We are pleased to note an improvement in the Philippines’ ranking in the 2012 Transparency International Corruption Perceptions Index (CPI). We now rank No. 105 out of 174 countries measured in the CPI. While we used to rank No. 129 in last year’s report, a change in the methodology used in the CPI this year makes a direct comparison to prior year’s rankings not possible. However, we note that in relative terms across Southeast Asia, the Philippines has moved up in rank from No. 7 out of 10 last year to No. 5 this year, having overtaken Indonesia and Vietnam.

               Transparency International has acknowledged that “impeachment trials, the declaration of SALNs, the transparent process of the Chief Justice replacement, the first year of the new Ombudsman, and the general openness of the Administration in the quest for a transparent government are all contributing to the change in public perception.”

               We would add that strides made in the areas of procurement reform and budget transparency have also contributed to the improvement of public perception in the fight against corruption. We have long felt that greater transparency will lead to greater trust in the government and economy by the business community and investors. One indicator of this has been an increase in the number of prospective bidders, many of them first-time bidders, in public works contracts and public-private partnership projects. The bidding of public works contracts and the improved pace of government spending coupled with the absence of corruption scandals are positive indicators that reforms are gaining traction. Additionally, they are having positive impact on economic growth.

               With respect to budget transparency, this year will mark the third consecutive year that a budget will be passed on time and not re-enacted in the following year. In the prior administration, re-enacted budgets created opportunities for corruption. One hallmark of the budget process now is that it is more transparent, with data made available on the Department of Budget and Management and Budget ng Bayan websites.

               The National Competitiveness Council will continue to aggressively work with different national government agencies and local government units to streamline and improve bureaucratic processes such as the Ease of Doing Business indicators, the Business Permits and Licensing System with LGUs, and the Performance Governance System with national government agencies. We believe streamlined processes and less red-tape will reduce vulnerability to corrupt practices.

               The latest CPI ranking demonstrates the current Administration’s serious drive for more transparency and curbing of corruption in all fronts of the bureaucracy have contributed to this change in global perception. However, we acknowledge that we are still below the median or halfway mark in the global list and that we need to continue focusing our energies on reducing red tape in the government which we believe serves as an opening for corruption. Our current score of 34 out of a possible top score of 100 also underscores how much more work we have ahead of us. About 70% of the world’s economies score below 50 on the 100-point scale, illustrating that corruption is a global problem.

               The 2012 Corruption Perceptions Index is an annual survey of  Transparency International, a global civil society organization that advocates good governance and fights corruption. The 2012 Index used an updated methodology covering 176 countries. This updated methodology does not enable direct comparisons with prior year’s scores or ranks. The CPI 2012 ranked Denmark, Finland and New Zealand as least corrupt while Afghanistan, North Korea and Somalia were listed as the perceived most corrupt countries in the world.

by Guillermo M. Luz, Private Sector Co-Chairman
National Competitiveness Council | Philippines