TOP GMA OFFICIALS ASK FOR KICKBACKS, SAY U.S. TRADERS

Makati City, April 22, 2003 -- Corruption is not only rife in President 
Arroyo's administration, but it has also become much too blatant, with 
American businessmen in the country having to pay off top government 
officials to transact legitimate business as senior officials have been 
found to openly demand kickbacks from foreign businessmen.

No names of these top and senior officials in the Arroyo administration, 
however, have been disclosed.

These statements are part of the complete survey results and their analysis 
from the American Chamber of Commerce (Amcham).

"Corruption was cited by the respondents of the Gallup and Amcham surveys 
as the most negative problem in the country. American companies, adhering 
to the strict provisions of the Foreign Corrupt Practices Act, have some 
ability to avoid engaging in corruption themselves. But many US firms 
bidding on public sector contracts find the playing field distinctly 
uneven. Amcham and the US Embassy have numerous open files from US firms 
complaining of problems of transparency in government bidding procedures 
and contract negotiations," the Amcham report said.

Comments made by survey respondents range from, "There appears to be no 
definite plan or political will to deter corruption. This has a negative 
effect on the economy, foreign investment, consumer and business 
confidence" to "sale of goods and services to public and private sectors 
often involves corruption. Senior government officials have approached us 
for kickbacks. Tender documents have been unfairly influenced by 
competitors unrestrained by FCPA (Foreign Corrupt Practices Act)...all 
these add to the cost of doing business"; "We see no clear improvement" to 
"Many companies are forced to pay off top government officials adding to 
commercial costs and risking home sanctions."

The same Amcham survey disclosed that the economic health of the 
Philippines is suffering further deterioration under the presidency of Mrs. 
Arroyo.

In a survey pursued by the Amcham in Oct. 8, 2002 among more than 250 
foreign investors which was released on March 2003 found out that the trend 
of the country's economic health in too many sectors is "deteriorating more 
than (it is) improving."

The survey covered 17 sectors in which American companies are most active 
in the Philippines, namely, agriculture, air cargo, automotive 
manufacturing and parts, banking, business services, construction and 
design, consumer goods, durable goods, energy, independent business/small 
and medium enterprises, Information Technology manufacturing, IT 
services/CRM/BPO, insurance, investment banking, pharmaceuticals, 
telecommunications and transportation.

"There was considerable variance between sectors with investment banking 
(1) rated the least healthy sector and business services, construction and 
insurance (7) rated the most healthy. The average for all 17 sectors was 
4.9, indicative of the overall business climate for the 17 sectors surveyed 
as being in fair condition, at the mid-point between poor and excellent 
condition," the Amcham report said.

Former Sen. Juan Ponce Enrile, who provided the Tribune with the Amcham 
report, commented that even as the general economic health of the 17 
sectors was rated fair at 4.9, it just means the Philippine economy is 
"seriously ill."

"Pervasive public sector corruption severely undermines the ability of the 
state to promote the welfare of the average citizen and burdens more of the 
population with unnecessary level of poverty.

It estimated that "half of taxes due are not collected and without doubt a 
substantial percentage (20-50 percent) of what is collected and budgeted 
for goods and services is wasted.' The World Bank has estimated that the 
Philippines over the last two decades has wasted as much on corruption as 
it has received in ODA (official development assistance), equivalent to 
almost $50 billion."

The Amcham further reported, "As investors in the Philippines, American 
Chamber members are concerned that the perception of the overall trend in 
the economy is deteriorating rather than improving."

It said its findings should be sufficient warning for Mrs. Arroyo to 
address the problem for the Philippine economy to recover.

"We believe these perceptions are of sufficient concern to ring an alarm 
bell for the Philippine leadership, in all branches of government, and in 
the private as well as the public sector. Near term, forceful actions by 
the Philippine leadership are required to begin to reverse these trends and 
to improve the country's image...serious long-term underlying problems 
exist which are not being adequately remedied and must be before the 
perception of deterioration is reversed," the Amcham said in its report.

But Malacaņang does not appear to take the Amcham report seriously, and has 
junked it.

It claimed also yesterday there is no "factual basis" for the allegations 
by Amcham that the President resorted to a superficial solution to the PPA 
problem though a $500-million loan to boost her sagging popularity.

Presidential spokesman Ignacio Bunye also yesterday said he had called up 
Department of Energy Secretary Vincent Perez early yesterday and refuted 
the allegations, which Bunye said was sufficient.

"There's nothing to disclose to the public (on the reported P27-billion 
loan) because that's not true. We just talked to Secretary Vince Perez and 
he said the (Amcham) report has no factual basis," he added.

When pressed whether Malacaņang would seek clarification from the Amcham on 
its allegations, Bunye skirted the issue.

"As I said, we already talked to Secretary Perez and he flatly denied the 
allegations," he said.

In its March 2003 report, the Amcham disclosed the "solution" resorted to 
by Mrs. Arroyo to reduce the PPA fees by 20 percent through a P27 billion 
loan, which it said was kept hidden by Malacaņang from the public.

But Enrile junked the Malacaņang denial, stressing that the Amcham is 
responsible enough not to raise allegations which are not substantiated.

In a phone interview, Enrile said Amcham had an established a credible 
reputation since its inception covering a hundred years.

"Credibility-wise, Amcham enjoys a good reputation," Enrile added, citing 
it huge range of credible sources it uses as bases for its reports.

He said the denial of the Palace was expected since it is the easiest way 
out of the controversy and most common way out of the controversy. (By 
Sherwin C. Olaes, Tribune)

Reported by: Sol Jose Vanzi

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