Villar’s ‘Fiscal Responsibility Bill’ aims to "instill fiscal discipline in the public sector by specifying principles of responsible financial management and promoting full transparency and accountability in government revenue, expenditure and borrowing programs."
According to Villar, president of the Nacionalista Party, "We all know that one of the major causes of our fiscal problem is the advances extended by the National Government to GOCCs and GFIs which cannot pay up their loans. These GOCCs loans contributed a great deal to our fiscal woes. Thus, we should still keep a tight watch on GOCC’s unrestrained expenses and debts."
Among the salient points of the ‘Fiscal Responsibility Bill’ are: Reducing the national debt to 60-65 percent the gross domestic product (GDP); setting fiscal targets for a three-year period based on an agreement between the executive and legislative branches of the government; repealing of all laws on automatic guarantees of the debts or losses of government-owned and controlled corporations (GOCCs); improve transparency and control measures; control mechanisms on government spending among others.
Under Villar’s bill, "All provisions of law, presidential decree or executive order requiring the State to guarantee payment, both of the principal and interest, of loans, bonds, debentures, collateral, notes or other forms of indebtedness as well as the fulfillment of any other obligation incurred by GOCCs are already repealed."
From 1997 to 2003, about P428.10 billion (21.3 percent) of the National Government debts are due to the assumed liabilities and lending to GOCCs. Furthermore, of the total consolidated public sector debts (CPSD), about 40-percent accrue to GOCC debts alone. In fact, about 20 percent of the total CPSD are debts of the National Power Corp. (Napocor).
"The government has been overshooting its lending limit. It should stop automatically guaranteeing GOCC or GFI loans. It is estimated that from 2004 to 2010, the government would assume about P611.7 billion of Napocor’s interest payments," Villar said.
The top GOCC borrowers, as of September 2004, are as follows: Napocor, P6.4 billion; National Irrigation Authority (NIA) for the Casecnan dam project, P2.5 billion; National Electrification Administration (NEA), P863 million; and Philippine National Railways (PNR), P464 million.