After Ondoy and Pepeng, Now Comes the Hard Part

Debt servicing, since the time of the dictator Ferdinand Marcos, has been siphoning valuable public resources from the country, with the current Arroyo administration paying out the biggest amount of public funds for debt servicing. Debt servicing (interest payments and principal amortization) under Mrs. Arroyo has been, on the average, more than 10% of the country’s gross domestic product (GDP) – higher than Aquino’s 8.1%, Ramos’s 6.8% and Estrada’s 6.6 percent.

Under its proposed national budget for 2010, the Arroyo administration will shell out a huge P746.18 billion for debt servicing covering interest payments and principal amortization. In 2009 and 2008, government spent P702.6 billion and P612.68 billion for debt servicing, respectively. These are huge amounts of money, with interest payments in 2010, for instance, eating up 22.1% of the national budget compared with housing’s 0.4%, health’s 2.5%, and education’s 15.3% — all of which will surely require more funds now because of Ondoy and other stronger typhoons expected to hit the country.

Debt Cancellation as Top Option

Is debt cancellation possible? Ecuador just did it earlier this year, with its president calling the country’s foreign debt “immoral”.

Considering the still unfolding humanitarian crisis that Ondoy has caused and threats of more super typhoons, the Philippines can justify its move to cancel debt servicing and attend to the more immediate needs of its people. On top of this is the long-standing issue that many of the country’s debts are considered odious and thus the people should not be burdened to pay for them.

Current debt-funded projects such as the multi-million dollar road projects being bankrolled by Asian Development Bank (ADB) and the Japan Bank for International Cooperation (JBIC), $100-million text book project of the World Bank, China’s $885.4-million South Luzon railways project, ADB’s $750-million power sector reform programs and projects, among others are tainted with irregularities and corruption and should be considered for debt cancellation.

While emergency grant assistance for disaster relief from foreign donors are welcome, debt cancellation should be a top option for the Philippines in terms of raising sufficient resources in a sustainable manner to deal with disasters and other immediate and basic needs of its people. The relationship between calamities and social services is directly proportional and has been clearly illustrated by the country’s experience with Ondoy and Pepeng — the graver the disasters, the higher the need for housing, health, education and other basic services.

As an initial and immediate move, Congress must repeal the Marcosian automatic debt servicing rule as provided under the revised Administrative Code of 1987 and rechannel funds allocated to debt servicing in the 2010 national budget to social services and disaster relief and rehabilitation. With more resources at its disposal to attend to the needs of its people, victims of Ondoy, Pepeng, and future natural calamities will not be forced to survive through alms and emergency employment. (Bulatlat.com)

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4 Comments - Write a Comment

  1. Para namang iniabot kay GMA ang pera. Siempre binibigay yaan directly sa different agencies like DSWD,NDCC and PNRC.

    Si Penoy puro daldal, wang wang lang ang nagawa.

    He'll say something you guys want to hear, puro palpak naman.

  2. The destructive ambitions of Gloria are frightening. She's just too crunk with power. Recall her SONA speech boasting that typhoons & other related calamities will not be a problem cuz according to her, the Phils is ready to handle it. Baloney, none of that beautiful speech helped anybody. she could not deliver when the time caame. I agree that we got hit with two supe typhoons worst than the Katrina hurricane, the least that our govt could have done was give ample or advance warning & told filipinos to prepare for it. Most of the emergency equipments & other vital logistics was not used. Now hope is all gone for the missing. Families are now torn apart. As Gloria pasiklab puts it in her SONA speech..don't worry, be happy. Same old s..t.

  3. A report stated that hte very agencies responsible to give relief & assistance to those affected by these super typhoons have virtually no funds left in their budgets. Gloria could not show us the money. Where did it all go? Billions have been spent on her never-ending foreign tours & now that we have to pump & inject P16 billion suddenly became a big problem. Gloria lacks transparency on all money matters. The repair & rehab of those affected masa is dismal & slow. It's ultimately a question of realistic policies & plain common sense. Gloria clearly showed that she could not do both. Stealing the donated money will not help anybody. Keep her away.

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