Debt relief to free up P 125 B for Eastern Visayas rehab

Nov. 19, 2013

by TYRONE A. VELEZ
Davao Today

DAVAO CITY– A partylist lawmaker said a debt relief is much needed to free up around P125-billion from the national budget that can be used for the rehabilitation of victims of Typhoon Yolanda in Eastern Visayas.

Carlos Zarate of Bayan Muna said debt relief, or the writing off of debts from international credit banks, can free government funds for rehabilitation.

The Bangko Sentral ng Pilipinas (BSP) reported in September that the country’s debt declined by 5.2 percent or at $58 billion as of June this year due “largely as a result of net loan repayments … and negative foreign exchange revaluation.”

With the country’s automatic debt payment law, the government automatically earmarks debt payments in the annual budget.

The World Bank announced it is earmarking USD 500-million in loans for rehabilitation efforts of the country. But Zarate said government should ask for debt relief so that efforts would be poured for rehabilitating some 57 provinces hit by Typhoon Yolanda in the soonest possible time.

“We ask foreign and local banks to write off the interest payment of P333.9 billion for the year and to declare a moratorium on the principal payments. The international community should understand that we need all the funds we have to help our countrymen rise up as soon as possible and we hope that other countries would support our call,” said the Mindanao-born solon.

“Aside from the rehabilitation of roads, bridges, schools, hospitals and other infrastructure this fund must also be used for housing and livelihood projects for the comprehensive effort to help our countrymen,” he also added.

Zarate raised this proposal as the Senate made proposals to source calamity assistance fund from the miscellaneous personal benefits fund (MPBF) of government employees.

“The miscellaneous personal benefits fund (MPBF) though a lump sum is not a good fund source because it will hit government employees, many of them are victims as well,” he said.

This proposal came from Senate President Franklin Drilon to fund his proposed P 15-billion fund called Calamity Assistance and Rehabilitation Effort (CARE).

Zarate said freeing funds from debt management fund would raise up to P85-B and international commitment fund worth P4.8-B.

He also said debts incurred from anomalous deals can be written off such as the NBN-ZTE deal.

“There should also be a review of the debts incurred from anomalous deals similar to the NBN-ZTE deal that was overpriced by US$ 200 Million.  Debts such as the Public Law 480 and our scheduled payment for the loan from the ADB for agrarian reform beneficiaries in the ARC II project both of which amounts to at least  P5.492 Billion could come under this category.”

He said freeing up the P 30 billion Risk Management Fund, which was scrutinized by Bayan Muna during the recent budget hearings, could generate as much as P 125 billion.

“We will now have a total of P125 Billion so far that would go a long way in the long term rehabilitation of areas affected by calamities including the victims of the Bohol earthquake and typhoon Pablo,” said the solon.

Zarate also asked people to keep an eye on the funds as this may become another form of pork barrel.

“The people must be vigilant though and we must ensure that the proposed rehabilitation fund should go straight to its intended purposes and solons would not have entitlement on these projects. The auditing for the fund should also be very strict,” said Zarate.

Senate Pro Tempore Ralph Recto also proposed a P55-B Rehabilitation and Reconstruction Fund to be taken from the administration’s risk management fund and debt management fund. Recto suggested utilizing the controversial Malampaya Fund and government’s share in the coconut levy fund for rebuilding efforts.

The government hoisted a webpage Foreign Aid Transparency Hub (FAITH) to monitor foreign aid it has received. On Tuesday, an amount of  P11.6-B (USD 271T) has been poured from 42 countries and four international agencies..

The United Nations called for a relief fund of P300 billion to rehabilitate Eastern Visayas, and some parts of Caraga and Southern Tagalog regions. (Tyrone A. Velez/davaotoday.com)

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  • Ric Atencia

    This is the sort of news that we want from our lawmakers, the scrutinizing of funds, suggesting ways to use these etc. Well done Bayan! Debt relief would be a hard try, but worth trying. There must be some very strict criteria by the lenders before a debt relief or rescinding could be granted. Perhaps this is an area for the Government or our lawmakers need to find out, and how we could ensure that succeeding loans being granted are fully protected to the max, i.e. that it is being used for intended purpose or objectives. With the many scams happening left and right, our governance although appeared to have improved but still long way to go, may not warrant the international lenders for relief since they could argue that we ask such relief because funds have been misused, but how avoid avoiding that? Do we have the solid mechanism for us to guarantee to our international lenders that we have change the way (esp. the Government) we use these borrowed funds? In future, we will ask the same relief because previous funds we borrowed were AGAIN misused? Where do we have to draw the line in the sand? But then again, it is worth trying, but of course, in my opinion, it all boils down to our capacity and capability and our honesty as a nation to use these funds wisely, appropriately, and for the intended purpose.

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