25 February 2011 MAP urges speed, intensity in anti-smuggling drive MAP Statement on Smuggling     The MANAGEMENT ASSOCIATION OF THE PHILIPPINES (MAP) commends the Department of Finance (DOF) for the anti-corruption steps it has already taken and for enhancing the capability of the Bureau of Customs (BOC) to step up counter-corruption initiatives to address rampant smuggling of many products like oil and motor vehicles.   A smuggling-free Philippines will not only improve the country’s standing in the world competitiveness ranking but will also address the revenue gap and provide much needed funds for education, health and infrastructure.  Smuggling of petroleum products alone is conservatively estimated to result in a revenue loss of at least P30 billion per year.   We therefore encourage the DOF and the BOC to aggressively pursue their efforts with maximum speed and intensity as plugging this continuing plunder would go a long way in addressing the country’s fiscal problems.   We encourage the DOF to do the following:    1.       Aggressively pursue its campaign to prosecute, convict and jail major tax evaders and smugglers. 2.       Quickly come out with results of all pending investigations and audit. 3.        Immediately file cases as soon as there are findings of tax evasion, smuggling and corruption.  4.        Continue filing cases against those who violate the laws as part of its Revenue Integrity           Protection Service (RIPS). 5.        Observe transparency in giving tax amnesty for those importers who voluntarily approach BOC           for their undervalued products by publishing clear tax amnesty guidelines that are approved by Congress. 6.        Speedily conduct an audit on the value of products declared by the importers and the tax           payments to ensure that government always collects the right taxes and duties. 7.       Improve and strengthen the import accreditation process so that those who actually do not            pay the right taxes and those with pending cases will no longer be able to import any           product. 8.        Establish a single efficient point of contact that will enable importers to track electronically           where their documents or cargoes are. 9.        Immediately release audit findings to be able to collect the right taxes.   We wish the DOF huge success in bringing the country’s tax effort to at least 18% of GDP, and the revenue effort to more than 22% of GDP, to enable the government to continue investing in the infrastructure for commerce and social services.   We encourage the President to certify as urgent the pending bills on anti-smuggling in Congress in line with his “Kung walang corrupt, walang mahirap” battlecry.   We strongly urge the business community, especially the members of MAP, to sign the Integrity Pledge and to lead by example in the fight against corruption by managing their businesses ethically and with integrity, paying the right taxes, taking care of their stakeholders and the environment, and not tolerating bribery. 2 February 2011    MAP Statement on Corruption in the AFP               We, in the MANAGEMENT ASSOCIATION OF THE PHILIPPINES (MAP), are appalled by the alleged massive corruption in the Armed Forces of the Philippines (AFP).                The plunder case against former AFP Comptroller, retired Maj. Gen. Carlos F. Garcia, which resulted in an anomalous plea bargain agreement; the shocking testimonies of former Commission on Audit (COA) Auditor Heidi Mendoza; the disgusting revelations of former AFP Budget Officer, retired Lt. Col. George Rabusa; and the alleged involvement of top AFP officials in illegal and immoral multi-million peso perks that they and their families enjoy are significant corruption cases that erode the confidence of the people in the AFP and put into question the moral fiber of the AFP leadership.               Corruption in public service in general, and the AFP in particular, is anti-poor and is blatantly opposed to the “Kung walang corrupt, walang mahirap” battlecry of President Benigno C. Aquino III.  The public money that went to private pockets of AFP officials and their families could have been used to enhance AFP’s capacity to fight insurgency, fund its modernization program and improve the lot of the Filipino soldier.               We urge other government officials to join Ms. Mendoza and Col. Rabusa in bringing to light the anomalous activities in the AFP and in other public offices.               We encourage Congress to immediately enact the Freedom of Information Law which will give the access to information heretofore hidden from public scrutiny.               We urge the government to provide the necessary protection to truth-tellers like Ms. Mendoza and whistle-blowers like Col. Rabusa.   We call on President Aquino to immediately create an independent body that will investigate and recommend solutions to the corruption practices at the AFP, and to send a strong message that corruption will not be tolerated in his administration.   We strongly request the President to act with speed and use the full force of the law against all involved in these anomalies.    We, in the MAP, can only hope that something good will come out of all of these shocking revelations, something that will assist all of us in “MAPping a Culture of Integrity.”   The only thing necessary for evil to flourish is for good men and women to do nothing.

	URGES STRONGER ANTI-CORRUPTION MEASURES ON SMUGGLING to improve the country’s competitiveness ranking and address revenue gaps MAP said the government should be more aggressive in its stance against smuggling, and should intensify its program combating plunder to address the country’s fiscal problems. "A smuggling-free Philippines will not only improve the country’s standing in the world competitiveness ranking, but will also address the revenue gap and provide much needed funds for education, health and infrastructure," it said. The group said bringing the country’s tax effort to at least 18% of the country’s economic output or its gross domestic product (GDP) together with increasing the government’s revenue effort to more than 22% of the GDP will enable more public infrastructure investments for commerce and social services. Smuggling of petroleum products is estimated to contribute to a revenue loss of at least P30 billion annually, the MAP noted. The MAP specific recommendations for government are as follows: >>> Aggressively pursue its campaign to prosecute, convict and jail major tax evaders and smugglers. >>> Quickly come out with results of all pending investigations and audit. >>> Immediately file cases as soon as there are findings of tax evasion, smuggling and corruption. >>> Continue filing cases against those who violate the laws as part of its Revenue Integrity Protection Service. >>> Observe transparency in giving tax amnesty to importers who voluntarily approach the BOC for their undervalued products by publishing clear tax amnesty guidelines approved by Congress. >>> Speedily conduct an audit of the value of products declared by importers and their tax payments to ensure government always collects the right taxes and duties. >>> Improve and strengthen the import accreditation process so that those who actually do not pay the right taxes and those with pending cases will no longer be able to import any product. >>> Establish a single efficient point of contact that will enable importers to track electronically where their documents or cargoes are. >>> Immediately release audit findings to be able to collect the right taxes. MAP also encourages the business community to be part on the fight against corruption.    “MAP STATEMENT OF THE WEEK” 21 February 2011   Compensation for Board Members of GOCCs and GFIs   The Management Association of the Philippines (MAP) commends President Benigno S. Aquino III for issuing EO 24 which rationalized the compensation structure for members of the Boards of Directors/Trustees of GOCCs and GFIs guided by the principles of transparency, accountability and prudence. While the structure can be improved in the future in terms of equity, competitiveness and scope, EO 24, as promulgated, is a good start.   The issuance of the EO reflects the sense of urgency of the Aquino administration in addressing malgovernance practices that could be acted upon immediately. “Quick wins,” such as this, are important in the efforts to rebuild the credibility of and confidence in our GOCCs and GFIs, many of which were taken advantage of in the past by opportunistic directors, trustees or commissioners and such abuses directly impacted on the reputation and integrity of said GOCCs and GFIs.   However, there is more to good corporate governance than the competitiveness or fairness of a firm’s compensation structure, GOCCs or otherwise. By the end of this year, MAP hopes that a more comprehensive law instituting other reforms in corporate governance can be enacted to ensure the public here and abroad that this administration is indeed serious about reforming the corporate governance environment in this country. After all, good corporate governance is globally acknowledged as one of the key determinants of a country’s competitiveness.

	“MAP STATEMENT OF THE WEEK” 9 May 2011   Office of the Ombudsman as   Anti-Corruption Tool   We in the MANAGEMENT ASSOCIATION OF THE PHILIPPINES (MAP) requests the Office of the President to appoint immediately a highly-qualified Ombudsman with proven honesty, integrity, transparency, accountability and good governance, and with unquestionable good moral character so that the government can finally use the Office of the Ombudsman as a management tool in eradicating corruption in government.   Corruption continues to be one of the biggest impediments to economic growth and prosperity in the country, and it has been eroding the moral fiber of the nation.   The selection of the next Ombudsman is highly critical in regaining the independence and effectiveness of the Office of the Ombudsman in discharging its vast powers like making public officials accountable for their actions, investigating and prosecuting erring officials and meting out administrative penalties, and recommending policies that will eliminate government inefficiency and corruption.   With the Office of the Ombudsman being the real protector of the people, and not of the few, P-Noy can finally transform his “Kung walang corrupt, walang mahirap” battlecry into reality.   We urge the Judicial and Bar Council (JBC) to bring out to the fore the background and qualifications of each candidate being considered to encourage greater public participation in the scrutiny, evaluation and selection of the new Ombudsman.   The resignation of Ombudsman Merceditas Gutierrez gives the government a prime opportunity to move forward with greater speed, and the resolution of the charges can serve as a strong signal and clear example of P-Noy’s non-negotiable, anti-corruption drive.   For a more proactive anti-corruption vehicle, we encourage the Aquino Administration to certify the Freedom of Information (FOI) Law as urgent and for Congress to immediately enact the FOI Law which will give the access to information heretofore hidden from public scrutiny, and provide the necessary protection for truth-tellers and whistle-blowers. . MAP Circular No. 082 - 2011 -2 May 2011 “MAP Insights” Column in BUSINESSWORLD – _26 April 2011    PCOS for ARMM Election? Manuel A. Alcuaz, Jr.   The COMELEC Website has published only one resolution for the  the ARMM Election,. i.e., Resolution 9144 on Voters Registration. However, there are persistent media reports that COMELEC has already passed a resolution on automating the ARMM election for P1 billion to P2 billion!   It is interesting that the CAC (Computer Advisory Council) had recommended that the Smartmatic machines should not be bought. The CAC was at the time headed by CICT (Commission on Information and Communication Technologies) Chair Ray Anthony Roxas-Chua.   Now it seems that the CAC, now headed by the new CICT Chair Atty. Ivan Uy, has reversed itself and recommended the purchase of between 4,000 to 6,000 Smartmatic PCOS machines for the ARMM election.   Let us analyze this COMELEC decision.   In the 2010 national and local elections, there were 76,347 clustered precincts and COMELEC rented about 82,000 PCOS machines.   In ARMM, there were 3,379 clustered precincts! Why does the COMELEC want to buy 4,000, 5,000, or 6,000 PCOS machines for the ARMM 2011 election?   If Chairman Brillates were not a devotee of St. Benedict, I would suspect that some people in COMELEC want to maximize their commissions!   One story that we have heard is that COMELEC thinks that ARMM has 4,000 clustered precincts but they will buy 6,000 machines. The 2000 extra machines will be back-up!   This is absurd, 50% back-up! If the machine is that unreliable, don’t buy it!   Another justification is that COMELEC had savings of P2.1 billion from the 2010 budget. This again is shameful thinking.   Having savings is never an excuse to throw away money.   In reality, there is no need for even a single PCOS machine for the ARMM election.   The 2011 ARMM Election does not need automated precinct counting. There is a need  for electronic transmission and canvassing.   There are only three positions in each ballot and probably a total of six to twelve candidates to tabulate votes for.   Manual counting is going to be fast enough, more transparent, and more credible.   Something that can be done in less than an hour per 200 ballots.   In the last National and Local Elections, there were about 20 to 30 positions to vote for and more than 200 candidates to tally. That could really take a long time to do manually.   The COMELEC’s insistence on automating the ARMM election using Smartmatic machines should be viewed with suspicion.   Ideally, there should be a thorough analysis of the different alternatives for automating future elections.   The purchase of 6,000 Smartmatic machines for the ARMM election is not only a waste of money this year, it may pre-empt a wise and unbiased choice for the future.   It looks like Smartmatic and some COMELEC insiders are making sure that they will make money in 2011 and again corner a huge contract for the 2013 national and local elections.   Where is “ kung walang corrupt, walang mahirap?”        (The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines.  The author is President of Systems Sciences Consult, Inc. and member of the MAP National Issues Committee. Feedback at map@globelines.com.ph. For previous articles, please click <http://map.org.ph/members/mappingthefuture.php?dir=MAP%20Insights>). .

	NEW Management Association of the Philippines  PRESIDENT JUN PALAFOX INAUGURAL ADDRESS:   MAPping a culture of integrity ..."As members of MAP, we must steadfastly adhere to the highest ethical standards, good governance principles and management excellence, while courageously confronting the growing complexity of managing businesses in an ever challenging environment. Our core values in the MAP remind us that integrity not only entails honor, transparency and accountability, but also completeness with all the valued components of the main theme taken into consideration to work efficiently as a whole. This year, we hope to address the challenges of corruption, criminality and climate change. Corruption, as I learned from the seminary, comes from two Latin words “cor,” which means heart, and “rupture,” which means break. So we seem to live in a country or society with a broken heart. The competitiveness of our country continues to decline, preventing us from addressing poverty, housing, public health, transportation, traffic, climate change and the environment, among others. MAP supports the Coalition against Corruption. We also fully support the Integrity Initiative of the Asian Institute of Management (AIM), the Makati Business Club (MBC), the European Chamber of Commerce of the Philippines (ECCP) and the American Chamber of Commerce (AmCham). Three-hundred plus companies have already signed up for a pledge of the Integrity Initiative which aims to promote integrity and accountability in business. MAP members are strongly urged to commit to ethical business practices and good governance. We should be exemplars, not the exempted. MAP members must lead by example in the fight against corruption by managing their business ethically and with integrity, paying the right taxes, taking care of their stakeholders and the environment, not tolerating bribery, and not just talking about corruption but also reporting and exposing it..." CLICK HERE TO READ THE ENTIRE ADDRESS A culture of integrity A Global View - By Beth Day Romulo, Manila Bulletin, February 2, 2011 The Management Association of the Philippines (MAP) inaugural meeting on January 25th, held at the Peninsula Hotel in Makati, was devoted to the subject of developing a culture of integrity. Incoming MAP President, Felino “Jun” Palafox, the first architect to head MAP, laid out an ambitious program for the year ahead. Viewing itself as a “Partner to Government,” MAP’s plans focus on addressing the problems of criminality, corruption, and climate change, and the development of a culture of integrity to replace the apathy of the past. MAP will form a “shadow cabinet” with a committee assigned to each department of government to assess its projects in terms of transparency, accountability, and sensitivity to climate change. Since MAP’s 1,000 members include former Cabinet secretaries and ambassadors, this will provide an informed oversight of government decisions. “We can ask them to come out with an analysis of what could be done better.” MAP also plans to launch a hotline “Text a Crook” which individual citizens can use to report incidents of corruption. These leads will in turn be forwarded to advocacy groups that will follow up on the complaints... Click here to read the full article

	Business managers  “appalled” by revelations of “massive” corruption in the military Call on President Aquino to form independent body to investigate allegations The Management Association of the Philippines (MAP) said the alleged irregularities unmasked by Rabusa and Mendoza threatened to completely erode the confidence of the people in the military. The public funds that ended up in the pockets of AFP officials and their families could have been used to enhance AFP’s capacity to fight insurgents, fund its modernization program, and improve the conditions of ordinary Filipino soldiers, MAP said. "We urge other government officials to join Mendoza and Rabusa in bringing to light the anomalous activities in the AFP and in other public offices," MAP said. "We encourage Congress to immediately enact the Freedom of Information Law which will give access to information heretofore hidden from public scrutiny," it added.  "We urge the government to provide the necessary protection to truth-tellers like Mendoza and whistle-blowers like Rabusa," MAP pointed out. "We, in the MAP, can only hope that something good will come out of all of these shocking revelations, something that will assist all of us in 'MAPping a Culture of Integrity.'" Click here to read full article

	MAPping the Future When good governance turns bad By Antonio Hernandez in Philippine Daily Inquirer, 2/27/2011 THE INCIDENCE of failed institutions during the Asian currency crisis in the late nineties and the more recent financial meltdown that questioned even the wisdom of Wall Street have trained the spotlight on the manner business enterprises are governed. In no time, the issue of Good Governance became the buzzword in business organizations up to the present. Whatever really happened to corporate governance (CG) on its way to “profit maximization?” Where have all the “quality decision-making” gone? How was governance understood and enforced then? Where did it fall short? According to Amy L. Bendurant, US Ambassador to the Organization for Economic Cooperation and Development, governance is “the manner in which the shareholders, the board of directors, the management and other stakeholders relate to each other in order to set company objectives and determine the means of attaining them.” Virtuous decision-making It is indeed a relationship among partners-players (investors, management, employees, buyers, suppliers) to align as nearly as possible, “the interest of individuals, of corporations and of society towards achieving a balance between economic and social ends,” according to Sir Adrian Cadbury. What makes for good CG is the imperative for “virtuous decision-making,” from which comes straight corporate policies and on to ethical action plans and programs. But the operational realities of CG takes a much deeper structural dimension. It is where the people factor enters the scene. The real challenge lies in the systems implementation. Is it founded, applied and pursued in the spirit of honest stewardship? Or is it but a smokescreen to ensconce and enshroud the drive of a selfish and iniquitous business opportunism? Because of the frailty of the human factor, controls and performance standards or balance scorecards covering both financial and nonfinancial factors are prescribed. These control standards are there to enforce good governance to protect business plans, and thereby achieve company goals in pursuance of the vision-mission statement. Collusion, or misplaced tolerance at responsible levels, if not connivance among accountable officials for instance, can surely render ineffective every elaborate control structure and thereby facilitate fraud. An unyielding values system embedded in the leaders’ psyche, and strong corporate culture may yet withstand the specter of collusion. This brings us to the realm of behavioral economics, to an awareness of and commitment at the highest level to a code of ethics and moral responsibility which shall redefine the Corporate Culture, or the way of doing things—and accordingly reform the performance measures as tools to good governance. Corporate culture CG, which shapes corporate culture, is in itself shaped by the behavior of corporate leaders. Leaders are logically looked up to by the young as models, ultimately shaping corporate conduct. In the end, it is the leaders’ mindset that will guarantee commitment to, and set the tone of, CG. Rotten mindset equals rotten governance. Corporate busts and scandals, as featured at one time in Fortune Magazine, were unfortunately traced to “breakdown in ethics, in corporate oversight, and in common sense.” The bigger and more fundamental question though is: “What precipitates the breakdown in business ethics, in corporate oversight and, yes, in common sense?” Again, a focus on the many institutions broken by the past financial storms points to such stark weaknesses as: neglect, ignorance and, the worst and foremost, greed—the inordinate acquisitive desire for wealth beyond reason. Sadly, we hear Wall Street stalwarts postulating that “Greed is Good,” that it is the “mantra that gives life to and propels Capitalism.” But business ethics would certainly not do well with such mantra of extremes that only leads to embracing wrongful means and, ultimately, to the corruption of the best. For the problem of extreme wealth accumulation is that it conflicts with values of greater humanitarian importance and thus breaks the principle of stewardship. Disarray Overdone, the subtle abuse of power or prerogative brings the control systems into disarray. Soon, the concept of ethical stewardship evaporates; moral ascendancy is lost; managing gets even more complicated and messy; and the corporate vision, which “articulates the nature of the business and its noble intention for the future,” is consigned to oblivion. Before long, good governance fades out and bad governance creeps in. The next great collapse cannot be far behind. As an Indian statesman puts it, what will destroy us is “Business without Principles; Politics without Morality; Pleasure without Conscience!” Isn’t it time to unlearn the bad and relearn the good? (The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is management and development finance consultant; director, Masaganang Sakahan Inc.; member – Advisory Council - Government Association of CPAs; former senior vice president, Land Bank of the Philippines; member - Management Association of the Philippines. Feedback at map@globelines.com.ph. SOURCE: http://business.inquirer.net/money/columns/view/20110227-322577/When-good-governance-turns-bad