Former senator Ralph G. Recto yesterday said it’s now time to convert the country’s surplus of typhoons into a valuable “economic asset” by asking creditor countries to swap our debts for disaster-relief expenditures especially in reconstructing devastated sectors and infrastructures by the devastating storms that have hit the country last year.
Recto, who also served as socioeconomic planning secretary, said the “debt-for-disaster relief” program would free up billions in pesos earmarked for debt servicing or for future borrowings to rehabilitation effort every time a crippling disaster strikes the archipelago.
“For a change, let’s make our typhoons work for us,” he said.
He added: “The money we spend to service our debts could be swapped to be spent on disaster rehabilitation program instead.”
Recto said the Reconstruction Commission created for typhoons Ondoy and Pepeng rehabilitation could spearhead the negotiation with multilateral lending institutions and creditor nations to grant us a debt reprieve.
He said foreign creditors may just charge the billions that the government will spend on typhoon rehabilitation to our outstanding debts or by crediting this as part of their relief assistance to the country.
The Reconstruction Panel headed by Finance Secretary Margarito Teves has so far received pledges of more than $ 5 billion in loans and grants from local and international funding agencies for the rehabilitation and reconstruction of infrastructure projects damaged by the typhoons in September and October.
Recto nevertheless said such amounts may already be entered as “debt payments” in the books of our foreign creditors and multilateral lending agencies since it will go directly go to typhoon rehabilitation work.
He said a similar “debt swap” movement is emerging today as poor nations haggle debt concessions from their foreign creditors in exchange for taking care or nurturing their fast depleting-environment.
Recto said with a national debt stock rising to P4.338 trillion as of September last year and a typhoon reconstruction bill worth $4.4 billion, the government is strongly advised to apply for such debt-for-disaster relief packages with creditor countries and global lending agencies such as the World Bank.
Recto said the “debt-for-disaster relief” program should be used as template in securing funds in the future from the international community during calamity or disaster seasons.
“For every devastation like floods, earthquakes and drought, we get debt credits. The country seems to be a catch basin for typhoons and other natural calamities that we’re running on a surplus of it,” he said.
The United Nations (UN) has cited in its May 2009 report that the country is one of the disaster-prone nations along side with Bangladesh, China and India.
The cost of devastation by the back-to-back typhoons was estimated to be at P38 billion in terms of destroyed farm lands and infrastructure.
But the lingering impact is seen to drag on until this year that government has already factored in the prolonged typhoon-related reconstruction work to a widened deficit target of at least P293 billion in 2010, or just similar to the emerging funding shortfall for 2009.
source: Batangas City Capitol