The Philippines is allocating P721.7 billion in debt service, with P340 billion going to the interest and P381 billion meant to pay for the principal amortization. This means an allocation of P1.98 billion per day which is equivalent to the building of 7,920 classrooms or 250 kilometers of roads per day.
This was the result of a study done by the Ateneo Macroeconomic Forum Model as presented by Dr. Cielito Habito, director of the Ateneo de Manila University Center for Economic Research and Development and former director-general of the National Economic and Development Authority, in a university forum on "The Millennium Development Goals and the National Debt" yesterday, at the Luce Auditorium of Silliman University.
"We are getting deeper in debt," Habito said, even as he credited the present administration with the improvement of its tax administration capability, including the expanded coverage of the value-added tax as well as the promotion of small and medium enterprises and development initiatives.
Habito added that while the country may have a strong peso, there are winners and losers. "The government is both a winner and a loser because the debt service bill declines, while the customs revenues drop, respectively," he said.
Nevertheless, despite this gloomy scenario, Habito said the Philippines is still blessed as a nation because it has rich natural resources, it has resilient people, and global trends provide rich opportunities at home and abroad.
"The Philippines will be the shining light of Asia and the world. Poverty need not be inevitable. No one is so poor as to have nothing to share; no one is so rich as to need nothing from another," he said.
Prof. Leonor Briones, professor of the National College of Public Administration and Governance of U.P. Diliman, former national treasurer and chairperson of the Silliman University Board of Trustees, said in the same forum that SU is a major player in the campaign for the eight Millennium Development Goals.
The MDG has 14 targets to be achieved in 2015 by 190 signatory countries of the United Nations, including the Philippines.
In an evaluation report submitted to the Social Watch Philippines, SU was cited as an outstanding example of academe as a local core energy in MDG advocacy.
"One-third of the financial resources of the national government go to debt servicing," Briones said as a consequence of the heavy borrowing done during martial law and other heavy burdens inherited by the present government. Briones also said the so-called illegitimate debts of the country have been legitimized as former President Cory Aquino reorganized these debts, converting them into bonds.
"We are now the ones paying for these bonds," Briones said, adding that a strong peso is not necessarily a strong economy.
The eight MDG goals are to eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria, and other diseases; ensure environmental sustainability; and, develop a global partnership for development.
