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The Problem of Corruption and Its Examples in Philippines

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Published: Mar 19, 2020

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A look at how corruption works in the Philippines

The Philippines is perceived to be one of the most corrupt countries in the world. Of 180 countries, the Philippines ranked 116 in terms of being least corrupt. This means that the country is almost on the top one-third of the most corrupt countries, based on the Corruption Perceptions Index (CPI) published by Transparency International.

According to CPI, the Philippines scored a total of 33 points out of 100. Even as far back as 2012, it has fluctuated around the same CPI score, with the highest score being 38 points in 2014 and the lowest being 33 points in 2021 and 2022. To further contextualize how low it scored, the regional average CPI score for the Asia-Pacific region is 45, with zero as highly corrupt. And of the 31 countries and territories in the region, the Philippines placed 22nd (tied with Mongolia).

It must be noted, however, that CPI measures perceptions of corruption and is not necessarily the reality of the state of corruption. CPI reflects the views of experts or surveys of business people on a number of corrupt behavior in the public sector (such as bribery, diversion of public funds, nepotism in the civil service, use of public office for private gain, etc.). CPI also measures the available mechanisms to prevent corruption, such as enforcement mechanisms, effective prosecution of corrupt officials, red tape, laws on adequate financial disclosure and legal protection for whistleblowers.

These data are taken from other international organizations, such as the World Bank, World Economic Forum, private consulting companies and think tanks.

Of course, measuring actual corruption is quite difficult, especially as it involves under-the-table activities that are only discovered when they are prosecuted, like in the case of the ill-gotten wealth of the Marcoses, which was estimated to be up to $10 billion based on now-deleted Guinness World Records and cited as the “biggest robbery of a government.” Nevertheless, there still exists a correlation between corruption and corruption perceptions.

4 Syndromes

Corruption does not come in a single form as well. In a 2007 study, Michael Johnston, a political scientist and professor emeritus at Colgate University in the United States, studied four syndromes (categories) of corruption that were predominant in Asia, citing Japan, Korea, China and the Philippines as prime examples of each category.

The first category is Influence Market Corruption, wherein politicians peddle their influence to provide connections to other people, essentially serving as middlemen. The second category is Elite Cartel Corruption, wherein there exist networks of elites that may collude to protect their economic and political advantages. The third form of corruption is the Official Mogul Corruption, wherein economic moguls (or their clients) are usually the top political figures and face few constraints from the state or their competitors.

Finally, there is the form of corruption that the Philippines is familiar with. Oligarch-and-Clan Corruption is present in countries with major political and economic liberalization and weak institutions. Corruption of this kind has been characterized by Johnston as having “disorderly, sometimes violent scramble among contending oligarchs seeking to parlay personal resources into wealth and power.” Other than the Philippines, corruption in Bangladesh, India, Malaysia, Nepal, Pakistan and Sri Lanka falls under the same syndrome.

In the Philippines, Oligarch-and-Clan Corruption manifests itself in the political system. As Johnston noted, in this kind of corruption, there is difficulty in determining what is public and what is private (i.e., who is a politician and who is an entrepreneur). Oligarchs attempt to use their power for their private benefit or the benefit of their families. From the Aquinos, Binays, Dutertes, Roxases and, most notoriously, the Marcoses, the Philippines is no stranger to political families. In a 2017 chart by Todd Cabrera Lucero, he traced the lineage of Philippine presidents and noted them to be either related by affinity or consanguinity.

Corruption in the Philippines by oligarch families is not unheard of. In fact, the most notable case of corruption in the Philippines was committed by an oligarchic family—the Marcos family. The extent of the wealth stolen by former dictator Ferdinand Marcos Sr. and his wife has been well-documented. In fact, several Supreme Court cases clearly show the extent of the wealth that the Marcoses had stolen.

In an Oligarch-and-Clan system of corruption, oligarchs will also leverage whatever governmental authority they have to their advantage. Going back to the Marcos example, despite their convictions, the Marcoses have managed to weasel their way back into power, with Ferdinand Marcos Jr. becoming the 17th President despite his conviction for tax violation. Several politicians have also been convicted of graft and corruption (or have at least been hounded by allegations of corruption) and still remain in politics. As observed by Johnston in his article, though Ferdinand and Imelda Marcos are the popular images of corruption in the Philippines, he also noted other entrenched oligarchs throughout the country.

Finally, factions also tend to be “unstable and poorly disciplined.” The term “balimbing” is often thrown around in local politics but, more than that, the Philippines is also familiar with politically-motivated violence and disorder.

All these features are characteristics of Oligarch-and-Clan corruption, where these oligarchic families continue to hold power and politicians exploit their positions to enrich themselves or their families.

Corruption, no matter what kind, needs to be curbed. It results in loss of government money, which could have been used to boost the economy and help ordinary citizens, especially those from the lower income sectors.

According to the 2007 study, the Office of the Ombudsman had, in 1999, pegged losses arising from corruption at P100 million daily, whereas the World Bank estimates the losses at one-fifth of the national government budget. For relatively more updated figures, former Deputy Ombudsman Cyril Ramos claimed that the Philippines had lost a total of P1.4 trillion in 2017 and 2018. These estimates are in line with the World Bank estimates of one-fifth (or 20 percent) of the national budget.

So grave is the adverse effect of corruption that the international community recognized it as an international crime under the United Nations Convention Against Corruption where perpetual disqualification of convicted officials is recommended.

But the question stands: can corruption be eradicated in developing countries like the Philippines? Many Philippine presidents promised to end corruption in their political campaigning, but none has achieved it so far. If the government truly wants to end corruption, it must implement policies directed against corruption, such as lifting the bank secrecy law, prosecuting and punishing corrupt officials, increasing government transparency and more. INQ

This is part of the author’s presentation at DPI 543 Corruption: Finding It and Fixing It course at Harvard Kennedy School, where he is MPA/Mason fellow.

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This article reflects the personal opinion of the author and not the official stand of the Management Association of the Philippines or MAP. He is a member of MAP Tax Committee and MAP Ease of Doing Business Committee, co-chair of Paying Taxes on Ease of Doing Business Task Force and chief tax advisor of Asian Consulting Group. Feedback at [email protected] and [email protected] .

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Analysis: Why Corruption Thrives in the Philippines

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Why Corruption Thrives in the Philippines

A marcos might soon be back in power in manila. that’s because political dynasties are more powerful than parties..

  • Southeast Asia

With Philippine President Rodrigo Duterte ineligible for reelection, Ferdinand Marcos Jr.—widely known as “Bongbong”—is poised to win a landslide victory at the polls on May 9. His father, Ferdinand Marcos Sr., who ruled as a dictator for 14 years under martial law, was known for his big infrastructure projects but also for his enormous corruption. (The World Bank estimates he stole between $5 billion and $10 billion over the course of his rule.) Marcos Jr., in turn, has been accused of graft and convicted of tax evasion.  

So what accounts for Marcos Jr.’s popularity in spite of his legacy of malfeasance? Like voters everywhere, Filipinos say they don’t support corruption. In fact, 86 percent of Filipinos surveyed in 2020 by Transparency International called corruption in government a big problem. One famous scandal involved members of congress funneling money to phony nongovernmental organizations in exchange for kickbacks in what is known widely as the pork barrel scam and which came to light in July of 2013. Janet Lim-Napoles, a businesswoman and the convicted ringleader of the scheme, claimed Marcos Jr. was involved, although he denied any knowledge and said his signature on forms releasing money to fake NGOs was forged.  

In a political system dominated by powerful families, corrupt politicians can still succeed. Dynasties are so influential that they have largely replaced political parties as the bedrock of Philippine politics. Politicians commonly jump from one party to another, making party labels meaningless. In a country where parties come and go overnight, voters look to families to evaluate candidates.

The history of the Philippine elite—and why voters continue to uphold their power—has colonial roots. 

Over the past four years, I have examined the impact of political dynasties on election outcomes in the Philippines and analyzed the results of 10 election cycles since 1992 involving 500,000 candidates. The results may help explain the Marcos family’s political staying power. Despite being chased out of the country when Marcos Sr. fell from power in 1986, the family bounced back to political prominence in only a few years: Marcos Jr. became a governor in 1998 and a senator in 2010. Imee Marcos later took on his former role as governor and is currently a senator, having been succeeded as governor by her own son Matthew Manotoc in 2019.      

My research shows that, when given a choice, Philippine voters are less likely to vote for corrupt politicians. After accounting for a candidate previously holding office—since incumbents are more likely to be reelected and more likely to face corruption charges—candidates indicted for corruption are 5 percent to 7 percent less likely to be elected. This is similar to how voters react to corruption in other countries. In Brazil, which also suffers from substantial corruption, researchers Claudio Ferraz and Frederico Finan showed that in the 2004 election, when there was evidence that a mayor had engaged in corruption on one occasion, that mayor was 4.6 percent less likely to be reelected.

A supporter holds pictures of the late dictator Ferdinand Marcos Sr. and his wife Imelda Marcos as Ferdinand “Bongbong” Marcos Jr. and Sara Duterte-Carpio take part in an election rally in Caloocan, Philippines, on Feb. 19. Ezra Acayan/Getty Images

But Philippine voters don’t punish politicians from large political dynasties even when they’ve been indicted for corruption. Ronald Mendoza and researchers at the Ateneo School of Government calculated that, as of 2019, 80 percent of governors, 67 percent of members of the House of Representatives, and 53 percent of mayors had at least one relative in office. These rich and powerful family networks can protect politicians from real accountability and keep reform at bay.  

The history of the Philippine elite—and why voters continue to uphold their power—has colonial roots. When the United States seized control of the Philippines in 1898, it pledged to give land to the poor. The opposite happened. The United States spent $7 million—almost as much as it paid for Alaska in the 1860s—to buy land from Catholic friars who had run much of the country. But the land was sold at prices well above what the poor could afford. The United States also instituted a system of land titles. This could have helped protect poor farmers from being dispossessed, but the land titles were so expensive and complicated to acquire that only the well-off got titles. The rich were able to buy up more land, while the poor were left without titles or access to the best land. My research shows that areas in the Philippines with more land inequality and where more of these titles were issued by 1918 have a higher concentration of dynasties today.  

The United States created a system where only property owners could vote, limiting the franchise to 1 percent of the population in the 1907 legislative elections. Wealthy landowners appointed allies to run the civil service and passed laws to cement their power. For example, in 1912, the Philippine Assembly made it a crime to break a labor contract, which effectively forced sharecroppers to stay on large plantations. Don Joaquín Ortega was appointed the first governor of La Union in 1901, and 120 years later his descendants are still governors.  

Voters turn to political dynasties for a variety of reasons. Familiarity certainly helps. Families are also known for delivering pork barrel projects and even direct payouts before elections. Vote buying in the form of gifts or cash is common in the Philippines. Some dynasties have also used force to turn out votes of limited competition. In return, the ruling families tend to commission populist projects. Jinggoy Estrada, son of former President Joseph Estrada, helped build day care centers when he was mayor of San Juan. He also was twice indicted for corruption but never convicted.  

The youthfulness of the Philippine population helps obscure the truth of the Marcos dictatorship. About 70 percent are under 40 years old, compared to 51 percent in the United States. Marcos Sr. was forced out of office 36 years ago, which is well before much of the electorate was even born. Few have a recollection of martial law.  

Deeply entrenched political dynasties have hollowed out the political process, making elections not about parties or ideas but about family names.

Over the intervening years, the Marcos clan has spruced up its image: Marcos Jr. appeared as a child in a movie glorifying his father. His older sister ran a children’s TV show when Marcos Sr. was in power. Marcos Sr. projected an air of power and pride that older voters remember. In addition, current Philippine President Rodrigo Duterte gave the clan a boost in 2016 when he had Marcos Sr. reburied in the “Cemetery of Heroes” in Manila.  

Marcos Jr.’s campaign also appeals to nostalgia among voters who lived during the era when Marcos Sr. built new rail lines, cultural centers, hospitals, and other infrastructure projects, as well as among younger voters who have been sold on this sanitized image of the Marcos era. Some recall the martial law period as one of peace (although not for the 34,000 political dissenters whom Amnesty International estimates were tortured by the government). The Philippine economy grew rapidly during much of the Marcos period, though it ended in a steep downturn in GDP and a huge increase in government debt.  

The other major candidates running against Marcos Jr. don’t come from such important families with such deep political connections. Marcos Jr. has avoided saying much about his opponents who have attacked him and his revisionist Marcos history. This has made the campaign all about him and left his opponents looking small. Marcos Jr. has also played up his alliance with the Duterte family, as the outgoing president remains widely popular despite the brutal violence of his anti-drug campaign. Duterte’s daughter Sara Duterte-Carpio is running for vice president, further cementing a Duterte-Marcos alliance.  

Across generations, the deeply entrenched political dynasties of the Philippines have hollowed out the political process, making elections not about parties or ideas but about family names. Powerful families date back to the Spanish period and have cemented their hold on power. While voters categorically oppose corruption, they continue to support families who deliver pork spending but do little for the long-term health of the country. Marcos Jr. has traded on carefully curated nostalgia about his father’s reign to propel himself to the presidency.

Daniel Bruno Davis is a Ph.D. graduate from the University of Virginia, where he studied Philippine politics and corruption. Twitter:  @Daniel_B_Davis

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Grand corruption scandals in the Philippines

Public Administration and Policy: An Asia-Pacific Journal

ISSN : 2517-679X

Article publication date: 8 April 2020

Issue publication date: 2 July 2020

The purpose of this article is to analyse the weaknesses of governance institutions in constraining grand corruption arising from the government procurement of large foreign-funded infrastructure projects in the Philippines. The weaknesses are revealed in the description and analysis of two major scandals, namely, the construction of the Bataan Nuclear Power Plant during the Marcos era and the National Broadband Network project of the Arroyo presidency.


This research employs a historical and comparative case approach to explore patterns of grand corruption and their resolution. Primary and secondary data sources including court decisions, congressional records, journal articles and newspaper reports are used to construct the narratives for each case.

Top-level executive agreements that do not require competitive public bidding provide an opportunity for grand corruption. Such agreements encourage the formation of corrupt rent-seeking relationships involving the selling firm, brokers, politicians and top-level government executives. Closure of cases of grand corruption is a serious problem that involves an incoherent and politically vulnerable prosecutorial and justice system.


This paper aims to contribute to research on grand corruption involving the executive branch in the Philippines, particularly in the procurement of large, foreign-funded government projects. It examines allegations of improprieties in government project contracting and the politics of resolving corruption scandals through the justice system.

  • Grand corruption scandals
  • Bataan Nuclear Power Plant
  • NBN–ZTE scandal
  • Infrastructure projects
  • Philippines

Batalla, E.V.C. (2020), "Grand corruption scandals in the Philippines", Public Administration and Policy: An Asia-Pacific Journal , Vol. 23 No. 1, pp. 73-86. https://doi.org/10.1108/PAP-11-2019-0036

Emerald Publishing Limited

Copyright © 2019, Eric V.C. Batalla

Published in Public Administration and Policy . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at http://creativecommons.org/licences/by/4.0/legalcode


Grand corruption scandals are a regular occurrence in the Philippines, tainting many presidential administrations ( Mathews and Wideman, 1977 ; Mydans, 1988 ; Coronel and Tordesillas, 1998 ; Rimando, 2000 ; Hutchcroft, 2008 ). Grand corruption refers to the “abuse of high level power that benefits the few at the expense of the many” ( Transparency International, 2016 ). Corruption at this level usually involves large sums of financial and state resources.

Popular thinking in recent years has attributed grand corruption simply to regime types (authoritarian vs democratic). This thinking is flawed. Corruption at various levels of government is rampant in weak or inferior democracies than in well-developed ones, leading to the belief that having a democracy alone does not guarantee effective control of corruption ( UNODC, 2019 ; Kukutschka, 2018 ). Similarly, the level of corruption varies across authoritarian systems, with monarchies and single-party systems tending to be less corrupt than military and personalistic regimes; in fact, as Kukutschka ( 2018 , p. 4) points out, “a small number of non-democratic countries perform relatively well in international corruption indices.” In either democratic or authoritarian systems, the commission of grand corruption is typically driven by personalistic and patronage-clientelistic motivations that benefit rulers and the dominant political elite, political parties and allies, cronies and friends, as well as families and relatives ( David-Barrett and Fazekas, 2019 ; Chang and Golden, 2010 ).

In the Philippines, grand corruption knows no political regime; its occurrence has been observed in both authoritarian and democratic governments. Thus, instead of simply regime type, it could be argued that it is the continued weakness of governance institutions that allows the culture and agency of corruption to thrive and persist, even at the highest levels of government. Despite the proliferation of anti-corruption laws, a perennially weak accountability environment and the ineffectiveness of the country's anti-corruption agencies encourage strategic rent-seeking by private firms and individuals through deception and bribes (or income transfer) to government officials. Furthermore, an inefficient prosecutorial and judicial system, often subservient to political power, encourages corruption by failing to punish crimes of powerful individuals and firms. All this constitutes the collective inability of institutional and agency constraints to overpower the forces that create, adapt and maintain the opportunities for corruption.

The scandals that affect many Philippine presidential administrations reflect this inability of both state and society to curb opportunities for grand corruption. Scandal, according to Lowi ( 1988 , p. vii) is “corruption revealed;” it is “breach of virtue exposed.” In his analysis of scandals, Lowi ( 1988 , p. viii) argues that the exposé of corruption (the first news break or the substantive scandal) is often followed by a more controversial cover-up phase or the procedural scandal. The cover-up extends the scandal's media coverage and further erodes a political administration's integrity and legitimacy. Hence, the unpacking of a corruption scandal could be guided by an examination of its substantive and procedural stages. The analysis should also cover the scandal's resolution or closure.

Following the theme of this special issue of Public Administration and Policy , this article examines and compares two corruption scandals involving large infrastructure projects of government, namely, the Bataan Nuclear Power Plant (BNPP) of the Marcos era and the National Broadband Network (NBN) project of the Arroyo presidency. These two projects are amongst the most controversial political corruption scandals during the last 50 years. Their comparison enhances the understanding of grand corruption in government-initiated projects involving foreign government and corporate entities. To construct the narratives of each case, primary and secondary sources are utilized, including court decisions, laws published in the Official Gazette , Senate committee reports, journal articles, biographies and newspaper reports. The following sections provide descriptive accounts of the BNPP and NBN scandals, followed by the comparative analysis and conclusion.

The BNPP scandal

In July 1973, based on a feasibility study conducted by the International Atomic Energy Association (IAEA), President Ferdinand Marcos announced his decision to build the country's first nuclear power plant in the Bataan province. Soon after the announcement, the National Power Corporation (NPC), as the main implementing agency, began the work of undertaking the necessary technical studies as well as negotiate with vendor and financing institutions.

General Electric (GE) was the first to respond and worked with NPC for months to secure the contract. On 14 June 1974, GE presented a 200-page prospectus to the NPC and Presidential Executive Secretary Alejandro Melchor, Jr. who also served as the NPC director. Accordingly, on that very day, the NPC formally approved the Westinghouse offer ( Dumaine, 1986 ). The NPC approval was in accordance with Marcos' decision during a cabinet meeting on 6 June to give the contract to Westinghouse ( PCGG vs Desierto et al. , 2003 ).

Westinghouse out-manoevered GE by employing Herminio Disini as its special sales representative. Disini was a golfing buddy of the president and was married to Imelda Marcos' cousin and family physician. Through his close presidential connection, Disini was able to build a vast business empire in a short span of time after the imposition of martial rule. His Herdis Management and Investment Corporation (Herdis), which was established in 1969 with a bank loan of only US$3,500, was ranked 15th amongst the country's top 1,000 corporations in 1976, with consolidated assets amounting to US$140 million ( Manapat, 1991 , p. 316). At the time of its divestment in 1981, the Herdis group included more than 30 companies under its umbrella.

In April 1974, Westinghouse sent a turn-key proposal to Marcos. A month later, a company delegation went to the Philippines to brief the president on the proposal to supply two 620-MW pressured water reactors for a reported cost of US$500 million. NPC general manager Ramon Ravanzo claimed that during the meeting Westinghouse only provided standard advertising brochures without any detailed costs and specifications ( Butterfield, 1978 ).

Immediately following Marcos's approval, Melchor signed a letter of commitment giving approval for Westinghouse and NPC to firm up the project contract. However, contract negotiations dragged on for more than a year. One of the issues raised by NPC was that many contract provisions were “onerous, unacceptable, or inconsistent with the turn-key approach to project implementation” ( PCGG vs Desierto et al. , 2003 ).

In November 1975, the final negotiated contract was transmitted to Solicitor General Estelito Mendoza for review. Mendoza recommended the rejection of the contract because of those provisions deemed onerous and disadvantageous to the government. Notwithstanding Mendoza's objections, Marcos ordered the NPC to sign the contract with Westinghouse ( PCCG vs Desierto et al. , 2003 ). In February 1976, close to two years after the approval of the Westinghouse proposal, the two parties formally signed the final contract. The U.S. government, through its Export–Import Bank, provided project financing with a US$272.2 million loan and a guarantee of an additional US$367.2 million for NPC bonds.

The final contract revealed three significant changes from the original 1974 proposal. First, the total project cost reached US$1.1 billion for one reactor compared to the original estimate of US$500 million for two reactors. Of the revised total project cost, Westinghouse would share US$677.1 million (or 61% of total cost) and NPC US$432.3 million.

Second, the parties agreed to transfer the site from Bagac, which was found to be more vulnerable to tidal waves, to Morong, which was 18 metres above sea-level but nearer a volcano. The site transfer led the parties to design a facility that could withstand an earthquake with a magnitude of 7.9 on the Richter scale. Safety considerations for the site transfer raised the cost of the original contract.

Lastly, the contract changed the scope of work for Westinghouse. Initially, it was understood that Westinghouse would only provide design engineering and project construction management services. However, in January 1975, on the basis of an Aide Memoire from Westinghouse, Marcos ordered the NPC to leave the business of construction to Westinghouse “since the concept is totally turnkey” ( Republic of the Philippines vs. Herminio T. Disini et al. , 2012 , p. 37).

Commissions and other income

It is not clear how much commissions Disini and by extension, Marcos received from Westinghouse. Subsequent reports citing bankers and former Disini associates indicated varying amounts, ranging from a few million dollars to more than US$50 million. Initially refusing to disclose information for proprietary reasons, Westinghouse eventually revealed that Disini received commissions of at least US$18 million for the period 1976–1982 ( Beaver, 1994 ; PCGG vs Desierto et al. , 2003 ). As sums were paid to him, no bribery of top-level Philippine government officials (including Marcos) was proven, which might have otherwise made Westinghouse legally liable under the U.S. Foreign Corrupt Practices Act of 1977.

Disini's profit from the BNPP project was not limited to commissions. His companies also engaged in underwriting insurance, construction, distribution of Westinghouse products and services as well as the setting up of communications for the power plant project ( Matthews and Wideman, 1977 ). Further, Disini intervened to make Citicorp the lead manager of the syndicated loan partly financing the BNPP despite a presidential decree that originally gave the role to American Express Bank ( Butterfield, 1978 ). The presidential committee on the BNPP formed in January 1988 by President Corazon Aquino alleged that Disini and Westinghouse influenced Marcos to displace the American Express Bank in November 1974 in favour of Citicorp ( Tiglao, 1992 ).

Media exposé and response

More than a year after the contract signing, a series of reports from the Washington Post followed by the New York Times , criticized Disini's Marcos connection as well as his involvement in the BNPP. In an interview with the Washington Post in December 1977, Marcos reportedly said that the decision to buy the Westinghouse plant was made based on a report by foreign technical consultants and that was before Disini's involvement with Westinghouse.

That explanation did not stop U.S. media criticisms of corruption and rising crony capitalism, as represented by the BNPP, as well as the spectacular rise of the Disini business empire through presidential influence. In response, Marcos ordered the Ministry of Energy and Ministry of Justice to investigate Disini's involvement in the award to Westinghouse ( Butterfield, 1978 ). He also directed the government takeover of three Disini firms, in which the government had substantial financial exposure. Then Press Secretary Francisco Tatad explained that the takeovers were done not because of any wrongdoing by Disini but because the government had large investments in the three companies ( Mathews and Wideman, 1978 ).

In 1981, in the midst of an international recession and piling debt, many crony empires, including Herdis, collapsed. This led Marcos to order the government bailout and takeover of 13 major Herdis companies and transferred them to the government-owned National Development Company ( Branigin, 1984 ). In 1982, Disini fled to Austria, a country without an extradition treaty with the Philippines. There, he allegedly acquired citizenship and a castle. He passed away in 2014 ( ABS-CBN News , 2014 ).

Increased project costs

While plant construction was undergoing in March 1979, a nuclear disaster struck in the United States at Three Mile Island (TMI). The TMI accident caused a partial nuclear meltdown, therefore raising alarm worldwide about the safety of nuclear energy. Consequently, the U.S. Nuclear Regulatory Commission (USNRC) issued guidelines for the upgrading of plant design and equipment requirements as well as other disaster preventive measures ( USNRC, 2018 , pp. 2-3).

In response, Marcos in June 1979 ordered a stop to BNPP construction activities. By virtue of Executive Order No. 539, he established a presidential commission to enquire into the safety of the BNPP. The commission, otherwise known as the Puno Commission because it was headed by then Justice Minister Ricardo Puno, submitted its report in November 1979, recommending the continuation of plant construction subject to the incorporation of additional safety features in the revised design ( Republic of the Philippines, 1980 , p. 1).

For its part, in August 1980, the Philippine Atomic Energy Commission (PAEC), the country's nuclear regulatory body, submitted its own re-evaluation study, which recommended the lifting of the construction suspension order. The PAEC further required the NPC to address 33 regulatory guides, nine TMI-related requirements and two IAEA concerns ( Republic of the Philippines, 1980 , p. 2). Based on the recommendations of the Puno Commission and PAEC, Marcos directed the NPC to resume construction of the BNPP.

These developments arising from the TMI accident ultimately resulted in a sharp spike in project cost mainly due to interest charges, inflation, foreign exchange losses and costs of additional safety requirements. According to former Energy Minister Geronimo Velasco, the incremental costs shouldered by the NPC following the recommendations amounted to US$844 million, which included safety upgrades (US$100 million), cost escalation (US$292 million), financing charges (US$373 million) and other contract scope changes (US$79 million). Consequently, by 1984, the revised BNPP project cost estimate reached US$1.95 billion ( Velasco, 2006 , p. 111).

The BNPP was completed in mid-1985 and was prepared to operate in December. However, political considerations led Marcos to postpone operations until after the 1986 snap elections. By early 1986, the total project cost had risen to US$2.1 billion, or a billion dollars more than the original contract price in 1976. It took more than 20 years before the Philippines could fully settle the NPC's BNPP financial obligations. Based on the Bureau of Treasury's statistics on debt service for the period 1986–2007, Table 1 shows that the country paid a total sum of PhP62.4 billion for the nuclear power plant (or about US$3 billion based on the February 1986 average exchange rate of PhP20.46 per US dollar). Of the total amount of payment, PhP18.88 billion were for interest (which ended in 2003) and PhP43.56 billion were for principal amortization (which ended in 2007).

Recovery of ill-gotten wealth

Days after Marcos' ouster in February 1986, Corazon Aquino issued Executive Order No. 1, creating the Presidential Commission on Good Government (PCGG) to recover the ill-gotten wealth of the Marcos family and associates. The PCGG found plausible documentary evidence left behind by Marcos in connection with the BNPP project. In July 1987, it filed a civil complaint against Disini, Ferdinand and Imelda Marcos, and former Herdis group president, Rodolfo Jacob. The complaint, known as Civil Case No. 13, alleged that the co-defendants colluded unlawfully to acquire and accumulate ill-gotten wealth ( Republic of the Philippines vs. Disini et al. , 2012 ).

Later that year, the Aquino government sued Westinghouse and its engineering subcontractor, Burns and Roe, for bribery, fraud and racketeering before a federal district court in New Jersey ( Butterfield, 1988 ). The government demanded US$6.6 billion in compensation from the two firms. Westinghouse, however, convinced the court that the case should stay pending arbitration by the International Chamber of Commerce in Switzerland, as provided in the BNPP contract ( Republic of the Philippines vs. Westinghouse Electric Corporation , 1989 ).

In 1991, the Swiss arbitration panel cleared Westinghouse of bribery charges ( United Press International , 1991 ). In May 1993, the federal court jury in New Jersey also reached a verdict exonerating the two American companies. In 1995, while cases in Switzerland and in a U.S. appellate court were ongoing, the Ramos government decided for a US$100 million out-of-court settlement with Westinghouse. Based on that agreement, the Philippine government would receive US$40 million in cash and two combustion engines worth US$30 million each. By virtue of this out-of-court settlement, all other pending cases against Westinghouse on the BNPP project were dropped ( Asian Wall Street Journal , 1995 ).

In contrast, the civil suit against Disini dragged on for a longer time. Legal tactics and jurisdictional conflict among the PCGG and Office of the Ombudsman (OMB) delayed settlement by the Sandiganbayan , the country's anti-graft court. It took 25 years before the court could resolve Civil Case No. 13 ( Republic of the Philippines vs. Disini et al. , 2012 ; PCGG vs Desierto et al. , 2003 ).

During the early course of its investigation, the PCGG successfully convinced former Herdis executives to be whistle-blowers. These included former Herdis president Rodolfo Jacob, former Asia Industries president Jesus Vergara, former vice president Angelo Manahan and former legal vice president and cousin, Jesus Disini. Jacob had claimed that Disini's commissions were deposited in his personal Swiss bank accounts and not to Herdis' accounts. Disini's cousin, Jesus, also testified that Marcos owned two-thirds of Herdis ( ABS-CBN News , 2009 ).

Surprisingly in 1997, the OMB then headed by Ananiano Desierto cleared Disini of graft charges for lack of prima facie evidence ( PCGG vs Desierto et al. , 2003 ). The PCGG appealed the OMB's decision before the Supreme Court. Six years later, the Supreme Court reversed the 1997 OMB order and directed the OMB to file in the appropriate court the appropriate criminal charges. Thus, in 2004, then Ombudsman Simeon Marcelo filed two criminal cases against Disini, one for bribery and the other for violation of Section 4(a) of the Anti-Graft and Corrupt Practices Act, which prohibits a private individual from exploiting close personal ties with a public official in order to gain some pecuniary or material advantage. Consequently, Disini was arrested but was later released on PhP54,000 bail.

In 2012, the Sandiganbayan ruled against Disini, ordering the return to the government his commissions, deemed as ill-gotten wealth, amounting to US$50,562,500 ( Republic of the Philippines vs Disini et al. , pp. 50-51; Salaverria, 2012 ). However, despite establishing the fact that Marcos and Disini were close associates (and relatives by affinity) and that Marcos acted in favour of Disini as Westinghouse's special agent, the court could not find preponderant evidence that the Marcoses received any commissions from the deal. Recovery of the Disini commissions has been made even more uncertain after his death in 2014.

The NBN–ZTE scandal

The government's deal in 2007 with the Zhongxing Telecommunications Equipment (ZTE) Company, a Chinese state-controlled firm, is another political controversy arising from a dubious big-item procurement – the NBN project. It is a complicated case arising from the quarrel for profit and commissions between two competing groups with powerful political sponsors. One group was ZTE, backed by top government officials identified with President Gloria Macapagal-Arroyo (GMA) and her husband, First Gentleman (FG) Mike Arroyo ( SBRC, 2009 , p. 1). At the time of the scandal, the unpopular GMA administration was already beleaguered by other election-related controversies, such as the Hello Garci scandal and the Fertilizer Fund Scam.

The other group was led by Jose “Joey” de Venecia III, son of House Speaker Jose de Venecia (JDV). De Venecia's group, Amsterdam Holdings, Inc. (AHI) submitted an unsolicited bid for a Build–Operate–Transfer (BOT) scheme, purportedly at no cost to the government. Before the scandal, Speaker JDV was allied to GMA. Associated with the House Speaker was National Economic Development Authority (NEDA) Secretary Romulo Neri ( SBRC, 2009 , p. 1).

On 21 April 2007, the government through the Department of Transportation and Communication (DOTC) headed by Secretary Leandro Mendoza signed a supply contract with ZTE for the NBN project. A week after, newspaper columnist Jarius Bondoc revealed the involvement of an unnamed official of the Commission on Elections (Comelec) in the allegedly overpriced deal ( ABS-CBN News , 2009 ). That official was later identified as Comelec Chairman Benjamin Abalos, Jr., who lobbied for the ZTE deal. Later, Joey De Venecia led in exposing anomalies in the deal.

On 11 September 2007, acting on a complaint from a House representative, the Supreme Court issued a temporary restraining order for the project. A week later, the Senate Committee on Accountability of Public Officers and Investigations Committee (or the Senate Blue Ribbon Committee [SBRC]) began a two-year investigation of possible ethical violations. Later that month, President Arroyo suspended the NBN project and then, on 2 October during her state visit to China, cancelled the ZTE contract ( SBRC, 2009 , p. 32).

Despite the contract's cancellation, the SBRC decided to continue its investigation. Two years later, it recommended further investigation with the view of filing graft charges against the president and her spouse, House Speaker de Venecia and his son, Comelec chairman Abalos, NEDA Secretary Romulo Neri, some whistle-blowers and other government officials involved ( SBRC, 2009 , pp. 110-118).

Since the initial exposé broke out in late April 2007, the Arroyo government attempted to minimize the scandal's impact by moving certain officials and personalities involved in the deal ( SBRC, 2009 , pp. 32, 57). In August, NEDA Secretary Neri was transferred to the Commission on Higher Education. His friend and technical adviser, Rodolfo Lozada, was sent to Hong Kong to avoid testifying before the Senate. In October 2007, amidst the Senate inquiry, Abalos resigned from his post as the Comelec chair.

Allegation of overpricing

ZTE's NBN deal with the government was negotiated within the framework of the Philippine–China Economic Partnership, which was established in June 2006 as a result of China's diplomatic offensive in Southeast Asia. Based on this agreement, the Philippine government signed an memorandum of understanding with ZTE, allowing the latter to invest in information technology projects in the Philippines, including the NBN project ( SBRC, 2009 , pp. 15-16). On 7 August, ZTE formally submitted to the Commission on Information and Communications Technology (CICT) its proposal to supply equipment and services for the NBN. The CICT was the agency under the DOTC tasked to review the NBN's proposals. In September 2006, China's Export–Import Bank indicated its intention to fund the project as a loan to the Philippines. The loan component ran contrary to GMA's initial preference for a BOT scheme, as expressed in NEDA's November 2006 Board meeting ( SBRC, 2009 , p. 22).

The two proposals bore different implications in terms of ownership and control. AHI's BOT scheme meant that the private company would run the enterprise until its agreed date of transfer to the government. In contrast, the ZTE proposal meant that the broadband network would be owned and operated by the Philippine government while the procurement of equipment, services, and financing would come from China ( People of the Philippines vs. Arroyo et al. , 2016 , p. 15). The DOTC later rejected the AHI's proposal because according to Secretary Mendoza, AHI was insufficiently capitalized to undertake a massive government project ( SBRC, 2009 , p. 54). As such, the ZTE was the only proposal left for consideration in the NBN project.

The design and cost of the original ZTE proposal submitted to the CICT was not clearly established during the Senate investigation or during the Sandiganbayan trial. Witness testimonies at the Senate revealed different design coverages and costs ranging from US$262 million to US$289 million. A revised ZTE proposal, incorporating the DOTC's suggestions of increased coverage and technical requirements, was endorsed by the NEDA at a contract price of US$379 million. In a NEDA board meeting, GMA ordered the modification of the proposal and removal of overlapping components of the NBN project with the Department of Education's Cyber Education Project ( People of the Philippines vs. Arroyo et al. , 2016 , p. 14). The purported final contract price signed in April 2007 by DOTC and ZTE was US$329 million.

Unethical acts

The SBRC report suggested several improprieties committed by government officials and private individuals in the deal. At the centre of the political controversy were Comelec Chair Abalos and FG Arroyo, alleged brokers who received commissions for their services. Both Abalos and Arroyo, as a private individual though married to the president, had no official capacity to intervene in the deal. A Senate witness identified other brokers particularly Ruben Reyes, a private businessman and alleged close friend of GMA's brother ( SBRC, 2009 , p. 62; Sabangan, 2008 ).

Testimonial evidence established Abalos' lobbying and bribery attempts. Neri had informed GMA of the Abalos bribe offer to him, to which the president advised non-acceptance ( SBRC, 2009 , p. 49). De Venecia also claimed a US$10 million bribe offer from Abalos for withdrawal of the AHI proposal. But de Venecia's insistence to pursue his proposal later led Mike Arroyo to demand that he withdrew from the project ( SBRC, 2009 , pp. 38-39, 42).

The SBRC report also found it improper for the president to be playing golf and having lunch at ZTE's Shenzhen headquarters in November 2006 since the company was lobbying for a contract. It further pointed out the president's tolerance of corruption, as she knew about Abalos' bribe offer to Neri as well as other irregularities in the broadband contract ( SBRC, 2009 , pp. 90-91).

The SBRC believed that Speaker JDV and his son likewise committed unethical practices ( SBRC, 2009 , pp. 113, 115). Speaker JDV tried to distance his involvement from the project by telling the SBRC that his presence in Shenzhen was due to the invitation of the president (SBRC Report, 2009, p. 76). Nevertheless, he showed his hand at influencing government by inviting the DOTC Secretary Mendoza for breakfast at his home. It was there that JDV introduced Mendoza to his son, Joey and informed Mendoza of Joey's DOTC project ( SBRC, 2009 , p. 48). The SBRC argued that both he and his son attempted to commit graft since by law, relatives of the House Speaker up to the third civil degree, were not supposed to intervene or engage in a business, transaction or contract with the government.

Ombudsman politics and court decision

Before the SBRC hearings ended in August 2009, the OMB released the results of its own investigation. The OMB cleared GMA and her husband but recommended the filing of administrative and criminal charges against Abalos and Neri. Ombudsman Merceditas Gutierrez was Mike Arroyo's schoolmate in one of the country's prestigious universities. Prior to her appointment as Ombudsman, she was GMA's former justice secretary.

After Benigno Aquino III assumed the presidency in 2010, the winds of Philippine politics shifted. The persecution of GMA and other government officials began. The House of Representatives impeached Ombudsman Gutierrez and she resigned in April 2011 before the conviction trial at the Senate. She was succeeded by former Supreme Court associate justice Conchita Carpio-Morales. It should be noted that, contrary to tradition, it was the retiring Carpio-Morales who swore in Aquino as president and not then Supreme Court Chief Justice Renato Corona. Corona, whom Aquino resented for accepting GMA's midnight appointment as chief justice, was later impeached ( Batalla et al. , 2018b , p. 133).

In December 2011, on the basis of a formal complaint by representatives of certain left-wing groups, the Ombudsman filed charges against the Arroyo spouses, Comelec Chair Abalos and former DOTC Secretary Mendoza for conspiring to commit illegal acts that culminated in the signing of the NBN–ZTE contract. The charge against GMA et al. was for violation of Section 3(g) of the Anti-Graft and Corrupt Practices Act. Specifically, the provision of the law prohibited public officials from “entering, on behalf of the Government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby” ( Republic Act No. 3019, 1960 ). The Ombudsman argued that the contract was “grossly and manifestly disadvantageous” to the government because (1) the actual cost of the ZTE proposal was US$130 million and therefore overpriced at the signed contract price of US$329 million; (2) the ZTE project covered only 30% of the country compared to the AHI's proposal of 80% coverage and (3) the project was to be financed by a loan from China versus the AHI's BOT proposal which would not entail any cost to government ( People of the Philippines vs. Arroyo et al. , 2016 , p. 2). In hindsight, the claims advanced by the Ombudsman in its case reflected the bias favouring the previous Senate testimonies of de Venecia and others in the opposition.

In late 2011, GMA and Abalos were charged and jailed for electoral fraud. Then in March 2012, on the basis of the Ombudsman's charges related to the NBN–ZTE project, the Sandiganbayan issued warrants of arrest for Mike Arroyo and Mendoza. Both men were freed after posting bail on the day of their arrest.

On 1 March 2016, the government prosecution finished presenting its case before the Sandiganbayan . Soon after, the accused asked the court to allow them to file a demurrer to evidence. A demurrer to evidence is a motion to dismiss the case for insufficiency of evidence. On 24 June 2016, the Sandiganbayan granted the request and as provided by the rules of criminal procedure, gave Arroyo et al. 10 days to file demurrers to evidence. Consequently, the accused individuals separately filed their motions for dismissal.

On 25 August 2016, the Sandiganbayan issued its resolution exonerating the Arroyo spouses, Abalos and Mendoza for lack of evidence to establish allegations of overpricing, the existence of a conspiracy and the disadvantages of the ZTE–NBN contract ( Macapagal-Arroyo vs. People of the Philippines and Sandiganbayan , 2016 ). Apparently, the OMB erred in its reliance on the evidence provided by the opposition during GMA's term.

Comparing the two scandals

The weaknesses of Philippine governance institutions to curb grand corruption in government procurement projects during the past half-century could be gathered from a comparison of the two scandals. Both scandals share a number of elements from the process of contracting to their resolution.

First, an opportunity for corruption existed based on executive agreements that did not undergo competitive public bidding. Although transpiring under different political regimes, one autocratic and the other democratic, the BNPP and ZTE projects were both based on top-level agreements with foreign entities that made contracting less transparent to the public.

Second, that executive agreements could be made without competitive public bidding encouraged the formation of corrupt rent-seeking relationships at the top levels of government. The two megaprojects revealed the importance of brokers and political sponsors–promoters in such relationships. Particularly, they were crucial to easing out the competition and successfully closing deals between the rent-seeking firm and the government.

Third, the lack of transparency in government contracting made the projects susceptible to public allegations of improprieties, which served to bolster the political opposition. Foreign media exposed the anomalous BNPP contract, which drummed up local opposition not only for the corruption but also for the nuclear plant's potential harm to public safety and the environment. In the ZTE case, the media exposé alerted the public of allegations of over-pricing due to huge commissions. Negative public opinion to the project of an already politically beleaguered Arroyo presidency prompted an inquiry from the Senate leading to the project's cancellation.

The fourth element relates to the erratic behaviour and questionable competence of prosecutorial agencies dealing with grand corruption, particularly the OMB and PCGG. The PCGG was able to gather voluminous evidence against the Marcoses and their cronies. However, important pieces of evidence were not properly handled as attested by the testimonies of PCGG personnel in Republic of the Philippines versus Disini et al. (2012) . The court found no convincing proof of Marcos' ownership of the Herdis companies or his financial gain from the Westinghouse deal.

Similarly, the two cases raise questions concerning the OMB's competence and behaviour. In 1997, Ombudsman Desierto dropped the graft charges against Disini for lack of prima facie evidence, despite the PCGG evidence. On appeal by the latter, the Supreme Court in 2003 ruled that the Ombudsman exercised grave abuse of discretion. Thus, it reversed Desierto's decision and directed the OMB to file the appropriate criminal charges against Disini ( PCGG vs Desierto et al. , 2003 ). Consequently, the new Ombudsman at the time of the Supreme Court decision filed graft charges against the Marcos crony. In 2012, the Sandiganbayan ruled in favour of the government.

In 2009, Ombudsman Gutierrez dropped charges against GMA in connection with the NBN–ZTE project because of her immunity from being sued as the president. She also cleared GMA's husband. In 2012, when the prevailing political fervour was against the former president, her successor Ombudsman Carpio-Morales, hastily filed charges against the Arroyos, Abalos and Mendoza. Insufficient evidence to graft charges led to the Sandiganbayan ' s exoneration of the accused in August 2016. In an earlier court decision, the Supreme Court also acquitted Arroyo for lack of evidence in a plunder case involving the alleged misuse of intelligence funds of the Philippine Charity Sweepstakes Office ( Macapagal-Arroyo vs People of the Philippines , 2016 ). The petition was filed in July 2012 by Carpio-Morales.

A politically subservient or accommodating judiciary might be argued to be the fifth element in the legal settlement of both corruption scandals. The Sandiganbayan and the Supreme Court decided on the Disini case during President Benigno Aquino's term. Aquino was of course against Marcos and his cronies. It was also during his term that criminal charges were filed against GMA. The Sandiganbayan ' s ruling on the ZTE case, issued in the early days of the Duterte presidency, favoured the Arroyos and other co-accused. In her 9 July 2019 farewell dinner speech as Congress representative and House Speaker, GMA thanked Duterte, whose presidency “provided the atmosphere in which the Court had the freedom to acquit” her of the “trumped-up charges” of his predecessor ( Panganiban, 2019 ). Her remark was suggestive of the political malleability of the courts.

Sixth, both projects contained the element of foreign government participation, therefore entailing diplomatic considerations. In this regard, the government had to take utmost care of relevant, confidential information in order to prevent scandals from erupting and harming diplomatic relations. It was therefore possible that discovered irregularities made it difficult for the governments involved to publicly acknowledge or outrightly denounce the projects. In the BNPP project, the U.S. government was involved directly through the project loan financing provided by the U.S. Export–Import Bank. It was also involved indirectly through the support of its nuclear export industry and support of private banks. In the NBN project, direct Chinese government participation came through the ZTE, a state-controlled firm, and the China Export–Import Bank for loan financing.

Finally, after the initial media exposés, the Marcos and Arroyo governments failed to effectively contain the scandals from further prolongation or escalation. To dismiss the Disini connection in the Westinghouse deal, Marcos explained that the decision was based on an earlier report of foreign consultants. Further, in reaction to the U.S. media pressure, Marcos immediately ordered the investigation of the Westinghouse deal and the government takeover of Disini companies, which were symbolic gestures to affirm his integrity. To be sure, authoritarian rule prevented the discovery of other incriminating evidence on the legal improprieties of the BNPP contract. However, no amount of damage control could erase the image of the BNPP project as a symbol of Marcos' corruption.

The Arroyo government's damage control included the cancellation of the NBN–ZTE contract as well as the suppression of key witnesses (e.g. Neri) from disclosing sensitive information to the public. However, such measures only fuelled further public suspicions and strengthened the justification for the SBRC's prolonged investigation of the scandal.

What obviously contrasts the two projects is that the ZTE contract never pushed through unlike the BNPP, whose liabilities had to be settled for decades. The ZTE project cancellation was the product of the system of checks and balances in post-Marcos democracy, with pressure exerted by the mass media, Congress, the courts and public opinion. However, this system of checks and balances has not guaranteed the absence of grand corruption in the country.

Despite the Government Procurement Reform Act of 2003, which mandates that all government projects to undergo competitive public bidding, the apparent loophole revealed by the ZTE–NBN experience was the government-to-government agreement, which provided an exception to the general rule. This point raised contrasting legal opinions yet to be resolved ( Suplico vs NEDA , 2008 ). That rules could be changed and broadly interpreted to favour particularistic interests does not bode well for the promotion of a culture of accountability and integrity in government in the Philippines.

The BNPP and NBN–ZTE scandals illustrate cases of corrupt relationships formed at the highest levels of government in contracting large infrastructure projects in the Philippines. Such projects, extending to national roadworks and other major undertakings, are often susceptible to political interference for the private gain of public officials ( Batalla et al. , 2018a ).

The constancy of grand corruption scandals in the Philippines suggests deeper problems in politics and society. First, many government institutions remain malleable to negative external influences. This is because the bureaucracy, lacking in both capacity and autonomy, has long been “subordinated to particularistic elite interests” ( Hutchcroft, 1998 , p. 26). Despite governance reforms through decades of restored democracy, many government institutions are still easily influenced by powerful vested interests.

Second, strong incentives to commit graft persist. Such incentives are not only exclusive to politicians, political appointees and professional bureaucrats but also to foreign governments, private firms and individual brokers. The persistence of corruption incentives in many government institutions draws from underdeveloped governance measures, the prevailing culture of corruption, low civil service wages and the low risk of detection with a promise of high returns ( Quah, 2013 , pp. 127-132).

Finally, there is the perceived failure of closure to past scandals by the justice system, as there continues to be a “low risk” of punishment ( Quah, 2013 , p. 129). With the exception of the conviction of President Estrada for plunder (though later pardoned by Arroyo), no other high-ranking official above the position of provincial governor has ever been convicted of corruption ( Bolongaita, 2010 ). At best, high-ranking officials accused of corruption have been shamed and jailed. Some senators including Juan Ponce Enrile, Ramon Revilla Jr. and Jose Ejercito Jr. were jailed in connection with the Napoles pork barrel scam but have been either released on bail or acquitted of plunder charges. The failure of closure of past scandals encourages corrupt practices by top officials, who regard government as a lucrative source of private wealth and power. The scandals provide a constant reminder of the long unattended opportunity of effectively reforming the political system.

National Power Corporation-Philippine Nuclear Power Plant interest payments and principal amortization, 1986–2007 (in million pesos)

Note(s) : Data on government payments for the BNPP prior to 1986 not available

Source(s) : The author's calculations are based on the online statistics on national government debt service provided in the Bureau of the Treasury (2020)

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The author thanks Professor Jon Quah for his editorial initiative and support for this work. Thanks are also due to Emil Bolongaita and Cleo Calimbahin for their useful comments and suggestions.

Corresponding author

About the author.

Eric V.C. Batalla is Professor at the Political Science Department, De La Salle University, Manila, Philippines. He is co-editor of the Routledge Handbook of the Contemporary Philippines (2018) and the author of several journal articles and book chapters on regional and Philippine politics, corruption and economic development.

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The Philippines: a social structure of corruption

  • Published: 06 February 2024

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example of corruption in the philippines essay

  • Andrew Guth   ORCID: orcid.org/0000-0001-6247-4955 1  

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The anticorruption community largely views corruption as a government or development issue. But in the Philippines, corruption is a social structure. The very social bonds and social structures that are good at building civic unity and solidarity are also good at spreading and maintaining corruption, and this is why corruption is so difficult to remove. Patrons use these societal features to implement a ubiquitous social structure of corruption by means of maneuvered friendships that makes it difficult for the masses to know when a patron is acting as a friend or foe. The social structure encompasses the whole of society and corrupts the encircled government, political, and development systems as easily as it infiltrates all other segments of society. It is why oversight and sector-based anticorruption initiatives underperform, and why initiatives must pivot towards addressing this social structure.

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Data availability.

The author’s interview notes generated during and/or analyzed during the current study are not publicly available to help ensure confidentiality of the interviewees, but are available from the corresponding author on reasonable request.

Pronounced ‘leader’ in English, lider is a term used in the Philippines specifically referring to individuals (or leaders) in the community that are sought by candidates to convince the electorate to vote for that particular candidate. Liders are the individuals that perform the physical exchange of money for votes with the electorate.

A barangay is the lowest level of elected government. Each city or municipality is comprised of multiple barangays (villages).

See Appendix for a full list of respondents.

Interviews 2–3, 6, 14–16, 18–20, 22, 25, 39, 41–42, 44–50.

Utang na loob is usually translated as “debt of gratitude.” The literal translation is “debt of inside” or “internal debt.” It can also be translated as “reciprocity” or “lifelong reciprocation.”

Interviews 1,14,21,24,42–44.

The paper uses the term ‘client’ to represent the economically lower-class voters who are in clientelistic relationships with political families/candidates (patrons).

Interviews 1,14,24,42–44.

Clans are a connection of least ten extended families – usually more – where each extended family could have more than a hundred members. Clans then have a minimum of a thousand members and usually much more.

Interviews 2,5–6,9–10,14–51.

Interviews 3–6,9–10,12,14–23,25–26,27–51.

Interviews 3–6, 9–10,12,14–23,25–26,27–51.

Interviews 14–22,25–26,39,47–50.

Interviews 16,22,27–38.

Interviews 14,16,21,24,39,42–44.

Interviews 16,22.

Interview 22.

Interview 23.

Interviews 1,20.

Interviews 2,5,14–23,26,32–39,41,45,47–51.

Interviews 15–16,20,22.

Interviews 27–31.

Interview 24.

Interviews 2,6,10.

Interview 22–23.

Interviews 14,18,32–38.

Interviews 32–38.

Interviews 1,10,18–22,32–38,47–49,50–51.

Interviews 2–4,6,14–15,20,22,40,45–49.

Interview 16.

Interviews 2–3.

Interview 3.

Interviews 1,3–6,10,12,15,50.

Interview 15.

Interviews 2–3,6,15.

BARMM consists of the region formally known as the Autonomous Region in Muslim Mindanao (ARMM) plus the addition of Cotabato City and villages in northern Cotabato.

Interviews 3–4.

Interview 1.

Interview 3–4,6,10,12.

Interview 7.

Interviews 2–3,6,14–16,18–20,22,25,39,41–42,44–50.

Interviews 1,3–7,10,12,14–15.

Interviews 1,3–4,6,9–10,14,16–18,24.

Interviews 1, 3–4,6,9–10,14,16–18,24.

COMELEC is the Commission on Elections in charge of ensuring fair and free elections.

Interviews 3–4,6–7.

Interview 6.

Interviews 14–15,25–26.

Interviews 14–16,25–26,32–38.

Interviews 14–15,25–26,32–38.

Interviews 14–16,20,22–23,25–38.

Interview 21.

Interview 2.

Interview 14,21,49.

Interviews 2,16,20,22–23,27–31.

Interviews 1,2.

Interviews 52,54–59,61–64,66–67.

Interviews 6,14,16,18–19,21–23,25,50.

Interviews 3–4,18,52,54–59,61–64,66–67.

Interviews 3–4,6–8,52,54–55,56–58,61,64.

Interviews 2–3,6,14–16,18–22,25,39,41–42,44–50.

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Guth, A. The Philippines: a social structure of corruption. Crime Law Soc Change (2024). https://doi.org/10.1007/s10611-024-10140-2

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Accepted : 16 January 2024

Published : 06 February 2024

DOI : https://doi.org/10.1007/s10611-024-10140-2

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example of corruption in the philippines essay

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The problem of corruption and corruption of power

Thinking beyond politics.

By Prof. Victor Andres Manhit

Transparency International (TI) has been fighting corruption for 27 years in over 100 countries. Here in the Philippines, I remember their prominent voices such as Randy David, Solita Monsod, Attorney Lilia de Lima, and Judge Dolores Español — all passionate advocates for transparency and accountability, issues that are still very relevant in our society.

Accordingly, TI defines corruption as “the abuse of power for private gain.” By this, corruption has deprived countless citizens around the globe of much-needed public services and benefits of development.

Under the Corruption Perception Index (CPI), corruption indicators pertain to “bribery; the diversion of public funds; the effective prosecution of corruption cases; adequate legal frameworks, access to information; and legal protections to whistleblowers, journalists and investigators.”

But what has corruption caused us?

In September 2018, the United Nations (UN), citing World Economic Forum (WEF) data, expressed that global corruption eats up 5% of the world’s gross domestic product; in November, the World Financial Review stated that Philippines had lost $10 BILLION annually due to illicit financial flows; in December, the UN and the WEF disclosed that $3.6 TRILLION had been lost due to bribes and stolen money; and in December 2019, the WEF published that “corruption, bribery, theft and tax evasion, and other illicit financial flows cost developing countries $1.26 TRILLION a year.”

In the Philippines, an estimated P1.4 TRILLION has been lost to corruption in the years 2017 (P670 BILLION) and 2018 (P752 BILLION), Deputy Ombudsman Cyril Ramos said, where around 20% of the annual government appropriation goes to corruption. Also, according to a study by Carandang and Balboa-Cahig (2020), “some of the more notable typologies and their accompanying corruption cases in the Philippine context are as follows: non-Compliance with the Government Procurement Reform, technical malversation, political dynasty, ghost project, income and asset misdeclaration, red tape, influencing a subordinate to defy order and protocol, bribery, connivance of government officials with drug lords.”

Further, the wide-ranging impact of corruption could result in a myriad of outcomes. In April 2020, the Global Infrastructure Anti-Corruption Center (GIACC) said that corruption may cause

“inadequate infrastructure, dangerous infrastructure, displacement of people, damage to the environment, reduced spending in infrastructure, reduced public expenditure, and reduced foreign investment.”

The said CPI indicators and data culled to substantiate them, and the gargantuan multi-level impact of corruption represent a formidable platform in instigating institutional reforms to achieve bureaucratic coherence and improve the development capacity of the state. With a multi-stakeholder roadmap against corruption, the plans and investments for economic recovery and development in the new normal will not be for naught. In turn, succeeding economic growths could be dispersed effectively.

Specifically, combating corruption in our country instantly augments the chance of helping the following: the 1.3 million people who have perceived themselves as poor in 2019 (self-rated poverty) and the families suffering from hunger (20.9%) during the pandemic, according to an SWS survey; the 16.7% of the population in poverty (Philippine Statistics Authority); and the additional 1.5 million Filipinos pushed into poverty by the pandemic (Philippine Institute for Development Studies).

But the problem of corruption could dangerously be translated into corruption of power. This happens if political opportunism becomes a trend. Rather than harmonize national unity in a pandemic-ravaged country, division and confusion among the population or a particular sector is instead espoused. In turn, false promises and hopes could frustrate the holistic approach being forged by a wide-range of social actors attuned to the long-standing battle against corruption.

More so, corruption of power could be exacerbated whenever the law is weaponized and used to benefit a new or selected few. Empirically, two examples could be cited. First if more than half of Filipinos agree that “It is dangerous to print or broadcast anything critical of the administration, even if it is the truth,” (SWS, July 3-6, 2020 survey), then what we have now is a terrified citizenry.

Second, the latest political charade in “handling” the country’s elite is not really about dismantling the oligarchy as pronounced. What’s happening is a mere changing of the old guards; the overt creation and empowerment of a new oligarchy, the “Dutertegarchs,” as William Pesek has pointedly raised.

To address corruption, political-institutional and economic reforms beg to be independently and holistically crafted and implemented.

Victor Andres “Dindo” C. Manhit is the President of Stratbase ADR Institute.



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Invisible no more: Shedding light on police violence and corruption in the Philippines

The Philippines was romanticized and dubbed the “ Pearl of the Orient Seas ” by national hero and writer José Rizal due to the country’s elegant organic beauty. However, the pearl’s beauty has been tainted by increasing police brutality, accelerated in recent years.

After becoming the 16th President of the Philippines in 2016, Rodrigo Duterte was quick and adamant about carrying out a “ war on drugs ” campaign. Duterte implemented extreme measures targeting criminals and non-compliant citizens from impoverished communities to restore peace and order in the country.

In his first press conference after being elected as president, Duterte pledged to end crime, corruption, and the illegal drug trade within three to six months of being elected. However, Duterte implemented this pledge through the promotion of a new measure: “shoot-to-kill” orders.

“What I will do is urge Congress to restore [the] death penalty by hanging,” Duterte said in his first press conference. “If you resist, show violent resistance, my order to police [will be] to shoot to kill. Shoot to kill for organized crime. You heard that? Shoot to kill for every organized crime.”

Unfortunately, Duterte’s strategies to combat the issues faced by Filipinos have conditioned and emboldened the police, creating a sense of invincibility. The implications of Duterte’s extreme strategies include the manslaughter of innocent citizens and the manifestation of police corruption in the country. However, as a new president leads the country, the future of the Philippines’ criminal justice system seems committed to less violent means.


Duterte’s shoot-to-kill orders evolved dangerously, putting more innocent Filipino lives at risk and perpetuating the human rights crisis in the country. The global COVID-19 pandemic was not a barrier to Duterte’s anti-crime operations.

Amidst the pandemic, the government implemented an “ Enhanced Community Quarantine ” (ECQ) for the country’s capital, Manila, as well as the entire island of Luzon in an effort to mitigate the spread of the virus. During the lockdown, Filipinos were confined in their homes, transportation was suspended, food and health services were regulated, and uniformed personnel patrolled the streets to enforce strict quarantine measures.

During the ECQ, the government did not fulfill its promises as residents did not receive relief support. On April 1, 2020, frustration from community members erupted into political demonstrations in the streets of San Roque, Quezon City. Advocates and protestors asked for answers from the government in regard to their promised supplies and food aid.

Duterte’s response? “ Shoot them dead .”

In a televised address on the same day as the protests, Duterte ordered the police and military to shoot troublemakers if they felt their lives were in danger. “My orders are to the police and military, also village officials, that if there is trouble or the situation arises that people fight and your lives are on the line, shoot them dead,” Duterte said.

According to the World Population Review’s most recent annual data, the Philippines is the country with the world’s highest number of police killings, with over 6,000 between 2016 and 2021.

As of February 2022, based on the Philippine Drug Enforcement Agency’s (PDEA) Real Numbers PH data , since Duterte took office in 2016, the government implemented 229,868 operations against illegal drugs, which resulted in the arrest of a total of 331,694 suspects. Beyond this, according to the PDEA, the total number of killings during anti-drug operations reached 6,235.

In November 2021, the Armed Conflict Location and Event Data Project published a comprehensive database of the Philippines revealing that since 2016, at least 7,742 civilians have been killed in anti-drug raids, which is approximately 25 percent higher than the figure issued by the government.

As described by Eliza Romero, a coordinator for the Malaya Movement , a US-based alliance that advocates for human rights, freedom, and democracy in the Philippines, Duterte’s fierce rhetoric has given an invitation to vigilante and extrajudicial violence among the community.

“The shoot-to-kill order will just encourage more extrajudicial killings and vigilantism,” Romero said in an interview with Foreign Policy. “It will give private citizens and barangay [village] captains impunity to commit more human rights violations with the protection of the law while normalizing carnage.”

example of corruption in the philippines essay

Behind every number is a real person—whose story has been invisible and whose life has been reduced by police officers who one day decided to target an innocent victim; a brother or sister; a son or daughter; a husband or wife; a father or mother.

Karla A., daughter of Renato A. who was killed in December 2016, recounts her experiences after losing her father at the age of 10, stating in an interview with the Human Rights Watch (HRW), “I was there when it happened when my papa was shot. I saw everything, how my papa was shot. … Our happy family is gone. We don’t have anyone to call father now. We want to be with him, but we can’t anymore.”

Emboldening the Police

Duterte’s enforcement measures to achieve public order put innocent citizens in a battle they have already lost. What is worse is that Duterte not only normalized but justified the killing of innocent citizens. Duterte assured the police impunity , stating that he would not only protect them from human rights abuses but ultimately pardon them if ever they are convicted for carrying out his anti-drug campaigns. This leads to the intensification of corruption within police departments in the country.

Duterte’s shoot-to-kill orders have not shown mercy to victims as he has always been in favor of the police. He never failed to show support for the police in carrying out his campaigns in his public and televised addresses. For instance, Duterte gave orders to Bureau of Customs Commissioner Rey Leonardo Guerrero stating that “Drugs are still flowing in. I'd like you to kill there [in communities]… anyway, I'll back you up and you won't get jailed. If it's drugs, you shoot and kill. That’s the arrangement,” Duterte said .

Duterte’s vow to protect the police results in police officers feeling emboldened and invincible. Police officers who have followed Duterte’s orders are promoted through the ranks. Police officers are not held accountable for the deaths of innocent civilians; the country’s own President pardons them. On top of this, police officers are falsifying evidence to justify unlawful killings and avoid legal repercussions.

The HRW published a report titled “‘License to Kill’: Philippine Police Killings in Duterte’s ‘War on Drugs,” which analyzed a total of 24 incidents that led to 32 deaths, involving Philippine National Police (PNP) personnel between October 2016 and January 2017. The report concluded that police officers would falsely claim self-defense to justify these killings.

To further strengthen their claims, police officers would plant guns, spent ammunition, and drug packets next to the bodies of victims. In turn, the victims would seem more guilty of being part of drug-related activities. Other times, police officers would work closely with masked gunmen to carry out these extrajudicial killings. In other words, police officers have succeeded in rooting their endeavors in deceit.

Fortunately, there have been instances where some police officers were legally prosecuted in police killings. Three police officers were found guilty of murdering a 17-year-old teenager in 2017, the first conviction of officers ever since Duterte launched his war on drugs.

A Look Into the Future

The Philippines as the “Pearl of the Orient Seas” has lost its luster due to the many problems that the nation continues to face—one of the most prominent ones is Duterte’s explicit abuse of police power. Similar to how pearls lose their glow when not provided with the care it needs, the integrity of police officers has dried out and become yellowed over time due to the government’s complicity.

Time and time again, Duterte has remained an instigator in instances relating to police brutality in the country. Luckily, the Philippines can combat pearl discoloration through the implementation of robust policies that would ensure increased transparency within police departments.

Freshly elected Philippine President Ferdinand “Bongbong” Marcos Jr. makes the restoration of the yellowed pearl an achievable goal. At the 121st Police Service anniversary celebration held at Camp General Rafael T. Crame in Quezon City—the national headquarters of the PNP—Marcos Jr. brings an opportunity for redemption. Aside from calling the PNP officers “vanguards of peace,” Marcos Jr. urged them to continue serving the community with integrity in order to restore public confidence.

“The use of force must always be reasonable, justifiable, and only undertaken when necessary. Execution of authority must be fair, it must be impartial,” Marcos Jr. said . “It must be devoid of favoritism and discrimination, regardless of race, gender, social economic status, political affiliation, [and] religious belief. It is only then that you can effectively sustain with great respect and wide support the authority that you possess as uniformed servicemen of the Republic.”

Beyond this, Marcos Jr. highlighted his hope for reforming the police system under the leadership of newly installed PNP Chief Police General Rodolfo Azurin Jr. Moreover, Marcos Jr.’s aspirations to increase accountability within police departments will be complemented by Azurin Jr.’s launching of a peace and security framework titled “MKK=K” or “Malasakit + Kaayusan + Kapayapaan = Kaunlaran” which translates to policies founded on “the combination of care, order and peace shall equate to progress.”

On the other hand, it is understandable if Filipino citizens and human rights activists have lost hope for the possibility of achieving meaningful progress in reforming the broken police system. Marcos Jr. is the son of Ferdinand Marcos Sr. , an ousted dictator who infamously declared martial law in the country, and Filipinos are still navigating the trauma of the Marcos era 50 years later.

Currently, Marcos Jr. pledges to continue the campaign against illegal drugs but with an emphasis on drug prevention and rehabilitation . Under this new framework, the Department of the Interior and Local Government (DILG) implemented a program dubbed “Buhay Ingatan, Droga’y Ayawan (Value Life, Shun Drugs)” which aims to address the root of the problem by suppressing the demand for illegal drugs. According to DILG Secretary Benjamin ‘Benhur’ Abalos Jr., the initiative needs support and solidarity from all sectors of the community in order to ensure its effectiveness.

Simultaneously, Marcos Jr. has no intention to cooperate with the International Criminal Court (ICC) on their investigation of the country’s drug war killings. Based on the ICC ’s official website, their purpose “is intended to complement, not to replace, national criminal systems; it prosecutes cases only when States do not are unwilling or unable to do so genuinely.” However, Marcos Jr. stated in an interview that “The ICC, very simply, is supposed to take action when a country no longer has a functioning judiciary… That condition does not exist in the Philippines. So I do not see what role the ICC will play in the Philippines.”

Nearly five months into Marcos Jr.’s administration, the University of the Philippines’ Dahas Project revealed that 152 people have died in anti-drug police raids as of Nov. 30. The report further disclosed that the drug casualties under Marcos Jr. “[are] exceeding the 149 killings recorded during the final six months of the Duterte government. During the first half of the year under Duterte, the average daily rate was 0.8. So far under Marcos, the rate stands at one per day.”

In the Philippines, police officers have repeatedly assumed the roles of prosecutor, judge, jury, and executioner. HRW Deputy Director for Asia Phil Robertson points out shortcomings in Marcos Jr.’s campaigns describing that “Using a drug rehabilitation approach means little when police and mystery gunmen are still executing suspected drug users and dealers. Law enforcers should receive clear orders to stop the ‘drug war’ enforcement once and for all.” The only way to effectively mitigate police killings in the Philippines is by abandoning violent and punitive measures against illegal drugs.

Ultimately, despite these obstacles, the yellowed pearl can still brighten. Under new leadership for both the national government and police department, the Philippines may embark on a journey of reconstruction and rehabilitation. In this process, the hope is to finally shed light on the issue of police violence in the country, implement fruitful solutions to combat the problem and advocate for innocent victims who might have felt invisible in their battle against police brutality. Once the light has been restored, the Philippines can finally live up to its billing as the beautiful and pure “Pearl of the Orient Seas”.

Laurinne Jamie Eugenio

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The Cause And Impact Of Corruption On The Philippines

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