FDC: P14.7-B ‘debt cut’ may end in 2010 campaign kitty
11/18/2008 | 04:40 AM
MANILA, Philippines - A debt watchdog voiced fears some P14.7 billion in cuts on interest payments in the proposed P1.41-trillion budget for 2009 could go to some candidates' campaign kitties in 2010.
The Freedom from Debt Coalition (FDC) said there was no clear detail from Congress on where the slashed amount would be allocated.
"With the national elections just around the corner, the temptation to use the people's resources as the personal campaign kitty of some is very likely," FDC president Walden Bello said in an article on the FDC website.
"In principle, we are in favor of reducing the country's debts as we believe the continuing burden of paying these 'obligations', many of which are challenged as illegitimate, is one of the biggest obstacle in realizing genuine economic development," he added.
Congress passed last Nov. 11 the P1.415-trillion proposed national budget for 2009 on third and final reading, but Bello voiced strong apprehension concerning the manner the debt-payment cuts were made.
Bello said FDC has been pushing for the non-payment of illegitimate, fraudulent, wasteful and/or useless debts by rescinding debt-creating laws as well as by pushing for meaningful reforms in the budget.
"The way it (debt-service allocation) was slashed by Congress is troubling. It lacks transparency regarding where the slashed debt payments will be reallocated, a clear operational stipulation that would guarantee its successful execution is absent and Congress was silent about this," he said.
FDC said from the original P302.650-billion allotted budget for debt interest payments as proposed by the Executive Department, Congress reduced it to P287.874 billion.
The group noted it had proposed a suspension of P14.9 billion worth of interest payments from 17 questionable loan agreements and proposed loans.
But it also sought that the amount be re-channeled as an augmentation budget to important social services as proposed by the Alternative Budget Initiative (ABI) group and the Task Force Food Sovereignty (TFFS).
Also, Bello voiced suspicion that civil society demands and alternative budget proposals might be used to push for the vested interests of some such as transforming the appropriations bill into an election budget.
Also, he highlighted the reallocations made by Congress on the 2009 budget and stressed the need for strict scrutiny.
FDC specifically drew attention to the augmented budget of the Department of Public Works and Highways (DPWH) which got a whopping P8.16-billion increase.
From the original DPWH budget of P112.364 billion as proposed by the executive department, its budget turned into P120.530 billion.
"The DPWH is well known as a cesspool of corruption, with infrastructure contracts being a well known mechanism for dispensing political favors especially during election time. While government spending at a time of economic slowdown is justified to counter recession, there are other forms of social spending that would be more effective," Bello said.
"Moreover, whatever channel public spending takes, its allocation, appropriation, and implementation must be transparent. This is not the case here," he added.
FDC will ask House appropriations committee chairman Junie Cua to explain and give ample details to Congress' amendments of the 2009 budget particularly on debt cuts and increased social spending.
It will also seek the assistance of the Senate concerning the following issues as it takes its turn in deliberating the proposed
2009 budget.
"To be fair to our legislators, we are giving them the benefit of the doubt and the chance to explain their side on this issue," Bello said.
"Their decision to surreptitiously cut debt payments might be due to their sincerity to reduce the country's debt burden or their way to skirt the veto powers of the President concerning debt cuts. Yet, we maintain any decision concerning the people's resources without their knowledge, participation and judgment are themselves breeding grounds for more corruption, plunder, disempowerment and the perpetuation of fiscal dictatorship," he added.
In the 2008 budget, FDC convinced both houses of Congress to provide a special provision in the budget to suspend interest payments to loan agreements challenged as fraudulent, wasteful and/or useless.
Also, it caused a further reduction in debt payments by persuading Congress to peg the foreign exchange rate at a more realistic level as well as the suspend payments to dubious proposed loans.
But President Arroyo vetoed the provision using the protection of the country's credit-rating, the non-violation of contract laws and the automatic debt servicing provision as pretexts. - GMANews.TV
The Freedom from Debt Coalition (FDC) said there was no clear detail from Congress on where the slashed amount would be allocated.
"With the national elections just around the corner, the temptation to use the people's resources as the personal campaign kitty of some is very likely," FDC president Walden Bello said in an article on the FDC website.
"In principle, we are in favor of reducing the country's debts as we believe the continuing burden of paying these 'obligations', many of which are challenged as illegitimate, is one of the biggest obstacle in realizing genuine economic development," he added.
Congress passed last Nov. 11 the P1.415-trillion proposed national budget for 2009 on third and final reading, but Bello voiced strong apprehension concerning the manner the debt-payment cuts were made.
Bello said FDC has been pushing for the non-payment of illegitimate, fraudulent, wasteful and/or useless debts by rescinding debt-creating laws as well as by pushing for meaningful reforms in the budget.
"The way it (debt-service allocation) was slashed by Congress is troubling. It lacks transparency regarding where the slashed debt payments will be reallocated, a clear operational stipulation that would guarantee its successful execution is absent and Congress was silent about this," he said.
FDC said from the original P302.650-billion allotted budget for debt interest payments as proposed by the Executive Department, Congress reduced it to P287.874 billion.
The group noted it had proposed a suspension of P14.9 billion worth of interest payments from 17 questionable loan agreements and proposed loans.
But it also sought that the amount be re-channeled as an augmentation budget to important social services as proposed by the Alternative Budget Initiative (ABI) group and the Task Force Food Sovereignty (TFFS).
Also, Bello voiced suspicion that civil society demands and alternative budget proposals might be used to push for the vested interests of some such as transforming the appropriations bill into an election budget.
Also, he highlighted the reallocations made by Congress on the 2009 budget and stressed the need for strict scrutiny.
FDC specifically drew attention to the augmented budget of the Department of Public Works and Highways (DPWH) which got a whopping P8.16-billion increase.
From the original DPWH budget of P112.364 billion as proposed by the executive department, its budget turned into P120.530 billion.
"The DPWH is well known as a cesspool of corruption, with infrastructure contracts being a well known mechanism for dispensing political favors especially during election time. While government spending at a time of economic slowdown is justified to counter recession, there are other forms of social spending that would be more effective," Bello said.
"Moreover, whatever channel public spending takes, its allocation, appropriation, and implementation must be transparent. This is not the case here," he added.
FDC will ask House appropriations committee chairman Junie Cua to explain and give ample details to Congress' amendments of the 2009 budget particularly on debt cuts and increased social spending.
It will also seek the assistance of the Senate concerning the following issues as it takes its turn in deliberating the proposed
2009 budget.
"To be fair to our legislators, we are giving them the benefit of the doubt and the chance to explain their side on this issue," Bello said.
"Their decision to surreptitiously cut debt payments might be due to their sincerity to reduce the country's debt burden or their way to skirt the veto powers of the President concerning debt cuts. Yet, we maintain any decision concerning the people's resources without their knowledge, participation and judgment are themselves breeding grounds for more corruption, plunder, disempowerment and the perpetuation of fiscal dictatorship," he added.
In the 2008 budget, FDC convinced both houses of Congress to provide a special provision in the budget to suspend interest payments to loan agreements challenged as fraudulent, wasteful and/or useless.
Also, it caused a further reduction in debt payments by persuading Congress to peg the foreign exchange rate at a more realistic level as well as the suspend payments to dubious proposed loans.
But President Arroyo vetoed the provision using the protection of the country's credit-rating, the non-violation of contract laws and the automatic debt servicing provision as pretexts. - GMANews.TV
