EDITORIAL - Weak regulation

With more than 20,000 registered non-government organizations and foundations, it will be difficult for the Securities and Exchange Commission to determine which ones were used to illegally funnel billions from the Priority Development Assistance Fund or pork barrel to personal accounts. SEC officials said this yesterday as the Senate resumed its probe into the PDAF scam.

Since the pork barrel scandal erupted, questions have been raised on the regulation of NGOs and foundations that raise funds ostensibly for charity and related civic purposes. The Philippines is said to be a center of NGOs, and their ranks swelled even more with the introduction of the party-list system. The proliferation of NGOs should have been accompanied by tight, effective regulation. This did not happen, as the pork barrel scandal showed.

Legitimate NGOs involved in valid causes have pointed out that regulations for their accreditation and operations are detailed and tight enough for bogus ones to have been weeded out. If this is true, certain agencies or individuals failed to do their job, or deliberately looked the other way.

Where the lapses occurred – whether deliberate or inadvertent – must be traced and corrective measures implemented. Regulation must be tightened especially for groups that want to engage in fund-raising. Many pyramid scams in recent years were perpetrated using questionable NGOs and foundations.

NGOs serve useful purposes, and legitimate ones have suffered from the pork barrel scam. Many sectors have pointed out that the scandal should lead to an overhaul of the regulatory environment whose weakness led to abuses and misuse of people’s money. The statement from the SEC yesterday raises questions on whether the scandal will lead to sweeping reforms.