Philippines: FDC to Senate: Take bold steps to address illegitimate debts

The Freedom from Debt Coalition (FDC) today expressed its serious disappointment over the decision of Senate Committee on Finance Chair Sen. Juan Ponce Enrile to restore P12.1-billion worth of repayments for questionable loans and slash P4.2 billion from the House approved budget for health services in the Senate version of the 2008 national government budget.

Outgoing FDC president Ana Maria R. Nemenzo said: “Instead of helping break the momentum of indebtedness and replicating the political courage manifested by the Lower House in reclaiming the power of purse, Senator Enrile has chosen the easy way out—staying loyal to Malacañang’s original, yet socially parsimonious budget.”

House Bill No. 2454 was praised for taking bold steps in addressing debt service payments and earmarking an additional P17.8 billion for important social services like education and health.

This amount was sourced from about P6 billion worth of savings as a consequence of a favorable US dollar exchange rate and about P11 billion worth of suspended interest payments for debts challenged by FDC as illegitimate.

The Senate, however, restored these cuts “to provide more legroom for the payment of interest on so-called tainted or fraudulent loans.” They also identified P5.7 billion worth of savings from favorable foreign exchange rate.

“Regardless of what foreign exchange rate they used, the Senate refused to make a political stand against illegitimate debts that continuously drain our national coffers and deprive the people of basic social services they deserve,” said Nemenzo.

FDC, comparing Enrile’s version with the Lower House regarding social service appropriations, said the following deductions were made:

• P4.2 billion from the House proposed health budget increase of P 4.7 billion;
• P643 million from the House proposed education budget increase of P 5.2 billion; and,
• P939 million from the House proposed State Colleges and Universities budget increase of P1.13 billion.

“The Lower House’s decision to include special provisions of suspending debt service payments for illegitimate debts ‘pending loan renegotiation and/or condonation’ is a step in the right direction. The question is: Can the Senate match this bold move and muster the political will to address the issue of illegitimate debts?” asked Nemenzo. -30-

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