Crisis of confidence

The construction and real estate industries are major contributors to economic growth.

- ANA MARIE PAMINTUAN

Businessmen say thousands of jobs in these industries are currently as frozen as the assets of controversial contractors and public works officials.

Approvals for collecting payments from government agencies have also become more complicated, with the required signatures tripling or even quadrupling. This time, the businessmen say the red tape is meant not to collect grease money or “facilitation fees,” but to spread culpability or broaden deniability in case a project is deemed to be anomalous by probers.

The real property sector had already taken a hit from the property bubble created by the proliferation — and then the abrupt shutdown - of Philippine offshore gaming operators.

Now the construction sector and its downstream industries are reportedly being battered. The corruption scandal has spread to substandard, overpriced or nonexistent farm-to-market roads, schools and hospitals.

This week, Securities and Exchange Commission Chairman Francis Lim lamented in a speech that the “crisis of confidence” arising from the corruption scandal has wiped out an eye-watering P1.7 trillion in market value from the stock market. Lim described corruption as a “weapon of mass wealth destruction.”

Presidential investment and economics adviser Frederick Go clarified that the P1.7 trillion was based on sensationalized “fake news” posted on social media, although there has been a slide on a much smaller scale in the stock market in recent weeks.

Regardless of the actual amount of market value losses, the scandal is turning the country into Asia’s basket case. Not only because of the staggering extent of the corruption now being uncovered, but also because of perceptions that after all the hue and cry, there will only be token punishments. The big fish will get a slap on the wrist and everything will return to business as usual.

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