Conclusion
Past administrations can’t escape responsibility
IT was in the set of macroeconomics policies that Presidents Corazon C. Aquino, her son, Benigno S. Aquino III and the two presidents between them—Fidel V. Ramos and Gloria Macapagal-Arroyo—who failed to examine the IMF-World Bank prescriptions for the Philippines, which were mostly prepared by neoclassicists whose macroeconomic fallacies merely resulted in economic hardship for many Filipinos today.
In fairness, President Joseph E. Estrada, now the mayor of Manila, stopped the practice of issuing sovereign guarantees and did not approve a single power project in his time. Five days after Mrs. Arroyo stepped into the presidency, she restored the issuance of sovereign guarantees.
As early as March 2009, Joseph E. Stiglitz, the 1981 Nobel laureate in economics, and 17 other UN economic experts said that the neoliberal policies of the IMF-World Bank and other financial institutions had pushed the very policies of deregulations and financial and capital market liberalization that led to the economic crisis in the US and its spread around the world.
For instance, they swallowed hook, line and sinker such elitist prescriptions as free trade, liberalization, deregulation, privatization, rehabilitation, deficit spending, floating rate exchange and other structural adjustments that consequently caused the country to sink deeper in debt and further widened the gap between the poor and the rich.
Structural adjustments are the set of macroeconomics policies, known as the Washington Consensus, created and imposed by narrow-minded neoclassicists or neoliberals of the International Monetary Fund (IMF), World Bank and US Treasury on debtor countries in order to access loans. These policies came in exchange for trade liberalization, privatization, devaluation, so-called tax reform, deficit spending and floating rate exchange.
They are what the late Harvard-trained Filipino economist-lawyer Alejandro Lichauco described in my best-selling book, A Country Imperiled, published by Amazon in 2011, as those who have dehumanized Filipinos. “They are evils capable of planning the mass murder of peoples. They planned the mass enslavement of Africans and American Indians.”
The past administrations cannot escape responsibility for their failures to shape the future because they controlled the currency, contracted debts, shaped the budget and decided the economic priorities with their hot shot technocrats, mostly IMF-WB disciples.
Both houses of Congress (Senate and House) cannot also escape responsibility for the country’s economic debacle, particularly on the issue of debt servicing, for deliberately abdicating its power over public funds in two specific instances.
In fact, it is in this area of public responsibility and accountability that betrayal of public trust appeared to have been flagrantly committed by most of the country’s politicians over the past decades.
Under the 1987 Aquino Constitution, Congress is the only government branch empowered to authorize and appropriate funds, two distinct congressional functions but inextricably linked with each other, to service debts and spur economic growth.
The Constitution is very clear on this in Section 24, Article VI, which says: “All appropriation, revenue or tariff bills, bills authorizing increase of public debt, bills of local application and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.”
This happened because Congress failed to amend or repeal Presidential Decree 1177 that automatically services the country’s foreign and domestic debts on the sole discretion of the finance secretary and the governor of the Central Bank.
It also failed to abrogate the Cory Aquino-issued Proclamation No. 50 and 50-A that dovetailed with PD 1177 and authorized President Aquino, without interference from Congress, to assume all the foreign and domestic liabilities incurred by the Marcos regime and unjustly dumped them on the shoulders of the Filipino people.
Proclamation No. 50 and 50-A, signed by President Aquino, respectively on December 15, 1986, and June 8, 1987, legitimized her economic policy of privatization, which mandated the rehabilitation of debt-ridden government financial institutions (GFIs), such as the Central Bank, Philippine National Bank and Development Bank of the Philippines.
According to the Freedom from Debt Coalition, the idea of rehabilitating the GFIs was the brainchild of then-Finance Secretary Jaime Ongpin and then-Central Bank Governor Jose “Jobo” Fernandez (both deceased, the former committed suicide and the latter died of cancer), who reasoned that “it will not be a good picture for the government if the GFIs were closed due to unpaid debts.”
In other words, they were more concerned of the country’s image abroad than the country’s poverty-stricken people.
Later, Sen. Franklin M. Drilon, who was then the secretary of justice, upheld the proclamations when some lawmakers questioned their use, stating that the “law vests upon the Chief Executive the discretion whether or not to undertake such assumption [of debts]”…even in a situation where the “value of assets transferred is less than the amount of liabilities assumed.”
Curiously, Drilon issued this legal opinion after the Aquino Constitution took effect in 1987, explicitly mandating Congress to assume full control over the disposition of budgetary liabilities.
Congress then should have asserted its mandate and called the attention of the Executive Department, or should have brought the issue to the Supreme Court for resolution or decision.
The present members of Congress can still correct these destructive and erroneous policies, but if they remain negligent of their duties like their predecessors, such inaction will also be on their conscience. Hopefully, it will hound them for the rest of their lives.
To reach the writer, e-mail cecilio.arillo@gmail.com.