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Friday, 9 June, 2000, 14:30 GMT 15:30 UK
Philippines graft costs billions
Government building
The government loses about $47m a year
Corruption in the Philippines has cost the country close to $50bn in two decades and is threatening critical foreign investment, according to a World Bank study.

The report, released on Friday, said corruption was costing the government about $47m a year.

It cited an official study which found corruption had totalled $48bn over the 20-year period ending 1997 - more than the total foreign debt at that time of $40.6bn.

The report also quoted a survey which found 72% of Filipinos believed there was some degree of corruption in the government.

The World Bank added that the indirect costs were far greater - these included opportunities lost due to substandard education, lives lost because of substandard housing and a shortage of medical supplies.

A Manila business survey in 1998 identified corruption as the biggest problem facing companies after the country's chronic crime, the report added.

'High-risk, low-reward'

It said the government should try to reduce the opportunities and motivation for corruption and make it a "high-risk, low-reward" activity.

The World Bank also said the private sector had a critical role to play.

"As a frequent source of bribes for public officials, the private sector shares responsibility for corruption," it added.

The report said the country's anti-graft strategy must focus on deregulation and reforming election campaign financing, budget processes and the judiciary.

But the World Bank said the corruption problem had improved since former president Ferdinand Marcos was overthrown in 1986 and it said the country was on the right track to fighting corruption.

"The Philippines today meets many preconditions that offer promise for a successful anti-corruption campaign," it added.

The Philippine Government outlined plans to fight corruption at a March 1999 donors' meeting.

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02 Jun 00 | Business
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