Philippines ranks high in economic data transparency among emerging markets

Among the world’s emerging markets, the Philippines has been adjudged one of the most transparent countries in terms of disseminating economic data but the quality of information still lagged behind transparency efforts, an international study said.

In a study conducted by the Washington-based Institute of International Finance (IFF), the Philippines was credited for its investor relations program that attempts to bridge the information gap between investors and the central government.

The evaluation criteria, IFF explained in the report, have been weighted to capture their relative importance from an investor perspective. "For example, the provision of forward-looking policy information that enables investors to forecast economic performance is given higher importance than provision of historical data," IFF said.

The IFF said none of the countries they have evaluated met all 20 of the investor relations criteria although Brazil, Chile, Korea, Mexico, Philippines and Turkey met at least 16 of the 20 criteria, scoring over 28 points out of a total of 38 on the weighted criteria.

However, the Philippines did not make it to the list of 10 highly transparent countries in terms of dissemination of government operations, government debt and external debt statistics.

Brazil, Bulgaria, Chile, Croatia, Mexico, Peru, South Africa, Thailand, Turkey and Uruguay were marked as highly transparent. These countries scored 35 points and above out of 43 criteria points including the provision of timely and relevant data.

The Philippines, in comparison, scored only 28 points. The least transparent countries were China, the Dominican Republic, Morocco and Vietnam – all scoring only 13 points and lower.

In the Philippines, investor relations is carried out by Investor Relations Office (IR0), an office directly under the Bangko Sentral ng Pilipinas (BSP).

The IFF said it evaluated what it considered the 30 most active countries in the international debt capital markets, examining the dissemination of data in areas that investor consider important but were not fully covered by the Special Data Dissemination Standard (SDDS) of the International Monetary Fund (IMF).

According to IFF, substantial amounts of private capital have flowed into emerging markets in the last 15 years. In addition to lending provided by commercial banks and direct investments from multinational corporations, the IFF noted an increasingly diverse range of investors including pension funds, mutual funds, insurance companies and hedge funds.

"But these private flows have been frequently interrupted, with periods of retrenchment by international investors and creditors that have generally reflected inconsistent economic performance," IFF said.

Best practices for investor relations and data transparency, the IFF said, help avoid crises from emerging and were critical in developing the effective approach when they do arise.