Rising budget,  deficit, and debt

Freedom from Debt Coalition (FDC) sponsored a very timely and relevant webinar on World Food Day last October 18 entitled “Rising Debt, Hunger and Anger: Ano Ang Tugon ng Sambayanan?”

The main speakers included Dr. Rene Ofreneo, president of FDC and professor emeritus of the University of the Philippines, Dr. Eduardo Tadem, convenor of the Program on Alternative Development, UP Center for Integrative and Development Studies, also a UP professor emeritus, and Ms. Flora Santos, president, Oriang Women’s Movement

Here are some initial important highlights of the webinar from the discussion of Dr. Rene Ofreneo on “Budget for prosperity: For whom? Assert people first policy in the budget process” and Dr. Eduardo Tadem, on “Some issues and problems in the Philippine debt”.

Dr. Ed Tadem reiterated that Philippine Debt (as of end of July 2023) totaled to ?14.2 trillion with 68.9% (?9.78 trillion) domestic debt and 31.3% (?4.44 trillion) external debt.

Total debt increased by 10.5% from July 2023 (total of ?12.887 trillion). As of August 2023, total Debt Service payment due is ?491 billion. Another very serious concern for Filipinos; percent of total debt to GDP stands at 61% (as of June 2023)!

Both speakers alerted all that “the entirety of debt repayments will account for 32.9% of the 2024 National Budget” which is unconstitutional because this is far bigger than the Education budget which according to Article 14, Section 5(5) of the 1987 Constitution shall be provided the highest priority in the national budget.

The higher 2024 budget of ?5.768 trillion is accompanied by rising revenue that will be imposed on the already-burdened ordinary Filipinos.

Dr. Ofreneo presented the following data from the Department of Budget and Management: “2024 national government Fiscal Program: Revenues: ?4.272 trillion (16.1% of the total GDP), Tax Revenues (the highest!) - ?4.073 trillion (15.3% of the total GDP), Non-Tax Revenues, Privatization, Disbursements: ?5.269 trillion, Current Operating Expenditures, Capital Outlays, Net Lending and Budget Deficit: ?1.356 trillion! Financing (a.k.a. Utang): ?2.460 trillion (gross), Amortization (less) - ?239.3 billion. Net Financing - ?2.220 trillion.”

Dr. Ofreneo calls on all Filipinos to closely examine the rising budget, deficit and debt and start demanding who benefits from these rising budget, deficit and debt taking place amidst widespread/deepening hunger/poverty, inequality (the Philippines has a 42.3% GINI coefficient), rising inflation, unstable food/resource supply, among other social-economic-political woes.

Filipinos are now more aware about the greedy grabbing and entitlement of officials for Confidential and Intelligence Funds.

Dr. Ofreneo asks Filipinos to examine questionable priorities in the budget like:

a.) Special purpose funds (?2,398,626,467,000) and contingent funds (?13,000,000,000) which may be “The largest, discretionary presidential “pork”.

b.) Why ?1.2 billion extraordinary expenses were awarded to the House/Senate when this is mandated only to - Department secretary/undersecretary/assistant secretary, head of bureau/organization with same rank,) head of department regional office/bureau regional office, metropolitan circuit judge and Shari’a court judge.

c.) Military budget - AFP’s Budget (?121,079,186,000), Philippine National Police (?195,737,552,000) and NTF-ELCAC at ?10.264 billion.

d.) Travel Funds - Total traveling expenses already breached to ?21,081,420,000 in the 2024 budget, over ?438 million (?438,567,000) compared to 2023. The Office of the President alone sought for ?1.408 billion funds.

e.) Infra projects with “possible pork for 2024” - Department of Public Works and Highways (DPWH) is second priority sector with ?822.2 billion even as the  “DPWH has been flagged during the budget deliberations with its questionable line items and redundant allocations from the previous year, estimated at around ?4.4 billion.”

Suggested People’s response: Involve the Filipinos in a people’s budgeting process, responsive to people’s needs amidst the multiple crises of debt, economy, climate, and push for Wealth Tax as a ‘Solidarity Surcharge’ of the richest Filipinos and to reduce wealth inequalities at present.