By Benjamin R. Punongbayan In recent weeks, there appear to be a welling up of commentaries, particularly on social media, about corruption in our government. There seems to be a growing perception that this disastrous practice is getting worse in terms of both its widening spread and the increasing scale of the amounts involved. This observation aroused an interest in me to analyze and try to portray in an understandable way the broad effects of corruption in the Philippine economy. Indeed, corruption in government has been prevalent in the Philippines for so long and appears to continue undiminished in the foreseeable future. I will not consider, though, that this lamentable practice is a part of Philippine culture, as others would do, for the simple reason that it is practiced by only a “few”. I mean “few” in relation to the number of perpetrators as compared to the entire Philippine population. Corruption is actually a crime that regrettably goes generally unpunished. I recognize, though, that others may claim that for the fact that a much greater part of the Philippine population tolerates the perpetration of this criminal practice makes the practice of corruption a part of Philippine culture. I would agree if such toleration is unforced. But it is not. The perpetrators hold considerable power. This power exudes intimidation and threat of retribution that greatly inhibits the concerned but unorganized citizens from taking appropriate action to challenge the perpetrators. Estimate of amount of corruption In the latest Corruption Perception Index released in September 2023 by the Berlin-based Transparency International, the Philippines is ranked 115 among 180 countries as being perceived to have a higher prevalence of corruption. While the country is not the most corrupt, it is more corrupt than 114 other countries out of 180. In a paper presented by an officer of the Department of Justice at the 13th Regional Seminar on Good Governance for Southeast Asian Countries in Tokyo in 2019, he stated that the amount of corruption in the Philippines at the national level was then estimated at 20% of the annual national budget. He applied that proportion to the 2015 and 2016 national budgets to show the magnitude of the resulting amounts. If we apply the same proportion on the current 2024 national budget, the amount of corruption at the national level currently translates to an estimated amount of about ₱1.6 trillion. And that estimated amount relates only to corruption at the national government level. If we include estimates of similar corruption at the level of the LGUs and bribery amounts at both national and local levels, the overall total will certainly be gargantuan. Types of corruption Corruption in government may be classified in a number of ways. For purposes of this commentary, I will classify them based on their nature, namely: overpricing; unrestricted appropriated funds; and bribery at both the national and local government levels. Overpricing relates to infrastructure and other construction contracts; purchases of equipment, materials, and supplies; and procurement of labor for the use of the national and local governments, including that of the various institutions under their respective jurisdictions. I define unrestricted appropriated funds or, simply, unrestricted appropriations as composed of what are commonly known as pork barrel, intelligence funds, and other intentionally mislabelled funds appropriated in both the national budget and local government budgets. Overpricing results in a complete loss of government funds equivalent to the amount of the overprice, while unrestricted appropriations result in a partial loss of government funds to the extent of the amount not used for the benefit of the Filipino people plus the overpricing of those goods procured for the benefit of the citizens. Bribery is different in the sense that these are in the form of money or valuable goods owned by citizens, private businesses, and other organizations and given to government officers and personnel, under coercion or not, to facilitate or expedite the release of required government permits, licenses, and other documentary requirements and approvals of all kinds. It also includes awarding of franchises and rights for exploitation and use of national resources and privileges; and favorable court decisions and regulatory rulings to deserved or undeserved persons, activities, and pending cases. While these corrupt practices do not result in direct loss of existing government funds, some of these practices may result in loss of government revenue in the form of exemption from or reduced amounts of legally collectible taxes, duties, and fees in exchange for the bribe money. Economic effects of corruption on government programs and activities In sum, corruption in government results in loss of government funds in the cases of overpricing and portions of unrestricted appropriations, and loss of revenue in some cases of bribery. On the basis of the estimated rate of corruption mentioned earlier, the total amount of these losses of government funds and revenue on an annual basis is huge. When put together, the recurring total annual amount could have been deployed in large-scale programs that have long-term and wide beneficial effects on the nation’s economic growth and development, such as in large infrastructures that provide connectivity within and among the country’s various islands (roads, railways, bridges, sea ports, airports, and similar others); rehabilitation of the education system; substantial reduction of poverty; a more expansive health care system; and other urgently needed economic and social development programs. When broadening the base estimate of losses from corruption referred to earlier for reasons explained thereafter, the expanded annual estimate would be significantly higher than the ₱1.6 trillion current annual estimate mentioned before. By multiplying whatever higher amount that may come to mind by any number of years, it provides a result that gives us a picture of the enormity of the opportunities for continuous economic growth that we lost during the past many years. And much more than this, we continue to suffer such losses annually, and there seems to be no end in sight. There is an additional unfavorable economic effect in the case of overpricing, especially in infrastructure contracts. To enable the corruption, some or much of the completed constructions will generally be of a quality level lower than what is specified in the contract. As a result, the completed infrastructure would provide benefits only for a much shorter period of time than planned and will necessarily entail large amounts of opportunity cost during the period of necessary repairs and replacements. Moreover, such early repairs and replacements will necessitate a premature round of sourcing the required funding. As a result, this premature funding crowds out new economic development initiatives, which clearly further delays in no small measure Philippine economic growth. In addition, this condition creates a cycle that goes on indefinitely under present circumstances. There are similar effects in the case of overpricing in the government procurement of equipment, materials, supplies and labor if the level of quality of the procured goods and services is not in accordance with specified quality levels. In the case of unrestricted appropriations, whatever portion is spent for the benefit of the Filipino people, it is spent in a scattered way in relatively small amounts. The power of using that money in the aggregate to fund large-scale economic development programs that provide much wider and longer-term benefits to the nation is forever lost. Economic effects of using corrupt money On the part of the corrupt persons, they obtain additional wealth for their own personal benefit and disposal. To the extent that they deploy this additional wealth in consumption, investments, and savings in the Philippines, such deployment would offset to some extent the harmful effects of the loss of government funds and revenue. However, based on general observations, much of this corrupt money is not spent in the Philippines but instead is used to purchase foreign, especially expensive, goods and to transfer some portion abroad in the form of foreign currency. In those cases, no benefit accrues to the Philippine economy at all, except maybe for some retail sale markups and applicable payment of local taxes and fees, which sum up to a relatively small amount. Other effects on the national economy The huge fund losses resulting from corruption have required the Philippine government to borrow much more than would have been necessary. Such additional borrowings result in a higher debt ratio (to GDP) that in turn results in a lower international credit rating than would otherwise be and consequently entails a higher interest cost. Of course, the government may choose to retain that level of borrowings and, without corruption, spend the additional borrowings for expenditures on large-scale programs that have long-term and wide beneficial effects on the nation’s economic growth and development, as explained earlier. Conclusion Clearly, widespread corruption has caused the Philippines to lose great opportunities continuously over a long period of time to become a more economically developed country. Equally sadly, the country will continue to lose such great opportunities in the foreseeable future. I purposely confined myself to analyzing the economic effects of corruption in government, except for a few comments in passing that corruption, in my opinion, is not a part of Philippine culture. I avoided commenting on the underlying issue of righteousness regarding the practice of corruption. I do not think I have the right to suggest to anyone to be like Mother Teresa. _________ Ben Punongbayan is the Founder of Punongbayan & Araullo. He is currently a member of the Board of Governors of the Management Association of the Philippines. Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com . Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com .GREEN BAY, Wis. (AP) — Defending the run has been one of the Green Bay Packers’ weaknesses over the last several years. Not so much lately, though. Green Bay limited San Francisco to 16 carries for 44 yards in a 38-10 rout of the 49ers on Nov. 24, with two-time All-Pro Christian McCaffrey gaining 31 yards on 11 attempts. Four nights later, the Packers beat Miami 30-17 by holding the Dolphins to 39 yards on 14 carries. It was the first time since 1995 — and only the second time since 1950 — that the Packers had allowed fewer than 45 yards rushing in back-to-back games within the same season. “I think we’re playing harder and harder each week,” first-year defensive coordinator Jeff Hafley said. “And that’s how you play good defense.” That defense needs to be at its best Thursday as the Packers (9-3) close a stretch of three games in 12 days by visiting the NFC North-leading Detroit Lions (12-1), who have the NFL’s highest-scoring offense thanks in part to a rushing attack featuring the speedy Jahmyr Gibbs and the physical David Montgomery. “Gibbs is a great running back,” defensive lineman Kenny Clark said. “I really think the offense really starts with him, honestly. He can do everything — receive, in-and-out runner, can do stretch, duo plays. We’ve got to have all hands on deck with Gibbs. And then Montgomery, he’s a great complement to him. He can do everything, also.” The Lions were the first team since the 1975 Miami Dolphins to rush for at least 100 yards and a touchdown in each of their first 11 games. The streak ended on Thanksgiving when the Lions rushed for 194 yards but didn’t have a touchdown on the ground in a 23-20 victory over the Chicago Bears. Green Bay outrushed Detroit 138-124 in the Packers’ 24-14 loss to the Lions on Nov. 3 at Lambeau Field. Montgomery rushed for 73 yards while Gibbs ran for 65 yards and a touchdown. Gibbs has 973 yards this season, which ranks fourth in the NFL. Montgomery ran for a combined 192 yards and four touchdowns in the Lions’ two games against the Packers last season. Green Bay’s run defense has come a long way since. The Packers have allowed 106.6 yards rushing per game this season, which ranks eighth in the league. The Packers haven’t closed a season in the top 10 in run defense since 2016 and have finished outside the top 20 in four of the last six years, including 26th in 2022 and 28th in 2023. “I think Haf’s doing a good job of mixing up the fronts and some of the coverages, but really it’s ultimately about tackling, swarming, getting many hats to the football,” Packers coach Matt LaFleur said. “And our guys have really embraced that style of play.” The Packers are yielding 4.2 yards per carry to rank seventh in the league after finishing 22nd or worst in that category each of the last three seasons. They haven’t closed a season ranked in the top 10 in yards allowed per carry since 2017. Hafley says the improvement starts up front. “The interior part of our D-line has done such a good job these last few games,” Hafley said. “They really have. They’re hard to block. They’re staying in their gaps. They’re tearing off of blocks, and it’s the same thing with those defensive ends. They’re setting edges, they’re forcing the ball back inside, they’re getting off blocks and then we’re tackling and we’re running to the ball and there’s multiple people to the ball. “And when you turn on our tape right now and when you freeze it, you see that. You see a lot of guys around the football. And then you’re not afraid, right? Like if I have an open-field tackle and I know eight other guys are coming, I’m going to take my shot because I know if I miss, it’s going to be, ‘Bang, bang, bang,’ we’ve got three or four other guys there, and we’re starting to play faster.” Green Bay's defense has the Lions’ attention. “They’ve been playing well,” Detroit coach Dan Campbell said. “I mean, they have, really, all season, and nothing has changed.” AP Sports Writer Larry Lage contributed to this report. AP NFL: https://apnews.com/hub/NFLDrexel secures 83-71 win over Chicago State
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