GOCC's Debt hit P494B

In 2001, a staggering 211.95 billion Philippine pesos, of the Php 649.48 budget is appropriated for the payment of debts. The said amount is higher than the proposed budgets for education, housing and health services combined.

This year, the budget for social services may shrink some more as the National Government shoulders the growing debt of Government-owned -and controlled -corporations (GOCCs).

Data from the Department of Finance (Dof) revealed that the GOCCs incurred debts amounting to some Php 493.35 billion (US$9.606 billion at PhP51.36=$1).

Of the amount, PhP26.22 billion are debts from domestic sources while PhP467.13 billion were sourced from foreign creditors.

Finance officials say that the government still has to determine the amount needed to be paid this year.

Estimates by the DoF show that the National Government has to pay some PhP600 billion in contingent liabilities of State-owned corporations in the next 20 years.

In 2000, the government's contingent liabilities reached PhP865 billion, bulk of which were guarantees given to build-operate-transfer projects and companies in the power sector, a study made by the US Agency for International Development (USAID) said.

The DoF has taken actions to trim contingent liabilities by requiring GOCCs to seek its clearance before they can apply for a loan guarantee from the National Government.

Finance Secretary Jose Isidro N. Camacho has said state firms seeking guarantees for their loans need to justify their applications based on strict requirements to be set by the Finance department.

The DoF also said it will veer away from granting guarantees to bring down its consolidated public sector deficit (CPSD) to PhP148.1 billion this year. The CPSD is the budget gap of the National Government, including the deficit of its monitored GOCCs.

A Finance official, meanwhile, said other proposals being studied include the collection of higher fees on GOCCs seeking guarantees for loans.