HCWH urges DOH to call for debt cancellation

August 16, 2008
HEALTH CARE WITHOUT HARM URGES DOH TO CALL FOR DEBT CANCELLATION

Health Care Without Harm (HCWH)-Southeast Asia calls on the Department of Health to take the lead in pushing for the cancellation of the P504 million loan the government entered into with Austria that involved the purchase of highly polluting incinerators for medical waste.

The loan agreement worth half a million pesos involves a buyer export credit facility agreement to purchase 26 medical waste incinerators and 36 disinfection units for government-run hospitals. Principal and interest payments for the loan amount to more than US$2 million per year and would be paid from 2002 to 2014.

According to the group, the Philippines is not the first to call on a move to cancel a 3rd world country debt.

"Even Sir Bob Geldof, a musician known for Live Aid and Live 8 concerts, and Bono of U2 echo the call for relief of Third World Debt. An erroneous loan agreement like the one we have with Austria must be scrapped off the Health's budget," said Merci Ferrer, HCWH Southeast Asia Executive Director.

She cited that in 2000, a controversial US Congress Report of the International Financial Institution Advisory Commission known as Meltzer Report concluded that total cancellation of poor-country debt was essential for development.

She added that in the 2008 National Budget alone, US$2 million is equivalent to the combined budget for the formulation and development of National Health Policies and Plans including essential National Health Research (Php41M), Health Systems Development (Php21M), provision for a pool of 60 resident physicians (Php11M), and provision for a pool of 136 part time medical specialists and 10 full time (Php19M).

Or better yet, "US$ 2 million should instead be used for non-burn treatment technologies such as autoclaves for disinfecting infectious waste from hospital, Ferrer pointed out.

In the 2008 General Appropriations Act, the Austrian loan was included in the list of those loans challenged as fraudulent, wasteful, and useless. Interest payment of the loan was put on hold in this year's GAA.

In 2003, Philippines' government expenditure on health as a percentage of total health expenditure is a measly 43.7% compared to Malaysia's 58.2% and Thailand's 61.6%. Total health expenditure as a percentage of GDP is only 3.2% vis a vis WHO recommended 5%.