Social Watch
Philippines (SWP) said that the 2010
budget deficit target of P233.4 billion
will require over P660 billion new
borrowings.
Former National
Treasurer and SWP co-convenor Leonor
Magtolis Briones said that government
plans to borrow almost thrice the amount
of the deficit target for next year. Of
the P660 billion new borrowings, P185
billion will come from foreign sources
while P475 billion will be sourced
domestically.
“Government is
borrowing much more than what is
required to fund the gap in the budget
to pay principal amortization on prior
years’ debts,” Briones explained.
Briones pointed
out that P405 billion, or two-thirds, of
these borrowings will go to principal
amortization. This, she added, belies
the claim in the Budget Message that
significant progress has been made on
strengthening debt management over the
past five years.
The concern of SWP,
according to Briones, is the impact of
these borrowings on financing critical
social development not only next year
but in succeeding years as well. She
explained that debt interest payment
corners a big chunk of public resources,
leaving little room for government to
fund programs necessary to attain the
Millennium Development Goals (MDGs) by
2015.
Briones, currently
a professor of public administration at
the University of the Philippines, also
expressed apprehension on deficit
targets for 2010. It is based on a
revenue target of P1.336 trillion.
“Assuming revenues
will grow by as much as 7.8 % next year
may be too much. It could very well lay
the groundwork for either higher deficit
or cuts in spending for productive
expenditures,” Briones concluded.
