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Combating Corruption

Corruption, sadly, has become endemic in the Philippines. It is a big obstacle to economic growth and reduction of economic inequality. The huge amount of money that leaks out is not spent for the general welfare of the nation, but instead it goes to and enriches just a few.

By BEN R. PUNONGBAYAN

And this few shows their ill-gotten wealth blatantly without shame and without condemnation by their friends and the general public.

Corruption is widespread and deep. It continues to persist without restraint. I dare say that the three branches of government – the Executive, Legislative and Judicial are generally corrupt. And so, with the Local Government Units (LGUs). Most Filipinos have become so numbed by its prevalence such that corruption no longer comes to the consciousness as terribly wrong. And worse, they feel it can no longer be fixed.

Among a few, corruption is a manifestation of absence of morality. If we breed enough morality through religion and education, then corruption, or much of it, will disappear. It is well meant. It is an expression of a feeling of hope.

As for me, we need to confront corruption frontally. And to fix corruption, much of the fixing should be done inside government. It cannot be done outside of it. The government must create an environment that inflicts pain to the offender and creates an effective and continuous vigilance to prevent, detect and punish corruption. And, consequently, in the course of time, creates a culture that treats corruption as shameful and therefore must be condemned.

Containing corruption cannot be done if the government leaders themselves are corrupt. That level of responsibility must then be the target of the first line of action.

If I were the next President, I will devote a significant part of my time to reduce corruption in the Executive Branch and influence the Legislative and Judicial Branches of government to do the same.

I will make it clear and declare publicly that we will avoid and prevent corruption at the presidential, vice-presidential, and executive department levels. I will constantly express that policy among the department secretaries and exhort them to be incorruptible. Those who cannot avoid the temptation will have to go.

Similarly, I will make it the responsibility of each department secretary to determine the corruption that are taking place in their respective departments. For this purpose, we will require the department secretaries to form an independent select group in their respective department to detect corruption in their departments, bearing in mind that large-scale corruption can only be done through collusion. Similarly, a select group will also be organized at the Office of the President.

For any corruption offenses, the select group will initiate the process of suspension from service and prosecution of the offenders in consultation and coordination with the appropriate government agencies.

In addition to this measure, we will require all executive departments to post publicly, in their websites, the significant details of all large contracts, as will be defined, and those of similarly significant regulatory decisions.

Through the Department of Interior and Local Government (DILG), a similar directive will be issued to the LGUs.

Regarding the LGUs, the Department of Budget will post publicly the annual National Tax Allotment (NTA)–formerly known as Internal Revenue Allotments (IRA)–of each and every LGU. Moreover, the DILG will issue a directive to all LGUs to post annually in the appropriate government websites their revenues, showing separately their NTA and local revenue, and expenditures, together with a list in the appropriate form of all their infrastructure expenditures.

The public posting of the foregoing information is for the purpose of inhibiting corruption by encouraging concerned sectors of society and the citizens at large to use such information to make evaluations of the reasonableness of government expenditures and commenting publicly and reporting to the authorities any out-of-line and unnecessary expenditures.

At the Office of the President (OP), I will organize a Compliance Unit that will have three responsibilities. First, to provide a horizontal link to the independent select groups in the executive departments and OP to provide technical assistance to the select groups. Initially, it will develop a methodology to guide the select groups in carrying out their responsibilities. Thereafter, it will provide technical guidance and advice to the select groups in carrying out their tasks. However, the department select groups will remain accountable to the department secretaries and OP.

Second, to establish a system that will provide information publicly about standard prices and required quality of government purchases and standard price per unit of measure and required quality of government infrastructure constructions. This information will be posted in an appropriate website for the same purpose as mentioned earlier.

The third responsibility of the Compliance Unit is to make a compliance review of the completed outputs of significant national and local government contracts to determine whether the completed projects are in fact done in accordance with the terms of the covering contracts. The Compliance Unit will do the same compliance review of significant regulatory decisions.

The third responsibility will extend to determining compliance, at regular intervals, with laws and regulations regarding forestry, mining, surface water and air pollution, cleanliness in cities and towns and similar activities of great national concern.

The work of this unit will not duplicate any compliance work by any executive department and LGU. If such work has recently been done internally, the Unit will review its results but with the authority to carry out supplemental work if it finds the previous compliance work to be deficient.

Similarly, the Compliance Unit will coordinate with the Commission on Audit for any potential overlap in any compliance undertaking.

As conceived, the Presidential Compliance Unit is not expected to be large in size. It will provide management of compliance work within the scope that has been established and will have a competent leader and a core group. Those compliance work that will require a group of personnel to execute or deploy necessary equipment will be contracted out. For example, when testing compliance with the contractual terms for the engineering and construction specifications of a completed road system, the Compliance Unit will contract the compliance work to a quality compliance expert. When verifying illegal logging, it will lease the use of a drone or similar vehicle for that purpose.

As a new government agency, the Presidential Compliance Unit will evolve as it gains experience in carrying out its mandate. But its purpose will remain the same: to reduce corruption substantially and ensure due compliance by those responsible for implementing laws and regulations of great national importance.

The other significant innovation that we will introduce is to consider privatizing, in whole or in parts, national government work that is easily susceptible to corruption. For example, the examination of tax returns, together with the related examination of the taxpayer’s books, by the Bureau of Internal Revenue can be privatized. And so, with the preparation of assessments for customs duties and value added tax on imported goods and the related physical examination of those goods being done by the Bureau of Customs. There are many such government work that can be privatized and which we will identify and evaluate for privatization.

When privatizing any government work, conflict of interest will be avoided, and the private entity will be required to carry adequate amount of professional liability insurance to compensate the government in case of insufficient fulfillment or non-fulfillment of contract terms.

Privatization will lead to reducing corruption. And, at the same time, reduce the size of government and stimulate private business activities.

There is another necessary, but admittedly difficult action that certainly will reduce corruption. This additional measure involves amending the bank deposit secrecy law to allow government prosecutors, with proper safeguards, to access the bank records of the accused corruption offenders. That amendment by itself will provide effective deterrence against corruption. It will, of course, help in the event of prosecution.

Seriously engaging to substantially reduce corruption is going to be a very difficult task. To be successful, it needs the involvement of our citizens to detect and report unreasonable government practices. It is for this reason that we are posting publicly all the relevant information about significant government transactions.

Moreover, the innovations discussed above will certainly meet opposition, including possible objections from the legislators if implementation of the new measures will require passing an enabling law. In dealing with objections, I am prepared to engage in persuasion and tough negotiation to achieve the desired objectives. If these actions fail, I will do whatever is necessary within the powers of the presidency, of which I will provide more comments in a subsequent part of this Commentary Series.

But I hope that all the concerned parties can work out any differences for the good of our country. I will always be motivated to reach out for a collaborative and mutually satisfactory solution.

Mr. Punongbayan is a well-experienced public accounting practitioner. He founded Punongbayan & Araullo 33 years ago and which is now one of the prominent and leading professional accounting firms in the country. On April 16, 2009, Punongbayan—along with several like-minded Filipinos—founded a national political party under the name of Buklod. As a political party, it aims to replace the present leaders with an entirely new set of trailblazers who do not carry the baggage and ineffectual governance of the past.

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