A Bigger Problem
by: Shiela Coderis
Philippines’ total foreign debt can be so alarming knowing the fact that in consumed almost 75% of the Philippine Budget of last year’s GAA (General Appropriation Act.). As of now,
Philippines’ foreign debt amounted to $54.8 billion at the end – December, 4.44% lower from $57.4 billion year ago and by 1.37% from $55.6 billion at the end- September, which consist mostly of the public section accounts. (BSP, Bangko Sentral ng Pilipinas).
This foreign- dominated Philippine bonds brought by Philippine residents become more of domestic rather than a foreign debt. Public sector borrowings have matured in 20 years on average, compared with 11 years from the private sector’s borrowings which amounted to $37.9 billion while private sector borrowings amounted to $16.9 billion, of which about 1/5 were banks loans. It’s probably obvious that with these records, debt service in the Philippines really consumed the most part of the budget of the
Philippines. These debts actually are increasing as years pass by. We are continually acquiring debts but are failing to pay the principal debts instead were only paying for the interest that are also increasing yearly. So how can we possibly pay these debts if it’s getting higher and higher every year? How can we pay, if even those innocent babies, who are still in the wombs of their mothers, have already the burden of these foreign debts? I certainly believe that solving problems don’t necessarily mean that you must strike to it directly .Sometimes it is really much better that you fix first the factors that could actually eradicate the burden. To make that clearer, I still believe that we have to allocate the government’s funds to other sector bigger than the payment of these foreign debts. The funds that we can allocate to other services will actually make the status quo much better as it is. It’s like having a “domino effect” right?