Stop automatic budget for foreign debts — solon

THE policy of automatic appropriation of debt and debt guarantee items
in the national budget may soon be discarded if a proposal to require
all expenditures for foreign debt payments shall be included in the
annual General Appropriations Act for the review, assessment and
approval of Congress to become a law.

Rep. Eulogio “Amang” Magsaysay (Party-list, AVE) said this practice of
automatic annual appropriation for debt payments robs the Filipinos of
the scarce financial resources that should instead support the
implementation of vital projects such as education, health, food
security and infrastructure, to name a few.

“Reversal of this practice would mean better lives for Filipinos,”
said Magsaysay, citing that at least 40 percent of the country’s
annual appropriations go to debt payment.

While the Constitution has vested Congress the power to review, assess
and approve the annual budget, the policy of automatic appropriation
circumvents this provision according to Magsaysay, a Vice Chairman of
the Committee on Higher and Technical Education.

“Decision-making on where the country’s scarce financial resources
should go has been virtually taken away from Filipinos. We surrender
our right to self-determination if we allow this practice to continue.
A common man of reason will only see injustice if the food on his
table is taken forcibly by his neighbors. Fortunately or
unfortunately, the common man is the very reason why we are in
Congress. Let us not deprive him of our representation,” he said.

While this policy of automatic appropriation of debt payments on the
national budget is a condition set by foreign creditors, Magsaysay
said the House of Representatives can, however, institute a more
innovative approach.

“My proposal, House Bill 2183, when approved, will reclaim Congress’
power of the purse. It will allow Congress to review, assess and
approve all budget items proposed by the Executive, including payment
of foreign loans and end the vicious cycle of borrowing just to pay
the interest of existing and maturing debts. Prudence and frugality
are virtues that the House should be known for as an inspiration to
our people,” said Magsaysay.

The bill provides for a repeal of all acts, laws and executive orders,
presidential decrees, including Section 31 of Presidential Decree 1177
which mandates an automatic appropriation of expenditures in the
national budget for payment of principal and interests on public debts
and guarantee.

Section 1 of HB 2183 provides that all expenditures for the following
items shall be automatically appropriated: personnel retirement
premiums, government insurance service, and other similar fixed
expenditures; principal and interest on domestic debt; and national
government guarantees of domestic obligations that are drawn upon
shall be automatically appropriated, provided that  the President of
the Republic of the Philippines shall include in his or her annual
budget proposal to Congress the amount of appropriations recommended
to service all foreign loans.

It provides further that no obligation shall be incurred and payment
made from funds thus automatically appropriated except as issued in
the form of regular budgetary allotments.


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