More openness, transparency in the budget

The government has released a total of P359 billion to deal with the COVID-19 pandemic. Under Bayanihan 2, a total of P165.5 billion has been allocated, with P140 billion readily available and P25.5 billion as a standby fund.

With the massive amount spent thus far for the COVID-19 response, the government is obliged to show how public money has been utilized and allocated. It is imperative to institutionalize transparency and accountability in budget planning and allocation.

Currently, standards for public finance management are being assessed through the Open Budget Survey (OBS) by the International Budget Partnership. The section on Transparency tackles the timeliness, online availability, and comprehensiveness of reports; Public Participation deals with the inclusivity of the process; and, finally, Budget Oversight refers to the role of legislative bodies and audit institutions.

Over the years, the Philippines has participated and shown improvements in the survey. In the 2017 Open Budget Index (OBI), the Philippines increased its ranking by 9 points, from 67 to what is currently 76 on a scale of 100. This score was higher than the country’s OBI target of 67 for 2019 and a projected score of 71 as stated in the Philippine Development Plan (PDP) 2017-2022. In hindsight, the improvements are indicative of both instituted reforms and more areas that need development.

In the latest 2019 report, the Philippines was given a score of 76 in Transparency, 31 in Public Participation, and 74 in Budget Oversight on a scale of 100. It ranked highest among its Asean neighbors in Transparency and Public Participation, with scores above the global averages of 45 and 14, respectively.

Government institutions are key players in implementing the ideals proposed in the OBS. The Department of Budget and Management (DBM), legislative bodies, and the Commission on Audit (COA) are key institutions in advancing and promoting transparency, inclusivity, and sustainability in the budget process.

As the budget agency of the state, the DBM may act to expand its presence by improving accessibility platforms and participatory mechanisms that will make reports and data openly available, while encouraging the public and civil society to engage more and become part of the process.

In line with the recommendations set by the OBS, the DBM should also include reports on the quasi-fiscal activities of public corporations, the balance sheet of the government, and, finally, more data on the government’s long-term finances to show the robustness and sustainability of the executive’s budget proposals. Performance indicators showing emphasis on borrowing and actual debt relative to the original estimates and budget year should likewise be covered.

The COA can reinforce participation and oversight by reaching out to civil society organizations (CSOs) through consultations and third-party audits with the agency. Bridging the gap between government and CSOs is an essential process in establishing and fostering a whole-of-society approach to budget management and developing public trust.

Legislative bodies are the final keystone in the project to institutionalize an open budget direction, by pursuing an agenda that would encourage public involvement in and open avenues for research and contribution to the budget process.

Economic recovery models remain uncertain until a safe and potent vaccine for the coronavirus is globally available. This is the reality for private industries, government, and all sectors of society today.

Quite aptly, the latest OBS comes at a time when transparency in government spending is of utmost importance due to the enormous spending measures needed to address the COVID-19 pandemic. The survey should prompt government to increase transparency, public participation, and budget oversight, to insulate and strengthen its fiscal environment against the political and economic headwinds brought about not only by the public health crisis, but also by the gargantuan funding needed to address it.

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Dindo Manhit is founder and managing director of Stratbase Group.