EDITORIAL — The cost of corruption

He may be charged with complicity in corruption, but former Philippine Forest Corp. president Rodolfo Lozada Jr. appears ready for the worst, bracing himself for retaliation by the administration. After saying “mea culpa” over his own sins yesterday, he revealed that government contracts are typically overpriced by 20 percent to factor in kickbacks.

This has been suspected all along by many Filipinos, but confirmation of the public’s worst suspicions does not reduce the disgust over the cost of corruption. Lozada, still distraught but now regaining his sense of humor, told the Senate in a day-long session yesterday that trouble started when Benjamin Abalos, at the time the chairman of the Commission on Elections, demanded a $130-million kickback from bro-kering the national broadband network or NBN deal — an amount that was double the usual kickback percentage. Abalos has threatened to sue Lozada for spreading lies.

The kickback amounts allegedly involved, as Abalos pointed out, are staggering — but not unbelievable, especially if the money must be shared with others. Kickbacks are suspected in everything, from patchwork road repairs to big-ticket projects including the NBN deal between ZTE Corp. and the Department of Transportation and Communications as well as the Southrail project, which Lozada said was overpriced by $70 million.

The corrupt will argue that since kickbacks are normally not taken directly from public funds, the beneficiaries are not stealing from national coffers. But the public does end up paying for corruption. Those who factor in corruption as a cost of doing business recover that cost through higher road toll or utility rates, for example. If the project is financed with a foreign loan, taxpayers must bear the burden of repaying it, no matter how low the interest rate.

Lozada decried the “dysfunctional” government procurement system that allows such kickbacks to go unchecked. Left unsaid at the Senate session yesterday was that even lawmakers get kickbacks from projects funded with their pork barrel. If Congress can pass legislation to put an end to that dysfunctional system, it will earn public respect.