Citizens’ audit sought on Philippine debt

Louise Maureen Simeon - The Philippine Star

MANILA, Philippines — A citizens’ audit will be conducted by various civil society organizations and the academe in a bid to dig deeper into the country’s debts and assess if those obligations really benefited Filipinos.

Several groups launched yesterday the Citizens Debt Audit Philippines, which seeks to learn more about the public debt and how funds are spent, and make policy recommendations on debt policy.

The country’s outstanding debt stood at P13.42 trillion as of end-2022 and is projected to grow further in the coming years.

University of the Philippines professor emeritus and Freedom from Debt Coalition president Rene Ofreneo said the country has lost decades of development because of the government’s overdependence on debt.

“The present generation faces a debt problem and overall maldevelopment. And we need to get out of a debt-driven economic governance,” Ofreneo said.

The audit, which is not a first of its kind in the country, targets to encourage more Filipinos to look into the public debt and disentangle the web of unsustainable debt levels and its burden on ordinary citizens.

UP professor emeritus Eduardo Tadem said that a previous citizens’ debt audit was already done in 2004, at the height of various issues that hounded the Arroyo administration.

Tadem said this audit discovered 20 illegitimate debts that benefited only large corporations and engendered corruption.

It also resulted in a move by Congress to pass a law that would audit the government’s questionable debts, but it was vetoed by then president Gloria Macapagal-Arroyo.

For the audit this time around, Tadem admitted that the initiative would face challenges anew such as refuting government arguments on debt and sustaining Congress initiatives.

Such arguments include misrepresentation on the debt service, sustainability of the debt level, debt as a share to the national economy, government objections on alternatives to borrowings like wealth tax, and the debt composition as a whole.

Further, the groups also pressed for the repeal of the law that allows the automatic appropriation of funds for debt service or the payment needed to pay back the country’s obligations.

Ofreneo argued that debt service is being shouldered by Filipinos, whether through taxes or cuts in public expenditures for health, education and other social services.

“We only get to know what debts were contracted after the deed is done and then bear the consequences of debt-funded projects that may have violated human rights or destroyed the environment,” Ofreneo said.

This year, 11.6 percent of the record P5.268-trillion budget or equivalent to P611 billion is allocated to pay off debts. The debt burden includes P582.3 billion for interest payments and P28.7 billion for net lending.

For the Asian Peoples’ Movement on Debt and Development (APMDD) coordinator Lidy Nacpil, an audit is critical in identifying loans that should not be paid and open opportunities for shifting public money to people’s needs.

Among the debt that will be audited include those that were incurred due to COVID, as well as on some projects such as the Kaliwa Dam.

Sanlakas secretary general Aaron Pedrosa said the loan agreement for Kaliwa Dam is onerous given its costly repayment terms and a waiver for immunity by the government in case lenders file for arbitration.

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