In The News

The Philippines: The Most Corrupt Country in Asia?

March 28, 2007

This piece originally ran on March 28th. Due to overwhelming popularity, we are re-issuing it with a correction (Note paragraph 8: 700 interviews were conducted as opposed to 1,200).

On March 14, 2007 the Philippines topped the charts.  Unfortunately, this was not a contest that the nation had aspired to win.  The Philippines came out on top (or depending on your perspective, the bottom) of a perception survey, conducted by Political & Economic Risk Consultancy (PERC), which ranked it as the most corrupt among thirteen nations in Asia.  The survey polled expatriates in the Philippines who, when asked “How big is the problem of corruption in terms of being a feature influencing the overall business environment?” gave it a 9.40 (out of 10).  Indonesia and Thailand tied for the second most corrupt at 8.03. 

The news spread quickly in the Philippines and the results were uniformly covered in the national media.  However, the responses from the press, the government, local analysts, and the business community were far from uniform.  Some questioned the utility and relevance of the survey, others felt it accurately reflected their own experience and the situation on the ground, while many shrugged their shoulders and rhetorically asked, “What’s new?”

What is new is that this time the Philippines ranked worse than any of its competitors, and its score dramatically sank from 7.80 in 2006 to 9.40 this year ” the biggest change in any country surveyed.

There are numerous surveys on perceptions of corruption in the Philippines.  The most prominent of these are carried out by Social Weather Stations, Pulse Asia, Ibon Foundation, the Makati Business Club, Transparency International (TI), and PERC.  These studies have, for the most part, painted the image of a graft-ridden country and a government seemingly powerless over corruption.  But, until now, they had simply listed the Philippines among the most corrupt — but not the most corrupt.

In the face of such ominous news it is easy to become overly pessimistic.  But with sound data, respected local partners, and on-the-ground presence, there are numerous opportunities to advance public understanding of the issue of corruption as well as monitor progress in combating this obstacle to Philippine development.

Since 2000, The Asia Foundation, with funding support from the United States Agency for International Development, has conducted the Annual Enterprise Survey in close partnership with the Social Weather Stations and the Makati Business Club.  Unlike international corruption indices implemented in the Philippines, the Annual Enterprise Survey focuses on the views of Filipino managers ” not expatriates.  The survey tracks these views over time and provides insight into the experiences of local businesses at various sites throughout the country.  It also covers the perceived sincerity of various government agencies in their fight against corruption, and exposes their progress or hindrances.

Initially implemented in the National Capital Region, the surveys expanded to Metro Cebu and Davao in 2004, and further reached to include Cavite, Laguna, Batangas, Cagayan de Oro, and Iligan City in 2005.

In 2006, interviews were conducted with a total of 700** business managers based in the National Capital Region, Cebu, Davao, Cavite, Laguna, Batangas, Cagayan de Oro, and Iligan City. The results indicate that a majority of business managers believe that corruption in the public sector remains very high, but their personal experiences indicate that solicitation of bribes for some transactions — such as business permits and income tax — is decreasing. The private sector is also starting to improve: there are signs of a decrease in giving bribes and an increase in honest business practices. Despite these improvements, the perceived sincerity of Philippine government institutions in fighting corruption has mostly declined.

While Filipino business leaders would agree that the picture is far from satisfactory, the results of the Annual Enterprise Survey show that their perceptions are markedly different from those of their expatriate counterparts.  For Filipinos, not much has changed ” for better or for worse.  For the expatriate respondents, the Philippines has plummeted to the most corrupt in Asia.  We will see what 2007 brings.  The researchers are currently in the field conducting interviews, and the results of the 2007 Annual Enterprise Survey are expected in June.

**Note: The original entry on March 28 noted that 1,200 business managers were interviewed, this has been corrected to 700.

For detailed examination of the various corruption surveys, please see The Reverse Engineering Study

For an overview of the 2006 Annual Enterprise Survey, please see http://www.sws.org.ph/pr060706.htm

For the full 2006 Annual Enterprise Survey presentation, please see http://www.tag.org.ph/survey/surveypres.pps

Ky Johnson is The Asia Foundation’s Deputy Country Representative for the Philippines and Pacific Island Nations.

View all posts by Ky D. Johnson | Bio

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3 comments on this post:

  1. [...] out in the Philippine media, and some international observers have rated the Philippines as the most corrupt country in Asia. Unfortunately, a recently conducted survey clearly shows that business managers in the Philippines [...]

  2. [...] Last Monday, March 10, the Political and Economic Risk Consultancy (PERC) in Hong Kong stated in its annual survey of corruption that, “for the second consecutive year, the Philippines has the dubious distinction of being the worst rated country.” (For an analysis of last year’s rating, click here.) [...]

  3. [...] Asia Foundation Blog has a piece on that corruption survey regarding the Philippines. Then laurgism.com explains why the [...]

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