Video #21 - The Philippines: Corruption and the Economy
Tuesday, January 10, 2006BACKGROUND INFORMATION
Speaking before the Management Association of the Philippines in March 2004, a top US Embassy official said perceived corruption in the Philippines is a deterrent to foreign investments. Presidential Spokesman Ignacio Bunye denied the allegation, stating that President Arroyo's efforts to thwart corruption in her government have been lauded by the World Bank. "This problem of corruption has been our problem before. But we do not sleep on it and we do not stop coming up with measures to fight corruption," Bunye said in a Radio Mindanao interview. He noted that US firm Intel Corporation, the world's largest computer chip maker, has invested one billion dollars in the nation during Mrs. Arroyo's administration. Bunye cited Sunpower, Ford and Texas Instruments as other US corporations whose investment plans have not been affected by the charges of endemic corruption. (However, the Asia Development Bank says foreign direct investment in the Philippines plummeted to $319 million in 2003 from $1.8 billion in 2002. It blames the drop on "political uncertainties" and a lack of public investment in infrastructure projects).
The Arroyo government is credited with charging 70 high-ranking officials for using their positions to benefit themselves. Nevertheless, the President's opposition is skeptical of the seriousness of the crackdown, in light of the country's deficit of P200 billion in 2002 and a bit less in 2003.
Corruption has a long history in the Philippines. Former President Ferdinand Marcos is accused of stealing between $5 billion and $10 billion during his twenty-year government. His successor, Joseph Estrada, has the distinction of being on the list of top ten most corrupt leaders in the world, according to Transparency International. Earlier this year, Hong Kong's Political and Economic Risk Consultancy (PERC) ranked the Philippines as the fourth most-corrupt country in Asia.
President Arroyo expected her Cabinet "to craft enforceable, doable and not motherhood anti-corruption programs." She admitted that corruption would be a hard fight because those involved "may be in cahoots with rogue elements in the criminal justice system-- from law enforcers and prosecutors to judges and justices."
Sheila Coronel of the Philippine Center for Investigative Journalism says the problem originates with the typical Representative or Senator-"who cannot be more unlike the typical Filipino. The legislator is likely to be male, middle-aged, and college educated, most likely with a degree in law...In 1962, only 27 percent of Representatives were classified as upper class. In 1992, it was 44 percent. Over time, the assets of legislators have grown. In 1992, the average net worth of Congressmen was P8million. By 2001, it was P22 million...A quarter of all senators today have a net worth of above P100 million. The typical Filipino, meanwhile, is likely to be below 35, with a few years of high-school education, and an annual income of about P150,000 in 2000." (Sadly, in 2002, one in three Filipinos lived below the annual poverty threshold of 12,000 pesos).
Ms. Coronel adds, "The legislature has traditionally opened to its members a world of privilege that enables the enterprising among them to take advantage of money-making opportunities and to accumulate wealth." This system narrows the possibilities for a large segment of the population to participate in government, with "the passing on of legislative seat from one generation to another...evidence of the caste-like structure of the legislative elite." In fact, political clans have been an integral part of Philippine politics. According to Sheila Coronel, "The Aquinos and Cojuangcos of Tarlac, the Osmenas of Cebu, the Romualdezes of Leyte, and the Marcoses of Ilocos Norte, among other clans, have been in Philippine legislatures for four generations."
Recently, during the "state of the nation" address to Congress, President Gloria Macapagal Arroyo defended her decision to withdraw Philippine peacekeepers from Iraq to save the life of Angelo de la Cruz, a Filipino truck driver who became a hostage of militant forces in Iraq. "I cannot apologize for being a protector of my people," she said. "Sacrificing Angelo de la Cruz would have been a pointless provocation. It would have put the lives of 1.5 million Filipinos in the Mideast at risk by making them a part of the war." She refers to 10% of the population whose remittances help the Philippine economy.
President Arroyo presented five reform packages designed to create 6 million jobs in six years, attract international investment, end corruption, improve education and make the Philippines independent from foreign energy sources. Her election in May for a new six-year term, as well as her party's gain in Congress, should help her gain support for this legislation. The Asian Development Bank (ADB) forecasts the Philippines' gross domestic product (GDP)to grow between 4.5%-5.5% in both 2004 and 2005, compared to 4.5% in 2003. One of the reasons given is that consumer spending rose by 5.1% in 2003. This increase is credited to the seven million overseas workers' increased remittances (by 6.3%) to 7.6 billion in 2003, 7.5% of the GDP.
However, the ADB adds, "Unless major economic and political reforms are accomplished, it will be extremely difficult for the country to lift its potential growth rate or to escape the vicious circle where capital scarcity implies low incomes, low incomes imply a limited capacity to save, and limited savings lead to limited investment and capital scarcity."
SOURCES
Ager, Maila, "President wants businessmen, church help vs corruption." (Manila Time) INQ7.net, July 5, 2004
"Arroyo outlines domestic reform plans in state of nation address." Yahoo Asia News, July 26, 2004
"Philippine Economic Growth to Improve Slightly in 2004 and 2005." Asian Development Bank, ADB.org, April 28, 2004 Dizon, Mikko and Sheila Crisostomo, "Palace Defends GMA on Corruption." Philippine Headline News Online, March 30,2004
Tiglao, Rigoberto, "Corruption decreased under Macapagal-Arroyo." (Manila Time) inq7.net, April 23, 2004
LESSON PLAN
GRADE LEVEL/SUBJECT:
10-12 grade Economics, International Relations, World History, Geography, International Baccalaureate Programs (IB), Current Events.
PURPOSE:
To present activities to be used in a variety of classroom situations in order to enhance student understanding of the Malaysian economy and its significance globally.
OBJECTIVES:
Students will be able to:
- Describe the current state of the Philippine economy.
- Evaluate President Arroyo's policies.
- Investigate corruption in the Philippine government.
- Analyze the role of political clans in the Philippine government.
MATERIALS:
- Background information provided.
- Resources on the Philippines available at your school's Media Center and the Public Library System in your area.
- Background information available through Internet "search engines".
- Knowledge.wharton.upenn.edu/100902_ss.html
ACTIVITIES:
May be assigned as group activities or as individual tasks. They may also be designed as preparation for related presentations either by individuals or groups.
- After reading Maila Ager's article (See Sources),evaluate BBC chairman Jose Concepcion's proposals on how to fight corruption. Write an editorial expressing your opinions.
- Use charts and graphs to illustrate the state of the Philippine economy.
- Develop a timeline showing the major political events in Philippine history that can be linked to the country's most influential families.
- List President Arroyo's policies on a bulletin board in the classroom. Keep up with events in the Philippines to evaluate the results throughout the year.
- Hold a class debate simulating the discussion prior to President Arroyo's election in order to expose the discourse of the opposition.
EVALUATION:
Individual assignments should be graded by the teacher using established criteria.
Group activities, presentations and projects may be evaluated by teachers and students using the following criteria and scale: Content 1 = Superior (A) Creativity 2 = Excellent (B) Clarity 3 = Good (C) 4 = Fair (D) 5 = Poor (F)
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