Historic first: 20 gov't loans worth P7.6B up for audit
MANILA, Philippines – With the signing of the 2017 national budget, a congressional oversight committee will start auditing 20 government loans with debt service amounting to P7.6 billion, the debt watchdog Freedom from Debt Coalition said on Friday, December 23.
The audit was made possible by President Rodrigo Duterte, who mandated it in a special provision of Republic Act 10924, or the 2017 General Appropriations Act, which he signed on Thursday, December 22.
The Congressional Oversight Committee on Official Development Assistance will hold the audit and investigation.
“We congratulate the senators, particularly Senator Risa Hontiveros who relentlessly pursued the inclusion of a debt audit provision in the 2017 budget, Finance Committee Chair Senator Loren Legarda who supported the amendment, and Senate President Koko Pimentel who also co-introduced a separate resolution for a wider examination of foreign loans contracted in the last 15 years,” said Eduardo Tadem, FDC president, in a statement.
In a separate statement, Hontiveros said: "This is truly a historic first. With this provision, we commit to diligently scrutinize the country’s debts if they are indeed in accordance with the principles on promoting responsible sovereign lending and borrowing by the United Nations Conference on Trade and Development (UNCTAD), and repudiate the illegitimate part of our overall debt."
The FDC said this 2017 audit came after almost a decade since the first debt audit provision in the national budget was vetoed by then President Gloria Macapagal-Arroyo.
The FDC had earlier challenged the 20 foreign obligations as “illegitimate for being fraudulent, wasteful, useless, or environmentally and socially destructive.”
Many of these loans were from the Asian Development Bank, the World Bank and the Japan Bank for International Cooperation.
The borrowed funds, used for large infrastructure projects, were tainted with corruption, bloated and violated legal procedures, FDC added.
“These are just 20 of the 481 outstanding regular foreign obligations of the national government, all of which should also undergo thoroughgoing audit and examination. But the presently mandated audit is an important first step towards a critical exhumation of this huge burden that has deprived the country of meeting its obligations on social protection and economic development for the people,” Tadem said.
Tadem called on Congress to ensure a transparent and extensive audit that should include the public.
Outstanding Philippine external debt stood at $77.7 billion as of end-June 2016, up by $81 million or 0.1% from its end-March 2016 level of $77.6 billion.
Obligations to foreign banks and other financial institutions continued to have the largest share (32.6 %) of outstanding debt, followed by official sources multilateral and bilateral creditors such as development banks at 31.7%.
FDC earlier reported that P3.78 billion in the 2016 national government budget went to interest and principal payments in connection with a number of questionable loan-funded projects. These include the Power Sector Development Program, Sixth Road (Tullahan), Pampanga Development Flood Control, Bohol Irrigation II, and Angat Water Supply Optimization. – Rappler.com