Contrary to the theme of the Asian Development Bank (ADB) Annual Meeting this year of “inclusive growth”, the ADB has caused economic problems and further underdevelopment for the Philippines while ensuring huge profits through its loans, says research group IBON.
The 45th ADB Annual Meeting and Governors' Meeting, themed "inclusive growth through better governance and partnerships" will start tomorrow, May 2. IBON, a secretariat of the nationwide aid network AidWatch Philippines, says that ADB has not only increased the Philippines’ debt dependency, but has also made these loans a leverage to implement damaging economic policies like trade liberalization and privatization of social and public services.
For instance, the Electric Power Industry Reform Act (EPIRA) was passed as a conditionality to the US$300-million loan from the ADB for the government’s power privatization program. The ADB also funded the EPIRA implementation by financing several key projects and programs under it. But after ten years of implementation, the EPIRA has resulted in unbearable power rates while assuring profits for private power companies. Manila, in fact, has the highest residential electricity rates in Asia—higher than Tokyo and Singapore, according to a study of International Energy Consultants.
The ADB also promotes the privatization of the health sector, providing in 2004 a US$200-million loan for the Health Sector Development Program (HSDP) to systematically advance and accelerate the privatization and commercialization of hospitals and the health care system in the country.
The ADB has also provided loans to and pushed for the privatization of the water sector, and in 2001 declared in its water policy that government should cease providing water service to the public. It has also pushed for the privatization of dams, irrigation, as well as the National Food Authority (NFA). All these have resulted in higher use fees and diminished access to social services. Meanwhile, government spending on social services is likewise repressed to free up public resources for debt service.
To cover up for the damage that its policies and operations have caused, the ADB funded part of the administration’s conditional cash transfer progam (CCT) despite lack of comprehensive studies and assessments on its effectiveness. This is aside from its resulting in a heavier debt burden for Filipinos who will repay the ADB an estimated US$508.5 million in 25 years.
Despite the resulting destructive effects on the economy, the Aquino government continues to support ADB’s programs and its corporate and private-sector driven agenda. According to IBON, government’s economic managers should bear in mind that the ADB programs are designed not to ensure "inclusive growth" but only to support private sector profits and the profits of the ADB itself. (end)