INSIDER VIEW | Preventing corruption in PPPs

Public–Private Partnerships (PPPs) are meant to improve the lives of Filipinos—the very purpose of all government projects. PPPs unite public purpose and privateinnovation to accelerate infrastructure development and service delivery based onperformance. 

Yet, like traditional procurement, PPPs—if left unchecked—can become fertile ground for corruption.

A framework for integrity in PPPs

To sustain public trust and investor confidence, every PPP must be anchored on Robert Klitgaard’s formula for corruption and guided by a culture of integrity, transparency, and accountability. 

Klitgaard’s well-known equation offers a practical framework for governance and ethics in any PPP project, process, or arrangement:

Corruption = Monopoly + Discretion – Accountability (C = M + D – A)

This formula should shape every stage of the PPP lifecycle—from project identification to procurement, financing, implementation, construction, monitoring, and eventual turnover.

Corruption risks rise when there is monopoly of ideas, process, proponents, award, service, renewal, decision-making, or audit. They also increase when there is unbridled or unrestrained discretion in project identification, mode of procurement, evaluation and approval, contract negotiation, implementation, or financing.

Atty. Alberto Agra

"When monopoly and discretion are curtailed and accountability is institutionalized, PPPs truly become Partnerships for the People, with the People, and for Progress."

Strengthening accountability in PPPs

To counter and mitigate these risks, accountability and good-governance mechanisms must be institutionalized. Accountability in PPPs means that every decision, action, and transaction must be traceable, justifiable, and reviewable. 

Good governance demands transparency, efficiency, participation, fairness, and integrity in all phases of the partnership.

The PPP Code and its Implementing Rules and Regulations (IRR) address corruption risks by:

• Prescribing open, fair, transparent, and competitive selection processes, whether through competitive selection or challenge
• Requiring stakeholder consultation for PPP projects
• Mandating the inclusion of an anti-corruption clause in PPP contracts
• Imposing audit of PPP projects and contracts
• Delineating layers of approval
• Enumerating specific offenses punishable by imprisonment and/or fine

Putting people and trust at the center

However, these measures may still be insufficient. In the author’s 24 Prescriptions to Future-Proofing PPPs, he recommends embedding people’s participation at every stage, including participatory audit, and integrating ethical considerations into all PPP undertakings.

Such measures strengthen the true foundation of PPPs—trust: trust between government and private partners, and above all, trust by the people, the true north of PPPs. 

By applying the Klitgaard formula, PPPs rest on both physical and ethical infrastructure.

When monopoly and discretion are curtailed and accountability is institutionalized, PPPs truly become "Partnerships for the People, with the People, and for Progress.''