Governance and Accountability
By Ramon R. del Rosario, Jr.
Chairman, Makati Business Club
FOCAP 2007 Prospects Forum, 19 January 2007

Thank you for the invitation to your Prospects Forum and in particular for this opportunity to speak on Governance and Accountability. It is indeed a privilege for me to speak on this subject before the Foreign Correspondents Association of the Philippines, an organization that, I believe, truly values the principles of good governance and proper accountability

When things seem to be looking good, such as we have now, with the economy posting sustained growth and the financial markets trading with a very bullish tone, there is a tendency for people to brush aside issues of governance and accountability for fear of unsettling the situation and derailing the economy’s and financial markets’ positive momentum. The stereotypical businessman, in particular, is viewed to be very reluctant to become proactively involved in demanding political accountability and good governance, particularly when business is doing well.

But we in the Makati Business Club have always tried to take a longer term perspective on the close interrelationship between good governance and political accountability and the sustained progress of the nation’s economy. We believe that in the long run, sustained economic development that allows us to create successful and stronger business enterprises and to liberate more Filipinos from poverty can be achieved only if we set a strong foundation of good governance that enables and supports the implementation of both enlightened policies and meaningful and effective programs and projects.

We are encouraged, therefore, that the FOCAP has chosen to devote part of this forum to the discussion of governance and accountability. We do need to devote attention to this issue because while the country is currently enjoying economic gains as a result of an upswing in the business cycle, we have experienced serious setbacks in terms of governance and accountability that threaten to undermine the credibility and effectiveness of our democratic institutions.

Consistency of Policies

Consistent rules provide predictability and stability. Recall how several Executive Orders manifested policy “flip-flops” on open skies (EOs 500 and 500A), oil exploration (EO556), microfinance (EO558), and diminished powers of PAGC (EO531A).

We are deeply bothered by the observation that the current administration seems to have become very comfortable with the idea of simply barreling through with their political initiatives and measures with very little regard to constitutional, legal, and moral constraints. If they can get away with it, they will trample on people’s rights and the prerogatives and authority of other democratic institutions in order to achieve their political ends. Only when blocked by a superior force such as the threat of widespread popular protests or adverse Supreme Court rulings do they back down.

The administration’s attempts to change the constitution illustrate how hubris and a sense of invincibility have affected how the administration conducts itself in the pursuit of its political agenda.

Our Constitution tells us how we are to govern ourselves. Since these are the most fundamental guidelines of governance, our Constitution also provides self-limiting rules on how these guidelines are to be changed. The recent attempts to revise the Constitution in a manner that blatantly violates these rules have scandalized many of us in the business sector. It was obvious from the start that the so-called people’s initiative was not a genuine popular movement, but was machinated by the executive branch of government itself. And the succeeding attempt to fast track charter change, this time by a legislative body, was even more appalling.

The business sector is not against charter change. While we may not agree among ourselves on the new form of government, there is near unanimity that the current economic provisions are too restrictive. We would like the new constitution to be silent on economic parameters and allow the legislative branch of government, whether it is a unicameral parliament or a bicameral congress, to promulgate rules on how the economy should be run. But we believe that the ideal time to change the Constitution is after the May 2007 election.

Electoral Reforms

This point brings us to reflect on the importance of clean and honest elections in ensuring accountability and good governance in a democratic society. Unfortunately, we have seen no progress whatsoever in terms of the electoral reforms and the reform of the Commission on Elections that we have been advocating vigorously since the middle of 2005.

In fact, we believe that the lack of credibility of the Comelec is a key reason why we should defer changing the Constitution. If the vote counters are not credible, this will reflect negatively on the revised basic law of the land, especially if the vote is close. Such a tainted constitution, no matter how well crafted, would reflect badly on us as a people.

As we all know, the Supreme Court declared the Mega Pacific deal null and void, rejecting the automated counting machine contract for reasons including the non-compliance by the Comelec with its own rules for bids and awards and because of a “clear violation of law and jurisprudence”. As is also well known, the contract was approved by three of the six incumbent members of Comelec, including its Chairman.

In countries where accountability is valued, those involved in the transaction that has cost the government a billion pesos and has caused further delay in the implementation of a critical law to modernize elections (RA8436 of 1997) would have resigned out of delicadeza, even if they have not been indicted. They would do so to preserve the credibility of the institution they serve. In a larger sense, the commissioners are accountable to the entire nation whose people value their right to suffrage.

Unless the three commissioners resign or are impeached by Congress, every electoral exercise is tainted by their incumbency as Comelec commissioners. The Comelec Chairman himself asserts that he would have to be impeached as he does not intend to resign. And I certainly wouldn’t hold my breath waiting for this Congress to impeach the three involved commissioners.

It is apparent to even the most pedestrian observer that a crime has been committed. Yet no one has been held accountable. The Ombudsman says she does not believe a crime has been committed and has virtually ignored the Supreme Court’s ruling. After all, she asserts that the Ombudsman is a Constitutional office that is not accountable to the Supreme Court.

The response of the Makati Business Club has been to doggedly pursue the legal avenues available notwithstanding the lack of cooperation from the bodies constitutionally mandated to prosecute. Together with the CBCP, Namfrel, BBC, CODE-NGO, TAN and other anti corruption NGOs, we have formed the Coalition Against Corruption which, among other areas of concern, has taken on the case against COMELEC as one of our key undertakings, with our steering committee member, Gus Lagman, taking the lead.

While the CAC presses for the revamp of the Comelec, we also urge the President to appoint a credible seventh member of the Comelec. We suggest that the President accept a short list of nominees to be furnished by a credible non-partisan body comprised of members of the church, civil society and business.

Competitiveness and Corruption

Allow me now to spend my last remaining minutes on competitiveness and corruption. We need to get rid of corruption to be more competitive. The Philippines ranks 71st out of 125 countries in competitiveness according to the 2006 Global Competitiveness Report by World Economic Forum (WEF). By comparison, Malaysia ranks 26th, Thailand 35th, and Indonesia 50th. We are ahead of Vietnam at 77th, Cambodia 103rd, and Timor-Leste 122nd.

Among the criteria applied in determining competitiveness are the level of corruption and effectiveness of institutions, both in the public and private sectors. On this score, the WEF ranks our country 88th among 125 countries, putting us immediately behind Trinidad and Tobago (85th), Lesotho (86th), and Romania (87th), and just ahead of Suriname (89th), and Benin (90th).

Meanwhile, the 2006 Corruption Perceptions Index of Transparency International ranks the Philippines 121st, lumped with Benin, Gambia, Guyana, Honduras, Nepal, Russia, Rwanda, and Swaziland.

Business is seriously concerned with corruption because it is morally wrong and impoverishes our people. More close to home, corruption affects our cost of doing business.

Government institutions play an important role in competitiveness and growth because they carry the burden of distributing benefits and developing policies that may affect investments. Thus, we engage in programs that prevent resource misallocation and ensure transparent management of public funds. MBC together with its partners in CAC also support projects on procurement monitoring (BBC), as well as medicine (Namfrel) and textbook delivery (G-Watch) monitoring.

In closing, while accountability has never been a strong suit for the Philippines, I believe that the past two years have been particularly frustrating and discouraging in terms of our country’s aspirations towards a regime of greater accountability and good governance. And, to my mind, the seminal event that led to this further deterioration was the Hello Garci affair. Together with the fertilizer scam, the Garci affair reminded us how a party in power can use election levers and government resources to win elections. This of course is by no means a unique strategy, as it has been employed by administrations past. The novel attainment in the Garci affair was that you can actually be caught with your hands in the cookie jar on a matter as serious as election fraud and get away with it. And even when cornered with major legitimate issues against you, a party in power can fight back with repressive means and emerge even stronger. These are very liberating and exhilarating achievements for a leader who will stop at nothing to stay in power. While this may not be a permanent situation, these developments clearly demonstrate that our nation, at this point in our history, still needs to find it in itself to develop an all-consuming passion for accountability and good governance.

As we once again enter the political season, we do so realizing that in these elections, we will probably be faced with the same issues and the same problems that limited the effectiveness of these exercises in bringing meaningful change in this country. But we remain hopeful and committed to do whatever we can to ensure that this time around this exercise will somehow bring us closer to, and not further away from, greater transparency and accountability in public service.