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UN calls for debt relief for reconstruction in Philippines

8 April 2014, five month after Typhoon Haiyan struck

Typhoon Haiyan: UN human rights expert calls for urgent debt relief for reconstruction in the Philippines

Geneva, 8 April 2014 – United Nations human rights expert Cephas Lumina today urged international creditors to cancel 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 Independent Expert charged 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.

Typhoon Haiyan, also known as Typhoon Yolanda, left around 4 million displaced and 500,000 houses destroyed. The cyclone had a devastating impact on the country’s infrastructure, hospitals, schools and public services causing an estimated damage of $12 billion.

“I welcome the international support provided to the Philippines in the aftermath of the cyclone, but am concerned that more than $22 million leave the country every day paying off overseas debts,” Mr. Lumina said.

“While around $3 billion have left the country to serve 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.

Although 26.5 per cent of the total population lives below the poverty line, the country has been excluded as a lower Middle-Income Country from international debt relief initiatives. The Philippines are 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,” Mr. Lumina warned.

“By definition, loans for reconstruction cannot generate returns to enable the debt to be paid,” the Independent Expert noted. “International lenders should rather consider cancelling debt, to ensure that the country can recover.”

The Asian Development Bank has provided nearly $900 million of assistance, but 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 percent 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 of America, United Kingdom, France and Germany.

“The disaster should rather serve as an opportunity for lenders to acknowledge that odious debts emanating from the rule under Ferdinand Marcos should be cancelled,” Mr. Lumina underscored.

Up to $10 billion is thought to have been embezzled or stolen during the Marcos regime (1965-1986), but international lenders that had provided loans continued to demand repayment after he was deposed.

This statement has also been endorsed by the UN Independent Expert on the promotion of a democratic and equitable international order, Alfred de Zayas.

Cephas Lumina is an Advocate of the High Court for Zambia and an Extra-Ordinary Professor of Human Rights Law at the University of Pretoria. He was appointed Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights by the UN Human Rights Council in 2008. He is independent from any government or organization and serves in his individual capacity. The mandate covers all countries. Learn more, log on to: http://www.ohchr.org/EN/Issues/Development/IEDebt/Pages/IEDebtIndex.aspx

UN Human Rights, country page – Philippines: http://www.ohchr.org/EN/Countries/AsiaRegion/Pages/PHIndex.aspx

ENDS

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