Fight Duterte’s pandemic borrowing binge that will aggravate people’s plight
[UPDATED] The debt-addict Duterte regime is exploiting the Covid-19 pandemic to obtain onerous foreign loans under the guise of stimulating the economy and providing emergency relief. In just three months, the regime has already accumulated a total of $5.5 billion (P275 billion) in foreign loans primarily from imperialist lenders. These loans are bound to further aggravate the Filipino people’s plight as they will be made to shoulder payments in the form of new and higher taxes.
The most recent borrowing is the $750-million (P37.5-billion) loan package co-financed by the China-dominated Asian Infrastructure Investment Bank and the Japan-dominated Asian Development Bank (ADB). The other loans were previously made under bilateral contracts with the ADB ($1.7 billion or P85 billion) and the US-controlled World Bank ($700 million or P35 billion). The regime is also set to borrow money through the issuance of government bonds ($2.35 billion or P117.5 billion).
It is utterly contemptuous for the regime to bury the people in mountains of foreign debt, while taxes for big corporations are being slashed, and trillions of funds continue to be squandered in the purchase of helicopters and war matériel, counterinsurgency, debt amortization and rampant corruption in its Covid-19 response programs.
These loans will increase the outstanding debt of the Philippines from P8.477 trillion in March 2020 to at least P8.752 trillion, excluding billions in interest payments. This means, every Filipino is saddled with approximately P79,945 of debt should the aforementioned loans be fully secured. This is higher by 27% than the P58,064 per capita debt in July 2016. Thus, in less than four years, the debt burden on each Filipino ballooned by nearly P22,000 which mostly has gone to fund anomalous infrastructure projects, lining up the pockets of military officers, funding drug killings, Duterte’s billion in confidential funds, and other anomalies.*
While Duterte is providing “stimulus packages” to ensure the profits of big corporations, the Filipino toiling masses are made to suffer from low wages and higher taxes. Amid the pandemic and economic crisis, it even sanctioned companies to implement wage cuts. To Duterte’s World Bank-trained economic managers, recovering from the crisis is never about ensuring the people’s livelihood and standards of living.
Quite the contrary, in fact. Last month, Duterte issued an executive order which levied a 10% tax increase on imported crude oil and petroleum products. Its adverse impact is now increasingly being felt by the people amid the pandemic as prices of oil, food products and other basic commodities have started to shoot up these past few weeks. This burden is heavier for the poor majority who pay proportionally more out of their incomes for the same goods than those from higher-income groups.
The Filipino majority are set to suffer even more hardships from these onerous loans and neoliberal reforms. They are bound to lose a significant portion of their already meager incomes due to higher consumption taxes which will be used to pay Duterte’s debts.
It is incumbent on the Filipino people to collectively raise their voices and fight these neoliberal policy offensives under the pretext of the Covid-19 response and denounce corruption in overpriced government purchases and bribery in infrastructure projects.
They must demand that money go to the pockets of the people in order to stimulate economic demand and domestic production. They must demand the suspension of the TRAIN Law, removal of Duterte’s oil tax and seek a rise in wages.
They must demand the Duterte regime to stop accumulating more debt and fleecing the poor with taxes, and instead raise money through means other than oppressing the people. These include among others the realigning of funds from the costly counterinsurgency campaign (for the so-called “AFP modernization program”), suspending or canceling debt payments, as well as from the unaudited confidential and intelligence funds of Malacañang and other agencies, and imposing direct taxes on wealth and property of the country’s top billionaires.
* This statement was updated on June 4 updated to reflect DOF’s recent National Government Outstanding Debt Report, specifically the amounts in the fourth paragraph.