President Ferdinand Marcos Jr. signed RA 11954 on July 18.
Posted on July 23 by Philippines Trending News, a YouTube channel with 425,000 subscribers, the video generated 87,149 views and 1,900 Likes as of 8:56 a.m. of August 9. Its headline reads: “GRABE to, BUONG PILIPINAS UMIYAK PRES MARCOS BURADO na UTANG ng PILIPINAS MEDIA AT DILAWAN NGA-NGA! (This is awesome! The entire Philippines cried. President Marcos got rid of the Philippines’ debt. The media and the yellows were dumbfounded.)”
In no part of the video showing him giving a speech after signing the law did Marcos say that the Fund would enable the country to clear itself of all debt obligations. But the President did say in his speech that the sovereign wealth fund would help fund projects without obtaining more loans.
Moreover, there is no provision in the law that says it is intended to service Philippine debt, domestic or foreign. RA 11954 stated that the Fund shall be established “by investing national funds, and coordinating and strengthening the investment activities of the country’s top-performing government financial institutions to promote economic growth and social development” (Section 2, Declaration of Policy).
As of June 30, 2023, the country’s debt had reached a record P14.15 trillion.
The Marcos Jr. administration needs to borrow P2.207 trillion more to cover the projected deficit in the 2023 national budget of P5.26 trillion — P1.65 trillion will come from domestic sources and P553.5 billion from external sources. The government is always forced to resort to borrowings from both domestic and foreign creditors, as it spends more than it earns.
Yet, of the total national budget, debt servicing will eat up roughly P1.6 trillion – P582.32 billion for interest payments and P1.01 trillion for principal amortization. The inclusion of debt servicing items in the national budget is mandated by Presidential Decree No. 1177, which is more popularly known as the Automatic Appropriations Law issued by the late President Ferdinand Marcos Sr., the incumbent President’s father.
The P1.6 trillion for debt servicing is equivalent to 72 percent of the amount to be borrowed to cover this year’s projected budget deficit, and 30 percent of the budget itself.
As with all our other reports, MindaNews welcomes leads or suggestions from the public to potential fact-check stories. (H. Marcos C. Mordeno / MindaNews)