Philippines Threshold Program

MCC selected the Government of the Republic of the Philippines to participate in the Threshold Program in FY 2006. When the Philippines was selected as threshold eligible, it did not meet the criteria in the Ruling Justly category, failing the Control of Corruption indicator. To assist the with its threshold program proposal, MCC provided the government with an indicator analysis highlighting key policy constraints that included those raised by the eligibility indicator institutions and tracked in the current indicator scorecard.

The Philippines threshold program targeted policy areas measured by two MCC eligibility indicators, Control of Corruption and Fiscal Policy. The Philippines’ threshold program included two components that focused on reducing corruption throughout the government and improving authorities’ ability to monitor, expose, and sanction corruption practices.

Philippines Threshold Program Implementation

The Philippine government and USAID, which was responsible for implementing the program on MCC’s behalf, signed the threshold program agreement in July 2006. The program concluded in May 2009. As the program administrator, USAID managed program operations and oversaw the program implementing partners:  Management Systems International (MSI) and the Asia Foundation. 

Program Achievements

The threshold program provided extensive training, support for inter-agency collaboration, and IT equipment to the investigators, lawyers and prosecutors in charge of pursuing corruption, tax evasion, and smuggling cases. To improve transparency and data-sharing, the program connected all seven ombudsman enforcement offices throughout the country using a local area network, and linked the remaining non-computerized BIR district and regional offices nationwide to the headquarters office. 

The program also significantly improved the capacity of government anticorruption and revenue generating agencies. More than 3,000 investigators, prosecutors, lawyers, revenue officers, and other staff were trained on various anticorruption, anti-tax evasion and anti-smuggling techniques. All nine performance targets were exceeded, most notably:

  • A 55 percent conviction rate against high-ranking public officials (against a target of 40 percent); 
  • 688 public grievances mediated in the Ombudsman’s Office (from a baseline of zero); 
  • 140 corruption complaints against a target of 116 cases filed against Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), and other Department of Finance (DOF) officials; 
  • A 16.5 percent increase in corporate income tax returns filed (against a target of 10 percent); 
  • About 117 complaints filed against tax evaders and 95 complaints filed against smugglers, exceeding the targets of 116 and 61 cases, respectively. 

Program Budget

Milestones

  • Signed:
     July 27, 2006
  • Closed:
     May 29, 2009

Program Projects

Strengthen the Department of Finance

Objective

Improve the ability of the revenue collection agencies to detect and deter tax evaders and smugglers, and increase compliance with the laws by both taxpayers and officials to reduce corruption and increase revenue generation. 

Activities

  • Improved the investigative skills of the Department of Finance’s Revenue Integrity Protection Service (RIPS) unit:
    • Trained and mobilized RIPS staff, including basic training and advanced training courses.
    • Strengthened the investigation and surveillance capacity by providing surveillance equipment such as cameras, optic and electronic devices, which will reduce backlogs in case development and prosecution. 
    • Improved information security to safeguard evidence and documents by designing and installing a security system.  
  • Established the Run After Tax Evaders (RATE) unit within the Bureau of Internal Revenue to deter tax evasion.
    • Executed the RATE campaign at the national level through local and overseas training programs on detecting illegal activities, evidence needed to prove a tax case, and how to investigate and document a case.  
    • Reformed the processes associated with taxpayer registration and filing, introducing computerization to substantially increase the effectiveness of RATE investigations.  
    • Automated the Human Resource Information System to enable the BIR management to allocate human resources more effectively, improve work efficiency of BIR staff, and evaluate and monitor performance.
  • Strengthened the capability of the Bureau of Customs’ Run After The Smugglers (RATS) unit to investigate, prosecute, and deter violators of the Tariff and Customs Code and trade-related laws.
    • Trained RATS staff on profiling, case evaluation and litigation.
    • Improved information management and document security including developing a RATS database that would allow customs personnel greater insight into information to better develop cases.
    • Strengthened the Customs Accreditation Secretariat to conform with international standards by training staff in areas such as financial evaluation and document validation, and by centralizing and integrating accreditation systems that will eventually connect with other systems globally.
    • Ensured that the Tariff and Customs Code of the Philippines is attuned to developments in worldwide customs administration.
    • Established an Integrity Action Plan to promote ethical and professional behavior within the Bureau of Customs.
    • Established an Internal Control Unit to ensure that all Bureau of Customs units perform their respective mandates in accordance with key performance objectives. 

Strengthen the Office of the Ombudsman

Objective

Strengthen the Office of the Ombudsman’s ability to address corruption and reduce the deficit by reducing the costs of corruption.

Activities

  • Expanded the training program for new hires and provide advanced courses for previously trained employees.  
  • Improved information management by internally connecting the six existing offices via a Local Area Network and a Wide Area Network.  
  • Strengthened investigation and surveillance capability of the office by providing training and acquiring equipment such as cameras, optic and electronic devices.  
  • Trained teachers to provide an anti-corruption module in public school curriculums.
  • Established a mediation system to unclog the investigation-prosecution system of requests that are not legally actionable but require conflict mediation.