NSCB - Statistically Speaking... Coordination of National Statistical Systems: The Current Thrust of Statistical Development by Dr. Romulo A. Virola

Coordination of National Statistical Systems:
The Current Thrust of Statistical Development
by Dr. Romulo A. Virola ¹
Secretary General, NSCB

My gut feel is that one of the reasons Obama won is that his campaign managers collected and used statistics better than McCain’s, coming up with a campaign strategy that sought greater voter participation. They believed that voters who were likely to vote for Obama had not been enthusiastically voting in the past so they worked hard on getting them to the election booths. This resulted in turnout increases in Southern states like Alabama, Georgia, Mississippi, and South Carolina compared to 2004. Can better use of better statistics make you become the president of the only superpower of the world? You had better believe it!

Up for discussion during the First Regular Session of the Fourteenth Congress are House Bill No. 3843 introduced by Hon. Rufus B. Rodriguez and House Bill No. 4136 introduced by Hon. Neptali M. Gonzales II. The two proposals seek to strengthen the Philippine Statistical System (PSS) by essentially integrating the National Statistical Coordination Board (NSCB), the National Statistics Office (NSO), the Bureau of Agricultural Statistics (BAS) of the Department of Agriculture, and the Bureau of Labor and Employment Statistics (BLES) of the Department of Labor into one national statistical organization and centralizing all primary data collection activities in the new organization.

We are happy and grateful that Cong. Rodriguez and Cong. Gonzales appreciate and support statistics and want to strengthen the PSS. But while we commend highly the efforts of the two congressmen to help the Philippine Statistical System, we think the methods proposed under the House Bills No. 3843 and 4136 are not going to work. In fact, we think that the two House Bills will destroy the very source of strength of the PSS.

quote Never in the history of statistical systems has statistical coordination been given so much importance towards statistical development. “Coordination among statistical agencies within countries is essential to achieve consistency and efficiency in the statistical system“ is enshrined as Principle No. 8 among the Fundamental Principles of Official Statistics² (FPOS) adopted by the United Nations Statistical Commission in April 1994.

Despite FPOS No. 8, the lack of statistical coordination in many countries, both developed and developing has been identified as a fundamental weakness of many national statistical systems. The results of such absence of statistical coordination include costly duplication of efforts among the line departments, weak sectoral statistics, use of different concepts and definitions in the collection and dissemination of statistics. In other words, inefficient and ineffective, uncoordinated national statistical systems.

The members of the international statistical community have therefore shifted attention or at least have been paying much higher priority now to the need for statistical coordination at the national level.³ During the 60th Anniversary of the Statistical Commission in 2007, a Seminar on the “Evolution of National Statistical Systems” was organized by the UN Statistics Division. Part of this seminar was devoted to a Panel Discussion on “Prospects and Risks in the Future: How to Manage Uncertainties?” in which the author was invited to talk on statistical coordination.

The current thrust of statistical development efforts is now clearly on the entire national statistical system, instead of just the national statistics office. One of the most effective institutions currently active in advocating for mainstreaming statistics in the national development agenda is PARIS 21 or Partnership in Statistics for Development in the 21st Century⁴. It is a partnership of policy-makers, analysts and statisticians from all countries, based in the OECD and with the main goal of developing a culture of evidence-based policy making and implementation. Its membership comes from governments, international organizations like among others, the World Bank, the UN Statistics Division, the IMF, Eurostat and the Asian Development Bank, professional bodies and academic institutions.

Advocacy for statistical development is very strong in the agenda of PARIS 21. At the country level, it pushes for the formulation of a statistical development plan generically called the National Strategies for the Development of Statistics or NSDS. The Philippine version is called the Philippine Statistical Development Program (PSDP), now on its seventh episode and prepared as an interagency collaboration within the PSS under the stewardship of the NSCB. The Philippines is clearly a pioneer in this area as we are a pioneer in the area of statistical coordination⁵. The PSDP being a plan, like other plans, it has of course its implementation problems and there is definitely much room for improvement in the PSS.

The NSDS emphasizes the critical need for statistical coordination. In fact, in the PARIS 21 Steering Committee Meeting held last week in Paris, one of the most frequently mentioned words was coordination. Realizing that one of the major weaknesses of many statistical systems is the absence of statistical coordination, countries are being encouraged to strengthen coordination of the entire national statistical system. Never did I hear the word “reorganization”⁶ or “merger” as a solution to the problems of statistical systems. And the people talking were chief statisticians and people who had worked with various countries who therefore knew first hand the strengths and weaknesses of various types of national statistical systems!

When everybody thought that donor money for statistics was drying up, the funding organizations are scaling up initiatives to put statistics in the limelight, to convince policymakers that statistical development should be mainstreamed in the national development agenda. In the old days, donors were giving support for statistics only if they were incorporated somewhere in a traditional development project. Not anymore. Statisticians should thus take advantage of these new opportunities, but be wary of their pitfalls⁷.

It is rather strange and disappointing, but a very welcome development nonetheless, that the international community has realized it only lately that the quality of statistics needed in evidence-based decision making extends beyond the products and services of the national statistics office. Nowhere in the world are all statistics produced by only one statistical agency. For practical reasons, line ministries/departments and other government offices generate statistics they need for their own policy and program uses. These statistics generated outside of the national statistics office therefore deserve as much attention when seeking to improve the quality of statistics produced in one country. Strengthened coordination of the entire national statistical system is indeed, the way to go, when one talks of statistical development.

quote Coordination is a provision under existing statistical laws of many countries. IMPLEMENTATION IS THE PROBLEM. This is where the current PSS, because of the existence of NSCB, has comparative advantage⁸. In the PSS, coordination of the national statistical system is not lodged with the same organization mandated with data production. In contrast, in many countries, coordination is included among the functions of the NSO. What happens generally however is that with its limited manpower and financial resources, the NSO tends to be biased towards improving its own data production and dissemination activities, leaving very little time and resources for coordination to improve the various sectoral statistics generated by the line departments. In such a setup, the NSO enjoys little credibility as an objective and independent coordinator of the national statistical system. This is exactly what the author saw in many Asia Pacific countries when he was asked by an international organization in the late 90s to help improve the generation of gender statistics in these countries.

On November 19, the Executive Board of the NSCB will have a workshop to discuss the recommendations of a Committee created by the Board to review the Philippine Statistical System. The different agencies of the PSS have been requested to submit a position paper as inputs to the discussion. In this month’s Statistically Speaking, we attach as Annex SS-2008-11-1 the position paper of the NSCB Technical Staff on the issue,.

quote We submit that many improvements of the PSS can be carried out by a genuine appreciation of the immense power of statistics and a strong political will to provide better statistical service to all stakeholders.

Political will on the part of government, as well as the private sector, to pour greater investments in statistics, greater investments in statisticians, greater investments in statistical offices. Statistics do not rain from heaven and underpaid and overworked statisticians and understaffed statistical offices cannot forever quote be expected to work for love of country!

Political will on the part of statisticians to deliver what can be delivered under existing difficult circumstances. In an international forum, we were informed, half-jestingly that over at a development partner institution, when the president and the vice-presidents wanted certain statistics, the statisticians never said no!

Meanwhile, with 2010 just around the corner for some, I do not think professional statisticians should try to be politicians; but I believe that politicians can win⁹ elections if they try to be good statisticians. But as my textmates would say:
He He He !

Reactions and views are welcome thru email to the author at ra.virola@nscb.gov.ph.

Posted 10 November 2008

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¹ Secretary General of the National Statistical Coordination Board (NSCB) and Chairman of the Statistical Research and Training Center (SRTC). He holds a Ph. D. in Statistics from the University of Michigan in Ann Arbor, U.S.A. and has taught mathematics and statistics at the University of the Philippines. He is also a past president of the Philippine Statistical Association. The preparation of the NSCB Technical Staff position paper annexed to this article was spearheaded by the Programs, Policies, and Advocacy Division of the NSCB under Fe Vida N. Dy-Liacco. The author thanks Noel S. Nepomuceno, Jessamyn O. Encarnacion, and Candido J. Astrologo, Jr. for the assistance in the preparation of the article. The views expressed in the article are those of the author and do not necessarily reflect those of the NSCB.

² The ten FPOS may be viewed at http://unstats.un.org/unsd/dnss/gp/fundprinciples.aspx, of the UN Statistics Division website.

³They have also recognized the need for better coordination among themselves, as they obviously have not been coordinating with each other, resulting in the inefficient use of donor resources and technical assistance facilities and the low level of statistical capacity in many countries despite the amount of resources that has been spent.

⁴ The author is a member of the PARIS 21 Steering Committee representing Southeast Asia and also of the Steering Committee Bureau.

⁵Chapter 1 of the PSDP is on “Management and Coordination of the PSS”. Among the more recent papers prepared by the NSCB staff on the matter are “Improving Social Statistics in the Philippines through Effective Coordination” prepared by Lina V. Castro for the United Nations Expert Group Meeting on the Scope and Content of Social Statistics, 9-12 September 2008, New York; “Challenges and Opportunities in the Coordination of a Decentralized Statistical System”, Journal of the International Association for Official Statistics, Volume 24, Number 1-2/2007; ”Challenges of Decentralization in the Philippine Statistical System” by Romulo A. Virola, presented as an invited paper during the 53rd Session of the International Statistical Institute, 22-29 August 2001 in Seoul, Korea; and “Recent Initiatives of the NSCB in Improving Official Statistics in the Philippines”, by Romulo A. Virola, Leticia D. De Leon & Christopher Ivo S. Bacani, NSCB Technical Papers No. 2001-002, February 2001.

⁶ I wonder how much the costs and benefits of the government “Rationalization Plan” have run into!

⁷ Some countries become favorite recipients of support and can be overwhelmed by the sudden influx of assistance.

⁸ The NSCB has been visited by delegations from various countries including those from Uganda this year, Cambodia and Bangladesh in 2007, Bhutan and China in 2006, Nepal, Lao PDR, and Thailand in 2005, Vietnam, Turkmenistan and Thailand in 2004 and India and Japan in 2003.

⁹ That is CAN, not will!

ANNEX SS-2008-11-1

NATIONAL STATISTICAL COORDINATION BOARD
POSITION OF THE TECHNICAL STAFF ON:

HOUSE BILLS NO. 3843 AND 4136
ON THE REORGANIZATION OF THE PHILIPPINE STATISTICAL SYSTEM

The Technical Staff of the National Statistical Coordination Board (NSCB) agrees with the overall intent of the two bills, which is the strengthening of the Philippine Statistical System (PSS). Indeed, the importance of statistics as a strategic resource of the country amidst the fierce global competition among the knowledge-based economies of the Third Millennium should be recognized. Thus, the PSS should be maintained as a national statistical system that is capable of providing adequate, accessible, consistent, reliable, timely, and relevant statistics to guide the planning and decision making processes of the government, the private sector, and the general public.

While the NSCB is in full accord with the general objectives of the two bills, it has strong reservations on the proposed reorganization of the PSS, which will be undertaken through two basic provisions:(1) the integration of the NSCB, the National Statistics Office (NSO), the Bureau of Agricultural Statistics (BAS), and the Bureau of Labor and Employment Statistics (BLES) into one national organization to be called the National Statistics Authority or NSA under House Bill (HB) No. 3843 and Statistics Philippines or STATPHIL under HB 4136; and (2) the centralization of all primary data collection activities in the new organization.

This position paper was arrived at after careful consideration of related issues and possible implications of the proposed legislations.

1. The Centralized Versus the Decentralized Statistical System

The statistical services in different countries may be classified as either centralized or decentralized. In a centralized system, a single autonomous institution has the responsibility for the management of essentially all data collection activities of the government. In a decentralized system, on the other hand, statistical activities are under the supervision and control of sectoral departments or offices, with or without overall coordination by a national body or committee.

In practice, however, there is no national statistical system that is fully centralized, nor is there a system that is totally decentralized. Rather, statistical systems could be placed along a spectrum where some tend towards being highly centralized, while others tend towards being highly decentralized. In more decentralized systems, either the main national statistics agency or a separate authority outside of the sectoral departments is responsible for the coordination of the statistical activities of various government offices. In more centralized systems, coordination, which is internal, resides within one central organization.

Several studies¹ have been conducted to compare the two approaches to statistical organization. There are advantages and disadvantages in both systems, but it has not been clearly established which approach has the edge. Even the United Nations Statistics Division does not give a definitive statement that one setup is superior to the other. Among countries, the type of organization differs depending upon their tradition in data collection, historical circumstances, and their socio-political and cultural environment. Several countries with a long tradition of data collection at the subnational level, as in the case of the United States, Japan, and the United Kingdom, remain decentralized and have been effective as such. On the other hand, countries like Canada, Australia, and the Netherlands have for a long time been functioning under a centralized system and remain as such. It is interesting to note, however, that Sweden, one of the countries reputed to have a well-functioning statistical system, introduced major adjustments to its highly centralized setup in the early 1990s and is now working under a decentralized statistical system.

In the case of the developing countries, particularly those that have been colonies of other countries, the type of statistical organization has often been patterned after the system of the colonizing country. In Asia, examples of the centralized and decentralized types of varying degrees could be found. The Philippines, India, Thailand, and Korea have decentralized systems, while Indonesia and Sri Lanka have a more centralized form. However, regardless of the form of their statistical systems, many, if not all, countries continue to experience problems related to statistics for various reasons.

The Philippine Statistical System has been recognized as one of the most advanced among the developing countries. One primary reason is the existence of statistical coordination mechanisms that have been put in place by the NSCB; such coordination mechanisms do not exist in countries where data production and coordination are merged under one organization.

2. Existing Structure of the Philippine Statistical System

The PSS is currently operating under a decentralized setup. Nevertheless, the long history of statistical organization in the Philippines has been mixed with moves both towards centralization and towards decentralization occurring over the years. The country has thus seen the advantages and disadvantages of each setup.

The period from 1900 to 1918 saw the beginnings of modern statistical services as the first two population censuses were conducted in the Philippines and statistical units were created in various departments of government such as those involved in agriculture, labor and customs. From 1918 to 1931, the Bureau of Commerce and Industry under the Department of Commerce and Communication acted as a clearinghouse for statistical data and published a yearly statistical bulletin that served as the authoritative source of statistical information in the country.

In 1932, the first step towards centralization of statistical services was taken with the creation of the Department of Agriculture and Commerce with a special statistical division, which combined the data responsibilities of the old Bureau of Commerce and Industry and the old Bureau of Agriculture. In 1940, the move towards centralization continued with the establishment of the Bureau of Census and Statistics under the Office of the President, which consolidated the activities undertaken by several government offices, including four departments (i.e., Agriculture and Commerce, Labor, Health, and Public Information), the Bureau of Customs, the Commission of the Census, and the National Library.

Nevertheless, the post-war years, with a huge and urgent demand for information for planning, decision-making, and the implementation of rehabilitation programs saw the gradual disintegration of the centralized statistical system created before the war. This ushered in a period of great activity as new units sprang up in many departments and agencies to gather statistical data, mostly for their own needs, and partly because the central statistical agency could not provide all the data needs to the departments/agencies. Among these statistical units were the Department of Economic Research of the then Central Bank of the Philippines, the Agricultural Economic Division of the Department of Agriculture, and the Labor Statistics Division of the Department of Labor.

Two subsequent government reorganizations not only maintained the decentralized PSS, but even strengthened its coordination functions and structures. In 1972, the National Economic Council (NEC) was abolished and the National Economic and Development Authority (NEDA) was established in its place. NEDA had three offices, one of which was the Statistical Coordination Office (SCO), which was made up of two staff units drawn from the three branches of the old Office for Statistical Coordination and Standards (OSCAS) of the NEC. In 1987, the PSS was again restructured with the issuance of Executive Order (E.O.) No. 121, in accordance with the recommendations of a committee of eminent statisticians² that was created to review the Philippine Statistical System. The SCO was reorganized into the present NSCB, with an expanded membership chaired by the NEDA Director General. The Statistical Research and Training Center (SRTC) was also established at this time.

In 1992, there was again a move to centralize the system as initiated by some sectors in the statistical community. Consequently, a bill was passed by the Senate and the House of Representatives, but this was vetoed by then President Corazon C. Aquino. Among the specific reasons cited for the veto were as follows:

The necessity and advantage of the institutional change were not very clear;
The proposed reorganization will only create additional layers in the bureaucratic structure;
The integration of the statistical system, as provided in the bill, was not even complete with only the NSO, BAS, and BLES being merged with NSCB, leaving out the then Central Bank and other agencies conducting primary data collection;
The proposed setup for the conduct of statistical activities was deemed unwieldy;
The proposed reorganization was believed to be detrimental to the operation of the DA and the DOLE; and
A massive overhaul of the PSS must be carefully studied and evaluated from all angles.

Soon after President Aquino’s veto, attempts to revive the proposed revamp of the PSS were again filed with both houses of Congress from mid-1992 to 2003. However, these legislative proposals were not able to address all the issues raised against the previous bills and they were all dropped from the legislative agenda without action.

3. Main Arguments Against the Proposed Integration

3.1 Weakened statistical coordination

In the international community, the PSS is recognized for, among other things, its statistical coordination mechanisms, which can be attributed to the presence of a coordinating body independent from the data production organization. In various international fora, the PSS is widely considered as one of the best among statistical systems of developing countries despite our limited resources. Such reputation is also manifested in the various opportunities for the NSCB staff, in particular, to participate in many fora, either as invited experts/resource persons or paper presenters, or as training/workshop participants, as well as in the provision of and continuing prospects for development funding from both local and international organizations to the NSCB, in particular, and extending to the PSS, in general, to further improve capacity for their statistical undertakings. With the proposed integration of the data production and coordination functions in a single agency, the PSS will lose this comparative advantage that has been nurtured through the years.

The statistical coordination function will be weakened and the PSS will deteriorate into a dysfunctional statistical system as is the case in many developing and even developed countries where coordination is lodged with the central statistical organization. One of the 10 Fundamental Principles of Official Statistics adopted by the UN Statistical Commission states that coordination among statistical agencies within countries is essential to achieve consistency and efficiency in the statistical system. In the Philippines, while the major statistical offices may not need the assistance offered through the coordination mechanisms of NSCB, other agencies, such as the Department of Education (DepEd), Department of Environment and Natural Resources (DENR), Department of Health (DOH), Department of Tourism (DOT), Department of Trade and Industry, Department of Science and Technology (DOST), National Commission on the Role of Filipino Women, Technical Education and Skills Development Authority, and the LGUs have benefited from the assistance of the NSCB. Although these offices may not have been given all the attention they need due to resource constraints, the services that they have received have translated to concrete improvements in the sectoral statistics.

With the proposed merger of the four major statistical agencies, statistical management will be dealing with too many responsibilities. The new agency will not only be responsible for the collection, analysis, and dissemination of mainstream socioeconomic and demographic statistics, but also for the programming of statistical activities in government, development and maintenance of statistical standards, classification systems, and frameworks, and conduct of developmental activities. The ever increasing demand for statistics from the government, business, industry, and the general public, particularly at the subnational level and the continual challenge to improve statistical operations could lead to adjustments in priorities and programs. Statistical coordination and policy formulation for the whole PSS will take a back seat in favor of primary data collection and dissemination, leading to a subordination of the interests of the other PSS agencies and the consequent deterioration in the quality of sectoral statistics produced by these agencies. Statistical initiatives at the subnational level, such as the provincial product accounts, localization of the MDGs and small area poverty statistics and the development and coordination of the statistical systems of LGUs, could be disrupted, if not totally discontinued.

The existing scenario in the statistical systems of many countries can be either of two types. First, the system is decentralized but without a separate and independent coordinating body. Second, the system is centralized or decentralized but the coordination function is lodged with the national statistics office. In the former system, no coordination is going on among the statistical agencies, while in the latter, the general observation especially among developing countries³ is that coordination is subordinated to the primary function of data generation. The proposed merger could thus result in the PSS ending up in any of these two scenarios.

3.2 Conflict of interest and loss of the check-and-balance mechanism in the PSS

Even with the integration of the three major statistical agencies into one organization, the country’s statistical system shall remain decentralized as there are other government institutions, including the local government units (LGUs), conducting primary data collection activities and about 170 other agencies that are engaged in statistical activities as part of their administrative or regulatory functions. It must be pointed out that under a decentralized system, the policy making and coordinating body should ideally be kept separate from the statistical operations to maintain its objectivity in resolving issues and problems of the system and in exercising its coordinative function. This is precisely why EO 121, which created the NSCB, specifically provides that it shall not engage directly in any basic data collection activity.

Thus, the proposed merger could be perceived, rightly or wrongly, as a loss of the check-and-balance mechanism of the PSS. Melding of the functions of statistical coordination and data production into one agency contradicts the basic principles of independence, objectivity, and integrity, which should be upheld by the statistical system. Statistical coordination not only involves the delineation of responsibilities to avoid duplication, but also covers the development of appropriate concepts, techniques, and methodologies to improve data quality and accessibility, appropriate allocation of available resources among priority statistical activities, provision of technical assistance to other agencies, as well as the formulation of the cohesive and synchronized thrusts and plans for the whole statistical system in the government. Under the proposed setup, it is doubted whether the NSA or the STATPHIL can effectively and objectively carry out these responsibilities due to the conflicting interests of being the coordinator, the data producer, and the policy maker, all at the same time.

It should be noted likewise that, aside from losing touch with the users of statistics in a centralized system, the statistical units in various departments could weaken, as there is no independent and objective body to maintain effective horizontal linkages in terms of standards and other mechanisms to harmonize their various outputs.

3.3 Weakened capacity to respond to statistical demands of subject-matter departments

Consolidating the primary data collection activities, e.g., censuses and surveys, under a single agency, as cited in Section 15 of HB 3843 and in Section 6 of HB 4136, may not necessarily improve the efficiency and effectiveness of the Philippine Statistical System in meeting the demands for statistics. For subject matter departments, like the DA, the DOLE, the DOH, the DepEd, the DOT, the DENR, the DOST, etc., it may be more efficient to be on top of the data collection activities relative to their respective sectoral programs and concerns. Being the subject-matter experts, the agencies can focus on the development and implementation of the data collection instruments and methodologies applicable to their areas of concern more efficiently. In addition, as the main users of statistics they gather, these departments, and subsequently, the entire bureaucracy, benefit from having the results of data collection at once, instead of being coursed thru channels from the NSA/STATPHIL to the agencies, and being able to immediately act on the implications of the data. In other words, the timeliness in the release of sectoral statistics will suffer under the proposed setup.

Because of resource constraints, the proposed NSA/STATPHIL must prioritize its statistical activities. As a result, it will not be able to respond effectively and efficiently to the data requirements of the departments, as what is happening in many countries where the evaluation function is lodged with the same statistical office with the mandate of primary data collection. When this happens, the departments will resort to establishing again their own data collection units to address their statistical information needs, thus, reverting to the decentralized setup, repeating history in the process.

While it can be argued that the integrity of statistics produced by statistical agencies that are supervised by government departments may be questioned because of possible political influence, this might as well apply to the rest of the statistics produced of the bureaucracy. The disadvantages far outweigh the advantages of the proposed setup.

3.4 Threats to the integrity of statistical outputs

There may also be some perceived threats to the integrity of the statistical outputs that will be produced by the merged agency, such as the national accounts, poverty statistics, input-output accounts, and other key socioeconomic indicators. Under the present setup, these outputs are covered by the statistical frameworks developed and now being maintained by the NSCB. As these frameworks provide key macro level indicators and statistics encompassing multisectoral concerns based on the data coming from various source agencies (including the NSO), it is but logical that the compilation of these indicators is done by NSCB, an agency that is not concerned with any specific sector and does not produce any of the basic data inputs for the indicators. For example, in the compilation of the Philippine System of National Accounts, the present system allows the compiler (NSCB) the flexibility to use other data sources, which could be administrative-based records systems, to complement/supplement survey-based data.

For the public to trust the outputs to be produced, it must be assured that these are not subject to actual or perceived manipulation and that the objectivity of the data is fully protected. While the NSCB’s record in this area is good, the merged agency may have problems because, aside from being the coordinator, it will also be a data producer and data user, and maybe perceived to have a bias in using data it produces itself rather than administrative records of other departments.

3.5 Problems inherent in a large organization

The proposed centralization of primary data collection could probably be based on the premise that with this arrangement, field operations would become more efficient and less costly. The NSCB Technical Staff, however, has some apprehensions on this arrangement. It must be noted that the NSA or the STATPHIL would be such a large organization that its operations may become very bureaucratic and unwieldy. Difficulties associated with managing big statistical operations could translate to large non-sampling errors that result in loss in overall quality of the statistics/indicators produced. There would be many layers of decision makers, which could lead to delays in the administration of policies, decisions and activities. Prioritization of resource allocation and timing of fund approval/releases can become critical issues in view of the wide ranging areas to consider, which can unnecessarily affect the timeliness of output delivery. The proposed setup could thus lead to greater inefficiency of the entire system, impair the system’s objectivity and integrity, and could prove more costly in the long run.

4. Basis for the Proposed Legislations

HB 3843 was submitted to the House before the final report of the Special Committee to Review the PSS (SCR/PSS)⁴ came out. It is based on Senate Bill No. 532 filed in 1992. This bill was consolidated with HB No. 35104 and the consolidated version was the one passed by Congress, but vetoed by President Aquino in the same year.

HB 4136 is based on the draft Philippine Statistics Act included in the SCR/PSS report (with slight revisions), which, in turn, is premised on its own findings and recommendations on the PSS. However, the review process followed by the SCR/PSS could have been enriched with the following:

4.1 Review of the statistics generated by the other line agencies

The review should have given importance to the evaluation of statistics from the line departments because the quality of the PSS depends, not only on the MSAs, but also on the statistics produced by the DepEd, DOST, DOH, DOT, and others. In fact, in the statistical community, the development of capacities of national statistical systems, instead of just the national statistical agencies, is now recognized as the main agenda for statistical capacity building. The decision to reorganize the PSS, without looking very seriously at the statistics of the various departments, and how they could be improved under the proposed NSA/STATPHIL is premature and unwise.

The SCR/PSS could have taken off from the review undertaken by its predecessor, the first Special Committee to Review the PSS whose final report was released in 1986. The recommendations of the first Committee were the product of a review that benefited from a thorough assessment of sectoral statistics which comprised one of the major chapters of the report.

4.2 Some considerations proposed by the UN

The UN Handbook on Statistical Organizations categorically says that: “Organizationally, there is no ‘ideal’ model. Before initiating any major reorganization, it is wise to exercise caution. Some of the general considerations to bear in mind include:

“Don’t make changes to accommodate every valuable new idea; this creates confusion and uncertainty;

“Organizations are not ends in themselves; they serve to facilitate and they must accommodate traditions and, most of all, talented people;

“While efficiency is an important concern, some overlap in responsibilities and even some redundancy cannot always be completely avoided without running the risk of overlooking important matters; obviously, the overlap should be minimized

4.3 Peer review

In reviewing the statistical systems of a number of countries, the process followed is through the conduct of a peer review by a former head of a statistical agency from another country. A peer review by a counterpart foreign statistical system can contribute towards an independent, relevant, comprehensive and incisive evaluation, as the reviewer would have keen understanding on the workings of the system aside from a full grasp and experience in the management and operations of a similar statistical organization/system.

5. Other considerations to strengthen the PSS

5.1 Need for a competitive compensation structure for statisticians

The SCR/PSS notes that graduates of statistics are not attracted to joining the government service because it does not provide an attractive compensation package as in the private sector. For those already at the NSO, BAS, BLES, SRTC and NSCB, it is a fact that many of these trained professional statisticians continue to move out to much higher-paying jobs at the Bangko Sentral ng Pilipinas (BSP), the Asian Development Bank (ADB), and other private offices and international organizations. Their training and experience gained from government statistical work, and even from training in international institutions, are their competitive edge. Although the Scientific Career System for Statisticians, which is meant to encourage and provide incentives to statisticians in government, is now in place, there is still a need for more realistic strategies to entice them to stay in the service. The NSCB has been able to attract young graduates and develop them into competent and hardworking statistical professionals but could not match the attraction of working in much-higher paying jobs. Meanwhile, the SCR/PSS recommendation to study the possibility of exempting the SPC/StatPhil from the Salary Standardization Law is rather weak. Unfortunately, there is no specific provision in the Bill that addresses this issue.   We believe that we can improve our products and services best by improving our most important asset, our human resources – and an attractive compensation structure is rightfully due our statisticians.

5.2 Need for funding support for technical and human requirements of the PSS

The first statement of the third paragraph of the Explanatory Note of HB 4136 reads: “Toward this end, this proposed measure is designed to reorganize the Philippine Statistical System by providing adequate human, technical, and financial resources for its evolution into a dynamic, efficient and responsive system.”

However, there are no clear provisions on this in the said House Bill. While Section 22. Philippine Designated Statistics of HB4136 provides that the budgetary requirements for the generation of designated statistics shall be made available and a priority in any budgetary allocation or appropriation by Congress, it should be noted that in the existing statistical system, this is already articulated in Executive Order No. 352, which approved the System of Designated Statistics in 1996.   On the other hand, Section 35. Fund for Reorganization provides that the amount necessary for the effective implementation of the provisions of the Act shall be obtained from the savings or unused appropriations of the agencies affected. Also, Section 27. Statistics for LGUs provides that in cases the conduct of surveys and other undertakings will be required for the purpose of producing local level statistics, LGUs shall share in the cost of said surveys. Clearer provisions are needed for this as not all LGUs would be able to provide funding for surveys. These and related concerns are borne by the non-implementation of budgetary provisions of existing laws.

For purposes of reorganizing and improving the PSS, the provision of adequate human, technical and financial resources must be well-defined in both House Bills, and the government must develop a strong political will to implement provisions of existing laws. Existing problems on human, technical and financial resources in the PSS must undergo a thorough assessment and evaluation in order to come up with proper recommendations for inclusion in the House Bills.

Also, the House Bills do not provide for any funding provisions for the Philippine Statistical Development Program (PSDP) (section 24 of HB 3843 and item l of Section 6 of HB 4136). The PSDP contains new/developmental statistical activities and improvements in the existing activities for the medium-term, usually six-year period, as well as the corresponding budgetary requirements in response to the statistical demands of the Philippine Medium-Term Development Plan.   Apart from the regular undertakings of the statistical system, human, technical and financial resources for the activities in the PSDP are essential for evidence-based planning and policy formulation of the country.

RECOMMENDATION

Many, if not all, of the suggested improvements can be achieved without reorganizing the PSS. What is needed is to provide greater manpower and financial resources to the statistical agencies comprising the PSS, and to strengthen the commitment, capacity and capability of the statistical agencies to deliver statistical information and services. Most importantly, government must invest in statistics, invest in statisticians, invest in statistical offices.

NSCB Technical Staff
October 28, 2008

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¹The United Nations has produced the UN Handbook on Statistical Organizations, which is a good reference material when proposing changes to statistical organizations.

²The recommendations are contained in the "Report of the Special Committee to Review the Philippine Statistical System" released in August 1986. The Special Committee was created by the NEDA to conduct a comprehensive review of the PSS with the primary objective of strengthening the capability for sound and timely decision-making through an overall improvement in the statistical system, and corollarily, the provision of timely, accurate, and more comprehensive information.

³In the successful centralized setups in Canada and Australia, the statistical agencies do not have the same resource constraints as those faced by the PSS.

⁴A creation of the NSCB Executive Board per Resolution No. 7, series of 2007issued on February 7, 2007 to conduct a review and evaluation of various aspects of the PSS, and to come up with a set of recommendations on its overall improvement in relation to its effectivity, efficiency, objectivity and integrity in the delivery of statistical products and services to the various clients and stakeholders.