A press statement issued by the Philippines Malacañan Palace claims the government can manage the country’s ballooning national debt.
The Philippines Malacañan Palace said on Wednesday that the government can manage the ballooning national debt through sheer political will to pursue a plan that would reduce the debt while maintaining the country’s credibility in the international community.
Press Secretary Ignacio Bunye issued the statement a day after the Department of Finance announced that the national government’s outstanding debt tipped P3.8 trillion by end-2004 or a 13.4-percent increase over the previous year.
“Our national debt has ballooned over time, but it is manageable provided our institutions can get together in working out a strategy of debt reduction that maintains our international credibility and, at the same time, enables us to effectively implement our propoor programs,” he said.
He said it is important “to act with political will, unity, good governance” in reducing the national debt.
Sen. Manuel Villar, chairman of the Senate Committee on Finance, says the implementation of measures that would seriously address the debt problems of the country becomes even more urgent now, with national government debt having reached an alarming P3.8 trillion last year or 13.4 percent higher than the 2003 debt level.
“I have said over and over again that the government’s borrowing spree should be curbed, or at least limited, once and for all. More than one-third of our national budget goes straight into debt-service payments. Interest payments alone for national government debts are already worth P300 million. This means that the money that’s supposed to go to social services such as for the health and education of our people are being channelled for debt payments instead,” Villar said.
Last year’s national government debt of P3.8 trillion is already equivalent to 378.7 percent of the country’s gross domestic product (GDP), which according to Villar is a risky situation or scenario.
Villar filed Senate Bill 510 or the debt cap bill that seeks for the provision of a ceiling on the debt stock of the government or the so-called public sector debt, including contingent liabilities and for other purposes as well.
In the bill, Villar proposes that the total debt stock that the national government could be allowed to maintain shall not exceed 75 percent of the GDP of the previous year. “Thus, for last year, ideally the national government’s total debt stock should not exceed P811.12 billion, or 75 percent of GDP in 2003 of P1.08 trillion. But as we have found out, national government debt has reached P3.8 trillion already, way above the ideal level,” adds Villar.
Likewise, Villar also filed Senate Bill 1928 or the Debt Relief Act, that seeks “to create a council for debt relief to review bilateral and multilateral loan agreements and treaties entered into by the government and invoke the relevant privileges that would facilitate cancellation of odious debt or restructuring of debts or both to ease debt payments.”
Senate Majority Leader Francis Pangilinan meanwhile expressed support for congressional Joint Resolution 1, “Creating a Congressional Commission to Review and Assess the Debt Policies, Strategies and Programs of the Philippines.” Pangilinan would host a roundtable discussion next week in order to fast-track the proposal.
“The objectives of the Congressional Commission on Debt are as follows: full examination and prioritization of the government’s goals and objectives with respect to public debt, including assumed and contingent liabilities; reassessment of the rationale and effects of automatic appropriation for debt service; and adoption of both traditional and innovative strategies on debt service reduction and the liquidation of the debt stock,” he explained.
The debt inventory, review, validation and audit will cover national government debt and contingent liabilities, debts of local governments, debts and long-term liabilities and obligations of government-owned or -controlled corporations, Bangko Sentral debts and obligations, laws and regulations relevant to borrowings, debt payments, and government guarantees.
“In recent months, both Houses [of Congress] passed revenue generating measures. It would be a shame to see that proceeds generated be largely allocated to debt servicing,” Pangilinan said.
Mia Gonzalez, ABS-CBN News, March 2, 2005
Categories: Asia, Odious Debts, Philippines
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