debt.jpgMANILA, Philippines—Debt watchdog Freedom from Debt Coalition (FDC) today expressed shock and frustration over what appeared to be railroading of the national budget with the Senate’s quick approval of the proposed 2015 General Appropriations Act despite unresolved issues compromising the Congress’s power of the purse.

“Again, we witness how the interest of those in Malacañang prevails over public interest. Even in Congress. What wanton disregard of their duties to protect the people’s money,” said FDC Secretary-General Sammy Gamboa.

He added that the lawmakers seem to have conveniently forgotten that they are servants of the people and not of the masters in the Palace.

“This situation should all the more push us and our remaining allies in Congress to push for reforms in the budget process to safeguard public funds and ensure democratic fiscal space,” Gamboa stressed.

Not two but three minefields

Earlier, the group expressed support to Sen. Miriam Defensor-Santiago’s exposure of the Php 37 billion pork hidden in the proposed 2015 national budget and of pro-administration solons’ attempt to legalize the Aquino-Abad savings and budget augmentation scheme, notoriously known as the Disbursement Acceleration Program (DAP).

FDC, however, pointed out that there are three, not just two, “dangerous minefields” in the General Appropriations Bill (GAB) .

“Sen. Miriam was on the right track in questioning the Aquino administration’s pork-riddled expenditure program and attempt to circumvent the Supreme Court’s ruling on the DAP by re-defining “savings” but there is a perennial minefield often ignored, the automatic debt payments that also steal from Congress the power of the purse,” Gamboa said.

According to Gamboa, debt payments are automatically appropriated by virtue of a provision in the 1987 Revised Administrative Code which was signed into law by the late president Cory Aquino. The said provision was copied from Marcos’s Presidential Decree 1177 issued during the Martial Law period.

Appropriations for debt service do not pass Congress’s scrutiny, thus, making it susceptible to abuse, such as bloating the amount so that the excess can be later used as funds for other purposes.

“Debt service is not even itemized in the budget, which, also, does not reflect principal amortization. Thus, we are being led to believe that the debt burden decreases. The truth is that this administration has been passing on to future generations the weight of paying for Aquino’s new debts, which he used to pay for old maturing ones. The Philippines remains in a debt trap,” Gamboa added.

Passing the debt burden to future generations

According to FDC, the national government’s (NG) debt stock will have grown by 25.30% or P1.2 trillion, from P4.72 trillion in 2010 to P5.91 trillion by the beginning of 2015. Added borrowings amounting to P1.048 trillion are also in stated in the administration’s plans, which, minus the principal payments, will bring NG outstanding debt to P6.472 trillion by the end of next year.

The group asserted that lawmakers wrestling with defining savings and tracing pork in the proposed budget also owe the people the review and finally, the repeal of automatically earmarking public funds for payment of debts that past and current administrations have incurred.

“We are the ones paying for these debts and we don’t have a say on how these are contracted and spent, even wasted. Worse, these loans are repaid first before social and economic services are given funds from public coffers,” Gamboa stressed.

Servicing debts is the primary culprit behind the government failure to address backlogs in education, health, housing, social security and other basic services. These backlogs, according to FDC, form the government’s aggregate “social debt.”

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