We’re almost at the end of this series on the economic effects of corruption. We’ve talked about different types of corruption, like customs fraud, misused public funds, distortion of public spending, inflated project costs, and regulatory friction. But one type of corruption that hits us every day—and severely affects the economy—is corruption within law enforcement, especially among traffic enforcers and police. It’s a persistent problem the government is trying hard to fix. Its popular name is Kotong.
Here is a breakdown of how this specific type of corruption, known as Kotong , hurts our economy and what we can do about it.
What is Kotong Culture and How Does it Work?
Ask any Filipino driver, and they likely have a story about this kind of “everyday” extortion. Kotong is a term for an informal cash payment, or bribe, given to an officer to:
- Let a minor violation slide without a ticket.
- Look the other way on illegal activities.
Traffic enforcers have been known to exploit confusing traffic signs to target and pressure unfamiliar drivers. Public outrage even drove the Land Transportation Office (LTO) to probe an enforcer, who went viral in early 2026 for what looks like hiding behind a post to catch possible violators by surprise.
I’m not generalizing all traffic enforcers, but we have to admit that “Kotong Culture” is such a prevalent instance of corruption that still exists to this day. To cite one specific instance: in 2025, the Land Transportation Office (LTO) fired 68 enforcers from its central office in Quezon City.
This is a great move and the right step if they really want to cut down on this type of corruption. However, this isn’t an isolated case. Similar corruption behaviors have been reported in other regions.
Take, for example, this incident in Nueva Vizcaya – five traffic enforcers from the LTO Region 2 were arrested following complaints of widespread extortion activities targeting local drivers. It was an entrapment operation because, allegedly, these enforcers offered to settle a ₱200,000 fine for colorum vehicles for a cash payment of just ₱25,000.
They even gave them the option for a “monthly protection fee” of ₱1,000 – ₱2,000 pesos per unit just to let these colorum vehicles operate.
This specific, recent case points to the fact that this “institutional decay” is an existing reality that the government has to crack down on. In fact, it’s not even limited to traffic violations. “Kotong Culture” extends to other government offices, where petty violations can be “fixed” for a specific (and under-the-table) fee.
These incidents matter because they distort the rule of law, and undermine confidence in our institutions. When government and law enforcement shifts its focus from upholding the law to self-enrichment, the economic effects of corruption again emerge.
Allocating Resources to Navigate Corruption
As I’ve cited before, trust in institutions (or lack thereof) has a direct economic impact. Though much attention has focused on these massive infrastructure scandals, the deeper problem is that consistent law enforcement corruption reinforces the perception that rules aren’t enforced fairly.
This weak enforcement of laws — especially when enforcement agencies themselves are corrupt — creates space for informal and illegal markets. When officers accept bribes in lieu of formal tickets or when law enforcement colludes with illegal activities, the deterrence function of policing collapses.
Higher crime, under-enforced regulations, and informal payments increase the cost of doing business, especially for small and medium enterprises. Imagine a company that has to give a “kotong” budget to their drivers in case they run into trouble, or worse, they encourage a culture of “getting away” with violations because you can just pay it off anyway.
Multiply this by, say, a business with a fleet of 100 vehicles, and you can imagine the scale. This dynamic effectively acts as another “shadow tax” on the economy. Instead of investing in productivity or expansion, firms allocate scarce resources to navigating corruption. Consumers, in turn, bear these costs through higher prices and reduced service quality.
Public Participation and Oversight are the Keys
The good news is that this type of corruption isn’t inevitable and is, in fact, the most easily addressable by the government. As mentioned in the articles above, there have been crackdowns on officials that engage in this type of corruption. What needs to be done is for the government’s efforts to reach a critical mass in order to deter the whole practice of kotong not worth it anymore.
And what’s important in this is public participation and oversight – looking back at the Nueva Vizcaya incident above, the officers were apprehended due to complaints of these activities.
It starts with us:
- Do not accept corruption as a necessary part of life.
- Follow the rules instead of looking for ways to pay your way out of trouble.
- Complain and report officers who engage in extortion.
We all benefit when the law is applied fairly and predictably. By speaking up, we discourage this corrupt culture and help the economy grow for everyone.