Wake Up, Philippines!

Illegitimate debts and the economy (1)

Posted in Budget, Debt Policy, Social Issues/Concerns, Sovereign Debts by Erineus on February 12, 2009

I FIND some sense in the statements of Albay Representative Edcel Lagman, chairman of the House Appropriations Committee, when he said that “”If we want to sustain and enhance the economic gains we have achieved and ensure that our people will truly reap the benefits of economic growth, we have to first resolve the twin problems of a ballooning population and huge debt service.”

Debt servicing has been eating almost 50 percent of national budget through automatic ppropriations. The Arroyo regime is considered the run away winner as far as debt accumulation is concerned in financing its government among post 1986 EDSA administrations.

The Arroyo is also the record holder in terms of debt payments. In such a short period of time Mrs. Arroyo has borrowed a total of P2.82 trillion in while paying a total of P2.83 trillion.

While Representative Lagman expressed a significant point on the impact of debt servicing to economic growth, it needs to take an important step by looking into the legitimacy or illegitimacy of government debts especially the contracts entered by the Arroyo regime.

It is undeniable that the national government has entered into numerous projects which proved to be disadvantageous to the Filipino people. At the end, it is the people – the taxpayers, who bare the responsibility of paying anomalous projects. Ultimately, it is also the people who suffer the lack of appropriations for social services because debt servicing automatically absorb a big chunk of the national budget.

Let us look into the concept of the illegitimacy of debt in order for us to fully understand why some projects are by nature illegitimate, thus it must not be paid by taxpayers.

Lidy Nacpil, coordinator of Jubilee South-Asia Pacific Movement on Debt and Development who is also the vice-president of the Freedom from Debt Coalition-Philippines, has thoroughly discussed the concept of illegitimate debts.

The concept of legitimacy is a broad concept that touches on the principles of human rights and sustainable human development, justice and fairness, accountability and responsibility, sovereignty of people’s and nations, democratic rights and processes.

Loans which violate these principles are deemed to be illegitimate – or unacceptable. This violation occurs in the elements necessary in the acquiring of the debt and its impact, which includes, illegitimate processes, illegitimate terms and contractual obligations, illegitimate purposes and illegitimate use of the funds, illegitimate origins, illegitimate impact of debt servicing and illegitimate practice of using debt, debt relief, and access to credit as leverage for imposing conditionalities.

So much of the word “illegitimate” but numerous projects fall under this concept and category like the Social Studies textbooks and teachers’ manuals for public elementary and high schools, the Austrian Medical waste Projects, the North Luzon Railways Project, the Small Coconut Farms Project and the Power Sector Restructuring Program. (To be continued)

(Comments to tao.kolumnista@gmail.com)

Author: Ted Aldwin Ong
Source:http://www.sunstar.com.ph/static/ilo/2007/09/08/oped/ted.aldwin.ong.misreadings.html

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