RP achieves progress on debt relief proposal — JDV

The Philippines has achieved "significant progress" is pushing for a debt relief in the form of debt-for-equity in new projects in heavily indebted nations, Speaker Jose de Venecia reported yesterday.

He said he has received assurances from Paris Club president Jean-Pierre Jouyet and British treasury officials that they will consider the Philippine proposal.

"The Italian government of Prime Minister Silvio Berlusconi is giving the Philippine proposal favorable consideration. This could be a breakthrough since Italy is a member of G-8 — the world’s richest industrialized nations — which forms the core of the Paris Club," he said.

The debt-for-equity program seeks to convert 50 percent of the current debt service and/or principal amount into equities for the lending nations and institutions and invested in a series of wealth-creating projects.

He said in the case of the Philippines, under the country’s proposal, half of its staggering $4.5 billion foreign debt service, or $2.25 billion, could be made available for development projects such as reforestation, mass housing, hospitals and health care.

"Our debt relief idea program presents a workable idea, with a reasonable chance of success, to help poor nations lift their peoples from grinding poverty," he added.

A letter sent to De Venecia by the Italian Ambassador Umberto Colesanti said Berlusconi agreed with the Philippine proposal’s objectives to use debt conversion to fund the fight against poverty and pursue the United Nations Millennium Development Goals (MDGs).

"I have little doubt that our proposal has stirred interest and, even more significantly, triggered a process of evaluation to determine whether it is workable and how its mechanics would work out in specific development projects," he added.

De Venecia, together with a delegation of six, returned from a three-week European swing on June 30. Hours after arriving, he and his delegation proceeded to the House to vote on playing in public of the controversial "Gloriagate" tapes. He heard the recordings for the first time that day.

De Venecia left the country after attending the June 12 flag-raising ceremony, when the expected jueteng and Glorigate-related rallies did not materialize.

Two days before he and his group traveled to Europe, finance ministers of G-8 nations met in London and decided to write off $40 billion in debt owed by poor nations. The list did not include the Philippines.

Still, the delegation crisscrossed European capitals to plead for debt relief not only for the Philippines but for other poor and heavily indebted nations.

In his report yesterday, De Venecia said any form of debt relief should benefit at least two billion people in 100 poor nations in Asia, Africa and Latin America.

The program would free public funds for investment in debt-for-equity projects De Venecia has identified as reforestation, mass housing, hospitals and health care, schools and classrooms, irrigation and post-harvest facilities, clean water, eco-tourism, reclamation and mining.

The Speaker said the development projects would advance the President’s 10-point legacy program, the 12-point wealth-creation program he has authored, and keep the country on course toward attaining the MDGs and the government’s battle against poverty, ignorance and disease.

Without debt relief, the Philippines and other heavily indebted nations will achieve the MDGs only marginally, De Venecia said.

The Speaker had a series of meetings with top financial and political officials in Europe aside from his talks with Mr. Jouyet of the Paris Club.

Among them were the British Treasury’s Mark Bowman, head of its International Poverty Reduction, and Joseph Thornton of its International Poverty Reduction Team. Both were involved in helping package the British proposal to cancel billions of dollars in bad debt of 18 heavily indebted African nations.

De Venecia also conferred with leaders of the French Senate and the head of the French National Assembly, Jean-Louis Debre; the head of the Vienna-based OPEC Fund, Suleiman Jasir al-Herbish; the Austrian Parliament president, Dr. Andreas Kohl; and Ukranian President Viktor Yushchenko, among others.