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The latest annual report from the U.S. State Department highlights that corruption has long been a serious problem in the Philippines, affecting both government offices and private businesses.

The report reviews how effective and safe other countries are for investment.

According to the report, the Philippines ranks 114th out of 180 countries on Transparency International’s 2024 Corruption Perceptions Index. This shows that corruption continues to be seen as a major concern in the country.

Several international organizations, including the World Economic Forum, also pointed out that corruption is one of the main challenges to doing business in the Philippines.

But there is some good news. In February 2024, the Financial Action Task Force (FATF) removed the Philippines from its “grey list.” This list includes countries that need to improve their efforts against money laundering and terrorist financing. The removal shows that the Philippines has made progress in strengthening laws and implementing measures to address these concerns.

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The Investment Climate Report of the U.S. State Department aims to help American companies understand the business conditions in over 170 countries. The report is based on observations from U.S. embassies around the world, including the embassy in Manila.

The report notes that business rules in the Philippines are not always consistently enforced.

Some American companies said they have difficulty registering their businesses and dealing with customs and immigration offices.

One agency highlighted in the report is the Bureau of Customs, identified as one of the most corrupt agencies in the country.

The report also mentioned cases where U.S. businesses experienced unnecessary inspections, inconsistent fees, and requests for bribes by some customs officials.

The report also noted the Philippines’ judicial system, describing it as slow, complex, and sometimes corrupt, making it difficult for investors to resolve business disputes fairly and quickly.

As a result, many investors prefer not to bring cases to court due to anticipated delays and the possibility of corruption.

Despite these issues, the report noted that the Philippines has taken steps to fight corruption.

In 2023, the Philippines ratified the United Nations Convention Against Corruption, a global agreement to prevent and combat corruption.

The overall message of the report is clear: corruption remains a major obstacle to doing business in the Philippines, and this problem continues to discourage many foreign investors.