MANILA, Philippines - Malacanang has defended President Benigno "Noynoy" Aquino III's decision to veto the debt cap in the 2011 General Appropriations Act.
Presidential spokesperson Edwin Lacierda said this is a good time to borrow given the favorable market conditions like the strong peso and the appetite for peso bonds.
It was Senator Joker Arroyo who inserted the debt cap provision, which allows the government to borrow only up to 55% of the gross domestic product.
Lacierda added the issue on the debt cap has always been there since the Quirino administration.
There was a debt cap law prior to the Martial Law years, but President Ferdinand Marcos eliminated this upon assuming power.
The Administrative Code of 1987 adopted some of the provisions from Marcos’ directive, Lacierda explained.
“This is an ongoing battle between the executive and legislative branch. Senator Arroyo was also Executive Secretary during the first Aquino administration. And that was also an issue before then. He's practically raising the same ghost against himself,” he said.
He said the government would be able to better manage the economy if there is no debt cap.
On criticisms from House Minority Leader Edcel Lagman that Congress has effectively become a rubber stamp for adopting the budget proposal of the executive, Lacierda said the observation has no basis since no less than the lawmaker had participated actively in the deliberations.