Senate committee on finance chairman Manuel Villar Jr. said that the Philippine government should continue to negotiate for debt relief using the unsustainable debt situation criterion.
Citing an HIPC report, Villar said that countries that face unsustainable debt situation even after full application of traditional debt relief mechanisms are still eligible for debt relief.
He pointed out that in order to qualify, countries must have a sustainable debt-to-export ratio.
The HIPC document indicated that a debt-to-export ratio of 150 percent is considered as financially sustainable debt servicing.
Villar pointed out that the Philippines is well above the 150 percent level at 171.8 percent.
Last month the G-8 cancelled $40-billion worth of debts of 18 poor, mainly African countries.
According to the G-8 report, HIPC would be considered for debt relief program if they meet targets for good governance and tackling corruption.
"So while G-8 used the HIPC classification as criteria for its debt relief program, they are still considering granting debt relief to more poor countries, especially those in unsustainable debt situations. Our country is definitely in such a situation," Villar said.
"Even decades ago, we were already told to seek debt relief.
We did not.
It should be time enough now to consider this option. We can invoke the unsustainable debt criteria for a possible debt relief. Our worsening debt situation is reason enough for us to grab all the opportunities out there to drastically reduce our country’s burgeoning debts," he added.
The Philippines also failed to qualify for a World Bank debt relief program for HIPCs as the country was considered a middle-income country with access to financial markets.
There are 27 countries that have already received significant levels of debt relief under the program and the World Bank has already committed about $13 billion in debt-service relief over the next two decades.
The HIPCs that qualified under the program are Benin, Bolivia, Burkina Faso, Ethopia, Ghana, Guyana, Madagascar, Mali, Maurtania, Mozambique, Nicaragua, Níger, Senegal, Tanzania, Uganda, Cameroon, Chad, Democratic Republic of Congo, The Gambia, Guinea, Guinea-Bissau, Honduras, Malawi, Rwanda, São Tomé Príncipe, Sierra Leone and Zambia.