GENERATIONS of Filipinos have grown up amid rallies denouncing the country’s constantly ballooning foreign debt. In her eighth and latest State of the Nation Address, however, President Gloria Macapagal-Arroyo boasted that her administration has managed to retire debts in great amounts, “reducing the drag on our country’s development.”
But our latest report shows that the Philippine debt stock has, in fact, grown at a faster rate under the Arroyo administration. In her first six years in office alone, Arroyo has incurred about P3.53 trillion in foreign and domestic debt, more than double the combined total borrowings recorded in 14 years under the administration of her three predecessors.
Arroyo has also resorted to prepaying maturing debts, resulting in P3.8-trillion payments to foreign and domestic lenders, more than double the combined debt-service payments of of her three predecessors from 1986 to 2000.
To be sure, Arroyo is only following in the footsteps of the post-Marcos governments before her by dutifully complying with the Marcosian law on automatic appropriation. Its disastrous implication, however, is that debt service has continued to be a national economic priority. More than anything, the huge amounts flowing out of the country in debt-service payments explain the spending compression — the underfunding of education, health, and public infrastructure — in the last seven years.
As Dr. Walden Bello, president of the Freedom from Debt Coalition sums it up succinctly: “It requires no special intelligence to realize that the massive amounts of money that have gone to paying our creditors to service our constantly mounting external debt was money that could not go to development.”
Read on at pcij.org.