MEMBERS of the Senate Committee on Economic Affairs are poised to grill ranking Duterte administration officials on March 5 on the “status, sustainability and risks” of multibillion-peso projects lined up under Malacañang’s massive “Build, Build, Build” (BBB) program, as well as the preferred mode of financing to bankroll the Palace-backed projects.
The inquiry, chaired by committee head Sen. Sherwin T. Gatchalian, is also set to tackle issues raised by detained Sen. Leila M. de Lima in a separate Resolution 626 seeking an inquiry into the complete terms and conditions of the loans entered into by the government to fund the BBB program in order to “assess the possible impact of such loans on our economy and national security.”
Gatchalian’s Resolution 759, on the other hand, pointed out that the National Economic and Development Authority (Neda) had adopted an expansionary fiscal strategy, and pushed for a significant increase in public infrastructure spending from 5.4 percent of the GDP in 2017 to about 7.3 percent of GDP by 2022 to propel economic growth in the country. The Build, Build, Build program is at the forefront of socioeconomic development.
The resolution recalled that on June 27, 2017, the Neda Board identified 75 high-impact infrastructure projects aimed at bringing provinces and regions into the mainstream economy by “improving infrastructure development in these areas, boosting economic activity, generating employment and, ultimately, lifting Filipinos living in the rural areas from poverty.”
Citing statistics, Gatchalian recalled that by end-December 2017, the total outstanding debt of the national government added up to P6,652.4 billion, and in the 2018 national budget, P329.052 billion was allotted “for debt servicing alone.”
The senator’s resolution also acknowledged concerns that the borrowing plan of the Duterte administration to fund its Build, Build, Build program could lead to “unsustainable debt levels due to onerous terms of loans,” citing, for instance, “such exorbitant interest rates imposed by China” at 2 percent to 3 percent.
Gatchalian also cited what the senator described as China’s nontraditional loan, scheme of holding natural resources as collateral for loans, which, he warned, can “further burden the average Filipino who will ultimately be responsible to pay for the country’s debt.”
The senator stressed the need to closely monitor debt obligations and other modes of financing incurred, adopted or to be incurred or adopted by the Duterte administration for the infrastructure program in order to “ensure transparency, accountability and prudent use of the loans and other modes of financing entered or to be entered by the government.”
The resolution also asserted the importance of monitoring “compliance with Article VII, Section 20, and Article XII, Section 21, of the Constitution,” as well as “conformity with the Principles on Promoting Responsible Sovereign Lending and Borrowing by the United Nations Conference on Trade and Development [Unctad].”
Gatchalian’s Resolution 759 pointed out that it is incumbent on the Senate, in the exercise of its power of the purse, to ensure that the public funds diverted from health, education and social services financing are properly appropriated and not used for debt service.
Among the Duterte Cabinet officials invited to testify at the initial hearing on Tuesday (March 5) are: National Economic and Development Authority Director General Ernesto Pernia, Budget Secretary Benjamin Diokno, Finance Secretary Carlos Dominguez, Bangko Sentral OIC Governor Almasara Cyd Tuaño-Amador, Public Works and Highways Secretary Mark Villar, Labor Secretary Silvestre Bello, Transportation Undersecretary Ruben Reynoso, Bases Conversion Development Authority President Vivencio Dizon, Public-Private Partnership Center Executive Director Ferdinand Pecson, Freedom from Debt Coalition President Dr. Rene Ofreneo, Ibon Foundation Research Head Rosario Bella Guzman and Calixto Chikiamco of the Foundation for Economic Freedom, among others.
Image credits: wingatchalian.com