$10M to be saved if Austria cancels RP debt

MANILA, Philippines – Filipino taxpayers could be spared the burden of paying about US$10 million in the next five years should Austria cancel the P500-million loan incurred by the Philippines 12 years ago, the Freedom from Debt Coalition (FDC) said on Wednesday.

FDC president Walden Bello visited Vienna last week and called on Austria's Federal Ministry of Finance for the termination of the loan and requested for possible refund of payments already carried out.

Bello, who was sworn in as Akbayan party-list representative in Congress, together with representatives of Austrian partner organizations, made the appeal in a meeting with Finance Ministry State Secretary Reinhold Lopatka last week. Bello also gave the State Secretary a copy of a parliamentarians’ petition signed by 86 Philippine lawmakers.

According to the statement, Bello cited two major reasons for the cancellation.

One is that the incinerators Austrian supplier Vamed Engineering brought to the Philippines in 1997 were substandard, not even meeting the emission levels the supplier guaranteed.

Bello also pointed out that the Philippines is heavily hit by the present global crisis, making non-payment of illegitimate debts an urgent measure for the country to use its own financial resources to stir up the economy.

Herbert Wasserbauer, advocacy and lobby officer of the development NGO DKA Austria, who accompanied Bello in the meeting, was quoted in the statement saying Lopatka expressed his openness to the request and pointed out that several debt cancellations were granted by the Federal Finance Ministry in the past through multilateral initiatives.

“A refund seems impossible, but the case will be re-examined in depth regarding a possible cancellation, though there is little precedence for bilateral debt cancellation as the incinerator case would be," Wasserbauer quoted Lopatka.

Lopatka also reportedly promised to coordinate with the project lead Michael Spindelegger, Austrian Minister of Foreign and European Affairs (BMeiA) regarding the appeal.

Contracted by the Department of Finance in 1997 with Bank Austria, the loan financed a project to establish waste disposal facilities for hospitals run by the Department of Health.
A main component of the project was the purchase of 26 incinerators called Multizon manufactured by Liechtenstein-based Hoval. These were supplied to the DOH by Austrian firm VAMED.

At the time of the sale, the incinerators would not have passed Austrian clean air regulations anymore. The Clean Air Act, a similar regulation passed in 1999 in the Philippines, imposed a ban on incinerators effective 2003. If the incinerators were still in use, their pollution levels would exceed current air standards 800-fold and pose a serious health threat. Despite this, the Philippine government continues to pay US$2 million a year to the Austrian government until 2014.

The call to cancel the debt was initiated in October 2007 by Stop Toxic Debt Campaign members that include FDC, EcoWaste Coalition, Healthcare without Harm, and Greenpeace.

Bello said the FDC is optimistic that the Austrian government will cancel the loan, so that payments appropriated by the Philippine government can be diverted to add more funds to country’s dwindling budget for health care.

In October 2007, Stop Toxic Debt! Campaign members that include FDC, EcoWaste Coalition, Healthcare without Harm, and Greenpeace began the campaign to get the illegitimate debt canceled.

The groups reached out to members of the Philippine Congress and to Austrian-based groups for support.

“We are optimistic that the Austrian government will cancel the loan, so that payments appropriated by the Philippine government can be diverted to add more funds to country’s dwindling budget for healthcare," said Bello. - GMANews.TV

Reserved. 2009 © GMA Network Inc