National Government Debt end-Sept 2011 Source: Bureau of Treasury, Statistical Data Analysis Division

Using US$ 1 = PhP 43.85 US$

(billion)

PhP (trillion)

NG Outstanding Debt 111.083 4.871

Domestic Debt 63.421 2.781

By

Inst

rum

ents

Treasury Bills 7.526 0.330

Treasury Bonds/Notes 55.690 2.442

Loans 0.205 0.009

Others 0.000 0.000

Foreign Debt 47.881 2.090

By

Cre

dit

ors

Multilateral 7.684 0.337

Bilateral 10.861 0.476

Commercial 1.001 0.044

Foreign Denominated Securities

28.335 1.242

NG Contingent Liabilities 12.543 0.550

Domestic Debt 2.281 0.100

Foreign Debt 10.239 0.449

Note: Breakdown of totals may not sum up due to rounding of digits. The total national government debt must take into account the contingent liabilities, so it comprises both the outstanding and the contingent debt.

DEBT SNAPSHOT Freedom from Debt Coalition (FDC)

http://www.fdc.ph

The Philippine debt problem is not yet over, as some people would want us to believe. Let us view some statistics on the debt situation.

National Government Debt per Filipino (using end-Sept 2011 NG Debt and Commission on Population 2011 projection)

P 50,737.72

Debt Servicing per day (using data on Interest and Principal payments of 2012)

P 2.153 billion

Public Sector Debt as % of GDP (using public sector debt from DoF and GDP from NSCB as of end-2009)

64.65%

Source: Various Government Sources

Debt Payments and Under-spending. Almost all throughout post-EDSA era, 1986-1995 and 1999-2012, total debt service exceeded spending for both economic services and social services. Supposed additional funds for economic services to spur growth and for investment in the country’s human capital in the form of social services are instead used for debt payment, some of which for questionable loans.

Debt service for interest payments alone for 1986-2012 and for 2001-2012 averaged around 23.47% and 22.04%, respectively, of the total national government (NG) budget. Compare this to the meager education-to-NG budget average of 15.03% and 2.52%, and health-to-NG budget average of 2.52% and 1.88% for the same time spans.

Proposed Government Spending for 2012 Source: Department of Budget and Management Proposed Budget for 2012

in billion

pesos % of total

expenditure*

Debt Service 785.955 29.80%

Interest Payments 357.090 13.44%

Principal Amortization 428.865 16.35%

Education, Culture and Manpower Development

271.493 12.47%

Health 47.951 2.37%

Natural Resources and the Environment

13.921 0.90%

Agriculture and Agrarian Reform 93.312 5.00%

Social Security, Welfare and Employment

121.498 4.21%

Housing and Community Development

21.260 0.58%

Defense 102.079 4.58%

NOTE: Breakdown of totals may not sum up due to rounding of digits.

http://www.treasury.gov.ph/statdata/monthly/mo_debtindicator.pdfhttp://www.fdc.ph/

FACT: In 2008, Congress suspended interest payments for loans “challenged as fraudulent, wasteful and/or useless”. Section XLVII of House Bill 2454 or the General Appropriations Bill (GAB) for F.Y. 2008, the version submitted by the Bicameral Conference Committee, unilaterally suspended interest payments for 11 debt cases, pending investigation and loan renegotiation and/or condonation. Unfortunately, then President Gloria Macapagal-Arroyo decided to veto the Special provision, citing the automatic appropriations law. While two of the original eleven loans were already fully paid for, some P 8.16 billion of the 2012 budget is earmarked for payments the remaining nine identified illegitimate debts and a new illegitimate debt. These are: a. Austrian Medical Waste Project, funded Bank Austria Aktiengesellschaft

b. Social Expenditure Management Program 2 (SEMP2), funded by the

International Bank for Reconstruction and Development (IBRD)

c. Secondary Education Development and Improvement Project (SEDIP),

funded by Japan Bank for International Cooperation (JBIC) and the Asian

Development Bank (ADB)

d. Philippine Merchant Marine Academy (PMMA) Modernization Project,

funded by Kreditanstalt fuer Wiederaufbau (KfW) of Germany

e. Telepono sa Barangay (TSB) Project, funded by Export Development

Corporation (EDC) of Canada, Credit Comm'l de France (CC DE FRANCE)

f. Power Sector Restructuring Program (PSRP), funded by JBIC and ADB

g. Power Sector Development Program (PSDP), funded by JBIC

h. Angat Water Supply Optimization Project (AWSOP), funded by JBIC

i. Procurement of Search and Rescue Vessel from Tenix Defense Pty Ltd.,

funded by Export Finance and Insurance Corporation (EFIC) of Australia

j. Pampanga Delta Development Project, funded by JBIC

k. GMA Ports Projects (Modular Roll on-Roll off (RoRo) Ports), funded by

Banque Nationale de Paris (BNP) Paribas S.A.

This amount would have built more than 12,500 additional classrooms, procured 190 million new textbooks, or fed almost 700 thousand families (of five, for one year). Under the new administration of President Benigno Aquino III, with his recent moves to investigate, suspend and renegotiate questionable loan contracts, we hope justice would finally be exacted for the Filipino people.

OUR CALLS: 1. In the immediate, Hold in Escrow Debt Service Payments for

Questionable Loans and Contracts, Pending Investigation, and Re-

negotiation and/or Condonation. Debts found to be illegitimate

(fraudulent, behest, onerous) must be re-negotiated or repudiated,

with appropriate sanctions to be applied against erring parties,

whether government or private entities.

2. Create a Congressional Debt Audit Commission, which will regularly

a. Investigate all public sector debts and contingent liabilities; and,

b. Review and rationalize all laws pertaining and/or concerning public debt,

borrowings, payments and contingent liabilities with the end view of

restoring the Congressional power of the purse, and promoting transparency

and accountability.

3. And through Congress, Repeal the Automatic Appropriations on

Debt Servicing, contained in the Sec. 31 (B) of Presidential Decree

1177 in Sec. 26 (B), Book 6 of the Revised Admin Code of 1987.

Total External Debt end-Sept 2011 Source: Bangko Sentral ng Pilipinas (BSP), Key Statistical Indicators

Using US$ 1 = PhP 43.85 US$

(billion) PhP

(trillion)

RP External Debt 62.424 2.737

General Government 37.337 1.637

Monetary Authorities 1.488 0.065

Banks 8.192 0.359

Other Sectors 14.002 0.614

Direct Investment: Intercompany 1.412 0.062

Outstanding Public Sector Debt end-2009 Source: Department of Finance, Outstanding Public Sector Debt.

Using US$ 1 = PhP 43.8503 US$

(million) PhP

(trillion)

Consolidated Public Sector Debt 129.896 5.696

Consolidated Non-financial Public Sector Debt (includes GOCCs like NPC, PNOC, MWSS)

106.316 4.662

Financial Public Corporations (BSP and 3 GFIs – DBP, LBP, TIDCORP)

50.262 2.204

Minus: Intrasector-debt holdings 26.682 1.170

NOTE: Breakdown of totals may not sum up due to rounding of digits. The consolidated public sector comprises the general government sector, non-financial public corporations, and financial public corporations, after elimination of intra-debt holdings among these sectors.

Freedom from Debt Coalition #11 Matimpiin Street, Barangay Pinyahan, Quezon City, Philippines 1100 http://www.fdc.ph, mail@fdc.ph http://www.twitter.com/fdcphil http://www.flickr.com/photos/freedomfromdebt/

+63 (02) 924-6399 (telefax) +63 (02) 921-1985

ANG PAGGUGOL NG MATUWID AY PAGGUGOL NG MALAYA!

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