Lawmaker bucks debt cap

MANILA, Philippines - A Liberal Party congressman urged President Aquino to reject the borrowing cap the Senate has inserted in the proposed P1.8-trillion 2012 national budget.

Eastern Samar Rep. Ben Evardone said the provision limiting borrowings to 60 percent of gross domestic production “will severely limit the tools available to the President in the management of the economy.”

“The borrowing cap is anti-growth as it would severely handicap the President’s growth policies. In most parts of the world, brutal and misplaced austerity – not runaway debt and inflation – is the reason for economic slowdown,” he said.

Evardone said even in debt-burdened countries of Europe, the clamor is for fiscal and monetary intervention, not more austerity and inaction from central bankers.

“While the borrowing cap was well-intentioned, we should be more focused on boosting economic growth than be terrified by fears of phantom inflation and debt,” he said.

“I must emphasize that there is nothing bad in borrowing provided that the proceeds are used judiciously for social services and infrastructure. The government must also have an exit plan on this regime of borrowing,” he stressed.

He noted that the administration has been receiving flak for its alleged failure to spend on time what Congress has appropriated in this year’s budget, resulting in an economic slowdown.

It was Sen. Joker Arroyo who proposed the debt cap provision, which was carried in the bicameral conference committee report on the final version of the proposed 2012 budget.

The Senate and the House of Representatives approved the final version of the budget on Tuesday.

President Aquino is scheduled to sign the spending measure on Dec. 15.