Corruption

- According to the Transparency International, corruption is defined as the abuse of entrusted power
for private gain. It erodes trust, weakens democracy, hampers economic development and further
exacerbates inequality, poverty, social division and the environmental crisis.

Fidel V. Ramos’ Administration (1992-1998)

National level:

PEA-Amari Deal
● It is regarded as the “Grandmother of all scams”
● Public Estates Authority (PEA) is a government agency in-charge of the Manila Bay Reclamation
area.
● Amari Coastal Bay Resources Corporation
● The government agency, the corporation and the persons involved inside and outside the deal resulted
in the aforementioned deal.
● Due to the deal, three islands were reclaimed off the coast of Manila Bay. This sparked interest in
potential investors.
● There were 6 persons involved of the PEA-Amari deal: (1) George Trivino, the Ital-Thai Development
Corporation Representative, (2) Bobby Montano, the Presidential Appointee, (3) Benito Cuevo, the
Commissioner, (4) Premchai Karnasutra, the Contractor, (5) Frank Chua, casino buddy 1 (6), Benito
Co, casino buddy 2.
● A total of P1. 269 billion were given to certain officials and individuals as a sort of payoff.
● Former President Fidel V. Ramos was allegedly involved in the said deal, however, he was not mainly
focused by the Senate because of his position.
● Another controversy was the Clark Centennial Expo Scandal. The commemorative projects,
particularly those undertaken at the former Clark Air Base, were hounded by illegal electioneering
and corruption controversies even years after the Centennial celebrations. A special report by the
Philippine Center for Investigative Journalism (PCIJ) showed how the project relating to the expo site
not only revealed the extravagance and inefficiency of the administration but also served as a
convenient vehicle to affect election fund-raising for the lakas political party of Ramos at the expense
of tax-paying Filipinos and in violation of the Election Code.
● These controversies blemished Ramos’ presidency and eroded public trust in government institutions.
They also highlighted the need for transparency and accountability in government operations.

● 1994: The National Power Corporation (NPC)

- A government owned and controlled corporation, awarded a contract for the construction of
the Pagbilao Power Plant to a consortium led by the Alcantara Group. The consortium was
accused of overpricing the project by billions of pesos. The overpricing of the Pagbilao Power
Plant led to higher electricity rates for Filipinos.

- This occurred during the presidency of Fidel Ramos. He was accused of not doing enough to
combat corruption.
 ● The Philippine Airlines (PAL) Corruption Scandal of 1995

- This involved PAL awarding contracts to suppliers and contractors at inflated prices. This
shows that corruption can occur even in high-profile companies. PAL is the national flag
carrier of the Philippines and the largest well-known company in the country. It is a public
company whose passengers are primarily Filipinos, its inflated prices led to higher fares for
passengers. This is a significant concern, as many Filipinos already struggle to afford basic
necessities.

● APEC LUXURIOUS VILLA ISSUE

- Joseph "Erap" Estrada, who served as the President of the Philippines from 1998 to 2001,
initiated an investigation into the APEC Luxurious Villas controversy. He suspected that the
government funds were used for the construction of the villas including allegations that the
villas were built through loan from the Home Guaranty Corp (HGC).

- The developer of the APEC Villas FBSC, did not receive any payment from the government
for its construction. They were only given the option to lease out the constructed overly
luxurious houses on a long-term basis to recover its return of investment (ROI), over time the
FBSC sold the villas to generate revenue.

- The Apec Villa was supposedly constructed for the APEC summit where the US president
and other world leaders, but became a subject of controversy due to the cost and allegations
of public funds being used.

Issues of corruption in local/provincial level:

● In 1997, the mayor of the town of Calamba in Laguna province was accused of awarding a contract
for the construction of a public market to a company that was owned by his brother. The contract was
allegedly awarded at an inflated price, and the project was never actually completed. The mayor was
eventually impeached by the Philippine Congress, but he was acquitted by the Senate.
(https://www.philstar.com/nation/2011/02/18/658030/calamba-mayor-denies-hes-facing-
graft-raps)

• Philippine Daily Inquirer, August 4, 1996, Headline: P20-M ghost road project in Iloilo probed
- The Philippine National Police (PNP) is investigating a P20 million ghost road project in the
town of Lambunao, Iloilo Province . The project was allegedly awarded to a company that
was owned by a close friend of the town mayor. The road was never actually built, but the
funds were allegedly pocketed by the mayor and his associates.

Consequences to people: (Ramos)

● Economic growth and development - hindering economic progress

● The controversy could have political consequences, potentially affecting the popularity and credibility
of political leaders associated with the decision to build the villas. Also making the people erode trust
 in the government, making the citizens more skeptical of the government's ability to allocate funds
responsibly.
● The limited convictions of the aforementioned perpetrators of corruption, the legal system continued
to be criticized as being slow and politically interfered further eroding the people’s trust and
confidence in the judicial system.

Joseph Estrada’s Administration (1998 - 2001)

National level:
- Estrada was charged with four counts of corruption, involving diversion of funds amounting
to about 4 billion pesos. Lawyers said he was found guilty on two counts of receiving payouts
from illegal gambling and taking commissions in the sale of shares to government pension
funds. (Estrada given life sentence for corruption | World news | The Guardian)

● Corruption allegations:
- When he was still the president of the Philippines, Estrada allegedly received P10 million
monthly from November 1998 to August 2000 from jueteng lord as protection money. He
was also accused of bagging a P130-million kickback from the P200 million released by then
budget secretary Benjamin Diokno for tobacco farmers. He also allegedly received P100
million as “donation” from government funds allegedly given by a private organization run
by Estrada’s wife.
Aside from kickbacks, he reportedly ordered 52 impounded luxury vehicles from the Bureau
of Customs commissioner to give to his Cabinet members and other officials. (Looking back
at EDSA II: The political paths of Estrada and Arroyo (rappler.com))

● Estrada gave luxury cars to favorite senior bureaucrats and cut deals during all night mahjong games
with his “midnight cabinet” cronies, which included some of Marcos’ cronies, gangsters and people
involved in gambling and smuggling and other illicit trades. He kept four houses and helped friends
who were notorious tax dodgers.
● Estrada was accused of profiting from trading stock for BW Resources, operator of an online bingo
game, which shot up 5,000 percent and dropped just a quickly and triggered the Philippine’s largest
stock scandal ever and almost caused the closure of the Philippine stock market.
● Estrada was also accused of: 1) failing to pursue a $1 billion tax evasion case against tycoon Lucio
Tan, a major campaign supporter; 2) taking a cut of ransom money paid to release Abu Sayyaf
hostages; 3) laundering drug money through U.S., Canadian and Hong Kong banks with a former
national police chief; and 4) taking a $20 million kickback form sale of a telephone company. He had
many supporters in key places. The movie industry withdrew advertising from a newspaper that was
critical of Estrada. But even so as the charges against him mounted, his approval rating dropped from
65 percent in June 1999 to 21 percent in May 2000.
● Estrada wanted to replace a popular illegal numbers game with a new legal game called two ball
bingo. He gave the contract to a gambling crony, Charlie Ang, a move that would later force Estrada
from office. One of Ang’s rivals, Gov. Luis Singsong, who ran an illegal numbers game threatened by
two ball bingo, got his revenge by offering details of how Estrada received payoffs from gambling
bosses.
 ● Political interference during Estrada’s Impeachment trial
○ Bank records that, according to House of Representatives prosecutors, would show Estrada
had accrued $63.5 million in unreported revenue from bribes and kickbacks since his election
in 1998 had been sealed up. By a vote of 11 to 10, the Senate, however, decided not to release
the records, with the majority claiming that the evidence was outside the purview of the
impeachment process.
○ The prosecutors argued that the bank records, if opened, would have shown that Estrada had
assets worth $63.5 million, which he kept under four aliases, including Jose Velarde. On the
opening day of the trial, prosecutors displayed a $2.8 million check used to buy a mansion for
one of Estrada's mistresses. The check was signed with the name Jose Velarde, and the
signature was remarkably similar to Estrada's.
○ The president is accused of collecting over $12 million in bribes from tobacco taxes and a
criminal gambling ring, as well as of betraying the public's trust and violating the
constitution.
https://www.washingtonpost.com/archive/politics/2001/01/17/estrada-impeachment-trial-thrown-into-chaos/
4f8f0b07-028b-4b15-a10c-fc0e51bcba41/

Issues of Corruption in local/provincial level: (Estrada)

● Estrada: Jueteng bribery charges a ‘hatchet job’ by my rivals | Philstar.com

(https://philippinespres.weebly.com/joseph-estrada.html)
- former Philippine President Joseph Estrada is alleged to have received millions of pesos in
bribes from jueteng operators, with former Ilocos Sur Governor Luis Chavit Singson serving
as his bagman.
- Jueteng is a popular illegal gambling game in the Philippines. It is a numbers game in which
players bet on a three-digit number. The winning number is drawn from a pool of all possible
three-digit numbers.
- The headline is significant because it alleges that Estrada, the highest-ranking official in the
Philippine government at the time, was involved in corruption. It also suggests that Singson, a
close associate of Estrada, was involved in the scheme.
- The headline is based on the testimony of Singson, who testified at Estrada's impeachment
trial in 2001. Singson claimed that he personally delivered millions of pesos in jueteng
payoffs to Estrada.
- Estrada denied the allegations, but he was eventually convicted of plunder and sentenced to
life in prison. He was later granted pardon by President Gloria Macapagal Arroyo in 2007.

● Ilocos Sur School Building Corruption Scandal

-In 1999, the Commission on Audit (COA) released a report that found irregularities in the awarding of
contracts for the construction of schools in the province of Ilocos Sur. The report found that the provincial
government had awarded contracts to unqualified contractors, and that the contracts were overpriced. The
COA also found that the provincial government had failed to properly supervise the construction projects,
which resulted in poor quality work.
- The COA report implicated the provincial governor at the time, Luis Singson, and several other provincial
officials. Singson denied the allegations, but he was eventually impeached by the The demise of the Estrada
administrationHouse of Representatives. 4

- The Ilocos Sur school building corruption scandal is a classic example of local level corruption during the
presidency of Joseph Estrada. The scandal involved the misuse of public funds for private gain, and it resulted
in the construction of poor quality schools that did not meet the needs of the students.

Consequences to people:
● Financial problems - mismanagement of money due to “jueteng”. May cause the properties of bettors
and even their life savings.
● A decrease in the quality of education, healthcare, and infrastructures caused by corruption.
● The consequences of corruption caused by Estrada made it difficult for businesses to grow due to the
possibility of being extorted by corrupt government officials during his administration.
● It led to business uncertainty. It made the business owners doubt the future of their businesses because
of economic instability because estradas economic policies were widely considered ineffective. (The
demise of the Estrada administration: Estrada's Corruption)
● The result of the impeachment trial, in which senators refused to open the letter that would have
incriminated Estrada, led to another acts of protest which ultimately led to the 2nd EDSA People
power which saw Estrada’s resignation and the rise of Gloria Arroyo as the next president.