THE DUTERTE administration has borrowed money again and this time from Japan further sinking the country in debts.
The Philippines now has over P10 trillion in debts and the increase in foreign and domestic borrowings heightened the last four years.
The government thanked Japan for quickly disbursing another 10-billion yen under the second phase of its Post Disaster Standby Loan 2 (PDSL 2) program that will support ongoing government efforts to rehabilitate areas, and help families affected by the series of powerful typhoons that devastated parts of Luzon in the last quarter of 2020.
Finance Secretary Carlos Dominguez III said this financial support from Japan (equivalent to approximately P4.67 billion or US$91.79 million) will help cover the funding needed to help families get back on their feet and rebuild communities following the destruction left by typhoons Quinta, Rolly and Ulysses in October and November.
This recent disbursement brings to 20 billion yen (about P9.33 billion or US$183.58 million) the loans released so far by Japan to the Philippines under PDSL 2.
“On behalf of the Philippine government, I express my gratitude to the people and government of Japan for helping our country swiftly mobilize financial resources for the massive rehabilitation efforts in the areas pummelled by typhoons Quinta, Rolly and Ulysses,” Dominguez said.
The government estimates losses of over P10 billion combined in the agriculture sector alone from these three cyclones that struck the country one after the other in two weeks’ time beginning October.
“The speedy release of this 10-billion yen loan underscores anew the Japanese government’s unwavering support for the Duterte administration’s disaster relief and mitigation programs. Such immediate financial support at this time will certainly go a long way in helping our people and communities recover quickly from the devastation wrought by the three super typhoons,” Dominguez said.
The JPY10-billion disbursement on January 5 is the second fund release under the JPY50-billion (about P23.33 billion or US$ 458.95 million) PDSL 2, which was formalized between the Philippines and Japan last September 15 through an agreement signed by Dominguez and Japan International Cooperation Agency (JICA) Chief Representative Eigo Azukizawa.
“As a friend and trusted partner of the Philippines, JICA stands by Filipinos whose lives were disrupted because of the recent natural disasters. Through the JICA post-disaster assistance, we hope that vulnerable sectors affected will find relief and support to recover their livelihood and income through the spirit of ‘bayanihan’ in these difficult times,” Chief Representative Azukizawa said following the second PDSL 2 disbursement.
Azukizawa said JICA is supporting the Philippines with available financial resources to mitigate the impact of natural disasters and health crisis. “We’re making it clear that we are in this together and that JICA will support development partners who need our assistance,” he said.
Japan earlier disbursed another JPY10 billion yen to the Philippines to support the government’s Covid-19 response measures following Duterte’s extension of the state of calamity on September 16 throughout the Philippines because of the pandemic.
Duterte later declared a state of calamity in the entire Luzon on November 18 through Proclamation 1051 to hasten the rescue, relief and rehabilitation efforts of the government and the private sector, including any international humanitarian assistance, in the wake of the devastation wrought by the strong typhoons.
Under the agreement for the PDSL2, the disbursement of the standby loan to the Philippines will be triggered by either of the following circumstances: The declaration of a state of calamity; or the declaration of a state of public health emergency.
On top of PDSL 2, JICA has supported the Philippines’ pandemic response measures through a JPY50 billion yen Covid-19 Crisis Response Emergency Support Loan (CCRESL).
The Philippines became the first recipient of Japan’s emergency support loan for Covid-19 affected economies with the early disbursement last August 14 of the 50-billion CCRESL to the government.
Aside from committing to support the Philippines’ disaster response and mitigation programs, Japan has also been a reliable partner of Duterte’s so-called “Build, Build, Build” infrastructure modernization program. But most of these projects have been suspended due to the pandemic and funds were used to address the health situation.
Since the start of the Duterte administration in July 2016, some 15 loan agreements totaling JPY679.296 billion (about P313.147 billion or US$6.443 billion) have been signed by Manila and Tokyo.
About 82 percent of this funding support is for big-ticket infrastructure projects under “Build, Build, Build.”
Japan is also the Philippines’ number one Official Development Assistance (ODA) partner, with loans and grants amounting to around US$10.10 billion (38.53 percent of total ODA) as of June 2020.
Where is the money?
Senator Panfilo Lacson scored the Duterte government’s penchant for borrowing, but not always with the corresponding results. Lacson said that while borrowing may be necessary for the economy, the government has yet to show results of the trillions of pesos it has borrowed over the years.
“When I first became a senator in 2001, our national government’s outstanding debt was P2.88 trillion. Over the Arroyo, Aquino and Duterte administrations, it has ballooned to P10.027 trillion as of October this year, from P8.2 trillion at end-2019,” he said.
“Thus it is hard to accept the Palace spokesperson’s statement that we will look for funds to acquire vaccines,” he added, referring to Harry Roque’s recent statement on the government’s plan to borrow more money despite the country’s ballooning debts.
Lacson said that in the last nine to 10 months, the Duterte administration’s borrowing accelerated at a record rate, with an additional P1.8 trillion.
He said while the United States has borrowed $27 trillion, their infrastructure development and social services are being adequately provided. “In our case, we have expressways and skyways but they are provided and maintained by the private sector. Tayo, utang ng utang, toll naman ng toll,” he said.
The country continues to sink in debts as the government trumpeted fresh loans running into billions of pesos to fund the purchases of anti-Covid vaccines and other responses to the pandemic.
Debts, Debts, Debts
Duterte had already borrowed billions of pesos since 2016 after winning the election, for his ambitious Build, Build, Build infrastructure projects and dole outs to poor families across the country.
Dominguez told Duterte in one of his briefings that the government has 3 sources of funding through various loan agreements – the Asian Development Bank (ADB), the World Bank and domestic banks such as Land Bank of the Philippines and the Development Bank of the Philippines (DBP), and even Government-Controlled Corporations.
He said government can get as much as P40 billion loans from ADB and World Bank, and another P20 billion from domestic sources. And not only that because Dominguez is also looking to get more loans from bilateral sources in the United Kingdom (UK) and the United States (US) where Covid-19 vaccines are available amounting to over P13 billion.
“Mr. President, may tatlong sources po tayo ng funding okay. Ang first — ang unang source natin ‘yung mga multilateral agencies: ADB at saka World Bank. Ang estimate namin we will have around 40 billion pesos from them. Low cost, long-term loans, 40 billion from multilateral agencies.”
“Tapos mayroon po tayong domestic sources of financing. Ang domestic sources of financing we estimate around 20 billion. So that will come from Land Bank, DBP, and possibly ‘yung mga government-controlled corporations. So that’s 20 billion,” he said.
Dominguez added that the government will negotiate with bilateral sources in UK and US for the purchase of the vaccines.
“Tapos magne-negotiate pa po tayo sa mga bilateral sources depende sa source ng — depende sa source ng vaccine, either England or US or whoever. And ang target po namin doon around 13.2 billion pesos. So ang total niyan is about 73.2 billion financing that it’s pretty much — it’s almost fixed. Most of it is already fixed, 13.2 billion hindi pa completely negotiated. So 73.2 billion pesos,” he said.
Dominguez estimated the cost of the vaccine at around $25 (about P1,200) per person and since the government is targeting to vaccinate some 60 million Filipinos, he said the loans are enough to cover the expenses.
“Ngayon ang estimate namin sa average cost ng vaccine is around 25 dollars — not per dose, per person. ‘Di ba? Around 25 dollars which is 1,200 pesos more or less. Some are lower, some are higher so we don’t know yet exactly how much is the cost. But let’s say 25 dollars or 1,200, 72 — 73.2 billion pesos is good for 60 million people to be vaccinated, around 60 million people. So that is more or less what we have in line. Ngayon, we’ll have to consult with the DOH if 60 million is enough, if 60 million people is enough to be vaccinated,” he explained.
Aside from massive borrowings, Duterte also hiked taxes despite public outcry, saying he needed it to fund government more projects. In August, the Bureau of Treasury said the government’s outstanding debt stood at P9. 615 trillion, but this has already reached over P10 trillion now. (With a report from Mindanao Examiner.)
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