instead of chacha, revoke automatic appropriation for debt service!
my first reaction upon hearing of senate president enrile’s and house speaker belmonte’s joint call for charter change soon after the impeachment and ouster of the chief justice, of which they were prime movers, was to wonder, ano ito, quid-pro-quo? the president owes them for corona and this is what they want, okay, hope for, in exchange? it’s a relief, of course, that the prez was quick to reply that chacha is not a priority of his administration, kahit na i don’t agree with the it-aint-broke-so-why-fix-it rhetoric.
this time the arguments for deleting, changing, whatever, the nationalist, protective economic provisions are old and new. old is the one about attracting foreign investments that our economy direly needs daw. new is the one about giving the military a bigger budget than education, the better to build an armed force capable of driving away the chinese from west philippine sea territory.
re foreign investments, as usual some agree, some disagree: economist calixto chikiamco and senator joker arroyo agree; economist solita “winnie” monsod and columnist conrado de quiros disagree. re an improved military budget, however, i have yet to hear anyone agreeing. the palace via lacierda says there are already efforts to upgrade the capability of the military for a minimum defense position. senator trillanes prefers the more prudent alternative of a peacefully resolving our differences with china and reviving our relationship as economic partners. and senator miriam thinks charter change to boost military strength is “just wrong”:
“We just don’t have enough resources to be a world or even a regional military force… What we need is a more effective Coast Guard, not the Navy itself,” she said.
She added that she finds nothing wrong in the Constitutional provision requiring the government to allocate most of its annual budget to education.
“The hierarchy of priorities should begin with the mind. If we are clever, we can outclass the Chinese,” she said.
philstar columnist ana marie pamintuan also objects to a bigger budget for defense than for education.
The Constitution stipulates that the state “shall assign the highest budgetary priority to education…” Enrile thinks this should be subject to change depending on the nation’s needs.
Debt payments in fact have always eaten up the largest chunk of the annual national appropriation. Maybe Budget Secretary Butch Abad can devise a similar creative way of going around the constitutional provision to finance the achievement of the administration’s goal of minimum defense capability.
… As it is, education (and health, for that matter) are still pitifully lacking in funding. So if defense spending will be increased, it will have to be taken from other budgetary items.
indeed. it’s not as if education’s budget is anywhere close to enough. the dismal lack of classrooms and textbooks and toilets and running water for our public schools is public knowledge. so is the low low pay of our teachers — no wonder they opt to work as domestic help abroad as a matter of survival. so is the poor quality of public education hereabouts — k-12 won’t make a significant difference, promise! not without money for teacher and curriculum upgrades.
so really, it’s a major major puzzlement how the senate president can even think of making bawas from that pitifully inadequate budget just to make dagdag to the defense budget. yes, china is a problem. yes, we need billions, even just for minimum defense, much more for the wishlist of jetfighters, mini-submarines, well-armed frigates, corvette-size combat vessels and minesweepers. but changing the charter to take money away from education to fund any of that is simply daft, when we could, should, as pamintuan suggests, be looking instead at annual debt payments that eat up the biggest chunk of the budget.
pamintuan, however, is mistaken in thinking that the automatic appropriation for debt service is provided for in the constitution. read the freedom from debt coalition (FDC)”s Briefer on the Automatic Debt Servicing Provision
It was during the Martial Law in the Philippines that automatic appropriation for debt service was first codified, in Section 31(B) of Presidential Decree 1177 (Budget Reform Decree of 1977). In consonance with her “honor-all-debts” policy, Aquino signed into law the Administrative code of 1987, copying en toto Section 31(B) of PD1177 into Section 26(B) of the code. Section 31(B) of PD1177 also serves as its legal basis.
read this explanatory note to House Bill 1962 authored by kabataan partylist rep mong palatino proposing the repeal of the automatic appropriation for debt service:
Because the government willingly binds itself to a law enacted not through the legislature, but by the decree of a dictator during the dark days of Martial Law to automatically spend more than a third of its annual budget on debt service, its spending on social services, from education to health care has always been grossly insufficient …
so there. THAT deserves to be repealed, amended, undone. THAT should be the priority of congress, not charter change. i’m not saying let’s not pay our debts, i’m saying let’s pay in amounts we can afford. what the senate and the house of reps should be wanting to change is not the constitution but this odious marcos decree that cory copied in full, unconditionally, without reservation, and which the fernan supreme court upheld :(
here’s senator angara, who also wants the policy changed:
Angara, vice chairman of the Senate Finance Committee, said that debt servicing eats up a significant portion of the national budget, depriving the poor of their right to social services. He said that at least 40 percent of the country’s budget goes to servicing of interest payments and principal amortization of debts.
During the interpellation for Senate Bill No. 2857, “An Act Institutionalizing the Participation of Civil Society Organizations (CSOS) in the Preparation and Authorization Process of the Annual National Budget, Providing Effective Mechanisms Therefore, and for Other Purposes”, Angara stressed that the policy on automatic appropriations on debt service further encourages reckless borrowing and spending as it guarantees payment without legislative intervention and without going through a thorough screening.
“The power to realign the budget and savings and the automatic debt appropriations make for a deadly combination as it allows the manipulation of the National Budget. As long as these loopholes exist, the temptation will always be present. We must therefore revisit and propose amendments to the budget laws to ensure fiscal discipline,” he proposed.
so, really, when i read this in the news today:
Senate President Juan Ponce Enrile said he did not have in mind doing away completely with the 60-40 ratio favoring Filipino investors over foreigners.
“Just that we need to give ourselves the flexibility by authorizing Congress to change the ratio when there is a need for it. But (the idea is) always to protect the interest of the Filipino people in controlling the economy,” Enrile explained in a radio interview over dzBB radio Sunday.
… my reaction was, OMG, invoking the interest of the filipino people in controlling the economy! does he think we’re morons? if the interest of the people were truly the guiding principle of congress, matagal na dapat na-undo ‘yang automatic appropriation for debt service na ‘yan.
read walden bello’s In the shadow of debt: the sad but true tale behind a quarter century of stagnation that i blogged about in may 2008, when gloria’s congress was pushing for con-ass. i was against chacha then as i am against chacha now.
hindi charter change ang dapat nating pinag-uusapan. not at all. ang dapat nating pinag-uusapan ay ang pagbabago ng debt policy natin. we spend on the average half of the budget on bayad-utang and bayad-interes para lang makautang uli. ano ba yan. enough na please of the model debtor strategy that has only made a basket case of our economy.
and in the comment section, TonGuE-tWisTeD wondered,
Do these big lenders give the president of a country incentives or commissions for paying early? Gloria says we need to take advantage of the strong peso by retiring most of our debts earlier. Fishy, no?
and president aquino has been doing exactly the same thing, sabay pahiram ng one billion dollars sa IMF, sabay gloat that we are no longer a debtor country but a creditor na daw. LOL! read Govt debt hits P5.147 trillion and weep.