PH budget transparency, 64;
Congress budget oversight, 36

THE PHILIPPINES scored 64, on a scale of 0 to 100, for transparency of eight budget documents in the latest Open Budget Survey (OBS) 2015, a report on 102 countries in the world.

This piece of good news comes, however, with findings of weakness in budget oversight by the Philippine Congress, which got a dismal 36 points.

Yet still, budget oversight by the Commission on Audit got a 92-point score, while public participation, 67, one of the highest in the world.

The new Philippine rating for transparency of budget documents, a 16-point growth from 48 in 2012, puts the country in the top tier of 24 nations that provide substantial budget information to citizens.

The only independent, comparative, and regular measure of global budget transparency and accountability conducted every two years by independent civil society researchers, the OBS is a project of the International Budget Partnership (IBP) based in Washington, DC.

The Philippine Center for Investigative Journalism (PCIJ) has served as country researcher for the OBS since 2008. Karol Ilagan and Charmaine P. Lirio of PCIJ did research for the Philippines for OBS 2015.

The OBS does not reflect opinion but measures observable facts using 140 indicators, according to a standard research methodology.

OBS 2015 Is the fifth to be released by IBP since 2006. It now covers 102 countries that are home to about 90 percent of the world’s population.

Not an opinion poll

The OBS uses documented evidence and objective criteria “to evaluate the extent to which national or central governments in 102 countries provide the public with timely and comprehensive access to eight key budget documents required by international good practices.”

The OBS also examines “the ability of legislatures and supreme audit institutions to provide effective oversight of government budgets and opportunities for the public to participate in the budget process.”

The OBS is not an opinion poll or a measure of perceptions. It is based instead on a rigorous, objective methodology subject to independent review.

Researchers were trained in the OBS methodology and required to test budget transparency in practice, visit with government offices to check compliance with publication deadlines, and interview key informants.

Documented evidence, including citation of a law, interview, a copy of a document, were required to back up the researchers’ answers to the questionnaire.

The completed 140-item questionnaires were checked by anonymous, independent reviewers. Government officials were offered an opportunity to comment on the questionnaire for their country. The IBP staff referee any disagreement between reviewers and researchers to arrive at the most appropriate answer for the questions.

What it is, isn’t

A subset of 109 questions from the 140-question OBS is used to construct the Open Budget Index (OBI) that determines a hard score, ranging from 0 to 100, on budget transparency for each country assessed. The Philippines’s score of 64 for budget transparency comes from the OBI.

Meanwhile, the extent of public participation in the budget process was measured in 16 questions, and the strength of oversight institutions, in 15 questions.

The OBI assigns a transparency score on a 100-point scale using 109 of the 140 survey questions, which focuses specifically on whether the government provides the public with timely access to comprehensive information contained in the eight key budget documents.

The OBS, however, “does not directly measure the accuracy of information contained in budget reports — whether the information provided is correct — or the degree to which government budgets are equitable and address the needs of their populace.”

Too, the OBS “does not measure corruption” but only “budget transparency, opportunities for the public to participate, and oversight capability.”

The link exists, however, according to IBP. “If corruption is to be tackled, governments will need to take many different measures. It is critical that governments tackle corruption and as a first step, increase budget transparency and thereby close one door through which corruption can occur.”

THE PHILIPPINES: Top in ASEAN

The Philippines’s score of 64 — for transparency of budget documents — in the OBI puts it on top of the 10-member Association of Southeast Asian Nations (ASEAN).

In the last eight years, the Philippines’ OBI score has shifted up and down, however. It got 51 in 2006, 48 in 2008, 55 in 2010, 48 in 2012, and finally 64 in the latest report.

Public participation in the budget process got a 67-point grade, which is higher than the global average of 25,

Specific elements of public participation in the country was defined thus — Executive Branch – Adequate; Legislature – Limited; and Audit – Limited.

The sorriest point in the Philippines’s performance is budget oversight by Congress that got a dismal 36 points grade.

This poor score derives form following findings:

* “The legislature provides limited oversight during the planning stage of the budget cycle and weak oversight during the implementation stage of the budget cycle.”

* “A pre-budget debate by the legislature does not take place, and regular consultations on budget matters between the executive and the legislature do not take place.”

* “In both law and practice, the legislature is not consulted prior to the virement of funds in the Enacted Budget and spending contingency funds that were not identified in the Enacted Budget.”

In contrast, budget oversight by the supreme audit institution (Commission on Audit) scored a fantastic 92 points. This derives from the following factors:

* “The supreme audit institution provides adequate budget oversight. Under the law, it has full discretion to undertake audits as it sees fit.”

* “The head of the supreme audit institution cannot be removed without legislative or judicial approval, which bolsters its independence.”

* “The supreme audit institution is provided with sufficient resources to fulfill its mandate and has a limited quality assurance system in place.”

Recommendations

The OBS 2015 report raised the following recommendations for the Philippines:

On Improving Transparency

* Increase the comprehensiveness of the Executive’s Budget Proposal by, for example, presenting expenditures for a multi-year period by the three expenditure classifications and by program and presenting more information on issues beyond the core budget.

* Increase the comprehensiveness of the Year-End Report.

On Improving Public Participation

* Provide detailed feedback on how public perspectives have been captured and taken into account.

* Hold legislative hearings to review and scrutinize Audit Reports.

* Provide detailed feedback on how public assistance and participation has been used by the supreme audit institution.

On Improving Budget Oversight:

* Ensure the legislature holds a pre-budget debate and the outcome is reflected in the Enacted Budget.

* Establish regular consultations on budget matters between the executive and the legislature.

* In both law and practice, ensure the legislature is consulted prior to the disbursement of funds in the Enacted Budget and the spending of contingency funds that were not identified in the Enacted Budget.

GLOBAL FINDINGS

Efficient, effective, and accountable budget systems stand on three pillars: budget transparency, citizen engagement in the budget process, and formal oversight institutions. The absence of any one of these three components undermines the entire system, IBP said.

In OBS 2015, “only four of the 102 countries assessed — Brazil, Norway, South Africa, and the United States — have brought the three elements of their fiscal accountability ecosystem in line with international best practice.

New Zealand and Sweden were ranked No. 1 and No. 2 though in the OBI, or for transparency of budget documents.

But a large majority of the countries assessed – in which 68 percent of the world’s population lives – provide insufficient budget information. These 78 countries have OBI scores of 60 or less.

Worse still, “a troubling 17 countries provide scant or no budget information, with scores of 20 or less.”

According to IBP, “the prevalence of weak budget accountability ecosystems ultimately threatens national development outcomes and the success of global initiatives like the Sustainable Development Goals and agreements pending on addressing climate change.”

Additionally, “the 24 countries providing sufficient budget information tend to have higher levels of income, a freer press, and stronger democratic systems than the countries that provide insufficient budget information. Interestingly, more transparent countries are also typically perceived to be less corrupt.”

One surprising finding though is this: “Any country – irrespective of geographical location or income level – can establish open and accountable budget systems if the political will exists to do so.”

Interestingly, “the weakest performing countries (those with scores of 40 or below) actually have higher incomes, on average, than the countries with scores between 41 and 60.” This, IBP said, “likely reflects the many hydrocarbon revenue-dependent countries with very low levels of budget transparency,” with the exception of Mexico, Malawi, and Uganda.

A far larger number of countries (32) fail to meet the Survey’s standard of adequacy on any of the measures.

Bolivia, Cambodia, Chad, China, Equatorial Guinea, Fiji, Iraq, Myanmar, Qatar, Saudi Arabia, and Vietnam have been among the least transparent countries (with OBI scores of 20 or less) every single year they have been in the Survey.

Of the 25 countries whose scores placed them in the limited category when first surveyed (with OBI scores between 41 and 60), 19 either remain there or have fallen into lower categories in 2015.

HOW NATIONS FARE

TOP CLUSTER: On a scale of 0 to 100 in the OBI, the following countries landed in the top category – with scores of 88 to 62, in descending order:

New Zealand Sweden South Africa Norway United States, Brazil, France, United Kingdom, Romania, Peru, Russia, Italy, Germany, Czech Republic, Slovenia, Georgia, Mexico, Bulgaria, South Korea, Malawi, Portugal, Poland, Philippines, and Uganda

MIDDLE CLUSTER: On a scale of 0 to 100 in the OBI, the following countries landed in the top category – with scores of 41 to 59, in descending order:

Argentina, Indonesia, Spain, Chile, Colombia, Slovakia, Bangladesh, Papua New Guinea, Jordan, Kyrgyz Republic, Costa Rica, Croatia, El Salvador, Sierra Leone, Mongolia, Ghana, Kazakhstan, Azerbaijan, Dominican Republic, Ecuador, Hungary, Kenya, Serbia, Botswana, Mali, Nicaragua, Guatemala, Namibia, India, Tanzania, Malaysia, Ukraine, Benin, Turkey, Cameroon, Bosnia and Herzegovina, Senegal, Burkina Faso, Pakistan, Honduras, Thailand, Tunisia, Afghanistan, Timor-Leste

BOTTOM CLUSTER: On a scale of 0 to 100 in the OBI, the following countries landed in the top category – with scores of 0 to 39, in descending order:

Dem. Rep. of Congo, Sri Lanka, Zambia, Mozambique, Albania, Morocco, Liberia, Rwanda, Macedonia, Zimbabwe, Trinidad and Tobago, Yemen, São Tomé e Príncipe, Angola, Tajikistan, Nepal, Nigeria, Algeria, Vietnam, Bolivia, Niger, Egypt, Fiji, China, Sudan, Venezuela, Cambodia, Chad, Equatorial Guinea, Iraq, Lebanon, Myanmar, Qatar, Saudi Arabia

For further Information, visit www.openbudgetsurvey.org