IBON: Each Filipino owes P106,000 due to P11.6-T gov’t debt

Economic think tank IBON Foundation Inc. said Saturday that each Filipino owes over P106,000 in debt as the Philippine government’s running debt balance ballooned to a new record-high of P11.642 trillion.

Interviewed on Dobol B TV, IBON Foundation executive director Jose Enrique "Sonny" Africa said that if the P11.642-trillion outstanding government debt will be divided among the 109 million population, each Filipino will have a debt of more than P106,000.

“Kung kada pamilya [nasa] P470,000, halos kalahating milyong piso,” Africa said.

(If divided among each family, it will be around P470,000, almost half a million pesos.)

The national government’s running debt stock ballooned to a fresh record high as of end-August 2021, higher by P32.05 billion from the P11.61-trillion level as of end-July 2021 amid increased fund raising efforts to boost state coffers to address the lingering public health and economic threat of the COVID-19 pandemic. 

Africa noted that there is nothing wrong about the government borrowing money to bankroll the economy if the debt incurred could translate to more revenues to pay off obligations.

“Nagkakaproblema kung uutang ka tapos napupunta lang sa kickback, napupunta lang sa imprastraktura na hindi naman nagagamit,” he said.

(The problem occurs if the debt goes to kickbacks, infrastructure projects which are not used.)

“Actually, sa buong mundo, lahat ng mga gobyerno, lahat ng mga bansa, tuloy-tuloy ang paglaki ng utang kasi ginagamit nila para patakbuhin ang kanilang ekonomiya. Ang problema sa Pilipinas, palaki nang palaki ang utang pero ang kakayahan nating magbayad hindi naman… Walang kaakibat na paglaki,” he added.

(Actually, all over the world, all governments and countries continue to incur debts to run their economies. The problem here in the Philippines is that debt continues to balloon but our capability to settle obligations is not increasing.)

Finance chief Carlos Dominguez III earlier defended the uptick in the country’s programmed debt, which is expected to hit the internationally recommended threshold of 60% proportion of gross domestic product by 2022.

“I would like to emphasize again that the increase in our debt level is only temporary. It did not stem from profligate public spending, but rather resulted from a universal shock that deteriorated the financial positions of almost all countries around the world,” Dominguez told a House budget deliberation on the proposed P5.024 trillion national budget for 2022.

Africa said that, in the end, the government’s debts will be paid through taxes which are sourced from each citizens.

To make this more equitable, IBON is calling for a “wealth tax” which it estimated would raise some P467.1 billion in revenue for the government’s social services and welfare programs. 

“Dapat pag-usapan ang sistema sa pagbubuwis kasi lahat ng bayad sa utang nagmumula sa pagbubuwis,” Africa said.

(We need to discuss the system of taxation because the payment for debts comes from taxes.)

“Sobrang tama na patawan ng buwis yung lumolobong yaman ng mayayaman,” Africa said.

(It is right and just to tax the ballooning wealth of the rich.)

IBON estimated there are 2,919 Filipino billionaires with a cumulative wealth of P8.1 trillion. This translates to less than 0.003% of the population holding 16% of the country’s wealth.

The group said taxing the billionaires with a wealth tax of 1% of wealth over P1 billion, 2% over P2 billion, and 3% over P3 billion would  raise some P467.1 billion.

Combined with realignments from non-essential infrastructure, defense, and other items in the proposed 2022 national budget, IBON said the amount is more than enough to provide P10,000 in emergency aid to 18.6 million households, P101 billion for MSMEs, and P220 billion for agricultural support. —KG, GMA News