70% OF 2006 BUDGET TO GO TO DEBT SERVICING
MANILA, September 20, 2005 (STAR) By Ted Torres - We owe, we owe — to debt our budget goes.
Of the total P1.053 trillion national budget for 2006, roughly 70 percent or P721.668 billion will go to debt servicing while only P331 billion will be allocated to the legislative and executive branches.
That means for every P1 raised for next year’s budget, the Filipino people, through the departments of the executive branch of government, will only get to use roughly 33 centavos. The remaining centavos will go to pay off foreign and local creditors.
Of the P721.668 billion for debt servicing, interest payments will reach P339.998 billion and another P381.67 billion will go to the amortization of debt principals, based on Bureau of Treasury (BT) data. In fact, the 2006 debt service will be at an all-time high, as will the total amount of the national budget.
This year, debt servicing reached P674.114 billion while in 2004, it hit P601.672 billion. Of the total debt interest payments of P339.998 billion, the national government accounted P339.817 billion and the balance are assumed liabilities of government-owned and -controlled corporations (GOCCs) or government financial institutions (GFIs).
These are the Philippine National Bank (PNB), the Development Bank of the Philippines (DBP), the National Power Corp. (Napocor), the Trade, Investment and Development Corp. (Tidcor), the National Development Corp. (NDC) and Philippine Airlines (PAL).
The debts of PNB and PAL were incurred when the government bank and flag carrier were still government owned. Tidcor is now known as the Philippine Export-Import Credit Agency or PhilEXIM.
The Napocor debt payments both interest and principal amortization include the controversial Philippine Nuclear Power Plant (PNPP) in Bataan. The mothballed nuclear power plant sits on a major fault line and has never been put into operation.
Assumed liabilities of GOCCs and GFIs amounted to only P181 million. Amortization of principal debts amounted to P381.67 billion of which the national government accounted for P376.54 billion while its assumed liabilities reached P5.13 billion. The same GOCCs and GFIs were being serviced.
Meanwhile, domestic creditors accounted for P489.091 billion of the total debt servicing while foreign creditors accounted for P232.577 billion.
Most of the foreign loans were drawn from multilateral agencies such as the Asian Development Bank, the Japan Bank for International Cooperation, Overseas Economic Cooperation Fund, the Organization of Petroleum Exporting Countries and the United States Agency for International Development.
Domestic debts are basically servicing for the government securities, bonds and notes it issued to raise short-term funds through medium- and long-term servicing. These include the Zero Coupon Peace Bonds, US dollar-linked peso notes, ERAP Bonds, retail treasury bonds, 20-year and 30-year bonds, and foreign currency RTBs.
Chief News Editor: Sol Jose Vanzi
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