Manila: The outpouring of support that nations extended to the Philippines in the aftermath of Typhoon Haiyan did not come free after all — Filipinos will have to return most of the money.
Cephas Lumina, a United Nations human rights expert said much of the financial and material support that the country had received from international creditors would eventually have be paid back.
In a statement released by the UN Human Rights Council on a speech given by Lumina in Geneva on Tuesday, the international expert called on creditors to cancel the Philippines’ debt and to provide unconditional grant-aid instead of reconstruction loans in the aftermath of Typhoon Haiyan.
“Grant aid, not new loans, is needed to overcome the impact of the tropical cyclone which struck the country five months ago on 8 November 2013,” said the Lumina.
Lumina is an independent expert tasked by the UN Human Rights Council to monitor the effects of foreign debt on the enjoyment of all human rights, particularly economic, social and cultural rights.
Haiyan, known in the Philippines as Typhoon Yolanda, struck on November 8 along the Philippines’ eastern seaboard, destroying some two million homes and displacing four million people.
The storm took the lives of more than 6,200 people in the Visayas islands.
Haiyan devastated the country’s infrastructure in several provinces, including hospitals, schools and private businesses, while delivery of public services was severely affected.
In all, the extreme weather phenomenon had caused an estimated damage amounting to $12 billion (Dh44 billion).
“I welcome the international support provided to the Philippines in the aftermath of the cyclone, but am concerned that more than $22 million leaves the country every day paying off overseas debts,” Lumina said.
“While around $3 billion has left the country to service its debt since the typhoon struck, the country has received so far only $417 million for its strategic response plan by international and private donors, about half of the total relief requested,” the expert stressed.
While typhoons are a normal occurrence in the country, the Philippines was not prepared for the destructive force of Haiyan.
Battered as it is regularly by weather disturbances, 26.5 per cent of the total population live below the poverty line.
But Lumina said the country has been excluded as a Lower Middle-Income Country from international debt relief initiatives. The Philippines is expected to pay $8.8 billion in debt service this year alone.
“The reconstruction, development and realisation of economic and social rights will be undermined if the high debt stock of the country is further augmented to unsustainable levels,” Lumina warned.
“By definition, loans for reconstruction cannot generate returns to enable the debt to be paid,” he said. “International lenders should rather consider cancelling debt, to ensure that the country can recover.”
He said that while the Asian Development Bank — one of the country’s top creditors — provided nearly $900 million of assistance, most of it in the form of new loans, only $23 million was given in grants.
In addition, the World Bank has offered a $500 million budget support loan and a $480 million loan for rebuilding infrastructure and social services in affected areas.
As of December 2013, 20.6 per cent of Philippines external debt was owed to the World Bank and the Asian Development Bank. The countries’ largest bilateral lenders are Japan, the United States, United Kingdom, France and Germany.
“The disaster should rather serve as an opportunity for lenders to acknowledge that debts emanating from the rule under Ferdinand Marcos should be cancelled,” Lumina said.
Billions of dollars were estimated to have been embezzled by Marcos and his family from 1965-1986, but international lenders that had provided loans continued to demand repayment long after he was ousted in an uprising.
