Last Sept. 30, the Department of Public Works and Highways (DPWH) entered into partnership with a private sector group that will pilot-test a blockchain technology designed to fight corruption in one of the most-graft prone agencies of the government. In behalf of the DPWH, ‘acting’ Secretary Vivencio ‘Vince’ Dizon launched the ‘Integrity Chain,’ a digital platform meant to track and secure every peso and milestone in selected national infrastructure projects.
Dizon signed a memorandum of agreement with the Blockchain Council of the Philippines (BCP) headed by its president Donald Patrick Lim to pilot-test initially all foreign-assisted projects (FAPs) under the DPWH. This important signing event did not merit much public attention, taking place while congressional investigations exposed multibillion-peso budgets of the DPWH lost to alleged ‘ghost’ flood control projects.
‘From the budget process to procurement, contract awards, implementation, monitoring and even payments to contractors, everyone should be watching now, everyone,’ Dizon disclosed at the launch of the ‘Integrity Chain’ held in Makati City. Two weeks later at the Kapihan sa Manila Bay news forum, Lim reiterated the BCP will provide the government with a one-year free subscription to the ‘Integrity Chain,’ initially being put up as the platform for the public monitoring of the FAPs being implemented by the DPWH.
According to Lim, this exclusive blockchain platform for the DPWH will be running as soon as the technical support, training and cybersecurity safeguards are completed within the year. Lim described this as a private sector-led initiative by the 200 or so member-players of the BCP. Lim stressed the effort is not just about calling for reform, but building ‘participative democracy’ based on transparency of transactions and use of ‘trusted’ technology.
‘For the first time, the private sector isn’t just demanding integrity – we’re delivering it,’ Lim pointed out. ‘It’s privately funded. The private sector is the one funding it. The council is the one working with all the stakeholders to execute it,’ Lim stressed.
According to Lim, the pilot run will focus on FAPs funded by the Japan International Cooperation Agency (JICA); the Korean Eximbank; the Asian Development Bank (ADB) and the World Bank (WB). The FAPs from these multilateral institutions are being implemented under the Unified Project Management Office clusters of the DPWH, he added.
Lim welcomed the statement of support issued by the Makati Business Club, the Management Association of the Philippines, the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. and various foreign chambers of commerce in the Philippines. They were among the most vocal sectors that expressed extreme concern on the reported anomalous infrastructure projects that included foreign loans and official development assistance (ODAs) of the Philippine government.
President Ferdinand ‘Bongbong’ Marcos Jr. (PBBM) initially said as much as P545 billion went to 15 favored contractors that cornered these flood control projects in the DPWH annual budget for the past three years. It turned out, in congressional public hearings, ravenous district engineers, in cahoots with greedy contractors and the ‘proponents’ in Congress of these flood control and other infrastructure projects, siphoned off trillion pesos worth of the DPWH annual budget.
It set off protest rallies dubbed as Trillion Peso March that kicked off last Sept. 21. There are continuing protest activities ranging from noise barrage to walk out from classrooms in colleges as modes of anti-corruption mass actions.
Former National Security Adviser (NSA), retired General Hermogenes Esperon Jr., noted with concern that these series of national outrage activities against rampant corruption in the government could become a major destabilizing factor. To prevent further erosion of the Filipino people’s trust to their government, Esperon is convinced about the vital application of available technology that could immediately detect and avert corruption from taking place.
Tapping blockchain technology is the real time platform to fight corruption, Esperon declared.
Now working in the private sector as chairman of the Board of Directors of PhilTrust Bank, Esperon strongly backed the shift of public transactions through the use of blockchain technology. Esperon called for a ‘whole-of-nation approach, not just whole-of-government’ in the common efforts to modernize the systemic problem of corruption in doing business with government. ‘We need to innovate, or else we will stagnate as a nation,’ Esperon exhorted.
The 73-year-old Esperon speaks from his experience in public service where he spent almost half of his life. He started as a young lieutenant as a fresh graduate of the Philippine Military Academy, Class 1974. He rose through the military echelon all the way to his five-star rank as the Armed Forces chief of staff from 2006 to 2008. Then former president Gloria Macapagal-Arroyo appointed him as the Presidential Adviser on the Peace Process. He subsequently served as Cabinet secretary in various government bodies until his last stint as NSA during the six-year term of former president Rodrigo Duterte.
Before the DPWH, the use of blockchain technology was first offered to the Bureau of Internal Revenue (BIR) in a bid to improve tax collection from e-commerce and reduce tax evasion and avoidance. The proposed project to the BIR was presented during the same Kapihan sa Manila Bay news forum last Wednesday by Jonathan Bocaling, president and chief executive officer of Integra Nexus Inc. Through his blockchain technology company, Bocaling proposed to the BIR a system where every peso collected and every peso spent by the agency can be seen and verified, not through paperwork or reports but through a ‘trusted’ technology that keeps record beyond manipulation.
Bocaling’s Nexus has come up with a Digital Tax Clearing House as a pioneering tax collection platform designed to provide the BIR the modern tools that will capture large amounts of potential revenues for the government from the booming digital economy.
While such technology is of universal application, Bocaling is pushing for the creation of a ‘Sovereign Blockchain’ as a stand-alone, independent platform locally developed.
Senate Bill 1330 filed by Sen. Bam Aquino could be a take-off point for the official use of blockchain technology in the Philippines.