Corruption, hazard, and society in the Philippines
Greg Bankoff
Introduction
Corruption and disasters are perceived to be endemic to the Philippines.
Indeed, newspapers and social commentators alike frequently talk about a
‘culture of corruption’ pervading the body politic1 or of corruption as a total systemic affliction that has metastasised like cancer cells to all parts of government and the surrounding society.2Defined simply by the World Bank as the misuse or abuse of public office for private gain (1997), cor- ruption is held to be so pervasive that it has called into question the very nature of Philippine democracy and caused the state to be variously labelled a kleptocracy, a government led by thieves, a narco-democracy, the rule of criminal overlords in collusion with bent politicians, or the abode of crony-capitalism, where the political and economic spoils of office are shared between a select group of family, friends and key sup- porters.3Just as insidious as corruption, however, are the disasters caused by natural hazards that afflict the country with monotonous regularity.
According to the Belgium-based Centre for Research on the Epidemiology of Disasters(CRED), which has compiled one of the most comprehensive records on the occurrence of natural hazards in the world since 1900, the Philippines experiences more such events than any other country.
Between 1950 and 2001, there were 526 disasters, an average of more than ten a year, affecting over 65 million people (EM-DAT). In the quarter century 1950–75 alone, the islands experienced 2,126 recorded earth- quakes4 and were shaken on average five times a day by such events, though most are too faint to be felt.5There are 220 volcanoes, 21 or 22 of which are classified as active.6Aside from this seismic activity, the Philip- pines is also prone to climate-related hazards especially in the form of powerful typhoons that sweep across the islands from the Southwest Pacific, mainly in the period from June to November. On average, over 20 typhoons a year pass through the PAR (Philippine Area of Respons- ibility), some with wind speeds in excess of 200 kilometres an hour.7
Hitherto, there has been little attention paid to exploring the links that might exist between these two characteristics of Filipino society: the
propensity of corruption and the frequency of hazard. Corruption has been identified in six main areas of government: namely electoral fraud, legislative privilege, revenue assessment and collection, regulatory and licensing arrangements, law enforcement, and appointments and promo- tion.8Yet graft is also pervasive in a seventh area of government activity:
disaster management and relief. And since hazards and the disasters that they generate are all too frequent in the archipelago, the opportunity and scale of such abuse are also commonplace. Corruption and hazard are not disparate aspects of life in the Philippines: the nature of one and the fre- quency of the other are closely associated.
‘Culture of corruption’
The notion that Filipino society has a long history of corruption is often used both to explain its prevalence and excuse its continuance. Certainly the conditions that foster criminality have been a characteristic of the state in the archipelago. The initial archipelagic-wide administration was a colo- nial one, that of the Spaniards who between 1565–1898 evolved a hybrid- like structure that was partly theocratic, intended to facilitate the evangelisation of the indigenous population, and partly rapacious, designed to extract as much as possible from them. ‘They do not come to judge but to rob’ observed a Jesuit missionary of the sixteenth century with regard to the provincial magistracy.9 The profit motive remained a major consideration in the choice of a colonial administrative career: what was at stake were the caidas, literally the ‘droppings’ of office. As an offi- cial was simultaneously governor, magistrate and treasury official, within his jurisdiction, the pickings could be lucrative: price fixing, licence exemp- tions, unfair trading practices, contraband, extortion, bribery, and fraud.
Offices were openly auctioned to the highest bidder and so few were willing to make such an investment without expectation of substantial returns.10Charles Cunningham concludes:
From the point of view of these officials, the Philippines were neither governed for the good of the natives, nor for the residents, nor for the honour of Spain, nor for the propagation of the Catholic religion, but merely for the profit and advancement of those who were on the ground to take advantage of their opportunities.11
Corruption in the subsequent American colonial state is more difficult to assess. The new regime was anxious to demonstrate the benefits of its administration in contrast to that of the Spaniards in terms of both its greater efficiency and its greater egalitarianism. The resultant model has been characterised as one of cacique democracy, where the colonial bureaucracy was effectively penetrated by the indigenous elites at all levels of the administration, including, with the establishment of a national 166 Greg Bankoff
legislature in 1907 and self-government as an autonomous commonwealth in 1935, the very highest. Elite families used their influence and wealth to win elections and their office to enhance their power.12 The extent to which they were able to subvert the colonial bureaucracy in their own interests to both enrich and entrench themselves is only hinted at in the existing scholarly literature and still awaits a major study.13An important development during this era, however, was the expansion of direct govern- ment intervention in the economy to promote growth. As the role of government to sponsor, develop or employ expanded, so did the opportunities for politicians and civil servants to grant special favours, licences and contracts become more lucrative. Bigger government pre- saged further corrupt practice and, in the process, undermined the evolu- tion of a more meritocratic system in the Philippines.14
Independence in 1946 brought little reprieve: those families who had so skilfully manipulated the colonial state to their own advantage simply inherited the colonial structure of government. Any brake that the US administration may have exercised over the unbridled wielding of public office for private gain was lifted and corruption not only persisted but showed ‘no signs of abatement’.15 Corruption starts at the top with the politicians. Member of Congress have at least five ‘special purpose funds’
in the form of the Countrywide Development Fund, the Congressional Initiative Allocations, the Public Works Fund, the School Building Fund and the Farm-to-Market Roads allocation that place in excess of P50 million (US$943,000) annually at the discretionary disposal of House of Representatives and Senate seat holders.16 The diversion of public funds to campaign coffers reached scandalous proportions under President Fer- dinand Marcos (1965–86) but has not ceased under subsequent presidents.
The nepotistic business dealings during the administration of Corazon Aquino (1986–92) earned her term in office the dubious sobriquet of Kamag-anak or ‘Relatives Incorporated’ and the then Senator Gloria Macapagal-Arroyo (subsequently President of the Republic) has had a hard time dispelling the rumour that her 1995 election campaign was bankrolled by reputed jutengboss Bong Pineda.17
Corruption is also rife in the bureaucracy where government contracts provide ample opportunity for graft and malfeasance, while the ponderous wheels of administration and justice frequently require ‘grease’ to enable them to revolve more quickly or, on occasion, to turn at all. Again, this is nothing new but is a characteristic of government in the Philippines that can be traced back to the workings of the Spanish colonial administration where the importance of political exigencies and the inability to pay ade- quate salaries had much in common with the current situation.18A distinc- tion can be made between the opportunities for corruption arising from
‘income’, that is the use of government power to extort money, and that ensuing from ‘expenditure’, that is the diversion of infrastructural and procurement expenditure to uses other than those officially intended.19 The Philippines: profiting from disasters 167
The massive expansion of government services in the latter half of the twentieth century, no less in the Philippines than elsewhere, has created many new lucrative and increasingly innovative ways in which to plunder the public purse.
Forms of corruption have been variously differentiated between indi- vidual, incidental or spontaneous, on the one hand, and systemic or institu- tionalised on the other.20The first is seen as the private endeavour of an individual public official or one working in unison with his or her imme- diate fellows to undertake acts of petty bribery or extortion and small-time embezzlement of public funds. It is characterised by a lack of systematic organisation and the immediacy of its activities. Corruption becomes sys- temic when it is organised, recurrent, well entrenched, and involves the participation of other officials up and down the official hierarchy of several government agencies. ‘Under systemic corruption’, comments Ledivina Cariño, ‘an informal corruption organization coexists with the formal organization and mandates a quota for all personnel, rates for each person who participates in, shields or abets corruption, and rules for their recruitment, participation and termination.’21 While the first form can be detected in all states to a greater or lesser extent, the latter is much more characteristic of developing countries. Both are rampant in the Philippines.
The extent of corruption is difficult to assess. The Tanodbayan (Ombudsman) calculates that the government loses as much as a hundred million pesos a day through corrupt practices, equal to a sum of P1.4 tril- lion pesos (US$48 billion) since 1988. This amount exceeded the country’s entire foreign debt of US$40.6 billion in 2000.22Other estimates evaluate the loss at about 20 per cent annually of the national budget equivalent to about 3.8 per cent of GNP. Based on these figures, the aggregate cost of corruption amounted to P609 billion between 1995–2000 or more than the entire budget of P593.7 billion pesos in 1999.23Applying these same per- centages means that P125 billion out of the 2001 national budget ended up in the pockets of self-serving bureaucrats.24So widespread is corruption at all levels of certain government departments that the latter’s ability satis- factorily to provide mandated services are often seriously compromised.
The Department of Education, Culture and Sports (DECS), one of the most infamous bureaucracies in this respect, is barely able to deliver the most basic educational services to the country’s 15 million public school children. Only 65 per cent of funds allocated for the procurement of text books are used for such purposes; the rest is lost in kickbacks and payoffs to various officials: a 20 per cent cut to the national office, 5–20 per cent for the regional offices, 5 per cent for the Department of Budget to release the funds, and a further 5 per cent to the Office of the President to approve the contract.25While educational and medical procurement offer particularly lucrative opportunities for such practices, corruption is equally prevalent in other government agencies that provide more material evid- 168 Greg Bankoff
ence of their utility. The Department of Public Works and Highways (DPWH) is also notorious for its malfeasance, both in the way contracts are awarded and in how projects are implemented. Pre-qualification, bidding, and awarding of contracts are often more a matter of privilege, favour, reciprocity (utang ng loob), and bribery than of open competition.
At times, there is even collusion between officials and contractors that, at its most flagrant, can amount to the designing of ghost or dummy projects.
Kickbacks to legislators, their aides, mayors, and government engineers are estimated at between 20–40 per cent of project costs. Contractors, in turn, recuperate these sums and make profits by overpricing, using sub- standard materials, skimping on contractual requirements, and paying low wages. In extreme cases, only about 40 per cent of the allocated budget is actually spent on project implementation. Based on an outlay of P104 billion for road and bridge construction between 1995 and 1999, it is esti- mated that about P8.3 billion per year was lost in kickbacks. As the outlay for roads and bridges accounted for 5.2 per cent of the national budget in 1999, corruption in this sector alone amounted to 2 per cent of the national budget.26
Certainly the overwhelming popular perception is that the public sector is corrupt. A series of national surveys conducted by the Social Weather Stations (SWS) between 1998 and 2000 found that 70 per cent of respon- dents considered that corruption was rife in the government and only a mere 18 per cent thought to the contrary (Figure 8.1). The figures were even higher in the National Capital Region (88 per cent) and among those classified as belonging to upper and middle-class sectors defined as ABC socio-economic groups (87 per cent).27Among the main findings were that corruption was perceived to be the second-most common subject of public The Philippines: profiting from disasters 169
100 90 80 70 60 50 40 30 20 10 0
Percentage
Not corrupt Little corrupt
Somewhat largely corrupt Largely corrupt
Philippines NCR Rest of Luzon Visayas Mindanao
18 6 23 14 18
12 7 11 15 13
34 35 34 36 31
36 53 32 34 35
Figure 8.1 Perceived extent of corruption in the public sector, 2000 (source:
Special Issue on Corruption(SWS 2001: 4)).
dissatisfaction with government after the failure to control inflation, that graft was considered to be greater in the public than the private sector, that the origin of corruption was perceived to lie more with the bribe- receiver (66 per cent) than with the bribe-giver (33 per cent), and that the level of corruption was considered highest at national level (84 per cent) compared to the provincial (40 per cent) and municipal levels (27 per cent). The five government agencies considered the most corrupt were the Department of Public Works and Highways (14 per cent), the Philippine National Police (11 per cent), the Bureau of Internal Revenue (9 per cent), the Bureau of Customs (8 per cent), and the Department of Educa- tion, Culture and Sports (7 per cent).28
The international community also shares the Filipinos’ perception of their government as corrupt. The Corruption Perception Index (CPI) ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians, through surveys based on the perceptions of business people, academics, risk analysts, and the general public. The CPI awards states scores that range between 10 (highly clean) and 0 (highly corrupt). According to the 2002 survey, the Philippines rated 77th out of a total of 102 countries. Even within the greater Eastern and South Asian region, the country does not rank well with only Vietnam, Indonesia and bottom of the scale Bangladesh faring worse (Figure 8.2).
The Hong Kong-based Political and Economic Risk Consultancy (PERC) survey of 700 expatriate businessmen working in 12 Asian economies found that apart from Singapore, Hong Kong, and Japan, virtually all other countries were below the average with the Philippines scoring nine out of ten on a descending scale of corruption.29 Other international 170 Greg Bankoff
2.6 9.3
8.2
7.1
5.6 4.9
4.5
3.7 3.5 3.2
2.7 2.6 2.4
1.9 1.2
Score
10 (10 highly clean to 0 highly corrupt)
9 8 7 6 5 4 3 2 1 0
Singapore Hong Kong Japan Taiwan Malaysia S. Korea Sri Lanka China Thailand India Philippines Pakistan Vietnam Indonesia Bangladesh
Figure 8.2 The Philippines compared to other Eastern and South Asian nations, CPI 2002 (source: Corruption Perception Index(TI 2002)).
surveys have not been quite so harsh. In a survey of the six main Southeast Asian economies commissioned by The Economist magazine, the Philip- pines ranked second only behind Singapore in terms of least corruption and most transparency and scored a respectable third with regard to the potential for social unrest behind Singapore and Thailand.30In a further survey of international investors that year, however, it was found that con- cerns over corruption, cronyism, ethics, and the lack of governance had overtaken poor infrastructure as the major impediment to foreign invest- ment in the Philippines.31
So pervasive is the domestic and international perception of corruption in the Philippines that it is sometimes contrasted with the regularity of natural hazards, that other national characteristic so often associated with the archipelago. Thus an editorial in The Philippine Free Presscompared the unexplained depletion of the government’s disaster relief fund in 1995 to a tropical storm and asked how much of the money had really gone to aid the people affected and how much had been ‘stolen by the typhoon of government thieves’ that had been blowing for years and costing Filipinos billions of pesos.32But, in fact, the analogy goes beyond the purely literary:
the increasing magnitude if not frequency of the one provides more opportunities and occasion for the other. In the Philippines, there is a close link between disasters caused by natural hazard and corruption of all persuasions.
Corruption and disasters33
The last three decades of the twentieth century have been decades of momentous change and political upheaval in the Philippines. The nation and its people have endured long years of dictatorship under Ferdinand Marcos, cronyism and economic mismanagement, the 1983 assassination of Benigno Aquino, the People’s Revolution and the elevation of Corazon Aquino in 1986, military unrest and the Reform, the Armed Forces Move- ment, constitutional machinations, first, under Fidel Ramos and then under Joseph Estrada, the renewal of ethnic violence in Mindanao, EDSA Two and Three, and the elevation to the presidency of Gloria Macapagal- Arroyo in 2001. But there is another politics or history that usually remains below the public horizon. This other story of flooded streets, drought-stricken fields, shattered communities, flattened buildings, buried homes, and lost parents, children or livelihoods is much closer to the real- life experience of most Filipinos than the countless reports on the intrigues and manoeuvrings of politicians. In particular, the succession of major dis- asters that overcame the nation between 1990 and 1991 proved sufficient to temporarily displace sleaze from the headlines. While it is difficult to always establish that the frequency of all types of disasters is rising, there is little doubt that they exert an increasing impact on the lives and prop- erty of most Filipinos.34 The accelerating processes of urbanisation and The Philippines: profiting from disasters 171
industrialisation render more communities vulnerable to disasters, and human activities put more people at risk from their consequences. At no time has this vulnerability been so manifest in the Philippines as during the early 1990s. The Baguio earthquake in July (the most destructive of such events to hit the archipelago last century) and Typhoon Rupingin Novem- ber 1990 (that destroyed 60 per cent of the country’s second largest conur- bation), the eruption of Mt Pinatubo in June (the second largest of the twentieth century) and the Ormoc flood in November 1991 (that killed over 7,000 people), while not the only major disasters to afflict the nation in recent decades, were certainly among the most devastating.35
However, the vulnerability of any society to hazard is also partially determined by the way it is structured. Not only are some among the rich and powerful better able to cope with crisis situations but a few actually seem to profit from them through their greater ability to benefit from the economic opportunities presented for graft and malfeasance by relief and rehabilitation operations. It is even possible that disasters may act as important mechanisms for consolidating and increasing social inequalities within societies subject to their frequent occurrence. The way in which class interests are articulated within the debate over disaster management and relief assistance is important in understanding the reasons why governments in the Philippines have historically paid insufficient attention to natural hazards and have consistently failed to take adequate measures to prevent, mitigate, or ameliorate their effects. Not appreciating the close relationship between society, corruption, and its physical environ- ment hinders a true understanding of the political dynamics within the nation.
Disasters furnish situations whereby some among the rich and powerful are able to become richer and more powerful, to profit politically and financially from the provision of emergency-related services and relief assistance or through graft and corruption. Some in the elite have learnt to manipulate crisis situations in order to consolidate their hold on power and serve their own economic interests. For many holding public office, disasters provide a perfect opportunity for political grandstanding, afford- ing a very visible platform from which to dispense largesse in the form of relief items or rehabilitation schemes. Individual politicians often use the aftermath of natural hazards personally to distribute relief material in their constituencies. The eruption of Mt Pinatubo was ‘a publicity godsend’ in the 1992 election of officials from the President down to mayors and local council members.36 The geologist Kelvin Rodolfo observed hundreds of politicians descend on the disaster scene with relief goods: ‘the big players in helicopters bearing media crews, the small ones in jeeps with a couple of sacks of rice and a few canned sardines: hand out some goods, take some pictures with devastation in the background, and go, never to return’.37Similarly, after Typhoon Rosingdevastated areas of Quezon province in November 1995, a group of national politicians toured 172 Greg Bankoff