‘Pass bill repealing automatic debt-payment appropriation’


WITH government owing more than P11 trillion, a party-list group renewed calls for the passage of a measure repealing the automatic appropriations for debt service.

Bayan Muna Rep. Ferdinand R. Gaite called on the Palace to seriously study and prioritize House Bill (HB) 4087, or the “Repeal the Automatic Appropriation for Debt Service” bill. HB 4087 will amend Section 31 of Presidential Decree 1177 or the Budget Reform Decree of 1977 issued by the Marcos administration.

According to Gaite, the decree was issued to “appease international lending institutions which provides for automatic appropriation for public debt service.”

The measure will likewise amend Section 26, Chapter 4, Book VI of Executive Order 292, otherwise known as the Administrative Code of 1987, which reiterates in toto Section 31 of PD 1177.

“With the Philippines now being the biggest borrower of the World Bank, it would be best if the Duterte administration re-think its priorities and repeal the Marcos-era automatic debt servicing law,” Gaite said. “If not, then less and less of the national budget would go to basic and social services intended for Filipinos.”

Defect remedy

THE lawmaker added that the bill, “if enacted, “will remedy a long-standing defect in the government’s budget policy—the indiscriminate payment of all public debts including questionable loans, regardless of the grave diversion of finances from basic services.”

Gaite further said that the bill affirms and asserts the obligation of the State under Article II, Section 9 of the 1987 Constitution to promote a just social order through policies that provide adequate social services.

The lawmaker further said the bill’s passage also seeks to pave the way for a more “rational and humane” budgetary process.

“It seeks to bring hundreds of billions of pesos annually allocated to debt servicing and instead redirected to benefit the people,” Gaite said. “Government can then begin to prioritize badly needed social services.”

At the end of September, the national government’s outstanding debt is at a new high of P11.92 trillion, according to the lawmaker.


Gaite also describes as “unjust” the automatic appropriation for debt service at the expense of basic services.

“It preempts the people’s prerogative by giving absolute and unquestioned priority to debt servicing and placing so much of the national budget outside normal budget processes. It has caused economic policy to systematically favor narrow private creditor and corporate interests over the needs of the people,” he added.

Bayan Muna has said in the bill that since 1986, cumulative debt servicing has been consuming almost a third of the annual national government budget. The group said the need to repeal the law on automatic appropriation for debt servicing has become more urgent as the public debt has become an albatross for the nation. “The large share of debt servicing in the national budget has exacerbated the government’s worsening neglect of social service since 1997. Education, health and social welfare budgets remain insufficient while a large share of the people’s taxes is allocated for debt payments,” the party-list group added.

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