MANILA, Philippines – The Freedom from Debt Coalition (FDC) today asked the Senate to pass “seven essential reforms” in the proposed P1.45-trillion 2009 national government budget as it formally starts its plenary deliberations of the said appropriations bill.

In a protest rally, around 100 FDC activists wearing Santa hats and carrying Christmas socks and lanterns demanded the Senate to implement budget reforms by radically revising the 2009 appropriations bill in favor of social and economic services to effectively respond to the unfolding global economic crisis.

In a policy proposal submitted before the Senate finance committee, the group stressed the need to implement the following seven budget reforms:

1. Moratorium on external debt payments amounting to P200 billion and its reallocation to social and economic services;
2. Non-use of specific value-added tax (VAT) collections and its safekeeping under a trust fund to benefit education, health and agrarian reform sectors;
3. Suspension of interest debt payments to fraudulent, wasteful, useless debts in 2009 budget;
4. Suspension of payments to obviously illegitimate debts;
5. Creation of Congressional oversight committee on public expenditure with strong people’s participation; and,
6. Legislative parameters against executive impoundment and realignment of savings;
7. Strategic policy proposals to democratize the budget and regulate the executive’s fiscal powers.

“We urge the new Senate leadership under Senator Juan Ponce Enrile to set into motion the necessary reforms that must be introduced in the budget so as to help our people especially the most vulnerable mitigate the effects of the global economic crisis. Let these indispensable budget reforms be the Senate’s early Christmas gifts to the poor,” FDC Secretary General Milo Tanchuling said.

Tanchuling urged the implementation of an immediate moratorium on external debt payments worth P 200 billion in the 2009 Budget and the transformation of the said funds into a socio-economic package that will protect the most vulnerable sections of society against the crisis through increased social spending.

Tanchuling said the duration of the moratorium shall be until all loan agreements, proposed loans and other debts challenged to be fraudulent if not illegitimate are investigated, renegotiated and/or condoned.

The group also demanded the Senate to end the “fiscal dictatorship” of Mrs. Gloria Macapagal Arroyo in the budget process by regulating the President’s fiscal powers, democratizing the budget process which in return will give back the “constitutional power of the purse to the Legislature.

On loan agreements challenged as fraudulent, wasteful and/or useless, FDC also demanded the suspension of interest payments for the following:

1. Twenty five (25) loan items for 14 projects/programs that are challenged anomalous with a total of $80.14 million or P3.61 billion in interest payments;
2. Another 17 loan items for 10 projects/programs that are questionable, with $15.38 million or P692 million; and,
3. Proposed loans (bonds, programs and projects) for 2009 amounting to $237.74 million or P10.698 billion.

The group said the proposed total suspended debt interest payments would be $333.264 million or P14.997 billion.

During the third and final reading of the 2009 Budget in the House of Representatives, it was reported that a total of P14. 7 billion worth of interest payments was cut from the appropriations bill.

However, FDC expressed its apprehension as the said debt cuts lacks transparency regarding where the slashed debt payments will be reallocated and a clear operational stipulation that would guarantee its effective execution. Furthermore, Congress was silent on the debt cuts even to social movements doing work with the debt and budget.

Tanchuling called the attention of the Senate concerning the “silent debt cuts.”

“Our Senators must immediately introduce the necessary provisions and legislative parameters to ensure that the debt cuts would greatly favor the people through increased spending on social services like education and health,” Tanchuling said.

FDC asserted that without such corrective measures from the Senate, Congress’ debt cut initiative, no matter how sincere, would end up being used to push for certain vested interests such as transforming a large part of the appropriations bill into an election budget.

Tanchuling also challenged the Senate particularly its new leaders to exemplify true leadership by introducing specific policy measures with the end view of democratizing the budget process, strengthening the budget institutions and regulating the incumbent president’s enormous fiscal powers.  He urged the Senate to:

1. Overhaul the Revised Administrative Code of 1987 as instituted by Executive Order 292, which includes the removal of the automatic appropriations for debt service (Section 31.B.) and the presidential powers of impoundment (Section 38) and realignment of savings (Section 39).
2. Amend the Foreign Borrowings Act of 1966 (as amended by PD 1939) and the Official Development Act of 1996 to place more Congressional limits and parameters on the unilateral contracting of loans, pending a more favorable condition for a constitutional amendment modifying this presidential power (Article VII, Section 20).
3. Institute legislative parameters for the line-veto and reenactment, pending a more favorable condition for a constitutional amendment striking out these two presidential powers (Article VI, Section 27.2 and Section 25.7, respectively).
4. Institutionalize grassroots people’s participation and involvement in all stages and levels.
5. Passage of House Joint Resolution No. 4 mandating Congress to create a Congressional Debt Commission that will audit all public debts and contingent liabilities.   

“We remind the Senate that this is not their business as usual, typical run around with the Bbdget. The 2009 budget is being deliberated amid the backdrop of a serious global economic crisis that will be felt by all. To face it unprepared or to simply resort to sheer economic hubris is suicide,” Tanchuling asserted.

“Truly, extraordinary problems need extraordinary solutions. Thus, we call on the Senate to do the extraordinary, to do the unexpected,” Tanchuling said.

The Legislature expects to pass the 2009 Budget this first week of December. -30-

FDC Chapters