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Toxic debt
When the news broke out recently
that the Philippine government has finally paid in full the
mothballed Bataan nuclear power plant, the Freedom from Debt
Coalition has warned that the country has still a horde of “white
elephant-cum-anomalous” loans.
The case of the P500-million
incinerator loan from Austria is another classic example of an
illegitimate debt that is unacceptable and must not be honored.
Signed by the Department of Finance and the Bank of Austria in 1997,
the loan involved the importation of 26 medical waste incinerators
for Department of Health-run hospitals across the country. These
incinerators, called Multizon manufactured by Liechtenstein-based
Hoval and supplied to the DOH by Austrian firm VAMED, eventually
became useless following the implementation of the Clean Air Act of
1999.
The national government has been
paying this “toxic” debt since 2002 with a whooping $2 million,
or P100 million a year. Unfortunately, despite the retirement of the
harmful project in 2003, Filipinos will still have to pay the lender
until 2014 because of automatic appropriations law on debt
servicing.
In a time when the national
budget has just been submitted to Congress for scrutiny and
deliberation, we are calling on the legislative branch to exercise
its so-called “power of the purse” to rescind the “toxic”
loan payment not only from the proposed 2008 budget but also from
the national account.
We are also appealing to the
Austrian government to cancel the loan so that the Filipino people
can enjoy the taxes they pay to the national government. If the
Norwegian government has recognized last year its accountability to
the $80 million it lent to five countries: Ecuador, Egypt, Peru,
Jamaica and Sierra Leone—for a failed development initiative in
the guise of a flawed Norwegian Ship Export Campaign from 1976-1980
and cancelled these countries’ remaining debts without conditions,
then it is not a far-fetch thing to wish that the Austrian
government follow suit.
Again, we say that there are more
“BNPPs” out there. How about a comprehensive debt audit now?
BOBBY C. DICIEMBRE
Media Bureau
Freedom from Debt
Coalition
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