We are in favor of the passage of Senate Bill 1483, authored by Senate President Pro Tempore Ralph G. Recto, which would require the country’s economic managers to make a biannual appearance before a joint committee of Congress to report on the country’s debt and finances.
Although the government is not exactly in the red, not even in a precarious financial situation (at least not yet), requiring and institutionalizing more fiscal responsibility and accountability from each administration is most welcome.
Budgets and borrowings don’t normally hold the public’s attention as much as killings and corruption scandals, but it should. Politicians and the public often ignore government debts, but these are huge drains on the budget that have devastating effects on the daily lives of Filipinos.
The Philippines allots a third of its national budget for debt servicing. For 2018, the national government allocated P682.46 billion for debt payments, comprising of P353.41 billion in interest payments and P329.05 billion in amortization.
Recto said the national government debt was P4.582 trillion in June 2010, when then-President Gloria Macapagal-Arroyo stepped down. It reached P5.94 trillion in June 2016 when it was Benigno S. Aquino III’s turn to leave Malacañang. It expanded to P7.15 trillion in September.
The Department of Budget and Management (DBM) projected the national debt to hit P7.33 trillion in 2018 (up from P6.65 trillion in 2017), and it is expected to exceed P8 trillion in 2019, as the Duterte administration ramps up borrowings to finance its infrastructure program.
“Not included in the debt picture are contingent liabilities arising from sovereign loans or guaranteed obligations in PPP projects, and embedded in various kinds of joint ventures,” Recto noted.
He stressed the need to have “a reliable, running estimate on how much these cost, otherwise we may be blindsided.” He cited “the alarming trend of finding foreign financing, signing the loan papers, and passing, as a matter of fait accompli, the loan repayment to Congress—instead of first securing appropriations for a certain project or program.”
He gave as example the conditional cash transfers or the 4Ps program. “People don’t know that $1.75 billion, in five loan packages, were borrowed for such. What simply reached Congress is the request to allocate for debt servicing. It’s like we were just told, ‘Oh, by the way, we borrowed this amount, so pay this.’”
Under the Recto bill, those required to render what he dubbed the State of the Debt Address, or SODA, are the secretaries of the Department of Finance and the DBM, as well as the National Economic and Development Authority director general and the Bangko Sentral governor.
A lot of good can come out of knowing all the details of our country’s debts by mandating these four Cabinet officials to report on them before a House-Senate oversight panel twice a year. Proceedings must be televised so the public will know how much do we owe creditors, and how the loans actually helped Filipinos, if at all. Were the debts used to help lessen poverty and hunger in the country, boost employment and improve people’s lives? If more money from the national budget is going into debt servicing than to education, health and environmental protection, how could this be? Obviously, every peso or dollar we spend to pay our debts means less money available for poverty reduction, social services, housing, urban development and agriculture.
The government owes our people some explanation on our debt situation, and SODA will definitely quench the nation’s thirst for such information.
Image credits: Jimbo Albano