Phl financially sound, manages debt better – Palace

Malacañang refuted the statement of Freedom from Debt Coalition that President Aquino was a loan addict and even eclipsed his predecessor, Gloria Macapagal-Arroyo, as the biggest borrower among Philippine leaders since 1986.

Presidential Communications Development and Strategic Planning Office Undersecretary Manuel Quezon III said yesterday that the FDC was inaccurate.

He noted that the President reported in his last State of the Nation Address that the country’s dollar-denominated loans had been converted into peso with lower interest rates and longer payment period. The dollar-denominated loans were retired because of the fiscal space and reforms done by the Aquino administration.

The FDC said Aquino would leave his successor with a P6.4trillion loan of national government outstanding debt of which P4.16 trillion were borrowed under his term.

FDC had called for the repeal of automatic debt appropriations to ensure that government’s spending would prioritize social services for the people.

But Quezon said loans were “a basic reality of modern governance” so funds could be used for other purposes rather than tie or dry them up by paying off debts immediately.

“These are basic economic questions that, of course, are not accepted by the point of view of the Freedom from Debt Coalition, which has a more, perhaps, socialist orientation towards these things,” he said.

“However, I think by any measure, you can see in the ratings of the government, the sovereign debt of the Philippines and the economy as well as the confidence of both the local and foreign businessmen, that the management of public sector debt of the Philippines has been prudent and very responsible,” he added.