Australia urges Phl to pursue convictions for big graft cases

March 4, 2011

Australia said corruption has an “insidious” hold on the Philippines as Canberra urged the Aquino government to send the strongest signal of fighting corruption by pursuing convictions for high profile graft and fraud cases and diligently undertaking lifestyle checks on public officials.
In a statement released by the Australian embassy in Manila at the recently held Philippine Development Forum, Canberra welcomed the efforts of the Aquino government to tackle corruption, which it said is like a conflict that has had an insidious hold on the Philippines.
“We would encourage the sending of the strongest signal possible by pursuing convictions for high profile graft and fraud; diligently undertaking lifestyle checks for public officials; systematically addressing the vulnerabilities in government departments, for example grievance mechanisms,” Australia said.
Australia also welcomed President Aquino’s social contract with the Filipino people as the guiding framework for the Philippine Development Plan.
The 16 points outlined in the contract, which form the core of the President’s vision for the country, go to the heart of the many development challenges that Filipinos confront today.
Canberra, as one of the largest grant donors to the Philippines, acknowledged the Philippine government for some positive and early reforms.
Australia in particular welcomed the quality of the Aquino administration’s first budget, saying it sends an unambiguous signal that this government and the legislature are committed to being fiscally responsible, transparent and performance oriented.
The budget underlines the priority placed on restoring allocations to the social sectors that have suffered from years of fiscal consolidation.
But Australia said that future budgets provide an opportunity to extend this further by continuing to limit, and in some cases cease altogether allocations to underperforming and loss making programs and agencies.
“With the ever-present threat of external shocks and the inevitable realization of contingent liabilities, we encourage the government to continue its initial work on managing fiscal risk,” it added.
The Australian government said that further strengthening tax administration and addressing shortcomings in the tax structure will provide the fiscal space required to continue to expand social service expenditure.
The effective implementation of the Reform Road Map for Public Financial Management will also improve efficiency in, and accountability of, public spending.
Australia commended the government on its efforts in economic management, citing the economic growth and macro-economic stability that have done much to restore confidence in the Philippines.
“There is now an opportunity to signal to the world that the Philippines is indeed open for business.”
Three or four public-private partnership (PPP) success stories grounded in transparent and competitive bidding processes over the next 12 months have the potential to substantially rebuild private sector confidence in the investment environment.
Backed by concerted efforts to address some of the significant “behind the border constraints” to doing business, Australia said it could fundamentally alter the investment profile of the Philippines, noting that changes to the legal and regulatory framework are needed and some will be easier to achieve than others.
“We would encourage action on some of the more contentious areas such as anti-competitive practices, impediments to labor mobility, restrictions on foreign ownership, and inconsistent national and sub-national regulatory arrangements,” Australia said.
Achieving a target of 7-8 percent GDP growth over consecutive years will also require promising sectors, such as tourism and mining, to realize their full potential, it said.
Australia is hopeful that an executive order to enable limited open skies is issued soon to jump- start tourism, noting that “if the development potential of the mining sector is to be realized, greater certainty and transparency of regulatory arrangements will be critical to attract investors and to ensure the highest standards of social and environmental responsibility.”
Joining the global Extractive Industries Transparency Initiative would also send an encouraging signal, it said further.
Persistent poverty
Despite growth over the last decade, Australia said poverty in the Philippines remains persistent and paradoxically, the number of poor has increased.
The structural changes to the economy that will be required to deliver sustained and inclusive growth will take time.
Building human capital and protecting the poor in the interim will be critical.
Australia welcomed the government’s efforts to provide a pathway out of poverty by investing in education and emphasizing the delivery of quality education.
“We do not underestimate the challenges of fixing a system under stress while moving to an international standard of a 12-year cycle.
“Continuing key reforms to the education sector and appropriately phasing in the transition to a 12-year system are critical to ensuring the Philippines’ most important asset – its well educated people – does not decline further,” Australia said.
With the instability and insecurity continuing to act as a brake on development, Australia said low-level insurgencies and difficulties in bringing the peace process to completion contribute to unrest.
“There is a large opportunity cost to not securing peace. Scarce government resources will continue to be sapped, investment will remain constrained and efforts to raise living standards will be diluted,” it said.
Citing the latest poverty figures indicating that Mindanao accounted for more than half of the increase in the total number of poor families between 2006-2009, Australia said the conflict in Mindanao is dragging down national achievement against key Millennium Development Goals (MDG) targets and insecurity in a small part of the country is being perceived by potential investors as insecurity across the entire country.
Resolution of ancestral land issues, the formulation of an effective governance framework for an autonomous region and significantly increased access of the poor to basic services and employment remain at the heart of securing and sustaining a lasting peace.
Australia welcomed recent efforts to put the peace process with the MILF back on track as it encouraged the government and the Moro people to bring one of the oldest conflicts to an end.
“The challenges confronting the Philippines are immense but by no means insurmountable. The President’s contract with the Filipino people provides not only a way forward but also an unprecedented basis for a transformative partnership by which government and civil society in the broad can work collaboratively to move the country ahead,” Australia said.
Australia said academe is well positioned to provide analysis and policy advice, the business community can share the burden and opportunity in infrastructure and service delivery, and civil society can play an integral role to ensure transparency and effectiveness in government programs while the legislature can help by passing critical legislation.

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