September 07, 2009
Social Watch Philippines (SWP) said that the 2010 budget deficit target of P233.4 billion will require over P660 billion new borrowings.
Former National Treasurer and SWP co-convenor Leonor Magtolis Briones said that government plans to borrow almost thrice the amount of the deficit target for next year. Of the P660 billion new borrowings, P185 billion will come from foreign sources while P475 billion will be sourced domestically.
“Government is borrowing much more than what is required to fund the gap in the budget to pay principal amortization on prior years’ debts,” Briones explained.
Briones pointed out that P405 billion, or two-thirds, of these borrowings will go to principal amortization. This, she added, belies the claim in the Budget Message that significant progress has been made on strengthening debt management over the past five years.
The concern of SWP, according to Briones, is the impact of these borrowings on financing critical social development not only next year but in succeeding years as well. She explained that debt interest payment corners a big chunk of public resources, leaving little room for government to fund programs necessary to attain the Millennium Development Goals (MDGs) by 2015.
Briones, currently a professor of public administration at the University of the Philippines, also expressed apprehension on deficit targets for 2010. It is based on a revenue target of P1.336 trillion.
“Assuming revenues will grow by as much as 7.8 % next year may be too much. It could very well lay the groundwork for either higher deficit or cuts in spending for productive expenditures,” Briones concluded.
Social Watch Philippines is part of the international Social Watch network which monitors and advocates financing for development and the Millennium Development Goals (MDGs). SWP spearheaded the Alternative Budget Initiative (ABI), a network of 60 non-government organizations advocating for adequate funding for education, agriculture, environment, health and monitoring financing for social development.
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