PERC on dirty perks

PERC (Political and Economic Risk Consultancy, Ltd.) headquartered in Hong Kong issues to private firms and governments an annual report by which it examines graft and corruption in a dozen Asian countries. PERC’s method is by way of a corruption perception survey among regional executives of some 100 multinational banks and companies operating in Asia.

Last year, when Philippines got the better of Vietnam and Indonesia that were given the second worst and worst corruption rankings, respectively, PERC yet wrote an uncomplimentary analysis for the Philippines: “Nothing is happening that indicates the status quo with respect to corruption is about to change.”

If the PERC’s prediction was on target, it would have been a non-event or in fact spun favorably for the Gloria Macapagal-Arroyo government. In a scale of 0 to 10, zero being the best and ten the worst, Philippine was graded 9.4 this year from the 7.80 score it obtained in 2006. As a result, Philippines now has the unenviable distinction of being the most corrupt country in the region.

In 2003, when the perception of corruption in the Philippines came down to a healthier score of 7.67 from a high of 9.00 in 2001 - the year President Arroyo took over from former President Joseph Estrada - and then 8.00 in 2002, Arroyo was upbeat about the PERC report. This year she reportedly dismissed the PERC findings as based on “old data” and “unfair.”

PERC’s 2006 analysis sounded hackneyed, nay, practically a trite rant from some anti-Arroyo bloggers: “The problem of vested political and business interests is even more entrenched in the Philippines, where anti-corruption campaigns seem to be designed more as a tactic in political brinksmanship than as a serious attempt to actually tackle the problem at is core. President Gloria Macapagal Arroyo came to power in 2001 when her predecessor, Joseph Estrada, was swept from office on charges of corruption. Now Mrs. Arroyo herself is facing allegations of corruption and poll cheating.”

“People are just growing tired of the inaction and insincerity of leading officials when they promise to fight corruption,” PERC stated this year about the Philippines.

ABS-CBN Interactive reported that Trade Secretary Peter Favila, taken by surprise by the PERC 2007 report, has claimed that the survey respondents ignored various government initiatives to fight corruption.

“This is precisely the reason why the President issued Executive Order 558 creating the Anti-Red Tape Task Force to curb corruption brought about by long tedious process and lack of transparency in dealing with frontline agencies,” Favila is said to have stated.

On the other hand, Manila Times columnist and Arroyo protector Tony Lopez criticized the report as no more than “a damning generalization” of “so-called analysts” who really “don’t know the country that well.” Writing a column piece after hastening to the Palace where he obtained Arroyo’s reaction to the report, Lopez underscored how Arroyo “blamed ‘opposition people’ in a foreign group monitoring corruption across the globe for the negative perception.”

But PERC in its 2006 finding seemed to have well anticipated the angry blowbacks: “In our previous reports on corruption, the Philippines is usually the only country where we regularly receive complaints from people in the private and public sector that we are too harsh in our assessment of corruption.”

And this brings us to the twirl and whirl of Alex Magno, another Arroyo apologist, which appears to make some sense this time if not for the maladroit sleight in tautology, a style he is beginning to be noted for: “But the real gains against corruption are won on a less dramatic terrain. It involves reengineering the way we do things so that there is little margin for corruption to happen. It is about changing processes so that the opportunities for corrupt practices are limited.”

No more “tactic in political brinkmanship,” PERC put it more simply. Just “a serious attempt to actually tackle the problem at its core.”

One proposition by Magno, apparently to deal with the problem at the core, is “getting government off the backs of business” instead, for instance, of focusing efforts to fight corruption largely by “getting the big fish.”

I have once reflected on the problem of graft and corruption in the Philippines when on a technicality the government first lost a tax-evasion case* involving some 28 billion pesos against one big fish, then the Philippines’ richest guy, taipan Lucio Tan:

In Third-World countries like the Philippines, “graft and corruption” has served as a distorted form of social welfare or wealth distribution that usually reaches a high point during elections. It comes in many varieties such as vote-buying schemes and gimmicks, election dole-outs or campaign monies diverted somewhere—all coming from the same chest that escapes taxation. The cycle is so vicious, so inexorably enduring it is casually accepted as part of the institution.

However, even from that standard Philippine fact of life (or the further fact that 95% of business establishments in the Philippines are violating some tax laws), the botched tax evasion case against Lucio Tan is a deviation that is simply revolting to conscience. The tax Lucio Tan escaped from paying, according to some estimates given by well-meaning critics, is enough to rehabilitate war-torn Mindanao that has already wasted more than a hundred thousand human lives and displaced about a million more.

Former President Fidel V. Ramos has once summed up the monstrous malady: “The Philippine state is still too weak to prevent politically influential personages, families and clans from using their privileged access to the machinery of government to bend public policy and implementation to their purposes.”

What is bent is distorted. And distortion is corruption. There’s the problem at its core.

*13 years after the case was first initiated by the Bureau of Internal Revenue, and then elevated to the appellate court and the Supreme Court, a lower court ultimately dismissed the case in October 2006 for “insufficiency of evidence.”