International creditors urged to cancel PH debt
MANILA, Philippines—International creditors should cancel the Philippines’ debt and provide unrestricted grant aid instead of new loans, as the country continues to reel from the ill effects of Super Typhoon Yolanda, according to one of the United Nation’s (UN) independent experts on human rights.
In a statement, Cephas Lumina expressed concern that a heavy debt load could undermine the Philippines’ reconstruction and recovery efforts.
“While around $3 billion has left the country to serve its debt since the typhoon struck, the country has received so far only $417 million for its strategic response plan,” said Lumina, a lawyer from Zambia.
As independent expert, Lumina is described as focusing on the effects of foreign debt and other related international financial obligations of country on the full enjoyment of all human rights, particularly economic, social and cultural rights.
The position is honorary and Lumina is not part of the UN staff nor is he paid for his work.
He noted that while international donors rushed to the aid of the Philippines in the wake of Yolanda, the country still spends at least $22 million daily to pay off overseas debts.
According to the Bureau of the Treasury, the country’s outstanding obligations—from both domestic and overseas lenders—stood at P5.59 trillion as of end-January.
The UN notes that the Philippines is a lower middle income country even if a quarter of its population lives in poverty.
Being so, the Philippines has been disqualified from international debt relief programs.
Data from the Treasury show that of the debt stock, 35 percent or P1.97 trillion is owed to foreign sources.
The UN observed that for 2014 alone, the Philippines is expected to pay $8.8 billion in debt.
Further, in the aftermath of Yolanda, multilateral lenders have provided and offered close to $2 billion in loans and grants.
The World Bank has provided a $500-million support loan and a $480-million loan for rebuilding infrastructure and social services.
The Asian Development Bank (ADB) has offered nearly $900 million worth of assistance.
The UN said, however, that most of this was in the form of new loans and only $23 million was given in grants.
“Grant aid, not new loans, is needed to overcome the impact of the tropical cyclone which struck the country five months ago,” Lumina said.
