MANILA, Philippines – Out of the total P214.5 billion scheduled debt servicing for foreign liabilities of the national government, at least P3.7 billion will go to interest and principal payments of five questionable and illegitimate loans, the Freedom from Debt Coalition (FDC) revealed in a news release on Thursday.
"This huge amount, which could have been redirected to inadequately funded social protection programs such as education, health and housing, covers only five loan-funded programs and projects that FDC finds fraudulent, wasteful and useless. Imagine how much more will be uncovered if we scrutinize all the loans contracted by the government?” said Ed Tadem, FDC president.
Illegitimate debts are 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.
The five programs and projects funded by illegitimate loans were the Power Sector Development Program, Sixth Road (Tullahan), Pampanga Development Flood Control, Bohol Irrigation II, and Angat Water Supply Optimization.
FDC said that these five projects were marred by corruption, bloated budgets, violation of legal procedures, lack or insufficient public consultations and used as lender’s conditionality for privatization of public utilities such as power and water services.
Of the five, the most glaring was the US$750 million lent to the Power Sector Development Program (PSDP) by the Asian Development Bank and the Japan Eximbank.
"PSDP is a US$9.2 billion program basically meant to facilitate the privatization of generation and transmission sectors of the power industry and to pay back the debts of the National Power Corporation including assumed liabilities due to anomalous contracts with independent power producers,” Tadem said.
FDC had previously successfully lobbied the Congress in 2008 and 2011 for a moratorium on P25.9 billion interest payments for illegitimate debts and for an independent audit of all public debts but its efforts were blocked by former President Gloria Arroyo and the current Aquino administration.
FDC has repeatedly called for the cancellation of illegitimate debts and the repeal of the law on automatic appropriations for debt servicing which was promulgated by Ferdinand Marcos in 1977 through Presidential Decree 1177 and reiterated by then President Corazon Aquino through the 1987 Revised Administrative Code or Executive Order 292.
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.