MANILA, Philippines – Members of the 14th Congress should “stand firm” on the democratic gains achieved in last year’s budget deliberation as they tackle the P1.415-trillion 2009 national government budget, according to a debt watchdog.

In a statement, the Freedom from Debt Coalition (FDC) today said the best way to pay tribute to the gains won in last year’s budget development is for Congress to improve on the said achievements in the 2009 NG budget.

However, FDC said that such achievements could only become meaningful if Congress will realize a clear and concrete legislative concurrence concerning the need to repeal archaic institutional mechanisms on debt servicing, and to curtail the Executive Department’s enormous fiscal powers.

FDC Secretary General Milo Tanchuling said that the participation of civil society organizations in crafting this year’s budget produced political and tangible gains as far as debt reduction and budget augmentation are concerned.

“It also provided us with hard lessons,” Tanchuling said.

He said that one important lesson learned concerns the budget process’ seemingly scarcity of democratic processes.

“Unless the fiscal powers of the President is curbed and unless the institutional mechanisms that provide for automatic debt servicing is rescinded, any meaningful reform concerning debt reduction as well as the alternative reallocation of state resources in the budget will always be undercut by a powerful executive department,” Tanchuling stressed.

Tanchuling was referring to the 2008 Budget passed by both Chambers of Congress. It had a special provision calling for the suspension of interest payments of specific loan agreements challenged as fraudulent, anomalous and/or wasteful pending investigation, renegotiation and/or condonation. It was lauded by different sectors as a significant advance in the campaign against illegitimate debts, an advance made within the realm of the national budget.

Unfortunately, Mrs. Gloria Macapagal-Arroyo vetoed the special provision using the country’s protection of credit rating and the non-violation of contractual laws as pretexts. Lawmakers did not make any attempt to override the veto despite repeated appeals from civil society groups.

“Clearly, while the budget reforms are needed to effectively respond to the needs of the people, the best way to serve this purpose is for Congress to dismantle all the impediments resulting to a scarcity of democracy in the budget process,” Tanchuling said.

FDC is calling for the clipping of presidential powers by amending the Revised Administrative Code of 1987 as instituted by Executive Order 292. The group specifically called for 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).

It is also calling Congress to put limits and parameters on the unilateral contracting of loans by amending the Foreign Borrowings Act of 1966 and the Official Development Assistance Act of 1996.

Likewise, the group is calling for the institutionalization of grassroots people’s participation and involvement in all stages (proposal, legislation, authorization, evaluation) and levels (agency-level, region-level, etc.) of budget development by decentralizing budget decision-making using LGU-level mechanisms.

“The message is clear, Congress must help in democratizing our budget process by claiming back their power of the purse,” Tanchuling said.

The 2009 National Government Budget has the theme “Standing Firm in the Midst of Economic Challenges,” and is allegedly characterized by the government as a budget that would give people social protection against the current economic crisis. -30-

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