Seven Deadly Deals in the Philippines

The nine-year presidential reign of Gloria Macapagal-Arroyo is a depressing litany of major infrastructure and other projects and agencies that ran into trouble because of political interference, corruption and or bad planning, and missed opportunities to move in the right direction.

None of the scandals are new to the Philippines’ energetic press. But they are outlined in considerable detail in a new 130-page investigation called Seven Deadly Deals from Newsbreak, a Manila-based team of reporters and editors, and made public earlier this week. The eight journalists involved in the project devote a full chapter to each of the seven episodes.

The book is expected to be available in Philippine bookstores at the end of December, and through the electronic book sales portal of the Manila bookstore Fully Booked at a cost of Php300 (US$6.85). It should serve as an invaluable record for anyone interested in the Philippines, particularly because the Supreme Court, whose members were appointed by Arroyo and are considered loyal to her, last week declared unconstitutional on a 10-5 vote the Truth Commission proposed by President Benigno S. Aquino III, saying it "violates the equal protection clause of the Constitution" for focusing only on Arroyo’s administration.

The truth commission was designed to investigate allegations of corruption and cheating during Arroyo’s administration. Thus, without the commission, the Newsbreak team’s publication is a valuable record of the magnitude of some of the scandals during her time in office.

How far the Philippines has to go is recorded in the overview. The new president arrived halfway through a mass for government unity at a Manila cathedral. He had overslept because a power outage had rendered his air conditioning lifeless and the heat and humidity kept him awake. If that happens to the president, it is multiplied countless times for the poor and middle class alike unless they can afford generators.

The seven examples include the stalled construction of the North Luzon Railway, the impasse over third terminal at Manila’s Ninoy Aquino International Airport, the failure to upgrade the Metro Rail Transit Line in Manila, the stalled Subic Bay-Clark-Tarlac Expressway, the Farm Credit Agency, the decision to divide up the country’s biggest gold mining area between small-scale miners, big companies and indigenous communities, and the country’s defense procurement practices, which have resulted in mispricing and corruption.

There are plenty more scandals that could be covered, but the team “decided to focus on big and concrete examples of how public funds were wasted and misused — and what Aquino can do about them,” according to a foreword by Marites Danguilan Vitug, the Chair of Public Trust Media Group Inc, which operates Newsbreak.

“How Mr. Aquino will address these will be central to his promise of good governance,” Vitug wrote. “While he has the right to blame the mess on Ms. Arroyo’s presidency, he needs to grapple with solutions to right the wrongs. It’s a tricky lesson in leadership: how to strike a balance between looking back and moving forward.”

Accordingly, the book sets out solutions – many of them costly and unpalatable – that Aquino must face in order to get the Philippine infrastructure back on track – at least on these seven projects. There are plenty more as well. Where the money will come from is a question.

Infrastructure spending has fallen from a peak of 8.5 percent of Gross Domestic Product in 1998 to only 3 percent in 2006.

Although Filipino government corruption has always been well known, the book’s big surprise, at least to outsiders, is not the corruption, which has been reported widely, but the incompetence and indecision of the Arroyo administration on many of the projects.

“Lack of capable managers and specialists in government agencies, especially their planning and project implementation units, is a common problem shared by many of the troubled projects and programs covered in this book,” the authors write. “It is no coincidence that many of the problematic projects, including the infamous National Broadband Network project, belonged to the Department of Transportation and Communications whose transport planning experts left in droves in the early years of the Arroyo administration. The number of filled key positions in the department fell from 445 in 2003 to only 343 in 2005.”

In place of the departed government officials, according to the book, Arroyo appointed loyal former police generals. The longstanding policy of reducing the government work force through attrition, or not replacing those who left or retired, also cut the number of experienced government managers and experts.

Arroyo is hardly the only person responsible for the shambolic condition of Philippine infrastructure. The collapse began during the years of the Marcos dictatorship and extended through to the ineffective administration of Aquino’s revered mother Corazon and the corrupt administration of Joseph Estrada as well, with a slight respite when Fidel Ramos was president. The report quotes the World Bank as saying only a fifth of Philippine roads are paved, the second lowest in Asia and just a third of Indonesia’s, with the poor quality of the roads driving up the cost of transporting goods between cities by 50 percent more than in Thailand and Vietnam.

Although Manila’s Metro Rail Transit Line No. 3 reached capacity as long ago as 2004, lack of development funds, partly because of refusal to raise fares, has meant no new capacity can be designed into the system.

The well-publicized delay in opening Terminal 3 at the airport is particularly egregious. The finished terminal was allowed to sit unused for years because of a muddy contract dispute before it finally opened – partly – in 2008. But it remained closed for so long that security and other equipment installed in 1999 was obsolete. Airlines flying from Manila to the United States refuse to transfer to the new terminal because its security equipment is not up to US standards to deter would-be bombers. Today the international terminal at the airport is a chaotic mess for international travelers.

Yet even when funding is available, the book says, other problems come to the fore. Corruption, political interference, and weak institutional capacity could hamper projects from selection, design, choice of contractor, financing, and construction.

“The outcomes become all too predictable,” the authors write. “Projects are delayed, cost too much, and, once completed, fail to work properly.”

According to the book, Aquino got off to an interesting start. On his second day on the job, he took a motorcade to Camp Aguinaldo in Quezon City for turnover ceremonies for the Armed Forces chief of staff – without the use of the sirens or police escorts that Filipino and many other Asian politicians use to bull their way through traffic. He got there late. That should be a lesson to voters across Southeast Asia. The biggest motivator to clean up and modernize infrastructure would be for politicians in Bangkok, Jakarta, Kuala Lumpur and other major cities to sit in traffic for hours, like the rest of us do. One of Aquino’s most popular moves so far was to ban the use of police sirens, which far too often are used by the local barangay captain to get home for his adobo.