I once visited Sri Lanka and liked this tiny former province of India. The topography is beautiful, the people are very hospitable. There is a lot of culture, history, art, and music. But today, this country is on the brink of collapse.
The island country of Sri Lanka is located in the Indian Ocean, south of its mother nation, India, and southwest of the Bay of Bengal. It has an area of 65,610 square kilometers, much smaller than the Philippines' 300,000 square kilometers.
The population of Sri Lanka is only 22,156,000 while ours is estimated at 112 million. The nominal gross domestic product of Sri Lanka before the crisis was $84.5 billion and its citizens' per capita income was $3,830. The Philippines' nominal domestic product was $402.6 billion as of 2021. Because of our much bigger population, our peoples' per capita income was only $3,646 as of 2021.
The ongoing economic crisis gripping Sri Lanka resulted in the collapse of its national currency. The Sri Lankan rupee has practically no value in international trade. Thus, the nation cannot buy fuel from foreign sources. There are food imports that cannot be funded. People are hungry and angry. The Sri Lankans are demanding that the parliament be dissolved, the president and the prime minister should resign, and a new government should be installed.
This was brought about by soaring foreign debt due to excessive borrowings. The government embarked on overly-ambitious infrastructure projects that did not generate returns on investments.
Sri Lanka's debt soared since 2016 due to massive infra build ups funded by borrowed dollars. The IMF had to bail out the country in April of 2016 to the tune of $1.5 billion. By the fourth quarter of 2016, its national debt skyrocketed to $64.9 billion.
On top of all these, government-owned corporations had outstanding debts guaranteed by the government in the amount of P9.5 billion. Domestic debt increased by 12% since 2015 and foreign debt soared by 25% in the same period. Tourism, its main source of foreign exchange, collapsed in the last two years due to the COVID-19 pandemic. Thus, this crisis has always been ready to erupt.
The Philippines has a debt of P13.7 trillion. Recent massive borrowings driven by a combination of the pandemic response package and the “Build, build, build”, funded by “Borrow, borrow, borrow” is pushing the country to the brink of financial ruin.
My own research showed that Marcos Sr. left a debt of P526 billion, Corazon Aquino left ?334 billion in unpaid debts. The succeeding president also left unpaid debts, as follows: Ramos, P839 billion (he sold a lot of government properties including Fort Bonifacio), Estrada, P955.9 billion, GMA, P2 trillion and P471.2 billion, and PNoy only P808 billion.
If the incoming administration does not watch out, we shall end up, heavens forbid, like the failed economy of Sri Lanka. Rice will not be P20 per kilo because there shall be no more rice. We are an agricultural country with a perennial food shortage exacerbated by too many typhoons and too much corruption.
And there are no gold bars to share. The fairy tales have ended before they even began. We should all start to go home to the mountains and plant camote. Or the crisis shall overtake us in the city.