Sunday, July 29, 2007 Group raises alarm bells on gov’t debt pre-payment scheme
THE Freedom from Debt Coalition (FDC) has called on Congress to look into the debt management strategy of the Arroyo administration, particularly the pre-payment of debts, which it claimed only delays the onset of another debt crisis.
FDC president Ana Maria Nemenzo said in a paper she presented before a University of the Philippines (UP) forum that the “improvements” in the debt situation that government has been boasting about happened because of the pre-payment of loans in exchange for new loans with longer maturity, the strong peso, and the decreased availment by agencies of direct loans.
Nemenzo likened Arroyo’s debt management program to “pyramiding”, which “might be working at the moment but is highly unsustainable.”
“This grand pyramiding scam being perpetrated by this administration is a deliberate attempt to deceive the Filipinos that the country’s debt problem is seriously being addressed. The truth is, it only delays the onset of another debt crisis, while the debt problem embeds itself further,” she said.
She said the government prioritizes creditors over Filipinos because the administration must convince its creditors that lending to her government is good business.
Nemenzo said Arroyo is engaged in her own “FrancSwiss scam” to “virtually mortgage the future of Filipinos,” referring to the investment company that is under investigation of alleged pyramiding which has victimized several personalities.
Finance Secretary Margarito Teves has said there is nothing wrong with pre-payments because government is just taking advantage of more favorable conditions especially when the situation has changed such as when interest rates have gone down. (JMR/Sunnex)
