Case Study Reference - Ethics

PA 208 GROUP REPORT
ETHICS, ACCOUNTABILITY AND CORRUPTION

Michellin Lobos, Eula Mangaoang & Vina Mendoza
ETHICS, ACCOUNTABILITY AND CORRUPTION

In the course of history in public administration in the Philippines, state institutions and even
the private sector have been taught valuable lessons on the implications of negative bureaucratic
behavior on state governance and societal development in general. In particular, lingering issues on
graft and corruption have not only attracted public attention throughout the years, but also increased
the demand for administrative integrity, accountability, and stronger anti-corruption strategies. After
all, persistent problems such as poverty, massive inflation and rising social inequality compete for
airtime or column space along with news of graft and corruption in the public sector, a clear reflection
that graft and corruption indeed hinder inclusive growth and sustainable development.
As technology develops and more complex administrative problems arise in the Philippine
administrative system, new tools for preventing corruption and upholding ethical standards and
accountability are constantly being developed to impose greater responsibility over public officials,
monitor bureaucratic practices and guard against negative bureaucratic behavior. Even then,
responding to or addressing emerging forms of graft and corruption remains a daunting task for state
institutions and oversight agencies.
This paper discusses relevant issues on administrative ethics and accountability. From here,
the paper takes off from a number of recent events to reflect on the consequences of corruption.
Ultimately, the paper presents current and prospective strategies to guard against graft and
corruption in the bureaucracy.
Ethics in the Public Sector
The persistence of problems on graft, corruption and other forms of negative bureaucratic
behavior, warrant a constant, meaningful discourse on ethics, particularly in the field of public
administration. While this may not be a relatively new topic to discuss—in fact, it may be a little
overrated for some, especially those that somehow consider corruption as the “new normal” in the
Philippine administrative system—and while ethics is a multifaceted concept that is constantly
evolving according to the demands of time and necessity of citizens, we tend to all agree that one of
the hindrances to progress and development of the state and society in general is unethical
bureaucratic practices, including the “classic” graft and corruption.
Then again, policymakers and even bureaucrats are faced with the dilemma of differentiating
what is right from wrong in public administration. Many state institutions: the Constitution, the
Church, interest groups, professionals, indigenous peoples, etc., have crafted ethical standards with
different determinants of acceptable and unacceptable bureaucratic behavior, adding to the
confusion. The evolution of public administration also aggravated the problem by introducing
emerging ethical norms.
In the ensuing discussion on administrative ethics in the Philippine setting, we find that there
are common junctures—honed through history, experience and evolution of administrative
approaches—among these plethora of norms under which bureaucrats must adhere to. The
commonalities of what is acceptable and unacceptable point ultimately to the emergence of a free
market society and economy-based government that has since transformed public governance from
being citizen-oriented to consumer-oriented.
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Ethics, accountability and corruption in the Philippines: a history
Pre-conquest era
Historical records pointing to the existence of sultanates in the southernmost parts of

Mindanao during 15th century tells us that indeed, political organizations were already established
even before the Spaniards came into the Philippines in 1521. Small communities composed of around
30-100 families called barangays were established along rivers. These barangays were headed by
datus or village chiefs whose functions were to maintain existence and uphold peace and order in the
community. The datu being at the apex of hierarchy had stratified authority and performed the roles
of a chief executive, a lawmaker and a judge. He settled disputes, provides services and mobilizes
communities to act (Reyes, 2003). The datu’s authority was considered to be supreme and pre-
eminent; however, the position was customarily hereditary (Endriga, 1979). If not inherited, the datu
remained in power by endowments, display of prowess and valor during battles, or by exemplary
leadership.
The concept of graft and corruption may have not yet been clearly defined during the pre-
conquest era, and no clear standards were set to differentiate which administrative activities were
ethical or unethical. Meanwhile, some cultural practices in the pre-colonial period mirrored or were
embedded in the present administrative system. For example, the inextricable link with families and
personal loyalties, as well as leadership-centered activities typical of the pre-colonial communities,
still affects how our government works today (Reyes, 2003).
Since customary laws prevailed during the pre-colonial society, and there were no concrete
definitions for graft and corruption, there may have been occasions when people during that period
engaged in corrupt practices. The existence of social classes, feudalism, concentration of authority to
the datu and his subjects, and inheritance of position by virtue of blood or display of valor in battles,
or endowments, may have likely encouraged corruption in the pre-colonial period. These assumptions
were of course made by Spanish conquistador-writers whose customs and practices were not in line
with that of the pre-colonial Filipinos (Endriga, 1979).
Spanish colonization
Graft and corruption was said to be prevalent during the Spanish period. The culture of
corruption said to have been earlier perpetuated by the class system in the pre-colonial period was
rather reinforced at that time. In particular, Endriga (1979:246) mentioned that corruption during the
Spanish period can be broadly defined as the “deviation from the idealistic, high-minded norms
contained in legislation of various forms.”
Sources of graft and corruption may be attributed to the inconsistencies of colonial objectives
and administrative approaches during the Spanish regime. Conflict between Authority of Will and
Authority of Wisdom gave Spanish bureaucrats wide discretion based mainly on their priorities and
motivations. Simply put, there was disconnect between the interest of the colonizers to promote
evangelical law and the interest to increase collection of profits. This compromised idealism and
expediency in the administrative system during the period.
Public office, during the Spanish regime, was regarded as a grant or favor from the king or by
purchase. The latter means violated the provisions of Spanish law at the time; positions were endowed
on the basis of highest bidding and not on the basis of competence and capabilities of personnel.
Eventually, bureaucratic positions were considered private investments or property. This meant that
the officeholder could invest in a position, which eventually will be recovered through profit.
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Another factor was the dominance of colonial bureaucracy and its effect on the Filipinos
during the Spanish period. Endriga (1979) described the bureaucracy as a rule over a powerless
population that was unable to affect its colonizers. With colonial bureaucracy, the highest position
that a Filipino may occupy was cabeza de barangay. All the rest were occupied by the Spaniards.
Some of the remedies that were established during the Spanish regime to control graft and
corruption were the institution of the Visitador General, an official sent out by Council of Indies in
Spain and vested with investigatory, judicial and executory powers, to conduct Visita, an unanticipated
investigation of officials, which provides basis for suspending or removing erring officials from their
positions; and Residencia, which required bureaucrats to render at the end of their term an account
or their conduct before they could assume another office position. These were “essentially” effective
counter-checking procedures; however they were not strictly implemented.
American regime
The Philippine political structure was vastly improved during the American period, mimicking
that of the United States (Endriga 2003). Church was separated from state; and the Filipinos were
somewhat encouraged to participate in all levels of government, albeit at a much later time after the
Americans occupied the country. The concept of a public office being position of public trust and
responsibility, and the merit system were among the new philosophies introduced during the
American colonization (Endriga 1979). Among the first laws implemented to increase the credibility of
civil service was the “Act for Establishment and Maintenance of an Efficient and Honest Civil Service
in the Philippine Islands.” It reflected the practice of the Weberian Bureaucracy, characterized by
selection of members based on qualifications and not merely by political patronage that was typical
of the spoils system.
The civil service laws during the American regime benefited public service in the Philippines.
Professionalization of and adequate compensation for civil servants increased the morale of
bureaucrats who were treated like milking cows back in the Spanish period. In a way, reforms in the
civil service were a preventive mechanism against graft and corruption. This supplemented the Penal
Code, which was established in the 1930s to prevent corrupt practices in the bureaucracy (Endriga,
1979).
However, Endriga (1979) pointed out that corruption was still manifest during this period. The
civil service system in the American colonial period eliminated the spoils system, but only in part, to
supposedly accommodate Filipino experiences and interests. This loophole gave some of the
bureaucrats a window of opportunity for petty or small-scale corruption. Then again, these problems
were usually settled or addressed promptly or effectively under the American colonial government.
Independent Republic
After World War II, the country had to go through vast rehabilitation of infrastructure such as
roads, bridges and school buildings, which were devastated after the World War II. Reyes (2003: 51)
described it as a time when “poverty was endemic and the widespread destruction of property served
to exacerbate the situation.” Opportunities for public personnel to commit corrupt practices came
from the huge amount of financial aid that the country received for reconstruction. Amid economic
crisis, public officials were tempted to commit corrupt practices, slowly eroding public’s trust towards
the government. Co (2005), in her paper on Challenges To Philippine Culture Of Corruption: Causes,
Consequences And Change, referred to corruption as a result of misconceptions about public office as
an opportunity to reap personal rewards than to nobly serve in the government. With the constantly
changing perspectives and practices of corruption through the years, public officials began to concede
that corruption was a natural act.
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Marcos dictatorship
Graft and corrupt practices during Marcos regime were prevalent among his cronies and
associates. Misuse of government funds, drawn from monopolies of major industries such as sugar,
tobacco and coconut, led to accumulation of ill-gotten wealth. Blood relatives of either former
President Marcos or his First Lady Imelda owned and dominated public and private enterprises. The
Marcos regime was described as a deviation from democracy to the so-called “kleptocracy”, resulting
in a loss of multi-billion assets from foreign investments and government revenues, and accumulation
of unexplained wealth.1
Several ethical issues, aside from graft and corrupt practices, can be rooted from Marcos’
twenty-year presidency. President Marcos perpetuated massive militarization campaign when he
declared Martial Law in 1972, supposedly as a means to restore peace and order; however, others
believed that it was his way of prolonging his dictatorship and authority. There were accounts of
human rights violations and curtailment of the freedom of expression and assembly.
Nonetheless, a number of anti-corruption laws were enforced during Marcos’ time, albeit
being weak and altogether a lukewarm response to corruption. Among these were the following:
Presidential Decree No. 6, which identified punishable administrative offenses and immediate
dismissal of guilty officials; Presidential Decree No. 46, which prohibited public official to receive gifts
on any occasion including Christmas; and Presidential Decree No. 677, which required public officials
to submit Statement of Assets and Liabilities (SAL) (Quah, 2010). These laws, however, are almost
inoperable and overlapping with the existing law Republic Act No. 3019 (Anti-Graft and Corrupt
Practices Act of 1960) (Co, 2005).
Post-Marcos period
After the Marcos dictatorship, succeeding leaders strived to undo the mistakes of the past and
focused on installing a number of anti-corruption laws and regulations. In fact, Quah (2010) points
out that, among Asian countries, the Philippines has the most number of anti-corruption mechanisms
implemented. In particular, the Philippine government has maintained seven anti-corruption laws and
19 presidential anti-corruption agencies in the past half-century. However, the mushrooming of these
organizations was usually due to changes in leadership and the leader’s own discretion to abolish and
create new agencies. Even then, these agencies had to be salvaged over and over again. The
Presidential Commission on Good Governance (PCGG) itself allegedly harbored graft and corruption
during Cory Aquino’s administration. It was replaced by the Presidential Committee on Public Ethics
and Accountability in May 1987, which was equally incompetent due to lack of resources. This agency
was repeatedly rehashed under the Ramos, Estrada and Arroyo administrations. In 2002, the Arroyo
administration initiated “lifestyle checks” on public officials, examining their leisure habits, possible
relatives employed through influence, and other possible conflicts of interest. However, this gained
little support from the citizens due to Arroyo’s alleged graft and corruption offenses, among which are
the controversial NBN-ZTE deal and the “Hello Garci” scandal (Quah, 2010).
President Benigno Aquino III tried to rectify and take into account the alleged corrupt practices
committed during the past administrations. In 2012, President Aquino signed the Act to Further
Strengthen the Anti-Money Laundering Law and the Terrorism Financing Prevention and Suppression
1Roa, Anna. “Regime of Marcoses, cronies, kleptocracy.” [online]. Available from

http://newsinfo.inquirer.net/641277/regime-of-marcoses-cronies-kleptocracy [Accessed 15 May 2015].
Almario, Manuel F. (2011, February 27). The dismal record of the Marcos Regime. Retrieved from
http://www.philstar.com/letters-editor/660957/dismal-record-marcos-regime
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Act in an effort to improve transparency and accountability, capacity to investigate graft and
corruption cases and suppress funding for terrorist activities, respectively. President Aquino also
signed the third amendment to the Anti-Money Laundering Act, expanding the scope of the law to
more illegal acts. The Presidential Anti-Graft Commission (PAGC), on the other hand, mandated the
ten most corruption-prone government agencies to submit to lifestyle checks and/or report major
corruption cases every three months. Meanwhile, the Freedom of Information Bill, one of the
anticipated laws to improve transparency and accountability in the public sector, is yet to be passed
by the government. However, as what will be discussed in the section on “Corruption,” these laws
and mechanisms remained weakly implemented and unenforceable due to poor mainstreaming and
coordination across government agencies (GAN Integrity Solutions [online]).
Box 1 lists a number of anti-corruption laws and policies, as well as constitutional anti-
corruption bodies.
Administrative ethics
In one of his renowned lectures on politics, Jovito Salonga, a well-known Filipino statesman,
described ethics as a “discipline dealing with right and wrong.” But how do we distinguish right from
wrong? In relation to this question, Salonga also stated that ethics is a multi-faceted concept that goes
beyond the usual limitations of law. He further elaborates on this by saying:
This is another way of saying that what is legal may not be moral, that what may not
violate the law may nevertheless violate standards of honesty, fairness, propriety decency,
accountability, and compassion (Salonga, in Tapales, 1994:69).
Salonga also discussed a number of issues that were relevant during his time, such as the
appointment of relatives in another public office, state funeral for Marcos, and the controversial
Senate decision in 1991 on the RP-US Bases Treaty, to illustrate that administrative ethics may tend
to go beyond the confines of law. In the following discussion, we will see some of the perspectives of
administrative ethics, their differences and common junctures that could clarify ethical dilemmas in
public administration.
Normative foundations
Ethics is a very broad concept and is a subject of interest of many scholars. It is composed of
diverse perspectives which may be rooted from religious, political, professional and social beliefs.
Among the perspectives of administrative ethics, according to Cooper (2004), are the following:
a. Regime Values
These are values embodied in the constitution. While states differ on their constitutional
frameworks, Scholar John Rohr, author of Ethics for Bureaucrats: An Essay on Law and Values,
identified general constitutional values as freedom, equality and property.
b. Citizenship Theory
In this perspective, public administrators are encouraged to “put themselves in the shoes of”
the citizens. They are expected to consider the welfare of citizens in the conduct of public service;
and their ethical obligations dwell with good citizenship. Thus, should also be responsive, responsible
and accountable to the citizens. They are expected to be people-centered, to forgo self-interest, lead
people towards common good and establish moral bond with the community. As custodians of
resources public administrators should be responsible in using, allocating and generating the same.
Moreover, public administrators should be accountable by sharing authority and reducing control.
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c. Social Equity
It was during the New Public Administration movement that social equity became the central
principle of government. Forerunners of New PA—H.G. Frederickson, Frank Marini, William
Lambright, among other scholars—pointed out that despite economic growth, indeed social problems
such as poverty, unemployment and illiteracy still prevail. New PA sought to address the deprivation
of the poor, and eventually social equity became a guiding principle for public administration ethics.
d. Virtue
Virtue is an essential element of public administration ethics and, as a form of character,
assessed using the frameworks of moral crises and moral processes. Ultimately, under this
perspective, an individual tends to slowly build his/her tendencies to act according to his/her
espoused principles and values particularly in situations wherein these principles and values are
attacked or confronted with.
e. Public Interest
Public interest, according to scholars, is widely recognized normative foundation for
administrative ethics. This is true especially because serving the public interest is a major function of
the government and is the primary distinction of public from private administration. However, public
interest scope has a wide scope. It is not homogenous because there is a wide range of interests made
by the public and it continues to evolve over time. Public interest as normative administrative ethic
leads us to the fundamental obligation of serving the general shared interest and not that of the few.
These normative foundations offer a general scope of what administrative ethics should
entail. While they should ideally comprise what should be “ethical” to administrative institutions, they
each differ on the approach to ethics. From these five normative foundations, we will magnify ethics
based on regime values and public interest and how they usually clash with that determined by virtues,
social equity and citizenship theory.
Clash of bureaucratic and cultural norms
Cariño (1979), in support of Salonga, explained that there indeed exists a conflict between the
legal and cultural determinants of bureaucrat behavior. In particular, what are determined
unacceptable by law may fall within the ideal and acceptable behavior according to culture. In her
article on the conflict of ethics and law, Cariño purported seven bureaucratic legal norms that govern
the behaviors of bureaucrat and its corresponding provisions it embodies in Republic Act No. 3019,
otherwise known as Anti-Graft and Corrupt Practices Act. These are the following:
a. Universalistic Norms
This norm upholds equal, depersonalized treatment of stakeholders. In Republic Act No. 3019,
the principle is manifest in the provision prohibiting acts that give client undue advantage, such as:
“Directly or indirectly requesting or receiving any gift, present, share, percentage, or

benefit, for himself or for any other person, in connection with any contract or transaction
between the Government and any other party, wherein the public officer in his official capacity
has to intervene under the law.” (Section 3b, RA 3019)
b. Priority Norms
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The priority norm adheres to the idea of “first come, first served basis” versus the idea of
preference; however, “special cases” may be accommodated in favor of public service. Meanwhile,
this norm prohibits actions reflected in the following Sections of Republic Act No. 3019:
“Causing any undue injury to any party, including the Government, or giving any
private party any unwarranted benefits, advantage or preference in the discharge of his official
administrative or judicial functions through manifest partiality, evident bad faith or gross
inexcusable negligence. This provision shall apply to officers and employees of offices or
government corporations charged with the grant of licenses or permits or other concessions.”
(Section 3e, RA 3019)
c. Efficiency Norms
It is defined as the delivery of service at the least time and with the least cost as possible. RA
3019 indicates that unreasonable delay in the delivery of public services in favor of the public officials
is prohibited:
“Neglecting or refusing, after due demand or request, without sufficient justification,

to act within a reasonable time on any matter pending before him for the purpose of obtaining,
directly or indirectly, from any person interested in the matter some pecuniary or material
benefit or advantage, or for the purpose of favoring his own interest or giving undue
advantage in favor of or discriminating against any other interested party.” (Section 3f, RA
3019)
d. Technical Norms
The norm upholds a public official’s technical or professional standards in dealing with clients.
Negative behaviors that violate the technical norm are reflected on Sections 3(g) and 3(j) of Republic
Act No. 3019:
Section 3(g):
“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.”
Section 3(j):
“Knowingly approving or granting any license, permit, privilege or benefit in favor of

any person not qualified for or not legally entitled to such license, permit, privilege or
advantage, or of a mere representative or dummy of one who is not so qualified or entitled.”
e. Jurisdictional Norms
This norm upholds that the public official must carry out tasks within his/her respective
functions or jurisdiction. Section 3(a) of Republic Act No. 3019 states that:
“Persuading, inducing or influencing another public officer to perform an act

constituting a violation of rules and regulations duly promulgated by competent authority or
an offense in connection with the official duties of the latter, or allowing himself to be
persuaded, induced, or influenced to commit such violation or offense.”
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f. Propriety
This norm adheres to one of Weber’s principles of structural arrangements, which is

separation of office from a person. This norm declares that a public official must address conflicts of
interests that may hinder him/her from carrying out his/her functions in office (e.g. family relations,
private gains), as what is described in Sections 3(h) and (i) of RA 3019:
Section 3(h)
“Directly or indirectly having financial or pecuniary interest in any business, contract

or transaction in connection with which he intervenes or takes part in his official capacity, or
in which he is prohibited by the Constitution or by any law from having any interest.”
Section 3(i)
“Directly or indirectly becoming interested, for personal gain, or having a material

interest in any transaction or act requiring the approval of a board, panel or group of which he
is a member, and which exercises discretion in such approval, even if he votes against the same
or does not participate in the action of the board, committee, panel or group.”
g. Secrecy
Under the norm of secrecy, the public official is mandated to keep official secrets confidential
to preserve its power, or to avoid giving undue advantage to a particular client, as stated in Section
3(k) of RA 3019:
“Divulging valuable information of a confidential character, acquired by his office or

by him on account of his official position to unauthorized persons, or releasing such
information in advance of its authorized release date.”
RA 3019 is just one of the many anti-corruption laws in the country, which are deemed as
having a “public-office orientation”—that is, our laws against corruption focus more on bureaucratic
practices and compliance to rules, those dictated by Cooper’s notion of regime values, above other
normative foundations of ethics. By examining the nature of our cultural values, we find a conflict
between legal and cultural norms.
Cariño (1979) asserted that Filipino culture is characterized by particularism, ascription and
diffuseness. The Filipino is viewed as a system rather than as part of the system. He/She is defined by
personalities; thus, by giving or denying a person services, the public official has in turn refused the
client his/her integrity, family background, etc. (and, by virtue of hiya and utang na loob, it is
considered “rude” to refuse someone’s requests). As such, in dealing with the citizens, the bureaucrat
must consider all aspects of the client, including his/her networks and linkages. This may be the reason
why relational/parochial interests prevail over general/common interests in the delivery of public
services.
This is where the conflict between law and culture emerges.
The Filipino bureaucrat typically puts much value on his/her relationship with relatives,
friends, neighbors and other personal networks, thus deviating from Weber’s ideal type of a
bureaucrat. Personalism can be discordant in bureaucracy where relations are supposed to be
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governed by institutional rules and general interest rather than particularistic considerations (Cariño,
1979). Table 1 illustrates the possible scenarios of ideal, acceptable and unacceptable behavior
according to bureaucratic-legal norms may be unacceptable in terms of cultural ethical norms, and
vice versa.
Table 1. Bureaucratic-legal and cultural-ethical norms by types of acceptable behavior (Carino,

1979).
Cultural Ethical Bureaucratic-Legal Norms
Norms Ideal Acceptable Unacceptable (Illegal)
Ideal No example. Law does Utang na loob shown in Utang na loob shown by
not require utang na loob extra-bureaucratic bureaucrat by giving
to be acknowledged situations and decisions unfair advantage to alter
Acceptable Utang na loob shown Introducing alter to Utang na loob shown by
only where it does not agency personnel—to giving confidential
hurt other clients help dispel strangeness information or endorsing
of impersonal alter but without directly
organization—without deciding or persuading
endorsement or decision-maker to rule in
comment his favor
Unacceptable Treating alter like Abstaining from decision “True” corruption—when
(Unethical) anybody else (e.g. affecting alter (after due a person does not show
abstaining from decision suggestion from agency) utang na loob, deviation
on grounds of conflict of from law will have other
interest) bases
In the above table, Cariño used the practice of utang na loob in terms of bureaucratic-legal
and cultural-ethical norms to best illustrate the congruencies and discord between the two normative
perspectives. The table basically points out that what may be ideal or acceptable in law may not be
ideal or acceptable in culture or practice, and vice versa. Some of the cases of illegal bureaucratic
behavior being treated as culturally acceptable are the following: 1) praising corrupt officials for
accumulating wealth and being stealthy about it; and 2) praising Robin Hood officials who had the
opportunity to share their illegally-amassed wealth to others.
However, there are certain congruencies in areas, where both the law and the culture consider
the behavior of a public official acceptable and unacceptable. For instance, the fact that corruption
(which is illegal according to law) puts a public official in the hall of shame (which is culturally-driven)
proves that somewhat there are areas where both aspects can agree with each other. Another
common juncture between legal and cultural norms is found when, for example, granting of favors
disregards another Filipino value—pagkakapantay-pantay or equality.
Cariño finally argues that in general, the root of negative bureaucratic behavior that is
certainly both legally and culturally unacceptable—that is, the greed for money and power—
ultimately point to lack of law enforcement and free market conditions as factors contributing to
persistent corruption in the Philippines. There is thus a need to strengthen accountability and audit
mechanisms that prevent negative bureaucratic practices. Moreover, regardless of the cultural
traditions, we Filipinos should begin to acknowledge and accept legal standards of bureaucratic
behavior if we are to indeed eradicate corruption. As Co (2005) wrote, we should embrace a “culture
of rules.”
Evolution of ethics in public governance
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The “Reinventing Government” movement ushered in by Osborne and Gaebler has

transformed the public sector from being rule-bound, machine-like and hierarchic towards being
market-oriented. While the paradigm has paved way for innovations in public administration, in some
ways, this movement has affected ethical standards in public governance which transformed the
ethical foundations to commercial values (Haque, 1999).
According to Haque (1999), one of the major features of this ethical shift was consideration
of citizens as consumers, thus equating citizen satisfaction with consumer satisfaction. This
transformed traditional public administration into public management, leaning towards
managerialism as opposed to post-war concept of citizenship, which was viewed as a value of
democracy pertaining to social, political and civil rights. Subsequently, there emerged the shift from
traditional principles of public welfare to the commercial norm of value for money public sector
reforms in developed and developing nations. The paradigm also narrowed the gap between public
and private administration, eventually introducing public-private partnership, on one hand, and
compromising impartiality and neutrality, on the other. The ultimate goal of economic efficiency
redirected government programs towards trade and industry and deprioritized anti-poverty
programs. Finally, the paradigm encouraged managerial autonomy in decision-making, therefore
challenging the ethics of public accountability based on people’s control over governance (Haque,
1999).
This begs the question, “What kind of accountability does the public sector really need?” Is it
managerial accountability, “people-based” accountability, or the best of both worlds? In the
succeeding section, the concept of accountability and its different forms will be discussed. We will
then be guided by a particular framework of accountability that links political and administrative
processes, thereby strengthening the involvement of citizens in exacting accountability from
bureaucrats and political officials.
Accountability
Accountability is one of the principles espoused by the United Nations in its “good
governance” paradigm. It is deemed essential in containing or eradicating negative bureaucratic
behavior and ensuring institutional integrity. As technology develops and more complex
administrative problems arise in the public sector, new tools for ensuring accountability are constantly
being developed to impose greater responsibility over public officials in their roles and functions, to
monitor bureaucratic practices and guard against negative bureaucratic behavior. In this section, we
will be looking at the nature and scope of accountability, the types of accountability, and more
importantly, issues that confront the practice of accountability in the public sector.
What is accountability?
There exist many definitions of accountability in the literature of governance and public
administration. The World Bank (undated) and Ebrahim (2003) both define accountability as a
relational dynamic between two individuals or agencies in terms of two aspects: answerability,
wherein individuals or agencies inform or justify their actions to the inquiring body; and enforcement,
which involves sanctioning, guiding or rewarding individuals or agencies for their actions (or lack
thereof). Cariño (1983), Wang (2001), Cendon (2000) and Lindberg (2013) all refer to accountability
as a product or function of the following dimensions, which will be useful upon discussion of the forms
of accountability:
1) The person/institution being held into account (agent);
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2) The person/agency to whom the agent is to give account (principal), which may be internal or
external to the agent;
3) The content or subject matter for which the agent is accountable;
4) Mechanisms that ensure answerability and enforcement, which would depend on the degree
and direction of control; and
5) Accountability effects or outcomes.
Types of accountability
For the purpose of this report, the discussion of accountability will focus on the typologies by
Cariño (1983) and Cendon (2000), with emphasis on Cariño’s typologies of administrative
accountability. These forms will be classified according to the following: 1) principal or source of
accountability; 2) agent; 3) content subject to accountability; 4) accountability mechanisms; and 5)
accountability outcomes or consequences. The typologies will also be described based on Lindberg’s
(2013) additional dimensions: degree of control and spatial direction. The former refers to the rigor
of monitoring and evaluation mechanisms used and the amount of information required in ensuring
accountability; while spatial direction is related to the source of accountability. In particular, it is
upward in nature if service users or shareholders hold higher authorities accountable; downward if
higher authorities hold lower-level employees accountable; and horizontal if accountability is among
peers in a single organizational level (Lindberg, 2013).
As discussed earlier, the source, content and mechanisms of accountability vary on the nature
of the parties involved, the roles that they play in the accountability relationship and the external
environment under which the relationship works. As such, a single institution or individual may be
accountable under two or more types of accountability, depending on the circumstances. Table 2
shows the different types of accountability and their characteristics.
Political accountability
According to Cendon (2000) political accountability ensures that decisions or actions made by
public employees are aligned with the programmatic or political agenda currently put in place by the
government (or what is loosely assumed as the “will of the people”). The focus of political
accountability is therefore on ideally meeting the expectations of the elected official who in turn
represents the needs and interests of the electorate.
Political accountability assumes both vertical and horizontal dimensions. Vertically, political
accountability relates high-ranking authorities and lower-level bureaucrats with one another.
Horizontally, political accountability links high-ranking officials with one another through the
legislative branch; in a presidential form of government, the role of lawmakers is limited to appointing
officials and, in special cases, impeaching them. Political accountability is mainly measured through
technical standards as well as value judgments and political considerations (Cendon, 2000).
Lindberg (2013) points out that political accountability typically has the lowest degree of
control. First, rules or standards for attaining accountability are somewhat general in scope, allowing
for more flexibility and wider discretion among lower-level bureaucrats. Second, political officials
have relatively little control over bureaucracies mainly due to time and skill constraints as well as
conflicts of interest. As a result, officials are likely to leave important decisions to bureaucrats. In the
long run, however, bureaucrats may capture the decisions of political officials, especially when there
is lack of discernment or accountability on part of the officials. On the other hand, under heavy
political influence, bureaucrats may be used as tools to further political agenda (Alfiler, 2003; Lindberg,
2013).
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Administrative accountability
According to Cendon (2000), administrative accountability focuses on the level of compliance

with administrative rules and procedures, as well as legal and functional strictures on the efficient use
of resources. Values and standards for this form of accountability are hinged on the constitutional or
legal framework of the state, which usually governs public offices and guarantees the citizen equal
treatment and clear relationship boundaries with the state. It is also characterized by neutrality.
Cendon explains that public employees must be willing to work with different government agencies
and commit to government programs regardless of political or ideological bias.
Professional accountability
Under professional accountability, public employees equipped with the competence and skills
to address the problem first-hand are accountable for their faculties in carrying out their functions
and to the authorities that entrusted them these functions (Lindberg, 2013). In professional
accountability, it is important to keep the principal (e.g. the higher-level bureaucrat or political official)
well-informed of the agent’s performance, especially when the principal is inexperienced in the field
being handled by the subordinates (Romzek & Dubnick, 1987). Otherwise, there will be low degree of
control involved in maintaining professional accountability.
How is professional accountability addressed? Cendon (2000) refers to the concept as an

oversight on activities conducted by professionals with the appropriate skills or expertise to achieve
organizational or program goals and objectives. Thus, there is greater emphasis on the respect for and
compliance with professional ethics and standards of a particular field. Whether or not professional
accountability is linked with administrative accountability remains a point of contention, since
professional standards may, in some cases, be different with administrative standards.
Democratic accountability
Democratic accountability establishes the link between public administration and society as
an active participant in the accountability relationship. This implies that the administrative system
must not only be able to garner support and acceptance from the society in its actions and decisions,
but it should also be able to hold the administrative system accountable for addressing their needs
and interests. This type of accountability does not require a specific formal or legal framework
(Cendon, 2000), although the Constitution itself provides for principles such as the freedom of speech,
freedom of assembly and notion of public interest.
Cendon’s concept of democratic accountability is parallel to the concept of “societal

accountability” and “representative accountability” as explained by Lindberg (2013), wherein citizens,
through the media, Church and other interest groups, informally assume the role of the principal in
the accountability relationship. The source of control of democratic accountability is thus external to
the administrative system, coming from the citizens themselves. However, how much citizen control
is needed is derived from two factors: 1) the scale of action required to ensure accountability; and 2)
whether or not government agencies facilitate considerable citizen control (Lindberg, 2013).
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Table 2. Forms of accountability.

Characteristic Forms of Accountability
Political Administrative Professional Democratic
Basic -Acting following the political -Acting in full compliance with the -Acting in full compliance with -Acting according with the
operational and programmatic provisions legally established rules and the technical rules and needs and interests of social
principle adopted by the government procedures practices of the profession groups or society as a whole
Internal -Superior political authority -Superior political authority -Superior professional organ N/A
accountability, -Superior administrative organ or or authority (technical
to whom? authority evaluation)
-Superior administrative
organ or authority
(administrative evaluation)
External -Parliament -External organs of supervision and -External organs of -Social groups
accountability, control supervision and control -Society as a whole
to whom? -Citizen as subject (technical or administrative)
-Courts of justice
Subject matter -Results of administrative -Forms and procedures followed by -Professional rules and -Results of administrative
performance the administrative action practices followed performance
-Results of the professional
performance
Criteria -Political criteria -Formal criteria: compliance with -Professional criteria: -Social impact of administrative
-Technical or objective criteria established rules and procedures compliance with established performance
rules and practices of the
profession
Mechanisms -Internal supervision and control -Internal supervision and control -Internal supervision and -Mechanisms of civic
mechanisms (internal mechanisms control mechanisms (technical participation
responsibility) -External supervision and control or administrative) -Media and instruments of
-Parliamentary mechanisms of mechanisms -External supervision and expression of the public opinion
control (external responsibility) -Administrative claims control mechanisms (technical -Information technology
-Judicial procedures or administrative)
Consequences -Political criticism -Revision of the administrative act -Sanction or recognition of the -Adoption of administrative act
-Resignation or dismissal (confirmation, modification, official involved -Revision of administrative
annulment) decision
-Sanction or recognition of the official -Democratic legitimization of
involved administrative performance
-Compensation for the citizen
Source: Cendon (2000).
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Types of administrative accountability
Meanwhile, Cariño (1983) has aptly redefined administrative accountability in line with the
evolving nature and scope of public administration. Her typologies of administrative accountability
imply that Cendon’s (2000) definition of the same concept is only limited to traditional accountability.
The forms are discussed in the following paragraphs.
Traditional accountability
The focus of traditional accountability is on compliance, regularity and legality of actions and
decisions of public employees and officials. It is characterized by high degree of control over
bureaucratic behavior. It is exemplified by the concept of administrative accountability described by
Cendon (2000) and bureaucratic accountability defined by Lindberg (2013), where higher authorities
typically demand specific information on the level of compliance from lower-level employees.
Another example is legal accountability as defined by Lindberg, wherein the judiciary holds an
individual or agency accountable for lawful behavior and thus demands and monitors for compliance
to specific regulations.
Managerial accountability
Cariño goes on to describe accountability at a higher level—managerial accountability. The

focus of this form of accountability is not so much on compliance as it is on efficiency and economy in
the attainment of goals or objectives. In this area, the executive is accountable to institutions external
to the bureaucracy that fund or allocate resources for programs and projects. Examples of this type
of accountability include Lindberg’s (2013) concept of “fiscal accountability” and “audit
accountability”, where usually an external agency (e.g. COA, Ombudsman, etc.) evaluates the judicious
use of funds or resources. Mechanisms for ensuring managerial accountability include simplification
of work procedures, reorganization, rationalization, and operation/management audit by COA, DBM
and other external agencies.
Program accountability
In addition to efficiency and economy, program accountability focuses on the effectiveness of

a particular project or program. In particular, it delves on the following (Cariño, 1983):
1) Whether or not the agency implements only authorized activities and in the appropriate
manner to achieve intended objectives;
2) Whether or not the programs are implemented effectively, efficiently and economically in
compliance with rules and regulations;
3) Whether funds are used prudently as reflected in receipts and other accounts;
4) Whether or not the accounting system uses proper accounting standards; and
5) Whether or not funds are appropriately disclosed.
Program accountability allows for less control on compliance from the higher authorities and
therefore greater flexibility and discretion on the part of the program implementers, as long as the
program objectives are attained. Among the mechanisms for program accountability are
performance/comprehensive audit; productivity measures, program evaluation, cost-benefit analysis,
application of management-by-objectives (MBO) and organizational development (OD) models.
Process accountability
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In process accountability, the main focus is on the procedures, methods and approaches by
which resources are mobilized to achieve desired ends. This form of accountability supposes that not
all goals or objectives are directly measurable, except through the quality of activities performed in
pursuit of the given objectives. Cariño used McKinney’s concept of process accountability to
emphasize citizen participation, particularly in crafting a set of standards that may be acceptable both
to the bureaucrats and technical personnel, on one hand, and citizens, on the other. Thus,
negotiations with citizens and other sectors form an integral part of the accountability mechanism.
The following table summarizes the four types of administrative accountability as described
by Cariño (1983) (Table 3).
Table 3. Forms of administrative accountability.

Characteristics Traditional Managerial Program Process
accountability accountability accountability accountability
Employees and Administrator Administrator Administrator
Agent (A) being officials
held accountable
Principal (P) to People through People through People through In addition to
whom A is legislators, legislators, legislators, those in previous
accountable President, President, President, columns, direct
Constitutional Constitutional Constitutional accountability to
bodies, hierarchy bodies, hierarchy bodies, hierarchy; people through
Professional participation in
standards and negotiations
individual
conscience
Accountability Regularity, Economy, Economy, 3Es,
content legality, efficiency efficiency, decentralization
compliance effectiveness and participation
Accountability Line-item Management Comprehensive Negotiations
mechanisms budgeting, audit, systems audit, program
traditional improvement evaluation,
accounting, productivity
standard measurement
operating
procedures
Source: Cariño (1983).
Political-administrative accountability continuum
So far, we have characterized different types of accountability, and as we said earlier,

institutions and individuals may be involved in two or more of these relationships at the same time,
depending on the circumstances. Lindberg (2013) also explained that the relationship may involve
more than just the principal and the agent; he mentioned the presence of an implementing agent (I)
that the agent holds accountable for its actions toward P. For instance, the President (principal or P)
devolves decision-making powers to an agency head (agent or A), which then holds the lower-level
bureaucrats and employees under his jurisdiction (implementing agents or I) accountable for
implementing particular programs or policies toward citizens, which according to Lindberg’s
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definition, could be the principals behind P. Essentially, accountability relationships can be that
complex, to the point of blurring the distinctions among types of accountability.
To further illustrate this, we take off from Alfiler (2003), who provided an apt description of
the link between political and administrative accountability. She presented a framework that
indicates the transfer of authority among elected officials, bureaucrats and the people (Figure 1).
Looking closely at the framework, we find that, even though political leadership and administrative
efficiency are important in establishing an effective accountability system, people are and should also
be involved in exacting accountability.
P PEOPLE P
O O
L elect hold answers to submit for L
I accountable judgment I
T T
ELECTED OFFICIALS
I A. EXECUTIVE I
C B. LEGISLATIVE C
A A
Hold
L appoint, accountable L
provide for delivery of answers to report on public
goods/services programs
support /information
A A
D D
M APPOINTED OFFICIALS/EMPLOYEES M
I A. CO-TERMINOUS/NON-CAREER I
N B. CAREER N
I I
S S
T provide hold accountable for T
R public goods efficient/responsive R
A and services services A
T to T
I I
V V
PEOPLE E
E
Figure 1. Political-Administrative Accountability Continuum

(Source: Alfiler, 2003)
Meanwhile, the dynamism of relationships involved within the administrative system paves
way to a number of issues on the concept and practice of accountability.
Issues on accountability
Complexity of the concept
Confronted with emerging demands and situations, the concept of accountability has,
according to Cariño (1983), changed along with the evolution of public administration through the
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years. Cariño cites three main reasons: 1) changing human nature; 2) complexity of environment
under which administrative system works; and 3) the inability of legal approaches to address these
complexities. Cariño traced the evolution of administrative accountability as illustrated in Table 4.
Table 4. Types of administrative accountability dominant in each type of public administration.

Type of Public Administration (PA) Type of Administrative Accountability that best characterizes
the PA type
Traditional PA Traditional Accountability, Managerial Accountability
Development Administration Managerial Accountability
New PA Program Accountability
Development PA Process Accountability
Adapted from Carino (1983).
Lindberg (2013) wrote that because accountability comes in various forms, we should not
always assume that effective accountability mechanisms on one sector or area of governance
translates to good governance as a whole. He further elaborates this through the following
propositions:
1) Accountability does not assume linear cause-effect relationship nor is it solely hinged
upon rational, informed decisions;
2) Agents in the accountability relationship face the dilemma on whether to do what is right
or to do what is popular, and may leave out other aspects such as the context or the
presence of minority or opposition groups; and
3) Accountability forms may only be compatible in certain situations.
Political accountability in autonomous agencies
To what degree are political officials responsible or accountable for the performance of
autonomous agencies? How will formal accountability mechanisms affect their performance? The
Constitution, as well as other laws, may determine these mechanisms during the policy planning or
formulation phase. However, there might be separate mechanisms involved during the policy
execution phase.
Even with autonomy, agencies are still bound by the obligation to report their performance,
actions or decisions to the political officials to whom they are accountable. However, as discussed
earlier, the low degree of control that is usually observed in political accountability may cause
overlapping of accountability roles or lead to capture of either the political officials or the bureaucracy.
Harmonizing forms of accountability
Another point of contention is on leveling off the criteria or standards for different forms of
accountability, especially when they co-exist within the administrative system. In some cases,
standards for administrative accountability clash with that of professional ethics, legal standards clash
with political judgments, and so on. The section on administrative ethics already tackled the conflicts
between bureaucratic-legal and cultural norms.
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For instance, news on the accountability of President Aquino in the recent Mamasapano clash
revealed clashing perspectives, particularly from a legal standpoint2 on one hand (the President is no
longer the Commander-in-Chief of the PNP and is thus not responsible for the Mamasapano incident),
and from the professional standpoint on the other (principle of command responsibility makes
President Aquino ultimately accountable for the incident)3. While these two approaches offer two
different standpoints on the issue, they are nonetheless valuable for further deepening the discussion
of accountability over the Mamasapano clash. This is why, in most cases, there is a need to rely on
other forms of accountability aside from the traditional one to examine a particular problem or ensure
answerability and enforcement of rules in the organizations.
In practice, however, it may be difficult to align different measures and mechanisms for
accountability. This is true especially when there is greater discretion on part of the accountability
holder. Moral and legal norms (ethics of civility vs. ethics of consciousness), for instance, would be
more difficult to reconcile (Cariño, 1983). Accountability holders will also have the more daunting task
of distinguishing extra-bureaucratic standards (e.g. cultural bases for accountability) from purely
negative bureaucratic behavior, as what will be discussed in the following paragraph. Cariño (1979),
however, contradicts this by arguing that the real cause of negative behavior is not so much on culture,
but on motivations for gaining wealth or power.
Client-patron/Patron-client accountability
Lindberg (2013) described two related forms of accountability: the client-patron (upward) and
patron-client (downward) accountability. These forms are dominant in accountability relationships
wherein the principals have less control over the agents that they hold accountable (e.g. political
accountability) and thus have limited means for monitoring actions or decisions. In a client-patron
relationship, the client (usually an influential individual or agency) may request information from the
patron (bureaucrat or political official) on issues outside of the direct accountability relationship. This
happens usually if the client has a favored relationship with the patron, or if the patron is a subordinate
of the client.
In a patron-client relationship, the focus is on what the client can give in return for the patron’s
services (e.g. material wealth, career opportunities, etc. in exchange for votes or high performance
rating). Lindberg explains that in developing countries, this relationship is strengthened by cultural
norms—in the case of the Philippines, utang na loob and hiya are among these norms. Without the
proper formal mechanisms for enforcing accountability as well as political commitment in favor of
public interest, these accountability relationships are susceptible to clientelism and corruption and
may thus do more harm than good (Cariño, 1983; Alfiler, 2003; Serra, 2012).
Accountability and responsiveness
Lindberg (2013) indicated that conceptual confusion on accountability may pose problems
especially when we apply or equate it with responsiveness. In a vertical-upward accountability
relationship, the responsiveness of bureaucrats to their service users, employees or citizens is usually
the typical standard for accountability. However, in a vertical-downward relationship, especially in
low-control settings, the accountability holder, for instance, the elected representative (who is
2 “De Lima: Aquino cannot be held accountable for Mamasapano clash.” Philippine Daily Inquirer, 14 March 2015 [online].
Available from: http://newsinfo.inquirer.net/678894/de-lima-aquino-cannot-be-held-accountable-for-mamasapano-clash
[Accessed 18 March 2015].
3 “Ramos: Aquino liable if he violated chain of command in Mamasapano debacle.” Philippine Daily Inquirer 18 March 2015
[online]. Available from: http://newsinfo.inquirer.net/679702/ramos-aquino-violated-chain-of-command-in-mamasapano-

debacle [Accessed 18 March 2015].
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assumed to represent the interests of the citizens), may not always be directly involved. Instead, it is
an agency (e.g. an office of a ministry or department) that directly holds the bureaucrat responsible
for his/her actions or decisions. Whether the bureaucrat should be responsive to the political officials
or the agency itself may become an issue, especially when it is not designed to be responsive to either
the agency or the elected official (Lindberg, 2013). Take, for example, the Supreme Court or the
judiciary branch, which is always expected to rule in favor of the law. This leads us to the ultimate
question: is accountability always good? What type of accountability should be applied to achieve
intended accountability outcomes? What about non-linear accountability relationships, especially
those intended to maintain networks and linkages with other institutions? To what extent should
political judgments rule over what is ethically sound or legally sound?
Lastly, is there a single formula for ensuring accountability? Given the issues discussed, this
will depend on the nature of political system, leadership, incentives for establishing accountability in
one area versus other areas, among others. What may work in one area may not necessarily work in
another. It is one thing to encourage citizens to demand accountability from the government; another
problem to develop effective mechanisms for horizontal accountability; to strengthen vertical
relationships between higher- and lower-level bureaucrats, and so on.
What do we need?
Both Cariño (1983) and Alfiler (2003) have pushed for program and process accountability as
ideal frameworks. But while they are theoretically ideal, they might be difficult to make out in
practice. First, it has been earlier discussed that not all forms of accountability are applicable in
particular agencies and situations. In this case, citizen participation and negotiations might be useful
to further strengthen, not replace, traditional forms of accountability. As Cariño (1983) explained,
traditional accountability may mitigate corruption, while process and program accountability may
prevent corruption. The problem of harmonizing conflicting standards of accountability might also be
addressed through negotiation and participation.
However, how to engage citizens in negotiations and participating in accountability processes

may be another daunting task to carry out. According to Lindberg (2013), the aim of engaging extra-
governmental institutions is not to come up with a decision that is amenable to all (as what most
people expect it to be), but to simply give different sectors equal opportunities to be part of the
accountability process (equal representation). In relation to this idea, Lindberg (2013) cited Bentham
and Nietzche’s ideas to assert that the leaders’ authoritative responsibility still plays a huge role in
ensuring accountability. In other words, to secure accountability, agency heads and political officials
should exert strong political will and responsible leadership.
The next section of this paper will be dealing with corruption, its effects or consequences, and
how undesirable use of authority, along with other factors, may contribute to the said practice. Finally
we will also be dealing with the weaknesses in the current anti-corruption strategies in the Philippines,
and how a multi-sectoral approach to anti-corruption can help strengthen the fight against this
perennial problem.
Corruption
Corruption is one of the most serious issues faced by the Philippines for several decades now.
In the paper submitted by the Philippine Institute for Development Studies (PIDS) to the APEC Study
Center Consortium Conference in 2006, corruption was claimed as a problem which all governments,
at any level of development, have to deal with (Balboa and Medalla, 2006).
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Corruption as a subject of study has expanded and evolved from how scholars in the post-war
period perceived it to be. Before, corruption was highlighted as a process and practice that
systematically transpired within the bureaucratic structure. (Carino, et al, 1979 as cited by Co, 2005).
Nowadays, corruption is not merely viewed as a bureaucratic problem but also as social disease.
Ackerman (2000, as cited by Co, 2005), discusses corruption within a political economy
perspective, mostly explaining how political and economic players sustain corruption in high
institutions of society and spills the broad consequences over the society in general, resulting in mass
deprivation of resources, diminishing gains for the public sector, and further sustaining the exclusive
partnership between business and a few individuals in the bureaucracy for private gains. The last part
of this paper further elaborates the consequences of corruption specifically in the context of
development.
What is corruption?
Corruption is often defined as the misuse of authority and public power to benefit one’s
private interest. While corruption is often associated with the public sector, the private sector is also
often involved in the corruption, engaging in dubious transactions with the government (Co, 2005).
UNDP (undated) classifies corruption into two types: spontaneous and institutionalized. Cases of
spontaneous corruption are usually found in societies observing relatively strong ethics and morals in
public service. Institutionalized corruption, on the other hand, is found in societies where corrupt
practices are both prevalent and pervasive, embedded in societies as a culture and viewpoint toward
public office (Balboa and Medalla, 2006).
UNDP also identified three broad layers of corruption in the government. First, there is
corruption within the broader political system, which includes the demands of electoral politics, the
extensive use of patronage in political appointments, and the use of “pork barrel” funds. Second is
corruption within the public sector, as a consequence of weak mechanisms for monitoring and
sanctioning corrupt behavior, particularly in employment and compensation and government
procurement. Lastly, there could also be corrupt acts within specific agencies, classified as either grand
or petty corruption. Grand corruption involves large paybacks to speed up transactions or gain undue
profit or advantage. In extreme cases, the corrupt interests of private individuals or groups control
and manipulate government machinery (termed as state capture). Petty corruption, on the other
hand, refers to small facilitating acts of corruption to facilitate transactions with the government
(UNDP as cited by Balboa and Medalla, 2006).
Corruption and development
Why is there a need to evaluate, prevent or mitigate the problem? According to UNDP
(undated), corruption is linked with underdevelopment, each being a symptom or cause of the other.
Table 5 summarizes the junctures where corruption impacts development.
Studies show that a corrupt country is likely to attain aggregate investment levels of less than
five percent than a relatively non-corrupt country. In addition, corrupt states are likely to lose about
0.5 percent of GDP per year. Investing in a relatively corrupt country, as compared with a non-corrupt
one, is estimated to cost an equivalent of 20-percent private tax on investment. In addition,
corruption disrupts resource allocation and slows down government performance. It has a pervasive
and troubling impact on the poor, since it distorts public choices in favor of the wealthy and powerful,
and reduces the state’s capacity to provide social safety nets (UNDP, 2000 as cited by Balboa and
Medalla, 2006).
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Table 5. Summary of relationship between corruption and development.

Area of Development Corruption Impact
Economic growth Discouraging investment and aid
Adding unpredictability in business environment
Distorting economic policies
Poverty/inequality Undermining efforts to achieve MDGs
Increasing the cost of public services and lowering their quality
Worsening income and other inequalities
Governance Distorting rule of law and weakening moral values
Undermining government legitimacy by reducing public trust in
government
Weakening institutional foundation by worsening the ATI dimension of
corruption formula
Human rights Perpetuating discrimination
Denying rights to social services
Gender Increasing sexual extortions
Affecting women disproportionately in terms of access to essential public
services
Environment Worsening environmental governance and reducing the stringency of

environmental regulations
Conflict Fueling war, when, in the absence of a legitimate political regime, certain
social groups are favored in the allocation of resources, thus fuelling
grievances among marginalized groups.
Source: UNDP Basic Course on Anti-corruption (online).
Corruption also worsens poverty, particularly in developing and transitional economies.

According to Balboa and Medalla (2006), corruption is a prelude to:
1. Lower level of social services
2. Infrastructure projects biased against the poor, since public officials will design public
projects that will maximize bribery receipts and minimize the chance of detection
3. Higher tax burdens and fewer services
4. Lower opportunities for farmers to sell their produce and for SMEs to flourish, as their
ability to escape poverty using their livelihood will be severely restricted by corruption
of the state regulatory apparatus.
To sum it up, Co (2005) wrote that active citizenship despises corruption because it diverts
resources from the popular needs for services, facilities, and the promotion of society’s welfare. For
instance, the alleged misuse of Malampaya Fund, which not only involved DAR and Napoles’ alleged
dubious NGOs (as explained in Box 2) but also other institutions, may hinder the economic and energy
benefits expected to be delivered to citizens in Luzon.
In general, corruption hinders most of the people from reaching out to the bureaucracy and
availing of its services in a just manner. Certainly, corruption is a pressing development problem and
should be dealt with severely by the government and other institutions.
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How corruption takes place
How corruption takes place in government and other societal institutions is important in
assessing and addressing corrupt practices as well as evaluating anti-corruption initiatives. However,
the following discussion highlights corruption basically as a complex problem, and will thus be difficult
to address using only simplistic, rational approaches typical in present-day bureaucracies.
Blind (2011) premised that corruption is a consequence of deficiencies in transparency,

accountability and integrity in government processes and mechanisms. Based on this assumption, he
proposed the Path-driven Taxonomy of Corruption Indicators, which can be used to evaluate the
propensity for corruption along three broad temporal stages and four substantive categories, which
are neither mutually exclusive nor exhaustive as a whole.
The following are three temporal stages in evaluating corruption propensity:
(i) Prevention Stage where risk factors to corruption are identified and evaluated. The first pre-
corruption stage focuses on the general actual or perceived conditions that make corruption more
or less likely: it includes corruption indicators and metrics that can be likened to process variables
with focus on activities and input.
(ii) Detection Stage where the actual occurrences of corruption are examined. It focuses on
whether corruption is happening or is perceived to be happening: variables with focus on outputs
and outcomes are thus examined.
(iii) Elimination Stage where anti-corruption activities are probed. This stage concentrates on the
actual or perceived actions to prosecute and control corruption once it occurs: related variables
include enforcement of anti-corruption and monitoring of corruption.
Meanwhile, the substantive corruption indicators identified by Blind (2011) indicate where
corruption is likely to occur, takes place or is controlled:
(i) Political, Economic, Social Dimensions (PES). The PES category of corruption indicators focuses
on the general assessments of corruption within the frameworks of state, markets and the media.
(ii) Public Administration (PA) which assesses corruption in the public sector in terms of (a) laws,
rules and regulations (legal-institutional PA), (b) administrative and organizational mechanisms
including in the more specific areas of taxes, budget, procurement and customs (administrative-
organizational PA, including RM—Resource Management), and (c) the linkages with the private
sector (business- related PA).
(iii) Citizen Engagement Dimension (CE). This involves the participation of citizens in corruption-
or anti-corruption-related activities and processes.
(iv) Cultural Dimension (CU). This gauges the culture-based corollaries of corruption.
Meanwhile, Robert Klitgaard (1998, as cited by Co, 2005) adds the perspective of power to
Blind’s (2011) assumptions about corruption. He explains in a formula how corruption happens in
high offices where prevalence and exercise of power is the locus of and the plausible explanation to
corruption. According to Klitgaard, monopoly of power, when combined with discretion and absence
of accountability, will result to corruption. Thus, the formula: C=M+D-A, where C is corruption, M is
monopoly, D is discretion and A is accountability.
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UNDP modified Klitgaard’s formula by adding other dimension: integrity and transparency.
This creates the formula C=(M+D)-(A+I+T), where C is corruption, M is monopoly, D is discretion, A is
accountability, I is integrity and T is transparency. This suggests that the absence of AIT (primarily as a
consequence of weak governance) in addition to the prevalence of monopoly and discretion, results
in corruption. This formula asserts that corruption is primarily a failure in governance.
Another school of thought explains that corruption is the end result of the politics of privilege,
rent seeking and clientelism (Hutchcroft,1997). Corruption is said to be nurtured by politicians who
coddle supporters and followers, who in turn pressure them to engage in corruption to spread the
benefits of a corrupt regime. Corruption creates a cycle that would make sure that benefits are
concentrated on the privileged few.
The propensity of corruption can also be explained by the principal-agent theory of Jensen
and Meckling (1976). The agents (in this case, the politicians and bureaucrats) abuse the advantages
offered by such discretionary power especially given the diverse interests of the principal (in this case,
the electorate or the public at large). In the Philippines, this incoherence is partly the result of social
divisions (e.g. ethnolinguistic dimensions, religion and urban-rural distinctions), and economic
divisions (the huge gap between the rich and the poor).
While corruption measurements and indicators seem to cover the tempus and locus of
corruption and anti-corruption, they altogether pose a number of constraints, particularly on validity
and operability of the terms. First, the concept of corruption is ambiguous, complex and ever-
changing, as with public administration, ethics and accountability (discussed earlier in this paper).
What complicates it further is the secrecy involved in the act of corruption (“under the table”) which
makes it difficult to even detect. Because of cultural differences—and this goes from one region to
another in the Philippines—on perceptions on corruption, to operationalize a set of anti-corruption
standards universally across or even within societies is a daunting task (Co, 2005).
Co (2005) also mentioned that because the forms of corruption are greatly diverse, it is often
difficult to distinguish whether an act is corrupt or not. She mentioned that there is a broad definition
of corruption which includes influencing; but the boundary between acceptable and unacceptable
forms of influence is hard to define. Political lobbying is a form of influencing and is legitimate, but
secretive contacts or suspicion of favoritism or influence that are suspected to be disproportionate to
public interest may be considered as corrupt acts and behavior. Moratalla (undated) agreed to this
statement; in particular, he viewed corruption as a cultural and psychological phenomenon in a
country marked by incompatible legal and cultural norms, as earlier discussed in the section on
administrative ethics. The former emphasizes “rationality and universal principles of action” as against
and in conflict with “reliance and obligation toward kinship, friendship and primary groups” (Bautista,
1982 as cited by Moratalla, undated). Again, we trace this back to Cariño’s (1979) argument on the
clash between bureaucratic-legal and cultural norms.
While the proposed indicators by Blind (2011) cover cultural and citizen engagement
dimensions, specific indicators under each dimension are relatively few and multi-faceted in nature,
making corruption measurements prone to reliability issues and selection bias. Can we measure and
re-measure corruption given changes in its nature and scope over time? Can corruption
measurements be applicable to an entire locale, region or country given the variety and extent of
interest groups involved?
Demystifying corruption: issues and challenges
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Despite the urgency to mitigate corruption as bottlenecks to development, the topic remains
a sensitive subject. As explained in previous reports on transparency and accountability in the public
sector, weak enforcement of anti-corruption practices and initiatives is inextricably linked with the
lack of an enabling environment for freedom of expression and assembly, right to information,
protection of witnesses and whistleblowers, among others (UNDP, undated).
How can corruption be further articulated? We have a number of laws against corruption and
are one of the countries that have ratified the United Nations Convention Against Corruption (UNCAC),
further solidifying the Philippine government’s obligation to fight corruption and ensure good
governance. Recognizing alleged corrupt practices under the former President Arroyo, Benigno
Aquino III’s leadership tried to herald a stronger fight against corruption, through the Tuwid Na Daan
battlecry and Social Contract with the Filipino People. The Aquino administration, through the Good
Governance and Anti-Corruption Action Plan (GGACAP) 2012-2016, also pushed for “cashless and
checkless” transactions and open government data portals that aimed to prevent misallocation of
government funds and “open the halls of power to the people” (Cabinet Cluster on Good Governance
and Anti-Corruption, 2012).
Despite current initiatives against graft and corruption, implementation of policies and
strategies remains weak. The Global Integrity 2010 report rated the Philippine anti-corruption
mechanisms as very weak, usually because of political hindrances to independent investigations.
Meanwhile, reforms installed by the Aquino administration were complicated in nature and poorly
mainstreamed or coordinated among different government agencies (GAN Integrity Solutions
[online]). As Balboa and Medalla (2006) noted, too many policies and strategies against corruption
does not necessarily mean a strong framework against corruption, but rather causes overlapping and
weak coordination of functions among anti-corruption agencies.
Quah (2010) also attributed the inefficiencies of anti-corruption initiatives to the lack of
political and citizen support. He quoted former chairman of the now-defunct Presidential Commission
Against Graft and Corruption (PCAGC) Eufemio Domingo as saying:
“The problem is that these laws, rules and regulations are not being faithfully
implemented… I am afraid that many people are accepting [corruption] as another part of our
way of life. Big-time grafters are lionized in society. They are invited to all sorts of social
events, elected and re-elected to government offices. It is considered an honor—in fact a
social distinction—to have them as guests in family and community affairs.” (Quoted in Quah,
2010:20)
Co (2005) aptly described the kind of environment that further nurtures corrupt practices in
the government. She noted that decision-makers in anti-corruption agencies and programs are either
informally appointed or are politically influenced by higher authorities. Thus, it is difficult to pinpoint
accountability relations. She also pointed out the prevalence of spoils system and political patronage
at the national government, particularly because of the wide discretion given to the Office of the
President. Where limits and accountability relationships are poorly defined, the rule of law is not
effectively exercised. Add this to the cultural tendencies and norms that exist in the Filipino society,
and we have the systemic problem of corruption that thrives on ambiguous rules, weak accountability,
abuse of authority, and rent-seeking behavior.
Multi-sectoral approach: Who should be at the helm of anti-corruption strategies?
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The proliferation of non-government institutions and their apparent dominance in

development and governance field may seem to paint a picture of the government as inefficient, and
that extra-governmental institutions must take the reins. But should the private and non-profit sector
really take the lead?
Civil society groups and international organizations, among other groups outside the
government, are potential channels for gaining citizen support and involvement in the government’s
anti-corruption programs. The programs and projects undertaken by groups such as the Volunteers
against Crime and Corruption (VACC), the Philippine Center for Investigative Journalism (PCIJ) and the
Center for Media Freedom and Responsibility (CMFR), among other organizations, have given the
citizens a voice in the fight against corruption. Alongside the civil society groups are international
organization such as the World Bank, Asian Development Bank, UN Development Programme and
other institutions that have helped develop long-standing anti-corruption strategies (Balboa and
Medalla, 2006).
Some of the initiatives of the government are expected to be driven by the private sector and
NGOs. However, Co (2005) emphasized that while participation of non-government entities is
essential, their projects and programs are project-based and therefore unsustainable. Moreover, the
goals and aims of these alternative channels may focus more on the organization’s motives and
resources rather than that of the government. This means that NGOs and the private sector alone
may not be the best way to address the problem of systemic corruption in the country. The
government should remain at the heart of anti-corruption strategies. In this aspect, as Quah (2010)
also suggested, Co explained that leaders taking the seat at the government should have the credibility
and political commitment to minimize and prevent corruption. Then again, choosing able and
exemplary leaders continues to be a challenge to the electorate. Only by pushing for an anti-
corruption campaign that would change mindsets and values, particularly towards respect for the
laws, will citizens be able to choose capable leaders against corruption.
Conclusion
The approaches used to maintain institutional integrity and guard against graft and corruption
could never be the same over time. Ethical perspectives in public administration have continued to
clash against one another, and accountability relationships that prevent corruption are not anymore
just a linear, cause-effect relationship between individuals and institutions. Corruption tactics have
also evolved over time, from being petty to institutional or societal in nature. In itself, corruption is
multi-faceted, assuming political, public administration, economic and cultural perspectives. First
thought to be rooted solely on monopoly and wide discretion, corruption has grown to be a symptom
of weak governance founded on weak mechanisms for integrity, transparency and accountability.
As such, it is inadequate for societal institutions to adopt a single set of standards for ethics
and accountability; to adopt a single anti-corruption strategy; or to assume that strengthening one of
the many forms of accountability could strengthen overall accountability in the public sector. There
is a need to constantly review the norms of administrative ethics and to adopt a complementary
perspective for legal norms to reinforce, rather than prevail over, citizens’ perspectives on negative
bureaucratic behavior.
Consequently, democratic processes should ensure that citizens are involved in the crafting
of ethical standards and accountability mechanisms to guide the behavior and practices of public
officials and employees. As Schedler and Felix (2000) asserted, commitment is built on trust,
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partnership and the overall well-being of citizens. In turn, strong political leadership needed to
enhance transparency and accountability in government may arise from this kind of commitment.
The Philippine Government, through the Cabinet Cluster on Good Governance and Anti-
corruption has laid out an Action Plan for ensuring good governance and anti-corruption from 2011-
2016. The plan presents innovative and participatory strategies to improve transparency and
accountability as well as strengthen anti-corruption efforts. How the government institutionalizes,
synergizes or embeds these approaches into the system, remains yet to be seen.
References
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Alfiler, M.C.P. (2003). The Political-Administrative Accountability Continuum in Philippine Public

Service. In Bautista, V.A. et al. (eds). Introduction to Philippine Public Administration: A
Reader (2nd ed). Quezon City: National College of Public Administration and Governance,
University of the Philippines.
Balboa, J. and Medalla, E.M. (2006). Anti-Corruption and Governance: The Philippine Experience.
Paper submitted to the APEC Study Center Consortium Conference, Ho Chi Minh City, Viet
Nam, 23-24 May.
Bueno, C.F. (2014). Social Anatomy of Graft and Corruption in the Philippines. International Journal on
Graft and Corruption Research, Vol. 1 (January).
Cabinet Cluster on Good Governance and Anti-Corruption. Action Plan 2012-2016 [online]. Available
from http://www.gov.ph/governance/wp-content/uploads/2013/05/good-governance-
cluster-plan-2012-2016.pdf [Accessed 26 April 2015].
Cariño, L.V. (1979). “The Definition of Graft and Corruption and the Conflict of Ethics and Law,”
Philippine Journal of Public Administration (July), p. 221-240.
Cariño, L.V. (1983). Administrative Accountability: A Review of the Evolution, Meaning and
Operationalization of a Key Concept in Public Administration, Philippine Journal of Public
Administration, 27(2) (April): 118-148.
Cendon, A. B. (2000). Accountability and public administration: Concepts, dimensions,
developments. Openness and Transparency in Governance: Challenges and Opportunities,
22-61.
Co, EEA (2005). Challenges to Philippine Culture of Corruption: Causes, Consequences and Change.
Paper presented at the conference on “Redesigning the State? Political Corruption in
Development Policy and Practice,” University of Manchester, UK, 25 November.
Commission on Audit (COA) (2007). Revised guidelines in the granting, utilization, accounting and
auditing of the funds released to Non-Governmental Organizations/People’s Organizations
(NGOs/POs), Circular No. 2007-001, 25 October 2007.
Commission on Audit (COA) (2013). Malampaya Funds: Department of Agrarian Reform CY 2009.
Report No. 2013-01 Sectoral Performance Audit. Quezon City, Philippines: COA Special Audits
Office.
Cooper, T.L. (2004). “Big Questions in Administrative Ethics: A Need for Focused, Collaborative Effort,”
Public Administration Review (July), pp. 395-407.
Department of Budget and Management. Department of Energy. Department of Finance (2008).
“Implementing Guidelines for the Release of Funds for the Implementation of Development
Projects Chargeable Against the Gas-Malampaya Collection per SC 38 Pursuant to Executive
Order No. 683.” Joint Circular No. 3, 30 January 2008. Manila, Philippines: Department of
Budget and Management.
Ebrahim, A. (2003). Making sense of accountability: Conceptual perspectives for northern and
southern nonprofits. Nonprofit Management and Leadership, 14: 191–212. doi:
10.1002/nml.29
Endriga, J.N. (1979). Historical Notes on Graft and Corruption in the Philippines. Philippine Journal of
Public Administration, 23(3-4): 241-254, July-October.
Endriga, Jose N. (2003). “Stability and Change: The Philippine Civil Service” in Bautista, V., et al. (eds),
Introduction to Public Administration: A Reader. Quezon City: UP-NCPAG.
Government Procurement Reform Act. R.A. No. 9184, 12th Congress (2003).
Haque, S.M. (1999). “Ethical Tension in Public Governance: Critical Impacts on Theory-Building,”
Administrative Theory &Praxis (December), pp. 468-473.
Lindberg, S. I. (2013). Mapping accountability: core concept and subtypes. International review of
administrative sciences, 79(2), 202-226.
Moratalla, N.N. (undated). Graft and Corruption: The Philippine Experience. 113th International
Training Course.
http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN019122.pdf
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“Philippine Public Anti-Corruption Initiatives.” Business Anti-Corruption Portal, GAN Integrity

Solutions [online]. Available from http://www.business-anti-corruption.com/country-
profiles/east-asia-the-pacific/philippines/initiatives/public-anti-corruption-initiatives.aspx
[Accessed 26 April 2015].
Press Brief: Malampaya, 23 October 2012. InterAksyon.com [online]. Available from
http://www.interaksyon.com/assets/documents/file102412/Background%20Notes%20on%2
0Malampaya.pdf [Accessed 13 May 2015].
Quah, J.S.T. (2010). Curbing Corruption in the Philippines: Is this an Impossible Dream? Philippine
Journal of Public Administration, 54(1-2), January-December.
Reyes, Danilo R. (2003). “Public Administration in the Philippines: History, Heritage and Hubris” in
Introduction to Public Administration: A Reader. Quezon City: UP-NCPAG.
Romzek, B.S. and Dubnick, M.J. Accountability in the Public Sector: Lessons from the Challenger
Tragedy. Public Administration Review, 47(3): 227-238, May-June 1987.
Schedler, K. and Felix, J. “Quality in Public Management: The Customer Perspective.” International
Public Management Journal, 3 (2000): 125-143.
Serra, D. (2012). Combining top-down and bottom-up accountability: evidence from a bribery
experiment. Journal of Law, Economics, and Organization, 28(3), 569-587.
Shell Philippines Exploration (SPEX) (2009). “Overview of Malampaya.” Malampaya: Power from the
Deep [online]. Available from http://malampaya.com/about/ [Accessed 13 May 2015].
UNDP (undated). Online course basics on anti-corruption. Anti-Corruption for Development [online].
Available from http://www.anti-corruption.org/index.php/en/online-course [Accessed 19
May 2015].
Wang, X.H. (2001). Assessing Administrative Accountability: Results from a National Survey.
American Review of Public Administration, 32(3): 350-370, September 2002.
World Bank (n.d.) Accountability in Governance [online], available from
http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Resources/Accountab
ilityGovernance.pdf [Accessed 6 March 2015].
BOX 1
ANTI-CORRUPTION LAWS, POLICIES AND BODIES
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The following list entails the existing anti-corruption laws, policies and institutions. The list is
taken from Co (2005) and the Business Anti-Corruption Portal of GAN Integrity Solutions, which can
be accessed in the following link: http://www.business-anti-corruption.com/country-profiles/east-
asia-the-pacific/philippines/initiatives/public-anti-corruption-initiatives.aspx. Some of the policies
and institutions are dealing with various issues, ranging from inoperability, redundancy, weak
implementation, lack of coordination, among others.
Anti-Corruption Laws and Policies in the Philippines.

Law Year Passed Aims Issues
Republic (RA) 1379 1959 Forfeiture of property
unlawfully acquired by any
public employee in favor of the
state; covers property
unlawfully acquired during
incumbency & out of
proportion to lawful income
RA 3019 1960 Enumerates what may be
considered as corrupt acts;
An Act Declaring requires the submission of
Forfeiture in favor of public employees’ assets &
the State any liabilities every 2 years
property found to
have been unlawfully
acquired by any
public officer or
employee and
providing for the
procedure therefor
RA 6028 1969 Provided for the creation of an Agency never created
independent agency to attend
to complaints when citizens
are prejudiced by
decisions/actions of public
officials
Presidential Decree 1972 Makes gift giving unlawful for Corrupt acts
(PD) 46 govt. personnel, including ambiguously defined;
Christmas (whether for past or least understood by
future favors); prohibits many people; cultural
entertaining public officials practices considered
and relatives illegal in the law are
difficult to do away
with; overlaps with
RA 3019
PD 677 1975 Requires submission of assets Overlaps with RA
and liabilities every year 3019
PD 749 1975 Grants immunity from Reduces risk,
prosecution to gift and bribe heightens rewards for
givers when they agree to bribe-givers
testify in bribery charges
against public officials guilty of
offense
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RA 6713 1989 (also Promotes high standards of
Code of Conduct and provided in ethics among public
Ethical Standards for the 1987 employees; emulates public
Public officials and Administrative office to highest esteem
employees Code
RA 6770 1989 Recreated Office of the
Ombudsman (which was
created during Marcos
administration)
RA 7055 1991 Separate courts for trying President has full
Strengthening errant military personnel and discretion on where
Civilian civilians to try the case
Supremacy over the
Military
RA 7080 1991 Defines plunder and its
Act Defining and corresponding penalties
Penalizing the Crime
of Plunder
RA 8249 1997 Places Sandiganbayan as a
Act Defining of special court at par with court
Jurisdiction of of appeals
Sandiganbayan
Executive Order No. 2004 Recreates the Presidential Mandates, principles
12 Anti-Graft Commission, which of PAGC overlap with
helps the President uphold that of the Office of
anti-corruption principles and the Ombudsman
strategies and investigates,
hears complaints against
presidential appointees and/or
public officials also involved
with presidential appointees in
acts of graft and corruption
Omnibus Election 1985 Defines election rules and Accountability is
Code limits to campaign expenses weak, poorly
implemented;
detrimental to party
discipline and
facilitates “political
party switching”
RA 9184 2003 Standardizes government
Government procurement undertakings
Procurement Reform from purchase of goods and
Act supplies to civil works
RA 8792 2000 Mandates government
E-Commerce Act agencies including government
corporations to use electronic
data and documents in
transaction
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RA 8799 2000 Improves transparency in
Securities Regulation capital market
Code
RA 9160 as amended 2001 Defines, penalizes money
by RA 9194, RA laundering, other activities
10365 that legitimize illegally-
Anti-Money obtained funds
Laundering Act
RA 8791 2000 Regulatory measures by
General Banking Law Bangko Sentral ng Pilipinas
(BSP)
Source: Co (2005).
Main Anti-Corruption Agencies in the Philippines.

Agency Function/Role Issues/Problems
Tanodbayan (Office of the Main anti-corruption agencies Due to “quota system”
Ombudsman) of the government; evaluates introduced during Cory
Sandiganbayan (Special Anti- and reforms administrative Aquino’s administration,
Corruption Court) procedures in offices and office focused on petty acts of
sanctions public servants corruption than grand
found to violate administrative corruption cases
standards
Investigations are politically
influenced
Publication of reports and

investigations seldom made
public
Anti-Money Laundering Investigates and files money Investigations are politically
Council laundering cases to the influenced
Ombudsman, Sandiganbayan
and the Supreme Court
Commission on Audit Looks thoroughly into the fiscal COA lacks authority to
soundness of government prosecute and impose reform
projects, programs and measures for erring officials
activities and agencies
Consequently, the
government does not always
comply with COA
recommendations
Civil Service Commission Main agency for promoting Political influence, spoils
public service ethics, merit- system continue to persist,
based civil service and public particularly in senior career
accountability positions
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Agency Function/Role Issues/Problems

Value dimensions yet to be
integrated into appointment
and performance standards
Commission on Elections Ensures clean elections, free COMELEC’s integrity put to
from illegal activities such as test in several scandals
vote-buying, election-rigging, Some cases of electoral fraud,
etc. overspending, exist, although
uncommon compared with
those in previous elections
Presidential Commission on Works as the “People’s Redundant functions with
Good Governance Commission,” directly constitutional bodies such as
receiving and investigating COA and the Ombudsman
complaints of corruption, on
one hand, and looking into
tools and approaches that
promote good governance, on
the other.
E-Governance initiatives: Improve transparency, Despite the high commitment

efficiency of government to improve e-governance
BIR One-Stop Shop Inter- transactions, making them less systems, actual development
agency Tax Credit and Duty prone to graft and corruption of these systems are rated low
Drawback Center (UN E-Government Survey
2012).
Bureau of Customs – online
clearance and payment
system
DBM - Philippine Government

Electronic Procurement
System (PhilGEPS)
Construction Sector Multi-stakeholder initiative
Transparency Initiative (CoST) that facilitates public
disclosure of information,
leading to increased
transparency and
accountability in construction
projects
Disclosure mechanisms and

assurances integrated into
PhilGEPS and COA
Source: Co (2005) and GAN Integrity Solutions (undated).
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BOX 2
MALAMPAYA DEEP WATER GAS-TO-POWER PROJECT
Rationale
Article XII, Section 2 of the Philippine Constitution declares that all minerals, petroleum and
other mineral oils, and other natural resources are owned by the State, and that the exploration,
development, and utilization of these resources shall be under the full control and supervision of the
State. In 1990, the Republic of the Philippines, represented by the Department of Energy, entered into
Service Contract No. 38 (“SC 38″) and engaged the services of a consortium for the exploration,
development and production of petroleum resources in an identified area offshore northwest of the
province of Palawan. In 1998, the DOE and the SC 38 Contractor jointly declared that the petroleum
found in the areas designated as the Camago-Malampaya and San Martin reservoirs are in commercial
quantity. The increasing prices of oil and petroleum products in the world market has made it urgent
and imperative for the Philippine Government to aggressively pursue its energy independence agenda,
including the development and production of domestic oil reserves.4
Project Description
The Malampaya Deepwater Gas-to-Power project employs state-of-the-art deepwater

technology to draw natural gas from deep beneath Philippine waters. The indigenous gas fuels three
natural gas-fired power stations with a total generating capacity of 2,700 megawatts to provide 40-
45% of Luzon's power generation requirements.5
The Project forms two components: the Malampaya Upstream Gas Project (US$2.0 Billion),
and the Malampaya Downstream Gas project (US$ 2.5 Billion). The upstream side of the project was
developed and currently operated by Shell Philippines Exploration B.V. (SPEX) together with joint
venture partners: Chevron Texaco Malampaya LLC and Philippine National Oil Company – Exploration
Corporation (PNOC- EC).6 PNOC EC owns 10% stake in the upstream component of the Malampaya
Deepwater Gas-to-Power Project, together with Shell Philippines Exploration B.V., the Operator, (45%)
and Chevron Malampaya LLC (45%).7 Currently, the Service Contract (SC) 38 Consortium supplies gas
to Santa Rita (1,000 MW), San Lorenzo (500 MW) and Ilijan (1,200 MW) and to Pilipinas Shell
Petroleum Corporation (PSPC) for the refinery and CNG refilling station with individual gas sales and
4ExecutiveOrder No. 473, Tasking the Department of Energy (DOE) to Pursue the Immediate Exploration, Development and
Production of Crude Oil from the CAMAGO-MALAMPAYA RESERVOIR, November 29, 2005.
5http://www.malampaya.com [Accessed 26 April 2015].
6http://www.doe.gov.ph [Accessed 2 May 2015].
7http://www.pnoc-ec.com.ph/ [Accessed 26 April 2015].
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purchase agreement and power purchase agreement for the three power plants. The three power
plants are all located in Batangas.8
The Malampaya gas field has proven reserves of about 2.5-3.5 trillion cubic feet of gas (TCF)
of gas, 85 million barrels of condensate and at least 20 to 40 million barrels of oil. The gas field is
located 850 meters deep offshore northwest Palawan, an island situated in the South Sea within the
southwestern side of the Philippines. The Malampaya gas field is scheduled to produce 146 billion
cubic feet (BCF) of gas per year.9
What went right?
The Malampaya Natural Gas Project is one of the most significant industrial endeavors in
Philippine history, signaling the birth of the natural gas industry in the country. Malampaya has been
benefiting the country by reducing oil imports, assuring a more stable supply of energy, a cleaner
source of power and meeting up to 40% of Luzon’s energy requirements.10 The Malampaya project
has also generated 2,000 jobs.11
The gas project was developed in ways that are environmentally, socially and economically
responsible. It was the first project in the Philippines to actively undertake a community consent
process as part of its Environmental Impact Study (EIS). It was one of the ten recipients of the World
Business Summit Award for Sustainable Development Partnerships sponsored by the United Nations
Environment Program and the International Chamber of Commerce in Johannesburg, South Africa. 12
During the Natural Gas Summit 2014, the Malampaya Deep Water Gas-to-Power Project was cited as
a model for shaping the future share of natural gas into the country’s energy mix. 13
More than energy, Malampaya brings sustainable development in communities where it

operates through its various social investment programs implemented by Malampaya Foundation, Inc
(MFI) formed in 2005 (MFI) to reinforce the Malampaya Partners’ commitment to sustainable social
and environmental development. The Malampaya Joint Venture partners formed the MFI to empower
people through capacity building and provision of tools to enable productivity, social and economic
development and conservation of the environment.14
Alleged plunder of Malampaya: case of the Department of Agrarian Reform (DAR)
The government maintains a share of around 60 percent of the funds earned from the said
project since operations began in 2002. In July 2007, the Department of Finance (DOF), Department
of Budget and Management (DBM) and the said provincial government signed a Provisional
Implementation Agreement (PIA), defining the share of the Malampaya funds between national
government agencies and the provincial government of Palawan (as “financial assistance”).15 Series of
mandates issued by then President Gloria Arroyo—Executive Orders 683 and 848—later authorized
8http://www.pnoc-ec.com.ph/ [Accessed 26 April 2015].

9 http://www.doe.gov.ph [Accessed 2 May 2015].
10 http://www.philstar.com/opinion/2013/10/28/1250232/malampaya-story#ixzz3Utn0x6dQ [Accessed 2 May 2015].
11 http://business.inquirer.net/164535/756m-malampaya-rig-going-up-in-subic#ixzz3UtvUFiB4
12 http:// www.unep.org/cpi/briefs/Brief14Oct.doc [Accessed on 22 May 2015]
13 http:// http://www.mb.com.ph/natural-gas-summit-set-march-12-13-in-makati/ [Accessed on 22 May 2015]
14 http:// http:// http://malampaya.com/ [Accessed on 22 May 2015]
15 This followed an ongoing dispute between the main parties to the Malampaya project and the provincial government of
Palawan over revenue sharing of Malampaya proceeds and territorial jurisdiction over areas covered by the SC 38. The PIA
was basically a compromise agreement while the case is pending, giving the LGU only half of what should be 40-percent
share for LGUs (as indicated in the Local Government Code of 1991).
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PA 208 GROUP REPORT
the disbursement of Malampaya funds to national and local government agencies as well as GOCCs
for implementation of various infrastructure and development projects, “subject to applicable laws
and existing budgeting, accounting and auditing rules and regulations” (DBM, 2008:2).
The funds are stored in a government-managed fund account, known as the Malampaya
Fund.16 Based on DOE records as cited by the Commission of Audit (COA, 2013), SPEX remitted
PhP173.280 billion to the government as share of the Malampaya Funds from 2002 to 2013. Of this
amount, PhP38.830 billion was released to fund programs and projects of government agencies,
GOCCs and the province of Palawan. By nature, the Malampaya Fund was initially discretionary, as
provided for by Presidential Decree (PD) No. 910, which governs the use of proceeds from gas and oil
field operations. That these funds are discretionary made the use of Malampaya Funds, along with the
Priority Development Assistance Fund (PDAF), highly controversial. 17 In fact, it alleged cases of grand
corruption in the country revolved around the use of these funds.
The alleged misuse of Malampaya funds was aptly highlighted in a Special Audit Report by
COA in 2013. The report mainly tackled the appropriateness of the disbursement and use of
Malampaya funds, amounting to PhP900 million, requested by the Department of Agrarian Reform in
2009.18 This dubious transaction was linked to the fake NGOs allegedly orchestrated by Janet Napoles,
and this was also said to be the largest single transaction made by Napoles through the said NGOs.19
COA found that the DAR transaction committed a number of violations of budgeting, auditing
and accounting rules and procedures, as follows (COA, 2013):
1. DAR’s request from DBM was based solely on requests submitted by 12 NGOs and endorsed by 97 LGUs
that purportedly requested financial support from DAR;
2. DAR was not able to validate such requests and yet DBM was able to release the funds to the said agency;
3. DAR had already entered into contracts with the NGOs worth PhP900 million in total, even when the
request for funds was pending in DBM;20
4. The contracts between DAR and the said NGOs were outright illegal, as there were no funds appropriated
by law to the said NGOs;21
5. The NGOs to which the funds were to be disbursed were merely “endorsed” by the LGUs and not selected
through public bidding or procurement;22
6. The contracts did not provide for appropriate monitoring and evaluation as well as equity requirements
as mandated by COA for requesting government funds;23
7. Contracts with the 12 NGOs were split into MOAs amounting PhP10 million and below for no reason at
all, even if the projects to be implemented in each of the 97 LGUs were the same;24
16 The Malampaya Funds from SC 38 are credited and booked in Fund Code 151, a Special Account in the General Fund
(SAGF) managed by the Bureau of Treasury.
17 On 10 September 2013, the Supreme Court issued a Temporary Restraining Order (TRO) halting the use of Malampaya
Funds under Section 8 of P.D. No. 910.

18 According to the letter sent by former DAR OIC-Secretary Narciso B. Nieto to former DBM Secretary Rolando Andaya, Jr.
dated 22 October 2009, the said release of funds to DAR was meant to finance recovery and support projects for the
agrarian reform beneficiaries (ARBs) following the typhoons Ondoy and Pepeng in 2009.
19 Rufo, A. “How the Malampaya fund was plundered.” Rappler Newsbreak [online]. Available from
http://www.rappler.com/newsbreak/39418-malampaya-fund-plundered [Accessed 13 May 2015].

20 This violates PD No. 1445 (Government Auditing Code of the Philippines), which stipulates that “no contract shall be
entered into unless funds are available for the purpose.”

21 Violation of the Government Procurement Policy Board (GPPB) Resolution No. 12-2007, which provides that “the
procuring entity may enter into MOA with an NGO when an appropriation law earmarked an amount to be specifically
contracted out to NGOs.”
22 Also a violation of GPPB Resolution No. 12-2007 and Republic Act (RA) No. 9184 (Government Procurement Reform Act).
23 See COA Circular No. 2007-001 dated 25 October 2007, Section 4.5.
24 Contract splitting is illegal as provided for by RA 9184 and COA Circular No. 76-41 (30 July 1976).
Page 35
PA 208 GROUP REPORT
8. The requested funds were released to the NGOs more than a month before the Notice of Cash Allocation
(NCA) dated 21 December 2009, and the release of funds were only recorded as liquidated in November
2010, a year after the funds were released.
COA also asserted that the 12 NGOs that requested funds on behalf of the LGUs, as well as the
project beneficiaries, were found to be non-existent or with unknown location and addresses, casting
further doubt on whether these NGOs were really authentic. Most of the Mayors of the 97 LGUs that were
to benefit from the Malampaya funds either denied having signed MOAs with the 12 NGOs or having
participated in the projects purportedly proposed by the NGOs. Ultimately, expenses for the said projects
were not documented at all. In general, these transactions by the DAR were found to be “questionable”
by the Commission (COA, 2013).
From an audit accountability perspective, indeed the dubious PhP900 million transaction made by
DAR on behalf of the 12 NGOs have violated numerous budgetary and accounting regulations. COA also
takes off from an administrative accountability perspective when it found that the said transaction
bypassed rules and procedures on cash disbursement and utilization. From these perspectives, there is an
outright violation of public service ethics.
However, even if the procedures were done right and the NGOs were authentic in nature, the
release of such funds should nonetheless take into account the impending costs and benefits, including on
one hand the capacity of the implementing agencies to properly deliver or translate funds into running
projects, and the capacity of the beneficiaries to demand accountability from or absorb the benefits from
these projects. Thus, a rigorous accountability framework from the fiscal or administrative side should be
coupled by opportunities for program and process accountability as well as democratic or societal
accountability.
A World Resources Institute report in 2007 entitled, “Development without Conflict: The Business
Case for Community Consent,” looked into the case of Malampaya project to describe or elaborate the
challenging task of obtaining community consent and participation in the said initiative, particularly on six
aspects: 1) environmental soundness; 2) ecological soundness; 3) implementation of public participation;
4) conflict resolution; 5) promotion of social and intergenerational equity; and 6) enhancement of positive
social impacts. While the study took into account the costs incurred in engaging communities (particularly
because of opposition) in the implementation of the project, financial returns far outweighed these costs.
The complete report can be viewed online at

http://pdf.wri.org/development_without_conflict_fpic.pdf.
Page 36

Case Study Reference - Ethics

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PA 208 GROUP REPORT

ETHICS, ACCOUNTABILITY AND CORRUPTION

ETHICS, ACCOUNTABILITY AND CORRUPTION

Ethics in the Public Sector

Ethics, accountability and corruption in the Philippines: a history

Historical records pointing to the existence of sultanates in the southernmost parts of

1Roa, Anna. “Regime of Marcoses, cronies, kleptocracy.” [online]. Available from

Clash of bureaucratic and cultural norms

“Directly or indirectly requesting or receiving any gift, present, share, percentage, or

“Neglecting or refusing, after due demand or request, without sufficient justification,

“Entering, on behalf of the Government, into any contract or transaction manifestly

“Knowingly approving or granting any license, permit, privilege or benefit in favor of

“Persuading, inducing or influencing another public officer to perform an act

This norm adheres to one of Weber’s principles of structural arrangements, which is

“Directly or indirectly having financial or pecuniary interest in any business, contract

“Directly or indirectly becoming interested, for personal gain, or having a material

“Divulging valuable information of a confidential character, acquired by his office or

This is where the conflict between law and culture emerges.

Table 1. Bureaucratic-legal and cultural-ethical norms by types of acceptable behavior (Carino,

Evolution of ethics in public governance

The “Reinventing Government” movement ushered in by Osborne and Gaebler has

1) The person/institution being held into account (agent);

According to Cendon (2000), administrative accountability focuses on the level of compliance

How is professional accountability addressed? Cendon (2000) refers to the concept as an

Cendon’s concept of democratic accountability is parallel to the concept of “societal

Table 2. Forms of accountability.

Types of administrative accountability

Cariño goes on to describe accountability at a higher level—managerial accountability. The

In addition to efficiency and economy, program accountability focuses on the effectiveness of

Table 3. Forms of administrative accountability.

Political-administrative accountability continuum

So far, we have characterized different types of accountability, and as we said earlier,

Figure 1. Political-Administrative Accountability Continuum

Complexity of the concept

Table 4. Types of administrative accountability dominant in each type of public administration.

Political accountability in autonomous agencies

Harmonizing forms of accountability

Accountability and responsiveness

[online]. Available from: http://newsinfo.inquirer.net/679702/ramos-aquino-violated-chain-of-command-in-mamasapano-

However, how to engage citizens in negotiations and participating in accountability processes

Corruption and development

Table 5. Summary of relationship between corruption and development.

Environment Worsening environmental governance and reducing the stringency of

Corruption also worsens poverty, particularly in developing and transitional economies.

How corruption takes place

Blind (2011) premised that corruption is a consequence of deficiencies in transparency,

The following are three temporal stages in evaluating corruption propensity:

Demystifying corruption: issues and challenges

Multi-sectoral approach: Who should be at the helm of anti-corruption strategies?

The proliferation of non-government institutions and their apparent dominance in

Alfiler, M.C.P. (2003). The Political-Administrative Accountability Continuum in Philippine Public

“Philippine Public Anti-Corruption Initiatives.” Business Anti-Corruption Portal, GAN Integrity

Anti-Corruption Laws and Policies in the Philippines.

Law Year Passed Aims Issues

Law Year Passed Aims Issues

Main Anti-Corruption Agencies in the Philippines.

Publication of reports and

Agency Function/Role Issues/Problems

E-Governance initiatives: Improve transparency, Despite the high commitment

DBM - Philippine Government

Disclosure mechanisms and

The Malampaya Deepwater Gas-to-Power project employs state-of-the-art deepwater

What went right?