A lawmaker cautioned the government on Tuesday against acquiring new foreign loans for the rehabilitation of areas devastated by Super Typhoon Yolanda, as it would only result in incapacitating fiscal conditions in the future.
Rep. Terry Ridon of Kaba¬taan party-list said that though foreign loans may sound enticing, higher debts would mean long-term risks for the country and would result in lesser funds for social services and development projects.
“We should keep in mind that it’s debt and not a grant, and the government needs to pay it sometime in the future,” Ridon said. “As debt servicing is automatically appropriated in our country, higher debt would always mean less funding for economic and social services in the future, including less funding for disaster preparedness in the coming years.”
The government is considering to take the total of $1-billion loan offered by the World Bank and Asian Development Bank for the relief and rehabilitation of areas devastated by super typhoon Yolanda but National Economic and Development Authority Secretary Arsenio Baliscan said that it would still depend on the rehabilitation plan.
In the 2014 General Appropriations Bill approved by the Congress, P352.65 billion is automatically appropriated to debt servicing-interest payment.
Ridon noted that the government can easily tap sources from foreign grants and donations to restore the areas, particularly the parts of Visayas that were torn by strong winds and washed out by the deadly storm surge.
“The major problem that still besets the government is how it will maximize these funds in order to deliver immediate relief and rehabilitation to the devastated areas. Its swiftness and efficiency of service that is lacking in the current relief and rehabilitation efforts, which of course is the effect of not having a comprehensive disaster rehabilitation plan,” Ridon said.
According to the 2014 Budget of Expenditures and Sources of Financing, the total Philippine debt as of 2013 stands at P5.86 trillion. It could reach P6.32 trillion by 2014 as the government eyes to borrow an additional P1.05 trillion and P94.6 billion from domestic and foreign sources respectively next year.