President Ferdinand Marcos Jr. has vowed to fight corruption in his second year in office.
“We cannot tolerate corruption or incompetence in government,’’ he warned public officials during his second State of the Nation Address (SONA) on Monday, July 24.
He vowed to “shut down the illegal activities” and “dismantle the network of operations” of drug rings in the country.
The President, who sits as agriculture secretary, also warned smugglers and hoarders of agricultural products that their “days are numbered.’’ They have been blamed for the unreasonable increases in the prices of products, particularly onion and sugar.
Marcos has been previously criticized for his weak anti-corruption messaging. After Monday’s SONA, he took action.
Malacañang accepted the courtesy resignations of three generals and 15 colonels from the Philippine National Police over their alleged involvement in illegal drug activities.
The Department of Agriculture also announced the filing of charges against the owners of four warehouses in Luzon that stored smuggled sugar, onions and meat.
Watchdog groups interviewed by the Philippine Center for Investigative Journalism (PCIJ) welcomed Marcos’ SONA. But the proof of the anti-corruption pudding is in the eating, they said.
The Institute for Leadership, Empowerment, and Democracy (iLEAD) and Action for Economics Reform (AER) had reservations about Marcos’ proposals to amend a string of laws.
Often the laws are good, said iLEAD executive director Zy-za Suzara. It’s the implementation that is lacking.
Marcos’ failure to mention Freedom of Information (FOI) was also disappointing, said AER researcher AJ Montesa.
Transparency is an effective deterrent to corruption, he said. “For what will the modernization of budget, procurement and government processes be if you don’t allow citizens to also engage on that side, if they’re not able to access information?”
Challenges of digitalization
Marcos rallied the bureaucracy to “embrace digitalization’’ not only to provide better services to the people, but to curb corruption.
He cited how digitalization has boosted efficiency in many areas such as government payments, company and business registrations, issuance of permits and licenses, loan applications and revenue collection.
“Digitalization is the call of today; not the call of the future – but of the present. It is here. It is needed, and it is needed today,’’ he said.
He also touted the launch of eGov PH app, a single and centralized mobile app where all key government services are to be integrated. The core of the digitally transformed network of government services is the national ID system, he added.
“At 87 % total registration, we are now closer to establishing a complete, accurate and reliable digital database of our own for the entire population,’’ he said.
AER’s Montesa said a lot of government agencies have yet to “appreciate” digitization and digitalization.
“If you have information that is more readily available, machine-readable and analyzable, it’s easier to detect fraud and corruption. It’s easier to audit as well,” Montesa said.
Digitalization is tedious. It entails the migration of government transactions to digital technologies, converting analog data into computer-readable information.
Even if government agencies have the capacity to digitalize, there’s a lack of data integration among them. “There are those who do not share databases with one another,” he said.
A thorough navigation of the eGov PH app reveals features that merely redirect users to already existing government websites, with some still undergoing “single-sign-on integration.”
Most local government units also have no destinations at all.
New procurement law?
The President also enumerated a wishlist of priority measures that he wanted Congress to pass, including a new government procurement law and a new government auditing code.
The goal was “to make government procurement and auditing more attuned to these changing times,” Marco said, without going into specifics.
The procurement law was enacted in 2003 to ensure transparency in obtaining materials for government projects and to eliminate conflicts of interest among eligible contractors.
The process is also notorious among government officials for having a “highly technical” nature and for imposing “stringent” rules, which are often blamed for the delays.
But iLEAD’s Zusara said an overhaul of the law might not be needed. What government officials need is capacity building for a better understanding of the procurement process, she said.
Circular releases may be enough to clarify concerns with the law, and this has been done in several instances, she said.
AER’s Montesa also warned against a total revamp of the law, although he acknowledged the need for possible amendments.
“If you try to overhaul the entire system, certain things might be crossed out; it might even yield a negative impact. If I, for example, offer provisions to make procurement faster, these should not get in the way of transparency and accountability.” Montesa said.
Suzara said the government should also revive procurement observation that allows civil society members to monitor proceedings. This provision is already enshrined in the current law.
“Civil society has died down because they don’t have the capacity to go to every bidding,” she said.
Meanwhile, Montesa said Marcos’ pronouncement to prioritize an amendment to the Anti-Agricultural Smuggling Act was a good start to curb corruption “outside” government transactions.
But he said the Marcos administration should follow through on its enforcement once amended, and improve strategies in tracking down groups dealing in illegal trade.
Maharlika still dubious
The President defended the newly established Maharlika Investment Fund (MIF), saying this could finance key projects “without the added debt burden.’’
Besides, he added, operations of the fund will be overseen by internationally recognized economic managers to guarantee that any investment decision is based on financial considerations “absent any political influence.’’
The MIF law setting up the sovereign wealth fund had been dogged by controversy since it was speedily passed by the House of Representatives in December last year, approved by the Senate in May and signed into law on July 18.
At the heart of the opposition to the fund is the use of state pension funds for its capitalization.
For Montesa, it’s the ambiguity of the fund’s purpose that fuels doubts. Leading economists have also stated that it violates certain economic principles.
“Is it to maximize financial return? Gain? Profit? Or is it to maximize spending on development projects. Since that’s unclear, the possibility is they will try to go somewhere in the middle… It might just waste public funds,” the AER researcher said.
Suzara also said that even if it has found its P500-billion capital through untapped government resources, it will “eat up fiscal space.”
“That’s why they are prioritizing taxes that could replenish the funds that will be sucked by Maharlika,” she said.
Tax reforms
In his speech, Marcos asserted the need for “more structural tax reforms” for his administration to attain socioeconomic targets.
He identified the following priority legislation to ramp up government revenue:
- Excise tax on single-use plastics
- Value added tax (VAT) on digital services
- Rationalization of mining fiscal regime
- Motor vehicle user’s charge/road user’s tax
- Military and uniformed personnel pension
AER believes that in an economy where deficit-to-GDP (gross domestic product) and debt-to-GDP ratios are high, tax reforms are welcome. It only needs to be designed in a way that would tax the rich more than it does the poor, Montesa said.
For Suzara, though, discussion about taxes is not enough to ensure they will work. “[Additional revenues] will only have a positive impact on citizens if they are properly allocated,” she said.
Despite having the highest VAT rate among Southeast Asian countries, the Philippines performs lowest in channeling this type of revenue to higher national income, according to a 2021 Asian Development Bank report. END
TOP PHOTO by Larry Monserate Piojo for PCIJ