Gov't not inclined to seek debt moratorium to fund COVID-19 response

Published April 16, 2020, 11:47 AM

by manilabulletin_admin

By Genalyn Kabiling

The government is not inclined to seek a moratorium on its debt obligations supposedly to fund the country’s measures to address the coronavirus pandemic.

Presidential spokesman Harry Roque (Czar Dancel / MANILA BULLETIN)
Presidential spokesman Harry Roque (Czar Dancel / MANILA BULLETIN)

Presidential Spokesperson Harry Roque said the government has sufficient funds for the COVID-19 response for now, and may consider discontinuing infrastructure projects and selling state assets if the funds run out.

“Hindi po iyan option na kinokonsidera ng ating pamahalaan sa ngayon, dahil mas malaki po ang magiging repercussion niyan,” Roque said in a virtual briefing about the proposed debt moratorium.
(That is not an option being considered by the government for now because it will have a bigger repercussion.)

“Mayroon po kasi tayong tinatawag na cross-default provisions sa ating mga pagkakautang. Kapag tayo ay nag-default sa isang pagkakautang natin, magdi-default po tayo sa lahat ng pagkakautang natin, and mas madugo po ang mangyayari diyan kung lahat po ng ating pinagkakautangan ay sisingilin tayo sabay-sabay,” he added.
(We have a cross-default provision in our loans. If we default on a debt, we will default on other loans. It will be bloodier if our creditors demand payment all at the same time.)

Sen. Imee Marcos earlier asked the government to ask for a one-year postponement of debt payments after years of punctual payments. She said Pope Francis, the world’s richest countries, and large international lenders have supported debt relief for the world’s less fortunate amid the public health emergency.

Finance Secretary Carlos Dominguez III earlier rejected any debt moratorium, saying the government will continue to honor its financial obligations.

Roque, in the same press briefing, defended the country’s strong fiscal position for now.

“Sa ngayon naman po, sapat naman po ang pondo ng gobyerno. At kung hindi po sapat iyan, magbebenta muna ng ari-arian ang gobyerno bago po tayo mag-default sa ating mga obligasyon,” he said.
(At present, we have sufficient government funds. If that will not be enough, the government will sell assets before we default on our obligations.)

He also said the President mentioned his willingness to halt infrastructure projects if more funds will be needed to boost the coronavirus response.

“Ang mensahe po ng Presidente, gagamitin po natin ang pondo ng taumbayan; kung kinakailangan, sabi nga po ni Presidente noong Tuesday, kung kinakailangan ititigil niya ang lahat ng infrastructure projects.”
(The President’s message is we will use the public funds. The President said last Tuesday he will stop all infrastructure projects if needed.)

“Kung kinakailangan gastusin ang pondo ng bayan para magkaroon ng pagkain at iba pang mga pangangailangan ang ating mga kababayan — sagot po tayo ni Presidente Digong,” he added. (If we need to spend public funds to ensure food and other needs of our people, President Digong has our backs.)

On the possible sale of assets like Philippine International Convention Center and the Cultural Center of the Philippines, Roque said the President “just to emphasize that we have to sell physical assets because he will give primary importance to the health of the people.”
Roque also admitted that the sale of the recovered Marcos jewelries is also among the government options.
“I think even before the COVID-19 pandemic, that’s already an option being pursued by government,” he said.

Under Republic Act No. 11469 or the Bayanihan to Heal as One Act, the President is authorized to discontinue appropriated programs of any agency in the executive branch in the 2019 and 2020 national budget to augment COVID-19 operations.

The Bayanihan law also allows the President to reprogram, reallocate, and realign from savings in budget items, as well as allocate cash, funds, and investments held by national government agencies and state corporations to effectively address the pandemic.