FDC celebrates House’s special provision in 2008 budget versus illegitimate debts

15 November 2007


Freedom from Debt Coalition
12 November 2007

FDC celebrates House’s special provision in 2008 budget versus illegitimate debts

Moments after the House of Representatives approved on third and final reading Monday the General Appropriations Bill (HB 2454), the Freedom from Debt Coalition (FDC) celebrated the inclusion of a special provision putting on hold interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. payments for questionable loans in the 2008 national government budget.

“This is a momentous event for debt campaigners in Philippines. We congratulate the House Committee on Appropriations, chaired by Rep. Edcel Lagman, for putting on the record our recommendation to stop the payments for illegitimate debts that continuously drain our national coffer,” said FDC president Ana Maria R. Nemenzo.

The Lower House appropriated P277.95 billion for interest payments next year. This is P17.8 billion less than the Malacañang proposal of P295.75 billion.

Of the P17.8 billion reduction, around P6 billion was an off-shoot of favorable US dollar exchange rate and around P11 billion from questionable loans.

The special provision stipulated in the House approved budget bill stressed that “no amount shall be used for the payment of interest payments on debts which are challenged as fraudulent, wasteful and/or useless, like but not limited” to the following loans:
a. Austria Medical Waste Project – Bank Austria
b. Small Coconut Farms Development Project (SCFDP) – International Bank for Reconstruction and Development (IBRD)
c. Second Social Expenditure Management Program (SEMP2) – IBRD
d. Secondary Education Development and Improvement Project (SEDIP) – Japan Bank for International Cooperation (JBIC) and Asian Development Bank (ADB)
e. Philippine Merchant Marine Academy (PMMA) Modernization Project – Kreditanstalt fur Wiederaufbau (KfW) of Germany
f. Telepono sa Barangay Project – Export Development Corporation (EDC) of Canada and Credit Comm’l de France
g. Power Sector Restructuring Program – ADB & JBIC
h. Power Sector Development Program – ADB and JBIC
i. Angat Water Supply Optimization Project – JBIC
j. Procurement of Search and Rescue Vessel from Tenix Defense Pty Ltd. – Export Finance and Insurance Corporation (EFIC) of Australia
k. Pampanga Delta Development Project – JBIC
l. Remaining unsecuritized loans incurred during the term of former President Ferdinand Marcos.

The debt watchdog also lauded the House Appropriations Committee for breaking tradition when it allowed bona fide People’s Organizations (POs) and Non-Government Organizations (NGOs) to take part in public hearings on the GAA.

The Civil Society Consortium for Alternative Budget, led by Social Watch – Philippines and Freedom from Debt Coalition, presented an alternative budget and source of financing during the series of hearings.

Rep. Lagman had earlier said that “the traditional practice of solely limiting budget briefings and hearings to heads and representatives of government departments and agencies is an incomplete process.“”Verily, the people, who are the ultimate beneficiaries of sufficient budgetary allocations, or the casualties of meager or absent allotments, should be given the opportunity to be heard through their non-elective and alternative representatives in the PO and NGO community," Lagman said in a press release posted at the House Website.

FDC recognized that the war against illegitimate debts is a long process and that the first battle in the Lower House has been won.

“We fervently hope that the Senate will do what the Lower House has done. We hope that they listen to and understand our arguments and proposals. More importantly, we hope that they strike out automatically appropriated interest payments for these illegitimate debts and re-allocate them to basic social services,” stressed Nemenzo.



CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

35 rue Fabry
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

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