Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts
Vol. IV, No. 31 September 5-11, 2004 Quezon City, Philippines
Debt: The NDFP View
Gloria Macapagal-Arroyo’s recent admission that the country is in a
fiscal crisis has caused the issue of automatically appropriating funds
for debt servicing to be increasingly being questioned. Bulatlat
interviewed NDFP chief negotiator Luis Jalandoni, who is now in the
country, on the debt problem and the solution advocated by the NDFP.
ALEXANDER MARTIN REMOLLINO
interviewed NDFP chief negotiator Luis Jalandoni, who is now in the
country, on the debt problem and the solution advocated by the NDFP. Below
are excerpts from the interview:
Eduardo Zialcita (who belongs to the administration Lakas-CMD) mentioned
at the recent launch of the Alliance of Concerned Citizens Opposed to
Unjust New Taxes (ACCOUNT) that the Philippines is now P3.35 trillion
($59.8 billion) deep in debt – meaning that every Filipino owes P41,000
($732.14). One of the solutions he proposes for the fiscal crisis is the
combination of debt repudiation and debt renegotiation. What can you say
about this position?
think that is a good position, because we all know that the foreign debt
is a long-standing problem of the Philippines and a sign of the
exploitation by foreign multinationals and foreign governments of the
much we pay, our debt just keeps growing and growing, and now we have
figures showing as much as 94 percent of revenues may be used to service
foreign debt: not just the interest earnings, but also the amortization of
the principal. Or, if we talk of the budget, 33 percent of the national
budget for next year is for interest earnings, and 35 percent off-budget
the foreign debt problem has to be solved by the Filipino people.
way the NDFP looks at it, there should be cancellation of parts of the
foreign debt that are clearly fraudulent and anti-people, like the loan
for the Bataan Nuclear Power Plant, for which we pay $2.1 billion and
$655,000 interest per day. Such debts should surely be cancelled.
is a possibility that some parts of the debt may be renegotiated, if these
have no use for the Filipino people.
parts would be cancelled, parts would be renegotiated or written down.
Payment for foreign debt should be trimmed down to maybe just 10 percent,
unlike now when it can reach as much as 94 percent of revenues or 70
percent of the national budget.
on the NDFP’s studies, are there figures on how much of the country’s
debt is downright onerous?
are ongoing studies, but we can already see that there is a large portion
of this that can really be repudiated because these are clearly
anti-people and were used for fraud... The experts in the Reciprocal
Working Committere for the Comprehensive Agreement on Social and Economic
Reforms (CASER) are working this out for the peace talks in Oslo.
Zialcita also said that if debt repudiation or at least debt renegotiation
would be carried out, the government may earn more than it projects to
earn from its proposed eight new revenue measures.
I think so. There should also be a stop to corruption in the Bureau of
Internal Revenue (BIR), Customs, and other parts of the government, as
well as taking care of the Napocor (National Power Corporation) problem, a
P600-billion debt and losses of P100 billion per year.
are other possible measures. The government should not impose new taxes on
the people without looking at all the solutions that should be undertaken.
far as the NDFP is concerned, the solution of the foreign debt will
require the firm upholding, defense, and assertion of the sovereignty of
the Filipino people, because part of dealing with the foreign debt is
asserting that economic and human resources of the Philippines will be for
the benefit of the Filipino people.
example, our oil and gas resources, like in the Malampaya project – 90
percent of that is in the hands of the U.S. and Dutch and British
interests in Royal Dutch Shell, and only 10 percent is in the hands of the
PNOC (Philippine National Oil Company), and the government is even being
forced to sell that.
resources in Malampaya, and Liguasan Marsh with its huge gas and oil
resources, should be for the Filipino people.
CASER contains a provision that “As
an immediate corrective measure, the GRP's (Government of the Republic of
the Philippines) law on automatic appropriation for the public portion of
the foreign debt service shall be repealed.
yes. Thirty-eight percent of the budget going to debt servicing, that is
very wrong and too big. That should be repealed, and the policy of
selective renegotiation or writing down is what has to be done.
doesn’t the Philippine Constitution prohibit automatic appropriations
for debt servicing? It appears that particular provision is not being
in the 1987 Constitution. Much of the Constitution is not being followed.
The entry of foreign troops and military exercises, those are against the
when the regime is out and out in its servility, the Constitution is
disregarded – even though it is a GRP constitution.
is also a provision that “Foreign
borrowing shall be reduced, except to finance deferred payments for the
importation of equipment and technology for the establishment and
development of heavy and basic industries.” Could you explain this a bit
can still see that there is foreign currency to be gained through exports,
and then we try not to have only exports of primary products: we should
have processing here also to gain more. And we really have a need for
capital equipment, etc.
borrowing will not be totally taken out, but reduced to reasonable
proportions, for things that we really need. And then when we use
something from abroad, we would like to have a transfer of technology in
due time, within a few years.
are not against foreign investments or foreign relations with other
countries. What we want is that the foreign relations will be equal in
character, will be mutually beneficial to the Filipino people and to those
who are investing, and not unequal and exploitative of the Filipino
that part on foreign investment and foreign borrowing, is this in essence
similar to what was called for by the late Sen. Claro M. Recto?
and we can see nationalists among the businessmen who have such an
outlook: that our patrimony and economic resources should be for the
Filipino people. So we don’t go against foreign relations: we are not
have many natural resources which, if developed well, will provide
sufficiently for our population. But we know that we need to have
relations with other countries – exercising however the principle of
national sovereignty, meaning that the interests of the Filipino people
will be primary in carrying out this policy, and that the relations will
be beneficial to the Filipino people as they can also be beneficial to
should be regulated. There should be reinvestment here.
these regulations can be made by a government that is concerned with the
interest of the Filipino people.
at the same time, foreign borrowing should involve thoroughgoing
yes, thoroughgoing negotiations between two parties that are sovereign and
working out what is to the interest of each country – not the
master-puppet relation, but relation between two parties that are equal in
position. Especially since our rich natural resources – gas, oil, gold,
bauxite; there are so many – plus our marine and agricultural resources,
these are for the benefit of the Filipino people.
if other countries want to participate in developing these, they can do
so, through regulated agreements that will be benefiting the Filipino
people, and they can have their reasonable share in profit.
did not explain if there is a connection between the debt problem and what
is called neocolonial economics. Does the NDFP think these are linked?
the neocolonial pattern of trade and investment, the foreign debt through
usurious loans becomes a major aspect of the exploitation leading to death
actually. Aside from the foreign debt through usurious loans, there is
also the unreasonable profit that they get from investments and the
neocolonial pattern of trade that results in this kind of huge foreign
debt which becomes unpayable and already unmanageable. Now when we look at
that neocolonial pattern of trade, then we know that it is a major cause.
is part of the semi-colonial, semi-feudal nature of the system prevailing
now, and that’s what we have to break. So we have to go into a program
of national industrialization coupled with genuine land reform to destroy
this neocolonial pattern of trade and set up an independent and
progressive system that is not backward and not totally dependent on loans
– usurious loans – that drive the country to a debt trap.
you also say that the foreign debt problem stems, among other things, from
what is described as the export-oriented, import-dependent character of
part, I think, of the neocolonial pattern of trade. It is export-oriented
and all our products are primary products being taken out, and so it means
the exploitation of our natural and human resources without the people
gaining from these.
that because we are confined to exporting cheap raw materials and
importing expensive semi-processed goods?
that’s part of it, so imagine all our raw materials are exported and
then they come back at very high prices! Well actually, we (can) also
develop, through national industrialization, our capacity to process these
products and sell them as finished products also to other countries; or at
least take a huge part of the processing in our own hands.
on the studies of the NDFP, just how much capacity does the Philippines
have for national industrialization?
have huge human resources, with very skilled and intelligent and capable
personnel for different fields. Second, we have huge natural resources
with so many rich mineral resources, and also marine and agricultural
are basic ingredients for national industrialization coupled with genuine
land reform. So we can see that it’s really there, it’s just that the
system has to be changed. We have the capacity based on our rich human
resources and also very extensive natural resources.
why all these multinationals greedy for profit are swarming all over the
Philippines. They want to get the gold, the oil, the gas, the nickel, the
bauxite, the diamonds – besides of course the U.S. wanting to control
the whole Southeast Asian region.
the goals of the struggle are realized, what role will genuine land reform
play in the process of national industrialization?
agrarian reform has a vital role. It will sort of form the base so that
the huge army of the peasantry that’s now impoverished because of this
system will have the capacity to develop also agro-industries...so we will
also have the capacity to combine agricultural development with light
industry, and the possibility of heavy industry.
So the combination of these three will bring about what is needed for the Philippines to be prosperous and independent. Bulatlat
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