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Overview of the Philippine Debt Situation Freedom from Debt Coalitiom April 29, 2008 Outline (1) Philippine Debt Profile ??? 2007 Snapshot of Total Philippine Debt Public Debt – Focus on National Government External Debt NG Debt External (to be added later: Closer look at Domestic Debt; Breakdown of GOCC Debts and GFI Debts) Philippine Debt Through the Years Consolidated Public Sector Debt National Government Debt NG Debt External Fiscal Situation and Fiscal Impact of the Debt Arroyo, Debt and the Fiscal Crisis National Government Contingent Liabilities Outline (2)
Brief History of Debt Restructuring and Debt “Relief” Schemes Relevant Laws on the Debt and Borrowings Relevant Policies Relevant Laws Philippine Debt Profile ??? as of 2007 Philippine Debt PUBLIC PRIVATE EXTERNAL DOMESTIC Philippine Debt (end-Q3, 2007) in trillion pesos, billion dollars TOTAL Php 5. 144 T US$ 111. 51 B Domestic Debt Foreign Debt Php 3. 335 T US$ 72. 30 B PhP 2. 540 T US$ 55. 07 B PhP 0. 795 T US$ 17. 23 B Php 1. 809 T US$ 39. 21 B PhP 1. 679 T US$ 36. 40 B PhP 0. 13 T Public Debt Php 4. 219 T US$ 91. 47 B Private Debt Php 0. 925 T US$ 20. 04 B US$ 2. 81 B
Public Debt taken from DoF’s Consolidated Public Sector Debt Private Foreign Debt was taken from BSP’s Private External Debt Private Domestic Debt was taken from BSP’s FCDU loans of private residents Foreign Exchange Rate was pegged at BSP’s end-September 2007 rate: US$1=PhP46. 1315 Public Debt Public Debt PUBLIC External Domestic NATIONAL GOVERNMENT (NG) GOCCs GFIs Government Owned and Controlled Corps Government Financial Institutions National Government Debt (NG) (in trillion pesos, billion US dollars, using US$1 = PhP41. 6) NG Outstanding end 2007 Php 3. 712 T US$ 89. 24 B
Domestic (by instruments) Treasury Bills Treasury Bonds/Notes Loans Others Php 2. 201 T 0. 614 1. 565 0. 022 0 Php 1. 511 T 0. 226 0. 354 0. 033 0. 898 US$ 52. 91 B 14. 76 37. 61 0. 54 0. 00 US$ 36. 33 B 5. 44 8. 51 0. 80 21. 58 Source: Bureau of Treasury SDAD Note: Breakdown of totals may not add up due to rounding of digits Foreign (by creditors) Multilateral Bilateral Commercial Foreign Denominated Securities NG Contingent Liabilities Domestic Debt Foreign Debt 0. 484 0. 065 0. 419 11. 64 1. 56 10. 08 National Government Debt (NG) – External NG External Debt (per lender type) n billion US$, as of end 2007 20. 00 18. 00 16. 00 14. 00 12. 00 10. 00 19. 35 6. 29 4. 74 8. 00 6. 00 4. 00 2. 00 – 0. 50 0. 19 Ot h er s Bo nd s Co mm erc Bi lat e ial ral Mu ltil ate ra l NG External Lenders – Multilateral Asian Development Bank (ADB) European Union (EU) European Investment Bank (EIB) OPEC – Organization of Petroleum Exporting Countries OPEC Fund for International Development (OFID) International Fund for Agricultural Development (IFAD) International Bank for Reconstruction and Development (IBRD) International Development Association (IDA)
United Nations (UN) World Bank (WB) NG Multilateral Debt by Lenders in million US dollars, as of end 2007 3,043. 43 3500. 0 3000. 0 2500. 0 1,474. 30 2000. 0 1500. 0 1000. 0 15. 95 500. 0 0. 0 7. 25 28. 62 172. 35 ADB EIB OFID IFAD IBRD IDA Debts claimed by ADB in percentage 2% 4% 1% 2% 2% Finance 40% Infrastructure 17% 5% Multiple Agency 7% Energy 6% 40% 8% Transportation 6% Agriculture 8% 6% Environment 5% Education 4% Micro-credit 2% 6% Agrarian Reform 2% 7% 17% Health 2% Others 1% NG Debt External Lenders – Bilateral Australia Austria Belgium Belgium via Paris Club) Export Finance and Insurance Corporation (EFIC) Bank Austria AG Government of Belgium Paris Club Account without Peso Blocked Deposit w/ BSP Brunei Investment Agency Canadian Agency for International Development (CIDA) Export Development Corporation (EDC) Brunei Canada China China Export Import (EXIM) Bank China National Constructional & Agricultural Machinery import & Export Corporation (CAMC) Denmark France Germany Danish International Development Agency (DANIDA) French Protocol Loans Kreditanstalt fuer Wiederaufbau (KfW)
NG Debt External Lenders ??? Bilateral p2 Italy Japan Kuwait Paris Club Saudi Arabia South Korea Sweden United States (US) Italian Protocol Loans Mediocredito Centrale (MCC) Japan Bank for International Cooperation (Japan EXIMBANK and OECF, and via Paris Club) Kuwait Fund for Arab and Economic Development (KFAED) Paris Club Account without Peso Blocked Deposit w/ BSP Saudi Fund for Development (SFD) Korean Export-Import (KEXIM) Bank Swedish International Development Cooperation Agency (SIDA) Public Law 480 United States Agency for International Development (USAID) NG Bilateral Debt, By Country Top 8 6,000. 0 5,302. 40 (in million dollars, as of end 2007) 5,000. 00 4,000. 00 3,000. 00 2,000. 00 1,000. 00 354. 75 190. 99 115. 06 87. 81 60. 12 54. 58 61. 66 – Japan United States (US) Austria France China Canada Australia South Korea Debts Claimed by Japan in %, 4% 4% 1% 2%1% end year 2007 Infrastructure 46% National Govt 26% 5% Transportation & Communication 11% Agriculture 5% 11% 46% Education 4% Agrarian Reform 4% Science & Technology 2% Environment 1% 26% Others 1% NG External Lenders – Commercial Australia New Zealand ANZ/Export Finance and Insurance Corporation Austria France Germany Netherlands Spain
Raiffeisen Zentralbank (RZB) Osterreich AG Credit Commerciale de France Deutsche Bank AG ABN-AMRO Bank Banco Bilbao Vizcaya Banco Santander United States (US) Bank of America Corporation (BAC) NG External Debt Commercial Banks, Top 6 in million US dollars, as of end 2007 350. 00 300. 00 250. 00 200. 00 150. 00 100. 00 50. 00 Credit Raiffeisen ANZ/Export Finance and Zentralbank Commerciale de France (RZB) Insurance Corporation Osterreich Australia-NZ AG Austria Deutsche Bank AG Germany ABN-AMRO Banco Bilbao Vizcaya Bank Spain Netherlands 58. 22 49. 76 24. 69 6. 69 18. 33 347. 25 Debt Claimed by Deutsche Bank, in % 9% Salam Bridge 9% 2% 38% Tulay Pangulo Magsasaka Project 12% Tulay Pangulo para sa Magsasaka 8% 8% Tulay ni Erap sa Barangay 24% Tulay ng Pangulo sa Kaunlaran 9% Tulay sa Szopad 38% 9% 24% NG External Debt by Agencies,Top 6 in million US$ as of end 2007 22,735. 80 25,000. 00 20,000. 00 15,000. 00 10,000. 00 3,379. 89 1,036. 76 1,185. 62 527. 75 486. 07 456. 79 5,000. 00 – 2007 DA DECS DENR DOF DOTC DPWH RP (NG) Philippine Debt Through the Years Consolidated Public Sector Debt ??? through the years Public Sector Debt (in billion pesos, nominal) 6,000 5,074 5,289 5,034 4,944 5,000 4,369 4,000 3,000 2,000 1,000 1993 1994 1995 1996 1997 1998 ,913 1,949 2,167 2,237 2,952 2,669 3,666 3,624 3,850 1999 2000 2001 2002 2003 2004 2005 Ramos Estrada Arroyo 2006 Public Sector Debt (in billion pesos, nominal) 6,000 5,000 4,000 3,000 2,000 1,000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 External Domestic Ramos Estrada Arroyo Public Sector and National Government Debt (in trillion pesos) 6 Total Public Sector Debt 5 4 3 2 1 0 1993 Total National Government Debt 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Ramos Estrada Arroyo 2006 30% Total Public Sector Debt and NG Debt Growth Rate, in % 25%
Public Sector Debt Growth Rate National Government Debt Growth Rate 20% 15% 10% 5% 0% 1994 -5% 1995 1996 Ramos 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Estrada Arroyo -10% Growth rate of CPS ??? steep rise in recent years under GMA Decrease from 2004 to present ??? factors: Forex Rate Pre-payment Less Borrowings Relevant Developments: NPC Borrowings (account for big part of GOCC debt) ??? impact on ratio of NG and Non NG debt; Assumption of NPC liabilities after privatization ??? must take a look at impact From 1999 to 2000: Huge drop in domestic debt and increase in external conflict with data released earlier ??? changes in recording system?
NG Debt through the years Outstanding Debt of the National Government (in billion pesos, nominal) 4,500. 0 4,000. 0 3,500. 0 3,000. 0 2,500. 0 2,000. 0 1,500. 0 1,000. 0 500. 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 ForeignDebt DomesticDebt Aquino Ramos Estrada Arroyo Outstanding Debt of the National Government (in percentages) Aquino 1990 1991 1992 1993 1994 Ramos 1995 1996 1997 1998 Estrada 1999 2000 2001 2002 2003 Arroyo 2004 2005 2006 2007 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ForeignDebt DomesticDebt
After 1986 (post Marcos period) ??? increase in domestic debt vs external Factors: During Aquino period, more difficult to borrow from external sources than borrowing domestically; Eventually, restoration of credit rating, hence heavy external borrowing; but also heavy domestic borrowing ??? capital available ?? Buyers of domestic bonds may also be subsidiaries of foreign banks NG Outstanding Debt 1,000 900 800 700 600 500 400 300 200 100 – (in billion pesos, 1985 prices) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Ramos Estrada Arroyo 2007
Sharp increase in first 3 years under GMA Decrease from 2004: Foreign Exchange rate ??? peso value of US Dollar denominated debts are lower Lets look at trend if denominated in US Dollars ….. NG Outstanding Debt 25 (in billion dollars, 1985 prices) 20 15 10 5 – 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Aquino Ramos Estrada Arroyo 2007 Outstanding NG Debt as % of GDP 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 using nominal values Aquino Ramos Estrada Arroyo
Outstanding Public Sector Debt as % of GDP using nominal values 140% 120% 100% 80% 60% 40% 20% 0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Ramos Estrada Arroyo NG Debt to GDP from 2004 seem to indicate improvement ??? as GDP has been increasing…. NG debt per capita ??? very steep rise, and only small decrease since 2004 50 45 40 35 30 25 20 15 10 5 – Outstanding NG Debt per Capita in thousand peso, nominal 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Aquino Ramos Estrada Arroyo 2007 70 Public Sector Debt per Capita (in thousand pesos, nominal) 0 50 40 30 20 10 – 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Ramos Estrada Arroyo 18. 0 16. 0 14. 0 12. 0 10. 0 8. 0 6. 0 4. 0 2. 0 – Real Per Capita Income and Real NG Debt per Capita in thousands of pesos GDP Real (1985 prices) per capita NG Debt (1985, prices) per capita 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Aquino Ramos Estrada Arroyo 2007 0. 60 Real Per Capita Income and Real NG Debt per Capita in thousands of dollars 0. 50 GDP Real (1985 prices) per capita NG Debt (1985, prices) per capita 0. 40 0. 30 0. 20 0. 10 990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Aquino Ramos Estrada Arroyo Changes in the structure of NG External Debt … Short term debt vs medium and long term debt; Rise of bonds and financial instruments The government is on a drive to restructure old debts, and “improve debt manageability”. Continuing the post-Marcos policy and IMF-WB prescription of preferring medium-to-long term debts over short-term debts, preferring financial market instruments such as bonds over other forms of loans. Short, Medium and Long Term Debt as % of External Debt 00% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Medium and Long-Term Short-Term 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Marcos Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas 2007 NG External – Short, Medium and Long Term Debt, in billion dollars 60. 00 50. 00 40. 00 30. 00 Medium and Long-Term Short-Term 20. 00 10. 00 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Marcos Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas
Changes in Creditor Profile Types of Debt as % of Total External Debt 100% 80% Multilateral Bilateral 60% Bondholders /Noteholders Banks and Other FIs 40% 20% Suppliers 0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Others Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas National Government External Debt: NG Direct Foreign Denominated Securities NG Assumed Liabilities NG EXTERNAL DEBT OUTSTANDING, 4,500 in billion pesos, nominal values 4,000 Assumed 3,500 3,000 Foreign Denominated Securities NG Direct 2,500 2,000 1,500 ,000 500 1990 1991 Aquino 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Arroyo 2005 2006 2007 Ramos Estrada Assumed Liabilities of the NG Significant portion ??? immediately after the Marcos years (large part of it is assumed liabilities of private sector, based on sovereign guarantees of private debts) Have been reduced over the years Public guarantees of private risks, liabilities and profits are taken on different forms NG EXTERNAL DEBT OUTSTANDING, 90 in billion US$, nominal values 80 Assumed Foreign Denominated Securities NGDirect 70 60 50 40 30 20 10 990 1991 Aquino 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Arroyo 2005 2006 2007 Ramos Estrada Fiscal Situation and Fiscal Impact of Debt Inexhaustible Debt 6. 00 5. 00 4. 00 3. 00 2. 00 1. 00 5. 35 NG External & Domestic, in billion pesos 5. 29 3. 71 1990 NG Outstanding Debt 1991 to 2007 NG + Borrowings from Debt Service 1991-2007 S1 NG 2007 Outstanding Debt National Government Borrowings, Debt Service (principal and interest) in billion pesos, nominal 900 800 700 600 500 400 300 200 100 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Borrowings Debt Service Marcos Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas NG Borrowings and Interest Payments 700 in billion pesos, nominal 600 500 Interest Payments Borrowings 400 300 200 100 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Marcos Aquino Ramos Estrada Arroyo 2007 Our gross borrowings and our total debt servicing (interest plus principal) are almost at par with each other. The government is borrowing more than its deficit because it has to cover for the principal amortization of debts which is an off-budget expenditure.
National Government Borrowings & the Budget Deficit, in billion pesos, nominal 700 600 Borrowings Deficit 500 400 300 200 100 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -100 Marcos Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas National Government Borrowings NG Borrowings (in billion pesos, nominal) 450 400 Gross Domestic Borrowings 350 Gross External Borrowings 300 250 200 150 100 50 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 -50 2007
Marcos Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas National Government Borrowings, Debt Service, Budget Deficit, in billion pesos, nominal 900 800 Borrowings 700 600 500 400 300 200 100 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 -100 2007 Debt Service – Interest and Principal Deficit Marcos Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas Debt Service and Borrowings Drop The debt to tax ratio became almost 1:1 in 2006. But there was a drop of debt payments and borrowings from 2006 to 2007 due to the ff: 1.
Less Debts to Pay: Pre-payment of Debts: Last 2006, our Government prepaid $220 million worth of obligations to the IMF – Note spike in debt service in 2006 2. The further weakening of the US Dollar. 3. More Revenues to Burn Implementation of the 2% increase in RVAT Privatization of Assets GDP increase leading to increase in taxes NG Expenditures vs Revenues vs Borrowings in billion pesos, nominal 1,400 Tax and Non-tax Revenues 1,200 Total Expenditures 1,000 Borrowings 800 600 400 200 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Marcos Aquino Ramos Estrada Arroyo 2007 NG Tax & Non Tax Revenues vs Tax Revenues in billion pesos, nominal 1,200 1,000 Tax and Non-tax Revenues Tax Revenues 800 600 400 200 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Marcos Aquino Ramos Estrada Arroyo 2007 The Tax Crunch 1,200 NG Revenues vs. NG Debt Servicing (Principal & Interest), in billion pesos, nominal 1,000 Non-tax Revenues 800 Tax Revenues 600 Debt Servicing 400 200 983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Marcos Aquino Ramos Estrada Arroyo Source: Bangko Sentral ng Pilipinas The Tax Crunch 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 NG Debt Payments (Principal & Interest) as % of Revenues Aquino Ramos Estrada Arroyo Fiscal Impact of NG Interest Payments National Government Interest Payments from 1980-2007 in billion pesos, nominal 350 300 250 200 150 100 50 0
Interest Payments 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Marcos Aquino Ramos Estrada Arroyo 10% 15% 20% 25% 30% 35% 0% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Arroyo 2004 2005 2006 2007 Estrada Ramos Aquino Marcos 5% Interest Payments as % of NG Budget Interest payments have been increasing in nominal terms Interest payments as percentage of budget ??? improved since 2005 but has not gone below the levels during the 1980’s debt crisis.
Crisis for the lenders ??? not in terms of the impact on spending ??? but whether you can pay, in full, on time 1,400 NG: Total Expenditures vs Interest Payments vs Total Social Services vs Health vs Education Total Expenditures Social Services 1,200 1,000 Education 800 Health 600 Interest Payments 400 200 0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Marcos Aquino Ramos Estrada Arroyo 2007 Debt per capita vs. Social Services per Capita in pesos – nominal terms 12,000 10,000 8,000 Debt payment per capita Social service per capita 6,000 4,000 ,000 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Aquino Ramos Estrada Arroyo Debt per capita vs. Social Services per Capita in pesos – real terms (1985 prices) 2,500 2,000 Debt payment per capita 1,500 Social service per capita 1,000 500 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Aquino Ramos Estrada Arroyo Figures show that the drop in debt payments from 2006 to 2007 did not translate into a proportional increase in social spending. Neglecting Education
Basic Education Spending per pupil (deflated) 3500 3000 2500 2000 1500 1000 500 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Marcos Aquino Ramos Estrada Arroyo Source: NSCB Philippine Statistical Yearbook 2005 Neglecting Health Health per capita (deflated) 100 90 80 70 60 50 40 30 20 10 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Marcos Aquino Ramos Estrada Arroyo Source: NSCB Philippine Statistical Yearbook 2005 2,500 Suffer the Future
Debt per capita vs. Health, Education per capita 1985 prices 2,000 Health per capita (deflated) Education per capita (deflated) 1,500 Debt payment per capita (deflated) 1,000 500 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Aquino Ramos Estrada Arroyo The Burden of Debt National Government Debt per Filipino (using 2007 NG Debt and NSCB projected 2007 population) P 42,819. 42 Debt Servicing per minute (using data on Interest and Principal payments on 2007) P 1,165,898. 02 External Debt as % of GDP (using NSCB 2007GDP data nd external debt data as of Sep 2007 from BSP) 34. 51% The Suffering Continues DBM Proposed Spending for 2008 (in billion pesos) Debt Service Interest Payments Principal Amortization 624. 09 Education 181. 86 295. 75 Health 22. 90 328. 34 Agriculture and Agrarian Reform Environment Military 41. 18 10. 06 61. 42 Note: Breakdown of totals may not sum up due to rounding of digits. Distribution of Total Spending, per Administration in percentages 100% 90% 80% Net Lending 70% 60% 50% 40% 30% 20% 10% 0% Aquino (86-92) Ramos (93-98) Estrada (99-00) Arroyo (01-07) Economic Services Social Services Interest Payments
Gen Public Services Defense Arroyo, Debt, and the Fiscal Crisis The 2004 Fiscal Crisis In 2004, the Arroyo administration finally admitted and declared a fiscal crisis, after it incurred huge amounts of deficits year after year. It survived the crisis and reduced the deficit mainly through Further increasing its borrowings up to 2006 Aggressive indirect taxation schemes like E-VAT Spending cuts Increasing non-tax revenues, mainly through privatization Increase in GDP/GNP ??? translating to increase also in other