Dabawenyo laments over RP big foreign borrowings

Davao businessman Antonio “Ding” G. Diaz said national leaders of the Philippines should consider more creative moves to correct the country’s foreign borrowing situation, including possible debt repudiation.
Diaz said the country’s annual budget for debt interests alone is P341 billion. “Debt servicing allocation in the country’s annual budget is several times more disastrous that the “Ondoy”-spawned floods that devastated Manila,” he said, adding that the combined forces of killer typhoons “Ondoy” and “Pepeng” destroyed crops worth only P6 billion as reported by the Department of Agriculture.
Data from the National Census and Statistical Board, a government agency, indicated that the Philippine government has borrowed from foreign lenders and domestic sources a total of P4.2 trillion as of  June 2009. The amount set aside for interest payment alone constitutes 32 percent of the annual fiscal pie.
It may be recalled that in 2001, when Argentina defaulted on $81 billion in government bonds, President Nestor Kirchner and his successor wife, Christina Fernandez, refused to sit down with its major foreign creditors to discuss any terms for restructuring the defaulted debt.
Sometime in 2005, Kirchner also repudiated $19.4 billion in defaulted paper held by Argentina’s foreign lenders. As a result, the growth of foreign direct investments (FDI) in the country reportedly slowed by nearly two-thirds, forcing the Argentine government to depend on domestic borrowing and also inflating the money supply.
Argentina’s debt repudiation also hurt its borrowers and taxpayers worldwide. It had cost US bondholders nearly $9.5 billion. These bondholders include pension plans and mutual funds, saying the cost to bondholders worldwide now total almost $89 billion.
Saying that he witnessed how Manila and adjoining cities were submerged by the floods which “turned streets into rivers,” the Davao businessman also suggested that government should now allocate a sizable amount of funds for a general cleanup of the drainage systems and clogged waterways all over the country.
“Even if we spend P10 million a day for cleanup activities, that is still miniscule compared to P1 billion a day that we pay for debt servicing,” he said.
He said there is now absolute need for the enforcement of laws that address pollution and protection of the environment, which national and local governments have neglected for lack of political will. [AMA]