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By Darwin G. Amojelar, Reporter
MORE infrastructure, social service deliveries
and employment are among the gains from reducing the national debt,
officials said.
Acting Secretary Augusto Santos of the National
Economic and Development Authority (NEDA) said the government will
prepay more debts to be able to increase the budget for productive
expenditures.
The government wants to reduce the national debt
to 51.3 percent of the gross domestic product (GDP) this year by
prepaying outstanding debts and reducing its borrowings. GDP refers
to the total market value of all goods and services produced within
the country in a year.
Last year, the country’s debt ratio was 59.4
percent of GDP, much lower than the 64.3 percent ratio 20 years ago.
“If we reduce our debts, in effect we will be
reducing our interest payments,” Santos explained. “That means
we will increase primary expenditures. These include investments on
infrastructure, education, health and nutrition.”
Too much interest payments eat up government
money that should be spent for social services, officials said.
With the smaller budget allocated for interest
payments as a result of reduced indebtedness, Santos said, the
government will release more funds for public investments—for the
construction of more roads, irrigation systems and facilities,
seaports, airports and mass transit. More money will be also used
for the people’s health, education, nutrition and livelihood.
Santos added that the government is balancing
the budget this year and is stopping the old practice of borrowing
funds for the government’s operations.
“If the government finances are in order,
there will be a low-interest regime. Low interest will spur
productivity in the private sectors which means you create more
employment,” he said.
President Gloria Arroyo had said that with the
government’s commitment to balance the budget by the end of 2008,
“we can now reduce our dependence on borrowings and reallocate
more resources to the needs of our people, such as farm-to-market
roads, irrigation, schools and health centers. We are now in a
position to improve our economic growth without borrowing.”
“We cannot bequeath to our children and their
children’s children a legacy of debt,” President Arroyo added.
“It is not fair, nor does it make economic sense, to perpetuate
such a legacy.”
Mrs. Arroyo said the government’s financing
requirements this year will rely mostly on longer-term domestic
bills and bonds and on concessional official development assistance
projects and program loans.
For 2008, the government has increased the
infrastructure outlay by 22.5 percent to P116 billion. It was only
P94.6 billion last year.
For agriculture, the government’s total budget
for farm-to-market roads will amount to some P5 billion this year.
Of this amount, P4.2 billion will be set aside for Department of
Agriculture to use for the repair and construction of 3,126
kilometers of farm-to-market roads.
The budget for the North Luzon Agri-Business
Quadrangle will be more than doubled in 2008 with P1.4 billion.
Projects under that quadrangle include the 89.5-kilometer Halsema
Highway (Mt. Data to Bontoc-Banaue Road), worth P584 million; and
the 97.8-kilometer Bontoc-Tabuk-Tuguega-rao Road, P488 million.
For education, the government this year set
aside P146 billion and for health P16.3 billion.
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