Department of Economy, Planning, and Development Secretary Arsenio Balisacan said in a recent interview that corruption issues could undermine economic growth by deterring investments in the country.
“Corruption has consistently been shown to undermine the pace, quality, and sustainability of economic growth across countries. It reduces investment by creating additional risks and higher costs of doing business, while at the same time eroding fiscal capacity needed to build infrastructure and foster innovation,” he said.
He said high levels of corruption leads to slower economic growth and weaker forms of growth, with the economy often relying on extractive industries, rather than diversified, innovation-driven sectors.
He however said that serious efforts to combat corruption can yield significant economic benefits.
“Strengthening transparency and accountability builds investor and consumer confidence, improves the efficiency of public spending, and enhances the productive capacity of the economy,” he said, noting such reforms set the stage for faster, more inclusive, and more sustainable growth.
He sees the creation of the Independent Commission for Infrastructure (ICI) to probe flood control projects in the last 10 years, as a critical step as it reflects a firm commitment to integrity in the use of public funds, strengthen government systems, and reassure both citizens and investors that infrastructure projects will be implemented with transparency, efficiency, and fairness.
Business leaders and the private sector are already feeling the slowdown in the wake of the corruption scandal. Makati Business Club executive director Rafael Ongpin noted that some major multinationals have pulled out of the country due to corruption and red tape, while top infrastructure firms are shying away from bidding on flood control projects.
Analysts, however, stressed that decisive action could turn the crisis into an opportunity, as a transformed Department of Public Works and Highways could ensure that public funds are properly spent on the right infrastructure projects that could have a beneficial multiplier effect on the economy.
Balisacan remains optimistic that the reforms will ultimately pay off, and will set the stage for faster, more inclusive, and more sustainable growth.
Corruption doesn’t only steal from the nation’s coffers, but it also affects the future by undermining the country’s potential for growth when the funds are taken and when investors shy away to avoid involvement.
Would it be reasonable for Filipinos to expect the necessary reforms and improvements that can end the grip of corruption on our nation? Today’s focus on the flood control anomalies will hopefully be the start of a new era for our country.*
