"We now stand perilously at the brink of a fiscal quicksand as debt service as a percentage of the budget has ballooned to 27 percent from the more sustainable 17 percent in 1997," said Rep. Joey Salceda (Lakas, Albay).
Salceda said the growth in the loan payment portion of the budget is alarming since it means that more and more money is being set aside yearly for a purpose that contributes nothing to economic growth.
He said the situation is exacerbated when Malacañang seeks appropriations for activities that do not stimulate the economy but only earn "pogi" points for Palace officials from the military, the police and other sectors.
The former hotshot financial and stock market analyst traced the phenomenal growth of the debt service portion of the budget to a "rampaging" budget deficit that tripled from P50 billion in 1998 to P145 billion this year.
The growth in the deficit in turn is caused by the poor performance of revenue collecting agencies, principally the Bureau of Internal Revenue, whose collection target for this year has been brought down thrice from P447 billion to P388 billion.
Salceda said there were only four years since the post-martial law period when revenue collections exceeded government spending.
He said during the Ramos administration, from 1994 to 1997, the national government posted modest surpluses of P16 billion, P11 billion, P6 billion, and P2 billion.
He pointed out that starting next year, more money for loan payments will have to be set aside since the government will start paying for the P250 billion in loans of the National Power Corp. that Congress recently transferred to it with the passage of the Electricity Industry Reform Act.
Part of such transferred amount is owed to so-called independent power producers (IPPs), private firms contracted by the Ramos administration to build power plants at the height of the energy crisis under arrangements that guarantee them billions in income and profits. –Jess Diaz