04 March 2008
Debt & Public Finance
MANILA, Philippines—The Freedom from Debt Coalition today lambasted Malacañang for brushing off the initiative of various groups and concerned citizens who recently created an independent commission that will investigate all illegitimate loan-financed projects and programs that the present and past administrations have contracted through the years.
Malacañang reacted to the creation of the Independent Citizens’ Debt Audit Commission, stressing there is no need to put up an independent audit body because the country’s debt is already shrinking. The people’s commission was launched Monday with a least 30 people of proven probity, credibility and expertise, and coming from different sectors of society took their oath as members of the commission.
Lidy Nacpil, FDC vice president and member of the commission, said the reduction is negligible and not based on sustainable factors.
“Besides, the issue is not just on the amounts, but on the anomalous and illegitimate nature of the debts,” she stressed.
Nacpil reiterated that the apparent slight decrease in our total debt stock is because of two factors: the weakening of the US dollar worldwide; and, prepayment of debts.
“As we have said before, the Arroyo administration keeps describing this phenomenon as the strengthening of the Philippine peso. The more accurate term is the weakening of the US dollar against nearly all other currencies. In fact, the Philippine peso is one of the last to appreciate against the US dollar. The change in the dollar-peso exchange rates logically resulted in a lower peso equivalent of the country’s foreign debt,” she said.
Further, taking advantage of the low dollar-peso rates and claiming that the country is “awash with dollars,” the government prepaid at least US$220 million of debts claimed by the International Monetary Fund (IMF) and US$72 million claimed by the Asian Development Bank (ADB).
“The government alleges that this move is good because it saves the country several millions in interest payments. The irony is that the country continues to borrow in huge amounts. The truth is this: the government again chooses to prioritize its commitments to foreign lenders over that of its people’s urgent needs. The funds used to prepay these debts could have been used to expand health services, build classrooms and low cost housing, guarantee affordable access to clean water, provide support services for our farmers and raise the efficiency and sufficiency of the country’s food production,” she stressed.
To date, the National Government has a debt of P3.78 trillion or $81.6 billion. Our total consolidated public sector debt as of percentage to our Gross Domestic Product (GCP) is 81.9 percent. These mean public debt claimed from each Filipino, from new-born to the dying, is as much as P43,487, paying P7,012 annually to service the debt. The Philippine government, using citizens’ money, shells out P1.1 million every minute just to service the country’s debt.
During the public launching of the citizens’ commission, University of the Philippines Prof. Randy David stressed that “the public debt issue is the most highly concealed crime of the state against its people.”
“In a period when our government institutions lack integrity and credibility to undertake impartial investigations on loan-financed projects and programs marred with anomaly and fraud, people should actively engage to address this problem. We owe it to the next generation of Filipinos who will shoulder the burden of paying these debts,” said Prof. David.
He added that critical analysis of the public debt system is one of the most powerful ways to reveal the flaws and malfunctions in governance.
Milo Tanchuling, FDC secretary-general, explained the citizens' commission aims to conduct a critical, comprehensive, participatory and transparent examination of the Philippine public debt and contingent liabilities based on testimonies and inputs from affected communities, data and studies to be submitted by resource persons and organizations, and researches prepared by working groups and technical teams. It also aims to formulate policy proposals and recommendations for action.
"With Rodolfo 'Jun' Lozada's revelation on the aborted $329 million ZTE-NBN deal, the Philippines' debt problem and the continued accumulation of illegitimate debts has once again been put in the spotlight," said Tanchuling.
The Commission, created through a petition initiated by the People Against Illegitimate Debt (PAID!), is also charged with recommending immediate steps as well as far-reaching solutions towards eradicating the debt burden and correcting structural and systemic flaws and deficiencies that contributed to debt accumulation and domination.
The examination of structural issues shall not be confined in the Philippine system alone but will also address the international financial architecture, said Tanchuling.
The audit shall examine not only the responsibility and culpability of the Philippine government and related institutions, but also address the responsibility and culpability of international financial institutions and other lenders, he added.
Aside from Prof. David and Nacpil, other inducted members of the Independent Citizens' Debt Audit Commission include: former Vice President Teofisto Guingona, former Senator Wigberto Tanada, Bishop Efraim Tendero, Dr. Sixto K. Roxas, Fr. Ben Moraleda (CSsR), Sr. Cres Lucero (SFIC), former Representative Mayong Aguja, , Former FDC president Ana Maria R. Nemenzo, Dr. Sylvia Estrada-Claudio, Atty. Antonio Oposa, Dr. Grace Jamon, Atty. Golda Benjamin, Dr. Aurora Parong, Dr. Emmanuel Luna.
Economics Prof. Joseph Lim, Atty. Ibarra Gutierrez, Atty. Mari Paz Luna-Severino, Prof. Eduardo Tadem, Atty. Teddy Pascua, Mr. Eribert Padilla, Ms. Vaupet Pena representing the youth sector, Mr. Vic Fabe representing the farmers and fisherfolk, Teacher Benjo Basas, and representatives from the labor and urban poor sectors.
Tanchuling said the citizen commission will complement the highly awaited Congressional auditing of public debt by raising questions beyond the limits of the parliamentary initiatives, and by putting forward recommendations sourced from the people's standpoint on the problem.
Tanchuling confirmed that Albay Rep. Edcel Lagman has re-filed a joint resolution pushing for an official Congressional Audit of Public Debt and Contingent Liabilities in the House of Representatives.
"While we are pushing for the official debt audit, we believe that an independent citizen's audit is also crucial," he said. -30-