Akbayan Senator Risa Hontiveros’ explanation of vote on the Philippines’ ratification of membership to the China-led Asian Infrastructure Investment Bank (AIIB)
"Mr. President, I have refused to sign the resolution ratifying the Philippines’ accession to the Articles of Agreement of the Asian Infrastructure Investment Bank.
This is because, before becoming a member of another international financial institution, we should put our house in order by verifying whether the loan agreements our country has entered into with these institutions are in accordance with the principles on responsible sovereign lending and borrowing published by the United Nations Conference on Trade and Development.
Among others, these principles make lenders responsible for making realistic assessments of the sovereign borrower’s capacity to service a loan based on the best available information and following objective and agreed technical rules on due diligence and national accounts.
Lenders are also made responsible for performing their own ex ante investigation into and, when applicable, post-disbursement monitoring of, the likely effects of the project, including its financial, operational, civil, social, cultural, and environmental implications.
This responsibility should be proportional to the technical expertise of the lender and the amount of funds to be lent.
It is imperative that we do this, considering that our country has accumulated a substantial external debt burden, for which we are compelled to set aside a substantial portion of our annual budget pursuant to Section 26(B), Book VI of the Revised Administrative Code.
In the 2016 National Budget alone, 214.5 Billion Pesos has been allocated for debt servicing.
Of this amount, I have been advised by our partners in civil society that around 3.78 Billion will go to interest and principal payments in connection with a number of questionable loan-funded projects, including: the Power Sector Development Program, Sixth Road (Tullahan), Pampanga Development Flood Control, Bohol Irrigation II, and Angat Water Supply Optimization.
Thus, before joining another international financial institution, I strongly urge that the Congressional Oversight Committee on Overseas Development Assistance conduct a debt audit to verify whether the loan agreements our country has entered into are legitimate.
Pending the conduct of this audit, the payment of interest on questionable loan-funded projects should be held in abeyance.
In addition, before contracting additional sovereign debt, we should ensure that adequate safeguards are in place to protect the Filipino people from irresponsible sovereign lending and borrowing.
One of the most important ways this can be done is by finally repealing the provisions in our statutes requiring automatic appropriations for debt servicing.