Finance Sec. Sonny Dominguez, neoliberal zealot, stubbornly declared yesterday that the Duterte government will not even entertain the thought of cancelling foreign debt servicing, even temporarily, as an immediate measure to provide the wherewithal for the Covid-19 crisis.
Dominguez’s position reveals the anti-people economic policies and priorities of the Duterte government. It is such views that are causing grave hardships on the people and the continuing backwardness of the economy, which is now preventing the government from comprehensively addressing the public health and socio-economic problems brought to the surface by the Covid-19 pandemic.
Duterte and Dominguez are more concerned about preserving the regime’s “credit standing” before the foreign banks than ensuring urgently needed funds for Filipinos amid the Covid-19 crisis.
Even the IMF was obliged to recognize that continuing debt payments is an unbearable burden on third world countries which are having trouble sourcing funds to respond to the Covid-19 crisis. Yesterday, at least 25 countries were allowed by the IMF to suspend payments for six months. The least that Duterte and Dominguez could do is ask that the country be allowed to avail of such arrangements.
This year, the Duterte government alloted P1.03 trillion for debt servicing, with P451 billion going to debt interests and P582.1 billion for principal payment. Of this, P285.8 billion goes to foreign debt servicing. This is one of the biggest chunks of the Philippine budget. If it suspends debt servicing for even just six months, it will have more than enough to fund its Social Amelioration Program to provide immediate cash to millions of families.
Duterte has complained of lack of funds and has tightfisted the people, with millions of families being left out of state subsidy causing widespread suffering during the extended quarantine and lockdown.
Instead, Dominguez has announced that the government targets to borrow an additional $5 billion in new loans to address the Covid-19 crisis, which will redound to more economic burden on the Filipino people, in the form of additional taxes in the future.
(Updated on April 16 to correct details of the amounts that go to Philippine debt servicing.)