THE need for a bold and working Senate minority group cannot be overemphasized specially when the upper chamber takes up the national budget. While the government, specifically the Department of Budget and Management, proposes numerous expenditures, many of these cannot be funded by taxes and would depend on loans to be realized.
Senate minority leader Aquilino Pimentel III has urged government-owned and -controlled corporations (GOCCs) to rein in their borrowings as he lamented that 30 percent of the Marcos administration’s proposed P5.3-trillion budget for 2023 will be for debts.
Pimentel joins a number of businessmen, economists and academic leaders in pointing out that as of August, 2022, the government has incurred over P13 trillion in local and foreign borrowings.
‘Remember, we will have to work more just to meet payments for our dollar-denominated loans.’
The senator said that next year, the nation will have to pay P1 trillion to settle principal loans and another P582 billion for the interests on these loans.
“This means that we will have to work hard and even borrow more to come up with P1.6 trillion [for debt payments],” he said. These figures show how debt servicing is eating huge chunks of taxpayer money that should have been used for education, infrastructure, public health, and other basic services.
In the proposed 2023 national budget, the allotment for debt servicing is almost 19 percent higher than the approved budget of P1.3 trillion for loan payments this year. It is also equivalent to 6.85 percent of the country’s gross domestic product, Pimentel noted.
Aside from reminding them to go easy on borrowings, Senator Pimentel asked GOCCs, particularly the Power Sector Assets and Liabilities Management Corp. (PSALM) and the National Power Corp. (Napocor), to be transparent in presenting their corporate spending programs, including their borrowings. He also hit the propensity for extravagant spending by some GOCCs.
Those advocating for belt tightening both in the government and the private sector should make their voices heard especially now that the US Federal Reserve is hawkish and continues to increase interest rates purportedly to fight inflation in the United States. This move, however, resulted in a very strong US dollar and the devaluation of other currencies in Europe, Africa and Asia, including the Philippine peso.
Remember, we will have to work more just to meet payments for our dollar-denominated loans.
