THE Open Budget Survey 2012 bears bad news about budget transparency in the Philippines, but the story seems more upbeat in the areas of budget oversight and public participation.
Aside from the Open Budget Index (OBI) or the measure of the availability and comprehensiveness of the eight key budget documents that governments should publish, the Survey conducted by U.S.-based International Budget Partnership (IBP) also assesses the strength of formal oversight institutions, such as Congress and the Commission on Audit (COA), and opportunities for citizen participation.
The good news: The Philippines appears to be improving in these two areas, based on the results of the Survey’s latest round.
Legislatures and supreme audit institutions play a critical role in planning and overseeing the implementation of national budgets. Beyond making budgets transparent, ensuring the existence of a strong legislature and a supreme audit institution are among the other ways by which the budget process could be made more open, says IBP.
To be sure, the strength of the Philippine legislature in the budget process remains “moderate” in this round. Yet while improvement is needed on the aspect of conducting a formal debate on the overall budget policy prior to the tabling of the budget proposal and consultation with members of Congress to determine budget priorities, among others, it was noted that the legislature has the internal capability to conduct budget analyses through the Congressional Planning and Budget Research Department (CPBRD).
Meanwhile, the strength of the country’s supreme audit institution or the COA was assessed as “strong” in this round, from “moderate” in 2010. The improvement was due largely to the existence of legal provisions and processes that meet basic requirements such as the ability or authority to remove the head of the supreme audit institution, the legal power to audit public finances, and the availability of financial resources and skilled audit personnel.
But the best news comes from the Survey’s new section, which focuses on processes and practices that the executive, legislature, and supreme audit institution have in place to make sure that citizens are included in the preparation, enactment, implementation, and audit of the budget.
IBP says access to budget information must be coupled with opportunities for citizens to use this information in order to participate meaningfully in budget decisions and oversight. Albeit imperfect, opportunities for Filipinos to engage during the four phases of the budget process apparently exist in the Philippines.
One measure that has helped make this possible was a 2011 memorandum from the Department of Budget and Management (DBM) titled “Guidelines on Partnership and Participation of Civil Society Organizations and Other Stakeholders in the Preparation of Budget Proposals,” which formalized government engagement with civil society organizations (CSO).
In the crafting of the 2012 budget, for instance, DBM piloted consultations with six national government agencies (Departments of Agriculture, Agrarian Reform, Education, Health, Public Works and Highways, and Social Welfare and Development) and three government corporations (National Food Authority, National Housing Authority, and National Home Mortgage Finance Corporation). Other state agencies and corporations were also encouraged to initiate their own consultations with CSOs. Of the nine government agencies and corporations, four entered into a formal agreement with CSOs.
Agencies that entered into a Budget Partnership Agreement with CSOs were required to provide information to the latter to help them come up with an “evidence-based” evaluation of the agency's projects or programs. A significant result of the partnership was the P1.26-billion increase in the National Housing Authority’s 2012 budget “for additional resettlement projects in locations identified by the CSOs.”
The Open Budget Survey 2012 report cites this practice in the Philippines as one of the promising examples in which public engagement is being pioneered. Even as IBP maintains that improvements should be made in both areas of transparency and participation simultaneously, the Philippine example shows that providing opportunities for public participation is realistic and can be undertaken by any government.
“(I)t is not necessary for countries to first expand budget transparency before introducing mechanisms for public engagement in budgets — as demonstrated most starkly in the case of Philippines, which has introduced promising mechanisms for public engagement,” IBP says in its report.
Still, the executive’s pioneering effort has a long way to go. DBM has yet to expand the number of agencies covered for the entire bureaucracy to be looped into the budget preparation process. As well, public participation in the discussion and enactment of the budget remains limited, as evidenced by the actual experience of CSOs who had been previously engaged.
Prof. Leonor Magtolis-Briones, lead convenor of Social Watch Philippines that organized the Alternative Budget Initiative (ABI), for instance recounts that during the 2012 budget deliberations, CSOs including ABI were given a whole day to present their alternative budget to Congress. Briones notes, though, that this occasion was separate from the usual budget hearings that the House of Representatives conducts. In those regular hearings, the former Treasurer of the Philippines says, CSO members were not allowed to ask questions or say their piece because “it is not the system.”
The Budget Department, however, has taken other initiatives that may assist the public in scrutinizing the budget and help them understand how budgets are implemented.
For example, Section 97 of the General Provisions of the 2011 General Appropriations Act (GAA) requires all departments and agencies, including those enjoying fiscal autonomy, to post on their websites information such as: approved budgets, performance measures and targets set in the Organizational Performance Indicator Framework approved by DBM, major programs and projects to be implemented, annual procurement plan, contracts awarded and the name of contractors/suppliers/consultants, targeted and actual beneficiaries, utilization of funds, status of implementation, and program/project evaluation and/or assessment reports. Non-compliance with these requirements may be cause for a program or project to be discontinued.
In July 2011, DBM also launched the Transparency and Accountability Initiative for Lump-Sum Funds (eTAILS), a management information system that digitizes the processing of lump-sum funds and supports the timely disclosure of its release information.
As well, government agencies and stakeholders discuss the development of programs and projects through the Regional Development Council meetings. Department also have hotline numbers and websites that citizens can access to send comments, questions, and suggestions.
As for the audit phase, the COA website features a “Fraud Alert” section wherein citizens can report allegations of fraud, waste, abuse, or mismanagement of funds. It also includes an annual summary of fraud complaints received by COA, stating the agency involved, subject of allegation, date of receipt of the complaint, and the action taken by the Commission.
Teresita Mendoza, Director IV of COA’s National Government Sector, even says that these inputs determine COA’s audit program; an audit will be conducted once traces of fraudulent acts are identified in an initial investigation.
(The IBP collaborates with civil society around the world to use budget analysis and advocacy as a tool to improve effective governance and reduce poverty. The Ford Foundation, the Open Society Institute, the Flora and William Hewlett Foundation, and the U.K. Department for International Development [DfID] provide funding for the Open Budget Initiative at the IBP. The IBP is not affiliated with and does not receive funding from the U.S. government.)