MANILA, Philippines – The Duterte administration’s proposed 2017 national budget has allocated P6.13 billion in foreign debt service for 13 fraudulent, wasteful or useless loans, the Freedom from Debt Coalition (FDC) bared in a recent news release.
“For all of the hoopla about having a ‘Budget for Real Change’, billions of public funds remain to be captured and wasted on questionable loans incurred since the time of the late dictator Marcos. FDC has initially identified 13 questionable loans, but more are likely to be uncovered if Congress initiates an official comprehensive audit of all public debts,” FDC Secretary General Sammy Gamboa said.
FDC defines illegitimate debts as debts arising from loan-funded programs or projects that violated principles of human rights and sustainable human development, justice and fairness, accountability and responsibility, sovereignty of peoples and nations, and democracy. Projects funded by the 13 loans involved construction of farm-to-market roads, flood control, irrigation, power sector reforms, and elementary education, among others. Many of the loans came from the Asian Development Bank, Japan International Cooperation Agency and the World Bank.
According to FDC, the government’s projected debt service expenditures for 2017 will be P891.35 billion, including prepayments and bond exchange transactions. Of the said amount, P739.54 million and P5.39 billion will go to interest payments and principal amortization of the 13 loans that were marred by corruption, bloated budgets, violation of legal procedures, lack or insufficient public consultations and used as lender’s conditionality for privatization of essential services such as power and water.
Gamboa points to the continued existence of a law enacted in 1977 by Marcos that automatically appropriates payments for principal and interest of public debts. Thus, debt payments are prioritized in the government’s expenditure program and are not discussed during the budget authorization process in Congress.
“For 40 years, the automatic appropriations law on debt servicing or AAL has not only undermined the ‘power of the purse’ but has also facilitated payments for what can be considered as illegitimate debts. If there’s anything that President Duterte should train his guns on, it’s the 40-year old AAL and questionable public debts that only served the interests of a few oligarchs,” Gamboa added.
FDC has started an online petition on Change.org for the repeal of the automatic appropriations law and audit of all public debts. FDC intends to submit the petition to President Duterte and the Congress.
Freedom From Debt Coalition
The Freedom from Debt Coalition (FDC) – Philippines is a nationwide multi-sectoral, non-sectarian and pluralist coalition conducting policy advocacy work and campaigns to realize a common framework and agenda for economic development.