Special Report
JULY - SEPT 2001
VOL. VII   NO. 3

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CORRUPTION IN MILITARY PROCUREMENTS grease
Widespread corruption marks the procurement of military equipment and supplies.

by Ed Lingao

Howitzers are among the big-ticket items in the military's shopping list. [photo by Jose Reinares]

Howitzers are among the big-ticket items in the military's shopping list. [photo by Jose Reinares]
THE SIGHT of a cow's head, all that remained of a feast the night before, must have been demoralizing for the government troops that finally overran one of the camps of the elusive Abu Sayyaf in Basilan. After all, the soldiers had been subsisting on a diet of Skyflakes crackers and cheap sardines as they combed the steaming jungles of the island province for their enemy. Among themselves, they would be very lucky if they raised enough money to buy a chicken. Meanwhile, here was their foe, buying a whole cow — for P5,000 cash, said residents of a nearby barangay — to cook and feast on.

It is also no secret to many of the soldiers that the rifles they have cannot compare to those brandished about by the bandit group. Indeed, while government troops have to make do with weapons that are older than most of them, the Abu Sayyaf is known to have the latest firearms from the United States, Germany and Belgium. In fact, the bandits are even supposed to be on the verge of getting a fresh shipment of 100 new Russian-made rifles.

Truth to tell, the Philippine military's budget has lagged behind that of its neighbors. While Singapore buys submarines and Malaysia and Indonesia shop for the multi-role F16 fighter jets, the Philippine military is having great difficulty keeping the wings of its aging fleet of F-5s, OV10 broncos and C-130s from falling off. Getting the old, decrepit planes off the ground is actually just a bonus. Troops like to joke that all that is holding the Armed Forces of the Philippines (AFP) together are rubber bands and electrical tape.

The irony is inescapable. After more than 30 years of dealing with internal conflicts, the AFP can boast of being one of the most experienced armed forces in the world. But the guns and equipment once handled by soldier-fathers have only been passed on to the soldier-sons. Same war, different year. Same guns, different soldiers.

Actually, the defense establishment still gets a big chunk of the national budget. Last year, the Department of National Defense received an allocation of P53 billion, second only in size to the budget of the Department of Education, Culture and Sports (P82 billion), Since the Army is the AFPs workhorse, it usually gets the lion's share of the military budget. Last year, it got P13 billion; the Navy got P6 billion and the Air Force, P5.5 billion.

The military's top brass, however, still complains of a lack of funds. Some military insiders and AFP suppliers say the problem is more like a lack of moral values. This is because, they say, grease money has become as much a part of the military procurement system as the grease used to keep everything from howitzers to gun turrets to aircraft engines in working condition.

Many military contractors admit to setting aside huge amounts to ensure that their contracts travel smoothly down the paper trail and not get lost in Never-Never Land. Inevitably, the added costs are passed on to the taxpayer in terms of more expensive guns, aircraft and ammunition. More importantly, what reach the men and women on the ground are not only equipment that are considerably less in number than what they need, but also of questionable quality.

Corruption has become so much a part of the AFP procurement system that there are now special terms used by those in the know. For example, says a senior officer familiar with military purchases, "cost of money" refers to the cost of corruption; it is the additional cost incurred by the contractor over and above the actual cost of the contract. This may take the form of pay-offs, grease money, or expensive gifts. Since this added expense is usually factored into the final contract price, the cost of money is ultimately borne by the taxpayer.

"Cleared money," continues the officer, is bribe money that has already been properly "laundered." This means the pay-off or grease money can no longer be traced to the original source. If the money has already been 11 cleared," the corrupt supply officer has nothing to fear anymore.

One military contractor even complains of the massive bureaucracy they have to hurdle, even after they had already bagged a contract. He says, "Would you believe that we have to get as many as 136 signatures just to process all our papers?"

He says the red tape is bad enough, but the money needed to unfasten the tape at every level is worse. Each of the 136 signatures, says the contractor, requires different amounts of grease money. Otherwise, a contract that may amount to eight figures could get held up for several months, costing the contractor millions of pesos in interest alone.

The contractor, a supplier of artillery ammunition, remarks it might be cheaper in the long run if government simply institutionalized the corruption. "It would probably be better if Congress just legislates a 10 percent pay-off (for military contracts)," he says wryly "At least that would reduce the amount (of corruption)," the contractor said.

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