High time that public debt is subjected to closer examination
The year 2022 ended with a bang, not from fireworks but from an unprecedented national debt of P13.42 trillion reported by the Bureau of Treasury, or over 14 percent more than the P11.73 trillion from the previous year. Already at more than 63.5 percent of GDP, this does not yet include debts guaranteed by the national government amounting to P399 billion as of end-2022 and contingent liabilities arising from big-ticket projects with the private sector estimated at P456.2 billion in 2021.
Debt figures in the billions or trillions are simply incomprehensible to the majority of Filipinos. Minimum wage earners paid no more than P500 daily (in the National Capital Region) and their families ultimately bear the heavy price of servicing an increasingly ballooning public debt, and that’s not only in terms of taxes.
Fiscal belt-tightening to pay off debts means cuts in the level and quality of essential public services such as education and health. Unchecked borrowings could be funding environmentally harmful projects that erode local livelihoods and worsen the Philippines’ high climate risk, as debt-funded fossil fuel projects have shown.
Red flags are waving furiously, but who’s taking notice?
Not the Department of Finance, it would seem, from the way it has downplayed the mounting public debt as “manageable” without giving the public the whole picture of the additional costs of government borrowings outside of the interest and principal payments.
But the Citizens Debt Commission plans to find out. Forming the Commission for a Citizens Debt Audit (CDA), leaders and respected individuals from labor, informal workers, academe, the religious community, and other sectors have come together to get to the bottom of the massive public debt that Filipinos are routinely made to shoulder without question.
Organizations such as the Freedom from Debt Coalition and the Asian Peoples’ Movement on Debt and Development embarked on debt audit initiatives in the past that spotlighted questionable debts. Loan-financed projects were investigated based on how they were contracted, where they were spent, and how they affected people and the environment. Among the milestones is the inclusion in the 2017 General Appropriations Act of a section mandating the Congressional Oversight Committee on Official Development Assistance to conduct a debt audit of 20 loans contracted by the Philippine government; and a Senate resolution directing the appropriate Senate committee to inquire, in aid of legislation, into the foreign loans contracted by the Philippine government.
A CDA is a powerful means to enable active citizenship and exercise the people’s right to know and arrive at a deeper understanding of how current debt policies and practices impact public spending for urgent social needs, the fulfillment of human rights, and building climate resilience. It can also capacitate them to participate in discussions on debt management and policy reform, as is their right under a democracy.
It’s high time that the public debt is subjected to closer examination, especially when financial resources are most needed in the face of the multiple crises of livelihoods, public health, and climate, and at a time when a new administration is in place. Surely, how these debts came about and how they were spent is a fair, common-sense ask of our policymakers.
Mae Buenaventura,
Asian Peoples’ Movement on Debt and Development
