Foreign loan will further bury the nation into the quagmire of debt and poverty

The last thing the Filipino people need right now is to pay-off more debts in the future.

This was Samahang Operasyong Sagip’s (SOS) reaction to reports that the Philippine government plans on incurring new loans from the World Bank (WB) and Asian Development Bank (ADB) amounting to US$1 billion.  The two financial institution giants appropriated US$500 million each for the rehabilitation and reconstruction of Typhoon Yolanda (Haiyan) affected areas.

SOS is a disaster management group made up of different health NGOs and advocates.

Latest government estimates say that a successful reconstruction effort in the typhoon’s aftermath can amount to P250 billion (US$5.8 million).

Rosalinda C. Tablang, SOS president, noted that while additional infusion of budget may sound encouraging to some, she reminded the public that what these banks are giving are loans and not grants.  “Loans are meant to be paid. And, when a government decides to borrow from lenders such as WB and ADB, it’s the people who will pay later on,” Tablang said.

She further commented that the storm surge and foreign loan have one thing in common – both are catastrophically fatal to the people as this means that Filipinos, including the victims of Typhoon Yolanda will be further burdened in paying the new calamity loan.  The Philippine’s foreign debt has reached $60.3 billion at the end of 2012.

SOS also said that the ADB and WB are at the “height of their insensitivity and greed for taking advantage of the recent disaster to rake in more profit through loan interest.”  Tablang commented that loans are always with conditionality, “paying off the principal amount plus the interest will mean larger cuts in the national budget for the coming years.”  This will translate to smaller allotments for basic social services such as health, education, housing, agricultural subsidy and wage increase among others, she argued.

Instead of loans, SOS asserted that the government “should use foreign grants, local donations, and specific allotments from the national budget to rehabilitate the regions devastated by Yolanda.”

As of this writing, the Foreign Aid and Transparency Hub (FAiTH) website marked a total of PhP4,604,299,695.10 or US$104,968,300 of foreign aid from various international agencies.

On top of these, the government should “increase the national calamity fund in the next year’s appropriation.”  Calamity fund for this year was meagerly allotted PhP7.5 billion or a measly .75% of the PhP2.006 trillion 2013 national budget.

Tablang said that the Aquino government should have at least shown a little degree of independence and self reliance.

Instead of entertaining loans from international financial institutions should decisively allocate significant budget for post-Yolanda rehabilitation efforts.  Billions of people’s money that are being stashed away to corruption should be spent wisely to help millions of families that were rendered homeless and economically devastated by Typhoon Yolanda.

“Should it sincerely wish to help the people, the Aquino administration can create rehabilitation funds without having to be enslaved by foreign loans that have strings attached to it.  If Aquino pushes through with the loans from IMF-WB, he makes it all too obvious, again, that foreign domination through economic control is unforgiving even in the most trying times,” she ended.##