It's not the amount, it's how you spend the debt.
(Bangko Sentral ng Pilipinas)
One of the biggest problems that block the economic growth and development of our country is the foreign debt amounting to $52 billion. Foreign debt is defined as a loan or debt incurred by a certain country to foreign creditors and denominated in foreign currencies. Creditors include commercial banks, foreign governments and multilateral institution such as the International Monetary Fund (IMF), Asian Development Bank (ADB) and the World Bank.
The Philippine debt problem is part of the worldwide debt crisis taking a fast hold to the whole continent of Latin America, Asia, Africa and Europe. A country like the Philippines is much in need of borrowing money for developing projects in basic services like health, education, agriculture, national security, and even during big natural calamities.
No foreign debt can be fully paid because it is endless. The rule is that you must pay what you have borrowed, but the problem is, for us to be able to pay it, of course you have to borrow again.
How Foreign Loans Work
According to Ms. Cynthia Marcelo of Bangko Sentral ng Pilipinas (BSP), before foreign creditors grant loans to countries, they make sure it is in the debtor's capacity to pay. Questions are raised like: How are you going to pay for it? How much interests? On what projects will the loan be for? Creditors will have to study the economic performance of the Philippines. The BSP has to review the total receipts of our country-dollar earnings and dollar payments.
Copyright © 2001. The Supervixens.
Sheryle Pablo and Dinah Silverio. All Rights Reserved.
University of the Philippines,Diliman Q.C.