MANILA MARCH 14, 2007 (STAR) The Philippines is perceived by foreign businessmen as Asia’s most corrupt economy, according to a survey that polled 1,476 expatriate business executives in 13 countries and territories across the region.

Singapore and Hong Kong were seen as the cleanest economies, while China, Indonesia and Vietnam posted improvements, the Hong Kong-based Political and Economic Risk Consultancy (PERC) said in a summary made available to Agence France Presse.

"The Philippines has the distinction of being perceived in the worst light this year," PERC said after polling expatriate business executives in January and February.

President Arroyo dismissed the survey, saying the perceptions and data were outdated.

Perception of corruption in Thailand worsened, with the military junta now in power after last September’s coup seen as little better than the government it ousted.

In a grading system with zero as the best possible score and 10 the worst, the Philippines got 9.40, worsening sharply from its grade of 7.80 last year. Indonesia had been deemed Asia’s most corrupt country in 2006.

PERC, which provides advice to private firms and governments, said it had not noted a worsening in the actual situation in the Philippines despite its deteriorating score."It is bad and has been bad all along. People are just growing tired of the inaction and insincerity of leading officials when they promise to fight corruption," it said.

The protracted corruption trial of deposed President Joseph Estrada "is an example of the problem and probably explains why respondents to our survey were so negative in their assessment" of the country.

Thailand and Indonesia, both on a grade of 8.03, shared the spot as Asia’s second most corrupt nations.Thailand’s image worsened slightly on last year while Indonesia’s score was better.The junta that ousted Thaksin Shinawatra as Thailand’s prime minister last September promised to fight corruption "but there is no reason to be confident that its behavior will be any cleaner," PERC said.

On Indonesia, PERC said President Susilo Bambang Yudhoyono’s campaign to crack down on corruption has "produced some positive results, but he is still swimming against the current."

The rankings of the 13 economies put Malaysia mid-table, marginally worse than last year."One of the big disappointments for many Malaysians is that Prime Minister Abdullah Ahmad Badawi has not been able or willing to follow through effectively with his campaign promise to reduce corruption," PERC said.

China and Vietnam bettered their scores, but PERC said that the improved perception was because corruption was not being discussed openly."The media in both China and Vietnam is subject to tight censorship. The only bad news the governments want published is news that they see fit for public consumption," it said.

China was the seventh most corrupt nation, according to the survey table, up two places from last year. Vietnam was in 10th place out of 13, also up two.India was in ninth place. PERC said the Indian government must accelerate reforms, warning that corruption can limit companies’ expansion plans.

Singapore again just beat regional rival Hong Kong as the cleanest economy, although the latter posted a sharp improvement from its image in 2006.

PERC’s managing director Robert Broadfoot told AFP this may have resulted from a perception that "the differences between Hong Kong and (mainland) China are even starker now."

Singapore is becoming increasingly vulnerable to corruption elsewhere, the PERC report said, citing the soured investment by state-linked investment firm Temasek Holdings in Thai telecom giant Shin Corp.The tax-free sale of Shin Corp. to Temasek by the Thaksin family fueled the political crisis that led to the military taking power in Thailand.

Another problem, the report added, is that foreigners "who have profited from corruption elsewhere in Asia sometimes seek a haven for their ill-gotten gains" in Singapore, where rich Indonesian families hold massive assets.

Old data

The index, based on the views of nearly 1,500 expatriate businessmen, was based on "old data" that was no longer accurate, President Arroyo said.

"Our credit ratings are fine," she told Business News Asia magazine. "The political analysis, they work on old data.

"They don’t work on up-to-date data."

The survey was compiled by the Hong Kong-based PERC and showed the Philippines at the bottom of a list of 13 nations and territories in terms of the executives’ perception of corruption.

The agency, which advises companies and governments, said the poor ratings for the Philippines were more linked to frustration than any actual worsening in corruption.

"It is bad and has been bad all along," it said in its report. "People are just growing tired of the inaction and insincerity of leading officials when they promise to fight corruption."

Constancia de Guzman, head of an anti-graft commission that works for Arroyo’s office, insisted the Philippines was taking action.

"The government is doing something," she told journalists, "but the people want to see actual results like convictions, dismissals and the like." – AFP

Chief News Editor: Sol Jose Vanzi

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