Solons urge moratorium on debt payments with foreign creditors

A House leader urged the country’s finance and economic managers yesterday to seek a moratorium on debt payments with foreign creditors, including international lending institutions.

"We won’t task them to condone our debts, just give us a break until our economy is back on its feet," said Assistant Majority Leader Rodolfo Albano III (NPC, Isabela).

He said the country’s creditors, particularly the International Monetary Fund, the World Bank and the Asian Development Bank, would consider a debt moratorium proposal since they cannot force an economically-troubled nation to pay up if it cannot afford to.

"We have not reached that stage yet, but it would be wise for us to seek some relief so that the money that would otherwise go to debt payments and is therefore not productive could be used to prop up the economy," he said.

He pointed out that a big part of the annual budget is eaten up by debt service.

This year, P145 billion, or more than 20 percent of the proposed P715-billion national budget, is appropriated for loan payments, said Albano.

He said an equal amount constitutes internal revenue allotments for local government units, while salaries would amount to about P240 billion, leaving less than P200 billion as the productive portion of the 2001 outlay.

"Clearly, there is little room for us to grow, unless our creditors give us some relief," he stressed.

He added that if its economic condition worsens further, "we would be forced to take unilateral measures to save the economy."

Albano did not elaborate, but he was obviously referring to a unilateral suspension of loan payments similar to what the Aquino administration did shortly after taking over from the Marcos regime in 1986.

The Isabela solon also urged revenue collection agencies to improve their performance this year even with the deteriorating economic situation.

He said the government has had to borrow money from foreign and local sources because collection agencies have consistently failed to meet their targets.

Such failure has resulted in soaring annual budget deficits which amounted to P112 billion last year and to about P120 billion this year, he added. – Jess Diaz