“Walang pera” (“We have no money”) has been said or implied by Pres. Rodrigo Duterte numerous times since the lockdown on March that it has become a household word.
Yet, loan figures say otherwise. As early as June, three months after the Inter-Agency Task Force (IATF) declared a Luzon-wide lockdown on March 15, the Philippines foreign loans to help bankroll the Covid-19 response have already reached a staggering $6.4 billion.
The amount were sourced mainly from Asian Development Bank (ADB), World Bank and Asian Infrastructure Investment Bank (AIIB) as well as the issuance of US-denominated global bonds.
However, the Department of Budget and Management said in June that roughly P354.4 billion in cash allocations have been earmarked for the COVID-19 response programs for the same month.
The funds came principally from pooled savings from programs that were discontinued because of the pandemic, as well as unprogrammed allocations otherwise listed the 2020 national budget, not from foreign sources.
On the month of June alone, the Duterte administration under the Department of Finance had culled a total of P1.2 trillion in net foreign borrowings on top of a P300-billion financing support from the Bangko Sentral ng Pilipinas.
By October, the Duterte administration’s loan figures has reached a whopping P10.2 trillion from the previous administration’s P6.0 trillion in 2015.
That’s an average of P1 trillion per year since Duterte took office in 2016.
Where all the foreign loans had been spent is the bigger question. To say that the government is running low on funds makes for a statement that cannot hold water.
The China-backed loans beg for another inquiry.
During Duterte’s first visit to China on Oct. 2016, the Philippine president signed a cooperation agreement with China, under Pres. Xi Jin Ping, pledging to fund projects amounting to billions of dollars.
China Exim Bank and China CAMC Engineering Co Ltd had earmarked 4.37 billion pesos for the controversial Chico River Dam project whose groundbreaking was held last June.
Beijing also signed into funding two Philippine railway projects with a collective cost of $8.3 billion.
These projects are reportedly a little over 1,000% more costly than those offered by Japan, which are ten times cheaper considering China’s interest rate of 2% to 3%.
In the President’s budget message for both houses of Congress, Duterte proposed a P4.506-trillion budget for the fiscal year 2021. This is 9.9% higher than the 2020 budget, equivalent to 21.8% of the Gross Domestic Product (GDP).
He emphasized that the proposed budget will focus on sustaining government efforts to effectively respond to and recover from the pandemic. One of the key factors to be developed is a resurgence of GDP growth of 6.5% to 7.5%.
Many see the proposed budget as problematic as it allocates only P212.4 billion for the improvement of the healthcare system while P1.07 trillion for infrastructure projects.
The funding allocated for projects belie its supposed goal: to sustain all efforts in response to the pandemic.