Philippine bribery hurts MSMEs most; gov’t urged to fast-track digital push
By Kyle Aristophere T. Atienza, Reporter
THE PHILIPPINES remains highly vulnerable to bribery due to the slow rollout of its digitalization program, an industry group said, warning that it prevents small businesses from entering the formal economy.
Despite key developments in the country’s fight against corruption, the problem of bribery persists mainly due to the slow digital transformation push, Philippine Chamber of Commerce and Industry (PCCI) President Enunina V. Mangio said.
“Digitalization efforts have been slow as the infrastructure is still incomplete,” she said in a Viber message. “Perception is still strong that bribery is necessary for securing basic services or for businesses to operate.”
She said businesses usually encounter bribery in securing permits and licenses both at the national and local levels, in dealing with Customs and tax authorities, and in resolving disputes with government contractors.
Ms. Mangio said bribery raises the cost of doing business especially for micro, small and medium enterprises (MSMEs), which account for over 99% of businesses in the Philippines, because they lack the resources to deal with corrupt practices.
“It holds back the growth of enterprises, especially the nano- (cottage) and micro-enterprises that seek to enter the formal economy,” she said. “It deters market competition as only those with enough resources have the capacity to pay off agencies, officials and employees.”
“This leads to higher cost of goods and services and hinders the growth of innovation.”
The Philippines rose eight spots to 111th out of 194 countries in the 2024 edition of the Bribery Risk Matrix by nonprofit business group TRACE.
While the country’s ranking improved, its overall score fell two points from 54 in the 2023 edition, where the country ranked 119th. The country kept a “moderate risk” level of bribery.
The Philippines got the highest score in deterrence risk at 75. It received a score of 50 in opportunity risk, 49 in transparency risk and 44 in oversight risk.
Ms. Mangio noted that efforts to curb bribery and other corrupt practices have generally been limited to digitalizing frontline government processes to reduce face-to-face interactions.
Some of the key reforms that may help the country deter bribery include the creation of an Office of the Special Presidential Assistant for Economic and Investment Affairs and Private Sector Advisory Council, and setting up green lanes for strategic investments under a presidential order, she noted.
“Armed with a direct mandate from the President, they are effective and formidable allies of the private sector in the fight against bribery and corruption.”
Ms. Mangio also noted that the Department of Interior and Local Government’s Seal of Good Local Governance “has been instrumental in upholding transparency and accountability among local governments and in incentivizing good performance.”
The PCCI called for the integration of digital payment in all government services, noting that it should “cover all national and local government agencies and their instrumentalities.”
It sought the passage of a whistleblower protection law “to encourage reporting of corrupt practices without fear of retribution.”
The PCCI said the government should fast-track the creation of online platforms for government contracts, spending and procurement.
The government should also provide the Office of the Ombudsman, Commission on Audit and Philippine Anti-Corruption Commission with better resources and staff training, while giving them “political independence” to be free from interference.
