Our debt is worse than the Israel-Hamas war

OFF TANGENT - Aven Piramide - The Freeman

There are national and international events that we witness today. From the possible ramifications that I can foresee, I describe the national event as concerning although I consider the international scene as alarming. In the transnational level, we were shocked to learn that Hamas warriors invaded Israel. This happened on October 7, a very important and solemn holiday for the state of Israel. Using land, water, and air armed elements, Hamas invaders attacked unarmed Israeli kibbutz, massacred defenseless families, and kidnapped hundreds of innocent civilians. Naturally, Israel invoked self-defense and it is currently counter-attacking its enemies in a progressive kind of warfare. With countries reportedly taking sides, the bloody Israel-Hamas war is rapidly deteriorating into a global conflict.

Aside from the war storm in the Middle East, we are witnessing a different kind of conflict in our country. It is political in nature and I am referring to the brewing split of the Uniteam. The Marcos and Duterte camps may not be launching rockets and artillery shells but the issues of betrayal and corruption that they have thus far raised against each other are just as explosive. Believe me, these two events pull us away from a more serious concern. I am referring to the Philippine external debt.

In our layman’s understanding, foreign debt is money borrowed by a government, corporation or private household from another country's government or private lenders. Foreign debt also includes obligations to international organizations such as the World Bank, the Asian Development Bank and the International Monetary Fund. For purposes of this article, I just lump all of these borrowings into external debt.

Economics not being my cup of tea, I can only look at bare facts. When Ferdinand Edralin Marcos assumed the presidency in 1965, the Philippines had an external debt of less than $1 billion. If computed on the basis of current rates of exchange, the external debt would be almost ?56 billion. As a result of the People Power Revolution, Marcos was ousted from office in 1986 and was succeeded by Corazon Cojuanco Aquino (six years), Fidel Valdez Ramos (six years), and Joseph Ejercito Estrada (two years). In the span of 14 years, following the ouster of Marcos, the succeeding Aquino, Ramos, and Estrada administrations contracted a total of ?1.51 trillion in debts.

Then came Gloria Macapagal Arroyo, who took over the presidency from Estrada after the so-called EDSA II. It was reported that during her stay in office, Arroyo incurred a record ?3.54 trillion in domestic and foreign debt, which amount was more than twice the combined total borrowings of the three presidents before her.

When we elected Benigno Simeon C Aquino III as the president of our country, the total outstanding Philippine foreign debt stood at ?4.582 trillion. But, at the end of his term, when Aquino left office in June 2016, the country's national debt amounted to ?5.9 trillion. Based on these records, Aquino borrowed some ?1.4 trillion.

“Change is coming” was the battle cry of Rodrigo Roa Duterte in the 2016 presidential elections. The people got swayed by such promise of change and voted Duterte as president. Those who voted for him must now be really dumbfounded to learn that when Duterte stepped out of Malacañang, he left the country with an incomprehensible debt of ?12.79 trillion in outstanding national government debt, according to Bureau of the Treasury figures. In simple mathematics, the Duterte administration borrowed more than ?6 trillion, or more than twice the combined borrowings of all presidents before him. What a change!

Our economic situation is far worse than the Israel-Hamas war. The Middle East armed combats kill people with bullets. Our country’s terrible economy kills our people with poverty. Thus far, our leaders are busy laying down plans for 2028 instead of groping for the useful kind of economic programs. That is what the Marcos-Duterte conflict is all about. If they do not know what should be done to address this Duterte legacy of impossible debt, they should be responsible enough to tap the best economic minds in our midst in order to guide them.

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