Joker hits PNoy's removal of debt cap, says Senate was misled

Saying that the Senate was misled, opposition Senator Joker Arroyo on Thursday criticized President Benigno Aquino III for removing the limit on public sector borrowing.

 

"This is a very discturbing thing... the tendency of the executive to take all controls... even on the budget," Arroyo told reporters on Wednesday.

 

He issued the statement after Aquino signed into law the P1.816-trillion national budget for 2012.

 

But Budget Sec. Florencio Abad said the President vetoed the imposition of a ceiling on public sector indebtedness, which he said would have forced the government to constrict spending especially on critical social services and infrastructure.

 

The provision, which was suggested by the Senate, states that “the total indebtedness of the national government and any of its agencies, offices, GOCCs, which carry the sovereign guaranty of the Republic of the Philippines, shall not exceed 60 percent of the latest GDP (gross domestic product).”

 

The provision further states that any borrowing in excess of the ceiling requires prior consent of Congress.

 

Abad said the public sector debt as of 2010 already stood at 73.3 percent of GDP which is beyond the 60-percent debt cap provision. He said a debt cap would tie the hands of the executive department.

 

Arroyo, however, said that Finance Sec. Cesar Purisima told them during the plenary debates on the budget that public sector debt stood at just more than 50 percent, so the Senate agreed to put the cap at 60 percent.

 

"[The worth between] 50.2 percent and 73 percent is a lot of money.  Why were we misled?" he said.

 

The senator explained that every five percent of the GDP is worth half a trillion pesos.

 

"Let's not overborrow.  But we will never know when the government is overborrowing because there's no cap on their borrowings," he said.

 

Senate finance committee chairman Sen. Franklin Drilon, however, lauded the signing of the 2012 budget.

 

“I commend the early enactment of the 2012 budget, the earliest to be passed since 1986, which shows that this government is bent on fast-tracking its infrastructure and social services programs next year as ordered by President Aquino,” he said in a statement released Wednesday.

 

He likewise said that the early approval of the General Appropriations Act of 2012 would allow Malacañang to promptly start government infrastructure projects as early as January.

 

“Critical investments aimed at improving much needed social services, supporting economic growth and reducing poverty will now be addressed properly, and in a more transparent manner in keeping with President Aquino’s call for a results-focused budget,” Abad said. — LBG, GMA News