PHL loans reach P10.2 trillion, PRRD admin at P1T per year

“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.

Senate OKs bill granting San Miguel Corp. 10-year tax exemption for Bulacan airport project

The Senate has approved on third and final reading the bill granting San Miguel Aerocity, Inc. a 50-year franchise to operate an airport in Bulacan with 22-0 votes and no objections.

The bill just now awaits the signature of President Rodrigo Duterte in case the House of Representatives adopts the Senate version.

Several groups have raised concerns about SMC’s Bulacan airport project, particularly the provision of the bill that grants SMC tax exemptions.

Under the said bill, SMC would be exempted from taxes during the 10-year construction, development, establishment, and operation of the airport.

Beyond the said period, the company will remain exempted from paying income and real property taxes until it has fully recovered its investment cost.

Advocacy group Action for Economic Reforms (AER) had earlier insisted that the tax exemption granted to SMC contradicts the pronouncement of the executive branch of the government that public funds shouldn’t be utilized in such projects.

The said airport will be built on a 2,500-hectare area in Bulacan town and is set to serve as another main entry to the Philippines besides the Ninoy Aquino International Airport.

Communist insurgency a greater threat to PH security than China’s aggression in WPS — Lorenzana

China’s aggression and illegal claiming of islands and territories in the Philippines is a situation that’s “stable” and “manageable,” Department of National Defense (DND) Secretary Delfin Lorenzana said, adding that what can be considered as a bigger threat to the security of the country is the existence of communist rebels.

Lorenzana stressed that more than the external factors, the danger lies on internal concerns, citing terrorists who have mostly established their bases in Mindanao. He added that the country should focus attention more on such issues.

The DND chief explained that the West Philippine Sea dispute is now being managed by the Department of Foreign Affairs (DFA).

In response, Senator Risa Hontiveros contradicted the statement of Lorenzana, saying that she was “surprised” that he considered communist insurgency as the biggest threat while police and military forces have been making it appear like it is under control.

Lorenzana himself repeatedly confirmed China’s continued illegal activities in the WPS which a Hague ruling released in 2016 identified as part of the exclusive economic zone (EEZ) of the Philippines.

Hontiveros hopes that the DND is also doing something to “prioritize external threats.”