The Call for the Audit of Public Debts
Audit of Public Debts FDC firmly believes that the Philippine debt problem cannot be solved simply by faithfully and uncritically paying, and putting up the funds for debt service at the expense of the Filipino people’s welfare and the Philippine economy’s well-being. This has been the resort of successive governments since the debt crisis erupted in the 1980’s and we are very far from “growing out” of the debt pit. On the contrary, the country’s outstanding public debt has continuously grown in the last 20 years.
The Call for the Audit of Public Debts Appropriate and decisive solutions to the debt crisis calls for a thorough and critical understanding of the problem. This is why we have been actively pressing for a Comprehensive Audit and Investigation of Public Debt and Contingent Liabilities to be conducted by the Philippine Congress in full transparency and with the active participation of civil society. The purpose of the audit is to establish the bases for alternative policies and strategies of action for sustainable and just means to surmount the crisis of indebtedness.
Alternative Policies These alternative policies should include: Stronger, coherent and consistent laws and regulatory mechanisms on borrowings, and addresses the following problems: Over-borrowing – borrowing beyond the capacity of our economy to pay, and too much reliance on borrowings to address fiscal needs Loans with Conditionalities -- undermining our sovereign right to determine our development strategies, and implementing policies with negative consequences for our people especially for the poor Lack of accountability and transparency – no effective legislative oversight
Alternative Policies Judicious, accountable and transparent debt payment policy that: Prioritizes public spending on social and economic services Restores the full power of the purse to Congress, and ensures democratic processes and transparency in determining debt payments Upholds Philippine national interest and the Filipino people’s rights and welfare as paramount Upholds the sovereign right to take unilateral action on odious debt Takes into account creditor responsibility and accountability
Alternative Policies Policies that addresses the issue of illegitimate and unjust debts such as those involving onerous terms and transactions fraudulent claims and representations the circumvention of laws and democratic processes the financing of projects that have damaging effects on the environment, violates human rights and/or results in the massive displacement and dislocation of people and communities Public assumption of private liabilities
Nature and Scope The Audit should look not just into the financial aspect of the problem, but should also involve a review of the economic, political, social, environmental, legal and ethical issues It should examine current outstanding debts – specific accounts and amounts, nature of the debt, purpose, compliance with procedures and requirements, terms and conditions, use of the funds, results and impact of debt-financed projects and programs – as well as the historical development of the debt problem It should examine all assumed and contingent liabilities, and determination of the total amount of assumed and contingent liabilities, the processes observed and implemented in the issuance of guarantees and performance undertakings, and the nature and purpose of the projects and programs that are the recipient of these guarantees
Nature and Scope It should look into flaws and weaknesses in the structures, policies and processes related to borrowings, payments, guarantees and contingent liabilities
Joint Resolution on the Debt Audit FDC calls on the Senate to approve Senate Joint Resolution No. 1- Calling for an Official Audit of the Debt and Creating the Congressional Commission on the Debt.
Other Calls Repeal of Automatic Appropriations Law on debt payments Stop payment of specific illegitimate and onerous debts Cancellation/annulment of debt-creating onerous agreements and contracts