From an improvement last year, the Philippines has once again slipped in the latest annual survey of corruption in the Asia-Pacific. In the poll, conducted by the Hong Kong-based Political and Economic Risk Consultancy, the Philippines was ranked as the fourth most corrupt among 16 major investment destinations in the region, worsening from sixth place in the previous year, although still an improvement from its worst country status in 2008.
In the latest poll, taken among 2,174 expatriate business executives in the region, the country fared only better than the worst, Indonesia, followed by Cambodia and Vietnam. As in many other surveys on corruption and transparency, Singapore was ranked as the cleanest investment destination.
Those behind previous surveys have noted that in some cases, the Philippines slid in its ranking not because the situation in the country had become worse but because others had done better in addressing the problem. That is bad news for a country that is trying to attract job-generating investments and working to keep those already here from moving elsewhere.
Investors, for their part, have also pointed out that as much as corruption, the inconsistency of government policies and the unpredictability of the business environment discouraged investments in this country. Last year the Philippines attracted only a fraction of the amount of foreign direct investments that went to two of the countries ranked among the worst in the latest PERC survey: Indonesia and Vietnam.
The next president will have to move quickly to restore investor confidence in the Philippines. Sweeping measures to reduce corruption, plus the successful prosecution of a big fish or two for plunder, could send a message powerful enough to persuade investors that the new government is determined to deal with this festering problem. The other problem will take longer to address; only time will tell if consistency and predictability in the business environment can be guaranteed in this country. In the race to clean up one’s act, the Philippines cannot afford to be left behind by its neighbors.