Whenever government officials are entrusted with public funds, what would stop them from malversation, defalcation, and plunder? Well, the president, in his first SONA, was talking about fiscal discipline. In fact one of his most important legislative agendum is precisely the institutionalization of systems, procedures, and protocols that shall guide government expenditures, control diversions, and technical malversations, and safeguard the public coffers from scoundrels, rascals, and scalawags.
Look what is happening to Sri Lanka, and soon to follow is Bangladesh and Pakistan. Sri Lanka's economic woes are the consequences of imprudence by their public officials, their lack of due diligence in protecting their public funds, and their extravagance in the allocation, use, and distribution of the country's money. Colombo cannot pay its foreign debt to the tune of $51 billion to foreign lenders, including India, China, and Japan. As a result, the whole nation has no foreign exchange with which to buy fuel, food, and medicines. India has already extended to Sri Lanka no less than $2.8 billion but the leaders of this small country of 22 million people have squandered public funds.
Bangladesh is currently suffering from serious financial troubles, albeit its leaders are trying their best to deny them. These problems are exacerbated by high inflation rates, price instability, massive unemployment due to COVID-19-driven devastation of its micro, small, and medium scale enterprises. Its finance minister is appealing to the International Monetary Fund to grant the country some sort of bridge financing to tide over its economy until the economic horizons look better for that highly-populated country of 168.1 million people. Like the Philippines, Bangladesh is overpopulated and underdeveloped as an economy. Its rate of population growth is almost double its rate of economic development.
Pakistan is also suffering from a confluence of serious financial woes both in terms of internal difficulties and external challenges. Internally, the main problems are insufficient revenue generation and high fiscal deficits. Externally, they have huge foreign debts and the migrant workers' remittances have slowed down substantially. It has a high level of tax evasions and low level of domestic resource mobilization. Taxes in Pakistan comprise less than 10% of GDP. This is way below the standard percentage rate, which is 35% percent among OECD countries or the Organization for Economic Cooperation and Development. Pakistan suffers from a very shaky structural problem. And it's heavily indebted to China among other creditor countries.
The Philippines should watch out. It has ?13 trillion national debt. Gross financing of the government has already reached ?1 trillion for the first half of the year. From January to June 2022, the government's gross financing hit ?1.07 trillion. Domestic borrowings reached ?741.26 billion and foreign debts to ?329.33 billion. From January to June, ?457.79 billion worth of retail treasury bonds as well as ?535.38 fixed rate bonds were issued to raise funds from domestic sources. These are topped by external borrowings of ?46.85 billion as project loans, ?117.32 billion in global bonds, and ?28.55 billion in samurai bonds. Stripped of all these dizzying numerical figures, the simplest message we can tell the people is: The Philippines is in bad financial and economic shape. Ours is one of the worst performing economies in Asia.
Here in Spain, I imagine how our Spanish rulers, from 1565 to 1898, influenced our culture of profligacy and extravagance. Filipinos tend to spend double our revenues. We tend to borrow beyond our means to pay. We keep on acquiring liabilities rather than assets. We should have learned more from the Chinese and the Japanese. Our culture is one of recklessness and immoderation. We need to change our paradigm. And the president, being an Ilocano, should be the first one to model that behavior in his decisions involving public funds.