Phl foreign debt, mendicancy rate up

Phl foreign debt, mendicancy rate up | Daily Tribune

The Bangko Sentral ng Pilipinas approved higher external borrowings for government projects, which climbed last year to $14.49 billion, or 40.36 percent more than in 2022.

These consisted of medium to long-term loans, which increased by 65.8 percent to $3.32 billion in the fourth quarter year-on-year.

Cumulatively, the BSP approved 12 project loans worth $5.67 billion, 10 program loans totaling $4.82 billion, and two bond issuances to the tune of $4 billion.

The borrowings are also seen to fund the government’s various social amelioration programs, including the recently announced increase to P1,000 from P500 of the monthly aid to senior citizens which was included in the 2024 national budget.

Critics have maintained that while the country gets mired in more debt, government payouts to beneficiaries of the various aid programs of the Department of Social Welfare and Development are promoting a “culture of mendicancy.”

Among DSWD’s aid programs are the Pantawid Pamilyang Pilipino Program, or 4Ps; the Sustainable Livelihood Program, or SLP; the Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services; the Recovery and Reintegration Program for Trafficked Persons; and the Walang Gutom 2027: Food Stamp Program.

Budget deficit

In a previous interview, Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, said that rising interest rates made debt servicing more costly for the government.

This, coupled with high inflation, called for more spending programs to aid poor Filipinos, thereby widening the budgetary deficit, or government earnings vis-a-vis its expenditures, he explained.

As of November 2023, amid rising borrowing costs and high inflation, total government indebtedness stood at P14.51 trillion, up by P27.92 billion month-on-month.

A Social Weather Stations poll released in the same month showed that 48 percent of Filipinos rated themselves as poor, against 25 percent that said they were not poor, and 27 percent that placed themselves on the borderline.

Another SWS survey taken from 8 to 11 December last year found that 12.6 percent of Filipino families experienced involuntary hunger at least once in the past three months. (See related story)

In an October 2023 report to the United Nations, the Commission on Human Rights noted the rise of street-level mendicancy in the country as penalized under Presidential Decree 1563.

In its input to the Report of the UN Special Rapporteur on the Right to Adequate Housing and the Special Rapporteur on Extreme Poverty and Human Rights, the CHR railed against penalizing street-level mendicancy.

Alarming

“This alarming situation has prompted local government units to adopt a stronger stance against mendicancy by enacting ordinances that impose hefty fines on any person who gives alms to beggars,” it said.

Government critics, however, do not make distinctions between the purported indolent tendencies of both street-level mendicants and those who rely on government doleouts.

In breaking down the new loans, the BSP said the first type posted a 40.36-percent growth rate compared to the level in 2022, while the bond issuances declined from $4.77 billion during the period.

The bulk of the loans was directed to infrastructure projects, such as transportation with $4.07 billion or a 28.1 percent share. Next was general financing requirements with $4 billion (27.61 percent).

The others were economic recovery and development, environmental protection and

climate resilience with $3.07 billion (21.16 percent); Covid-19 pandemic response with $2.27 billion (15.64 percent); agriculture with $0.88 billion (6.05 percent); and education with $0.21 billion (1.45 percent).

The Constitution requires the national government to obtain approval from the BSP’s Monetary Board for projects to be funded by foreign loans before proceeding with the loan negotiations.

Carbon taxes

“The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels to support external debt sustainability,” the BSP said.

Newly appointed Finance Secretary Ralph Recto said the government plans to source most funds from domestic loans at 75 percent of all borrowings over external borrowings at 25 percent.

The Department of Finance reported the Philippine external debt-to-GDP (gross domestic product) ratio remained relatively more manageable at 28.1 percent as of the end of the third quarter of last year at 28.1 percent, compared to Malaysia’s 69 percent and Thailand’s 38 percent.

To reduce dependence on debt and collect more revenues, Recto said the Philippine government plans to implement carbon taxes on firms and the carbon emissions trade with other governments.

These measures also mitigate the impact of climate change as the private and public sectors are forced to shift to environment-friendly methods, he said.

On Monday, the DSWD said indigent seniors would start receiving P1,000 in a monthly social pension starting next month.

DSWD Assistant Secretary for Strategic Communications Romel Lopez said the funds for the realization of Republic Act 11916, or an Act Increasing the Social Pension of Indigent Senior Citizens, were included in the agency’s 2024 budget.

“The funds increasing the monthly stipend for social pensioners were approved and included in the 2024 budget of the agency,” the DSWD spokesperson said.

Republic Act 11916, which lapsed into law in July 2022, provides for a 100-percent increase in the monthly pension of indigent senior citizens from P500 to P1,000 to further help cushion the impact of high inflation.

The monthly social pension for seniors is given to qualified beneficiaries on a semestral basis with a total amount of P6,000 per payout to augment their daily subsistence and other medical needs.

Some 4,085,066 indigent senior citizens are covered by the social pension program for 2024.