Russian authorities stopped former police comptroller Eliseo De La Paz from leaving Moscow on October 11 when he failed to present the necessary documents for the 105,000 euros (136,363 dollars) he was carrying in his luggage.
Russia allows cash of up to the equivalent of 3,000 dollars to be brought out of the country but requires "special export permission" for cash in excess of the ceiling,
De La Paz, who reached the mandatory age of retirement while attending the general assembly of Interpol in Saint Petersburg from October 7 to 10, was intercepted while on his way back to the Philippines.
Russian authorities also stopped other senior police officials accompanying De La Paz from leaving Moscow.
At first, Interior Secretary Ronaldo Puno and Police chief Director General Jesus Verzosa maintained that the money was a contingency fund for the Philippine delegation to the Interpol meeting and would be subject for liquidation.
The two officials further added that it was necessary for De La Paz to carry the huge amount of cash because Russia is an expensive place to stay.
But under the intense grilling from a senate committee on Thursday, Puno and Verzosa could not say with certainty whether the money carried by De La Paz indeed came from the organisation's budget.
De La Paz, 56, who arrived in Manila on Tuesday through the help of the Philippine foreign office, did not show up at the hearing and his lawyer argued that the Senate committee investigating the case was not the right body to conduct the probe.
Pro-administration Senator Miguel Zubiri said the international embarrassment the incident caused was much costlier than the money De La Paz carried.
Zubiri called on the police and the interior department "to act swiftly" to resolve the controversy.
"Heads should roll," he said. "There should be no whitewash in this case."
Senator Mar Roxas said the scandal was just "the tip of government corruption iceberg" in the country, noting that many corruption cases involving government officials have not been acted upon by concerned agencies.
"This mess in Moscow is not only an international embarrassment but goes to the root of the rule of law in our country because it involves those mandated to enforce the law," he said. "If this is what our police generals are doing, how can we stop corruption in the streets."
The Moscow scandal was the latest in the string of high-profile corruption cases in the country which involved senior officials, including President Gloria Macapagal Arroyo.
Arroyo was forced to scrap a 329-million-dollar internet broadband deal between the government and Chinese firm ZTE a few months after she personally witnessed the signing of the agreement in China last year due to a bribery scandal.
The scandal led to the resignation of elections chairman Benjamin Abalos, a very close ally of Arroyo, who was accused of attempting to bribe then socio-economic planning secretary Romulo Neri to ensure ZTE would bag the deal.
Arroyo invoked executive privilege to prevent Neri from telling a senate inquiry why she allowed the deal to push through despite knowing about a possible anomaly in the transaction.
A report of the Center for Global Development, a Washington-based think-tank the monitors the eligibility of a country for assistance under the US-funded Millennium Challenge Corporation, noted that the Philippine government's ability to control corruption deteriorated sharply during the past two years.
Arroyo, however, remained unconvinced that corruption has worsened and blamed the country's media for the general perception of widespread corruption.
"What would be on page 10 in some other countries would be a banner headline in the Philippines," Arroyo told an international business forum in Manila. "Even rumours and innuendos become fact when they're in the banner headline, that's part of what we have to live with."
Arroyo urged businessmen to report any act of corruption or shakedown they experience in their dealings with any government agency "so we can work on them."
Justin Woods, director for the South-East Asia corporate network of The Economist Intelligence Unit, took exception to Arroyo's claim that corruption in the country is just a perception.
"If you talk to business people privately, they believe that perception is correct and that corruption is high and its a problem that needs to be addressed," he said.//Deutsche Presse-Agentur/John Grafilo - October 24, 2008