Corruption Perception Index

The President’s speech

Image credit: Eaglenews.ph
Image credit: Eaglenews.ph

In his new year’s address, President Aquino spoke of the urgency to complete his administration’s good governance agenda alluding to the remainder of his term as the “last two minutes”.

Several challenges faced this year were mentioned including the PDAF scandal, severe weather events and the continuing task of providing employment for our people. Achievements to date were the prosecution of cases against corrupt officials implicated in the PDAF scam, signing of the annex to the framework agreement to end conflict in the South, resilient growth in the face of a regional slowdown, and the granting of investment grade status to the Philippines.

The president mentioned the ongoing tasks needing completion before the end of his term, which are eradicating corruption, solving the skills mismatch in labour markets and providing enough employment opportunities, and bringing about a final peace settlement in Mindanao.

Unfortunately, in seeking to play up the positive achievements under his administration, the president may have undermined his own credibility. The president intoned, “because of good governance, we are destroying the last bastions of corruption, and at the same time, creating more opportunities for our countrymen.”

The last bastions of corruption? As evidence of this, the president cited our improvement in Transparency International’s (TI) Corruption Perception Index moving 29 places up from 134th to 105th place out of 177 countries in the ranking. Actually, TI’s 2013 report shows us at equal 94th place along with countries like Djibouti, India, Suriname and Ecuador (see below).


Of course one can argue that the methodology used by TI necessarily makes it vulnerable to criticism based as it is on perceptions of the country, which can be influenced by the “halo effect”. The real proof of the pudding is  in the actual experience of investors when they try to do business in the country. And here a better yardstick comes from the World Bank’s Worldwide Governance Indicators.

Although the World Bank’s findings show the country’s Control of Corruption score in 2012 recovered from its recent lows, it was still at 33 with 100 being the highest possible. This puts us slightly below what we attained in 2005. I doubt that anyone would regard that as a banner year for beating corruption. It doesn’t suggest that we have limited corruption past the historical mean if you look back at the WB’s time series. We are way below our highest score of 55 attained back in 1998.

WB CoC

As far as providing jobs, the president said, “Through the cooperation of DOLE, TESDA, DepEd, CHED, and the private sector, we are finding solutions to the job-skills mismatch. Therefore, it is not surprising that the unemployment rate decreased this year.” This statement can be questioned. While the unemployment rate recorded for October 2013 was 6.5 per cent, lower than the 6.8 per cent in the same month of 2012, the average for 2013 was 7.1 per cent compared to 7.0 per cent in 2012. Also, it is worth noting that the October estimates excluded the province of Leyte.

It is standard practice in dealing with employment figures to use full year averages to smoothen out the volatility of results. While average total employment rose 0.8 per cent to 37.9 million in 2013 up from 37.6 million in 2012, the number of unemployed people also rose by 2.5 per cent to 2.9 million from 2.8 million during this period. This does not suggest that employment conditions improved much in the last year.

It is likewise hard to know what to make of the administrative statistics the president cites with respect to TESDA’s performance. He compares a study performed by the Department of Budget and Management showing that only 28.5 per cent of graduates between 2006 and 2008 found employment after training to a study performed by TESDA in 2012 that showed that this had increased to 62.4 per cent.

We are not told whether the methodologies used by the two agencies in deriving these results were consistent with each other. Was the length of time the same for both studies (the former was for three years, what about the latter)? How long since graduating were the former pupils surveyed in each study? How were respondents sampled? The seemingly vague language used in the president’s statement does not really help clarify the issue.

The seeming lack of rigour in subjecting the president’s statements to analytical scrutiny opens up his message to criticism. If the premise of his argument appears faulty, then the conclusions and policy direction he derives from them could be discredited as well.

For me, the cherry picking of statistics that favours his arguments simply undermines the very thesis that good governance reforms are in fact working to improve things and are close to their culmination. In our pursuit of the straight path, there ought to be no hint of deception or bias in our analysis of the situation. To be fair, I don’t think it is their intention to deceive us. Perhaps it is a case of the spin meisters not seeking help from technical analysts in proofreading the speech.

Finally, what was sorely lacking in the president’s narrative was a cogent strategy and clear policy direction for the remainder of his term. The president again seemed to resort to rhetorical flourishes, rather than spelling out his roadmap. He has left it to commentators to fill in the blanks for him. This is not what we would expect from a president at this stage of his term. Worryingly, the president’s speech has left us with more questions than answers.

Reformists and Populists

The debate over policies needed to make permanent progress achieved under President Aquino’s rubric of Daang Matuwid (the Righteous Path) has not happened yet and perhaps never will.

Reformist measures are best kept close to one’s chest, not announced until they are actually implemented. That is because these measures often involve some pain to be borne by some section of the community, which essentially leads to votes being lost rather than won. In contrast populist measures are worth shouting from the rooftops since they appeal to voters but don’t necessarily make for good policies once in office. That is the quandary facing the administration as it campaigns for its senators for the coming election.

Just cast your gaze on the Team Patay (Death) slogan foisted by the clergymen against the administration’s ticket in protest over the passage of the reproductive health bill which the government facilitated over the church’s objections. Team PNoy candidates act surprised although they could’ve seen it coming. One way for them to take the heat away from this issue however would be to focus on their plans to introduce reforms to expand insurance coverage and make health care more affordable using the taxes to be raised from the sin tax law which was another major landmark piece of legislation the government achieved.

But they have for the most part refrained from outlining a vision for the health care system, allowing other players in the UNA coalition to establish their own credentials in the area. By ceding control over the health debate, the administration is underplaying the tremendous hand it holds–it alone can credibly put forward a detailed, costed program of health reform that would lead to millions more Filipinos enjoying better benefits from its health spending.

This is particularly disadvantageous to candidates like Risa Hontiveros who is outside the winner’s circle, given her stand on the reproductive health issue. Her candidacy could be given a significant boost if she were to be identified as the future architect of health reform in the senate. Ms Hontiveros should be given the role of explaining the planned reforms to come in this area and be given a policy team to help scope out what those reforms should be. Instead, due to the lack of such assistance, her policy pronouncements in health have necessarily been vague and non-committal.

Secondly, consider the conditional cash transfers program, which the present administration considers its “cornerstone” in its fight against poverty. The World Bank recently released a report on the first stage of the program. Its findings were for the most part positive-places that were targeted by the program were found to have significantly higher levels of school participation and better health outcomes compared to similar areas that were not targeted. In fact, in areas where the program was not so successful, e.g. maintaining retention among older age groups of children, the study suggested extending the program beyond the current five years.

This would provide a solid basis for the administration to claim credit and to bat for a continued ramping up of the program, but there hasn’t been a party-wide celebration of the findings, or a vigorous endorsement of it. Instead, the stage has been vacated to departmental technocrats to extol its virtues against its critics in the UNA coalition who have maintained the old tired line that it has been nothing but a dole out.

One candidate cunningly sought to depict the government’s prioritising of the conditional cash transfers program as misplaced,  saying it could have instead spent the money on free college education and skills training–quite a clever way to wedge college student voters against the disenfranchised indigent households across the country.

Thirdly, in making the anti-corruption and transparency measures adopted by the administration more durable, the government has failed to articulate a program of action towards this end. This is partly due to the fact that its path towards greater openness has itself suffered setbacks. Its Open Budget Index score in the latest report of the International Budget Partnership fell by seven points, meaning Filipinos have been denied full access to budget information. Despite overtaking Vietnam, Bangladesh and Indonesia in Transparency International’s corruption perception rankings, it has slipped two notches in the World Bank’s Cost of Doing Business report.

The government should be arguing from a position of strength in this area given the president’s reputation as an honest leader in contrast to the scandals involving the use and abuse of pork and privilege by those opposite. Team PNoy ought to be taking a suite of reforms to the electorate, including such measures as the Freedom of Information, Whistle Blower Protection, strengthening the powers of the ombudsman, fiscal incentives rationalisation, budget sustainability and transparency reforms. Instead, its campaign has failed to create any daylight between it and the UNA coalition with regard to these issues.

Again, this is in part due to the fact that enacting such reforms runs counter to the populist mode of campaigning it is forced to undertake. Championing the cause of fiscal transparency, openness and sustainability would run counter to the many proposed pieces of legislation that candidates under the administration are espousing at the moment.

I could go on. The plans for generating employment following the release of the latest jobs figures which show fewer people finding work compared to last year ought to spur a debate around the best way to promote inclusiveness in a nation that continues to post robust GDP growth figures. Instead the debate is confined to small minded livelihood programs (despite revelations of pork going to dubious organisations connected to legislators). There really isn’t a debate over how to transform the industrial mix of the nation or on how to direct foreign remittances to productive employment generating activity.

The people within the campaign probably feel that the need to elevate the debate is unnecessary given that its candidates seem to be improving in the polls. The UNA coalition seems to have suffered a few setbacks of its own given the negative press surrounding some of its principals, the ones which I have alluded to above. Yet, recent headlines involving Sabah and the president’s handling of it might cause some damage to its ticket.

To provide its candidates with a greater edge, the administration needs to arm them with solid, well-thought out programs that would demonstrate its seriousness in cementing its reform agenda. Rather than running a race based on populist rhetoric, its candidates need to be equipped with enough detailed policy advice to articulate what these reforms mean and how they would work once enacted. Rather than the airy-fairy platitudes and motherhood statements that they currently mouth, the campaign needs to bring the exalted righteous path down to earth.

If it does this, then voters might not feel the need to hedge their bets with the opposing side; they will provide the government with the majority it needs in the upper house. After all, if the nation were truly convinced that daang matuwid works, there would be no point in undertaking it with half-measures (no pun intended). The only way to pursue it would be to go all in.