1. PHILIPPINE DEBT
STARLIGHT EXPRESS
DANNA ACAP
STEPHANIE CHIONG
KRYSTAL PUENTEVELLA
ENA VELASCO

2. HISTORY
 In 1961, Diosdado Macapagal departed from the
nationalist policies of predecessor Carlos Garcia
and he embraced free enterprise and opened doors
to free investment.
 In return, the United States, the International
Monetary Fund and the World Bank offered the
government huge loans. It was thought that the
foreign capital could be a catalyst for development.
This was however our entry into the debt trap.

3.  When Ferdinand Marcos became president in 1965, he
continued Macapagal's economic liberization policies.
And the outcome was that the debt rose from 277.7
million dollars to 840.2 million by the end of his term.
 When Marcos imposed martial law, the trend toward
economic liberalization accelerated. And he borrowed
from outside to finance deficit and nationalists like
Tañada, Recto, Garcia, and Diokno did not even oppose
ths decision.
 Almost 20 years after Marcos' regime, his successors
were still not able to rescue the country from debts and
rather only increased it. It went from 28 billion dollars to
69 billion dollars.The biggest borrowings were during
the Arroyo administration which was bigger than the
borrowings of Ramos and Erap combined and this was
only in a span of three years.

4. External Debt, 1982- 90
n.a.--not available. 1In billions of United States dollars.
2In percentages; GNP--gross national product.
3In percentages.
4As of June.
Ratio of Debt
Outstanding Ratio of Debt
Year Debt Service1 Service to
Debt1 to GNP2
Exports3
1982 24.54 3.50 62.5 42.5
1983 24.36 3.02 71.5 36.3
1984 24.38 2.30 77.2 33.4
1985 26.92 2.57 83.5 32.0
1986 28.37 3.04 94.1 34.5
1987 30.03 3.61 87.8 38.5
1988 29.16 3.48 74.8 31.5
1989 28.92 3.38 65.2 26.3
1990 26.974 2.35 57.9 n.a.

6. THE FOREIGN DEBT EXPERIENCES

7. THE FOREIGN DEBT EXPERIENCES
 The foreign debt experiences through the Marcos (1966-85),
Aquino (1986-91), Ramos (1992-97), Estrada (1998-2000) and
Arroyo (2001-present) administrations have then correspondingly
varied There is first of all the situation such as during the Marcos
dictatorship when foreign debt soared at unprecedented rates
from 1966 to 1985. Foreign debt of just US$599 million in 1965
increased forty-four-fold over 20 years at an average annual
amount of US$1.3 billion a year to reach US$26.4 billion by the
end of 1985. Borrowing was heavily concentrated in the post-oil
shock period of the 1970s.
 The Aquino government took over in the wake of the "debt crisis"
which started in Latin America in 1982 that, among others,
greatly constricted global lending. Thus the average
accumulation during the Aquino government was only US$591
million per year or less than half that during the Marcos period.

8. THE FOREIGN DEBT EXPERIENCES
 The Ramos administration was in contrast a period of rapid
increases in foreign borrowing at an annual average ofUS$2.2
billion. This rate in nominal terms even far surpassed that of the
Marcos administration. In large part this reflectedthe so-called
"emergent market" syndrome in the 1990s in which a handful of
Southern countries - especially in East andSoutheast Asia - were
seen as particularly profitable outlets for surplus finance capital.
In East Asia and the Pacific alone,total net resource flows soared
from US$27 billion in 1990 to US$128 billion in 1997; this
included an increase in theamount going to the Philippines from
US$895 million in 1992 to US$5.2 billion in 1996. This momentum
was maintainedcoming into the Estrada administration. Foreign
debt rose at a historically high rate of US$2.7 billion per year,
over ninetenthsof which was public debt and then largely in just
the first two years of the Estrada term.

9. FOREIGN DEBT SERVICE
The foreign debt service burden from 2001-2005 has consequently been
the heaviest in Philippine history whether measured in absolute terms, in
per capita or in its ratio to gross domestic product (GDP). Put another
way, the 2001-2005 period has seen the most severe drain on national
resources in its history with attendant adverse implications on economic
performance and development. For the purposes of seeing the immediate
drain on the Philippine economy, the debt service burden which measures
actual payments is more appropriate than the debt stock which mainly
reflects the sum of outstanding claims reaching into the future.

10. WHY IS SUCH A LARGE AMOUNT
ALLOCATED FOR IT IN THE NATIONAL
BUDGET?
 Almost 1/3 or more of the national budget goes to interest
payments on the debt of the government. The country
owes a lot of money from creditors.
 As figures indicate, the debt continues to snowball. There
is no evidence that it will ever significantly decrease in
the near future. The proof of the pudding is that the
money saved for debt service balloons every year.
 The government borrows to pay the money that we
borrowed and this has been a practice for many years. To
keep the government afloat and service its debt, it resorts
to borrowing from foreign and local creditors.

11. REFERENCES
 http://www.photius.com/countries/philippines/geogr
aphy/philippines_geography_external_debt.html
 http://msgrlope.multiply.com/journal/item/13?&show
_interstitial=1&u=%2Fjournal%2Fitem
 http://www.afrodad.org/downloads/Phillipines%20F
TA%20final.pdf