German openness to debt write-off confirmed

MANILA, Philippines - Economic Planning Secretary Ralph Recto has confirmed the offer of the German government to condone or write off part of the debt the country owes Germany.

“Yes, NEDA (National Economic and Development Authority) negotiated with German government regarding debt to MDG/health swap,” he said in a text message sent to The STAR over the weekend.

MDG stands for the United Nations’ millennium development goals, which aim to drastically reduce world poverty by 2015.

Recto heads NEDA, to which the German embassy communicated its government’s offer to write off 25 million euros (more than P1.6 billion) in Philippine debt.

Pangasinan Rep. Jose de Venecia Jr. has revealed the offer, saying it was made on condition that an equivalent amount in government funds be spent for campaigns against AIDS or acquired immune deficiency syndrome, malaria and tuberculosis.

The former House speaker said Spain and Italy have made similar offers, though no specific amount of debt and programs or projects have been mentioned.

Recto said there were no debt swaps yet with Spain and Italy.

“However, the Spanish government has given us grants on climate change adaptation and water for waterless communities,” he said.

He said the German offer “is consistent with our advocacy of debt swaps and debt-to-equity conversion.”

De Venecia has asked Health Secretary Francisco Duque to coordinate with Recto in the implementation of programs identified by the German government.

He said the German gesture was in response to his incessant call for rich nations to help poor countries by way of debt swap or a debt-equity conversion.

“Finally, after years of trying, we had a breakthrough,” he said.

De Venecia launched his campaign for debt conversion in 2005 when he was still Speaker. That year, President Arroyo spoke before the United Nations in New York and endorsed his proposal. The two were still allies then. – Jess Diaz