Re­forms in pub­lic fi­nance


THE Fi­nan­cial Ex­ec­u­tives In­sti­tute held its 2nd Gen­eral mem­ber­ship Meet­ing on Fe­bru­ary 15. The theme of the meet­ing was Gov­er­nance and Re­forms in Pub­lic Fi­nance. We in­vited Bud­get Sec­re­tary Ben­jamin Dio­kno and the Chair­man of the In­sti­tute of Cor­po­rate Di­rec­tors, Fran­cis Estrada, as speak­ers.

It has been a long- stand­ing ad­vo­cacy of FINEX to pub­lish and dis­trib­ute in­for­ma­tion about the gov­ern­ment bud­get as we be­lieve that it rep­re­sents the pri­or­i­ties and plans of the ad­min­is­tra­tion. - ways looked at bud­gets as sto­ries, and not just a set of num­bers. The fis­cal bud­get is no dif­fer­ent. It tells the story of what the gov­ern­ment wants to ac­com­plish over the course of a year. It de­scribes projects that they want to im­ple­ment and where they want them im­ple­mented. It tells a story of fa­vored de­part­ments. Some years it would be na­tional de­fense and se­cu­rity; other years it would be health, and still oth­ers, it would be pub­lic works. These projects might have been part of a cam­paign prom­ise or some, not at all. These are sto­ries that we have all been mon­i­tor­ing and watch­ing over the years, al­most like a TV se­ries, ex­cept that these sto­ries af­fect our lives, as well as our fu­ture.

This last meet­ing was im­por­tant to us in that sense. It rep­re­sented the moral in­ter­sect gov­er­nance. As pub­lic fi­nance would af­fect our daily lives, we, as cit­i­zens, have to con­tin­u­ally mon­i­tor where these plans would lead to. This is al­most akin to a board of di­rec­tors elect­ing the ad­min­is­tra­tion. As board di­rec­tors, we set the strate­gic di­rec­tion for a bet­ter fu­ture. This should be per­for­mance- ori­ented. We want to en­sure that our as­sets, in this case, all the gov­ern­ment funds are cor­rectly planned and uti­lized in a sus­tain­able man­ner.

Se­cond, we need to en­sure that we have the pol­icy guide­lines that would al­low all the branches of gov­ern­ment to ac­tu­ally ex­e­cute the strate­gic di­rec­tion that was set by the ad­min­is­tra­tion. We then have to act as vig­i­lant cit­i­zens in mon­i­tor­ing the per­for­mance of the ad­min­is­tra­tion against what it has set out to achieve. As we all know, very few pro­grams go as planned. A per­fect bud­get plan is al­ways an elu­sive ideal.

It is, there­fore, im­por­tant that in­for­ma­tion, devel­op­ments and feed­back are con­stantly mon­i­tored to al­low us to un­der­stand and nav­i­gate through the wind­ing land­scape. As cit­i­zens-di­rec­tors, we have to hold our­selves re­spon­si­ble over the re­sults. We have to would ac­tu­ally add value to the coun­try’s bot­tom line.

The In­sti­tute of Cor­po­rate Gov­er­nance that Mr. Estrada chairs gives a great deal of im­por­tance to cul­ture that draws from so­cial re­spon­si­bil­ity and ethics. This is pred­i­cated on the fun­da­men­tal de­mands of gov­er­nance. This de­mand of gov­er­nance is straight­for­ward: fair­ness, trans­parency and ac­count­abil­ity. These are the fun­da­men­tal prin­ci­ples un­der­ly­ing good gov­er­nance, whether in gov­ern­ment or in pri­vate cor­po­ra­tions.

Fair­ness re­quires that all stake­hold­ers, re­gard­less of creed, race or gen­der, are treated justly and eq­ui­tably. Trans­parency re­quires that all trans­ac­tions be above board and com­pli­ant with laws and reg­u­la­tions. In par­tic­u­lar, all re­ports should be truth­ful and ad­e­quate and in line with global re­port­ing stan­dards.

Ac­count­abil­ity re­quires a sys­tem of checks and bal­ances that re­wards good per­for­mance and pun­ishes bad per­for­mance on the au­thor­ity and per­for­mance eval­u­a­tion. These should ap­ply to the dif­fer­ent de­part­ments of gov­ern­ment as they do in pri­vate prac­tice.

Ethics sets forth norms of in­ter­nal con­duct and be­hav­ior, par­tic­u­larly in re­lat­ing and deal­ing with oth­ers. Fair­ness pre­sup­poses open­ness to­ward oth­ers and ac­cep­tance of our obli­ga­tions to­ward them.

Trans­parency adds to open­ness and a deep sense of identi with the wel­fare of oth­ers. It calls for a spirit of sol­i­dar­ity. Ac­count­abil­ity im­poses upon us a sense of stew­ard­ship over the as­sets and the en­vi­ron­ment en­trusted to us.

So­cial re­spon­si­bil­ity sets norms for tak­ing into se­ri­ous ac­count the ex­ter­nal en­vi­ron­ment, in­clu­sive of all the peo­ple around us, whose lives we are mo­rally bound to up­lift. Fair­ness asks from all of us to take good care of re­spon­si­bil­ity for, so these as­sets can con­tinue to serve fu­ture gen­er­a­tions, to with­stand the test of time and con­trib­ute pos­i­tively to the progress of the en­tire na­tion. and to show a gen­uine spirit of ser­vice to oth­ers.

With a weak foun­da­tion in ethics and so­cial re­spon­si­bil­ity, the reg­u­la­tory ini­tia­tives will al­ways come up short. The dis­cus­sions em­pha­sized the need to em­bed these two guide­posts in our cul­ture to achieve real progress and Ron­aldS.Gosec­ois­cur­rent­lyEVP oftheFi­nan­cialEx­ec­u­tivesIn­sti­tute­andCOOofIDI-Volk­swa­gen. Theopin­ion­sex­pressed­here­are the­view­soft­hewriterand­donot opin­ion­sofFINEX.

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