Disturbed by a thread where some good and respected friends are somehow engaging in intellectual masturbation on whether the Philippines was in default in 1983. The entire point of the relevant discussion is whether and to what extent the Chinese loans contain potential risk of seizure of our assets, in case we’re unable to pay. WE WERE UNABLE TO PAY CREDITORS IN 1983. And we economists and lawyers dance around what to call that event — either as a technical or a de facto default (since we couldn’t pay), or as some now claim, a non default since the creditors didn’t press for their pound of flesh (and they allowed for a debt rescheduling). Does that cop-out somehow make us feel better about the original point? DO CHINESE LOANS CONTAIN POTENTIAL RISK OF SEIZURE OF OUR ASSETS, IN CASE WE’RE UNABLE TO PAY? DO YOU SERIOUSLY THINK THIS CREDITOR WILL ALLOW US NOT TO PAY, OR ALLOW RESCHEDULING (LIKE IN 1983)? Sabi ng lolo ko, ang hirap gisingin ng nagtutulug-tulugan.
Ronald U. Mendoza
Dean, Ateneo School of Government