In 1965, the Philippine national budget was Php 2.4B, and the population was 32.8 million, Php 73/Filipino. The exchange rate was U.S.$ 1 = P3.90.
In 2024, the population is projected to be 116 million and the budget will be Php5.768Trillion; Php 49,700/Filipino.; U.S.$ 1 = Php56.70 (as of October 4, 2023).
If the national budget followed the peso devaluation, the 2024 budget should be Php 34.8B, an increase corresponding to the peso devaluation from Php 3.90 to Php 56.70.
Or if the national budget shadowed the minimum wage from 1989 (earliest minimum wage data available) of Php 89 to Php 610 in 2023, a 685% increase and if extrapolated back to 1965, the national budget would be about 1,000% or 10X of the budget in 1965: Php 25B. So, we finally got to Php 5.768 TRILLION, which is quite a mystery. Then consider that of the 2024 budget, Php 41.60 of every peso spent will be new debt, even if some of that borrowing is used to pay off maturing debt.
As of Oct 3, 2023, in the last 30 days, Php 5.8B was added to the national debt.
Php 2.4 trillion will be added to the national debt in 2024. At this rate, the national debt could double to Php 28T by 2028, at the end of the present administration.
12% of the 2024 budget is for debt servicing.
Even then, the government had not implemented its new development strategy. The sugar and coconut industries remained heavily overregulated: the processing mills could pay farmers far less than they might have if competitive marketing conditions prevailed, so farmers did not benefit from increased world prices. The state discriminated against agriculture in other ways. Preferring to keep grain prices low for urban workers and consumers, the government purchased rice and corn, which it resold at lower prices in urban markets. Rising oil costs pushed up the price of fertilizer and insecticides, causing further problems for farmers. Hence, real income for farmers barely remained constant or declined – the preceding was an assessment of the Philippine economy in 1972 by the Heritage Foundation. It strikingly resembles the current situation 2023 – as Yogi Berra of the NY Yankees said, “It’s deja vu“.
This is akin to electing the same politicians over and over again and expecting a different outcome.
Today, every Filipino born will have Php 129,310 of debt to their name. Likely twice that in 5 short years. There’s debt, then there’s too much debt. Before we sound the alarm, shall we wait until debt payments are 25% of the national budget? Should we wait until the Philippines returns to being a net borrower from the World Bank?
We pray this is not an intentional strategy to foment unrest and chaos from hunger and despair to justify authoritarian rule. Filipinos have seen that movie before, and we hope those who dare contemplate such a scenario remember its ending.
Today, every Filipino born will have Php 129,310 of debt to their name. Likely twice that in 5 short years. There’s debt, then there’s too much debt. Before we sound the alarm, shall we wait until debt payments are 25% of the national budget? Should we wait until the Philippines returns to being a net borrower from the World Bank? This happened during the elder Marcos’ term of office. We hope PBBM does not go down the same road already traveled.
Recently, there was outrage over Php11M being spent every day for over 11 days. Then there was the reported Php 10B total of similar confidential and intelligence funds (CIF) being available from all levels of government that will be shifted towards the West Philippine Sea crisis with China. What escapes scrutiny is that Php 10B for 2024 is a million per day for every calendar day, including weekends and holidays.
This is not to say that spending Php 11M a day is good compared to Php 27.4M a day – both are wrong given the nature of CIF spending, which is bereft of transparency and accountability.
Be reminded that Php 40 of every Php 100 spent is borrowed money, with interest, over however many years. Clearly, it’s not just Php 11M or Php 27.4M every day.
The national budget, Php 5.768 TRILLION, is Php 15.8 BILLION PER DAY. Who among Filipinos sees or feels the benefit of spending that much daily? Juan de la Cruz or ????????
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ABOUT THE AUTHOR: Dr. Crispin Fernandez advocates for overseas Filipinos, public health, transformative political change, and patriotic economics. He is also a community organizer, leader, and freelance writer.
