the philippine debt audit campaign a renewed call to the 14 th congress and the filipino people...
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The Philippine Debt Audit Campaign
A Renewed Call to the 14th Congress and the Filipino People
Presented byRebecca L. MalayTreasurer, Freedom from Debt Coalition
The Debt Audit
Congressional Debt Audit Where we are Moving forward: issues & considerations
Citizens Debt Audit Commission Where we are General Concept Refinement in structure Proposed members of the Commission
Is the debt problem over?Growing Debt Problem (in trillion pesos)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Aquino Ramos Estrada Arroyo
NG Contingent Liabilities
National Government (NG) Debts
Debt Service
Gross Borrowings
Sources: Bureau of Treasury for NG Debts and Contingent Liabilities, Bangko Sentral ng Pilipinas on Gross Borrowings, and Department of Budget and Management (General Appropriations Act) for Debt Service
Record Breaker
Sources: Bangko Sentral ng Pilipinas on Gross Borrowings, and Department of Budget and Management for Debt Service
Arroyo: Largest Borrowed, Largest Paid (in trillion pesos)
0.520.37
0.57
1.46
0.560.78 0.71
2.05
3.092.83
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Aquino (87-92) Ramos (93-98) Estrada (99-00) Total (Aquino,Ramos, Estrada)
Arroyo (01-06)
Gross Borrowings
Debt Payments
Is the debt problem over?NG Outstanding Debt 3.819
Domestic Debt (by instruments) 2.148
Treasury Bills 0.588
Treasury Bonds/Notes 1.538
Loans 0.022
Others 0
Foreign Debt (by creditors, using $1=P46.35) 1.671
Multilateral 0.251
Bilateral 0.378
Commercial 0.035
Foreign Denominated Securities 1.006
NG Contingent Liabilities 0.530Domestic Debt 0.072
Foreign Debt 0.458
Source: Bureau of Treasury, SDADNote: Breakdown of totals may not sum up due to rounding of digits
National Government Debt as of end-May 2007 (in trillion pesos)
Who pays?Revenues vs. Debt Service (in billion pesos)
0
200
400
600
800
1,000
1,200
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Aquino Ramos Estrada Arroyo
Revenues
Debt Servicing
Source: Bureau of Treasury for Revenues data, Department of Budget and Management for Debt Service data
Government Expenditures 1987-2006 (in billion pesos)
0
100
200
300
400
500
600
700
80019
87
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Aquino Ramos Estrada Arroyo
Debt Service (Interest plus Principal)
Education
Health
Social Security
Who suffers?
Social expenditures received the brunt of expenditure cuts.Most evident during the time of ArroyoThe gap between education expenditure and
debt service grew by 52.06% in 2002, the highest in recent history
Health and Social Security has not been a priority for the longest time compared to debt servicing
Who suffers?
Education Spending*
Average national spending for education by administration show that based on 2000 prices, the amount spent per pupil fell during Arroyo’s timeMarcos (1981-85) : Php 3 027Aquino (1986-92) : Php 4 478Ramos (1993-95) : Php 4 959Estrada (1999-01): Php 5 830Arroyo (2001-04) : Php 5 467
*former Budget Secretary Benjamin Diokno, “Real State of the Nation”, 20 July 2007
Health Spending*
Combined (NG and LGU) per capita health spending show that
Marcos (1981-85) spent Php 240Aquino (1986-92) Php 278Ramos (1993-98) Php 321Estrada (1999-00) Php 360Arroyo (2001-04) Php 303
*former Budget Secretary Benjamin Diokno, “Real State of the Nation”, 20 July 2007
Congressional Debt Audit
The call for a Congressional Debt Audit, calls for a comprehensive investigation of all public sector debts and contingent liabilities.
Last Congress, the House of Representatives swiftly passed the Debt Audit Resolution, but the Senate failed to take it up.
Congressional Debt Audit
13th Congress: Review of engagement
Positive Negative Unanimous approval of Passage House Joint Resolution No. 1 in Sept 2004 through the efforts of Lagman, Zialcita, progressive & minority solons
Discussion of Senate version blocked in the Committee of Finance headed by Sen. Villar
Developed stronger support from several minority senators – Pimentel, Madrigal, Lacson through other engagements
Sen. Biazon not keen on fighting it out; opted to develop an alternative bill creating a Debt Management Office
Linked up for support with key staff of LP Drilon wing
Sen. Enrile apparently unhappy about Biazon’s eventual authorship of the Senate version of the resolution
Congressional Debt Audit
14th Congress: Opportunities & Challenges
OPPORTUNITIES CHALLENGES Lagman’s continued commitment to pursue the debt audit; other allies also committed
Other issues such as charter change may put the debt audit agenda in the sidelines
Senate dominated by opposition; key allies in the HOR now in the Senate (Escudero, A. Cayetano), Trillanes
The Senate President opposes Debt Audit Resolution
Administration legislators dominates the Lower House
Congressional Debt Audit
How to move forward: issues & concerns
1. Joint resolution vs Committee level audit 2. Role of Rep. Lagman – he has the capacity to once
again push for the passage in the Lower House, but the dynamics between him and the Senate should be assessed
3. Authorship of Biazon of the Senate version; possible author is Sen. Pimentel
4. How to handle Sen. Enrile?5. How else to maximize the favorable composition of
the Senate?
Citizens Debt Audit
Where we are Convened 36 individuals and political bloc
representatives as convenors of the Citizens debt Audit in 2004
Met three times in 2005; difficulty in convening in 2006 as a result of the political crisis
FDC’s work since 2006 up to the present allowed it to consolidate sectors (YAD), and expand support for the debt audit initiative (Budget Consortium, ODA Watch, GCAP, LnM, other anti-GMA, faith-based, etc.)
Citizens Debt Audit Commission
General Concept1. Critical examination of the Philippine
public debt based on: Data and existing studies by resource persons
and organizations Studies prepared by working groups and
technical teams to be organized by the Citizens Debt Audit Commission
Testimonies and inputs from affected communities, sectors and people’s organizations
Citizens Debt Audit CommissionMechanics of the study: The review and examination process will follow an outline
of the themes/topics. The presentations and discussions will be aimed at establishing the over-all picture (data, trends, etc.) and answering general and specific questions addressing the issues and problems related to the themes/topics.
Studies, data and testimonies will be presented to the Commissioners and to the general public in Public Hearings. These sessions will devote sufficient time for questions, clarifications and open discussion.
The Commissioners may also have smaller discussion-meetings with resource persons, witnesses, working groups and technical teams.
Citizens Debt Audit Commission
2. Preparation and release of reports summarizing the findings of the Citizens Debt Audit and formulation of recommendations and options based on the findings. Thematic reports with corresponding recommendations will be issued periodically as theme of the review is completed. A comprehensive over-all report with recommendations will be issued at the end of the process.
Citizens Debt Audit CommissionMechanics of the reports and recommendations: The draft report and recommendations for each
theme will be prepared by assigned commissioners together with the working group(s), resource persons and technical team concerned.
The draft report will be presented to all the commissioners in Public Forums to which the general public may be invited. The findings and recommendations will be openly debated in the Forums
The commissioners will finalize the report/recommendations and submit it to appropriate government entities, which may be done with people’s participation (i.e. with accompanying mobilization). A summary will be presented to the media in press conferences
Citizens Debt Audit CommissionThemes and Topics 1. Overview of the Current Public Debt Situation2. Overview of the Historical Development of the Philippine
Debt Problem Including: Global context Periods of Crisis, Policies implemented, Results History of Renegotiations and Debt Relief Schemes Critical Issues that Emerged
3. Borrowings – Laws, Policies, Regulations, Trends and Issues
4. Debt Payments - Laws, Policies, Regulations, Trends and Issues
5. National Government Debt – Overview, Trends and Issues6. NG External Debt – BNPP (lessons)7. NG External Debt – Project and Program Loans – outcome
and impact of the projects, terms and conditionalities
Citizens Debt Audit Commission
8. NG External Debt – Loan Conditionalities; Debt as Leverage for Adjustment Programs; Relations with Multilateral Financial Institutions
9. Private Loans and Liabilities Assumed by the National Government; Behest Loans; Brady Securitization Deal
10. Interest Rates – Trends and Issues11. NG External Debt – Bonds - Trends and Issues12. Government-Owned and Controlled Corporations (GOCCs) and
Government Financial Institutions (GFIs) Debts NAPOCOR debts, etc
13. Build-Operate-Transfer (BOT) Projects– Debts and Liabilities 14. NG Debt – Domestic Debt15. Old Central Bank and Bangko Central
Other Topics for Background1. Debt Relief, Debt Reduction Instruments and Options2. Lessons and Experiences from Other Countries
Citizens Debt Audit Commission
Structure of the Commission Members of the Commission (not to exceed 20
individuals with established credibility & expertise) Organizing and presiding over the process; Taking the lead in the review, examination and
preparations of reports and recommendations; Ensuring people’s participation in the audit process Ensuring that the process is open and transparent
manner to the general public Finalizing the reports and recommendations
Citizens Debt Audit CommissionStructure (cont’n) Technical Committee
composed of consultants and technical experts Thematic Committees
composed of people’s organizations, NGOs and individuals to focus on putting together studies on a particular theme or specific topic for the audit process, to be submitted to the Citizens Debt Audit commission.
will also work with assigned commissioner/s in the preparations of the report and recommendations, which will eventually be presented and discussed in public forums.
Secretariat - events organizing, public information and media; research and data base-building; administration and finance (start with two staff)
Freedom from Debt Coalition (FDC) – Philippineshttp://www.freedomfromdebtcoalition.orgmail@freedomfromdebtcoalition.org+63(02)9246399 (Tele-fax), +63(02)9211985
Thank you.