The International Monetary Fund (IMF) has called on the government to hasten the passage of the proposed Public Finance Management Act (PFMA) to allow an overhaul of the country’s budget system and streamline existing weaknesses, as pointed out in the recent fiscal-transparency evaluation of the global institution.
In a briefing on Thursday following the IMF’s launch of the maiden report on the assessment of fiscal transparency in the Philippines, IMF Resident Representative for the Philippines Shanaka Jayanath Peiris said the proposed PFMA will address the weaknesses seen in the budget framework and implementation in the country.
The IMF on Wednesday released a report pointing out the strengths and weaknesses of the country’s
fiscal-transparency management juxtaposed with the international best practices.
“Fiscal reporting is relatively comprehensive, frequent and timely, with many areas of good and advanced practices. Coverage of public-sector units’ stocks and flows is well-developed, but coverage of the public sector as a whole lacks consolidated data for the public sector and general government subsectors,” the IMF said in the report.
Among the specific weaknesses, as cited and discussed by Peiris, included the gap on the budget ceilings and the degree of reallocations in the implementation.
As such, Peiris expressed his support to the Act—which is now pending in Congress—saying that most of the countries across the globe have an organic budget law, and the Philippines only has a General Appropriations Act.
“The proposed bill [public finance management law] is something we support and look at,” the IMF said.
Peiris further said that, as the country needs to limit reallocations in its budget framework, the proposed bill promotes “clear rules” and “clarity” on the specific aspect of budget framework and implementation.
The public finance management law has been filed in Congress, still bearing different versions.
Sen. Franklin M. Drilon’s version said in its explanatory note that “the Philippines is one of the few remaining countries where there is no law officially tailored to public- financial management.”
“The passage of this bill will, therefore, stand as a veritable landmark in the history of Philippine legislation, as it will not only align the public financial-management system with international standards and practices but it will also consolidate, harmonize and address the gaps between existing laws, jurisprudence, executive issuances and rules pertinent to all public financial-management activities,” the note read.
“The lack of clarity opens the opportunity not just for subpar implementation, but also for outright abuse,” Sen. Sonny M. Angara said.
Both versions were filed in May this year.
5 comments
We should have report pointing out the strengths and weaknesses of the country’s fiscal-transparency management juxtaposed with the international best practices.
“Coverage of public-sector units’ stocks and flows is well-developed, but coverage of the public sector as a whole lacks consolidated data for the public sector and general government subsectors,” very well said IMF.
“The proposed bill or the public finance management law is something we support and look at,”. I agree with IMF.
The public finance management law has been filed in Congress, still
bearing different versions.
The International Monetary Fund (IMF) has called on the government to hasten the passage of the proposed Public Finance Management Act (PFMA) to allow an overhaul of the country’s budget system and streamline existing weaknesses, as pointed out in the recent fiscal-transparency evaluation of the global institution. Good news!!