25 August 2011
Debt & Public Finance
– On the last few days of the budget committee hearings, a debt watchdog has asked the House Committee on Appropriations to follow President Benigno S. Aquino III’s example by suspending interest payments for “corrupted debts and deals” in the proposed 2012 national government budget.
The Freedom from Debt Coalition stressed that the move will bolster the drive towards more efficient infrastructure spending in the future.
“If the President himself is willing to use his political capital to suspend anomalous debt-financed deals, I cannot see why the Congress will not be able to hold its other end of the stick and withhold payments for these deals until they are investigated or renegotiated”, said FDC vice president Emmanuel Hizon.
Hizon cited Aquino’s recent move to renegotiate the controversial North Luzon Railways Project, which cost ballooned from $421 million to $621 million from cost-overruns and had been the subject of numerous Senate investigations by Senator Frank Drilon. Other questionable debt-financed projects have been cancelled, including the P18.7 billion ($430 million) Belgian-funded Laguna Lake dredging project and P12 billion ($276 million) French modular RoRo ports.
“We know of the good track record of Committee on Appropriations Chair Joseph Abaya, and we are sure of his capacity to implement such a breakthrough reform if only he will be willing to,” Hizon said.
Obstacle to justice
Hizon said that the practice of suspending interest payments for questionable debts goes back to 14th Congress, but has been continually vetoed by then President and now Pampanga Representative Gloria Macapagal-Arroyo.
“At that time, Arroyo had been a huge obstacle to justice by continually opposing this House measure, fearing that the subsequent investigations will eventually uncover more of her questionable debt deals, more of her NBN-ZTE’s and Northrails,” Hizon said.
Hizon said that with the current administration’s drive against corruption, Congress can expect a “more favorable outcome this time.”
“Ang paggugol na matuwid ay ang hindi pagpabayad sa di makatarungang utang. (Proper spending is when you do not pay for unjust debts,” Hizon concluded. (30)