The 13th SWS Survey of Enterprises on Corruption
The 2016 Survey of Enterprises on Corruption is the 13th in a series of surveys done by SWS since 2000: nine rounds in 2000-09 and four in 2012-16 (funds were not available in 2010-11). According to the full series of surveys, there was a marked improvement in the fight against corruption in the last six years. Unfortunately, however, the newest survey of 2016 shows some backsliding.
The 2016 Survey is based on face-to-face interviews of executives of 950 enterprises in National Capital Region, Metro Angeles, Cavite-Laguna-Batangas, Metro Iloilo, Metro Cebu, Metro Davao, and Cagayan de Oro-Iligan over the period February 2 to May 6, 2016.
The 2016 SWS Survey of Enterprises on Corruption was presented by SWS, in cooperation with National Competitiveness Council, on October 5 at the AIM Conference Center, Makati City.
The highlights of the 2016 Survey are as follows:
- Executives seeing “a lot” of public sector corruption increased to 63% in 2016, from 56% in 2013. The 63% in 2016 is disappointingly far above the record-low 43% in 2012. This is also a return to the 60-77% range under Pres. Gloria Arroyo, and is equal to the 63% in 2000 under Pres. Joseph Estrada. [Chart 1]
- Thirty-five percent had personal knowledge of a corrupt transaction with government in their line of business in the last 3 months, up from record low 32% in 2015. It was 32-38% under Pres. Aquino, or superior to 37-44% under Pres. Arroyo. [Chart 2]
- Forty-two percent say most companies in their sector of business give bribes to win public sector contracts, up from record low 39% in 2015. It was 39-42% under Pres. Aquino, superior to 45-57% under Pres. Arroyo, and 55% under Pres. Estrada. [Chart 3]
Of the 35 institutions rated for sincerity in fighting corruption, 19 scored favorable net sincerity rating (computed as % sincere minus % insincere), eight neutral, and eight unfavorable.
- Of the 35 institutions rated for sincerity in fighting corruption, there were four upgrades in 2016 from 2015, 18 no-change, and 13 downgrades from 2015.
- The sole agency with a Very good net sincerity rating is the Securities and Exchange Commission. It stayedVery good, although down by 8 points from + 63 in 2015 to +55 in 2016. This is similar to +55 in 2005. [Chart 4]
- Nine institutions had net sincerity ratings of Good in 2016: (1) Department of Trade and Industry fell by one grade from Very good to Good, down from the levels of +51 to +59 from 2012-2015, to +43 in 2016. This compares to the Good +38 in 2009; (2) of Labor and Employment stayed Good at +38 in 2016, although down by 5 points from +43 in 2013; (3) Office of the President fell by one grade from Very good to Good, down by 17 points from +54 in 2015 to +37 in 2016. It used to be at Excellent levels of +77 in 2013 and record-high +80 in 2012; (4) Dept. of Health rose by one grade from Moderate to Good, up by 9 points from +28 in 2015 to +37 in 2016. It used to be at Very good levels of +53 in 2013 and +61 in 2012; (5) Civil Service Commission stayedGood at +35 in 2016, although down by 6 points from +41 in 2015; (6) Dept. of Education stayed Good at +32 in 2016, although down from +43 in 2015 and +49 in 2013; (7) Social Security System fell by one grade fromVery good to Good, down from the levels of +57 in 2015 and +52 in 2013, to +30 in 2016. It was Good +40 in 2009; (8) Supreme Court stayed Good, although down by 12 points from +42 in 2015 to +30 in 2016; (9) Office of the Ombudsman stayed Good at +30 in 2016, down by 6 points from +36 in 2015, but 7 points above theModerate +23 in 2013. [Charts 5-6]
- Nine institutions had net sincerity ratings of Moderate in 2016: (1) Commission on Audit fell by one grade fromGood to Moderate, down by 7 points from +36 in 2015 to +29 in 2016; (2) of Social Welfare and Developmentstayed Moderate, moving from +24 in 2015 to +26 in 2016. It used to be at Very good +52 in 2013; (3) Sandiganbayan fell by one grade from Good to Moderate, down by 16 points from +37 in 2015 to +21 in 2016; (4) Government Service Insurance System stayed Moderate, although down by 6 points from +27 in 2015 to +21 in 2016. It used to be Neutral -5 in 2009; (5) Dept. of Justice fell by one grade from Good to Moderate, down from +35 in 2013 and +34 in 2015, to +20 in 2016; (6) barangay governments stayed Moderate, hardly moving from +19 in 2015 to +18 in 2016; (7) city/municipal governments also stayed Moderate¸ hardly moving from +12 in 2015 to +14 in 2016; (8) Commission on Elections rose by one grade from Neutral to Moderate, up from +7 in 2013 and -6 in 2015, to +12 in 2016; (9) Armed Forces of the Philippines also rose by one grade from Neutral to Moderate, up by 6 points from +4 in 2015 to +10 in 2016. [Charts 7-8]
- Eight institutions had net sincerity ratings of Neutral in 2016: (1) of Finance fell by one grade from Moderate toNeutral, down by 6 points from +15 in 2015 to +9 in 2016; (2) Governance Commission for GOCCs fell by one grade from Moderate to Neutral, down by 3 points from +12 in 2015 to +9 in 2016; (3) Presidential Commission on Good Government also fell by one grade from Moderate to Neutral, down by 7 points from +15 in 2015 to +8 in 2016; (4) trial courts has been Neutral for three years, hardly moving from +9 in 2013, +6 in 2015 and +6 in 2016; (5) Dept. of Environment and Natural Resources stayed Neutral, although down by 9 points from +6 in 2015 to -3 in 2016; (6) Senate has been Neutral since 2013, ranging from -3 to -8, after falling by two grades from Good +36 in 2012. This compares to the Neutral -1 in 2009; (7) Dept. of Interior and Local Government stayed Neutral, although down by 16 points from +9 in 2015 to -7 in 2016. It used to beGood +30 in 2012 and Moderate +20 in 2013; (8) Dept. of Agriculture rose by one grade from Poor to Neutral, barely moving from -10 in 2015 to -9 in 2016. [Charts 9-10]
- It was Poor for six institutions: (1) of Budget and Management fell by one grade from Neutral to Poor, down from the levels of +9 in 2013 and -7 in 2015, to -10 in 2016; (2) Philippine National Police has been Poorsince 2007, ranging from -13 to -24, after recovering from Bad -36 in 2006; (3) Dept. of Public Works and Highways has been Poor since 2012, ranging from -21 to -22, after recovering from Very Bad ratings in 2008-2009, ranging from -55 to -66; (4) Dept. of Transportation and Communications fell by one grade from Neutralto Poor, down from +8 in 2013 and -2 in 2015, to -25 in 2016. It used to be Moderate +10 in 2012 after recovering from Bad -30 in 2009; (5) Bureau of Internal Revenue fell by one grade from Neutral to Poor, down by 23 points from -4 in 2015 to -27 in 2016. It was Poor -20 in 2012 and -10 in 2013, after recovering from theVery Bad -57 in 2009; (6) House of Representatives stayed Poor, hardly moving from -28 in 2013 and -25 in 2015, to -28 in 2016. It used to be Neutral -6 in 2012 after recovering from Bad -34 in 2009. [Charts 11-12]
- The sole agency with a Bad net sincerity rating is the Land Transportation Office. It fell by one grade from Poorto Bad, down by 21 points from -26 in 2015 to -47 in 2016. It used to be at Bad -32 in 2013. [Chart 13]
- The sole agency with a Very bad net sincerity rating is the Bureau of Customs. It has been Very bad since 2013, ranging from -55 to -68, after briefly recovering to Bad -46 in 2012, from Very bad -69 in 2009 andExecrable -72 in 2008.
Notable cases of backsliding in 2016: Dept. of Transportation and Communications (Poor
-25), Bureau of Internal Revenue (Poor -27), Land Transportation Office (Bad -47) and Bureau of Customs (Very Bad -68).
[The SWS terminology for net sincerity ratings is: Excellent +70 and up, Very Good +50 to +69, Good +30 to +49, Moderate+10 to +29, Neutral -9 to +9, Poor -29 to -10, Bad -49 to -30, and Very Bad -69 to -50, Execrable -70 and below. A single-digit net satisfaction is considered not significantly different from zero.]
- New high 67% say “the government can be run without corruption,” an improvement on the 2015 record 62%. [Chart 14]
- Fifty-one percent disagree that “the present laws to fight corruption in our country are already adequate,” unchanged from a record high 51% in 2015. [Chart 15]
- Record high 73% disagree that they cannot do anything to reduce corruption in government (i.e. personal efficacy is at a very high level). Disagreement increased to 73% in 2016 from 67% in 2015. [Chart 16]
- Thirteen percent say that government “often/almost always” punishes corrupt government officials. This is two points higher than the record-low 11% in 2015. A record-high 27% was reached in 2012. [Chart 17]
- Eighty-seven percent agree that “Corruption will be reduced by the passage of a strong law on the right of the people to information from the government.” Agreement was a record-high 90% in 2015. It was 78% in 2009. [Chart 18]
- Seventy-five percent say transaction procedures of city/municipal gov’t offices are somewhat/definitely transparent, four-points down from the record 79% in 2015. [Chart 19]
Fifty-eight percent say the process of business permits/licenses renewal is easier now than 3 years ago. It was 55-60% under Pres. Aquino, and was 57% in 2009 under Pres. Arroyo.
- Eight-three percent now use the internet to transact with government, up from 75% in 2015, and 39% in 2007. [Chart 21]
- Executives who reported being solicited for a bribe by anyone in government rose to 49% in 2016, from 44% in both 2015 and 2013. It was 44-50% under Pres. Aquino, lower than the 60-71% under Pres. Arroyo. [Chart 22]
- Only 10% of those solicited for a bribe reported it. Reporting of bribe-solicitations was 9%-14% under Pres. Aquino, and 7-14% under Pres. Arroyo. [Chart 23]
- Twenty-six percent say most/almost all companies in their line of business give bribes to win private sector contracts, slightly up from 23% in 2015. It was 23-27% under Pres. Aquino, 22-30% under Pres. Arroyo, and 24% under Pres. Estrada. [Chart 24]
- Eighty-one percent disagree that “to prosper in business in the Philippines today, one has to be corrupt,” up from 78% in 2015 and 74% in 2006. [Chart 25]
- Seventy-three percent say that cheating the government for the benefit of the company is always wrong, up from 68% in 2015. It was also 73% in 2006. [Chart 26]
- The best ways for businesses to fight corruption are still: (a) never pay bribes, (b) use honest business practices, (c) know the laws/rules – far more acceptable than: (d) going to the Ombudsman, (e) going to mass media, (f) joining an anti-corruption CSO, and (f) campaigning against corrupt candidates. [Chart 27]
- Sixty percent say that corrupt executives in their own sector of business are often punished. It was 55-60% under Pres. Aquino, superior to 45-54% under Pres. Arroyo. [Chart 28]
- Eighty-four percent did not contribute in the last 2 years to any private anti-corruption program, equaling the record high 84% in 2015. It was 76-84% under Pres. Aquino, and 78-81% under Pres. Arroyo. [Chart 29]
- Honest business practices still leave much to be desired: referring to the companies in their own line of business, only 48% say they demand receipts for their payments; only 43% say they give full employee benefits; only 34% say theypay correct wages; only 33% say they issue receipts; only 21% say they keep one set of books; and only 19% say they pay taxes honestly. [Chart 30]
- Fifty-nine percent are satisfied with the national government’s performance in promoting a good business climate. It was 59-70% under Pres. Aquino, superior to 35-53% under Pres. Arroyo. [Chart 31]
- Sixty-five percent are satisfied with their city government’s performance in promoting a good business climate. It was 64-68% under Pres. Aquino, and 63-64% under Pres. Arroyo. [Chart 32]
- Seventy-four percent have good/excellent expectations for business in the next 2 years. It was 72-76% under Pres. Aquino, 28-61% under Pres. Arroyo, and 17% under Pres. Estrada in 2000. [Chart 33]
The 2016 Survey of Enterprises on Corruption was conducted by Social Weather Stations with support from the Australian Embassy-The Asia Foundation (TAF) Partnership in the Philippines, and USAID through the Integrity for Investments Initiative (i3), and in partnership with the National Competitiveness Council (NCC).
The 2016 Survey was conducted from February 2 to May 6, involving face-to-face interview of executives of 950 companies, 317 of whom were randomly drawn Large enterprises, and 633 were randomly drawn Small and Medium enterprises. The sample enterprises were drawn from seven study areas: 350 in Metro Manila, 100 each from Metro Angeles, Cavite-Laguna-Batangas, Metro Iloilo, Metro Cebu, Metro Davao, and Cagayan de Oro-Iligan.
In each area, sampling is stratified into one-third large and two-thirds small/medium, which are combined without weighting. The previous year's sample of companies is approached again, with those unable to respond replaced by random drawings from a cumulative list of companies interviewed in earlier lists, list of signatories to the Integrity Initiative, and from BusinessWorld's Top 1000 Corporations in the Philippines magazine.
The surveys report the views of Filipino managers, unlike the surveys of foreign consulting firms used to derive international corruption indexes, which use the views of typically-expatriate managers of multinational firms.
From left: Jeryll Reyes, TAF Senior Program Officer; Iremae Labucay, SWS Senior Survey Analyst; Guillermo Luz; Mahar Mangahas; Linda Luz Guerrero, SWS Vice-President; and Ky Johnson, TAF Senior Deputy Country Representative, Philippines.