Africa

Cancellation of odious debts an issue in upcoming Philippine presidential race

Manila Bulletin
January 5, 2010

Research organization Ibon Foundation urged the eight presidential candidates in the May elections to disclose how they intend to address the national government’s mounting debt obligations and budget deficit.

According to Ibon research head Sonny Africa, the Arroyo administration is about to pass on to the next President a national government debt of almost P5 trillion and likely a yearend budget deficit of P300 billion.

“Such very high levels of debt and deficit have serious implications on government spending on social services and at the same time threaten to burden the people with new and additional taxes,” he said.

With these figures, Africa said voters are entitled to know how the next president will address the country’s worsening fiscal problems in a pro-people and sustainable approach.

Ibon Foundation said that a major fiscal flare-up is expected this year as the widening gap between national government revenues and expenditure persists.

It further cited an official Department of Finance (DoF) data showing that the combined impact of the global financial and economic crisis and major climate-related disasters on tax collections and government spending; implementation of revenue-eroding measures; and missed privatization targets could push the 2010 budget deficit to as high as P300 billion.

Africa said the 2009 budget deficit has already reached P272.5 billion as of November, already an all-time high in absolute terms.

IBON had earlier estimated that the deficit could reach some P297.9 billion by the end of 2009 – or the biggest deficit in nominal terms that the government has ever had.

Meanwhile, as of September last year, the national government’s debt, including its contingent liabilities, was about P4.92 trillion – almost 85.7 percent higher than what it was when President Arroyo first assumed office in January 2001.

“As the deficit continues to swell, government is expected to borrow more to fill the gap,” Ibon said.

The group urged the candidates to make public their stand on the repeal of automatic debt servicing; cancellation of odious debt; increased allocation and spending for health, education, and housing; and reversing trade liberalization, improving collection efficiency, and addressing bureaucratic corruption and wastage to raise badly needed revenues instead of imposing new taxes such as the tax on text messaging.

Read the original article here.

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