The Philippines is among the heavily indebted countries of the South.

The foreign debt per capita as of 1997 is $630. The GNP per capita for the same year was $900. This means that the Philippines is indebted at a rate of 70% of its income. These figures do not even include the domestic debt, which was already over a trillion pesos in 1997.

The poor are victimized thrice over by the Philippine government’s debt and related economic policies. First they have not really benefited from these loans. Second, the economic policies which led to the country’s indebtedness have also led to the greater deprivation of the poor and widening of the income disparities. Third, debt service robs the poor of resources that should have been spent for their welfare.

The poor and marginalized peoples are the ones who pay the most for the country’s debt. They pay for it with taxes and they pay for it through the social services that the government does not provide because it chooses to pay the debt.

In 1997, the Philippine government allocated 24% of the annual national budget to interest payments of the foreign debt. In 1999, the government intends to use at least P235 billion. Interest payments continue to be the single biggest item in the national budget.

A central issue in the Philippine government’s debt service policy is Section 26(b) Book 6 of the Revised Administrative Code of 1987. The law provides for automatic appropriation for principal and interests payments of the government’s debt. This was originally embodied in Section 31(b) of Presidential Decree 1177 signed by President Marcos in the late 70’s. This law gave Marcos -- and succeeding presidents, Aquino and Ramos -- a legal justification for the government to give priority to the servicing of its foreign loans even though this severely constrains the government from funding its programs for social services and infrastructure.

We earnestly seek your support to repeal this law that allows the systemic debt addiction and debt servicing at the expense of the people.

The repeal of Section 26 (b) of the Revised Administrative Code of 1987* would pave the way for people’s intervention in determining which loans to pay and how much should be allocated for debt servicing. It would open the gates for greater allocation for social and economic services.

So many lives have been sacrificed in the name of paying the debt. The Jubilee should be a time for the people to reclaim power over their lives and for the the government choose life over debt.