Petition for Debt Moratorium and Repudiation, Reparations
- by: Freedom from Debt Coalition
- recipient: The Philippine Government and International Financial Institutions
Summary: In order to effectively address the economic and climate crises, we strongly urge the Philippine government 1) to implement a moratorium on the payments of foreign debts, 2) to seek reparations from developed countries' governments and international and regional financial institutions for their historical responsibility in plundering and extraction of developing countries's resources and minerals as well as for funding technologies and industries that exacerbated the climate crisis, and to 3) repudiate all odious and illegitimate loan agreements especially those that were incurred in the name of the environment.
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The recent catastrophes brought by Typhoons Ondoy (Ketsana) and Pepeng (Parma) to the Philippines have greatly damaged the country's infrastructure and food production. The Arroyo government initially estimated the cost to be P 4.6 billion with infrastructure losses reaching more than P1.5 billion while damage to agriculture amounted to P3.175 billion. On the other hand, independent rapid researches sourced from reports released by different government agencies estimated the cost of devastation could go as high as P 23 billion.
As a result, the demand for the government to create different financing mechanisms to mobilize needed resources to fund relief, rehabilitation and reconstruction initiatives has taken center stage.
However, government response was far from being outstanding or innovative. Instead of implementing bold measures with far-reaching results, the government relied on usual remedies such as new borrowings to finance the relief and rehabilitation efforts and the reconstruction of public structures. The P12-billion supplemental budget for the emergency relief and rehabilitation efforts and the P50-billion Reconstruction Bonds are examples of this.
We believe the government's response will only compound the current climate crisis as the financing mechanisms it is pursuing will be done at the expense of bloating the national government debt and our fiscal deficit, all of which shall be borne eventually by the people including the typhoon victims.
In fact, even before the country suffered from the recent typhoon calamities, it is already reeling from a deep and enduring fiscal crisis as a result of inflexible fiscal and debt policies which fused with the still unresolved global economic crisis. As a result, as of end-September, the government's budget deficit has already reached P237.5 billion, only P12.5 billion shy of the full-year ceiling of P250 billion. Worse, some economic experts say the deficit can go as high as P 300-350 billion.
True to form, the government's response to the country's fiscal and economic crisis is to incur new borrowings. According to the latest government data, state borrowings increased by 7.6% in the first nine months of the year as the government sought funds to finance the ballooning budget deficit. Government borrowings rose to P421.2 billion during January to September this year from P391.4 billion in the same months last year. Of the amount, P168.2 billion were foreign borrowings, representing a 227.9% increase from last year's P51.3 billion.
As such, the mishmashed economic and climate crises and the false solutions the government is pushing like new borrowings could probably herald a new debt crisis as well as epic state underspending on important social services like health and education.
Thus, in order to effectively address the economic and climate crises, we strongly urge the Philippine government to implement a moratorium on the payments of foreign debts. This is to free up much needed resources to fund measures to stimulate the economy, create new jobs and expand the fiscal space while simultaneously implementing strategic rehabilitation and reconstruction programs especially to areas which suffered the most from the typhoon calamities.
The moratorium should be until an official comprehensive investigation and audit of all public debt and contingent liabilities is completed by the Philippine Legislature while "unbendable" policies such as the Automatic Debt Servicing Provision of the Revised Administrative Code of 1987 which perpetuate our debt problem is overhauled.
Equally important, we strongly urge the Philippine government to seek reparations from developed countries' governments and international and regional financial institutions for their historical responsibility in changing the climate. Their plunder and extraction of developing countries' resources and minerals as well as their funding technologies and industries exacerbated the climate crisis and increased the vulnerability of developing countries to climate disasters.
Lastly, we demand the Philippine government and international and regional financial institutions to repudiate and/or cancel all odious and illegitimate loan agreements claimed from the Philippines especially those that were incurred in the name of the environment.
More than ever, the recent climate catastrophes as well as the grueling fiscal and economic crisis must become important if not crucial junctures for the Philippines as a nation and as a united people to renege from paying debts many of which are challenged as illegitimate.
Now is the time.
The recent catastrophes brought by Typhoons Ondoy (Ketsana) and Pepeng (Parma) to the Philippines have greatly damaged the country's infrastructure and food production. The Arroyo government initially estimated the cost to be P 4.6 billion with infrastructure losses reaching more than P1.5 billion while damage to agriculture amounted to P3.175 billion. On the other hand, independent rapid researches sourced from reports released by different government agencies estimated the cost of devastation could go as high as P 23 billion.
As a result, the demand for the government to create different financing mechanisms to mobilize needed resources to fund relief, rehabilitation and reconstruction initiatives has taken center stage.
However, government response was far from being outstanding or innovative. Instead of implementing bold measures with far-reaching results, the government relied on usual remedies such as new borrowings to finance the relief and rehabilitation efforts and the reconstruction of public structures. The P12-billion supplemental budget for the emergency relief and rehabilitation efforts and the P50-billion Reconstruction Bonds are examples of this.
We believe the government%u2019s response will only compound the current climate crisis as the financing mechanisms it is pursuing will be done at the expense of bloating the national government debt and our fiscal deficit, all of which shall be borne eventually by the people including the typhoon victims.
In fact, even before the country suffered from the recent typhoon calamities, it is already reeling from a deep and enduring fiscal crisis as a result of inflexible fiscal and debt policies which fused with the still unresolved global economic crisis. As a result, as of end-September, the government's budget deficit has already reached P237.5 billion, only P12.5 billion shy of the full-year ceiling of P250 billion. Worse, some economic experts say the deficit can go as high as P 300-350 billion.
True to form, the government's response to the country's fiscal and economic crisis is to incur new borrowings. According to the latest government data, state borrowings increased by 7.6% in the first nine months of the year as the government sought funds to finance the ballooning budget deficit. Government borrowings rose to P421.2 billion during January to September this year from P391.4 billion in the same months last year. Of the amount, P168.2 billion were foreign borrowings, representing a 227.9% increase from last year's P51.3 billion.
As such, the mishmashed economic and climate crises and the false solutions the government is pushing like new borrowings could probably herald a new debt crisis as well as epic state underspending on important social services like health and education.
Thus, in order to effectively address the economic and climate crises, we strongly urge the Philippine government to implement a moratorium on the payments of foreign debts. This is to free up much needed resources to fund measures to stimulate the economy, create new jobs and expand the fiscal space while simultaneously implementing strategic rehabilitation and reconstruction programs especially to areas which suffered the most from the typhoon calamities.
The moratorium should be until an official comprehensive investigation and audit of all public debt and contingent liabilities is completed by the Philippine Legislature while "unbendable" policies such as the Automatic Debt Servicing Provision of the Revised Administrative Code of 1987 which perpetuate our debt problem is overhauled.
Equally important, we strongly urge the Philippine government to seek reparation from developed countries' governments and international and regional financial institutions for their historical responsibility in changing the climate. Their plunder and extraction of developing countries' resources and minerals as well as their funding technologies and industries exacerbated the climate crisis and increased the vulnerability of developing countries to climate disasters.
Lastly, we demand the Philippine government and international and regional financial institutions to repudiate and/or cancel all odious and illegitimate loan agreements claimed from the Philippines especially those that were incurred in the name of the environment.
More than ever, the recent climate catastrophes as well as the grueling fiscal and economic crisis must become important if not crucial junctures for the Philippines as a nation and as a united people to renege from paying debts many of which are challenged as illegitimate.
Now is the time.
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