Senator warns government vs overborrowing amid budget debates

Senator warns government vs overborrowing amid budget debates
A money changer employee shows US dollar bills at their shop in Quezon City on Friday (September 30, 2022).
STAR / Michael Varcas

MANILA, Philippines — Sen. Risa Hontiveros warned the Marcos administration against overborrowing as the Senate continues to debate the national budget for 2023. 

This comes after latest data from the Bureau of the Treasury showed that total borrowings for September soared to P488.64 billion from the P215.106 billion in obligations in the same month last year, posting a 127% increase.

“Wag sanang tularan ni President Marcos si ex-President Duterte na nagpumilit umutang sa China kahit hindi naman kailangan. Kaya, President Marcos, hinay-hinay lang sa pera ng bayan,” Hontiveros said.

(President Marcos should not imitate ex-President Duterte who insisted on borrowing money from China even though it was unnecessary. So, President Marcos, just take it easy on the people's money.)

Hontiveros cited the Kaliwa Dam (P18-B) project and the South Luzon Long Haul Rail Project from Calamba to Matnog in Sorsogon (P171-B), which are now both in limbo as their Chinese investors have yet to make good on their commitment to lend money to the Philippine government to finance these projects. 

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She said at the Senate budget debates that “the delay is actually a blessing in disguise.” 

Hontiveros noted that as early as 2016, there had been a shortlist of private sector proponents pre-qualified to bid for the opportunity to make the capital investments to realize these two major projects.

“Dapat maiwasan ni Pres. Marcos ang mga dambuhalang utang na naka-amba dahil kay President Duterte, lalo na kung hindi naman pala utang ang kailangan ng mga proyektong ito. We should do everything so government avoids taking on the heavy loan burden itself,” Hontiveros stressed.

(Marcos should avoid incurring the giant debt that President Duterte ended up owing, especially if it turns out that these projects don't need debt. We should do everything so the government avoids taking on the heavy loan burden itself.)

The senator also called on the National Economic and Development Authority to conduct a review of the economic viability of the Mindanao Rail and of the Subic-Clark Rail projects. 

“We have reason to believe that economic evaluation of these projects was not thorough at all. These two projects were also originally offered for China to finance, but the need for them at this time should really be re-examined. Not many may even ride these projects and they risk ending up as white elephants,” she said in mixed Filipino and English. 

“Duterte’s pivot to loan financing to the exclusion of PPP for his flagship projects was an unsustainable tactic, and reliance on China for loans even more so."

According to the Bureau of the Treasury, the Philippine debt ballooned to a record P13.5 trillion, because of the recent depreciation of the peso. The Philippine government has also exceeded the borrowing limit that it set for 2022. 

NEDA Secretary Arsenio Balisacan and Department of Finance Secretary Benjamin Diokno vowed that non-debt financing options will be pursued more deliberately from hereon.

The economic managers also assured the Senator that it is possible for the government to partially contribute to the finance of flagship projects and even to take on some of the financial risks.

This will make the project attractive to the creditors of the PPP proponents and it will help the country avoid taking on unnecessarily massive debts. 

“We need to make sure that the projects get underway soon, however. Kailangan lang ituwid ang baluktot na naging kalakaran. Huwag nating hayaang nakatengga ang mga riles na ito. These railways can be an absolute gamechanger for Filipinos. It is high time we make these projects happen for our country,” Hontiveros said. — with a report from The STAR

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