The Philippines nudged up a spot in Transparency International’s 2024 Corruption Perceptions Index (CPI) where its score of 33 out of 100 placed it 114th out of 180 countries. In Southeast Asia, Singapore had the highest ranking at 3rd place with its score of 84 followed by Malaysia at 57th (score 50), Timor-Leste at 73rd (score 44), Vietnam at 88th (score 40), Indonesia at 99th (score 37), Thailand at 107th (score 34), and Laos tied with the Philippines at 114th (score 33).
A better CPI ranking might signal an improvement in governance which is always presumed good for economic development. Yet, while improved CPI scores and rankings could indicate progress, the limitations from the subjective nature of the CPI, which relies on perceptions of experts and business executives, are worth bearing in mind. The CPI for instance does not necessarily reflect deeper structural reforms or real improvements in the lives and well-being of ordinary Filipinos, nor indeed maybe even their daily experience with corruption.
Quantified subjective perception may seem to enable comparability with other countries and of a country across time, but perception is inherently variable, context-dependent and subject to cognitive biases. These figures shouldn’t be overread especially if there are just incremental changes in scores or just slight differences in rankings.
Singapore’s very high ranking is conventionally attributed to factors arising from its particular historical and political economic context – its strong state institutions, credible enforcement of the rule of law, and professionalized bureaucracy.
Accepting these as institutional best practices points to major challenges in the Philippines: weak state institutions captured by corrupt and dynastic political elites; authoritarian history continuing with human rights violations by the military and police and simmering fear of coups and destabilization; frequent disregard for the rule of law with too much impunity and poor accountability; and an under-capacitated and fragmented bureaucracy.
There is perhaps one particular thing to learn from Malaysia with relevance to current corruption controversies enveloping both of the feuding Marcos and Duterte political dynasties. Malaysia’s 1Malaysian Development Berhad (1MDB) scandal exposed, prosecuted, convicted and jailed high-ranking officials all the way up to a former prime minister. This did not uproot corruption which is still deeply entrenched in the country’s elite-controlled political and economic system, as in the Philippines, but was still a step forward to reducing the structural conditions enabling such elite capture.
The most common use of the CPI is supposedly as a guide for investor confidence and foreign direct investment in the country. Two points have to be made though.
First, the changes in the country’s scores and ranking are too marginal to be meaningful. Even from the narrow profit-seeking lens of foreign capital, they don’t override more fundamental problems of a limited domestic market because of mass poverty, low domestic levels of technological or industrial capacity, and sluggish global growth, trade and investment. Second, the CPI tends to focus on public sector corruption but does not consider analogous bad behavior by transnational corporations such as tax evasion or avoidance, or of financial systems enabling illicit capital flows.
With that in mind, the real challenges are not simply about improving the country’s CPI scores. It is rather in seeking real accountability for high-level abuse of power whether by the vice-president over funds allocated to her, or by the president in his decisions on pork barrel in the national budget. It is in democratizing political power with an anti-dynasty law, more potent freedom of information law, meaningful independent civil society participation in governance mechanisms, and breaking the grip and presence of oligarch corporations in politics. It is also in and democratizing economic power with income and wealth redistribution as well as structural reforms.
We need great leaps forward in these areas, and improvements in CPI rankings can just follow. Anything less is just image management for the optics and out of a misguided fixation on improving investor confidence. A development strategy that prioritizes national industry and reduces inequality is more transformative than simply improving CPI scores and rankings to please foreign investors.
