Press Release
August 4, 2009


Opposition Sen. Chiz Escudero said about P480 billion is lost each year to smuggling and corruption, and the best bet to stop the bleeding is through good governance.

Speaking at the Economic Agenda of the 2010 Presidentiables forum of the Economic Journalists Association of the Philippines (EJAP) yesterday in Makati, Escudero said there is an urgent need to "repair our house."

"Many of our institutions have been severely weakened," he said, citing the "chronically corrupt" Bureau of Customs and Bureau of Internal Revenue as among the weakened government agencies. Escudero said as much as $10 billion or about P480 billion is estimated to be lost to smuggling and corruption each year. "The uncollected VAT alone would be over P50 billion," he said.

Earlier, the senator reported in his State of the Nation-Sana Asikasuhin ni Arroyo (SONA-SANA) series that in 2003, the UN Conference on Trade and Development reported exports to the Philippines stood at $44 billion while recorded imports only stood at $34.5 billion. About $10 billion is estimated to be lost to smuggling, Escudero said.

At the same time, the UN Development Program reported in 2004 that $1.8 billion or about 13% of the government's annual budget is lost to corruption.

"On the average, around P300 billion is lost through the BIR and the BOC. Why? Officials or employees of these agencies exercise discretion. In my book, discretion in government offices is equal to corruption. Minimize discretion and you minimize corruption. Eliminate discretion and you eliminate corruption. Sadly, Arroyo's administration went and gone without any reform in these areas," Escudero said in his SONA-SANA series.

Escudero also said that according to the 2008-2009 Global Competitiveness Report, corruption has been identified as the most problematic factor for doing business in the country.

"We also ranked very low in these sub-categories: diversion of public funds; public trust in politicians; favoritism; and wastefulness of government spending. All of these underscore the fact that in the eight years that Arroyo was head of state, we nose-dived into oblivion," he said.

He also added that the corruption scandals and controversies that plagued Arroyo's administration have projected the country as one of the most corrupt in the world.

At the EJAP forum yesterday, Escudero also laid down his six-point Socio-Economic Agenda which emphasized agriculture self-sufficiency, lower costs of doing business, investments in education, and infrastructure development.

"The goal is the creation of millions of new jobs and livelihood opportunities. This would necessitate being able to successfully attract much greater amounts of direct investments, especially foreign investments," Escudero explained.

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