Analysts: Transparency vital to economic recovery

IMPROVING transparency in government spending, both at the national and local levels, will be a crucial factor in the success — or failure — of the Philippines as it navigates through economic challenges with limited public funds next year, according to analysts.

“There is a need to strengthen democratic oversight and improve transparency, accountability, and participation in planning and budgeting in both national and sub-national levels next year,” said Francisco A. Magno, who teaches politics and development studies at the De La Salle University.

Data management and digital transformation are necessary to “elevate performance accountability,” he said in a Facebook Messenger chat.

President Ferdinand R. Marcos, Jr. signed the 2023 budget Friday last week, which includes confidential and intelligence funds that are not subject to detailed public reporting.

Arjan P. Aguirre, a political science professor at the Ateneo De Manila University, said transparency, accountability, and participatory governance are needed to ensure effective management of limited fiscal resources during a crisis.

The country’s budget deficit, based on the Bureau of the Treasury’s cash operation report, slightly dropped in September at P179.8 billion, 0.61% lower from P180.9 billion a year earlier. However, the September gap was more than double the P72-billion fiscal deficit in August.

In terms of spending, the cash utilization rate of government agencies hit 98% at the end of September as the country further reopened its economy, up from 95% in August, according to the Department of Budget and Management.

With global and local headwinds such as soaring inflation, the government has lowered its economic growth target for 2023 to 6.0% to 7.0% from 6.5% to 7.5%. Manila’s revised target was more optimistic than that of the World Bank, which expects the country’s economic expansion to slow to 5.7% next year.

Amid these economic challenges, the Philippines needs “to have a way to make its political institutions and processes transparent and more accountable to the people,” Mr. Aguirre said in a Messenger chat.

“This way, we can force our elected officials to do jobs more seriously, forcing them also to avoid doing unlawful and unnecessary things that go against the interest and well-being of the people.”

AUDITS
Mr. Magno cited the importance of oversight by both formal and informal institutions to reduce opportunities for corruption which, according to the World Economic Forum (WEF), is likely to get worse due to “current” economic challenges.

“Legislative committees should examine in-year budget implementation and performance,” Mr. Magno said. “Audit reports should be adequately used by Congress, civil society, and policy think tanks to foster accountable governance.”

In an article published on Dec. 5, WEF said there is “strong evidence of a negative correlation between corruption and the level of GDP (gross domestic product) per capita.

“Corruption is linked to inequality, poverty, discrimination, and social exclusion,” it said.

Mr. Aguirre said another avenue on improving transparency is for government to address threats to media freedom.

“We need to decriminalize libel too so as to protect our journalists from the harassments and intimidations from people of power and wealth,” he said. “Through this, the media can better do its duty to the people.”

LOCAL GOVERNMENTS
Meanwhile, University of the Philippines Political Science Professor Maria Ela L. Atienza said political reforms that need to be pursued next year should also “focus on strengthening institutions and their capacities.”

This includes local government units (LGUs), whose share from national taxes have increased due to a 2019 Supreme Court ruling.

In line with the increased revenue share, the National Government is devolving  some functions to localities.

Ms. Atienza said there should be amendments to the Local Government Code to “make national tax allotment shares more equitable” based on the needs and performances of LGUs.

The amendment should also boost the capacity of LGUs to deliver basic services, especially in health, social welfare, and disaster response, she added.

Ms. Atienza also said good governance reforms for next year must also address gaps in the electoral system, promoting principled politics and preventing turncoatism. — Kyle Aristophere T. Atienza