Sun Star (Philippines)
August 29, 2005

“For every second we breathe, the amount we spend for debt service is equivalent to the amount of salary a common wage earner receives in three months because of the government’s refusal to change its borrowing and debt payments policies.”

Freedom from Debt Coalition (FDC), a militant non-governmental organization, said this after Malacanang submitted the proposed 2006 National Budget to Congress last Wednesday.

FDC said that for every second, more than P22,000 is automatically appropriated for both the interest and principal payments of the national government’s P4 trillion debt. This translates to a whooping P1.37 million per minute. This year, the government allocated P1.2 million per minute for debt service, the group added.

The proposed interest payments are P38.3 billion or 12.7 percent higher than the current P301.7 billion, while the “off-budget” principal payments are P37.6 billion or 10.9 percent higher than this year’s P344.1 billion.

“The total debt service will increase by P75.9 billion or 11.75 percent next year, again at the expense of delivering basic services to the people,” said FDC-Iloilo Chairperson Romeo Gerochi.

“The government must act quickly to address the issue of the country’s ballooning debt if it is really sincere in dealing with the worsening crisis and poverty,” he added.

FDC outlined possible steps in addressing the debt burden. They are to: audit all the debts; repeal the automatic appropriations law on debt servicing; stop paying all illegitimate debts such as the mothballed Bataan Nuclear Power Plant, the controversial World Bank-funded Small Coconut Farm Development Program and all the behest loans incurred during the Marcos period; and cancel onerous contracts and agreements awarded to some independent power producers (IPPs) like the Casecnan Power Project.

“The Arroyo’s administration again fails the people by reducing further the budget for the country. We in FDC had hoped that the proposed budget would serve the interests of the people, on the contrary, the Arroyo regime sees it fit that our money benefits the creditors first,” according to Ted Ong, FDC-ILoilo Deputy Secretary-General.

It can be recalled that early this year, FDC claimed that the passage of the 2005 national budget would contribute to the worsening of the current fiscal crisis into full-blown economic and social crisis. This year’s budget followed a pattern in the last five years of diminished spending for social and economic services.

In conclusion, the group urged Congress to ensure that the proposed 2006 budget will benefit not President Gloria Macapagal Arroyo nor the creditors, but the people.