ZTE and the Philippine Scandal

Posted by: Bruce Einhorn on September 26, 2007

Gloria Arroyo, the Philippine president, has cancelled a controversial $330 million deal that would have called for Chinese telecom equipment maker ZTE to supply equipment to the government’s planned broadband network. (For more on that move, click here.) ZTE rivals have been crying foul ever since April, when the Chinese and the Filipinos signed the deal, and the Supreme Court suspended the broadband project on Sept. 11.

The project may be over, but ZTE’s Philippine problems are not. ZTE says it has done nothing wrong and the accusations coming out of Manila are focusing on local officials, not people from the Chinese company. Still, the news is bound to be embarrassing for a company that wants to build up sales globally. Among the critics calling for a congressional investigation into the ZTE deal is one of the most powerful organizations in the country, the Catholic Church. According to this report in the local press both Archbishops Oscar V. Cruz and Angel Lagdameo yesterday called for Romulo L. Neri, former director general of the National Economic and Development Authority (which approved the government loan that helped ZTE land the deal), to tell investigators what he knew about the contract. And Neri seems to have heeded that call. In testimony before the Philippine Senate today, Neri said he had received a bribe offer of 200 million pesos (or $4.42 million) from another Philippine official.

Reader Comments

nanheyangrouchuan

September 28, 2007 12:58 AM

And the Philippines would be placing its national security completely in the hands of a company (ZTE) that is also a R&D arm of the PLA's cyberwarfare division.

I applaud the PI's move to reject China's imperial penetration of its national sovereignty.

dcop

October 5, 2007 2:49 AM

Mr Nanheyangrouchuan aka China-hater, the only imperial penetration of national sovereignity today is the USA, your demo-crazy lord. Haven't you got enough of sucking up to them?

Jogi

February 7, 2008 4:31 AM

The ZTE scandal is proof that our leaders in government are in a state of greediness rather than focusing on matters of the Filipino peoples day to day needs. Or matters concerning Philippines external threat to the Spratley Islands! This is so sad! That people who are in government should truly serve the welfare of the Filipino people not to serve their own purpose and greediness and the urge to be rich quickly and family dynasty's self interest.. Our leaders in government are no better than petty thieves; unless there are better ways to stop these kind activities it will just continue on and on until the Philippines is no longer a vaible place to invest in business or to travel as a tourist destination. So it is no wonder why Filipinos choose to work abroad and think of immigrating to countries like Canada or Australia or even the USA where corruption or being fought with control and having the will to maintain honesty and integrity. In the Philippines if you plan to invest in business government officials would want to have a profitable commission of percentage in any business venture and just simply get away with with someone's hard earned cash; the situation in the Philippines is totally grim they say the economy is growing positive but these people in government are doing for the welfare of the Filipinos people but doing it self-interest for their own survival like stating authority EO-464 previllages that cannot be investaigated or simply of Senate inquiry none the less these kind of provisions should be reviewed in order to limits the powers of our so called President of the Philippine Republic! 2010 may still be that far but who knows we Filipinos may one day might wake up tomorrow that our previlege to vote may be gone and that our government transformed to a Parliamentary government and once again our so-called president is still the leader in sitting on the highest position of the land and will stay there until up to her natural life expires and be taken over by one of her two sons or daughter who are just as corrupt as she is now.. the Philippines is already a GOD-forsaken country with no hope. Better to leave and immigrate to another country rather than being dictated or to be killed by a Tyrant small but terrible little woman.

Noriel

February 17, 2008 10:35 PM

I think all of the goverment official are all corrupt. Jun Lozada is only lucky because he cried and got the attention of the "massa." Even if that will be solved why will the goverment official will change.......

cher

February 17, 2008 11:39 PM

I hate the officials of this government! Esp. our president....... her only concern is to get a lot of money & become very rich before she leaves her position. In my opinion, she is the most corrupt and worst president of the Philippines.

barbie

February 18, 2008 1:59 AM

it really affect our economy....with this ZTE scandal

jona

February 18, 2008 7:21 AM

Duh!! What kind of country is this??!!

ruffa

February 18, 2008 11:40 PM

All the transactions in the Philippine government have commission to the officials or head of the departments, even in small projects...

MONAH VILLALON

February 20, 2008 2:58 AM

I don't know what to believe and whom to believe. This controversy can really affect the image of our country.. But for me nothing can be hidden and the truth shall always prevail.........

CHAD

February 20, 2008 3:29 AM

This is the country I think. I think we need to reformat our country.

d-hi

February 20, 2008 4:44 AM

Wake up dear public servants! Why don't you just continue serving the country and the poor Filipinos than making your self rich. Remember that richness and success do not measure what you have but what you give! Wake up!!!!!

lynx

February 20, 2008 6:04 AM

Ahhmm.... all I can say is that I am against in ZTE because it can add to our economical problem.....

felix

February 20, 2008 7:32 AM

Please pray for this country. Only God can change hearts. And only changed hearts are honest.

mae

February 21, 2008 12:16 AM

I vow with Mr Lozada.....

Anyway I against with ZTE Project bcoz only Mr Abalos AND FG CAN MAKE RICH Not the poor people....and Blessed are those people who are working in this Administrations.

Marina

February 21, 2008 5:03 PM

Shame on the officials involved in the ZTE scandal. Better resign before the credit score of the Philippines get ZERO that means the Filipinos will go to hunger.

maureen

February 21, 2008 9:11 PM

According to mr joker arroyo, he doesn't want a country run by a thief...why doesn't he make some actions about this scandal?

FAITH

February 22, 2008 2:13 AM

ZTE scandal makes every Filipino crazy. Economy down already , still leaders of the government want to ensure that they will be more powerful that themselves. Means Philippines is the poorest among other countries, if our leader will not open their mind to the needs of others. Stop greediness!

Ernie Razon

February 22, 2008 4:13 PM

My suggestion is this: transaction of this magnetitude should show a great degree of transperancy from both parties. I further suggest that this should be handle by an escrow company properly bonded to handle this kind of transaction. All documents properly reviewed,knowing all names of the parties on both sides,all conditions properly satisfied or waived or even excused as the case maybe,then only the escrow company could release the funds to the payee.Funds must be in the hands of this escrow company after all described above became fully executory.In other words all parties must be aware how payments will be disbursed.Methodof disbursement or disbursements must be fully acceptable to both parties.Why are Catholics or other religious organization involved in this government transaction.?

shai

February 23, 2008 1:21 AM

Voice of every youth:

Come on people! Especially all those who are in the palace! What are you doin to us people? To your own country? All of you are selfish.. You even dont think ab0ut what might be the effect to every Filipino's life.. The truth must be revealed before its too late..


Wake up FILIPINOS!

nheil

February 23, 2008 6:05 AM

ZTE scandal, it really affect to our economy..

jose

February 23, 2008 11:47 PM

ZTE scandal is an eye opener for the public to be vigilant in the fight against graft and corruption in the government. Those whose names have been dragged into the limelight must be investigated and if probable cause exist, let the necessary criminal charges be filed against them.

It is time that the rule of law must prevail let the HANDS OF JUSTICE set the facts straight and bang the gavel to those guilty.

CArLA

February 24, 2008 1:15 AM

It's so sad that our country is one of the most corrupt among the world. I can't understand people having guts in doing these things which they only think only about themselves.

tunay_na_pinay

February 25, 2008 9:27 AM

Everyone can't escape from the ZTE scandal now... I think the deal was a matter of miscommunication... miscommunication on the percentage of kickbacks, miscommunication on how to deal with J.Lozada... In the golden age of communication, how could they have failed? Greed.

It's sad that this is happening to my beloved country!!! But on the other side foreigners can still come in the philippines no more terrorist attacks... You will be safe in our beaches!

mark

February 26, 2008 1:00 AM

Many Filipino people are so poor they couldn't afford to buy food for a meal, yet some government officials, who are supposed to help alleviate povery in the country, are bathing in gold from peoples taxes...Revolution now!!!!

aaron

February 26, 2008 1:06 AM

What the Philippine officials involved in the controversy lack is transparency of the project...In fact, the $300+ ZTE NBN contract couldn't be found (or maybe the president is keeping it)....Filipinos want the truth! Filipinos have suffered so much poverty! Let's not allow our children in the future to suffer more!!!

marriel

February 26, 2008 4:51 AM

I am not hopeless of my future but I want to let my voice be heard. We only want the truth!

daniel

February 26, 2008 9:24 PM

I am so disapppointed at what has become of GMA's administration. I have admired her for her wit and courage in dealing with the country's concerns after the Estrada ouster. But look at now. History repeats itself. She is no different than those who were ousted by the Filipino people. I don't trust anyone now among our veterans in politics. All of them stay there primarily because of personal interests. It is so sad a situation for all of us, the working masses who pay taxes religiously. I'm so disappointed!

johna

February 26, 2008 9:27 PM

Look who's TALKING?! Are they good enough? Reliable? like LOzada? Nobody can predict who is telling the truth.. Don't be one sided-- Take a look. We are not deft and blind. How about the dollars, oil price, LPG--- try to view some other good things she does in our country. We are PART of PEACE UNITY. She was graduated at HARVARD UNIVERSITY... who will be the right person to be President is that ERap--- Funny isn't it.

orio

February 26, 2008 9:42 PM

Why do those people especially the politicians keep on fighting each other? Can't they do things without having one to be put down? They were not the only one who are affected on this kind of embarrasment, and failure of the country but the most of the Filipinos.

joey

February 26, 2008 10:46 PM

If in the first place you knew that there was a flaw in the nbn-zte scandal, why on earth does she approved it. Did she had a bigger commission than those corrupt employees she had.

rod

February 27, 2008 1:17 AM

All government officials are corrupt. I thought that our leader or "president" teach the children how to do good things and respect..but even she cannot do good in our government. All Filipino people are gett'n strive just to pay all our taxes from govt but the taxes that we pay earned by govt officials...

ZAINAH

February 27, 2008 9:49 PM

Those people that involves in this scandal are also useless, they are all useless to our society, all corrupt they all corrupt.

jom

February 28, 2008 12:50 AM

What kind of country is this already? especially the leaders!

Trex

February 28, 2008 1:35 AM

I agreed of some commentators that ALL OF THE GOVERNMENT OFFICIALS ARE CORRUPT. Even the President will go down in her Position, the one(even who) that replace her will do the same thing. We have to accept the fact that the country Philippines will not rise anymore. The system is very poor. The blame is not just for the President but also for all government officials.

MIA

February 28, 2008 1:57 AM

I've been expecting this situation. This is not a new thing. The Philippine Government is on worst position...and i guess it will continue now and then...whoever will sit in the throne...the uncurable corruption had flooded the entire society.

Ian

February 28, 2008 8:47 PM

What's happening now is not ordinary. It's expected to happen at this point in time. No matter who the president is. What is needed now is to pray for the nation, and for the hearts of the leaders to have that compassion for the poor. Nothing is impossible! We, Filipinos can survive, if only the rich will give the poor a share of their wealth. and the excessive greed of some come to stop.

RUTH

February 29, 2008 9:56 AM

They are all blinded with their own deeply ingrained selfishness!!!! That's the common denominator of all personalities involve in ZTE scandal!!!!

RUTH

February 29, 2008 10:00 AM

They are all motivated with their own deeply ingrained selfishness!!!! That's the common denominator of all personalities involved in this ZTE scandal!!!!

otoy

March 3, 2008 6:32 AM

Mr. Losada sir, please be honest and be consistent always. God Bless..

neutral

March 4, 2008 4:21 AM

We can't always believe on oral evidences. they're just too weak to have as basis for judging the truth. nowadays, it's hard to trust anyone...and about the corruption, well, we cannot erase it in any economic system. even the most powerful countries have corruption in some ways. i also think that we should not put all the blame on our president. remember, we must not depend on our leaders all of the time (they're not supermen and superwomen with super powers)- as citizens we should learn how to contribute good things to our country too. we must stop all the bickering. the problem with us Filipinos is that we only focus on the black dot drawn on a clean, white slate. we always put our attention to the negative things that are happening to our country. all we do is comment and comment and comment without weighing down conclusions. that must not be it. why not focus on the good things? our president has done beautiful things for our country. think about oil price, the dollar-peso rate, and stuff. don't rely fully on what we see on television. most of the time, they're negative...the media do that because they know they are going get the attention of the masses and thus, gain more profit. also, today, we cannot afford to have another people power! we would just embarass ourselves. having it would just waste our time. we've done that for the nth time...did they work? well, just for some time, ryt? PLUS we cannot just oust Arroyo. no one as competent as her could occupy her position rith now. She's a graduate of economics(if i'm not mistaken) and was able to studiy in reputable schools. NOw, do you want Erap to take her place? How about Cory? She's kind and is able to get the symphaty of people- but she doesn't have the "technical" qualifications if i may say so(i'm sorry but that's true). i still wonder how people manage to arrive at a conclusion that all government officials are corrupt. they're over generalizing. what we need is unity. :)

anrey

March 4, 2008 10:25 PM

Havent watched television much this days. I heard of the ZTE scandal but didnt mind it. Its always like this. Theres a 'pattern'. Someone would spill the beans, the president and or his/her family is in controversy, then theres a call to oust her/him, people power follows, someone takes over, the pattern starts again.

I received a letter from the NUSP,inviting student leaders and writers for a gathering where national issues will be discussed. One of the highlights of the said activity was the ZTE scandal to be discussed by no other than the whistle blower himself- MR. Jose de Venecia III. Free accomodation and transportation, food and everything. No registration fee. Someone is behind this i know. Of course im going to attend it, but i will be very vigilant as i dont want my signature for the political ambitions of some politicians. Its always like this, youths are used for the selfish motives of others. They want someone to step down so that they can take over.

but im gonna attend it, coz as a youth its my resposibility to be aware of whats happening in our country and take an active part in initiating reforms....but i will be very vigilant and i will carefully examine all the informations- coz not all of them is true.

Any hope for this country? "Yes! God loves us and He will never forsake His children."(the most hopeless answer)

Ian

March 5, 2008 10:17 AM

There's nothing wrong with knowing what's happening around us, especially to our country, but the best weapon is prayers. There's nothing better than to teach the people more so with the children/youth the power of prayers. We,Filipinos, are much luckier compared to other nationalities who lack knowledge on the true faith.Let us begin praying for our leaders, instead.

Ian

March 5, 2008 10:23 AM

There's nothing wrong with knowing what's happening around us, especially to our country, but the best weapon is prayers. There's nothing better than to teach the people more so with the children/youth the power of prayers. We,Filipinos, are much luckier compared to other nationalities who lack knowledge on the true faith.Let us begin praying for our leaders, instead.

Melstorm

March 6, 2008 9:49 PM

Let the people hear the truth. I think we Filipinos are still the best in other country, and i strongly believed their is still hope in our nation, But first we must change ourself individualy. Let the administration finished their term.its two more years. then we people decide for the 2010. GOD BLESS our COUNTRY.

Andrea

March 7, 2008 6:16 AM

It's not the leader whom we should change.. It's the system of the government. Cmon

Mikael Arhelger

March 7, 2008 11:03 PM

This is the way in your country; Mickey Mouse Country. You people will never change. Why should you? It somehow worked like this all the time, did it not? After all, you vote for actors to be president (like USA) - what kind of joke is that? You love living in a Soap Opera and then crying foul play instead of doing something about it. That is why the Philippines, once a economic powerhouse in Asia, is now the laughing stock in the world!

Philippines: The first thing that comes to my mind now is only drinking and women.

... and then you pray to God that he will help and fix things? Help yourself for God's sake! Stop talking and act! Anyway, knowing that my comments will only fall on deaf ears, why should I or anyone else outside the Philippines care anyway?

Why do you think that everyone wants to leave this godforsaken country and make a decent living? And even then you are taken to the cleaners again by paying huge amount of so called "agency fee"!

Philippines: Hurrah!

Vanni

March 8, 2008 9:29 AM

Our government is crap. And what makes it crap are the crappy government officials.

jayson

March 8, 2008 10:05 AM

if you take a look at it... this is just a battle of the officials to get what they want... this time Joe De Venecia brought this issue because the contract involving his son did not triumph... so go ahead... let GMA be ousted and be replaced by those leaders to get their own interests as well... Now guys don't be so dumb... its like fighting against the family of werewolves to save the vampires.. (Underworld ;D) but i don't think we can oust GMA.... she's a cunning leader... and some of u are dumb guys.....

ANALYN

March 8, 2008 9:09 PM

Arroyo must step down to her position, a very dangerous, corrupt country in the whole world.

Danie

March 8, 2008 11:53 PM

Yo people..lets just focus in our own success..lets not all depend on our government to get our success there.

zel

March 9, 2008 7:43 AM

this is no longer a shocking issue..

lil

March 10, 2008 1:50 AM

i think mr. lozada is telling the truth..more power to you!

zeeki chee

March 11, 2008 9:23 AM

the ZTE scandal is a mess. Gloria Arroyo will you please step down from office? stop the corruption, be a good leader please, only God know the truth and he will take all your power and you will find your place in the hell....

jpldfrm

March 14, 2008 9:25 AM

i think GMA is in her position for a reason, i know that many people are protesting against her but God put her in that position theres nothing we can do but to submit to authority and pray for her. im not pro Gloria or what im just saying that we must submit to her even though she is bad nor good just submit caus everything has a reason. this verse speaks to our nation Jeremiah 29:11 says For I know the plans I have for you declares the Lord, plans to prosper you and not to harm you, plans to give you a hope and a future. so pls submit

haydz

March 15, 2008 7:51 AM

We all know that mr.lozada was telling the truth but do you think that changing our president was the best solution for that???? let us open our mind!!! if pres. Arroyo will remove to her office who do you think will replace her position?? erap?? your joking!! if erap will replace her it is justlike we throw our future in the spoul of mud!!!

anonymous

March 18, 2008 5:00 AM

in progressive country the rule of law are being exercise. everybody cooperate to seek truth to uplift their country economy..here, is different ..it is really complicated, we can never be out from poverty because of the system of you are implementing ,obseeve other country u can never see people from 18 up in the street. they are all working educated or not. what happen here gloria magapagal ... everybody has the right to question you ,, where is your pride then ..
are you not aware of what happening to the Filipino people now specially those young generations un educated and no work for them, did u think what will happen to them ...you totally forget them ,, the reason of high crime and poverty is your negligence. and what happen now to zte ... we like president that will govern the interest of filipino people,,, every filipno have the right to question you ..we put you there but you what happen where is the pride now macapagal aroyo ,,

aileen santos

April 11, 2008 8:08 PM

if the president really knows the truth like she said she does, then why hide it.

dark gamer

May 30, 2008 8:42 AM

heres a thought for the morons who blab about something they have VERY LIMITED knowledge about in the arroyo admin. during her term, the problem with the lack of classrooms was solved by SPLITTING/DIVIDING classrooms in half!i dont want ERAP to b president too, but at least during his term school buildings were being BUILT! UN standards says that EDUCATION should be get the top priority and budget, now the MILITARY gets the BIGGEST CUT, educ is in 4th place. commenting palparan for a job well done when KILLINGS (unsolved) rise wherever he is sent to. also journalist and activist killings are at an alltime high since gloria assumed office. and check ur governments projects.. the politicians FACE gets erected first even before the project is done AS IF they used there own money for it. "project by this..and that name" what ever happened to the signs "YOUR TAXES ARE WORKING.." NOW when there is a BIG ISSUE and a big chance of being caught...ZTE.. theres the RICE SHORTAGE!?!? PHILIPPINES is the RISE GRANARY of asia.. other countries learned to plant rice from the philippines.. now this?! WTF?! because they SOLD rice fields and built subdivisions and GOLF CLUBS! or is it just artificial to get the attension away from ZTE?! soooo... DO YOUR HOMEWORK FIRST JOHNA before posting!

dagul

September 4, 2008 5:35 AM

our president is very disgusting.. she is a corrupt president..

anonymous

December 31, 2008 7:58 PM

Def..before making any comments Jona you should make first your investigation.

little girl

February 24, 2009 4:00 AM

Duhhh...this scandal is a dirt in the name of the country. this should be resolved fast...or the country will lose the trust of others.

Aklas

September 1, 2009 3:09 PM

How can you resolve it if the main root of the problem or the SCANDAL is it's own government?

Nick Matyas

January 15, 2010 4:08 PM

Your posting is so valuable. Thanks for your posting.

Post a comment

 

About

Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

BW Mall - Sponsored Links

Buy a link now!