Open Budget Index: How fares the Philippines?

AVERAGE. That is the grade that the Philippines obtained in the Open Budget Initiative for 2006, a comparative study on budget transparency recently completed in 59 countries across all continents.

“The Philippines’s performance indicates that the government provides citizens with some information on the central government’s budget and financial activities,” the report said, “but that there is much room for improvement.”

Using an Open Budget Index, the study rates countries on how open their budget books are to their citizens. The Index evaluates the availability of key budget documents, the quantity of information these documents provide, and the timeliness of their dissemination. It makes the assumption that the availability and quality of these information are key to informing citizens about the budget and facilitate an inclusive budget process.

The Philippines scored 51 percent out of a possible 100 percent on the Open Budget Index.

Led by the Center on Budget and Policy Priorities (CBPP), a non-profit research organization based in Washington, DC, the Open Budget Initiative was conducted in the Philippines by the PCIJ. The CBPP says that a country’s ranking on the Open Budget Index “measures that government’s commitment to accountability and transparency.” (View highlights of findings on the Philippines here. Click here for the full report.)

Overall, the Index found that most countries provide “at least some information” to their citizens about their budget. However, said the report, the “vast majority” fail to provide the basic information necessary for extracting government accountability.

Researchers found what they called “deeply troubling” patterns of poor performance across various countries in terms of budget transparency. Of all 59 countries covered by the study, only “a handful” of governments were found to be scoring particularly well.

Key budget documents and their availability in RP

Pre-Budget Statement. Based on standards on good budget practice, the Pre-Budget Statement is intended to disclose the parameters in which the Executive will form its budget proposal. In the Philippines, sadly, this document is not produced.

Executive’s Budget Proposal: As used in the Open Budget Initiative, the Executive’s Budget includes all the supporting budget documents that are issued by the Executive at the same time that it presents its proposal to the legislature. In the Philippines, the main document of the Executive’s budget proposal is the Budget of Expenditures and Sources of Financing or BESF; the supporting documents are the National Expenditure Program (NEP) and Staffing Summaries. These documents are all available online, on the website of the Department of Budget and Management.

According to the study, the Philippines’ proposal provides some information to the public, scoring 57 out of a possible 100 percent of the information needed to provide the public with a comprehensive picture of government’s financial activity. This suggests, says the report, that “there is room for improvement.”

Citizens’ Budget: Do governments go out of their way to provide non-expert explanation of the budget? In the Philippines, a Citizens’ Budget is not produced.

In-Year Reports: These are regular reports on government’s spending, revenue collection, and borrowings. The idea is that as the budget is being executed, information must regularly be provided to the public. The report says the Philippines provides “good information” in its in-year reports.

Mid-Year Review: This document gives updates on what to expect in the second half of the budget year. Ideally, says the Center for Budget Policy and Priorities, this provides a more detailed explanation of the budget, than the monthly in-year reports. A review of the implementation of the budget six months into the budget year is considered necessary to ensure that programs are being implemented effectively, and as well to identify any emerging problems. The report finds that the Philippines would be able to greatly strengthen public accountability if it published a more comprehensive mid-year review.

Year-End Report: The Index suggests that while the Year-end Reports by the Executive are released in a timely manner, they lack the details needed to provide comparisons between enacted levels and actual outcomes.

Auditor’s Report: This report is issued by the Supreme Audit Institution, in the case of the Philippines, the Commission on Audit, attesting to the government’s year-end final accounts. The Index cites the Philippines for making its audit reports public. However, it finds that the audit reports provide very little information on whether their recommendations are successfully being implemented.

Citizen Participation in the Budget Process

The research found that opportunities for citizen participation in the budget process could be improved.

The report emphasizes that citizens require both access to information, and opportunities during the consideration of the budget to use that information to ensure their informed participation in the budget debates. The Philippines’ score on the Open Budget Index suggests that the public’s access to information could be improved.

Major findings among 59 countries

Overall, the major findings from the Open Budget Index 2006 include:

• Only six of the 59 countries provide the extensive budget information necessary for government accountability: France, New Zealand, Slovenia, South Africa, the United Kingdom, and the United States.
• More than a third of the countries provide minimal or no budget information to citizens.
• Six countries keep their budget secret until after it is adopted by the legislature — effectively barring any public participation in the budget’s consideration. (Angola, Burkina Faso, Chad, Egypt, Mongolia, and Vietnam)
• Nearly half (25) of the countries fail to hold public hearings on the budget.

The Index — according to the lead organization, Center on Budget and Policy Priorities — aims to provide citizens, legislators, and civil society with comprehensive and practical information that can be used to gauge a government’s commitment to budget transparency and accountability. It is hoped, says the CBPP, that armed with this kind of information, areas of necessary budget reforms will be more easily identified, so that their impact on development initiatives can be heightened.

View a summary of the ratings obtained by all 59 countries, here.

Visit the website of the Open Budget Initiative for 2006.