Correcting Corruption

For the past two weeks, this column has discussed the issue on hunger and possible solutions to this problem. Eleven entreps gave their opinions on how we can fight hunger in this country and among those who replied were: Usec. Mel Alonzo of DTI, Santi Araneta of LBC Express, Dra. Vicky Belo of the Belo Medical Group, Nonoy Colayco of Level Up!, Joey Gurango of Webworks, Dr. Rolando Hortaleza of Splash Corporation, Butch Jimenez of PLDT, Johnlu Koa of French Baker, Manny Pangilinan of PLDT, Socorro Ramos of National Bookstore and Ardy Roberto of Salt & Light Ventures.

In summary, the solution to hunger is really about creating more enterprising Pinoys and teaching them how to fish. But the process will have to be a concerted effort between the private sector and government and getting big business people to create business models for the small entreps. While some banks have started, there is a need to get more banks to lend and support MSME’s so they can start to expand their businesses. I hope to see banks lending more aggressively not only to the successful corporations but to micro, small and medium entrepreneurs and in a way support in incubating these businesses. Banks can also increase loan allocations to rural banks and MFI’s who support micro financing programs.

These topics of hunger and corruption are somehow related. We have observed that corruption in a way is correlated with low level of economic development or where hunger could also be a national issue. While poverty is cited as a probable factor, I am not to say that hunger directly leads to corruption as we know a lot of less fortunate and financially-deprived Filipinos striving to make a clean and honest living, of high moral values and adhering to a God-centered way of life.

I guess the correlation could be attributed more to weaker control structures, jurassic rules and procedures, lack of transparency and the highly regulatory regime that are oftentimes associated with developing economies. As the country develops, and probably also true the other way around, controls are in place and there is better check and balance in the way things are run. We see more transparency and consciousness towards stronger corporate governance, both in the public and private sectors. Above all, there’s greater demand for moral leadership.

There must be political will to institute reforms, less regulatory and more promotional policies with clearer set of rules that leave no room for negotiations and discretions with rule-makers and implementors.

The overall policy environment and good governance culture set in a virtuous cycle that encourages more investments, entrepreneurship and job and wealth creation. So as we take this journey towards development, we build on a better conducive climate to build entrepreneurship. We now see corporate governance and more transparency enter into the private sector. Higher standards are now being asked of public companies, and we see more private companies become public.

In the public sector, we must bank on pro-economy, developmental and honest leaders that will help bring the country forward. As we get more enterprising leaders who have a clear vision of what they want to see their town, province and city either as a lawmaker or a hands-on local government official, then we can see a more progressive climate that can diminish further the areas for corruption.

It is also important to see our leaders become more frugal on spending, as this builds confidence on the part of the taxpayers that the money given to government are spent wisely. Seeing people’s money put to good use encourages more people to pay taxes that will fund more development projects benefiting the people and the economy.

Any remaining issue on corruption in fact should not influence entrepreneurs to see if they should invest or not. By getting into business, you contribute to the nation’s economy when you pay taxes and hire people and create business opportunities for others. As we see this positive cycle, together with the moral leadership and stronger good governance practices mentioned above, we can hope for a more conducive “cleaner” business environment in the near future.

Here are contributions from other entrepreneurs on how to minimize corruption:

ROBERTO CLAUDIO
(chairman and CEO, Toby’s Group of Companies)
The government must institute transparency in the procedures of complying with its rules and regulations. They must be printed and clearly seen and understood by all applicants. These should include the process, the paper flow and the rates to be paid. This should be very visible in the place of transaction. Government offices must also provide for “fast-tracked” processing for an additional fee. These should clearly be stated and made available as part of the menu of services in government agencies such as passport renewal, driver’s license renewal, business permit application, etc. In the past, facilitations like these were done unofficially and thus were construed as corrupt practices. If we legitimize the use of “Fast-tracked” services and publish rates for such, then the perception of corruption will be reduced.

As to foreign investors, my advice to them is: Ask all the foreign companies and multinationals operating in the Philippines why they are still doing business here if corruption is an issue to them? Ask especially those who have been doing business in the Philippines for more than 10 years.

DENNIS MENDIOLA
(CEO and president, Chikka Asia)
Government should push for a campaign that talks about corruption – the common ones, the consequences, the effects on our youth, their future. They should create an incentive for watchdogs. The incentive is likely financial. Anonymity should be preserved. But a government, or third party body could be the investigators and auditors.

FRANCISCO “PACO” SANDEJAS
(founder and managing partner, Narra Venture Capital)
As entrepreneurs and investors in the field of information systems, the problems of corruption and all other inefficiencies are viewed by us in Narra Venture Capital as opportunities for new products and services. Examples are the use of internet watchdog and electronic procurement or bidding systems. Making information readily available is clearly great for transparency and accountability.

JEAN HENRI LHUILLER
(president, Cebuana Lhuiller)
Asia remains as the dynamic engine of global free trade. Though corruption plagues a number of countries like the Philippines, investments help give the needed boost to improve living conditions. Our investments create jobs, improving living conditions, thereby putting a better chance for people to do good, and eradicating corruption in the long run.

ROBERT YUPANGCO
(president, Zoobic Safari Corporation) 
“Sa Kauunlad ng Bayan… Disiplina ang kailangan”… these are beautiful thoughts of Marcos during Martial Law! Unfortunately he couldn’t sustain it! But Singapore did!! Lee Kuan Yew then added one additional component (espaused by Michael Porter…a business guru) which is productivity! That made Singapore top 10 in GDP in the world…we are not yet late… we can still transform with a good benevolent and honest hardnose leader/s. The old concept/approach is “do it, you’ll have it and you’ll be it”… since we are kinda late (last 3 min)…Lets just be it, do it and we’ll have it!!


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