this Plan, we intend to pursue rapid and sustainable economic growth  and

development, improve the quality of life of the Filipino, empower the poor and

marginalized and enhance our social cohesion as a nation. Our strategic development

policy framework thus focuses on improving transparency and accountability in

governance, strengthening the macroeconomy, boosting the competitiveness of our

industries, facilitating infrastructure development, strengthening the financial sector

and capital mobilization, improving access to quality social services, enhancing peace

and security for development, and ensuring ecological integrity.

The Philippine Development Plan will serve as our guide in formulating policies and

implementing development programs for the next six years. It enables us to work

systematically to give the Filipino people a better chance of finally finding their way out

of poverty, inequality, and the poor state of human development.

ADMINISTRATIVE ORDER NO. 59 - RATIONALIZING THE GOVERNMENT CORPORATE SECTOR 

WHEREAS, there is need to improve the efficiency of government-owned and controlled corporations and their subsidiaries in order to promote economy, efficiency and effectiveness in the delivery of public services;

WHEREAS, in the past there was an excessive proliferation of government-owned and controlled corporations without clear delineation of the grounds for government activities in corporate form and without adequate supervision and control; and

WHEREAS, there was a discouragement of private initiative on account of undue government competition, and because of the lack of oversight mechanisms, the financial performance and productivity of government corporations, in the aggregate, were below desirable levels.

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by law, do hereby order: