Consumers Domain
Strike out P1.3 B illegitimate debt off 2008 budget
"It's like ten thousand spoons…
When al you need is a knife."
—from "Ironic" by Alanis Morisette
(With the horde of anomalous, grease-heavy and debt-laden projects being exposed lately, this column is yielding space to a relevant statement from a debt watchdog organization. The article below is an excerpt from a recent press release from the Freedom from Debt Coalition or FDC.)
In a historic move, legislators from both the administration and opposition crossed party lines today just to listen and accommodate the alternative analyses and amendments of various civil society groups to the proposed 2008 national government budget.
House Appropriations Committee Chair Rep. Edcel Lagman confirmed that the undertaking is the first time this is being done in the budgeting history of the country. He said the Committee of Appropriations is breaking legislative tradition and even called the activity a "day of innovation" about the national government budget.
Former National Treasurer and Freedom from Debt Coalition (FDC) President Leonor Briones, currently the co-convenor of the Civil Society Consortium for an Alternative Budget, pointed out that the said initiative of involving the public in the crafting of the budget for the achievement of Millennium Development Goals (MDGs) is the first of such in Asia.
During the presentation, the incumbent FDC President Ana Maria R. Nemenzo urged Congress to strike out some P1.3 billion earmarked for anomalous projects from the proposed 2008 national government budget. Among the "anomalous" projects identified are:
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Small Coconut Farms Development Project (SCFDP), $ 11.32 million or P 524.86 million;
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Austria Medical Waste Project, $ 2.02 million or P 93.697 million;
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The textbook scam or Second Social Expenditure Management Program (SEMP2) and Secondary Education; Development and Improvement Project (SEDIP), $ 8.32 million or P 385.81 million;
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Philippine Merchant Marine Academy (PMMA) Loan, $ 1.2 million or P 55.596 million; and,
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Telepono sa Barangay (TSB) Project, $ 5.3 million or P 245.79 million.
"Some of these projects are now ‘white elephants' or liabilities in terms of cost and benefits. We therefore urge our lawmakers to exercise their power of the purse and to strike out the interest and principal payments for these anomalous projects and loans," said Nemenzo.
The FDC leader also asked Congress to disallow impoundment of funds for education and health in the 2008 budget to prevent artificial under-spending without Congressional permission.
Impoundment is the refusal of the President to spend the money that had been appropriated by the Philippine Congress.
In light of anomalous contracts such as the ZTE-National Broadband Network project and the Cyber Education Project (CEP), the debt watchdog encouraged the members of the House Representatives to scrutinize the borrowing program of the national government as contained in Section D of the Budget of Expenditures and Sources of Financing (BESF) and the financing for Foreign Assisted Projects which can be found in Tables B.14 and 15.
"Approving this section is already an implicit approval of the loan to finance the projects, without any consideration of whether these are tainted with anomaly or not," explained Nemenzo.
The group also asked Congress to check if current borrowings and loan agreements followed existing procedures as stipulated in Article VII, Section 20 and Article XII, Section 21 of the constitution and Republic Act 4860 or the Foreign Borrowings Act.
"In order to avoid future debt problems, Congress should tighten its grip before approving loans designated for specific projects and programs and should impose ceiling or borrowings cap on borrowings undertaken through government bonds, treasury bills, and other similar instruments," stressed Nemenzo.
For their part, members of the Committee of the Appropriations welcomed FDC's proposals on the 2008 budget.
Representative Rufus Rodriguez said the P 1.3 billion allocated for payments of illegitimate debts in the budget identified by FDC could instead be used by the legislature as one of the alternative sources of funding to augment allocation to much needed social services like education and health.
In the proposed 2008 budget, the national government automatically allocates P624.09 billion for debt service. From this amount, P295.75 billion is already earmarked for interest payments and P328.34 billion for principal amortization.
Representative Lagman enjoined fellow legislators to sign and support House Joint Resolution No. 4 calling for the creation of a Congressional Commission that will audit all public debt and contingent liabilities, as well as the bill calling for the repeal of Presidential Decree 1177 or the law on Automatic Debt Servicing.
"We support the initiatives proposed by Rep. Lagman and other lawmakers to address the debt problem., which included the suggestion to create a Congressional Committee purposely to take up the debt issue," Nemenzo said.
"The openness exhibited by the committee members to civil society proposals is very encouraging, and we hope that the dialogue process that has been started today will continue and bear concrete results," Nemenzo concluded.
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