Need for debt moratorium to help MSMEs, rehab PH cited

HOUSE Deputy Minority leader and Bayan Muna Rep. Carlos Isagani Zarate along with Bayan Muna Chairman Neri Colmenares on Sunday reiterated their call for the Duterte administration to impose a debt service moratorium to help micro, small, medium enterprises (MSMEs) and rehabilitate the country, especially the health care system.

"According to the UNCTAD, some 64 low-income countries currently spend more on debt service than their health systems, while the Philippines is among the top 30 poorest countries in the world based on Gross Domestic Product (GDP) per capita, it should prioritize the strengthening of its health system and renationalize privatized hospitals," said Zarate, lamenting the ill-effects of the deadly coronavirus disease-19 (COVID-19).

They made the statement following the recent proposal of the United Nations Conference on Trade and Development (UNCTAD) for a global deal of debt cancellation of around $1 trillion owed by developing countries.

"With this in mind, the Duterte administration, along with other countries hard struck by the pandemic, should now seriously 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 multilateral lending institutions," said Zarate.

"As of now, there may be 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," said the progressive lawmaker.

"As it is, every Filipino is already neck deep in debt at P80,000 each due to the P8.1 trillion government debt. Even those not born yet already have debt and it is best that no debt is further added," said the Davao-based congressman.

Meanwhile, Colmenares revealed that 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."

"It can also be used to build disaster resilient evacuation centers for every three barangays like in House Bill (HB) 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," said Colmenares.

"I think that the Duterte administration should seriously consider this now and urge other countries hit hard by COVID-19 to follow suit for the sake of their citizens because the world is already in recession. So we need to truly reboot, reconfigure and jump start the economy," Colmenares ended.

The left-leaning party-list group issued the statement as the Duterte administration announced that it will be borrowing from ADB that extended a $3-million or around P153 million grant to aid the Philippine government’s efforts to combat the disease.

Yet to be added to the government’s war chest is the planned $5.7 billion or roughly P290.7 billion in loans from the ADB and the WB, according to the group.