Leftist politicians have, in turn, renewed calls for Manila to renege on some of those debts incurred during the Marcos era after Mrs. Arroyo asked Congress this week to pass the proposed P1.05-trillion national budget for 2006.
But the government, which allocates nearly a third of its national budget to servicing interest payments alone, was adamant that all debt must be honored.
"It is the responsibility of an honorable borrower to pay his debtors," Press Secretary Ignacio Bunye said in a statement. "We must pay our past and present obligations. Otherwise, we will face severe economic sanctions that will only ruin the Philippine economy."
The government debt reached P3.87 trillion in April, including $32.14 billion owed to foreign lenders. The buildup began in the latter half of Marcos’ rule, which ended with his ouster in a popular revolt in 1986.
The finance department warned the government is likely to miss its target of an extra P15 billion this year from higher taxes on tobacco and alcohol products, following weak first-half revenues from cigarettes.
In another development, international auction firm Christie’s proposed a two-part auction of the sequestered jewelry of former First Lady Imelda Marcos.
Christie’s Europe managing director Harco Van Den Oever, based in Amsterdam, confirmed this in a telephone interview with media.
He was in Manila yesterday to meet with Philippine officials regarding the auction of jewelry sequestered by the government after the fall of Marcos. Van Den Oever met with Customs Commissioner Alex Arevalo, Finance Undersecretary Gabriel Singson Jr., Finance Undersecretary Noel Bonoan and Presidential Commission on Good Government (PCGG) Commissioners Ricardo Abcede and Nicasio Conti.
Singson is also the chairman of the Privatization Council.
Also present at the meeting with Van Den Oever were Christie’s Manila representative lawyer Felicia Rabago and two deputy collectors of the Bureau of Customs who had seized Mrs. Marcos’ jewelry in 1986, PCGG spokesman Nick Suarez said in a press conference at the PCGG office in Pasig City.
The meeting took place at 10:30 a.m. at the Department of Finance (DOF) office in Manila. During this meeting, the government’s representatives formed a committee composed of Singson, Arevalo, Abcede and Bonoan to handle the matter. They also formed a technical working committee under them to handle the auction of the sequestered jewelry.
Suarez said Van Den Oever presented Christie’s proposal, which is to hold two auctions in Geneva, Switzerland — one in November this year and another in May next year.
"We are doing a two-part process for this," Van Den Oever said. "One in November and one in May because these are peak seasons. We have a strong market with lots of expertise and we are confident that we will be able to work hand in hand with your government."
He said these months are also the best time to auction off the sequestered jewelry because this is traditionally when jewelers converge at auction houses, though he said the final strategy would be up to the Philippine government — particularly steps it would take to prevent the jewels from being resold or otherwise returned to the possession of Mrs. Marcos
"It’s really up to the government," Van Den Oever said. "I have read (stories) in the newspapers about it.
He refused to comment on who the prospective buyers for the jewelry might be, how much the pieces might fetch at auction, how much of a commission Christie’s will make from the auction or when the exact auction dates would be.
Suarez, however, said that, as far as he knows, the first auction date has been set for Nov. 16, while no date has been set yet for the May auction.
So far, three worldwide auction firms have expressed interest in Mrs. Marcos’ sequestered jewelry: Christie’s, Sotheby’s and Bonham’s, he added.
Bonham’s and Sotheby’s representatives will also meet with officials of the PCGG, DOF and BOC on the matter, Suarez said.
After the three auction houses’ presentations have been made, each will submit sealed bids from which the government will select one auction house to conduct the bidding on the sequestered jewelry.
A document given by the PCGG to the press said Christie’s secured the position of world leader in jewelry auctions since 1994 and has held that top slot for 11 years. Christie’s has been in business since 1784.
In spring this year, Christie’s achieved a market share of 65 percent compared to their principal competitor, with a dominant stake of 71 percent in the United States, 65 percent in Europe and 58 percent in Asia.
Suarez said the biggest sale Christie’s had reported was of a piece called the "Jade B" necklace, which went for $9.4 million in Hong Kong.
While Suarez said the PCGG is unwilling to make an estimate of the worth of the sequestered jewels to be auctioned, he cited reports pegging the value of the jewelry collection kept in the Bangko Sentral ng Pilipinas (BSP) vault at $10 million. — Sandy Araneta, AFP