NAME: Franz Ediann Y.

Girado Date submission: 12/07/22

BSOT-1A Date submitted: 12/07/22

CONTROVERSIES

1. What was the loan amount given to us after WW-II for reconstruction of war damages.
According to the 1946 Philippine Rehabilitation Act, the total amount authorized for war-related
losses was $520 million. In order to make amends to private parties, this statute was created. Only
$400 million of the $520 million total budget was allocated.

2. How much has each President-to the present, had availed of foreign and domestic loans?
At the end of World War II, the Philippines, which had been a province of Spain, obtained
independence from the United States. President Marcos was chosen in 1965. After discovering that
he could not run for a third term in office under the constitution, Marcos proclaimed martial law in
1972. Because he was on their side during the Cold War, the US and other western nations provided
significant outside assistance to the Marcos dictatorship in order to maintain its hold on power.
Governmental and international organizations, including the World Bank, provided loans as one of
the main forms of assistance. It is estimated that Marcos stole up to $10 billion while in power.
Between 1970 and 1980, the government's external debt rose from $600 million to over $6 billion,
or 10% to 20% of GDP, at the same time. Early in the 1980s, US interest rates rose as the cost of
export goods decreased. In just a few years, the yearly loan payments quadrupled. More loans were
obtained in order to continue making payments on the debt and interest, growing from $900
million in the late 1970s to nearly $2 billion by 1983. The debt in the Philippines reached 70% of
GDP by 1987 after years of stagnation and a severe recession that saw it contract by more than
20% in the middle of the 1980s. The IMF and World Bank gave the Marcos regime loans totaling
$5.5 billion over the course of his dictatorship, and other foreign governments, including the United
States, contributed an additional $3.5 billion. Lending from the foreign private sector, which
includes banks, totaled over $9 billion. One infamous transaction involved loans backed by the US
government for the Westinghouse-built Bataan Nuclear Power Plant. The plant was profitable for
Westinghouse, Marcos, and his associates. It was constructed at the base of a volcano and on an
earthquake fault line, but it never generated any electricity. The Filipino people spent hundreds of
millions of dollars repaying the loans, and the debt for the worthless plant was ultimately settled in
2007. Through the 1980s, the Marcos regime faced growing public opposition; as a result, in 1986,
the "Edsa Revolution" saw him overthrown. The cancellation of the debts from the Marcos era was
sought by activists. In September 1986, however, the newly elected President Aquino addressed the
US Congress and declared that all debts would be paid in full. A later law was passed that put all
debt payments ahead of all other government expenditures. The Freedom from Debt Coalition was
founded in 1987 by a large number of the activists engaged in toppling Marcos, and it still exists
today. In 1988, it had its inaugural Congress with about 250 delegates present. The Freedom from
Debt Coalition called for the adoption of two principles: that since the people are the ones who
must pay the debt, they should be informed of its origins; and that debt payments should be
adjusted to promote economic growth and reduce poverty. The Freedom from Debt Coalition later
became one of Jubilee South's founding organizations. Nevertheless, hefty debt payments persisted;
they averaged 17% of export receipts in the 1980s and 1990s and remained around 12% in the
2000s. The Philippines' government has received a $110 billion loan since 1970, paid back $125
billion of it, and is still reportedly owed an additional $45 billion.

The size of the Filipino economy has grown 40% in terms of GDP per person since the late 1980s.
However, the number of people subsisting on less than $2 per day has increased from 33 million in
1988 to 38 million in 2009 were found guilty of bribing officials in Angola, Bangladesh, Ghana,
Madagascar, Mozambique and Jamaica., despite a slight decline in the percentage of people living in
poverty as measured by the World Bank. Local campaigners who documented the heavily
reinforced steel bridges that led into the middle of fields, were only used by pedestrians, or
connected up mud tracks made the project famous as the "bridges to nowhere" scheme. Despite
claims of excessive profit, corruption, and overcharging, Mabey & Johnson were charging
significantly more than competitors, and the UK government's UK Export Finance program
continued to support the program.

As years goes by, under the leadership of outgoing President Duterte, the World Bank has approved
its final credit to the Philippines, a $178.1 million loan to combat the pervasive stunting of Filipino
children. The World Bank's board of executive directors in Washington still had to decide on 11
projects totaling $1.84 billion in low-interest, concessional loans for the Philippines during the
incoming administration of president-elect Ferdinand Marcos Jr. after the loan for the multisectoral
nutrition project was approved on June 22.

3. How much is our present foreign and domestic DEBT?

MANILA, Philippines, September 3, 2022 - As of the end of July 2022, the National Government (NG)
owed a total of ₱12.89 trillion. The ₱96.09 billion or 0.8% increase over the level at the end of June
2022 was brought on by net domestic and international loan issuances as well as currency changes.

4. How much is the proposed fiscal budget for 2023?

The national budget that has been planned for 2023 is about ₱5.268 trillion. This is 5.9% more than
before. 5.024 trillion and will represent almost 22% of the total domestic product this year.
GDP) for the next year. The first fiscal year of President Ferdinand's administration.

₱5.268 trillion that’s how much the government plans to spend next year as submitted to congress.
President Ferdinand Marcos Jr. says he wants the proposed budget to result in economic
transformation and inclusive growth. Education tops spending with nearly ₱853 billion followed by
the health sector with nearly 300 billion pesos. Social welfare will get 197 billion pesos while
spending for agriculture now headed by the President will be up by a hefty 32 at 184 billion pesos.
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5. How much EACH Department/agency/commission is allocated?

The Department of Education (DepEd), State Universities and Colleges (SUCs), Commission on
Higher Education (CHED), and Technical Education and Skills Development Authority (TESDA),
which together make up the education sector, will receive ₱852.8 billion, an 8.2 percent increase in
funding, in 2019.

The government's 2023 infrastructure plans have a PHP1.196 trillion budget. From ₱75.8 billion in
2022 to ₱167.1 billion in 2023, funding will go to the Department of Transportation. This rise is the
result of more money being needed to pay for various railroad projects that have foreign assistance.
₱718.4 billion will be given to the Department of Public Works and Highways in 2023.

In order to increase vaccination campaigns and the uptake of booster shots for our vulnerable
population, the government's health sector will receive a 10.4% budget increase at ₱296.3 billion in
2023, inclusive of the budgets of the Department of Health and the Philippine Health Insurance
Corporation. At the same time, the nation's health system will be strengthened through
improvements to medical facilities and services.

A budget of ₱184.1 billion will be allocated to the Department of Agriculture (DA), its associated
businesses, and the Department of Agrarian Reform, which is an increase of 39.2% from the
amount allocated for 2022. In this amount, 29.5 billion is designated for irrigation services.

In 2023, the Department of Social Welfare and Development (DSWD) would get financial support of
₱197 billion. The government will continue to provide full funding for the Pantawid Pamilyang
Pilipino Program, the Social Pension for Senior Citizens in Need, the Protective Services for
Individuals and Families in Difficult Circumstances Program, the Sustainable Livelihood Program,
and the Supplementary Feeding Program.

Food security, water security, ecosystem and environmental stability, human security, climate-
smart industries and services, knowledge and capacity development, and sustainable energy are
the four main areas where the Climate Change Expenditure Tagging Mechanism is used to track and
report climate change expenditures. The Philippine government has set aside ₱453.1 billion for
climate change-related expenses.

6. What happened and where most of the budget went through?

Allocating income and borrowed money is a crucial part of government budgeting in order to
achieve the nation's economic and social objectives. Additionally, it comprises the administration of
public spending in order to maximize economic impact on the production and distribution of
products and services while maintaining a sound fiscal position. There are four main stages
involved in this: Budget Preparation, Budget Legislation/Authorization, Budget
Execution/Implementation, Budget Accountability & Review.

7. What is the standing economic condition of our country today?

Philippines, a country with increasing urbanization, a growing middle class, and a large young
population. Usually countries achieve their economic growth by slowly transitioning from
agriculture to industry and then to the service sector. Yet for the Philippines, this transition was
very quick. The service sector overtook the industrial sector in terms of GDP contribution. During
the early eighties, it increased from 36% in 1980 to 60%. Today, the services sector employs 56%
of the country's workforce, which is more than the agricultural and industrial sectors combined.
The main reason behind the growth of the service sector is that the Philippines was a former US
territory, and the US had a very strong cultural impact on the Philippines. More than 90% of the
people in the country speak English as their second language. The cultural similarities gave them
the opportunity to become the most popular business process outsourcing country, plus a popular
destination for other back office jobs too.

And the significantly low cost definitely adds a cherry to the top. Another source that brings a big
chunk of income is remittance. The remittance accounts for more than 9% of their gross domestic
product. This is a result of their good education system, which is suitable for many foreign
countries. Now, if we come to the industrial sector, it still holds 30% share in the country's GDP and
employs 18% of the country's workforce. This seems considerably low, and the reason behind this
lies in the geography of the Philippines. You see, the country is spread over 7,000 islands. This
makes transportation very difficult. This also limits land for development, and it explains why
Manila, the capital of the Philippines, is one of the densest cities in the world. The other problems
include high energy prices, poor infrastructure, low fdi, and lack of ease of doing business. So this
was a glimpse of the Philippines economy to know more.

8. What happened in the past (history) why become like this now?

Ever since we were freed from the conquerors and gained our independence, there were many
great and massive changes that were brought to the table in our country, the Philippines. The
government used to be non-existent in our country, but not until our second former president,
Manuel L. Quezon, sat in his position as president of the Philippines. As the year went by, many
corruptions and wars happened, and that is why we have a debt that is a burden. This heavy burden
carried on until today because, based on my own observations, people became so greedy that they
would end up corrupted.
Election fraud and corruption have been the key issues in our politics, causing numerous problems
and poor performance from the administration. Unlawful wealth, the Hello Garci affair, martial law,
extrajudicial executions, the pork barrel fraud, and many other events had a significant impact on
our economy, leading to the debt-ridden position we are in today with inadequate resources.