|
By Nora O. Gamolo, Senior Desk Editor
First of two parts
On Monday, civil society groups launched a
30-person strong Independent Citizens’ Debt Audit Commission,
composed of prominent Filipinos from different professions and areas
of concerns, to investigate all loan-financed projects and programs
allegedly accompanied by shady deals.
Civil society stalwarts consider as illegitimate
any loan tainted with graft and corruption, overpriced—like what
is being alleged about the national broadband deal—and which
resulted in the displacement of many sectors and communities.
Many of these tainted loans concerned government
programs and projects financed with official development assistance
(ODA), which are, according to Republic Act 8182, or the ODA Law,
“flows to developing countries and multilateral institutions,
provided by official agencies, including state and local
governments, or by executive agencies.”
ODA is an attractive source of development funds
in that interest rates for loans are lower than commercial rates,
have longer terms and extended grace periods, and are usually geared
for projects that would otherwise not attract private capital. The
availability of grant assistance (which need not be repaid) also
adds to ODA’s attraction.
ODA flows to the country at the moment are
reported to be at the highest now that Mrs. Gloria Arroyo has taken
over as President since January 2001. Indeed, many have noted that
while the Arroyo administration has made retiring old loans its
priority to achieve a balanced budget, among others, but it is also
speeding toward contracting new loans, supposedly to promote
development.
Yet, the Arroyo government has been charged with
bloating the national government’s debt to P3.78 trillion, or
$81.6 billion, at least three times higher that the total national
debt registered in 1986, after the fall of the Ferdinand Marcos who
bloated national debt after he took over the reins of political
power in 1965.
At the moment, the total consolidated public
sector debt as a percentage to the country’s gross domestic
product (GDP) is 81.9 percent, according to the Freedom from Debt
Coalition, one of the groups that established the citizen’s debt
audit group.
“Each Filipino, from the newly born baby to a
dying septuagenarian, is indebted by as much as P43,487, paying
P7,012 annually to service the debt. Every minute, our government,
using our money is paying a mind-boggling P1.1 million just to
service the debt,” said Beckie Malay, Freedom from Debt Coalition
vice president, who also represents the rural development-oriented
Philippine Rural Reconstruction Movement.
Like others militating against the enormity of
the country’s debt, Malay is aghast that “every minute, the
government is paying a mind-boggling P1.1 million just to service
the debt.”
However, the state planning agency, National
Economic and Development Authority (NEDA), claims that for the past
five years, official development assistance loans have steadily
decreased, a factor it attributed to the government’s conscious
effort to adhere to better project quality and greater fiscal
discipline.
From a peak of $11.8 billion in 2002, cumulative
ODA loans decreased to $9.5 billion as of end-December 2006. That is
7 percent lower than the 2005 figure and 20 percent lower than the
2002 figure.
The botched $330-million national broadband
deal, supposedly to be financed by the Chinese government, is just
one of loan agreements that the Arroyo government had worked out
with foreign ODA funders and governed by the stringent provisions of
the ODA Law.
Based on that law, ODA funds are administered by
NEDA for purposes of project identification, feasibility studies,
master planning at the local and regional levels, monitoring and
evaluation.
Each ODA is excluded from the foreign debt
limit, and administered with the objective of promoting economic
development and welfare, concessional in character, and contains a
grant element of at least 25 percent (calculated at a discount rate
of 10 percent).
ODA proceeds shall be used to achieve equitable
growth and development in all provinces through priority development
projects for the improvement of economic and social service
facilities, taking into account such factors as land area,
population, scarcity of resources, low literacy rate, infant
mortality, and poverty incidence in the area.
The ODA Law also demands that rural
infrastructure, countryside development, and economic zones
established under the law on economic zones shall be given
preference in the utilization of ODA funds.
One should not be misled to think that ODA comes
without costs. The costs, in fact, are hefty.
On the donors’ side, the costs include the
opportunity cost of resources, which implies foregone earnings given
the option of investing the resources in something else, and the
administrative costs of administering and monitoring ODA.
The costs of the recipient or borrowing
government, on the other hand, include providing a local
counterpart; operation and maintenance costs of implementing
programs and projects; and financial costs such as debt service
requirements of ODA loans.
Rolando Tungpalan, NEDA deputy director, said it
is precisely because of these costs that the government undertakes
an ODA programming exercise to ensure that aid resources are only
channeled to priority development activities, and utilized
effectively and efficiently.
Programming and coordination demand that ODA is
directed and matched with programs and projects consistent with
national development objectives.
ODA should go only to projects identified in the
government’s Medium-Term Public Investment Program and the
Medium-Term Philippine Development Plan.
Tungpalan is positive the botched broadband deal
went through the prescribed ODA process, including NEDA’s
preliminary appraisal of the proposal, for which it gave a positive
assessment. However, he refused to go into details because of the
petition lodged by former NEDA Director General Romulo Neri before
the Supreme Court.
Augusto Santos, acting NEDA director general,
had actually done a Neri, claiming executive privilege when the
Senate also summoned him to make a testimony on the broadband
project.
With NEDA’s silence, one wonders for which
proposal was its positive assessment given: for the $130-million
build-operate-transfer scheme proposed by Jose “Joey” de Venecia
3rd; the $262-million second proposal; or the controversial
$330-million proposal approved for the ZTE contract.
Civil society stalwarts believe that the
scrapped national broadband deal, already controversial on account
of alleged pay-offs to the First Couple and top bureaucrats like
former Elections Commissioner Benjamin Abalos Sr. “should not have
progressed as it is not a key social welfare project,” as
expressed by Milo Tanchuling, Freedom from Debt Coalition
secretary-general.
The same ODA Law, according to Tanchuling,
provides that official development assistance shall not be availed
of or utilized, directly or indirectly, for telephone programs
contracted as of January 1, 1996, (except basic telephone programs
and projects for rural areas not adequately serviced and/or
currently developed by private enterprises, which can then avail of
ODA).
ODA shall not be availed of by projects mandated
primarily by law to be served by the private sector, and which can
be financed by private corporations with access to private credit.
The formation of the citizen’s debt audit
group was no doubt spurred by the revelation of Senate star witness
Rodolfo “Jun” Lozada Jr.’s on the aborted broadband deal, and
comes three days after the mammoth Inter-Faith protest in Makati
City against the alleged role of the First Family and corruption in
the overpriced national broadband network deal.
For civil society groups, however, the botched
national broadband project is just one of the questionable ODA-funded
projects that they want to audit, not just in money terms, but on
how they have affected Philippine society and government, in
general.
To be continued
|
