2010年-世界发展银行全球_Philippines___Public_Expenditure_and_Financial_Accountability_134页_10mb

Summary of Philippines Public Expenditure and Financial Accountability Report (No. 54584-PH)

Core Content

This report provides an assessment of the Philippines' public financial management (PFM) system using the Public Expenditure and Financial Accountability (PEFA) framework. It was conducted by the World Bank with financial support from AusAID and in coordination with the Department of Budget and Management (DBM). The assessment focuses on the period 2004–2006, though some recent data are included.

The report aims to offer stakeholders an evidence-based evaluation of the PFM system and to identify areas for improvement. It is intended to serve as a baseline for monitoring future reforms and to support coordination between government agencies and development partners.

Main Points

1. Budget Credibility

• Definition: Refers to the extent to which the approved budget is executed without significant deviations.
• Findings:
  • Budget credibility is difficult to assess fully due to the way budget data are reported.
  • Re-enacted budgets during the period and the inability to capture continuing appropriations ex ante make it hard to evaluate this aspect.
  • Revenue forecasts were relatively realistic during the period.
  • The Annual Financial Report does not correct for over-statements of arrears identified by the Commission on Audit (COA), potentially leading to an inaccurate assessment of expenditure arrears.

2. Comprehensiveness and Transparency

• Definition: Refers to the completeness and openness of budget documentation.
• Findings:
  • The GOP uses a reasonable set of budget classifications (economic, administrative, and functional), aligning with international benchmarks like the IMF's Government Finance Statistics (GFS).
  • However, the reporting of budget execution is weak. COA uses a different classification system (NGAS) than the DBM, leading to inconsistencies.
  • Budget execution data are not made public or consolidated in a meaningful report, limiting transparency.
  • Public access to key fiscal information is hampered by the lack of in-year budget execution reporting and unavailability of data on resources allocated to primary service delivery units.

3. Policy-Based Budgeting

• Findings:
  • The executive has a fairly orderly process for budget preparation, meeting the constitutional deadline for submitting the budget proposal to Congress.
  • Final approval of the General Appropriations Act (GAA) is often delayed well into the fiscal year.
  • Since 2001, Congress has failed to approve the GAA for the whole year on three occasions (2001, 2004, 2006).
  • The GOP is actively addressing multi-year budgeting, but systematic debt sustainability analysis is not yet in place.
  • The DBM is developing a medium-term expenditure framework (MTEF), but the link between forward estimates and annual budget ceilings remains unclear.
  • Only the Departments of Health and Education have developed multi-year sector expenditure plans, while other departments are lagging behind.

4. Predictability and Control in Budget Execution

• Findings:
  • Budget execution is a relative weakness in the PFM system.
  • Tax administration effectiveness is limited due to technical complexity, lack of clarity on taxpayer obligations, and weak controls.
  • Tax collection suffers from weak enforcement of revenue transfer rules and discrepancies between the Bureau of Internal Revenue (BIR) and Bureau of the Treasury (BTr) records.
  • The current system of managing allotment releases through SAROs creates uncertainty about fund availability, especially for capital outlays and MOOE.
  • The Constitution allows the President a high degree of discretion in re-allocating budget portions, but weak reporting on budget execution makes it hard to assess in-year re-allocation.

5. Internal Control and Audit

• Findings:
  • Internal control and internal audit are areas the GOP is beginning to strengthen.
  • Existing internal control rules are outdated, and familiarity with them among financial management staff is low.
  • Compliance with these rules is poor, as evidenced by the majority of national government agencies receiving adverse or qualified opinions in COA audits.
  • Internal audit units are functional only in a few agencies, and audit reports are not produced for most government agencies.
  • In cases where internal audit is functioning, management responses to audit findings are delayed, though actions are eventually taken.

6. Procurement Practices

• Findings:
  • Non-competitive bidding methods are used to a limited extent.
  • However, COA audit reports indicate some unjustified uses of non-competitive procurement methods.
  • The procurement process is being improved, with the development of an electronic procurement system (EPS) and the use of PhilGEPS for posting contracts.
  • The procurement policy board (PPB) and the Bureau of the Treasury (BTr) play key roles in managing procurement and financial flows.

7. Accounting, Recording, and Reporting

• Findings:
  • COA is a professional body conducting competent financial and performance audits.
  • It has introduced the New Government Accounting System (NGAS) based on accrual accounting concepts and is promoting its government-wide application through the electronic system eNGAS.
  • Despite these efforts, the accounting, recording, and reporting system still requires substantial improvements to meet PEFA standards.
  • The BTr faces challenges in conducting timely bank reconciliations due to staff shortages, leading to large discrepancies in national government books and bank balances (e.g., P5.65 billion in 2005).
  • Irregularities in the recording and reporting of unliquidated cash advances are frequently identified in COA audit reports.

8. Institutional Constraints

• Findings:
  • The GOP lacks a comprehensive information system to track resource flows to service delivery units.
  • Some agencies face institutional constraints in internal information flows, such as the fragmented fund release system for DepEd.
  • Accountability reports are required from agencies to the DBM, but delayed submissions are common, and a systematic consolidation process is missing.

Key Information

• PEFA Methodology: Used to assess the PFM system.
• Funding Sources: AusAID and the World Bank.
• Primary Counterpart: Department of Budget and Management (DBM).
• Timeframe: 2004–2006, with some recent data included.
• Key Entities Involved:
  • DBM: Leads the development of the MTEF and budget management.
  • COA: Conducts audits and highlights issues in financial reporting.
  • BTr: Manages the treasury and faces challenges in reconciliation and reporting.
  • DOF: Manages treasury and debt functions.
  • DepEd: Faces fragmented fund release processes.
  • BIR and BOC: Involved in tax and customs registration, with issues in data reconciliation.

Conclusion

The Philippines' PFM system has made progress in several areas, but significant challenges remain in budget execution, internal control, and transparency. The report highlights the need for improved reporting mechanisms, better integration of financial data, and stronger internal audit practices. It serves as a baseline for ongoing reforms and a reference for future improvements in public financial management.