SOMEONE ELSE’S WINDOWS: Budget and the debt trap By H. Marcos C. Mordeno / MindaNews

MALAYBALAY CITY (MindaNews/15 Sept) – Malacañang has submitted to Congress a proposed 2011 national government budget amounting to P1.645-trillion, or an increase of P104.4 billion from the 2010 budget. The increase, however, won’t necessarily mean improved delivery of basic services and a promise of a better life for ordinary Filipinos. A large chunk of it is allotted for purposes other than economic development that really benefits those living at or below the poverty line.

Then who benefits from the increase? First, the good news: the Department of Education will get a 12.9-percent increase or P31.1 billion more the bulk of which is reportedly for building new classrooms and hiring additional teachers. Now for the bad news: the military gets an increase of 17.9 percent or P10 billion. Defense budget next year stands at P65.8 billion, a move that appears to negate the Aquino administration’s avowals to pursue peace negotiations with Moro and communist-led rebels. It’s highly questionable since the military has time and again bragged that Oplan Bantay-Laya, the Arroyo-era counterinsurgency plan, has drastically reduced the number of New People’s Army rebels nationwide.

The Philippine National Police also gets a significant 13.2-percent increase or P6.6 billion. How much of this amount goes to counterinsurgency is not known as of the moment.

On top of these dubious allocations is the whopping 29.2-percent increase (P80.9-billion) in interest payments on debt, the largest absolute increase so far. The total amount for debt servicing next year will reach P357.1 billion. This amount is 21.7 percent of next year’s overall budget.

In contrast to the huge budget for debt interest payments, the government has proposed large cuts in the allocations for agriculture, power and energy, water resources development and other economic services. Power and energy, for example, suffers a 65.5-percent cut or P3.4 billion. It isn’t farfetched that government will pursue in earnest its plan to privatize the power industry to give foreign investors more leeway in controlling a sector made more lucrative by laws like the Electric Power Industry Reform Act.

Agriculture gets a bigger absolute reduction in the 2011 budget – P23.1 billion or 5.2-percent. This could mean abolition of or decrease in subsidies for farmers and scrimping on allocations for support services like irrigation systems and technical assistance.

Social services will suffer too from budget cuts. The health budget has been reduced from P40 billion to P38.6 billion. With the continuing neglect of the health sector, the ordinary citizen going to government clinics and hospitals has to expect more of the same – insufficient medicines, poorly maintained and outdated equipment, and an inadequate number of nurses and physicians.

It escapes logic that the government should prioritize debt servicing over domestic needs. P357.1 billion is P357.1 billion, enough to address the miserable state of public medical institutions, undernutrition, the acute housing problem, lack of textbooks, disaster preparedness and other recurring problems.

President Aquino points to corruption as the major impediment to progress in this country. But as the 2011 budget and previous budgets would show, our subservience to foreign creditors is eating up a much larger portion of our fiscal resources and keeping our human development index low.

Congress would invoke Presidential Decree 1177 in justifying the huge appropriation for debt servicing. This Marcos-era edict provides for a minimum percentage of the national budget to be allotted for payment of the country’s ever growing foreign debt. One can only wonder why our lawmakers haven’t had the fortitude to repeal an authoritarian decree that’s clearly meant to please our foreign creditors at the expense of poor patients in hospitals and other Filipinos who are in dire need of government attention.

(MindaViews is the opinion section of MindaNews. H. Marcos C. Mordeno can be reached at