PRESS RELEASE l 15 DECEMBER 2011
KALIPUNAN NG DAMAYANG MAHIHIRAP
Reference: Gloria Arellano, Kadamay national secretary general (0921.392.7457)
MANILA, Philippines--Urban poor group Kalipunan ng Damayang Mahihirap (Kadamay) slams President Aquino's veto, just like last year, of a provision inserted by the Congress on the 2012 national budget that would guard the government over-borrowing funds and spending excessively on infrastructures and other development projects.
Kadamay national secretary-general Gloria Arellano says, "It is a sign of the Aquino administrations' puppetry to the dictates of neo-liberal policies, that encourage more public borrowings from the World Bank (WB) and other financial institutions at the peak of the global economic crisis."
Kadamay notes that to protect their interests amidst the global financial crisis, global financial institutions have imposed policies that encourage nations to borrow more from these institutions, and to limit public spending on basic social services including education and health services.
"We call on the Filipino people to have keen eyes on the possible implications of Aquino's removal of debt cap, including over-borrowing by government officials, which the people will pay eventually," Arellano adds.
Instead of vetoing on debt cap, Arellano says, "The government should veto foreign debt-servicing instead."
The budget for debt servicing in 2012 is pegged at P367 billion, 19.6 percent of the total national budget.
"Much of our foreign debt have only fallen into hands of cronies of past administrations, and have never been utilized for the country's development," Arellano adds. "And the public need not shoulder its payment."
Loans for Palliative Programs
The urban poor group has recently slammed the huge fund in the 2012 national budget allotted to 'palliative pro-poor projects' including the P39 billion Conditional Cash Transfer, to which foreign loans are being used as supplements.
WB President Robert Zoellick, in his recent visit, has offered debt-assistance of $100 million for the Aquino administration's CCT program.
"While its long-term effect is yet to be proven, CCT even condones mendicancy among the urban poor," says Arellano.
Official records show that the CCT had started out as an entirely government-funded program. But with a dramatic expansion in the program’s coverage since 2008, the government started to supplement the CCT budget with loans from the WB and the Asian Development Bank (ADB). These loans have altogether amounted to $805 million or P34.6 billion at current exchange rates.
Official data also show that for 2010-2011, about 32 percent or P10.2 billion of the expenses for the CCT would be paid through these loans.
"Huge funds for palliative programs should be realigned to programs that provide direct social services and employment to the people," Arellano adds.
State of Indebtedness
Meanwhile in August this year, the government’s debt stock rose to P4.79 trillion (US$111.48 billion), up by 1 percent, from the July level primarily due to a weaker Philippine peso and a net issuance of domestic securities.
This means that with the country’s population at 95.6 million, every Filipino citizen has now an outstanding debt of P50,141 (US$1,166).
Long-term solutions vs. crisis
One of the reasons behind Aquino's veto on imposition of a ceiling on public burrowing is to stimulate economic growth and provide ample services to the poor, amidst the crisis.
Arellano adds that to protect the poor Filipinos from the harsh effects of the global financial crisis, "The government should allot funds to create more jobs and to increase the measly wages of the workers, instead of giving dole-outs to the poor."
"The Aquino administration should control its penchant for following neo-liberal policies that have dwarfed our economies for decades, and have buried millions of Filipinos into a massive foreign debt, and into chronic poverty," she ends. ###
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