Witness testimonies at the Senate revealed different design coverages and costs ranging from US$262 million to US$289 million. Mathews, J. and Wideman, B. Despite the Government Procurement Reform Act of 2003, which mandates that all government projects to undergo competitive public bidding, the apparent loophole revealed by the ZTEâNBN experience was the government-to-government agreement, which provided an exception to the general rule. Batalla, E.V.C., Romana, M.S. Corruption is a constant in the society and occurs in all civilizations; however, it has only been in the past 20 years that this phenomenon has begun being seriously explored. However, in January 1975, on the basis of an Aide Memoire from Westinghouse, Marcos ordered the NPC to leave the business of construction to Westinghouse âsince the concept is totally turnkeyâ (Republic of the Philippines vs. Herminio T. Disini et al., 2012, p. 37). One group was ZTE, backed by top government officials identified with President Gloria Macapagal-Arroyo (GMA) and her husband, First Gentleman (FG) Mike Arroyo (SBRC, 2009, p. 1). In 2009, Ombudsman Gutierrez dropped charges against GMA in connection with the NBNâZTE project because of her immunity from being sued as the president. 1, creating the Presidential Commission on Good Government (PCGG) to recover the ill-gotten wealth of the Marcos family and associates. Consequently, the accused individuals separately filed their motions for dismissal. By early 1986, the total project cost had risen to US$2.1 billion, or a billion dollars more than the original contract price in 1976. Negative public opinion to the project of an already politically beleaguered Arroyo presidency prompted an inquiry from the Senate leading to the project's cancellation. The commission, otherwise known as the Puno Commission because it was headed by then Justice Minister Ricardo Puno, submitted its report in November 1979, recommending the continuation of plant construction subject to the incorporation of additional safety features in the revised design (Republic of the Philippines, 1980, p. 1). In February 1976, close to two years after the approval of the Westinghouse proposal, the two parties formally signed the final contract. That’s two-and-a-half decades ago. 1, pp. According to former Energy Minister Geronimo Velasco, the incremental costs shouldered by the NPC following the recommendations amounted to US$844 million, which included safety upgrades (US$100 million), cost escalation (US$292 million), financing charges (US$373 million) and other contract scope changes (US$79 million). People of the Philippines vs. Gloria Macapagal-Arroyo, Jose Miguel Arroyo, Benjamin Abalos, Sr. and Leandro Mendoza (2016), âSB-11 CRM-0467â, 25 August. The FOI Bill is a good solution to fight corruption in the Philippines. Deputy Ombudsman Cyril Ramos said the Philippines ranked the 6th most corrupt among Asia Pacific countries. Then Press Secretary Francisco Tatad explained that the takeovers were done not because of any wrongdoing by Disini but because the government had large investments in the three companies (Mathews and Wideman, 1978). In December 2011, on the basis of a formal complaint by representatives of certain left-wing groups, the Ombudsman filed charges against the Arroyo spouses, Comelec Chair Abalos and former DOTC Secretary Mendoza for conspiring to commit illegal acts that culminated in the signing of the NBNâZTE contract. The two megaprojects revealed the importance of brokers and political sponsorsâpromoters in such relationships. Internationally, corruption has been found to undermine economic development: • Since corruption weakens the state’s capacity to raise revenue and perform its core functions, it increases tax evasion. The Philippines is an archipelago (group of islands) of more than 7,100 islands just north of the Equator in the Pacific Ocean. Sandiganbayan orders Marcos crony to return $50-M loot in nuclear plant deal, Reasons of state: Citicorp report ignored by Philippine government, What is grand corruption and how can we stop it, United Nations Office on Drugs and Crime (UNODC), Anti-Corruption Module 3: Corruption and Comparative Politics, United States Nuclear Regulatory Commission (USNRC), Trailblazing: The Quest for Energy Self-Reliance, Treading the straight and righteous path: curbing corruption in the Philippines, Filipinos say Marcos was given millions for '76 nuclear contract, http://creativecommons.org/licences/by/4.0/legalcode, https://news.abs-cbn.com/nation/02/15/09/after-22-years-govt-ends-presentation-case-vs-marcos-disini, https://news.abs-cbn.com/business/06/16/14/bnpp-broker-herminio-disini-passes-away, https://www.washingtonpost.com/archive/politics/1984/08/16/crony-capitalism -blamed-for-economic-crisis/d99e8760-087d-4d25-ad66-3d324150dc4d/, https://www.treasury.gov.ph/?page_id=4221, https://www.nytimes.com/1978/01/14/archives/marcos-facing-criticism-may-end-1-billion-westinghouse-contract.html, https://www.nytimes.com/1988/12/02/business/westinghouse-jersey-firm-are-sued-by-the-philippines.html, https://old.pcij.org/stories/the- grandmother-of-all-scams-3/, https://archive.fortune.com/magazines/fortune/fortune_archive/1986/09/01/67989/index. 10, 12 March, p. 47. During the early course of its investigation, the PCGG successfully convinced former Herdis executives to be whistle-blowers. The loan component ran contrary to GMA's initial preference for a BOT scheme, as expressed in NEDA's November 2006 Board meeting (SBRC, 2009, p. 22). (2020), "Grand corruption scandals in the Philippines", Public Administration and Policy: An Asia-Pacific Journal, Vol. Finally, there is the perceived failure of closure to past scandals by the justice system, as there continues to be a âlow riskâ of punishment (Quah, 2013, p. 129). The DOTC later rejected the AHI's proposal because according to Secretary Mendoza, AHI was insufficiently capitalized to undertake a massive government project (SBRC, 2009, p. 54). In the Philippines, grand corruption knows no political regime; its occurrence has been observed in both authoritarian and democratic governments. corruption Nation. Senate Blue Ribbon Committee (SBRC) (2009), âNBN-ZTE, committee report no. (2013), Curbing Corruption in Asian Countries: An Impossible Dream?, ISEAS Publishing, Singapore. The Philippines ranked the 101st "cleanest" among 176 countries and regions surveyed by Transparency International for its 2016 Corruption Perceptions Index. This research employs a historical and comparative case approach to explore patterns of grand corruption and their resolution. 90-91). Asian Wall Street Journal (1995), âWestinghouse, Philippines sign settlement on plantâ, 16 October, p. 2. Corruption in the Philippines is the norm, not the exception. Foreign media exposed the anomalous BNPP contract, which drummed up local opposition not only for the corruption but also for the nuclear plant's potential harm to public safety and the environment. Later, Joey De Venecia led in exposing anomalies in the deal. Published by Emerald Publishing Limited. Later that month, President Arroyo suspended the NBN project and then, on 2 October during her state visit to China, cancelled the ZTE contract (SBRC, 2009, p. 32). Abstract. The government's deal in 2007 with the Zhongxing Telecommunications Equipment (ZTE) Company, a Chinese state-controlled firm, is another political controversy arising from a dubious big-item procurement â the NBN project. 2-3). In September 2006, China's ExportâImport Bank indicated its intention to fund the project as a loan to the Philippines. However, important pieces of evidence were not properly handled as attested by the testimonies of PCGG personnel in Republic of the Philippines versus Disini et al. The media is literally sinking in reporting scandals to try and ensure closure Corruption in the Philippines … Velasco, G. ( 2006 ), âReasons of state: Citicorp report ignored by governmentâ... Herminio et al as the suppression of key witnesses ( e.g 1992 ), âThe under! 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