Philippine government and people drowning in debt
It is estimated that by the end of 2004, the reactionary government�s overall debt will equal if not surpass the total value of the local economy�an indicator of continued economic collapse and corruption in the reactionary government. The ever-growing debt has resulted in the grave deprivation of basic necessities for the Filipino people and the imposition of an ever-growing burden on their shoulders.
In February, the Philippine government�s overall external and domestic debt had come to P4.13 trillion. The figure already represents 95% of the overall value of local production in the country from February 2003 to February 2004 of P4.32 trillion. By the end of 2004, total government indebtedness is expected to equal the overall value of the local economy.
If we add the P1 trillion owed by local governments and government corporations as well as government-guaranteed private sector debts, the Philippines� total public sector debt would amount to P5.5 trillion or 125% of what the economy is worth.
Philippine public debt continues to rise without any corresponding economic growth. Compared to February last year, the country�s overall public debt swelled by 17.5% (or over P600 million). Meanwhile, according to government statistics, local production in 2003 grew by only 4.5% (or P33.64 billion).
| The reactionary government has done nothing to resolve the hemorrhage in the financial system but to borrow even more to pay for previous debts |
Aside from the debts of the Philippine public sector, external debts of the private sector now amount to over $30 billion. The total external debt of the Philippines� private and public sectors combined comes to over $57 billion (equivalent to P3.2 trillion).
This financial scarcity is continually worsened by corruption and huge shortfalls in tax collections, the outright plunder and theft perpetrated by bureaucrats, gargantuan military expenditures and other antipeople, inutile and showcase programs and mispriorities. Further damage is wrought by imperialists and their local bureaucrat-comprador cohorts who plunder the country.
Consequently, the budget deficit that keeps growing year after year is irresolvable. The 2003 budget deficit of P199.9 billion is bigger by 32.86% compared to the P132.2 billion budget deficit of 1999. If we include the deficits incurred by local governments and state corporations, the government�s deficit already amounted to P244.6 billion a year ago.
To avoid overshooting the targeted P199 billion budget deficit for 2004, the government and public sector debt must be increased.
The reactionary government has done nothing to resolve the hemorrhage in the financial system but to borrow even more to pay for previous debts and defray current necessary expenses, and to adopt �austerity measures� by cutting back on basic services, especially for the poor.
Mounting interest payments and other debt service further worsen the problem. Because the money for debt service itself is borrowed, this further condemns the government and the people to drown in a sea of debt. An economy already suffering from a dearth of capital and production is being made to pass through the wringer even more.
The government has allocated 31.2% of the national budget for debt service in 2004�up from 18% in 1999. In the last four years, the amount earmarked for debt service has grown by 97.5%, even as the government relentlessly skimps on spending for basic social services.
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