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Is Corruption still a Major Issue for Int’l Businesses Wanting to Set-up in the PH?


Corruption still a huge hurdle for businesses in the PH?

While our stories on Epson setting up a major plant in the Philippines and over 200 Japan companies looking at relocating from China to our country got a lot of positive comments from our readers, we also got a barrage of negative private messages from various businessmen. It was actually a rather surreal experience for us at Unbox. On one hand we see a lot of people happy about the news but on the other side we have more cautious and frustrated veterans in business. With the promise of keeping them anonymous we interviewed several of them and they all have one major gripe that they feel will make life hard for Epson and the 200+ Japanese companies — Corruption.

Forced to Pay Bribes to Get Things Going?

The inefficiency in infrastructure apparently opens up a lot of opportunities for corrupt officials to ask for bribe money. According to several of our interviewees, when businesses need to transfer their products across the country they experience massive slow downs unless they fork out money to get things moving. They also claimed that they need to pay off a lot of people in Customs and BIR.

“Daan na matuwid is a total fallacy. Concocted by PR of this administration. We pay more bribes now than ever before.”

Modernization and Technology Upgrade a Solution?

Transparency and automation has always been one of the best ways to solve corruption. And this is the reason why several interviewees were also disappointed when they heard that the modernization program of Customs was scrapped a few days ago by the newly installed commissioner Bert Lina.

Commissioner Lina, in an interview with Karen Davila, explained that there was a solution that was much cheaper. He also stated that the committee looking into the modernization program prior to him being appointed was the one that made the recommendation to cancel the awarding of the contract to the company that won the bid.

Watch the full interview below.

Our take on it? If this move will really save us money, then sure go ahead. But we need to see a timeline on when this program will actually get to see the light of day. This has been dragging on for too long already.

An interesting comment that we got from one of our interviewees who owns a retail chain was this:

“One reason why BPO and call centers are flourishing in the PH is that they don’t have to go through Customs!!! Kung pwede lang ba i-email mga produkto namin eh!”

Our recommendation to him? Try to figure out e-commerce! Cash on Delivery, hehe. Seriously though, he has a point there. Good food for thought.

Federalism Another Solution?

Another proposed solution by our interviewees was to shift the government system to Federalism. By unclogging and decentralising Metro Manila the government will be able to develop other cities and provinces. Budgets will no longer be centralised and businesses can flourish better in different parts of the country since they will have better infrastructure thanks to the properly spread budget.

There is actually a chance of this happening since one presidential contender, Davao City Mayor Rodrigo Duterte, is an advocate of Federalism.

Let’s Keep the Conversation Going

There are definitely a lot of problems and hurdles that have yet to be overcome by the government so that we have a more stable and transparent landscape for business. The good news is that people are talking about this more and more. This is the reason why the 2016 Presidential Elections is critical. Whoever we put in charge of the government will have to face these issues head on. This is the time to closely scrutinize the platforms of those seeking the presidency.

Wouldn’t it be awesome to have a technology / IT forum featuring all the Presidentiables?

So yes folks, don’t forget to register for the upcoming elections. Make sure you study the candidates who are running. Finally, vote wisely and let’s try to get this country moving towards the right direction so that we here in Unbox get to write more stories about tech companies moving from China and other parts of the world to the Philippines.

IMPORTANT NOTE: We are not business experts or analysts. We just wanted to share some of our thoughts and observations after talking to several businessmen who PM’d us after we wrote the stories on Epson and the Japan 200. 🙂

Carlo Ople

Carlo is the Editor-in-Chief and Founder of Unbox.ph. During daytime he’s the Managing Director and Partner of a Digital Marketing Agency in the Philippines and by nighttime he’s living out his passion as a gadget enthusiast and story teller through Unbox.

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  1. Economic Liberalization is another solution to get more foreign investors to compete with Pinoy Oligarchs who are owning public utilities, and to create more jobs. No need PEZA zones. That PEZA law can cause more corruption. We can do it by revise the constitution to remove its anti-Foreign Direct Investment(FDIs) provisions, and revisit and revise other anti-FDIs statutory laws. We reduce the government intervation/regulation in business and simplfiy the tax system to reduce the corruption.

    I wonder why Vietnam and Indonesia are more corrupt than Philippines according to transparency international data but these two countries has more FDIs than latter(Philippines).

    1. Transparency international data is a big joke. Parang SWS survey din yan na unreliable sometimes dahil hindi naman lahat ng corruption e recorded. Pakulo lang ng politicians yang PEZA para dumaan sa kanila ang business accreditations at hindi sa DTI. Look at CEZA na criniticize ni Miriam Santiago noon dahil sa anomalous deals at kung sino ang may-ari noon.

      1. Ginamit ng mga ilang foreign investors ang transparency international as their basis to invest in any countries despite may flaws ang methodology ng international transparency. Talamak din ang corruption sa Vietnam and Indonesia. Ask their citizens.

        Yap, may corruption sa PEZA.

  2. Open secret naman na sa lahat ng government agencies natin e may corruption. May direct, may indirect, may patago, may halata, may pabarya barya, may malakihan. Lahat yan gustong makaparte sa business world kaya nga pagdating sa technology and gadgets e sobrang taas ng patong sa costing. Ok lang sa mga business ang maglagay, ang importante e mabawi sa consumers ang pinanlagay. Daang matuwid? Campaign material lang ni Noynoy yan. Walang corrupt kung walang nagtotolerate pero pag nagpakabayani ka ikaw naman ang mapapatay.

  3. Until the voters are smart enough to NOT vote for the people who have even mere allegations of corrupt and/or maligned practises, corruption will remain an issue here – from global business right down to the sari sari business. We cannot merely introduce need new agencies, new legislation, remove entire divisions and/or employees, if fundamentally the system and leadership is corrupt, because the people VOTED THE CORRUPT AND/OR MALIGNED OFFICIALS. I’m sorry, Mr. Reyes, but Economic Liberalization will not save this nation and attract investors, our economy is corrupt at all levels because the leaders who are in charge of it that WE voted, are corrupt.

    It is our fault, and only we can solve it.
    That is all I can say.

    1. Eradicating the corrution is impossible in real world but reducing the corruption is possible.

      Myanmar is implementing the Economic Liberalization to create more jobs for its people despite of corruption and human right violations in that country.

      No excuses.

      I hope we shall stop to blame Bobotante, and shall find the right and doable solutions. Wag tayong yung puro motherhood statement.

      1. The fundamental element of democracy is the people – the people in a democracy make a government. A flawed, inept government is a manifestation of a flawed, inept voting population who was not aware of the credentials and perspectives of the leaders and is blinded by idle promises, and as documented often, bribed.

        So no, we should NOT ‘stop to blame Bobotante,’ and true, profound education and information dissemination is the ‘right and doable solution.’

        Liberalisation could work, but PLEASE understand that if the government that the people installed is inept, the government will merely be a megaphone to big business. And this cannot be good for us by any means – contractualisation, legal favouritism to big business, exemptions that the foreigners may enjoy but not the locals, but it WILL attract more businesses, so…

  4. Bitch, please! 95% of the country is dumber and more pathetic than Pavlov’s dog. Don’t expect them to vote wisely anytime soon.

  5. Unscrupulous businessmen love it here in the Philippines because almost every official has a price.

    Just look at the Canadian garbage rotting in our ports abs warehouses.

  6. The Binays mastered this dark Art…hence, their skin color….Kung mananalo yun patay tayong lahat……

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