MANILA, JULY 28 -- President Corazon C. Aquino's sharp criticism of foreign creditors has spawned new interest here in an idea that causes nightmares for the international lending community: debt repudiation.
While Aquino stopped short of calling for repudiation, support for that step appears to be gaining support, even from political moderates.
The House of Representatives today passed a resolution supporting Aquino's comments about foreign lenders, and speaker Ramon Mitra formed a special committee to explore the possibility of repudiation.
Following Aquino's speech Monday, Sen. Alberto Romulo -- her former budget director -- introduced a bill to limit the country's payment on its foreign debt to 10 percent of its merchandise trade and commodity export receipts.
Romulo, who is vice chairman of the finance committee, said he was reacting to government estimates that payments on the $28 billion debt will consume more than 45 percent of merchandise export receipts and account for 40 percent of all government expenditures.
"First and foremost is our economic recovery," Romulo said. "Most of our income should go into that. Our foreign debt should take a back seat."
Those are the kinds of remarks that give bankers the jitters, particularly since Brazil declared a moratorium on its international debt in February.
Philippine politicians are divided over whether to take similar action, with a small but vocal group of nationalists and leftists advocating total repudiation. The issue here takes on added emotion since most of the debt was incurred by former president Ferdinand E. Marcos for projects that are considered wasteful or extravagant -- like the troubled nuclear power plant at Bataan.
Aquino's top economic advisers have rejected repudiation as an option, preferring instead to try to renegotiate payment terms.
Aquino said in her speech Monday that banks "took undue and unfair advantage of the internal difficulties we have had with factions intent on subverting this government and destroying our democracy."
Rep. Raul Daza, the assistant majority floor leader in the House, was quoted today as saying payments on the nuclear plant loan and other questionable projects should be suspended. "It is high time we showed to foreign creditors that we can stand on our own feet," he said. "That's the only way to get their respect."
The minority floor leader, Rodolfo Albano, a longtime Marcos loyalist, also said he favored selective repudiation.
The Senate today criticized the central bank for failing to reveal all the details of the various loans, and called for an immediate investigation and a possible subpoena of the central bank's governor