Fiscal transparency to free $5.4T in economic value, says McKinsey principal

Fiscal transparency can help unlock trillions of dollars worth of economic value per year, an association principal of a global management consultancy said. 

 

Framing her discussion in terms of opportunity, McKinsey & Co. associate principal Kristine Romano claimed on the first day of the Asia Pacific Economic Cooperation (APEC) 2015 Workshop on Fiscal Management Through Transparency and Reforms in Bagac, Batangas that open data can help unlock $3.2 to $5.4 trillion in economic value per year in seven domains: consumer finance, oil and gas, health care, electricity, consumer products, transport, and education. 

 

APEC member economies also explored how openness can optimize results in procurement and contracting, budgets and expenditures, tax incentives and subsidies, and expanding fiscal space to target more productive public investments, the Department of Finance said on Wednesday.

 

Emphasis was placed on information and communications technology innovation and citizen participation as ways to bolster fiscal transparency reforms.  

 

The two-day workshop also discussed initiatives on international cooperation to address tax evasion, as well as base erosion and profit shifting. 

 

International best practices on auditing cross-border transactions and facilitating exchange of information, such as Automatic Exchange of Information (and Foreign Account Tax Compliance Act initiatives, were also tackled. 

 

Ahead of the curve 

 

The workshop focused on open data and budget transparency on the first day, while the second day highlighted international tax transparency and cooperation. 

 

The two-day workshop builds on the existing body of work and firms up the fiscal transparency pillar of the Cebu Action Plan (CAP), the infrastructure component under the APEC roadmap. 

 

The CAP, proposed by the Philippines, intends to boost financial integration, fiscal transparency and resiliency, as well as infrastructure development and financing among APEC member economies for more sustainable and inclusive growth trajectories across the region. 

 

During the workshop, Finance Secretary Cesar Purisima claimed the Philippines is ahead of the curve as an open, transparent government delivering real economic returns for the people. 

 

"We find evidence from some of our neighbors showing how the Philippine experience with good and open governance is not an isolated miracle. These are results we wish to scale up across the region. Together with APEC member economies, we will advance the tested idea that openness, in terms of data and citizen participation, is the best guarantee of inclusive and sustainable growth," he said. 

 

However, Budget Undersecretary Richard Moya noted transparency isn't a not a panacea for fiscal woes. 

 

"Transparency is not enough, it is not an end. It is a means towards efficient and effective delivery of public goods and services," he said. – Trisha Macas/VS, GMA News