This was delivered by former Supreme Court senior associate justice Antonio T. Carpio on Friday, December 16, during 1Sambayan’s online forum, “Maharlika Investment Fund: Yaman o Utang ng mga Susunod na Henerasyon.”
Every year, Congress enacts the General Appropriation Act which authorizes disbursements from the revenues accumulated during the corresponding year in the General Fund. For several decades now, the revenues accumulated yearly have always been less than the expenditures for the corresponding year. In short, the national government has always been in deficit – expenditures have always exceeded revenues every year.
The total debt of the national government is projected at P13.64 trillion as of end-December 2022. Our debt-to-GDP ratio is now 64%, up from 39.6% in 2019, an increase of 24.4%. A debt-to-GDP ratio of more than 60% is considered not a healthy situation in terms of capacity to repay the debt. A debt-to-GDP ratio of more than 60% means we should start reducing our national debt, not increasing our national debt.
For 2023, the debt servicing under the proposed 2023 GAA is a staggering P1.6 trillion – or 29.8% of the proposed 2023 national budget, with P1.02 trillion for amortization of principal and P582.3 billion for payment of interest. This means that almost 30% of our national budget will go to debt servicing, and over P.5 trillion of that will go to interest payment alone. In addition, the projected budget deficit for 2023 is 6.1% of the national budget, or P1.
The question to the Filipino people is: how should we use our precious public funds – to pay our national debt and reduce the crushing debt servicing every year, or put the funds as equity of the MIF in the hope that its investments will earn more than the interest payments that the government pays annually for the borrowings to put up the equity of the MIF?
Jr is setting up DBP to fund MIF. 🤬