24 November 2009
Debt & Public Finance
– In an effort to step up its campaign for a temporary freeze in foreign debt payments, members of the Freedom from Debt Coalition (FDC) today enjoined the public to support the growing call for the government to impose an immediate moratorium on the payment of external debts.
In a signature drive at Plaza Miranda in Manila, the group said a debt moratorium could be the “best Christmas gift” the government can give to an already debt-burdened populace. As of August 2009, the National Government Outstanding Debt was recorded at P4.23 trillion, while its Contingent Liabilities was at P585.19 billion.
Emman Hizon, FDC campaigner said: “The enduring economic crisis as indicated by the widening fiscal deficit, the infrastructure and agriculture damage brought by typhoons Ondoy and Pepeng and the rise in the prices of certain basic commodities due to unmitigated oil price hikes are clear indicators of another bleak Christmas season to millions of poor Filipino families.”
The debt watchdog said unless the multiple crises are readily confronted with correct fiscal measures together with needed political courage, it will only produce new economic dilemmas.
FDC pointed to a recent special SWS national survey done on October 24-27 stating that hunger rose to 18.9% nationwide representing an estimated 3.5 million families, compared to 17.5% in the previous survey of September representing 3.2 million hungry families.
“The government cannot expect the economy to correct itself without doing much effort in reforming its fiscal and economic instruments. This is not ‘business as usual’ for the government and its economic managers, the situation calls for new and transformative solutions. Resolving the Philippine debt problem is one of those,” FDC said.
The group said the government’s refusal to deal with the debt problem even when confronted with the economic crisis caused it to incur an epic fiscal deficit which in turn limited its capacity to deal with the typhoon disasters and increasing hunger.
FDC said the proposed P1.54 trillion 2010 budget is a case in point, wherein P119.582 billion is being earmarked for interest payments of foreign debt and P221.230 billion for interest payments of domestic debt compared to spending on health (P48.34 billion), natural resources (P13.32 billion), agriculture (P55.37 billion), and water resources development and flood control (P14.6 billion).
“Thus, a necessary wedge must be put in place to prevent the continuing exodus of our resources to debt payments when it is badly needed to fight the economic and climate crises,” FDC said.
The group said an immediate moratorium of external debt payments in the proposed P 1.54 trillion 2010 budget alone would free up P253.459 billion which the government a free hand in funding counter-cyclical spending to stimulate the economy, as well as fund and rehabilitation and reconstruction initiatives for the said fiscal year,” FDC said.
It also said a temporary cessation of foreign debt servicing could augment increased social and economy spending to finance important state programs out to curb huger, generate jobs and increase the people’s purchasing power.
“We believe the Philippines, at this point, has a stronger bargaining leverage, now that the banks and other financial institutions had been battered by the recent global financial and climate crises. The lenders and financiers, struggling to prevent borrowers from defaulting, will be more than eager to go to the negotiating table should we ask them to. The government must seize this opportunity,” Hizon asserted.
The signature drive is part of FDC’s petition initiative which is also calling on the government to seek reparations from rich countries’ governments and lenders for their “historical responsibility” on the climate crisis, and to repudiate all odious and illegitimate loans in order to raise funds for reconstruction and recovery initiatives.
The gathered signatures will be submitted to the Senate this 1st of December in time with the deliberation of the 2010 budget. -30-