The Philippines has a history of corruption, and practically all governments throughout the country's history have struggled with the problem. Corruption in the Philippines is characterised by a combination of societal factors, institutional factors and an incentives system that contributes to corruption. Many companies identify corruption as the most problematic factor for doing business in the country, and corruption is often encountered when interacting with public officials. Companies should also be aware that illegal donations to political parties and bribery in order to influence policy-making are common types of private sector corruption.

Positive developments in relation to corruption and investment:

• The government has shown commitment to e-governance in an attempt to increase transparency and to stamp out much of the corruption caused by face-to-face interactions with public officials.
• In March 2011, President Aquino approved the Philippine Development Plan for 2011-2016. The overarching theme of the Plan is good governance and anti-corruption while achieving inclusive growth, which would create substantial employment opportunities as well as reduce poverty.
• In May 2011, the House of Representatives committee on justice passed the proposed Whistleblowers’ Act, which seeks to protect whistleblowers from all forms of retaliatory actions. The Act is expected be reported out for plenary approval within a short time frame.

Risks of corruption:

• Corruption is said to take place at all levels of the government, but it is more rampant among high-level civil servants.
• It is reportedly common for civil servants to attempt to supplement their relatively low salaries by extracting bribes, facilitated by the country's complex, sometimes contradictory regulatory regime.
• Companies generally have little confidence in the Philippine judicial system. The main reasons are: the allegedly incompetent court personnel, corruption and long delays of court cases.