It’s a paradox that Filipinos are highly optimistic this year despite the economy facing bleak prospects, as their top two concerns, as shown by a survey, are inflation and corruption, which reinforce one another unless both are resolved.  

“Corruption and rising prices are like twins,” said Center for People Empowerment and Governance (CENPEG) economist Professor Emmanuel Leyco.

He explained, “When corruption is rampant, people should worry because prices also rise. They are not separate. When corruption is strong, prices of commodities increase, affecting people with low or fixed incomes, like wage earners.”

Corruption has been pervasive, and the floodgate scandal, involving the highest officials in government, isn’t even half the story.

Agencies responsible for issuing licenses and permits are also well known for irregularities.

When businesses are forced to pay bribes or public funds are stolen, the resulting losses are made up for in higher prices.

A trader who has to pay off customs officials inflates the declared cost of doing business.

A contractor who pays kickbacks recovers the money by overpricing goods and services.

Consumers have to pay more for food, transport, housing, electricity, and even basic government services.

Corruption favors those with political connections over efficiency or quality, while firms that comply with the law are pushed out because they cannot or will not pay bribes.

Monopolies and cartels thrive under the protection of corrupt officials.

Corrupt practices disrupt the smooth flow of goods, as shipments are delayed at ports until bribes are paid. Smuggling flourishes, hurting legitimate suppliers.

Hoarding and preferential access are tolerated in exchange for payoffs. Examples of this were previous artificial shortages that were created to drive up prices, even when the supplies were sufficient.

The more familiar form of corruption leads to overpriced, low-quality, or nonexistent flood control, road, port, irrigation, and power plant projects.

In sectors such as healthcare, education, transport, and licensing, “under the table” payments become normalized.

When prices rise, even by less than two percent, people with low incomes will have nothing left to draw on. Even small increases are deeply felt by them and their families.

“That’s why our outlook for the future requires that corruption be stopped as soon as possible, because people are physically feeling — in their stomachs — the effects of the widespread corruption we are seeing today,” according to Leyco.

In the past, during the Napoles scandal, Leyco said the amounts stolen were in the millions. “Now, we’re talking about billions. People feel that what happened with Napoles was just spare change compared to today’s billions.”

He was referring to the Priority Development Assistance Fund (PDAF) scam where pork barrel allocations were diverted to non-government organizations that packaged kickbacks for legislators.

With the Napoles scam, people felt there was accountability. She was imprisoned and some politicians were detained, even if they were later acquitted.

People feel the effects of corruption. Billions are lost that should go to flood control, public services, health, and education.

Leyco said the direct consequence of the corrupted projects is that there is no effective deterrent to flooding during a downpour, so “many Filipinos nearly drown in floods. No schools and no classrooms have been built. Students have to walk long distances or wake up very early to attend school.”

Moreover, P60 billion was taken from PhilHealth. In exchange for their treatment and hospitalization, people must beg politicians for a guarantee letter.

Promoting patronage, along with the pilferage of public funds, makes Filipinos’ lives miserable, yet the vested interests of public officials perpetuate such a system.