The Problem of Debt Servicing17.01.11
Aired on January 17, 2011
Narration by Baben Grace Lumapas
The Problem of Debt Servicing
Year in year out, more than 40% ( around 44% this year ) of the national budget has to be allotted solely for payment of foreign and domestic debt. This is because of the Automatic Appropriation Law. So, with P1.6 Trillion for the proposed 2011 national budget, only 60% of that, around P700 Billion, shall be left for other government expenses—operations, social services and infrastructure.
The Freedom from Debt Coalition has long been calling for the repeal of the automatic appropriation to debt servicing law. This is to provide our government greater fiscal flexibility every year—that is, greater flexibility to assign priorities and provide necessary resources for other sectors of the economy and other national and social needs that must be addressed. August of this year marked the 22nd year of their long campaign.
There is a way of thinking ingrained in the national consciousness that keeps us running into perpetual debt. It is the outlook that as a nation, we are incapable of growing, developing or prospering without having to rely on foreign capital, foreign loans, foreign grants, foreign technology, and even foreign ideas. Studies support the understanding that this outlook is a result of our colonial past—300 years of Spanish rule, followed by almost 50 years of direct American colonial rule, then the Japanese occupation, and then the return of the Americans, who sponsored a formal independence but are still heavily involved in Filipino affairs. This has left us with an immature and poorly-grounded national confidence.
Certainly the Philippines, though an archipelago, is not an island in the international community. We must engage, gain from, and also contribute to other cultures and societies. We must trade. And thriving commerce will mean that we will also have to borrow. However, our borrowing should work for us and not cripple us. Debt should at best be supplementary, resorted to within an economic framework based on national interest, industry and self-sufficiency.
In Isaiah 65, God paints a beautiful picture of how his covenant people will live, in the age of the new heavens and new earth. “ They shall build houses and inhabit them; they shall plant vineyards and eat their fruit. They shall not build and another inhabit; they shall not plant and another eat; for like the days of a tree shall the days of my people be, and my chosen shall long enjoy the work of their hands.” May our own economic vision for our country glorify God by foreshadowing the certain fulfilment of this promised future.
Adapted from Mr. Ric Reyes’ speech during the 8th ISACC Fellows’ Gathering last October 30, 2010.Mr. Reyes is the President of the Freedom Debt Coalition.