On 2008 NG budget, illegitimate debt, pork barrel, and repeal of automatic debt service provision

PRESS STATEMENT
Freedom from Debt Coalition
11 Matimpiin St., Brgy. Pinyahan, Quezon City 1100
Tel. No.: +632 9211985; Telefax: +632 9246399
Email: fdc_media@yahoo.com
Contact persons:
Lidy Nacpil, FDC Vice President, @ 0917-8800410
Bobby Diciembre, FDC media bureau, @ 0920-9059856

FOR IMMEDIATE RELEASE
28 January 2008

FDC Statement on the 2008 National Government Budget, Illegitimate Debt Payments, Pork Barrel, and Repeal the Automatic Appropriations Law

As the 14th House of Representatives resumes it session today to ratify the proposed 2008 National Government Budget, the Freedom from Debt Coalition (FDC) welcomes reports that the final version of the Budget bill retains the special provision suspending interest payments on “debts which are challenged as fraudulent, wasteful and/or useless…”  This is a critical and historical provision that represents a major step forward in our fight against illegitimate debt.

However, the Coalition expresses its extreme disappointment with the Bicameral Conference on the 2008 Budget for its lack of transparency for not relaeasing the details of the Budget bill before it is presented for ratification. Does this indicate an intent to avoid scrutiny of possible controversial pork barrel allocations before the Congress passes the bill?

The Freedom from Debt Coalition has consistently called for the end of the practice of using public funds for political patronage. And one of the laws that makes pork barrel insertions possible is the Automatic Appropriations Law.

Congress is not allowed to increase the total amount of the Budget as proposed by the Executive. We have been told that it had been a practice in the past that the amount for debt payments proposed by the Executive are reduced by Congress and is used by some legislators as an opportunity or means to increase their pork barrel allocations, knowing very well that no matter the amount indicated in the Budget the debt service that is due will still be fully paid because of the Automatic Appropriations Law.

It is a tragic and cruel irony that a good thing (reduction in allocations for debt payments) can be used to make a bad thing (increase in pork barrel funds) possible. And all because of the Automatic Appropriations Law for debt service.

The Automatic Appropriations Law for debt service threatens even the historic inclusion in the 2008 Budget bill of the special provision suspending payments to anomalous debts.

We have no illusions about the 2008 Budget bill. Even without being privy to the final details, based on the previous versions and the deliberation we can foresee that once again the Budget will still be weighed down with wrong priorities and will still be highly vulnerable to patronage politics because of congressional pork barrel allocations. It provides for an even bigger Presidential pork barrel due to the colossal amounts of unprogrammed funds under the discretion of the President.

While theoretically the power of the purse resides with the Congress, the principal responsibility for the design of the budget lies with the President who practically dictates the program allocations. Further the budget is also held hostage by international and domestic lenders because of the automatic appropriations for debt service. Allocations to much needed social spending like education and health while have been increased are still under the shadow of debt payments which continue to take the larger slice of the fiscal pie.

Clearly basic political reforms must be effected in order to ensure a National Government Budget that is truly responsive to the needs and interest of the poor and exploited, who comprise the majority of Filipinos.

An immediate challenge is the REPEAL of the AUTOMATIC APPROPRIATIONS LAW FOR DEBT SERVICE. ###