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Groups launch citizens’ audit of Philippines’ P13.42-trillion debt

Civic society and advocacy groups on Tuesday launched an independent review of the Philippine government’s outstanding debt, which reached P13.418 trillion as of end-2022.

Launching what they call the Philippine Citizens’ Debt Audit were the Freedom from Debt Coalition (FDC), SANLAKAS, Bukluran ng Manggagawang Pilipino, the Asian Peoples’ Movement on Debt and Development (APMDD), the Oriang National Women’s Movement, and Katarungan Rights Organization.

At a press conference in Quezon City, APMDD coordinator Lidy Manuel said the goal of the debt audit is to identify loans that could be canceled or suspended, so that public money may be shifted from automatic debt servicing to “people’s needs, especially in these extremely difficult times.”

Manuel said the audit will look into debts that are used to fund “harmful” projects such as fossil fuel projects; those having grossly disadvantageous provisions; those involving corruption, fraud, or embezzlement; those that violated the laws governing both the lender and lendee; and those contracted by illegitimate regimes.

She said the debt audit will also try to recommend a cap or ceiling on how much the government can borrow annually.

The groups are also calling for the repeal of the law on Automatic Appropriations for debt servicing or Presidential Decree No. 1177, issued in 1977.

Manuel said the groups will issue two to three partial reports in the coming months on their independent debt audit, which they aim to influence the discourse in crafting next year’s national budget or General Appropriations Act.

For his part, former FDC president Eduardo Tadem said that the groups’ initiative will also push for an official debt audit and hopes that a lawmaker will sponsor it in the Congress.

“Debt audits are critical towards shaping and transforming policies on outstanding debts and debt payments, as well as borrowing policies. They can also serve as bases to call for changes in the policies of lenders,” Manuel said.

As of end-December 2022, the government’s outstanding debt stood at P13.418 trillion, down 7% or by P225.31 billion from the end-November 2022 level of P13.644 trillion—which was a record high. 

Also at the end of 2022, the Philippines’ debt-to-GDP ratio stood at 60.9%, down from the 63.7% in the third quarter, the highest it had been since 2005.

The government aims to bring down the debt-to-GDP ratio to less than 60% by 2025 and further shrink it to 51.1% by 2028 as well as reduce the deficit-to-GDP ratio to 3% by 2028; and maintain high infrastructure spending at 5% to 6% of GDP annually.

Finance Secretary Benjamin Diokno said that the country’s debt management strategy prioritizes the domestic market over external sources to protect the country against foreign exchange risk as fluctuations in exchange rates run the risk of increasing debt service payments each time the peso depreciates.

Prior to the COVID-19 pandemic, the Philippines’ debt-to-GDP ratio reached a record low of 39.6% in 2019. — BM, GMA Integrated News