Can corruption jack up the price of your pansit?

The Philippine Daily Inquirer reports:

The shroud of secrecy surrounding high-level government contracts has led to the rise of “grander” and more lucrative corrupt practices in the Arroyo administration, anticorruption crusaders said Tuesday. But red tape and petty corruption, such as bribery, have decreased because of the anti-red tape executive order issued by Malacañang last year, Vincent Lazatin, executive director of Transparency and Accountability Network (TAN), said.

The executive order reduced transaction fees and trimmed bureaucratic dealings in several frontline agencies. “Bribery is going down. But the grand or bigger types of corruption are on the rise,” said Segundo Romero, a senior fellow at the Development Academy of the Philippines (DAP), which presented Tuesday corruption prevention studies under its Corruption Prevention Action Project.

Everybody in this town hates corruption. That collective distaste is real. I can almost taste it. Yet, given the choice to pay off the traffic enforcer or accept a ticket, most would take the former. Most would choose to bribe someone at the Bureau of Internal Revenue rather than pay the right amount of taxes. Pay a small bribe rather than add to some corrupt congressman’s largesse?

The Filipino conscience is at odds with itself. Here’s a twisted application of the left hand not knowing what the right hand is trying to do. We hate corruption and yet we do it because it’s convenient.

Vince Lazatin was a fund manager for more than 10 years. We spoke more than a week ago, and I pointed out that he seemed more grounded and looked more fulfilled working in the NGO sector as president of Transparency and Accountability Network. Apparently, fighting corruption is the job he had longed for, more fulfilling than the rush that comes from fighting the herd in financial markets. May your tribe increase, Vince.

Let me state the obvious. Corruption is not about some congressman’s pocket or some government official’s retirement package. It is an insidious tax that affects everyone. It adds to the cost of doing business and raises the cost of goods and services. It’s one of the reasons Philippine sovereign bonds are still considered junk bonds in global markets. It’s one of the reasons why small businesses do not survive.

The flip side is, elimination of corruption can drop the price of your pansit. It’s as simple as that.

In other news, Noet Ravalo expects more opportunities for individual investors arising from the SONA. He expects higher returns through an increase in interest rates and from a stronger currency. He expects the government to issue more debt securities to fund all the roads and highways the President wants to build. We may also see more local governments issuing more municipal bonds. He sees more development of the forward market and the wider tradability of bankers/trade acceptances.

“These products directly help our exporters/importers and would alleviate the volatility on spot (current) market prices.” Certainly, these products represent opportunities for retail investors to better participate in the financial market. But perhaps beyond purely personal finance considerations, they also provide a way for individuals to be active partners in funding the desired vision for the country.

I’m fighting some pessimism here. Let’s hope you’re right.

Other bloggers: Get Rich Slowly has an answer for Peter who is worried about his credit score (well, in a way). Yeah, its not the end of the world when your credit score is down in the pits. But more vigilance is needed. Investopinoy says you save on electricity cost if you use the rice cooker instead of the microwave. Dave Llorito says the NBN and Cyber-Ed projects have bloated costs and should be dropped.

Oh and following Dave’s gracious lead, I would also thank Manolo Quezon for inviting me to be a guest on The Explainer over at ANC to talk about Francswiss and explain about pyramid scams. It was fun to play with the friendly orcs, play money and children’s blocks to show why pyramiding is doomed from the beginning, Manolo. It was a great experience, and thanks for promoting MoneySmarts! Unfortunately, I was nervous ALL the time. hehe. I don’t know how you do it so well.

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