Wider public consultation requested on public debt management
By Kyle Aristophere T. Atienza, Journalist
Civil society organizations (CSOs) must have a place at the table in determining how to deal with the national debt, after being largely excluded from discussions about the record levels of debt the current government has taken on, a group of reflection. .
The government has tended to exclude the general public from discussions about Ffunding, leaving them uninformed of the costs of foreign-funded projects, according to Sonny A. Africa, executive director of the Ibon Foundation think tank.
“Governments have for too long presented economic policy-making as the domain of experts and Ifnance in particular as its rarestFied kingdom,” he said in a Messenger chat. “The result is that the general public is excluded from vital decisions that affect them, their livelihoods and their economic well-being.”
Failure to engage the public on the national debt and inform them of the consequences eFeffectively excludes them from governance, Mr. Africa said.
“CSOs have long proven their ability to serve as organized channels of the broader public interest, independent of vested political and economic interests,” he said. “Even the mere presence of civil society in key decision-making bodies can go a long way to bringing people’s views into the process and improving transparency.”
President Rodrigo R. Duterte will leave behind a record debt of 12.76 trillion pesos when he resigns on June 30. Outstanding debt rose 16.2 percent from a year earlier, according to preliminary data from the Treasury Office.
“The public should be involved in decisions about the national debt for the simple reason that it is the public who pays the national debt through their taxes and whatever the government earns using public assets and resources,” Mr. Africa.
Sri Lanka has been rocked by weeks of protests after its government defaulted on multi-million foreign debt payments, pushing its economy to the brink of collapse.
Sri Lanka’s economic crisis has been attributed to the government’s handling of the national debt, allegedly accompanied by corruption.
Sri Lanka’s economic crisis is a consequence of its government’s failure to ensure transparency and public participation in the management of the national debt and the public debt. Iffunding, said Rene E. Ofreneo, president of the Freedom from Debt Coalition.
In an email, he called for “debt transparency – transparency in government borrowing and debt service plans, transparency on the rationale for borrowing and its purposes, transparency in the selection of creditor institutions, transparency on the conditionalities and the cost/conditions of the loans.”
Mr. Ofreneo noted that when the government approached the Asian Development Bank (AfDB) in 2020 for a budget support loan of $1.5 billion, the bank and the Ministry of Finance (DoF) asserted that the Philippines’ debt scenario was “sustainable”. and should not exceed the 60% threshold of the debt-to-GDP ratio.
“But that was breached in 2021 and we are now heading towards the mid-60%, with serious economic implications,” he said.
“We collectively hope that President-elect Ferdinand R. Marcos, Jr. and DoF Secretary-designate Benjamin E. Diokno will be open to frank and sustained dialogue on debt and economic issues affelection of the population within the framework of the government and civil society organizations Iffind the best solutions to our economic diseases.
Mr Ofreneo said the 1987 Constitution requires that information on foreign loans obtained or guaranteed by the government be made available to the public.
“The essence of such a provision means not only full disclosure, but also advanced information sharing and consultation with the broadest segments of the public,” he said.
Mr. Ofreneo, an academic, noted that the Philippines’ foreign debt under the leadership of Mr. Marcos’ late father, Ferdinand E. Marcos, Sr., increased dramatically to $20 billion in 1980 from $2 billion in 1972, the year of martial law. was declared.
“A number of people were then alarmed by the debt. But the technocrats serving under the Marcos dictatorship said there was nothing to worry about because the economy was growing and growth can pay the debt,” Ofreneo said separately by phone. “People were unaware of the growing external debt at that time and look where we are now.”
He said public financial management involving various sectors is required for democratic governance.
Terry L. Ridon, a former lawmaker and public investment expert, said the public should not concede the nation’s public debt management to technocrats “because our current limited fiscal space has a direct impact on the continuation of existing social programs. for poor Filipinos a new government.
“CSOs and grassroots organizations should actively engage with policymakers in the executive and legislative branches to ensure that the main agenda of government remains poverty reduction and job creation amid the pandemic. which continues,” he said in the Messenger chat.
This active engagement is essential at every stage of the budget process to monitor appropriations that do not focus on a social development agenda “such as expanding funding to confidential and intelligence funds, and infrastructure projects that have made the subject of various controversies,” Mr. Ridon said. said.
“It’s important because a peso given for unnecessary spending is a peso lost for social programs, such as conditional cash assistance and free education.”
Although there are provisions on transparency and accountability in the general finance law of 2022, there is currently no law guaranteeing that popular organizations are involved in debt management, said Zyza Nadine Suzara, director Executive of the Institute for Leadership, Empowerment, and Democracy (I-Lead).
“That may be an area that can be addressed by freedom of information legislation,” she said in a Messenger chat.
Marcos said further stimulus would be among his priority bills for the next Congress, although potential revenue sources are still under consideration.
Public finance experts asked the Marcos team to clarify whether this plan would involve more foreign borrowing.
The members of the 19e Congress will take office on July 25, when Mr. Marcos delivers his first State of the Nation address.