Manila—(PHStocks)—With the country getting a favorable score in the International Monetary Fund’s Fiscal Transparency Evaluation (FTE), the Aquino Administration’s goal of instituting sustainable public financial management (PFM) reforms for greater transparency and accountability is expected to gain more ground.
While the IMF also emphasized the need to close the remaining gaps in the Aquino administration’s strategy to fulfill the 36 principles of the IMF’s Fiscal Transparency Code (FTC), Administration officials expressed confidence in addressing these issues.
“Through Daang Matuwid, we sought to reform public fiscal management and bring greater transparency and accountability to it. The IMF is a valuable partner in our fiscal reform efforts, and working with them and other stakeholders has allowed us to cover the gaps in our PFM reform road map.
“At the same time, however, we have to resolve some longstanding issues in our fiscal management practices. From the DBM’s end, for example, we need to strengthen budget planning so that the resulting National Budget can properly support our growth and development targets. There’s a lot of work to be done as well in making sure that agencies spend their allocations quickly and efficiently,” Department of Budget and Management (DBM) Secretary Florencio “Butch” Abad said.
According to the FTE report, the Aquino Administration scored well among the 36 indicators—Advanced in 7 indicators, Good in 16, and Basic(minimum) in 8. These scores range across the three pillars of the FTC, including fiscal reporting, fiscal forecasting and budgeting, and fiscal risk analysis management.
“Unprecedented fiscal transparency under this administration’s core belief that ‘good governance is good economics’ has been a bedrock of our sound fiscal strength. We continue to strive for openness, as public finance reform allows us to better enhance the management of every hard-earned taxpayer peso,” Finance Secretary Cesar V. Purisima said.
“As a priority of the government, enhancing fiscal transparency stands as one of four pillars in our Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Process (FMP) Cebu Action Plan (CAP) for inclusive and sustainable economies,” Purisima said.
The DBM, the Department of Finance (DOF), and the National Economic Development Authority (NEDA) pushed a number of reforms that helped the country secure a high score. Expenditure reforms include Performance-Informed Budgeting, Bottom-Up Budgeting, and the timely release of the GAA.
The FTE report likewise issued a number of recommendations that would address the gaps in the country’s transparency practices. Some of these items have already been addressed via reporting improvements across government. For example, agencies now prepare their own final Annual Financial Reports (AFRs) for auditing by the Commission on Audit. Meanwhile, the DOF has already released its Tax Expenditure Report (TER) for 2011 early this year, which addresses the issue of transparency in income tax incentives and other tax expenditures.
On the other hand, the Development Budget Coordinating Council (DBCC) annually releases the Fiscal Risk Statement (FRS), which includes information on government guarantees. With the government gathering the list of guarantees per Government-Owned-or-Controlled Corporation (GOCC) and the DOF computing for contingent liabilities, the resulting data—together with information on non-explicit guarantees—can be readily be included in the FRS.
“We are encouraged by this report as we continue to lead the push for openness across the Asia-Pacific. An open government opens opportunities for a better performing economy,” Purisima noted.
“The IMF’s report not only validates the Aquino administration’s good governance agenda. It also tells us that we’re headed in the right direction with our fiscal reform efforts. And as we continue to fine-tune our public financial management system, we can look forward to better government services and further improvements to our economy,” Abad concurred.