EDITORIAL - Blacklisted

The World Bank has blacklisted three Philippine companies, barring one of them permanently, for colluding with four Chinese firms in rigging the bidding for a road project partly funded by the WB. The rigging was unearthed in phase one of the National Roads Improvement and Management Program, according to a WB report released this week in Washington. Last year the WB had withdrawn its $33-million funding for the NRIMP-1 as the investigation was launched, but a larger project, NRIMP-2, is pushing through.

The investigation was launched amid an intensified WB campaign against corruption, which diverts development funds away from the poor. Reacting to the WB report, the Philippine government said it would review the NRIMP-1 before deciding how to deal with the companies: EC De Luna Construction Corp., which was permanently banned from participating in WB projects; Cavite Ideal International Construction and Development Corp., and CM Pancho Construction Inc.

The government should do more and find out whether public officials were involved in the rigged bidding. There should also be a serious effort to streamline processes to prevent the rigging of bids in all government agencies. Such an effort was undertaken at the Department of National Defense and the Armed Forces following the indictment of former military comptroller Carlos Garcia for corruption several years ago. Other agencies, particularly the Department of Public Works and Highways, should undertake a similar streamlining of bidding and procurement procedures.

The streamlining is needed particularly for foreign-assisted projects, especially because last year’s Supreme Court ruling on executive privilege encourages rather than deters corruption in projects where a foreign government is involved in the negotiations.

Not all sources of official development assistance are like the World Bank, which conducts its own probe of projects that might be tainted with corruption. Washington, through its Millennium Challenge Corp., has also demanded more effort by Manila in fighting corruption before the Philippines can qualify for a larger amount of aid. Other members of the international donor community should do the same if they do not want their aid to end up being pocketed by crooks in the recipient country.

The Philippines cannot leave this battle solely in the hands of foreign governments and multilateral institutions. The country should do its own housecleaning and implement measures that will prevent the rigging of bids and discourage corruption.