Palace defends national debt cap veto

MANILA, Philippines - Malacañang defended yesterday the national debt cap veto, saying it was meant to take advantage of the bullish market conditions and effectively manage the positive outlook of both domestic and foreign investors.

“We have a strong peso, we could pay our debt services right now and we could issue bonds in peso,” presidential spokesman Edwin Lacierda said in a press briefing.

Lacierda, together with House appropriations committee chairman Cavite Rep. Joseph Emilio Abaya, dismissed the claim of Sen. Joker Arroyo that the P1.645-trillion first financial blueprint of President Aquino was copied from the previous administration.

The Palace spokesman said Aquino vetoed the debt cap because of the bullish performance of the stock market and the outpouring of investment pledges from foreign investors.

“That’s why (this administration) believes that debt cap is not proper at this point. We believe that we would better serve and manage the economy if we have no debt cap at this time,” he said.

“The Aquino budget is a reform budget. There are clear provisions in the 2011 budget that exact transparency and accountability from all agencies, which were not seen in previous budgets,” Abaya, whose committee drafted the House version of next year’s outlay, said.

Lacierda recalled that when Senator Arroyo was the executive secretary of then President Corazon Aquino, debt cap was also an issue.

“This is an ongoing battle between the executive and legislative branch. Senator Arroyo was also executive secretary during the first Aquino administration. And that was also an issue then. He’s practically raising the same ghost against himself,” he said.

The debt cap was a hot issue since the term of former President Elpidio Quirino in the 1950s and former President Ferdinand Marcos, who scrapped it through an executive order during martial law.

Marcos said the government could better manage the economy if there was no debt cap.

Lacierda also brushed aside the criticism of House Minority Leader Edcel Lagman that Congress had effectively become a rubber stamp of the executive branch for adopting the budget proposal of the administration in full.

“I don’t know how Edcel Lagman could have said that considering that he was the most vocal and the most strident critic whenever we were appearing in the budget deliberations. He had actively participated. The fact that he was not able to get what he wanted, the fact that we were able to get the budget that we wanted, should not be an indication that we are worse than whoever he wanted to compare us with,” Lacierda said.

Lacierda said they prepared for their budget presentations and Congress agreed to the proposals so there should not be any accusation, especially coming from Lagman who was the most active participant in the budget deliberations.

He said it was also unfair to brand Congress as a lame duck because all processes were followed.

Abaya, on the other hand, said there are other differences between the 2011 budget and this year’s appropriations law, which embodies former President Gloria Macapagal-Arroyo’s last spending program.

“Most notable difference is the disappearance of CIs (congressional initiatives, the euphemism for budgetary insertions made by lawmakers) generated from debt service. All representatives and senators are aware of this. Clearly not copied from the budget of the previous administration,” he said.

Last week, Speaker Feliciano Belmonte Jr. took pride in signing the first budget the House has approved under his leadership.

“There are no insertions here, nothing like the P65 billion in insertions in the 2010 budget,” Belmonte told reporters, referring to the huge amount of debt payments which members of the previous Congress diverted to their pork barrel.

Of the P65 billion, then President Arroyo released P16.5 billion mostly to her congressmen-allies before the combined presidential-congressional-local elections last May 10.

Meanwhile, Social Welfare Secretary Corazon Soliman said the 2011 budget charts the Aquino administration’s anti-corruption drive and huge investments on social service. – Jess Diaz, Artemio Dumlao, Rainier Allan Ronda