The Philippine Debt Audit Campaign

1
The Philippine Debt Audit Campaign

• A Renewed Call to the 14th Congress and the
  Filipino People
• Presented by
• Rebecca L. Malay
• Treasurer, Freedom from Debt Coalition

2
The Debt Audit

• Congressional Debt Audit
• Where we are
• Moving forward issues considerations
• Citizens Debt Audit Commission
• Where we are
• General Concept
• Refinement in structure
• Proposed members of the Commission

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Is the debt problem over?
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Record Breaker
5
Is the debt problem over?
National Government Debt as of end-May 2007 (in
trillion pesos)
NG Outstanding Debt NG Outstanding Debt 3.819
Domestic Debt (by instruments) 2.148
Treasury Bills 0.588
Treasury Bonds/Notes 1.538
Loans 0.022
Others 0
Foreign Debt (by creditors, using 1P46.35) 1.671
Multilateral 0.251
Bilateral 0.378
Commercial 0.035
Foreign Denominated Securities 1.006

NG Contingent Liabilities NG Contingent Liabilities 0.530
Domestic Debt 0.072
Foreign Debt 0.458
Source Bureau of Treasury, SDAD Note Breakdown
of totals may not sum up due to rounding of digits
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Who pays?
7
Who suffers?
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Who suffers?

• Social expenditures received the brunt of
  expenditure cuts.
• Most evident during the time of Arroyo
• The gap between education expenditure and debt
  service grew by 52.06 in 2002, the highest in
  recent history
• Health and Social Security has not been a
  priority for the longest time compared to debt
  servicing

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Education Spending

• Average national spending for education by
  administration show that based on 2000 prices,
  the amount spent per pupil fell during Arroyos
  time
• Marcos (1981-85) Php 3 027
• Aquino (1986-92) Php 4 478
• Ramos (1993-95) Php 4 959
• Estrada (1999-01) Php 5 830
• Arroyo (2001-04) Php 5 467
• former Budget Secretary Benjamin Diokno, Real
  State of the Nation, 20 July 2007

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Health Spending

• Combined (NG and LGU) per capita health spending
  show that
• Marcos (1981-85) spent Php 240
• Aquino (1986-92) Php 278
• Ramos (1993-98) Php 321
• Estrada (1999-00) Php 360
• Arroyo (2001-04) Php 303
• former Budget Secretary Benjamin Diokno, Real
  State of the Nation, 20 July 2007

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Congressional Debt Audit

• The call for a Congressional Debt Audit, calls
  for a comprehensive investigation of all public
  sector debts and contingent liabilities.
• Last Congress, the House of Representatives
  swiftly passed the Debt Audit Resolution, but the
  Senate failed to take it up.

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Congressional Debt Audit

• 13th Congress Review of engagement

Positive Negative
? Unanimous approval of Passage House Joint Resolution No. 1 in Sept 2004 through the efforts of Lagman, Zialcita, progressive minority solons ? Discussion of Senate version blocked in the Committee of Finance headed by Sen. Villar
? Developed stronger support from several minority senators Pimentel, Madrigal, Lacson through other engagements ? Sen. Biazon not keen on fighting it out opted to develop an alternative bill creating a Debt Management Office
? Linked up for support with key staff of LP Drilon wing ? Sen. Enrile apparently unhappy about Biazons eventual authorship of the Senate version of the resolution
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Congressional Debt Audit

• 14th Congress Opportunities Challenges

OPPORTUNITIES CHALLENGES
? Lagmans continued commitment to pursue the debt audit other allies also committed ? Other issues such as charter change may put the debt audit agenda in the sidelines
? Senate dominated by opposition key allies in the HOR now in the Senate (Escudero, A. Cayetano), Trillanes ? The Senate President opposes Debt Audit Resolution
? Administration legislators dominates the Lower House
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Congressional Debt Audit

• How to move forward issues concerns
• Joint resolution vs Committee level audit
• Role of Rep. Lagman he has the capacity to once
  again push for the passage in the Lower House,
  but the dynamics between him and the Senate
  should be assessed
• Authorship of Biazon of the Senate version
  possible author is Sen. Pimentel
• How to handle Sen. Enrile?
• How else to maximize the favorable composition of
  the Senate?

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Citizens Debt Audit

• Where we are
• Convened 36 individuals and political bloc
  representatives as convenors of the Citizens debt
  Audit in 2004
• Met three times in 2005 difficulty in convening
  in 2006 as a result of the political crisis
• FDCs work since 2006 up to the present allowed
  it to consolidate sectors (YAD), and expand
  support for the debt audit initiative (Budget
  Consortium, ODA Watch, GCAP, LnM, other anti-GMA,
  faith-based, etc.)

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Citizens Debt Audit Commission

• General Concept
• 1. Critical examination of the Philippine public
  debt based on
• Data and existing studies by resource persons and
  organizations
• Studies prepared by working groups and technical
  teams to be organized by the Citizens Debt Audit
  Commission
• Testimonies and inputs from affected communities,
  sectors and peoples organizations

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Citizens Debt Audit Commission

• Mechanics of the study
• The review and examination process will follow an
  outline of the themes/topics. The presentations
  and discussions will be aimed at establishing the
  over-all picture (data, trends, etc.) and
  answering general and specific questions
  addressing the issues and problems related to the
  themes/topics.
• Studies, data and testimonies will be presented
  to the Commissioners and to the general public in
  Public Hearings. These sessions will devote
  sufficient time for questions, clarifications and
  open discussion.
• The Commissioners may also have smaller
  discussion-meetings with resource persons,
  witnesses, working groups and technical teams.

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Citizens Debt Audit Commission

• 2. Preparation and release of reports summarizing
  the findings of the Citizens Debt Audit and
  formulation of recommendations and options based
  on the findings. Thematic reports with
  corresponding recommendations will be issued
  periodically as theme of the review is completed.
  A comprehensive over-all report with
  recommendations will be issued at the end of the
  process.

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Citizens Debt Audit Commission

• Mechanics of the reports and recommendations
• The draft report and recommendations for each
  theme will be prepared by assigned commissioners
  together with the working group(s), resource
  persons and technical team concerned.
• The draft report will be presented to all the
  commissioners in Public Forums to which the
  general public may be invited. The findings and
  recommendations will be openly debated in the
  Forums
• The commissioners will finalize the
  report/recommendations and submit it to
  appropriate government entities, which may be
  done with peoples participation (i.e. with
  accompanying mobilization). A summary will be
  presented to the media in press conferences

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Citizens Debt Audit Commission

• Themes and Topics
• 1. Overview of the Current Public Debt Situation
• 2. Overview of the Historical Development of the
  Philippine Debt Problem Including
• Global context
• Periods of Crisis, Policies implemented, Results
• History of Renegotiations and Debt Relief Schemes
• Critical Issues that Emerged
• 3. Borrowings Laws, Policies, Regulations,
  Trends and Issues
• 4. Debt Payments - Laws, Policies, Regulations,
  Trends and Issues
• 5. National Government Debt Overview, Trends
  and Issues
• 6. NG External Debt BNPP (lessons)
• 7. NG External Debt Project and Program Loans
  outcome and impact of the projects, terms and
  conditionalities

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Citizens Debt Audit Commission

• 8. NG External Debt Loan Conditionalities Debt
  as Leverage for Adjustment Programs Relations
  with Multilateral Financial Institutions
• 9. Private Loans and Liabilities Assumed by the
  National Government Behest Loans Brady
  Securitization Deal
• 10. Interest Rates Trends and Issues
• 11. NG External Debt Bonds - Trends and Issues
• 12. Government-Owned and Controlled Corporations
  (GOCCs) and Government Financial Institutions
  (GFIs) Debts
• NAPOCOR debts, etc
• 13. Build-Operate-Transfer (BOT) Projects Debts
  and Liabilities
• 14. NG Debt Domestic Debt
• 15. Old Central Bank and Bangko Central
• Other Topics for Background
• 1. Debt Relief, Debt Reduction Instruments and
  Options
• 2. Lessons and Experiences from Other Countries

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Citizens Debt Audit Commission

• Structure of the Commission
• Members of the Commission (not to exceed 20
  individuals with established credibility
  expertise)
• Organizing and presiding over the process
• Taking the lead in the review, examination and
  preparations of reports and recommendations
• Ensuring peoples participation in the audit
  process
• Ensuring that the process is open and transparent
  manner to the general public
• Finalizing the reports and recommendations

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Citizens Debt Audit Commission

• Structure (contn)
• Technical Committee
• composed of consultants and technical experts
• Thematic Committees
• composed of peoples organizations, NGOs and
  individuals to focus on putting together studies
  on a particular theme or specific topic for the
  audit process, to be submitted to the Citizens
  Debt Audit commission.
• will also work with assigned commissioner/s in
  the preparations of the report and
  recommendations, which will eventually be
  presented and discussed in public forums.
• Secretariat - events organizing, public
  information and media research and data
  base-building administration and finance (start
  with two staff)

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• Freedom from Debt Coalition (FDC) Philippines
• http//www.freedomfromdebtcoalition.org
• mail_at_freedomfromdebtcoalition.org
• 63(02)9246399 (Tele-fax), 63(02)9211985
• Thank you.