E·N·Q·U·I·R·Y
DEMAREE J.B. RAVAL
DEMAREE J.B. RAVAL
Corruption ad infinitum
Sunday, 10 26, 2003
Corruption is our most persistent and distressing problem. Because of it, our poverty level remains high, since the money that could have gone to the satisfaction of the basic needs of our people is pocketed by dishonest officials and favored individuals.
It is a source of deep embarrassment for us that our country is listed as one of the most corrupt countries in the world. For this, we should not blame the ordinary citizen, because the average Filipino is still among the most honest in the world. But we should blame persons in positions of power and responsibility for this appalling perception of our country as (demonstrably) corrupt.
The 2003 corruption perception index of Transparency International (TI), a global watchdog based in Berlin, places the Philippines at No. 92 in a field of 133 countries. We are ranked along with Pakistan, Tanzania, Zambia, Ethiopia, Albania, Gambia and Argentina, with a score of 2.5 on a scale of 10, with 10 as the highest rank for honesty.
Worse, we have slid down the ranking. At the start of the Estrada administration, we had hit 3.6, our highest ranking since the index was established by TI eight years ago. A year later it fell to 2.8, and rose slightly to 2.9 when President Arroyo took over. It slid to 2.6 last year, and now it is down to 2.5, the lowest score ever.
It is a shame. Edsa II in January 2001 sought to overthrow what the people perceived to be a corrupt administration. The people rightly hoped that after Edsa II we would finally get an honest and effective government. Instead, we have reached our lowest ranking in the corruption scale in the past eight years since TI started making the corruption survey among nations.
Another survey conducted by the Wallace Business Forum among the executives of 36 multinationals doing business in our country found that “corruption” in the highest places poses the biggest problem besetting business in the country.
This deplorable perception of our country by businessmen is one of the reasons for the slow growth of our economy. In Asia, we have one of the lowest rates in foreign direct investment (FDI). Most of the FDI is going to China, Malaysia, Singapore and Thailand. Already, Moody’s Investors, a prestigious rating agency, has downgraded the Philippines credit rating to negative.
The causes of our failure to attract more foreign investments and more foreign capital are best demonstrated by the example of the Ninoy Aquino International Airport (NAIA) Terminal 3 project. The project, which was supposed to make our country the hub of international air travel in Asia, has turned out to be an unmitigated disaster not only for foreign and local investors, but also for the Filipino people. Also, the Philippine government may end up paying the project’s investors more than $500 million in damages. In addition, our country’s reputation as a bad risk for foreign investors would gain more credence.
NAIA Terminal 3 – a state-of-the-art airport passenger facility with a new four-story building spanning 1.1km, making it the longest in the Philippines, and containing the best and the latest technology for maintaining passenger and aircraft security – lies idle, useless and rotting, all because of the greed, idiocy and arrogance of government officials responsible for approving its operations.
NAIA Terminal 3 could yet be a paradigm of government folly, incompetence and corruption, next to the Bataan Nuclear Power Plant project for which our impoverished people are still paying the loan incurred in its corruption-laden construction. We will end up paying more for another white elephant.
If the NAIA Terminal 3 had gone into operations, it could easily accommodate 13 million passengers each year, earning the government more than P17 billion over a 20-year period, or up to P710 million a year in guaranteed payments, plus other additional benefits in commercial, industrial and real estate profits.
After its contractors had spent $425 million on the project, the NAIA Terminal 3 was ready to be opened as scheduled in November last year. But in a series of dubious and apparently devious moves, the Arroyo administration put up roadblock after roadblock that eventually prevented the opening of the completed terminal.
In its petition for arbitration filed with the International Center for Settlement of Investment Disputes (ICSID), Fraport accused the Arroyo administration of breaching its obligations under the German-Philippines Bilateral Investment Treaty and international and domestic law. It also asked the ICSID to award Fraport not less than $425 million, including additional damages still to be incurred, and lost profits. Fraport charged the Arroyo administration with committing a series of unlawful acts that culminated in the expropriation without compensation of the NAIA Terminal 3. “This series of unlawful acts by the Philippines.” said Fraport, “began after the administration of President Macapagal-Arroyo came into office and the construction of the terminal was already well advance.”
These are the serious charges coming from one of the most prestigious global companies engaged in international airport operations and construction. Whether or not we believe them, such charges would certainly be believed by the global business community in general. The mere filing of an arbitration request before the ICSID, involving the Republic of the Philippines, in a major development project already is a big blow to our international prestige as a creditor.
On the top of that, the Filipino people are being deprived of the right to enjoy a state-of-the-art airport facility, while suffering from the low-quality and inadequate services of the current NAIA Terminals 1 and 2, simply because of greed, arrogance of power and favoritism in high places of the Arroyo administration.
This shocking display of cupidity and irresponsibility in the high reaches of the Arroyo administration has heightened the impression of the global community of widespread corruption in the Philippines, an impression which insults the ordinary Filipino who is generally honest and trustworthy.
With this development in the Philippine International Air Terminals Co. Inc. case, there is a need for the Senate to reopen the investigation into the charges of “unlawful acts” of certain government officials. Hopefully, the senator who continues to stonewall the investigations – unless and until he is removed as committee chairman – will find the petition for arbitration as a wake-up call, and finally convene the committee.
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