Achieving Financial Transparency in the Philippines
From 1960 to 2011, the Philippines had illegal cash flows amounting to $410.5 billion. In this period, the Philippines lost $132.9 billion to crime, corruption, and tax evasion, and gained $277.6 billion through illegal transfers. This amount of money gained is not even beneficial to the development of the Philippines since this flows only to the underground economy, and not the official economy (Global Financial Integrity, 2014). Even more cases of money lost to corruption have occurred since then — the Philippines consistently ranked low in Transparency International’s Corruption Perception Index, ranking 113 out of 198 countries in 2019, dipping from the rank 99 in 2018 (Transparency International, 2020).
Developing countries such as the Philippines are most affected by the systemic effects of corruption due to the lack of strong institutions to regulate it. However, while institutions can curb these acts to an extent, the approach to corruption should be multi-disciplinary and involve not only the government but also the citizens (Mendoza & Peralta, 2018). The key to this is transparency, which is “basic to make participatory good governance work by which the rich, elite, and poor people should strive together” (Ayuste-Bastian, 2018).
In this age of information, accessibility and financial transparency can be effective through reporting relevant information on user-friendly digital formats to bridge the gaps among government, citizens, and financial information (McCann, 2015). According to McCann’s article in 2015, three things will make communicating financial information more effective: (1) active efforts in making information accessible, (2) providing context, and (3) applying the data in policy decisions.
Financial information accessibility and the Manila Bay rehabilitation project
Financial information should not only be posted for everyone to seek but instead proactively shared with stakeholders. According to McCann’s article in 2015, not only does proactive sharing of financial information show commitment to accountability, but it is also beneficial for government staff since fewer questions on where taxes go are asked as the citizens can answer their questions on their own.
The lack of proactive communication of financial information can be seen in social media discussions about government projects. For example, on the Manila Bay Rehabilitation project, many people were confused with how much was spent on the project. Many sources reported it to be P389 million, gaining many reactions on how such an amount of money could have been used for more practical uses instead (De Vera-Ruiz, 2020). Other sources reported that it is only P28 million, and even up to P47 billion (Cruz, 2020; CNN Philippines, 2019). The financial information posted was not clarified enough as evidenced by the confusion and mixed reactions and judgments of people. Instead of the information being able to report and clarify, people became more confused. To clarify, P28 million was reported to cover “the price of dolomite sand, transportation cost, taxes, and other fees,” P389 million for “beach nourishment,” and P47 billion is for the whole rehabilitation project of Manila bay which may take up to 7 years to accomplish (Cruz, 2020; Perez-Rubio, 2020; Lato-Ruffolo, 2019).
Providing context to financial information and the COVID-19 response loans
Instead of just posting the numbers, financial information should be given context. Reporting spending and borrowing of funds should not only be stated but explained. It should provide more answers than bringing about more questions. McCann’s article in 2015 also mentions the use of visual representations to help viewers understand the information better — how they relate to each other, and how they affect government decisions that ultimately affect their lives.
The lack of contextualized financial information is seen in mixed reactions to increasing reports of billions worth of loans for the COVID-19 response. There should be a comparison to other spendings, and clear explanations and plans with the use of funds. Explanations should be clear and specific, and not as vague as “to fund programs aimed at easing the effects of the coronavirus pandemic” (Lopez 2020). Especially with total loans reaching trillions in pesos, it is important to know where these huge amounts of money go specifically to have a better assessment of action efficiency and to further promote financial accountability.
Application of financial information in policy decisions and the pocketed PhilHealth billions
“Citizens do not trust what they cannot understand” (McCann, 2015). When given financial information, aside from context, explanations and implications should also be reported. Not everyone has the tools to understand the meanings of financial information right away and so the government should proactively communicate how policies affect the citizens in any way. This results in an increase in public trust and ultimately increased collaboration between the government and the citizens.
The lack of application of financial information in policy decisions is seen in reports on the pocketed PhilHealth billions. Instead of saying “the total amount of money spent and pocketed amounted to more or less P15 billion,” it is important to explain its implications (Jalea & Peralta, 2020). While breakdowns of the pocketed billions presented through infographics helped explain the inconsistencies in budget and actual costs, there are more important questions that need to be answered. More than just showing the figures, questions involving how citizens will be affected should be answered: How will the PhilHealth members get affected? Will the funds be replenished?
The call for improved financial transparency practices is greater than ever in this new age of information. A hurdle in communicating financial information is the way fake news continues to be rampant and reaches even wider audiences. Fake news reaches to people faster than the truth because of its characteristics that real reports don’t have: (1) accessibility, especially through social media, (2) contextualization, especially through the fabricated stories that would perfectly piece together information, and (3) well-explained relevance to its readers, though also fabricated. These characteristics are also the same characteristics that financial information should have, but grounded in truth. Thus, proactive, contextual, and applied practices on financial transparency is important to combat corruption in the Philippines. The importance of this is from the fact that corruption is not only a financial issue. Corruption is a social issue — it “creates social systems compliant to its practices and influences entire societies and the relationships they contain” (Lewis, 2017). When financial information achieves the three characteristics, citizens and governments can collaborate even more to combat the systemic effects of corruption.
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References
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Lopez, M. (2020, June 30). PH debt nears ₱9 trillion with surge in loans for pandemic response. CNN Philippines. Retrieved October 9, 2020, from https://www.cnn.ph/business/2020/6/30/PH-debt-nearing-9-trillion-May-2020.html
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Perez-Rubio, B. (2020, September 7). Palace: P389-M Manila Bay ‘white sand’ project approved prior to pandemic. Philippine Star. Retrieved October 9, 2020, from https://www.philstar.com/headlines/2020/09/07/2040714/palace-p389-m-manila-bay-white-sand-project-approved-prior-pandemic
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