Tag Archives: debt cancelation

Bayan Muna slams Palace refusal to stop debt payment

By Chocolate Moose Fernandez

Manila, Philippines- Bayan Muna party list Rep. Teddy Casiño slammed President Gloria Macapagal-Arroyo for honoring fraudulent debts at the expense of the general public and Filipino taxpayers.

In a press statement emailed to The Pamalakaya Times, the activist lawmaker decried reports that the Macapagal-Arroyo government spent a total of P549.016 billion to service its debt from January to September this year.

The amount, according to Casino is two percent higher than the P537.352 billion it released last year for the same purpose. Some P235.283B of the total went to interest payments, slightly higher than last year’s P234.706 billion.

“After the devastation caused by typhoons Ondoy and Pepeng worsened by the lack of government preparedness, it is shocking that the Arroyo administration still refuses to declare a moratorium on debt payments. These so-called ‘financial obligations” are nothing compared to government’s obligations to the Filipino people, millions of whom are worse off than they were previously because of the calamities,” Casiño said in a statement.

The Bayan Muna solon also castigated the government’s refusal to reorient the remaining section of its programmed payments for financial obligations for the rest of the year. For 2009, government aimed to allot a total of P698.5 billion for debt payments, 8.7 percent higher than the actual payout of P612.7 billion in 2008.

“It is an endless source of outrage that the Philippine government refuses to drop its debt payments when there are undoubtedly more urgent needs that should be attended to and provided for,” Casiño said.

“A debt moratorium is of utmost importance, as more funds are needed to hasten the rehabilitation are devastated areas and enable victims and survivors to get themselves back on their feet. The billions going to international banks and creditors should be given instead to local service infrastructure repair and creation,” Casiño pointed out.

Based on current data from the Bureau of the Treasury (BTr), the government released P61.277 billion for debt payments in September alone, higher by 1.87 percent from last year’s P60.149 billion allocation.

Interest payments to local lenders and foreign creditors were also exorbitant, with the former receiving P132.635 billion during the nine-month period, and the latter getting P102.648 billion from P93.379 billion paid out in the same period last year, an increase of 9.9 percent.

Principal payments amounted to P313.733 billion, or 3.66 percent higher than the P302.646 billion disbursed in 2008 during the same period. #

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Think tank to PGMA: Cancel debt payment to free up funds for calamity relief

By Billy Javier Reyes, Bb. Joyce Cabral,Gerry Albert Corpuz and Viva Regala-Alonzo

Manila, Philippines–The independent think tank and research group IBON on Thursday urged the Macapagal-Arroyo government to cancel debt payments and free up resources for relief and rehabilitation, instead of seeking financial loans from foreign donors.

In a press statement sent to The Pamalakaya Times, IBON senior researcher and economic expert Sonny Africa said the environmental shifts mean that extreme weather events will become more frequent and there must be much greater investments in the country’s disaster preparedness.”

“Extreme weather conditions are beyond government’s control, debt payments are not,” he added. “It is the height of insensitivity of the country’s leaders if they dogmatically insist on repaying debt in the face of the multiple crises facing the country,” Africa explained.

IBON’s Africa said the Arroyo administration paid P1.52 trillion in foreign debt service, interest and principal, from 2001-2008. It is scheduled to pay a further P224 billion in 2009 and P253.5 billion in 2010. In contrast, the programmed calamity fund for 2009 and 2010 were just P2 billion annually.

This unceasing debt service, according to IBON, is undermining the government’s capacity not just to prepare for disasters, give relief and support rehabilitation after calamities, but also to meet the people’s basic needs for health, education and housing—which could have ensured their adaptability to extreme weather changes and resilience to calamities.

IBON asserted that the government has a range of options for debt cancellation, said Africa . It can start from identifying a target overall percentage of debt stock and corresponding payments to cancel. It can identify particularly loans such as any still left over from the Marco s dictatorship or others funding particularly onerous or anti-developmental projects.

The research advocacy and polling group likewise stressed that government can prioritize loans from multilateral development banks such as the World Bank or Asian Development Bank which, unlike commercial creditors, purportedly extend loans for developmental purposes.

IBON said: “The drastic economic slowdown especially with the onset of the global crisis, the looming fiscal crisis with deficits rising rapidly and now the calamities due to tropical storms Ondoy and Pepeng are enough justification to call for emergency cutbacks in foreign debt payments. More than trickles of foreign aid, debt cancellation would free up resources for relief and rehabilitation and for overall economic development”.

“This is an opportunity for the government to exert political will and cease being a mendicant in its dealings with foreign governments and creditors,” said Africa . “We Filipinos are fully capable of helping ourselves if only the government stops its self-destructive debt policy”, it added..

IBON reiterates successive governments including the Arroyo administration have vigorously opposed any debt moratorium, cancellation or repudiation on the grounds of protecting creditworthiness. However, this long-standing lack of vision in the government’s debt management policy has proven to be extremely burdensome for the people.

The position of IBON on debt cancelation was supported by the militant fisherfolk alliance Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya).

It pressed President Gloria Macapagal-Arroyo to immediately stop paying the country’s debts to foreign and domestic creditors and re-channel the annual budget to debt servicing to massive relief and reconstruction efforts of all areas devastated by storm Ondoy and typhoon Pepeng from South to North of Luzon.

“Immediately suspending debt payment and by re-channeling these funds for all-out relief and reconstruction will definitely make sense, but our problem here is Mrs. Arroyo who has no sense of genuine public service, lacks political will and undeniably defiant in correcting fatal mistakes,” said Pamalakaya national chair Fernando Hicap in a press statement.

The Pamalakaya leader said if the government will stop paying these debt burdens at the maximum or impose debt moratorium for a significant number of years at the minimum to rebuild the country it would be able to make a big difference for Filipino public, especially those affected by Ondoy and Pepeng.

Hicap said the government has been honoring fraudulent debts at an average of P 450 billion per year or almost 33 percent of the annual national budget.

“Imagine the big push this amount would bring only if this government knows its priorities and has this great sense of serving people. But this government is the partner in crime of transnational interests whose business escapades and super profiteering ideology is behind this humanitarian crisis and across-the-nation corporate-driven calamities,” he stressed.

Pamalakaya rejected the proposal of Albay Gov. Joey Salceda for the government to seek at least $ 1 billion in foreign grants and concessional loans to be administered by a special reconstruction commission composed of the government, big business and civil society group.

Salceda, the former economic manager of the Arroyo administration said it is time for the government to admit that it needs help in a big way beyond the exigency of disaster response, saying the country can no longer opt to raise taxes or slash other priorities. The Albay Gov. said the country needs new external resources to address the situation.

Under Salceda’s proposed 1 billion US dollar aid, the government would cover the estimated P 46 billion in damage wrought by Ondoy, P 12 billion by Pepeng and P 7 billion by typhoon Frank that devastated Panay island last year.

The proposal also covers P 20 billion for relocation, P 21 billion for infrastructure rehabilitation and P 5 billion for livelihood . But Pamalakaya said if the government suspends if not erases its debt servicing policy and budget allocations for such purpose, the country can afford to finance rural and reconstruction projects, including a comprehensive disaster management programs all over the country. #

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