De Venecia seeks expanded debt relief plan for have-nots

Speaker Jose de Venecia will propose an expanded debt-relief strategy without debt repudiation to aid debt-saddled borrower nations before top leaders and statesmen from 80 Asian political parties — both ruling and opposition — this week.

De Venecia will make his pitch before the third International Conference of Asian Political Parties in Beijing when the Communist Party of China hosts the biennial conference.

"This proposal is not about debt repudiation, it is for working out an expanded debt-relief strategy," said De Venecia, who launched the biennial conference in Manila in 2000 to organize the region’s political parties to catalyze change amid mass poverty.

In a related development, Camarines Sur Rep. Rolando Andaya Jr., chairman of the House appropriations committee, warned yesterday that the country is much deeper in debt than officially reported owing to "contingent liabilities" amounting to over P3 trillion.

Andaya said the budget deficit does not present the true financial health of the nation, since the national government must take into consideration its exposure to the growing contingent liabilities.

De Venecia said the proposal has gained urgency for the Philippines and other Third World countries as borrower-nations face exploding internal and external debt and the beginnings of a fiscal crisis amid the fluctuating world prices of crude oil.

"Whatever these nations face — a fiscal crisis or massive and ballooning debt and the pursuit of an effective anti-poverty program — everything revolves around debt relief and the need for debt reduction between creditor and debtor nations," De Venecia said.

He said he also raised the need for such a strategy at last week’s Legislative-Executive Development Advisory Council (LEDAC) meeting. According to him, President Arroyo directed her economic team to consolidate the proposal and present it to creditor nations.

Interest payments for the country’s external debt will eat up one third of the proposed P907.6 billion 2005 national budget presented to Congress by Malacañang.

At the Beijing summit, which the President will address during her state visit to China, De Venecia is also expected to call on Asia’s leaders of parliament to adopt a common strategy using their resources to push agricultural modernization forward "since Asian poverty is largely rural poverty."

Quoting an Asian Development Bank study, he said 60 percent of the world’s poverty is concentrated in Asia and over 1.2 billion of its people subsist on two dollars a day despite recent economic advances.

In the Philippines, he said, over 33 percent of the population live below the poverty line "in almost subhuman conditions" earning just one dollar a day.

China’s top communist party leaders are expected at the conference, where a Beijing Declaration is to be drafted at its conclusion similar to the historic communiqués produced by the two previous conferences in Manila 2004 and in Bangkok 2002.

De Venecia earlier proposed a United Nations-organized summit to work out a debt-relief strategy during a recent roundtable discussion on the Millennium Development Goals organized by the UN among Asia-Pacific nations.

He said such a summit should be organized by the world’s industrialized nations or the G-8, but their leaders are saddled with domestic issues, an electoral campaign in the case of the United States, and the fight against organized terrorism.

"With the G-8 countries preoccupied with other things, we are seeking the intervention of the UN in organizing this global summit," he said.

For his part, Andaya said contingent liabilities are generally obligations of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs) — not of the national government per se, though they are acquired though sovereign guarantees, performance guarantees, and the like.

"As a consequence, Juan de la Cruz ends up paying for it," Andaya said. "The latest being this year’s assumption of P36 billion in interest payments of NAPOCOR’s (National Power Corp.) debts by the national government."

He said the additional debt-servicing brought about these liabilities, which is not part of the current year’s program of expenditure, could trigger a higher year-end deficit than the projected P197 billion.

As of 2003, total public sector debt stands at P5.85 trillion of which P3.18 trillion is national government debt with the balance of P2.67 trillion representing only part of contingent liabilities, he said.