Freedom from Debt Coalition

11 Matimpiin St., Brgy. Pinyahan, Quezon City 1100, Philippines Phone: (+632) 921 1985 * Telefax: (+632) 924 6399 Website: * Email:

No to the Bataan Nuclear Power Plant! Enough of Illegitimate Debts!

The Bataan Nuclear Power Plant (BNPP) is a glaring representation of the country’s fraudulent, wasteful, and useless debts. The Freedom from Debt Coalition (FDC) also sees it as a symbol of the Philippines’ struggle against a debt-driven development strategy – often peppered with rent seeking and cronyism – that different administrations, including the current disposition, have espoused.
To revive the BNPP would be to create greater social deficits and push the Filipino people deeper into the vicious debt and underdevelopment trap. FDC raises serious questions about the immediate rehabilitation, commission, and commercial operation of BNPP. We strongly believe that to make the “Monster of Morong” operational would be to gamble away the people’s lives on a lost deal.

Projecting a Power Shortage Founded on Faulty Rationales: Double Burden to the People
The proponents of the bill are trying to make it appear as if there will be a power shortage of 3,000MW before 2012. Consequently, they propose the BNPP in order to address at least 20% of the shortage. These faulty claims point to the government’s track record in forecasting electricity – self serving at worst and dismally inaccurate at best.

These inaccuracies have resulted into greater burden on the part of government by incurring more debts, passing on the costs of unutilized electricity to consumers through additional electricity charges. For more than a decade now, over-projecting demand has led to an overcapacity situation in the Philippine electricity sector, and this has been proven to be as expensive – if not more – than a power shortage. As of April 2008, DoE data show an excess generating capacity of 4,212 MW on a national level. This 4,212 MW is the dead weight loss to the Filipino consumers, mostly households, who must pay for the excess capacity even if the plants are idle, thanks to the ‘take or pay’ clause in the contracts the Ramos government signed with the independent power producers (IPPs).
The only possible justification specific to the operations of a nuclear power plant is to meet an increase in base load, or replace existing base load supply. An increase in base load is highly unlikely in times of economic crisis.

However, it is a much worse option to replace existing base load supply as the current generators to meet such demands are the environmentally safe geothermal and hydroelectric power plants that are very much necessary in climate crisis mitigation-adaptation strategies.
On the point of power generation alone, we already establish that additional generation plants are not necessary, and certainly not in the monstrous form of a nuclear power plant.

Operating the BNPP Leads to More Wasteful and Useless Debt

We now need to look at the real cost of rehabilitating and operating the mothballed compound. Stated explicitly under Section 22 of the unnumbered substitute House Bill, the government may raise equity up to US$1 billion “through a surcharge of PhP 0.10/kWh of the total electric power generated” or “international or domestic loan agreements.” Is the government making the public choose, or is this a question of being caught between the devil and the deep blue sea? They make us pay more for the increased electricity surcharge, while debt service is prioritized over social services.

Nowhere in this world has the re-construction of nuclear power facilities been right on schedule and on budget.

Here we express our support for the Greenpeace-conducted studies that expose the real price of reviving and maintaining a nuclear power plant. After being mothballed for over 20 years, the BNPP will more likely exceed the projected $1 billion to meet the technical and safety demands of a fully operational and nuclear meltdown – safe structure – and exclusive of the monumental costs of corruption and bribery that the BNPP itself represents, and the current administration has mastered.
Moreover, nuclear power plant operations will necessitate government financial support, particularly when we factor in purchasing and safely transporting the highly expensive and toxic uranium fuel needed for the functioning of a nuclear power plant. We thus ask government: Can the Philippines afford to subsidize a project with this level of danger and expense? To subsidize the generation costs and mandate the payment of a PhP 0.10/kWh surcharge, or to bring the public deeper into debt and charge them exorbitant rates for the energy they will consume, the government will be pushing the people into a deeper level of economic and financial crisis.

We are still Paying for the Fraudulent BNPP Debt

How true is it to say that the BNPP has been fully paid for, and will therefore not incur expenditures in the current budget? In the books of the National Government, no doubt the debt has been paid and the creditors have fully collected, with interest. However, given our weak economy and the feeble fiscal position of the government, we are certain that new borrowings, or successor debts, were incurred in order to at least pay for the principal amortizations on the BNPP debt. So perhaps, in a narrow accounting sense, the BNPP debt is paid, but we are no less indebted, and we continue to pay for this monster. We challenge the current administration to make transparent and available to the public the details of all transactions regarding the BNPP debt.

The result of this colossal debt burden is the automatic debt servicing provision in Section 26 (b), Book VI of the 1987 Revised Administrative Code (Executive Order 292). That debt service trumps government prioritization of social welfare is shown by social services lack of growth in terms of share in national government expenditures especially when compared to the share of debt service interest . To illustrate this disparity in expenditures further, government spending in 2008 allocated P624.09 billion on debt service, combining principal amortization and interest payments. Education and Health expenditures put together amount to a meager P203.76 billion, falling short of one-third the allocation for debt service.

Furthermore, the Filipino people continue to pay for the BNPP debt in terms of struggling with the mammoth social deficit that an “Honor All Debts” prioritization has created: over-crowded public schools, deteriorating quality of education, insufficient health services, low-cost housing that the poor cannot afford, grossly incomplete agrarian reform and inadequate support for agrarian reform beneficiaries, a steady state of joblessness to which the government’s primary response it to send its citizens overseas – these are but a few of the manifestations of this misprioritization of debt service over addressing the needs of the poor. There is a real social cost of the past and the present misguided debt policies and practices and we know that it is not the cronies, the foreign investors, the creditors, or the elite who are paying for this.

Prioritize the People’s Welfare over Vested Interests

Time and again, we have suffered under the hands of the very same individuals that claim to represent the people’s interests. National development has been severely compromised because of these anomalous and corrupt transactions that resulted in compounded burdens and untold suffering.

Especially in this time of economic crisis, we call on our policy makers to prioritize the true needs of the Filipinos and halt any attempt to rehabilitate, commission, and commercially operate the BNPP. The Filipino people deserve no less.

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