BY ED ESCULTURA – Philippine President Bongbong Marcos Jr. has no surprises for us so far.
As expected, he follows the footsteps of his father. As of January 2023, Philippine foreign indebtedness has gone up from $32 billion when his father was ousted by people power in 1986, to $246.34 billion from the World Bank alone.
Not included here are loans from China, Asian Development Bank and the internal debt which stands at P8.6 trillion or $151 billion. Still, BBM continues to look around for more loans. In fact, he is going to China in the next couple of weeks.
The Budget deficit is now at a whooping high of P8.6 trillion or $156.1 billion. This is essentially equivalent to printing money without value, the main source of inflation which is now 8.1% or more than doubled the prices of commodities during the first 7 months of BBM’s administration.
By law, the ceiling for payment of interest of on foreign loans is 23% of GDP or $92,368. As of January 23, the Gross Domestic Product (GDP) of the Philippines is $401.6 billion. Assuming the best-case scenario that the Philippine government pays the maximum amount to avoid balance-of-payment that would be added to the total debt, the annual payment would be $50,802.40 billion.
If the $401.6 billion would be spent on Philippine development it would be good for the country.
But, given the systematic corruption in in government since the dark days of Martial Law, this amount will dissipate in no time and end up in the bank accounts of government officials.
Recall that BBM promised to reduce the price of rice by P20 per kilogram. It will not come to pass. Instead, BBM will grant loans to the farmers to assist them.
Loans are no help at all because they have to be paid back with interest. Despite this dismal situation, we find an eerie silence except for occasional industrial strike. Is this the calm before the storm?