Zarate, Colmenares urge Duterte gov't to push for debt service moratorium with international lenders

Published April 11, 2020, 1:38 PM

by manilabulletin_admin

By Charissa Luci-Atienza 

House Deputy Minority leader and Bayan Muna Rep. Carlos Isagani Zarate asked the Duterte government on Saturday (April 11) to seriously consider a debt service moratorium with key international and multilateral lending institutions to help the country get back on its feet following the COVID-19 crisis.

House Deputy Minority leader and Bayan Muna Rep. Carlos Isagani Zarate and Bayan Muna Chairman Neri Colmenares (MANILA BULLETIN)
House Deputy Minority leader and Bayan Muna Rep. Carlos Isagani Zarate and Bayan Muna Chairman Neri Colmenares (MANILA BULLETIN)

Zarate, along with Bayan Muna Chairman Neri Colmenares, sought the debt service moratorium after the Duterte administration announced that it will be borrowing from the Asian Development Bank (ADB).

The Japan-led ADB already approved a $3-million or around P153 million grant to help fund the Philippine government’s efforts to fight against COVID-19.

In a statement, Zarate and Colmenares said the government should “now consider a debt service moratorium in order to free at least a trillion of funds to help micro, small and medium enterprises (MSMEs), as well as rehabilitate the country from the ravages of the COVID-19 pandemic.”

They noted that the planned $5.7 billion or roughly P290.7 billion in loans from the ADB and the $500 million from the World Bank have yet to be added to the government’s war chest against COVID-19.

“This global modern scourge should push the Duterte administration, along with other countries hard struck by the pandemic, to consider a debt service moratorium with the International Monetary Fund (IMF)- World Bank (WB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), and other international and multilateral lending institutions,” Zarate said.

He noted that currently, there are enough available financing sources in the 2020 national budget without burying further the Filipinos in debt.

“But if the fight against COVID will take longer, then it would be better to have a debt service moratorium rather than borrow more money from creditors,” he said.

Zarate expressed his serious concern that every Filipino is already neck deep in debt at P70,000 each, due to the P7.7 trillion government debt.

“Even those not born yet already have debts and it is best that no debt is further added to their burden,” he said.

He said allocated under this year’s national budget are a P13 billion contingency fund and P16 billion
National Disaster Relief and Rehabilitation Management (NDRRM) fund.

There is at least P56 billion in accumulated NDRRM funds up to 2019, he added.

“These alone already amount to P85 billion, plus, there are also the billions of intelligence and confidential funds that can be used to alleviate the plight of our workers. But if those will not be enough, a debt service moratorium is already a must,” Zarate said.

Colmenares, for his part, said the Duterte administration should seriously consider their proposal and urge other countries hit hard by COVID-19 to follow suit for the sake of their citizens, pointing out that the world is in an economic recession.

“So we need to truly reboot, reconfigure, and jump start the economy,” he said.

He said, based on the 2020 national budget, “more than P450 billion is earmarked for interest payment alone of foreign and domestic debt of the national government, while P582 billion for principal payments or a whopping P1.033 trillion taken as a whole.”

“The moratorium can apply either just to the interest rate or the whole debt for the year, but ultimately the realigned funds can be used to help our micro, small and medium enterprises not to go bankrupt and rehabilitate the country as well,” the former Bayan Muna partylist representative said.

“It can also be used to build disaster-resilient evacuation centers for every three barangays, like in House Bill No. 5259, that can also be used as quarantine areas when future pandemics occur.

“It would be more secure and suited for this purpose than what is happening now that we are using basketball courts and hotel for quarantines,” Colmenares added.