By ANTHONY IAN CRUZ
Malaya
March 13, 2008

A LEADER of the Philippine Business Leaders Forum (PBLF) yesterday said the Philippines has become the most corrupt country in the region, imperiling efforts to attract foreign investors and keeping those who are already here.

In an interview at the sidelines of an Asian Institute of Management Policy Center forum, PBLF chair and CEO Michael Clancy said “the level of corruption here and the stink of it is much greater here than I have ever witnessed.”

Clancy, who has lived in Hong Kong, Korea and Taiwan, said companies doing business in the region allot about “10 percent” of costs for “facilitation” or bribes.

He said in the Philippines, the figure is 50 percent.

PBLF boasts of a membership of about 240 executives representing 40 multinational corporations operating in the country.

Clancy said among businessmen, the overwhelming concern nowadays is good governance.

“Security would be one percent, and corruption is 99 percent,” he said. “Because of the level of corruption some people have pulled out (of the country).”

Clancy said low confidence in governance has resulted in weaker inflows of investments: “In terms of putting new investments, they are looking at somewhere else in Asia,” he said.

He said the NBN-ZTE issue is “just one more (incident) and each one of them drives another nail into the coffin. What it does is that people are thinking about the Philippines and they would say, ‘forget it.'”

He said that while most Western countries are betting on China, they also have backup areas.

“But at the moment, that backup is not the Philippines,” said Clancy. He named Malaysia, Thailand and Australia as the second choice after China.

Clancy also said that the Philippine government rejected “pointblank” a European investment delegation two years ago which sought to look at business prospects.

He said government representatives told the European delegation that “we don’t need your money anymore, we have China now.”

“`We can get all the money we need from China.’ That’s what we were told,” said Clancy.