Congress to Decide on Miyazawa Fund

Filipino Monitor
Thursday, December 24, 1998

MANILA – Only Congress can authorize the appropriation of the $2 billion (P79 billion) in funds that the Philippines hopes to draw from the $30-billion Miyazawa Fund.

"Congress is the sole branch of government vested with the power to appropriate. Thus, only Congress may set the funds aside for specific projects," according to Deputy Speaker Eduardo Gullas.

Gullas' remarks followed the mad scramble by agencies and the private sector for a share of the soft loans that would have been made available by the Japanese aid initiative.

"Since the (Miyazawa) funds are in the form of loans guaranteed by the Philippine government, then Congress is duty-bound to screen and approve all allocations," Gullas pointed out.

"We also understand that the Philippine government may have to put up counterpart local funding to match some of the project loans. In view of this, there is really a compelling need for Congress to oversee the fund allocations," he added.

Gullas, meanwhile, welcomed the Department of Finance's proposal to tap the Miyazawa Fund to raise the $150 million in fresh equity needed by the cash-strapped Philippine Airlines (PAL).

"PAL must be saved. But then again, Congress must appropriate the money out of the Miyazawa Fund," Gullas said.

He added that Congress may provide for the $150 million in exchange for increased government equity in PAL.

He said PAL's permanent closure should be averted because it would shatter investor confidence in the country and ruin the economy.