sharing visions on how to respond to the debt challenge

8/14/2019 Sharing Visions on How To Respond to the Debt Challenge

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FORUM SERIES

Presentations

FOUNDATION FOR A SUSTAINABLE SOCIETY [FSSI]

FREEDOM FROM DEBT COALITION [FDC]



Sharing Visions for Ways to Respond to the Debt Challenge

August 24, 12:00 noon ‐ 4:OO PM

Ballroom A, Sulo Hotel, Quezon City

TIME

PROPOSED PROGRAM

12 noon ‐1:00 PM SOLIDARITY LUNCH AND REGISTRATION

A warm gathering of advocates in celebration of the Foundation for a

Sustainable Society’s [FSSI] 14th

year of uplifting the lives of the poor. A brief

audio‐visual presentation of Freedom from Debt Coalition’s [FDC] Odious

Debts

will

also

be

shown

to

open

the

forum.

1:00‐1:30 PM OPENING CEREMONY

Welcome Remarks Mr. Milo Tanchuling

FSSI Chairperson and FDC

Secretary General

Introduction of the Forum Moderator

Message from the Swiss Embassy Mr. Juerg Casserini

Charge

de

Affairs



2. Foundation for a Sustainable Society

3. Philippine Tropical Forest

Conservation Foundation

The presentation seeks to narrate how the debt reduction came to be, how it was managed and factors contributing to its success and its remaining challenges.

Ms Emma Lim‐Sandrino

Executive Director

Foundation for a Sustainable

Society

Atty. Jose Andres Canivel

Executive Director

Philippine Tropical Forest

Conservation Foundation

2:45‐3:15 PM

(30 minutes)

PRESENTATION 3: The Illegitimacy of

Debts

The presentation seeks to discuss the underlying principles and requirements for

both

indebted

and

debtor

countries

Ms Lidy Nacpil

International Coordinator

Jubilee

South



SPEECH OF JEURG CASSERINI

COUNSELLOR AND DEPUTY HEAD OF MISSION

24 AUGUST 2009

FOUNDATION FOR A SUSTAINABLE SOCIETY INC.(FSSI)

Honorable Congressman Walden Bello, AKBAYANRepresentative and President of Freedom from DebtCoalition (FDC)

Honorable Congressman Edcel Lagman, Representative of the 1st District of Albay, Bicol

Mr. Milo Tanchuling, FSSI Chairperson and FDC SecretaryGeneral



It is a great honour and privilege for me to address a few words

to such an illustrious group.

The best way I could contribute to today’s theme of “Sharing

Visions for Ways to Respond to the Debt Challenge” is for me to

recall a story.

This year we celebrate the 718th Anniversary of the Swiss

Confederation. In 1991 or 18 years ago, on the occasion of Switzerland’s celebration of its 700th Anniversary, the Swiss Debt

Reduction Facility or SDRF was passed and enacted. I guess they

had to do something big because 700 was a big number.



debtor country must put up in local currency a portion of the

original debt to be primarily managed by representatives of civil

society, for the financing of domestic development programs for

the poor.

Twenty-eight countries benefited from the Swiss Debt Reduction

Facility with eleven putting into practice the creative debt relief

scheme. Among these eleven is the Philippines, where in 1995,

the Swiss and Philippine Governments concluded an Agreementon the Reduction of External Debt.

The Scheme called for the Philippine Government to set up a

t t f d i th t f P 454 illi th th



the counterpart fund is managed by a foundation, whose highest

decision-making body is made up of civil society representatives.

In others, the highest decision-making bodies for the counterpart

funds are bilateral committees whose representatives are those

from the contracting governments. In other words, the Philippine

fund is managed solely by NGOs with the Philippine Government

merely as observer. In other countries, the funds are more or less

under government control.

I make mention of this difference because it attests to the strong,

dynamic NGO movement in the Philippines and to the vital role it

plays in the development process. I am told that the country has

f th hi h t b f i t d t



As you known, the endowment fund was and is structured as

long-term capital fund, only the interests or profits from

investments and inflows from loan re-payments are used to

finance the projects and programs of the Foundation.

The FSSI was established after a lengthy process that involved

both Swiss Coalition of Development Organizations and the

Philippine Caucus of Development Organizations and the

Philippine Caucus of Development NGO networks.

Incorporated in September 1995 by Philippine and Swiss NGOs,

the FSSI serves as a resource institution for the economic

t f t i i l d b iti i th



its operations of empowering various marginalized communities in

the Philippines through eco-enterprises.

The Foundation for a Sustainable Society was borne out of a

creative debt relief measure between the Philippines and Swiss

Governments and today, FSSI is the leading eco-enterprise

resource institution for the empowerment of poor communities in

the Philippines. FSSI is taking the lead in supporting community-

oriented, ecologically-sound, and financially-viable business

ventures knows as “eco-enterprises.” Sustainable economic

development is one of the visions of FSSI.

Wh t t h t hi t I d d it i f t ti d ll



Truly what has been achieved so far can be a benchmark for

other similar debt relief schemes.

My congratulations to the Philippine Government and the dynamic

NGOs that make up the FSSI. I wish the Foundation and all its

partner organizations good luck and much success with all its

projects.

Thank you and Mabuhay!

Manila, 14 August 2009

CAJ

###



DEBT-FOR-MDG SWAP:

RESPONDING TO THE DEBT CHALLENGE

(Speech delivered by REP. EDCEL C. LAGMAN during a forum sponsoredby the Freedom from Debt Coalition and the Foundation for Sustainable

Society, Inc. at the Sulo Hotel on 24 August 2009)

Since the revival of the Congress of the Philippines soon

after the May 1987 elections, proposals and initiatives to address

the foreign debt problem have come and gone, resurfaced and

stagnated.

Among these various debt reduction strategies, are the

following:

1 S l ti d bt di ti d bt t i d d bt



total of about 129 coauthors, the bill was voted down in

the Committee of the Whole with only 31 steadfast

supporters remaining after Malacañang issued funding

releases for Congressmen’s pet projects a day before

the voting.

3. Creation of a Legislative-Executive Foreign Debt Council

under Republic Act No. 6724 which was moribund even

before it started to operate as it was deluged by a chop

suey menu of options and was principally adopted to kill

the debt cap bill.

4. Debt swap arrangements where the Philippines was a

beneficiary like the debt-for-nature swap (World Wildlife

F d) i 1993 d d bt f t i bl i



proposed to transform debt payments to equity

investments by creditor countries which could

perpetuate foreign control or domination of important

domestic undertakings and sensitive national industries.

6. Proposals to create a Congressional Commission to

review and assess the debt policies of the Philippines

and conduct a public audit of loans acquired. This was

first initiated under House Joint Resolution No. 02 and

was the first measure of national significance

unanimously passed by the House of Representatives

early in the 13th Congress but was never acted upon by

the Senate. The Joint Resolution was re-filed in the

t 14th

C 10 S t b 2007 H



been provided for in Republic Act No. 9498 or the GAA

for Fiscal Year 2008. It enumerated an open-ended

listing of such odious loans like, among others, the

Austria Medical Waste Project, condemned as the

“ghastly incinerators”. This was vetoed by the President

and Congress did not have the independence and

political will to override the veto.

8. The current global financial crisis has activated interest

in debt-for-Millennium Development Goals (MDGs)

swaps which are both a debt reduction strategy and a

resource generation plan for sustainable human

development.



maternal health (Goal No. 5), and combating HIV-AIDS, malaria,

tuberculosis and other infectious diseases (Goal No. 6), among

other Millennium Development Goals.

Considering that the Philippines allocates a huge portion of

its annual budget to debt service, that crowds out badly needed

resources for health, other social services and sustainable

development, the debt-for-MDGs-swap is pure benefit that the

Philippines must pursue and avail itself of.

According to the United Nations Development Programme

(UNDP), the country’s resource gap in achieving the MDGs on

h l h h i l l l h l i l f 45 billi



It is a truism that maternal death is not only a tragic

circumstance but a scandalous social inequity.

Perforce, we must relentlessly pursue this newest initiative

on debt reduction which has been volunteered by creditor

countries of Europe like Germany, Italy and the Netherlands to

help developing debtor countries achieve the Millennium

Development Goals. Otherwise, if we do not act with alacrity,

similarly situated developing countries will beat us to the draw

like in the case of Pakistan which has reportedly forged a swap

with Italy.

I l k h FDC d FSSI h l li h f



Why Debt Reduction Now

by Maitet D. Pascual

Presented at FSSI-FDC Forum on

aring isions or ays to espon

to the Debt Challenge,”Sulo Hotel, Quezon City, 24 August 2009



Three Compelling Reasons

Justice demands that we be freed from fraudulentan o ous e s.

If there is anything the current global crisis is

teaching us, it is that the banks – like the elites in oursociety – do not seem to learn from their mistakes.

As government repays its creditors, it is accumulating

an ever increasing social debt to the people,

particularly the poor.



Fraudulent Debt

Government must go after perpetrators of fraud or the banks continue rofitin from lendin to us even under

onerous conditions

worse, the perpetrators/cronies become government officials

Bataan Nuclear Power Plant a classic example; Austrianincinerator loan a more recent one

House of Representatives recently recognized this by

removing interest payments on loans identified by FDC

from the budget BUT vetoed by Mrs Arroyo



Immoral Moral Hazard

In Philippine debt crisis of 1980s, banks spared fromlendin to cronies for over riced uestionable

projects the proceeds of which would end up back in

the banks' vaults as the privatized deposits of

corrupt officials and cronies Today banks all over the world, the same top

creditors of the Phili ines are in a crisis all of their

own making

Time for banks to own up to their responsibility for the

debt debacle we've been going through



Mounting Social Debt

Debt crisis of 1980s didn't end there.

Translated into power crisis of early 1990s

“Resolved” through overpriced and guaranteed risk-free

contracts with IPPs and liberalization of capital accounts Resulting in 1997 financial currency crisis and high electricity

rates, second only to Japan

Resulting in a public sector heavy with debt & totally

subservient to credit ratings and IFI prescriptions Resulting in nearly total decimation of manufacturing sector,

and an economy unable to provide jobs for its people.




Unexpected “dividend”: OFW remittances

who have access to job opportunities overseas

Hailed as new heroes primarily because their

remittances reversed the balance in the current account,creating sustained surpluses never before experienced

in the past

Remittances have allowed a weak economy to avert

crisis, spending by OFW families fueling growth caveat: questionable growth data




What debt crisis?

erta n y go ng y sovere gn so vency an qu ty

ratios, Philippine debt appears to be “manageable”.

Liquidity provided by OFW remittances the key factor

explaining why there does not appear to be animminent debt crisis, at least FINANCIALLY speaking.

But this is not because we no lon er have a debt

problem. On the contrary, the government has skillfully

passed on the burden of the debt to ourpeople, resulting in a SEVERE SOCIAL CRISIS.



Education Spending Deficit

If government followed“ ”

2500

recommended by

UNESCO, education

spending from 1996-2007 should have been

PhP3T500

1000

1500

2000

Actual education

spending:PhP1.4T, leaving a gap

of PhP1.6T

Ramos (96-97) Es trada (98-00) A rroyo (01-07) TOTA L (96-07)

0

Interest

Educ'nSpendingGap



Every cent paid out to creditors



... is a social obligation denied



... our youth



... our workers and producers



... our families



Hiding the debt problem

By forcing Filipinos to go abroad to work

Failing to address joblessness at home

Maintaining scandalously low level of social and

infrastructure spending



Results in deepening poverty

Families torn apart

Youth robbed of their dreams and their future

Able bodied women and men rendered

worthless, unable to develop their creative powerand spirit



This is a huge UTANG

That will take generations to repay

And requires a radical change in economic

paradigm to resolve



The FoundationThe FoundationFor the PhilippineFor the Philippine

EnvironmentEnvironment



The Philippines figures prominentlyin the biodiversity map...

…it is 7th among the 17“megadiversity”

-wealthiest nations: a hometo an inordinately largeshare of the world’sbiodiversity,



…and one of the world’s19 ecological “hotspots” -places which have the

g es concen ra on obiodiversity and are under the greatest threat fromhuman activities.



FPE is a private, non-stock andnon-profit corporationorganized solely in thepublic interest.



Founding History

The socio-political situation in thePhilippines after 1986 marked bythe restoration of democratic

ns u ons an eestablishment of new policyreforms, provided the enablingenvironment that led to theeventual creation of FPE.



Birth of FPE Registered with the Securitiesand Exchange Commissionon January 15, 1992, FPE isconsidered the largestPhilippine grant-making

government to supportenvironment andsustainable developmentwork among NGOs and POs

in the Philippines



FPE as an EnvironmentalFund

ENDOWMENT:The initial financialbase of FPE is anendowment fundestablished throughdebt-for-natureswaps*.

* A debt-for-nature swap is an arrangement by which an indebted

developing country undertakes, in exchange for cancellation of a portion of itsforeign debt, to establish local currency funds to be used to finance aconservation program



• CooperativeAgreement betweenUSAID and WWF-US

• Interim Board

Creation of FPE throughpartnership:

• Philippine Government

• Philippine NGOs and POs

• U.S. Government

• U.S. NGOs

• RegionalConsultations

• CooperativeAgreement betweenWWF-US and PBSP



Start-up financing camefrom the United StatesAgency for InternationalDevelopment (USAID)which, through the Natural

esources anagemenProgram (NRMP), providedthe grants that establishedan endowment worthabout US$22 million (or

PhP 569M in 1994)



• $ 21,851,335.55

USAID => $21,731,745.40

Total Endowment

an o o yo = , .TOTAL $21,851,335.55

• Php 569,809,065.24



FOCUSED ON THE

ENVIRONMENT:

FPE aims to reverse therapid destruction of thePhilippines’ natural

programs and activities thatstrengthen the role of NGOs, POs and localcommunities in the

responsible management of the ecosystem.



FPE was created througha process of nationwideconsultations withPhilippine NGOs andPOs.

Strong CSO involvement

They remain deeply involved in FPE’s programsthrough majority membership in the FPE Board of

Trustees (BOT) and their participation in threeRegional Advisory Committees (RACs):Luzon, Visayas, Mindanao



“The decision to go for NGOs and POs is adeliberate one. NGOs and POs in the Philippineshave shown a commitment to work on criticalconcerns, amidst difficulties and conditions of risk.

Why NGO?

, , , ,many of whom are proponents of grassrootsempowerment, are the best bridge to reach thecommunities, which are, in the final analysis, thebest stewards of the country’s natural resources.”

(Inputs for FPE Strategies by Dr. Ganapin, Jr, 1994)



FPE encouragesinternational and localcooperation between andamong communities, NGOs

Catalyst for Cooperation

Our Roles

,and government agenciestowards developing policiesand effective programs for biodiversity conservation

and sustainabledevelopment.



Grant-maker

FPE initiates, assistsand finances biologicaldiversity conservation andsustainable developmentactivities.

It aims to strengthen thecapabilities of NGOs and

POs and local communitiesin enhancing biodiversity

conservation andsustainable development.



FPE generatesadditional financial

resources for fundingqualified projects in

Fund Facilitator

biodiversity conservationand sustainable

development. FPE alsoprovides financiallinkages between

proponents and donors.



In March 2000, the BOTadopted the Area-BasedStrategy, “an operationalapproach to the localizationof or anizational

Area-Based Strategy

structures, systems andprocesses to servedesignated areas.”

It highlights FPE’s role as a catalyst for cooperation andas an advocate for sustainable development.



FAST FACTS AND FIGURES



FPE Intervention in 21 Sites

Philippines

FPE Area of

InfluenceForest Cover 5.8 M has. 1.35 M has.

Protected Area 1.5 M has. 562,110 has.

Marine Protected Area 159 MPAs 39 MPAs

IP Area/CADC 1.2 has. 117,723 has.

(57 CADT/CADC) (9 CADCs)

FPE Sites under PASites under

MPA IP Areas/CADC

LUZON

1. Bolos 220,000 1 *

2. Malanas/Balbalasang 16,700 42,000 (1)

3. Biak na Bato 2,117

4. Banahaw 11,133

5. Bulusan 3,6736. Palawan/Honda Bay 13

7. Zambales 41,161 (4)

Sub-total 253,623 has 14 83,161 has (5)



VISAYAS

1. North Negros 80,454

2. Northwest Panay 12,609

3. Mt. Talinis/Twin Lakes 65,0004. Bohol Marine Triangle 14

5. Guiuan 11

Sub-total 157,463 has 25 None

MINDANAO

. ,2. Matutum 15,600

3. Malindang 53,262 5,642.27 (1)

4. Pulangi 27,025 (1)

5. Arakan 1,895.47 (2)

Sub-total 151,024 has 34,562.74 has (4)

Total562,110 has. in 11

FPE sites 39 MPAs117,723.74 has in 9

CADC areas



Name of Project Sites REGIONSGRAND TOTAL (Totals 1,2,&3)

Mt. Bulusan Sorsogon Luzon 15,681,449.06

Banahaw and San Cristobal Luzon 17,148,542.37

Biak na Bato Luzon 13,873,436.17

Buasao and Poswey Luzon 11,635,913.04Baggao Luzon 4,945,026.00

Palawan Luzon 13,002,864.84

Zambales 2 PASS Luzon 6,562,017.84

Bolos Point Luzon 9,834,954.84

Banao-Malanas Watershed Luzon 8,209,402.84

Pulangi Mindanao 8,326,432.01

Mt. Matutum Mindanao 19,481,290.84

Dinagat Island Mindanao 10,811,645.00

. , , .

Ligawasan Mindanao 5,193,589.84

Tawi-Tawi Mindanao 1,151,060.00

Lake Mainit Mindanao 5,125,603.84

Arakan Mindanao 6,197,989.84

Pantaron Mindanao 2,020,000.00

Mt. Talinis (Ting Matiao Fdn) Visayas 10,969,503.42

Twin Lakes (SU-CENTROP) Visayas 12,463,047.42

Catubig Estuary/Palapag Visayas 4,818,801.00

Paranas Visayas 8,405,464.84

Guiuan Visayas 7,762,410.24Northwest Panay Visayas 9,260,313.24

North Negros Natural Park Visayas 7,695,511.84

Bohol Visayas 8,314,934.00

Total 241,473,119.46



Figure 5. Approved Projects & Amount by Type of

Grants

20

25

30

35

4045

50

0

5

1015

No. of

proposals

Million PhP No. of

proposals

Million PhP No. of

proposals

Million PhP

FY2006-2007 FY2007-2008 FY2008-2009

Competitive Proactive Site-Focused Total



Figure 6. Approved Projects & Amount by Funding

Level

25

30

35

40

45

50

Small

0

5

10

15

20

No. of

proposals

Million PhP No. of

proposals

Million PhP No. of

proposals

Million PhP

FY2006-2007 FY2007-2008 FY2008-2009

Medium

Large

Total

Fi 7 A d P j & A b R i



Figure 7. Approved Projects & Amount by Region

25

30

35

40

45

50

Luzon

Visayas

0

5

10

15

No. of

proposals

Million PhP No. of

proposals

Million PhP No. of

proposals

Million PhP

FY2006-2007 FY2007-2008 FY2008-2009

Mindanao

National

Total



Assets, Liabilities & Fund Balance

1997 to Jun-2009*

Year ASSETS Grant Liab. Oth. Liab. Fund Bal.1997 711,397,863 56,085,055 1,858,407 653,454,401

1998 737,971,818 61,006,267 15,332,705 661,632,846

1999 735,826,046 62,627,491 6,848,734 666,349,821

2000 786,905,977 64,699,079 9,517,549 712,689,349

, , , , , , , ,

2002 772,426,984 44,351,521 7,052,382 721,023,081

2003 803,962,195 43,668,945 6,525,560 753,767,690

2004 834,967,361 48,322,699 8,559,075 778,085,587

2005 812,160,504 47,559,247 7,931,928 756,669,328

2006 857,687,938 57,784,956 7,320,354 792,582,628

2007 839,568,138 55,205,340 8,849,578 775,513,220

2008 765,817,400 37,942,835 15,062,831 712,811,735

2009** 780,736,574 34,403,082 13,040,094 733,293,398



FPE Financial Standing

Initial Endowment P 569,809,065.24

As of 2009

, , .• Disbursed (54%) P 846,175,516.00

================

• Endowment Value P1,579,488,814.00

(100%)



Disbursements (Expenses)

• Grants Approved: P 560,628,025.00

• PDME P 115,441,940.00

• Administrative P 170,105,551.00

================

TOTAL P 846,175,516.00



The FSSI Debt-Swap



Our Roots

Product of a debt relief

program as a result of a

Just and

sustainable

participative, cross‐sectoral,

multi‐level

campaign

society!

Philippine Debt

50% Payment

Cancelled

FSSI

oun erpar



Product of successful negotiation

at

different

levels

Swiss NGOs

and

Swiss

Government

Swiss NGO and Phil NGOs

Swiss Government and Philippine



How it began..

•

NGOs was

launched

in

1989

formed an alliance

• Cam ai n Ob ectives

Obtain substantial reduction of bilateral debt

between Switzerland and poorer developing



Basic Proposition

“



The Petition

Establish a fund to write‐off both official deb

low‐income

countries

That part of the funds be converted into loccurrency to finance local development

ro rammes

For the Swiss government to promote debt



The Response

•

individuals signed

the

petition

• Passage of debt relief bill in March 19

• Establishment of the Swiss Debt

Reduction Facility (SRDF)



Eligibility of Potential Beneficiaries

for the Debt Swa

1. Highly indebted low‐income countries

. eas eve ope coun ry

3. Country with

major

bilateral

development

coopera

programmes

4. Debtor country must:

Practice good governance

‐

programme

Have an effective debt management, including



Creative Debt Relief Concept

• e emp on o ex erna e n oca currenc

“Counterpart Fund

(CPF)”

for

development

ro rammes

Macroeconomic

benefits

derived

from

debt

redupasse on to t e m cro‐ eve

Focuses on creating long‐term financial instrume

ca ital or trust funds



Elements to a Creative Debt

R li f h m

1. Bilateral debt relief agreement

2. Body responsible for the management

Counterpart Fund (CPF)

3. Pro ects and ro rams to be submitted

funding

.



PHILIPPINES: The Processes that Took Place....

• 1992 – initial

contact

of

the

Debt

for

Development

(DDU) of the Swiss Coalition with Phil NGOs

• Swiss Coalition – CODE‐NGO partnership

• Data gathering pertinent to Philippine bilateral debSwitzerland




Program Preparation

Series of

consultations

among

Phil

NGOs

and

re ardin the desi n of the CPF

As endowment fund –only interest will be used

grants and

loan

Criteria for projects to be supported –environm

friendly, gender sensitive, for disadvantaged se




Fact Findin Mission Ma ‐ June’93

Amount:

Sfr15‐

20

million

CPF payment will be in the form of treasury bills byen ra an

FSSI submitted a letter on behalf of the Philippine

urging the

Swiss

government

to

sign

the

agreemen

Jan‐Feb ’95 – the two Governments finally met in

PHIL – Department of Finance and Central Bank




Final Negotiation

Swiss

government

cancels

all

its

bilateral

reschnon‐official debt against the payment by the

Philippines of an amount in local currency to F

CPF

will

be

50%

of

the

external

debt

to

be

usesupport sustaina e pro uction projects

New foundation shall be created to manage th

,



FINALLY AFTER

THREE

YEARS,

THE SWISS

GOVERNMENT

SIGNED THE DEBT SWAP AGREEMENT



Our Vision

Sustaina

Development

Margina ize Po

Communities in t



Our Mission

‐



Our People

• AF • NASSA

• APPEND• CONVERGENCE

• NATCCO• NCCP

• FDC

• FPSDC

• NCSD

• PBSP• GREEN FORUM

• HELVETAS

• PHILDHRRA

• PHILNET‐RDI



FSSI is able to reach the poor…

Coco‐coir Business Integration and

Development Program

Fund for Sustainable Civil Society P

Micro Finance for Eco‐Enterprises

Sustainable Partnership

for

Eco

‐E

Development Program

Sustainable Waste Management

Eco‐Enterprise Program



Increased social investments

Over Php44

million in so

investments

provided to

enterprises.



Leaning towards

communit ‐mana ed enter rises

million supports

democratized

ownerships via p

cooperatives,



Reaching the entrepreneurial poor

,

individuals hav

derived incom

owners, worke

suppliers or su

contractors

More than 104

poor, mostly

women receiv



Our Partners

CabauatanJun S op

“Hardwork and perseveran

are keys to entrepreneurial

success. I am not ashamed

m

work. There

is

decent

income and I also help othe

earn in a way that is also g

to the environment”



Our Partners

“My income has

become better

compared with

commercial farming

techni ues. M

breathing problems

from using chemical ‐

disappeared. Our lives

have truly improved!”



Our Partners

3KJ Chicharon

“I used to work

factory that

here. Now, I

happy

to

havenough earn

while I can d



Our Partners

“We now produ

manu ac ure an

our peanuts wit

the help

of

a middleman”

‐



Our Partners

“Because of the loan for

banca im rovement we

Carles MPC

now have a bigger catch

because our

banca has

.

because of the project, I

am

able

to

provide

for

my

students’ needs unlike

before when we were

indin it di icult to ul ill



Our Partners

Kapatagan MPC

“Increasing organic

production to

provide

and direct support to 238

farmer ‐members”

‐Kapatagan MPC



Why Debt Swap?

• Opportunity to finance needed developm

services

• BUT not a solution to the debt problem

• Debt swaps…

–

– not a substitute on international commitme



Contact Us:

# 46 E., Samar Avenue cor

Eugenio Lopez St, SouthTriangle Quezon City 1103

Tel No: [632] 928-8671



Illegitimate DebtIllegitimate Debt

Lidy Nacpil, FDCLidy Nacpil, FDC

For the FSSIFor the FSSI--FDC Forum August 24FDC Forum August 24



Saving the Forests andSaving the Forests and

urse vesurse ves

Philippine Tropical ForestConservation Foundation



We envision lushand biologicallydiverse Philippineforests that aresustainablymanaged andequitablyaccessible to

responsiblestakeholders, as acollectiveresponsibility forthe greater good.



Creation of PTFCF

• Established under two bilateralagreements signed on Sept.19, 2002, between thegovernments of the UnitedStates and the Philippines underthe US Tropical ForestConservation Act.

• Leveraged $5.5 million USGappropriation to treat $41.5million in RP-US debt and divert$8.25 million in peso-denominated interest paymentsover 14 years, to the TropicalForest Conservation Fund.

• 9 Trustees (5 NGOrepresentatives, 2 each forPhilippine and US governments)



Modes of Support



Modes of Support

• Area Projects (upto Ps.2M/year)

• Small rants u

to Ps. 100T)

• Partnerships (FPE-EnDefense, nurserydevelopment)

• PTFCF initiatives



Knowledge generation and sharing

• Preparation of dipterocarpfactsheets (26 species out of

the 45 species documented

in the Phils.)

• Advocac on the use of

indigenous and endemicforest tree species including

use of multi-species

mangrove for reforestation

• Mapping of forest cover



Catalyzing bureaucratic action

and civil society action

• Enforcement in SouthernSierra Madre (50,000 bdft of

lumber and flitches) and in

NSMNP-Isabela (1.4M bdft

confiscated logs and lumber)

• EnForestment operations inPalawan confiscating 15

chainsaws, a vehicle and the

tools for timber poaching

• EnDefense program



Restoration and Sustainable Use

Nursery Management

-Non-mist Technology/Growth Chamber System

Soil and Water Conservation Foundation (Bilar, Bohol)



Restoration and Sustainable Use

Mangrove conservation as protection from rising sea water level, as

manifested by the need to increase the height of fishpond dikes.

Ipil, Zamboanga Sibugay



Ensuring Tenure

Implementation of Co-Management Agreement & IPRagreements

FRENDS (Quezon, Nueva Vizcaya)



Ensuring Tenure

Declaration of Protection Forest and Sacred

Ground covering 28,447 hectares in Mt.

Kampalili-Candalaga)

PBPF (Maragusan, Compostela Valley)

Ensuring Tenure



Ensuring Tenure

Restoration of abandoned fishponds –

LGU, NGO partnership

Ipil, Zamboanga Sibugay Vincenzo Sagun, Zamboanga del Sur

Li lih d f F t D ll



Livelihood of Forest Dwellers

Abaca intercropped with indigenous tree as abaca requires 60% shade

for better growth and fiber yield) and tinagak processing

Landcare Foundation – Claveria, Mis. Oriental

Li lih d f F t D ll




Processing of forest fruits and honey and and Buri product development and

marketing

Morong, Bataan; Bilar, Bohol and Bolinao, Pangasinan





Crab and grouper culture as incentive for mangrove conservation

COSEED (Vincenso Sagun, Zamboanga del Sur)

• Livelihood of Forest Dwellers



• Livelihood of Forest Dwellers

Tuway (bi-valve) production and crab fattening

as incentive to mangrove conservation

Bangsa Palawan - Rizal, Palawan

PTFCF Supported Projects (2008)



Dr. Abraham – Sanchez Mira, Cagayan

LIFE – Maragondon, Cavite

CBMSF – Morong, Bataan (Year 2)

Tanggol Kalikasan – NSMNP, Isabela

BIND – MKNP, Negros Occidental

BICAS – Diffun, Quirino

Illenberger & KPLN– Calapan, Mindoro

(BRUTUS) & Roxas, Oriental Mindoro

CONCERN –Pampanga

ISO & PIBCFI – Polilio, Quezon

COSCA& ESSC-Lian & San Juan,Batangas

KEF – Kalahan, Nueva Viscaya

VISAYAS

MINDANAO

XAES – Ipil, Zamboanga Sibugay (Year2)

COSEED – Vincenzo Sagun, Zamboanga

del Sur (Year2)

SWCF – Bilar, Bohol (Year 2)

SDGF – Marilog District, Davao

City

Kasilak & PBPF – Maragusan,

Compostela Valley

TLDFI – Tboli, South Cotabato

KGMC – Kabasalan, Zamboanga Sibugay

Atty. Chan & PNNI - Palawan– eyte out ern eyte

BCMPC - Palawan

UBCDFI – Bohol

NEDF-:Ilog-Hilabangan, Negros Oriental

ALG-En Defense Program: Nationwide

PTFCF Supported Projects (2009)



Isla Biodiversity, Inc. –

Calayan Island

Pusod Inc., Lipa City,

Batangas

Cavapped – Ilagan, Isabela

Task Force Sierra Madre

Tanggol Kalikasan

Sasamaka (Y2) – Sablayan,

Occidental Mdo.

WWF-ATMST – Sibuyan Island,

Romblon

Omagieca – Bantayan

Island, Cebu

UP Baguio Fdtn – Baguio City

VISAYAS

MINDANAO

Kinaiyahan Foundation, Inc

– Marilog, Davao City

&Arakan, No. Cotabato

PBPF – Compostela Valley

PNNI – Puerto Princesa,

Palawan

KRDFI – La Paz, Zamboanga City

PAMAAS, Inc. – Magpet,

No. Cotabato

Landcare (Y2) – Claveria,Misamis Oriental

Bangsa Palawan (Y2) –

Rizal, Palawan

ISFI-ADDU – Bagumbayan, Sultan

Kudarat



• Ps. 110,346,313 awardedfrom 2005 to 2009, with Ps.88,889,431 as counterpartfrom grantees and partners

• 109 ro ects su orted 38

are on-going

• Covers 47,840 hectares of mangroves and 1,001,006hectares of dipterocarpforests



Ch ll



Challenges

• Outdated nationalforestry law

• Continuing landconversion and illegal

• Increasing ruralpopulations withoutaccess to resources

• Need for more

resources

O t iti



Opportunities

• Increased awarenessof forest ecosystem

services (i.e.

watersheds)

• Public support for forest conservation

• Increased support

from local

governments

Th F t f D bt R d ti



The Future of Debt Reduction

• Agreement on debt

• Commitment to use funds for purposes

agreed upon

• ransparency an accoun a y• Forest recovery

• Public benefits

• Sustainability of resources

Th k f li t i



Thank you for listening

Philippine Tropical Forest Conservation Foundation (PTFCF)Unit 11-3A Manila Bank Building, 6772 Ayala AvenueMakati City 1223

ILLEGITIMATE DEBTILLEGITIMATE DEBT



ILLEGITIMATE DEBTILLEGITIMATE DEBT

Now a major focus of many debt campaignsNow a major focus of many debt campaigns

all over the world, North and South.all over the world, North and South. Governments, intergovernmentalGovernments, intergovernmental

organizations and international financialorganizations and international financialinstitutions have begun to recognize andinstitutions have begun to recognize and

deal with the issue.deal with the issue.–– The World Bank came out with a paper in 2007The World Bank came out with a paper in 2007

exploring the merits and issues surrounding theexploring the merits and issues surrounding thequestion of Odious and Illegitimate Debt. Inquestion of Odious and Illegitimate Debt. In

2008 it organized a roundtable discussion on2008 it organized a roundtable discussion onthe this topic with experts, governments andthe this topic with experts, governments andcivil society.civil society.



–– The UNCTAD also came out with a study paperThe UNCTAD also came out with a study paper

in 2007 and is now preparing to form an expertsin 2007 and is now preparing to form an experts

group on Responsible Finance which will covergroup on Responsible Finance which will cover

among others the problem of Odious andamong others the problem of Odious and

Illegitimate DebtIllegitimate Debt

–– The UNDP and the UNFfD organized aThe UNDP and the UNFfD organized aConsultation on Debt withConsultation on Debt with

governments, experts and civil society groupsgovernments, experts and civil society groups

in May 2008. Two of the sessions addressed thein May 2008. Two of the sessions addressed the

issue of illegitimate debt.issue of illegitimate debt.

–– The “Paris Club” of bilateral lendersThe “Paris Club” of bilateral lenders



The Paris Club of bilateral lendersThe Paris Club of bilateral lendersannounced in 2008 that it plans to start aannounced in 2008 that it plans to start astudy of the issuestudy of the issue

–– The call to study and address theThe call to study and address theproblem of illegitimate debt wasproblem of illegitimate debt wasincluded in the penultimate draft of theincluded in the penultimate draft of the

Outcome Document of the UN FinancingOutcome Document of the UN FinancingFor Development Conference in Doha inFor Development Conference in Doha inNovNov--Dec 2008. The document that wasDec 2008. The document that wasfinally approved did not contain thefinally approved did not contain the

provisions because of strong oppositionprovisions because of strong oppositionfrom US and Japan.from US and Japan.



–– The NORWEGIAN DEBT CANCELLATIONThe NORWEGIAN DEBT CANCELLATION



O G C C OO G C C O

In 2007 the Government of NorwayIn 2007 the Government of Norwaycancelled its loans to 5 countriescancelled its loans to 5 countries

Though they did not use the termThough they did not use the term“ille itimate debt”“ille itimate debt” –– the ar umentsthe ar uments

they used fall within the scope of they used fall within the scope of issues covered by the concept.issues covered by the concept.

An important statement they madeAn important statement they made

was the acknowledgement of “creditorwas the acknowledgement of “creditorcoco--responsibility”responsibility”

THE CONCEPT OF ILLEGITIMATE DEBTTHE CONCEPT OF ILLEGITIMATE DEBT



THE CONCEPT OF ILLEGITIMATE DEBTTHE CONCEPT OF ILLEGITIMATE DEBT

Based on experiences of the peoples of the SouthBased on experiences of the peoples of the South

and is a systematic articulation, analysis andand is a systematic articulation, analysis and

address of these experiences.address of these experiences.

Issues and implications of the debt are beyondIssues and implications of the debt are beyond

simply the huge amount of debt and the burdensimply the huge amount of debt and the burdenon debt servicing.on debt servicing.

The framework of debt sustainability does notThe framework of debt sustainability does not

cover these dimensions, no matter howcover these dimensions, no matter how

progressively defined.progressively defined.

The concept is not newThe concept is not new



The concept is not new.The concept is not new.

Issues of illegitimacy have been raisedIssues of illegitimacy have been raisedsince the 1980’s, or even earlier.since the 1980’s, or even earlier.

––

fraudulent, onerous, odious, criminal, immfraudulent, onerous, odious, criminal, imm

oral, unjust….oral, unjust….

There is a range of perspectives:There is a range of perspectives:



There is a range of perspectives:There is a range of perspectives:

From the more radicalFrom the more radical

–– looks at debts not only in their specificlooks at debts not only in their specific

and immediate circumstances, natureand immediate circumstances, nature

and consequencesand consequences –– but from abut from a

,,

To a narrower and more easily empiricallyTo a narrower and more easily empirically

verifiable definitionverifiable definition

Illegitimate Debts are those which cannot beIllegitimate Debts are those which cannot be



Illegitimate Debts are those which cannot beIllegitimate Debts are those which cannot be

rightfully claimed as debts of the peoples of therightfully claimed as debts of the peoples of the

South.South.

Involve the gross violation of basic assumptionsInvolve the gross violation of basic assumptions

of debt contracts, as well as widely acceptedof debt contracts, as well as widely accepted

ethical, social, political, economic,ethical, social, political, economic,

environmental values, standards and principles.environmental values, standards and principles.

Cause harm to the well being of the people andCause harm to the well being of the people and

communities in whose name the debts werecommunities in whose name the debts were

incurred and who are the ones paying for theseincurred and who are the ones paying for these

debts.debts.

These violations can be found in any one orThese violations can be found in any one or



These violations can be found in any one orThese violations can be found in any one orcombination of the followingcombination of the following

•• circumstances surrounding the contraction of circumstances surrounding the contraction of the debt (can be immediate, can also includethe debt (can be immediate, can also includebroader, historical context)broader, historical context)

•• the nature of the contractin artiesthe nature of the contractin arties

themselvesthemselves

•• the relationship between the contractingthe relationship between the contractingparties (and the imbalance of power whichparties (and the imbalance of power whichshapes the financial transactions andshapes the financial transactions and

relationship)relationship)

•• the terms and obligations of the contractsthe terms and obligations of the contracts

th i li ti d i t f tt d tth i li ti d i t f tt d t



•• the implications and impact of attendantthe implications and impact of attendantconditionalitiesconditionalities

•• how the funds were usedhow the funds were used

•• the impacts of servicing these debtsthe impacts of servicing these debts

•• leverageleverage

•• the impact and implications of “indebtedness”the impact and implications of “indebtedness”and the “dependence” on borrowingand the “dependence” on borrowing

EXAMPLESEXAMPLES



EXAMPLESEXAMPLES

Loans were contracted by dictatorialLoans were contracted by dictatorial

governments with dubious legitimacygovernments with dubious legitimacy

Debts were incurred with the use of Debts were incurred with the use of

..

Many loans had terms of payment whichMany loans had terms of payment which

were unfair and unjust.were unfair and unjust.



Many loans were supplyMany loans were supply--driven,driven,benefiting mainly or even solely thebenefiting mainly or even solely the

lenders (Norwegian case)lenders (Norwegian case)

Many loans were spent on projectsMany loans were spent on projects,,

communities and the environmentcommunities and the environment

Many loans were contracted withoutMany loans were contracted without

complying with domestic lawscomplying with domestic laws

Basic assumptions of debt contractsBasic assumptions of debt contracts




1.1. The contracting parties are clearly authorizedThe contracting parties are clearly authorized

and clearly have the mandate to act in behalf of and clearly have the mandate to act in behalf of

the constituency in whose name they arethe constituency in whose name they are

contracting the agreement.contracting the agreement.

2.2. The contracting parties have the commonThe contracting parties have the commonobligation of being transparent and accountableobligation of being transparent and accountable

to the constituencies in whose name they areto the constituencies in whose name they are

contracting the agreement, and that thecontracting the agreement, and that the

agreements must respect this obligation.agreements must respect this obligation.




3.3. The agreement being contracted is for theThe agreement being contracted is for the

benefit of the constituencies in whose namesbenefit of the constituencies in whose namesthey are contracting the agreement.they are contracting the agreement.

4.4. The agreement, and the attendant terms andThe agreement, and the attendant terms and

obligations, should be fair and mutuallyobligations, should be fair and mutuallybeneficial. It should not be grosslybeneficial. It should not be grosslydisadvantageous, or outrightly harmful to onedisadvantageous, or outrightly harmful to oneparty.party.

“Widely accepted”“Widely accepted”

ethical social political economic environmethical social political economic environm



ethical, social, political, economic, environmethical, social, political, economic, environm

ental values & principlesental values & principles

We assume and invoke a collective or communityWe assume and invoke a collective or community

sense of justice and fairness, a sense of what issense of justice and fairness, a sense of what is

right, what is the common good. These commonright, what is the common good. These common

values and rinci les include:values and rinci les include:

oo Basic Human RightsBasic Human Rights

oo Sovereignty and Self Sovereignty and Self--Determination of PeoplesDetermination of Peoples

and State and the Obligation of States and publicand State and the Obligation of States and public

officials to act in the interest of theirofficials to act in the interest of theirconstituencyconstituency

oo Democratic Process DemocraticDemocratic Process Democratic



oo Democratic Process, DemocraticDemocratic Process, DemocraticGovernance, which includes transparency andGovernance, which includes transparency and

accountabilityaccountability

oo Sustainable use of ecological andSustainable use of ecological andenvironmental resourcesenvironmental resources

oo Relations based on Parity, MutualRelations based on Parity, MutualRespect, MutualRespect, MutualBenefit, Fairness, Transparency, MutualBenefit, Fairness, Transparency, Mutual

Accountability and Responsibility; Non Accountability and Responsibility; Non--interference and noninterference and non--aggressionaggression



Many of these are not just assumedMany of these are not just assumed –– therethere

are established laws, customs andare established laws, customs andcodes, treaties and in fact United Nationscodes, treaties and in fact United Nations

covenants and agreements as evidences of covenants and agreements as evidences of

,,

commitment and obligation to upholdcommitment and obligation to uphold

these values and principles.these values and principles.

Illegitimacy is more than just legality.Illegitimacy is more than just legality.



Illegitimacy is more than just legality.Illegitimacy is more than just legality.–– Support and resonance to be found in presentSupport and resonance to be found in present

laws (national and international), butlaws (national and international), but–– Laws do not YET adequately cover and addressLaws do not YET adequately cover and address

all the issues being raised in the work onall the issues being raised in the work onillegitimate debt.illegitimate debt.

Definitions not rooted solely in law, but,Definitions not rooted solely in law, but,

Full appreciate of the value of using legalFull appreciate of the value of using legalinstruments to explain the concept, gaininstruments to explain the concept, gain

recognition of the problem, and compelrecognition of the problem, and compelaction.action.

The Question of Illegitimate DebtThe Question of Illegitimate Debt



Lays further, firmer grounds forLays further, firmer grounds for

demanding debt cancellation anddemanding debt cancellation and

repudiation as a matter of justicerepudiation as a matter of justice

the alternatives to be established in thethe alternatives to be established in the

policies, practices, processes, powerpolicies, practices, processes, power

relations and structures of therelations and structures of the

international financial architecture.international financial architecture.

sharing visions on how to respond to the debt challenge

Documents