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MANILA, Philippines — Senate Minority Leader Aquilino “Koko” Pimentel III on Sunday sounded the alarm on the rising debt servicing costs, or the budget reserved to pay for the country’s existing debt.
This came after Pimentel noted that the debt servicing costs for the P5.268 trillion national budget for 2023 amounts to P1.630 trillion, which is 18.65 percent higher than 2022 debt service costs.
The new costs are also equivalent to 6.85 percent of the country’s gross domestic product.
“Ang ibig sabihin nito, P1.6 trillion ang ating pagsisikapan, pagpapawisan, pagtatrabahuhan plus uutangin din para lang makabayad tayo ng utang,” Pimentel said in a statement on Sunday.
(What this means is that we will have to strive, work hard, and sweat for the 1eP1.6 trillion, plus we will borrow just to pay off the debt.)
This huge cost of debt servicing diverts critical funds that should be used to augment social and health expenditures.
Pimentel then explained that of the P1.630 trillion, P1.019 trillion will go to principal amortization and P582.32 billion to interest payments.
Pimentel also noted that the government’s outstanding debt has already reached P13.021 trillion as of end-August and may reach P14.63 trillion by end of 2023.
“Ang bawat isa sa 109 milyong Pilipino ngayon ay may utang ng P119,458 (each of the 109 million Filipinos today owes P119,458),” Pimentel said.
Transparency in presenting budgets, borrowings, expenditures
Because of the rising debt service, Pimentel in the same statement said that government-owned and controlled corporations (GOCCs) should now become more transparent in presenting their corporate operating budgets, including borrowings.
“You should be able to explain your financial statements in layman’s terms during our hearings so that anyone can understand them because extravagant spending of GOCCs, if there are any, contribute to the bottom line of our national debt,” Pimentel said.
According to the senator, the P43 billion that the Power Sector Assets and Liabilities Management Corporation (PSALM) will borrow next year as well as the P5 billion that the National Power Corporation may borrow to fund its fuel purchase and subsidies — a big chunk of which how will also be used to pay existing debts.
Pimentel explained that since debts incurred by the GOCCs including the National Power Corporation, the Power Sector Assets and Liabilities Management Corporation, and the Philippine National Oil Company form part of the national debt, it is only proper that the public is aware of how these corporations are spending their funds.
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