Stop paying debts we don’t owe
An independent expert of the United Nations Human Rights Council has called for the cancellation of Philippine debts and asked for grants, not new loans, to fund reconstruction efforts for “Yolanda”-stricken areas. Pointing out the effects of foreign debt on the full enjoyment of human rights, Cephas Lumina put to task both government and international financial institutions. His call, sounded with a sense of urgency, should serve not only to chasten the lenders; more importantly, it should prompt President Aquino to abandon his and the previous administrations’ policy of prioritizing debt payments over social spending.
Lumina has actually given our country another opportunity to repudiate debts that have been tainted with fraud and that have hardly benefited the people. The first such opportunity was squandered by P-Noy’s mother, the first post-martial law president Corazon Aquino, at the expense of the people, when she decided to honor the dictator’s debts and even adopted the policy of automatic appropriations for debt service even as the nation was still reeling from the economic and political ruin caused by the Marcos regime. Lumina pointed out how debt payments squeeze our country dry of its resources and belie government’s claim of fund shortage.
Since Supertyphoon Yolanda struck in November last year, P-Noy’s regime has spent around $3 billion for external debt servicing. Government, estimating the reconstruction efforts to cost $8.11 billion (P360.9 billion), has eagerly resorted to new borrowings. Meanwhile it has earmarked $8.8 billion of public funds for debt payments this year. Five months after Yolanda, P-Noy’s strategic response plan boasts nothing but new indebtedness ($1 billion to the World Bank and the Asian Development Bank) and guarantees profits only for big corporations.
Philippine external debt which still stands at P1.92 trillion is
littered by loans spent on questionable projects that did not benefit the Filipino people (e.g., the $450-million Power Sector Restructuring Program and the $600-million Power Sector Development Program contracted from the ADB and the Japan Bank for International Cooperation). Both loans facilitated the privatization of the power industry, the result of which now burdens electricity consumers with skyrocketing rates. In 2007, the $3.35-billion Brady bonds used to service Marcos’ loans were retired. To add insult to injury, the public which pays for these debts, has never been consulted nor informed of these transactions despite demands from the Freedom from Debt Coalition and other groups for an immediate moratorium on debt service and a comprehensive audit of all Philippine debts.
There can be no more excuses. Lumina has again sounded our long-time call for debt cancellation. P-Noy must walk the walk of his daang matuwid and take this opportunity to free up public funds from servicing onerous debts in favor of ensuring a people-centered rehabilitation for Yolanda-ravaged areas and securing the country from disaster threats.
—RICARDO REYES,
national president,
Freedom from Debt Coalition,
11 Matimpiin St.,
Barangay Central, Quezon City
