MANILA,  September 10, 2004
By Marichu Villanueva - Malacañang expressed yesterday its willingness to cooperate with the Senate and open to public scrutiny records and documents detailing the status of Philippine foreign and domestic debts.

Presidential Spokesman Ignacio Bunye posed no objection to the Senate’s plans for a public hearing looking into the actual debt situation of the government, if only to persuade Filipinos to unite behind President Arroyo’s calls for sacrifice and help in averting a looming fiscal crisis.

"The records and documents regarding the debt are intact and open to public scrutiny," Bunye said in an official statement.

He acknowledged the validity of the Senate’s plan to open an inquiry, in aid of legislation, into the P5.4-trillion debt that has been blamed for the nation’s fiscal problems.

"We encourage the Senate to bring this to public view to ease speculations and at the same time inform and educate the public about the serious financial challenges we are facing," Bunye said.

He issued the statement in reaction to Sen. Manuel Villar Jr.’s announcement that he would initiate a public hearing as chairman of the Senate finance committee.

Villar said the combined audit-inquiry would cover which agencies incurred the obligations, who authorized and signed the loan agreements, where the money was spent, debts assumed by the national government and payment for interests and principals.

It will also touch on the possible criminal liability of officials involved in obtaining the loans or who misspent the money, he said.

"Averting the crisis through the joint efforts of the executive and legislature, and the support of the public, can start with a good consensus on the full extent of the problem," Bunye said.

However, he took exception to claims that of the country’s total debt, the Arroyo administration accounts for the large bulk of foreign loans and more than the combined borrowings of her two immediate predecessors in office.

Bunye, who is concurrent press secretary, said Mrs. Arroyo’s economic managers made a slide presentation in one of the meetings at the Palace, showing that the borrowings during the first three and a half years of her administration have not increased that much compared to that of two previous administrations.

During the ways and means committee hearing on the fiscal crisis last Tuesday, Sen. Ralph Recto, committee chairman, said the national government started borrowing heavily in February 2001. The Arroyo administration borrowed a total of P1.3 trillion in three years up to February this year.

Ousted President Joseph Estrada borrowed P700.7 billion; his predecessor, Fidel Ramos, tapped the market for P216 billion in loans, and President Corazon Aquino borrowed P639.5 billion.

The Recto committee found that of the P5.4-trillion national debt, P3.3 trillion represents government borrowings while the balance of P2.1 trillion accounts for the liabilities of state corporations.

But government-owned and controlled corporations really account for the larger portion of the national debt since of the 3.3-trillion national government debt, about P1 trillion represents liabilities of GOCCs that the government has assumed, he said.

The Recto committee also found out that these corporations were earning billions until 2001 when they started reporting huge losses and when they began to borrow heavily.

Senators want controls on the borrowing binge of GOCCs, most of which do not pass through Congress for their budget allocations. Only the National Power Corp., the National Electrification Administration and the Philippine National Oil Co. submit their budgets to the legislature.

Reported by: Sol Jose Vanzi

All rights reserved