Strengthening the Freedom from Debt Coalition’s Role in the Proposed Congressional Commission on Debt (A Policy Brief)

Joel F. Ariate Jr.

This policy brief was prepared as part of the United Nations Research Institute for Social Development's (UNRISD) study entitled "Global Civil Society Movements: Dynamics in International Campaigns and National Implementation." The Philippine country study examined five contemporary civil society movements that deals with debt, international trade rules and barriers, global taxation, corruption, and fair trade.

Statement of the Problem

In the proposed Congressional Commission on Debt,[1] the main challenge is how to assure the “active involvement and participation in all activities” of people’s organizations that engage in freedom-from-debt advocacy, like the Freedom from Debt Coalition (FDC) as stipulated in sec. 5, (e) of House Joint Resolution (HJR) No. 2 and Senate Joint Resolution (SJR) No. 1[2] of the Thirteenth Congress of the Republic of the Philippines.

Objective

To suggest possible amendments to SJR No. 1 to make it more responsive to art. 16, sec. 13 of the 1987 Philippine Constitution which states that: “The right of the people and their organizations to effective and reasonable participation at all levels of social, political, and economic decision-making shall not be abridged. The State shall, by law, facilitate the establishment of adequate consultation mechanisms.”

Background

HJR No. 2 and SJR No. 1 of the Thirteenth Congress of the Republic of the Philippines intend to create a Congressional Commission on Debt. Being a congressional commission, its membership is limited to the following: the chairperson of the Senate Committee on Finance, the chairperson of the House Committee on Appropriations, six members of the Senate and six members of the House of Representatives to be designated by the Senate President and the Speaker of the House of Representatives. It was also provided that two of the six members from the Senate and the House of Representatives “shall represent the minority as designated by the Minority Leader of each House.”

Sec. 3 of HJR No. 2 states that the Congressional Commission on Debt “shall, among other things, critically review and assess debt policies, strategies and programs.” The proposed commission has the following objectives:

a. Full examination and prioritization of the government’s goals and objectives with respect to public debt, including assumed and contingent liabilities;

b. Reassessment of the rationale and effects of automatic appropriation for debt service;

c. Encouragement of the active involvement of the private sector in the formulation and implementation of debt management strategies, policies and program;

d. Adoption of both traditional and innovative strategies on debt service reduction and the liquidation of the debt stock.

Voting 129 to 0, the Philippine House of Representatives passed on August 21, 2004 HJR No. 2, the Congressional Commission on Debt resolution authored principally by Rep. Edcel Lagman. On August 23, 2004, the House of Representatives transmitted the joint resolution to the Philippine Senate.

Sen. Rodolfo Biazon filed on August 16, 2004 the counterpart Senate joint resolution, SJR No. 1. On August 21, 2004 the proposed resolution was referred to the Senate Committee on Finance and Economic Affairs, chaired respectively by Sen. Franklin Drilon and Sen. Mar Roxas. To date, no action has been taken on the SJR No. 1.

People’s Participation in Crafting the Nation’s Debt Policies, Strategies, and Programs

The last attempt to shed a degree of democratic participation, policy coherence, and transparency on the nation’s debt that currently stands at Php4, 701.2 million was when Republic Act (RA) 6724[3] took effect on April 17, 1989. RA 6724 created the Joint Legislative-Executive Foreign Debt Council. The council was last convened in 1992 by President Fidel Ramos. The Joint Legislative-Executive Foreign Debt Council has become inactive as evidenced by its lack of proposed expenditure for fiscal years 1999-2006.

In proposing measures that will strengthen the people’s involvement and participation in the proposed Congressional Commission on Debt, it is instructive to look at what the Joint Legislative-Executive Foreign Debt Council aimed to achieve, in particular sec. 3 (h): “To facilitate nationwide consultations and public hearings on the foreign debt.” This particular provision carries in intent the spirit of art. 16, sec. 13 of the 1987 Philippine Constitution.

In the past, this provision has provided the FDC a toehold in the Joint Legislative-Executive Foreign Debt Council. FDC had participated actively in its consultations and public hearings. The hearings and consultations that were organized by the Joint Legislative-Executive Foreign Debt Council nationwide also gave the FDC an opportunity to bring their positions and advocacies on the nation’s debt at the local level. Indoors, economist and public finance experts from the FDC debated with the council; outside, FDC held pickets and demonstrations.[4]

The opening provided by RA 6724 helped FDC, especially during its early years (1988-1992), to establish itself as the leading coalition on the issue of national debt and debt-related matters. FDC’s active participation in the Joint Legislative-Executive Foreign Debt Council can even be said to have inspired Rep. Socorro O. Acosta to file House Bill (HB) 3565[5] during the Ninth Congress. Rep. Acosta’s bill, filed on October 9, 1992, wanted to amend the composition of the Joint Legislative-Executive Foreign Debt Council. She wanted to include two professionals from nongovernment organizations (NGOs) which have made in-depth studies on the foreign debt problem. Unfortunately, after being filed, nothing was heard anymore about HB 3565.

Compared to RA 6724, HJR No. 2 and SJR No. 1 are not as explicit on how people’s organizations can gain access to the congressional commission. The joint resolutions have both managed to neglect the previous effort of RA 6724 and HB 3565 to actively engage the people in crafting programs, policies, and strategies regarding the nation’s debt.

Suggested Amendments to SJR No. 1

Bearing in mind the intent of art. 16, sec. 13 of the 1987 Philippine Constitution, RA 6724, HB 3565, and how debt commissions have fared in other countries, in particular in Latin America, the following amendments to the SJR No. 1 now pending in the Senate are proposed:

A. In its section detailing the Congressional Commission on Debt’s purpose and objectives, sec. 3 (c) should read:

Encouragement of the active involvement of the private sector, in particular people’s organizations which have made in-depth studies on the nation’s debt, in theformulation and implementation of debt management strategies, policies and program;

1. The broadness of the term “private sector” might result in having the commission consult any actor from the private sector which might not even have the requisite experience in research and advocacy concerning the nation’s debt. Unqualified actors from the private sector might crowd out organizations like FDC, which at the outset, was the kind of organization that HJR No. 2 has in mind. In the House Journal bearing the floor deliberation for HJR No. 2, Rep. Edcel Lagman, the joint resolution’s main author, was recorded arguing that “transparency would be upheld and ascertained in the commission’s performance of functions and exercise of powers. He pointed out that the private sector, including competent non-government organizations such as the FDC which has been studying the debt problem for many decades now, will be made to participate in the public hearings that it will conduct (emphasis added).”[6]

2. The inclusion of the phrase “people’s organizations which have made in-depth studies on the nation’s debt” will also make clear and precise the provision in sec. 5 (e) which states that “concerned nongovernment organizations shall be accorded preferential and regular representation to guarantee their active involvement and participation in all activities of the Commission.”

3. In countries like Ecuador, Argentina, Peru, and Brazil, representative of people’s organizations that deal with the issue of national debt are given important roles in their debt commissions. In Ecuador, for example, a representative from the Jubilee Network sits as a member in the debt commission itself. In the case of the Philippines, it is understandable that the members of the commission be limited to the members of the Congress since it is a congressional commission. A limitation that can be remedied by having the specific clause mentioned above integrated in the SJR No. 1.

B. In its section detailing the Congressional Commission on Debt’s duties and functions (sec. 4), an additional item should be added: To facilitate nationwide consultations and public hearings on the country’s debt policies, strategies and programs.

1. There is a provision in sec. 5 (c) for the commission to conduct hearings and a public audit. However, this provision is insufficient to guarantee maximum participation from people’s organizations. The hearings which might be conducted by the commission could not be public and limited only to the government’s policy elite. Without any specific provision on the location and extent of the hearing, the commission might merely seek the comfort of its Manila-based office to the detriment of those from the provinces who would like to seek audience with the commission but with limited resources.

C. Sec. 5 (c) should be amended to read “Conduct hearings and a public audit of all loans and receive testimonies, reports and technical advice. Provided, that all hearings related to the public audit must be also public.

1. Making the hearings on the pubic debt audit public will “provide a powerful opportunity to hold the executive to account by testing the audit results against the testimony of executive officials and other experts. Hearings also can build public interest in important policy issues. In these ways, hearings can begin to create constituencies for change within parliament, civil society and the media.”[7]

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[1] House Joint Resolution (HJR) No. 2, Joint Resolution Creating a Congressional Commission to Review and Assess the Debt Policies, Strategies and Programs of the Philippines, Conduct a Public Audit of All Loans Acquired, Including Assumed and Contingent Liabilities, Validate the Utilization of Loan Proceeds, and the Payments Made Thereon, and Recommend Policies and Strategies to Reduce Debt Service as well as Institutional and Infrastructural Measures to Ensure Sound Fiscal and Monetary Status of the National Government Principally through Effective Debt Management.

[2] Being a counterpart measure, Senate Joint Resolution (SJR) No. 1 bears the same title and content as that of HJR No. 2.

[3] Republic Act No. 6724, An Act Organizing A Joint Legislative-Executive Foreign Debt Council, Defining Its Objectives, Powers, And Functions, Appropriating Funds Therefor, And For Other Purposes.

[4] Leonor M. Briones, former FDC president, interview by Joel F. Ariate Jr., digital recording, 28 June 2006.

[5] House Bill No. 3565, An Act Strengthening the Membership of the Joint Legislative-Executive Foreign Debt Council, Amending for the Purpose Section Six of Republic Act No. 6724.

[6] Journal of the House No. 17, September 13 and 14, 2004, http://www.congress.gov.ph/legis/print_journal.php?congress=13&id=18, accessed 06 October 2006.

[7] Warren Krafchik, “What role can civil society and parliament play in strengthening the external auditing function?” http://www.internationalbudget.org/auditorgeneral.htm, accessed 05 October 2006.