Dow Jones & Company, Inc.
March 2, 2009

The Philippines’ top graft-buster on Monday defied mounting calls for her resignation for failing to act over a multimillion dollar corruption involving a World Bank-funded road project.

Ombudsman Merceditas Gutierrez told reporters that she had not “violated any legal, moral or ethical principles that would call for my resignation or stepping down”.

“I have my mandate, I have my term and I believe this is my duty, my service to our countrymen,” she said.

A Senate inquiry was told two weeks ago Gutierrez had failed to act on a World Bank recommendation to prosecute Jose Miguel Arroyo, the husband of President Gloria Arroyo, for alleged involvement in a cartel to corner lucrative public works contracts.

The bank had earlier blacklisted several Chinese and Filipino firms it said had colluded in the bidding for a 33-million dollar road rehabilitation project in and around Manila, whose funding was overseen by the World Bank.

In a confidential “referral report” subsequently publicly released by the Senate, the World Bank quoted witnesses who charged the president’s husband “was supporting the cartel’s efforts”.

The bank said it gave the report to Gutierrez as early as 2006, and that it had hoped she was going to do her own investigation and go after Arroyo and those involved in the cartel.

Gutierrez initially said she didn’t have a copy of the report and asked the World Bank to provide evidence.

“We will not file a case if we don’t have any evidence,” Gutierrez said on Monday, virtually clearing Arroyo of the charges.

Corruption in high places in government remains rife, with Gloria Arroyo having already survived two military-supported uprisings to remove her from office.

Various surveys have said Arroyo has become the most unpopular president since dictator Ferdinand Marcos, who ruled the country for 20 years before being ousted by a popular revolt in 1986. Marcos died in exile three years later.