Editorials:

Illustration by Jimbo Albano

Torpedoing the cuts in debt-service budget

THE question raised over the weekend by Senate Minority Leader Aquilino Pimentel Jr. should jolt us anew to the realization that allowing too much political noise in the air—without truly intelligent, definite directions—comes with one danger: that of overlooking such basic issues as the national budget.

The senator wondered, quite rightly, why more than a month after the Senate and the House of Representatives approved the final version of the bill on January 28, the President’s signing of the appropriations measure was being unduly delayed.

Lawmakers have a reason to gripe: the Senate exerted extra efforts to pass the bill before the Christmas break last year.

They were painfully aware of the need to pass the P1.127-trillion national budget for fiscal year 2008, precisely to avoid the scenario in past years when delays in the new budget bill forced a fallback on the existing, or old, budget.

If we recall, Senate President Manny Villar had loudly denounced this situation—having three reenacted budgets in six years—and called it a bureaucratic shame. This time around, because the 2008 budget bill has not yet been signed into law, the reenacted 2007 national budget is being used to finance government operations; hence the alarm Pimentel raised.

Senator Pimentel reiterated the many disadvantages of this situation, one being, that “they [the Executive] are free to spend taxpayers’ money at their own discretion and without the restrictions imposed by the new Appropriations Act.”

Recalling the resort to a reenacted budget for several consecutive years now, he added: “Every time the approval of the new budget is delayed, it is the people who ultimately suffer because funds for new projects like classrooms, farm-to-market roads and municipal ports cannot be released, resulting in the delay of the construction of these public-works projects.”

When the previous year’s budget is automatically reenacted, the funds for projects that are already completed are reallocated and treated as savings.

What, then, is the danger here? As the senator explains, such supposed savings can be easily realigned, without any constraints, by the Executive to projects that advance partisan political interests; thus averting accusations of juggling, which would be the case if a new budget law were already signed.

As this was being written, meanwhile, one of the prime citizen fiscal watchdogs raised the alarm of a possible veto by President Arroyo of special provisions on debt-service cuts in the national government budget. This would render useless the efforts by civil society and concerned lawmakers to make the 2008 budget more responsive to people’s needs.

Milo Tanchuling, secretary-general of the Freedom from Debt Coalition (FDC), asked both chambers of Congress in a letter to override Malacañang’s decision should Mrs. Arroyo go ahead and veto specific stipulations on debt-service reduction in the P1.2267-trillion budget.

The FDC was reacting to information, supposedly coming from the Department of Budget and Management (DBM), that Mrs. Arroyo is poised to veto such stipulations if she ever does sign the budget bill this week. In fact, FDC learned, the DBM has already drafted the President’s veto message of certain provisions in the 2008 budget.

“Should Mrs. Arroyo veto specific stipulations on debt-service reduction, we urge the leaderships of both Houses of Congress to once again rise to the occasion by defending the said special provisions by means of a Congressional Override,” said Tanchuling.

The P25-billion debt-payment reduction was the result of long-drawn discussions between lawmakers and an alliance of civil-society groups under the Alternative Budget Initiative, including FDC. The reductions were made possible by the suspension of P5-billion interest payments to loan agreements challenged as “tainted” with fraud; the suspension of P5 billion worth of “premature payments” to proposed loans still in the pipeline; and P15.9 billion in savings arising from the peso appreciation.

A firm stand on the special provisions is crucial, in the view of Tanchuling and company, in light of what he described as a painful political crisis wrought by the aborted loan agreement that would have saddled taxpayers with a P16-billion debt for a questionable project (the national broadband network [NBN] deal).

In fact, many reforms sought in recent months, both within the budget process and outside it, pertained to the use of borrowings for government programs and projects, after serious questions arose about how proponents of the NBN-ZTE deal allegedly short-circuited established National Economic and Development Authority-Cabinet processes for vetting loan-funded projects.

Besides the need to reform the use of loans for development, the FDC has stressed that Congress’s decision “to suspend interest payments for questionable loans pending renegotiation/condonation is a step in the right direction.”

This, asserts the FDC, will free up scarce resources to augment puny budgets for vital social services. It will also signal a determination by Congress to assert its power of the purse “or constitutional duty to plan and manage the people’s hard-earned resources.”

In this same space earlier, we had praised civil-society groups and the enlightened, hard-working lawmakers whom they engaged for never giving up on reforming the budget process. Their efforts have been characterized by fits and starts, it’s true, and required patience and meticulous work from both sides. Still, they persevered, and deserve praise for that. More than anyone else, therefore, they should be alarmed by the possible jettisoning of the people’s budget.

THE question raised over the weekend by Senate Minority Leader Aquilino Pimentel Jr. should jolt us anew to the realization that allowing too much political noise in the air—without truly intelligent, definite directions—comes with one danger: that of overlooking such basic issues as the national budget.

U.S. recession. ZTE scandal. High rice prices. Gasoline prices up again. Stock market falling. Poverty numbers up. Marquez could pull a miracle and beat Pacquiao.

Under the Constitution of the Philippines, the exploitation of natural resources is the exclusive right of Filipinos. But due to various interpretations by learned men in the Judicial, Legislative and Executive branches of government, this constitutional provision has made new meanings that have made exploitation by foreigners extremely legal.

Omerta: Will we lose the Spratlys?

The Institute of International Legal Studies of the University of the Philippines—or briefly, the UP Law Center—has reason to be skeptical that we can still make the May 2009 deadline set by the United Nations for us to formalize our territorial claim over the Spratlys, Scarborough Shoal and the waters off Cagayan.

Pablo S. Trillana III: Tumult and a sacred nation

Once more, we are living in interesting times. The ZTE-national broadband network (NBN) scandal is tearing the nation apart, and we have again spilled out into the streets, lending our warm bodies to the growing number of dissent.

On Firm Ground: Fortifying credit control extrajudicially—don’t shoot the sheriff

Not the sheriff always. . . Largely perceived as purely sheriff business and sometimes misconstrued as creditor’s agency, extrajudicial foreclosure of real-estate mortgage is a sui generis affair.

Sen. Edgardo J. Angara: Racing toward innovation

In her inauguration in 2006, Chilean President Michelle Bachelet declared that innovation should be at the core of her administration. Five years back, the United States made a similar declaration to make research and development (R&D) a national priority.