Tighten regulation of NGOs – PSE

MANILA, Philippines - The government should tighten rules on registration of non-government organizations (NGOs), dozens of which have been linked to the multibillion-peso pork barrel scam.

The call was made by Philippine Stock Exchange (PSE) president and chief executive officer Hans Sicat, who also urged authorities to make sure those involved in the scam are punished.

He said that with the staggering amount of taxpayers’ money embezzled, measures must be put in place to prevent further abuses in the use of congressional pork barrel, officially called Priority Development Assistance Fund (PDAF).

“This is a personal view only. The PDAF was presumably developed to enable the local representative to help direct project spending at the local level to the appropriate uses. The reckless use of unqualified NGOs has meant billions of losses,” he said. “Safeguards should be put in place, including accrediting and regulating NGOs and policing politicians. I think parties guilty of perpetrating fraud should be punished severely,” Sicat added.

The PDAF, widely perceived as a major source of corruption, has allowed greedy lawmakers to pocket public funds – in connivance with NGOs and other private groups – at the expense of taxpayers.

The Makati Business Club, Bishops-Businessmen’s Conference for Human Development, Catholic Bishops’ Conference of the Philippines-National Secretariat for Social Action, Justice and Peace, Citizens’ Congress for Good Governance, and Transparency and Accountability Network had earlier asked the government to implement tighter rules on the use of pork barrel and other public funds.

They said that while the Aquino administration is exerting efforts to shore up revenues through increased tax compliance, “people’s money has been allegedly misused by individuals both inside and outside of government.”

A special audit conducted by the Commission on Audit covering 2007 to 2009 showed how some lawmakers had malversed their pork allocation in collusion with bogus NGOs.

Ten of the 82 NGOs on the COA list were identified with fugitive businesswoman Janet Lim-Napoles.

According to the COA report, the agreements entered into with NGOs breached rules prescribing inspection and monitoring of projects.

The COA report also found interlocking interests among the NGOs.

Francis Lim, a senior partner at the ACCRA law office and former president of the PSE, has expressed his disgust at officials’ misuse of their PDAF.

“The gross misuse of the pork barrel fund is mind-boggling and scandalous. No wonder we have very poor basic services and infrastructure, which have been weighing down on our competitiveness as a country,” Lim said.

Lim said he hopes that the scam as well as the rising public uproar against corruption would not affect government’s efforts to boost its tax revenues and attract more foreign investments.

“It is demoralizing to the taxpayers. I hope it will not adversely impact on the government’s tax efforts,” he said.

A report released by the United Nations Conference on Trade and Development showed that the Philippines continues to receive the least foreign direct investments among the six largest economies in Asia due to poor quality of infrastructure.

The World Bank said the Philippine government should step up infrastructure spending from the current three percent of Gross Domestic Product to five percent by 2016 if it wants to attract more foreign direct investments.

While the Philippines improved its global competitiveness ranking to number 65 out of 144 economies this year from the previous year’s ranking of 75, the country is still behind Southeast Asian neighbors Singapore (2nd), Malaysia (25th), Thailand (38th) and Indonesia (50th).