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By Nora O. Gamolo Senior Desk
Editor
Last of three parts
Editor’s note: In this
three-part series, the first part discussed how the Congress is
taking notice of the need to stop automatic debt servicing,
particularly for those allegedly tainted with corruption. The second
part showed how automatic debt servicing has literally eaten up much
of the national budget. Ironically, the country’s debt stock
continues to balloon.
After more than 20 years, the
$2.3-billion loan incurred for the mothballed Bataan Nuclear Power
Plant was finally retired. That project is actually the country’s
most infamous white elephant and yet, Filipinos had to pay as much
as $155,000 a day for it since 1976.
Significantly, it was only upon
the retirement of the nuclear-plant loan that the government
declared that it could now have a “balanced budget.” Civil
society considers the servicing of the nuclear plant loan a massive
bloodletting on the Filipino people, and the project remains useless
to this day.
“We do not want a repeat of
this project,” said Ana Maria Nemenzo, president of the Freedom
from Debt Coalition, which is among the organizations spearheading a
civil society campaign to audit all debts incurred by the national
government.
The Coalition is asking for a
re-examination and deletion of certain line-item appropriations in
the 2008 budget intended for what the coalition considers
“illegitimate debts.”
“These are loans which have
been detrimental to the public, of little benefit, tainted by
corrupt and questionable dealings, and loans which push for severely
detrimental conditionalities, such as privatization of social
services borne by government,” Nemenzo said.
From government documents, the
Coalition has estimated that the total consolidated public-sector
debt as a percentage of the gross domestic product is at least 81.9
percent.
This means that the economy is
practically being sustained on debts and the coalition said that
based on 2007 data, the debt servicing for every minute stands at
P1,165,898.02.
“We have asked for at least a
congressional audit, if not outright deletions, of certain line-item
appropriations amounting to P494.32 million as interest payments for
these illegitimate debts,” Nemenzo said.
Debts questioned
They have won one round when the
House of Representatives reduced by P17.3-billion automatic foreign
debt payments from the 2008 budget bill.
There was also a commitment from
the House to audit existing loans and suspend payments for onerous
ones. Not all repayments for these loans have been integrated in the
2008 budget, though.
The biggest allegedly tainted
loan that was tacked by civil society groups is the Small Coconut
Farms Development Project, which was originally marked for repayment
on the 2008 budget. The project carried a $121.8-million loan from
the World Bank-International Bank for Reconstruction and
Development.
Declared successfully implemented
by its creditor, some P524.86 million (or more than $10 million)
should have gone to its repayment in 2007. The loan retires in 2010,
but some $124.04 million has been paid for it already, or almost $3
million more than the principal amount.
Civil society groups consider it
illegitimate because far from addressing rural poverty in the
coconut-producing areas, the project has been beset with widespread
corruption among government officials and private contractors.
Alleged irregularities include
sale of fertilizers to private companies engaged in the trading and
manufacturing of fertilizers, and nondeliveries. It is estimated
that at least 40 percent of funds intended for the project’s
fertilizer deliveries had been mismanaged.
Other loans considered
illegitimate by civil society groups include the $100-million Second
Social Expenditure Management Program and the Secondary Education
Development and Improvement Project that saw the printing of faulty
textbooks. The project is the subject of occasional rallies by
teachers and students.
Likewise, for the now obsolete
Telepono sa Barangay Project (with a $24.99-million loan), Filipinos
will pay this year some $5.3 million, or P247.79 million as partial
payment. The project was overtaken by cellular-phone technology
before 2,460 telephone lines in 246 villages in seven provinces
could be installed.
Another is the Austria Medical
Waste Project worth 199.99 million Austrian schillings, where
substandard medical waste incinerators for use by 26 government
hospitals were purchased. With the passage of the Clean Air Act of
1999, the 26 incinerators could no longer be used.
Then there’s Philippine
Merchant Marine Academy Modernization Project worth P858 million
owed to the Kreditanstat fur Wiederaufbau or Kfw, a German-based
bank. Its winning contractor, a German firm, reportedly had ghost
deliveries of items paid for under the loan. There was also an
alleged bribery attempt amounting to 228,000 euros, and an attempt
on the life of a German technical consultant who refused to
cooperate with some project principals.
Breaking the vicious cycle
In championing a debt audit in
the House, Rep. Edcel Lagman of Albay, chairman of the House
Committee on Appropriations, said, “The economy has to break the
vicious circle it has inflicted on itself.”
“The country’s debt burden
may not be as heavy as it was during the crisis years 1983 and
1991,” he added. “However, it remains to be heavy and
crisis-vulnerable, crowding out provisions for basic social services
and infrastructure development from the national budget.”
For sure, the campaign against
paying debts from the national treasury for onerous projects is
gaining ground, prompted by the need to preserve precious resources.
Dagupan Archbishop Oscar V. Cruz,
one of the most vocal critics of corruption in the government,
probably reflects the sentiments of the average Filipino who may not
have a very sophisticated knowledge on the workings of the national
economy: “No one should pay for loans he or she has nothing to do
with, much less benefited from.”
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