Post-Yolanda: Aquino’s disaster conspiracy with World Bank, ADB

by Carlos Maningat as originally posted at Post-Yolanda: Aquino’s disaster conspiracy with World Bank, ADB

Filipinos will foot an even bigger foreign debt bill in the coming years as some development agencies opted to dump multi-billion loans instead of providing full financial grants to the victims of super typhoon Yolanda. It is strange that the Aquino government – which brags of realigned and unused pork funds in billions – readily accepted the new debt ties.

In the minds of the skeptical few, why do we have to accept new loans to pursue rehabilitation efforts when there are billions of foreign aid pouring in and when there are also billions of discretionary funds, now mostly under the President’s control in the wake of the abolition of the priority development assistance fund (PDAF) program?

A month after Yolanda ripped through the country, the Asian Development Bank (ADB) signed a $500-million emergency loan to provide support in shelter and reconstruction, power restoration, livelihood, resettlement and psychosocial care, and environment protection. The loan was the first phase of its “support” for the typhoon victims.

ADB fueling corruption?

The ADB then pledged an additional $372-million loan and a $23-million grant, bringing the total financial package to about $900 million (P39.9 billion). The additional $372-million loan will support the Kapit-Bisig Laban sa Kahirapan – Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS), a program under Social Welfare Secretary Dinky Soliman which is tainted with anomalies. A former employee at the DSWD bared that funds under the program were allegedly misused by some government officials.

It was also noted by a former lawmaker that KALAHI-CIDSS has been an integral part of the government’s counterinsurgency program that has resulted in gross human rights violations over the last decade. KALAHI-CIDSS was started in 2002 by the Arroyo regime and continued by the Aquino administration, under the pretense of “peace and development” when it actually aims to purge villages of suspected communist elements.

Under the broad labels of “development” and “rehabilitation” lie particular policy prescriptions which foreign agencies are adept at sneaking into country programs. The ADB is no exception to this, as it has its “Strategy 2020” that is primarily geared towards the further promotion of increased private sector roles in building climate resiliency, social service delivery, and infrastructure provision in the Asia-Pacific.

Aside from the ABD, the World Bank also pledged loans worth $980-million (P43.48 billion) for Yolanda victims under the National Community Driven Development Project (NCDDP). The project will supposedly help communities rebuild “community-level or livelihood related infrastructure such as water, rural roads, schools and clinics, using retroactive financing.”

Japan also signed a 69-billion yen loan package (P29.39 billion) during President Benigno Aquino III’s visit in Tokyo in November. Of the amount, 50 billion yen will go to post-disaster efforts while the 19 billion yen will be disbursed for acquisition of maritime patrol ships.

Debt eats recovery

With the new loans imposed by foreign agencies, the country’s total foreign debt servicing – which is currently at an all-time high – is expected to even increase. Under the 2014 budget, P791.5 billion is allocated for debt-servicing, or around one-third of the total P2.268-trillion budget. Of the debt servicing allocation, P192.2 billion will go to foreign debt obligations (P104.3 billion for interest payments and P87.9 billion for principal payments). In August, the country’s foreign debt service payments increased by 7.25 percent to nearly $5 billion.

Debt servicing taking up an even bigger slice of the pie is certainly bad news, as it will eat out funds for social service and rehabilitation programs (which are by the way suffering from shrinking budgets). Imagine public funds that could have gone to financing a comprehensive climate adaptation program but could end up in the foreign debt vortex.  When that happens, the country could again be caught flat-footed in the face of new super typhoons. Another season of loan-dumping led by the World Bank and ADB will ensue, trapping new generations of Filipinos into debt. What is reinforced is the nasty cycle of indebtedness and climate change vulnerability – and the false sense of recovery.

Lest we forget, both the Senate and the House of Representatives have put up a supplemental budget for Yolanda victims worth nearly P15 billion out of unspent and realigned pork barrel funds. The fund, which are residues from lawmaker’s pork, is now under the executive’s control. This is separate from the President’s multi-billion calamity fund. The last thing we heard about it is that it is running dry, if we are to believe President Aquino.

Honestly, I cannot make sense out this dizzying combo of loans and standby government allocations in billions, except for one thing: the Aquino government kowtows to foreign impositions even in times of calamity. When a government cooperates with foreign “development” agencies in exploiting disasters to dump more loans, that is disaster conspiracy – the impact of which is climate and debt paralysis for Filipinos long suffering from economic and environmental vulnerabilities.