Fssi Debt Swap Experience_09
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The FSSI Debt-Swap Story Foundation for a Sustainable Society
Our Roots Just and sustainabl e society!
Product of a debt relief program as a result of a participative, crosssectoral, multi-level campaign 50% Payment Cancelled
Philippine Debt to the Swiss Government
50% Counterpart Fund Three-years completion
FSSI Endowment Facility
Product of successful negotiations at different levels Swiss NGOs and Swiss Government Swiss NGO and Phil NGOs Phil NGOs and Phil Government Swiss Government and Philippine Government
How it began.. •
•
Broad based national debt campaign led by Swiss NGOs was launched in 1989 6 major organizations and 18 smaller organizations formed an alliance Campaign Objectives Obtain substantial reduction of bilateral debt between Switzerland and poorer developing countries To raise public awareness on the consequences of debt problem to people of poorer countries
Basic Proposition
“Development requires debt relief”
The Petition Establish a fund to write-off both official debt owed to government and to private banks by low-income countries That part of the funds be converted into local currency to finance local development programmes For the Swiss government to promote debt relief in the international level To advocate fair economic relations with the underdeveloped and developing countries
The Response • 250,000 (4% of Swiss population) individuals signed the petition • Passage of debt relief bill in March 1991 • Establishment of the Swiss Debt Reduction Facility (SRDF)
Eligibility of Potential Beneficiaries for the Debt Swap 2. 3. 4.
Highly indebted low-income countries All least developed country Country with major bilateral development cooperation programmes 5. Debtor country must: Practice good governance Engaged in a medium-term economic reform programme Have an effective debt management, including a comprehensive program for obtaining debt reduction & consolidation with different creditors 6. Volume of debt relief should be sufficiently large so as to have significant impact on the country’s growth and development prospects
Creative Debt Relief Concept • Redemption of external debt in local currency into a “Counterpart Fund (CPF)” for development programmes Macroeconomic benefits derived from debt reduction are passed on to the micro-level Focuses on creating long-term financial instruments (capital or trust funds) Substantial participation of & benefits to NGOs & citizen’s group
Elements to a Creative Debt Relief Scheme 2.Bilateral debt relief agreement 3.Body responsible for the management of the Counterpart Fund (CPF) 4.Projects and programs to be submitted for funding 5.Development Partnership
PHILIPPINES: The Processes that Took Place....
Establishment of Development Partnership • 1992 – initial contact of the Debt for Development Unit (DDU) of the Swiss Coalition with Phil NGOs • Swiss Coalition – CODE-NGO partnership • Data gathering pertinent to Philippine bilateral debt to Switzerland • Study of existing Philippine NGO-managed Fund Mechanism –PCHRD, PDAP, UNDP-GEF-SGP and
PHILIPPINES: The Processes that Took Place....
Program Preparation Series of consultations among Phil NGOs and POs regarding the design of the CPF
As endowment fund –only interest will be used for grants and loan
Criteria for projects to be supported – environment friendly, gender sensitive, for disadvantaged sectors, improve social, ecological and economic status
Support shall be open to all NGOs and POs
PHILIPPINES: The Processes that Took Place....
Fact Finding Mission
(May-June’93)
Amount: Sfr15-20 million CPF payment will be in the form of treasury bills by the Central Bank FSSI submitted a letter on behalf of the Philippine NGOs urging the Swiss government to sign the agreement Jan-Feb ’95 – the two Governments finally met in Manila. PHIL – Department of Finance and Central Bank of the Philippines SWISS- Swiss Federal Office of Foreign Economic
PHILIPPINES: The Processes that Took Place....
Final Negotiation Swiss government cancels all its bilateral rescheduled non-official debt against the payment by the Philippines of an amount in local currency to FSSI CPF will be 50% of the external debt to be used to support sustainable production projects New foundation shall be created to manage the fund, thus FSSI The two Governments will sit as ex-officio
FINALLY AFTER THREE YEARS, THE PHILIPPINE GOVERNMENT AND THE SWISS GOVERNMENT SIGNED THE DEBT SWAP AGREEMENT ON AUGUST 11, 1995
Our Vision Sustainable Economic Development of Marginalized Poor Communities in the
Our Mission
To be the leading eco-enterprise resource institution for the empowerment of marginalized communities in the Philippines
Our People • • • • • • • • • •
AF APPEND CONVERGENCE FDC FPSDC GREEN FORUM HELVETAS HEKS MASS-SPECC MINCODE
• • • • • • • • • •
NASSA NATCCO NCCP NCSD PBSP PHILDHRRA PHILNET-RDI PHILSSA VCF WAND
SSI is able to reach the poor… Coco-coir Business Integration and Development Program Fund for Sustainable Civil Society Program Micro Finance for Eco-Enterprises Program Sustainable Partnership for EcoEnterprise Development Program Sustainable Waste Management Eco-Enterprise Program
Increased social investments
Over Php443 million in social investments provided to more than 183 ecoenterprises.
Leaning towards community-managed enterprises
47 percent or P174 million supports democratized ownerships via primary cooperatives, cooperative banks and federations.
Reaching the entrepreneurial poor Some 10,700 individuals have derived income as microenterprise owners, workers, suppliers or sub-contractors More than 104,000 poor, mostly women received support through the
Our Partners Cabauata n Junk Shop
“Hardwork and perseverance are keys to entrepreneurial success. I am not ashamed of my work. There is decent income and I also help others earn in a way that is also good to the environment” Illumida Cabauatan, junk shop owner
Our Partners “My income has become better compared with commercial farming techniques. My breathing problems from using chemicalbased inputs have disappeared. Our lives have truly improved!” Agnes Sayucop Philip,
LaTOP Cooperative
Our Partners 3KJ Chicharon
“I used to work in a factory that is farther from here. Now, I am happy to have enough earnings while I can do my household chores.”
Our Partners Greenminds “We now produce, manufacture and sell our peanuts without the help of a middleman” -Datu Makadinding Greenminds Manager
Our Partners
“We are now able to sustain our daily needs. I am able to gradually improve my house. Our entire family now sees opportunity in every trash that is considered worthless for others.” Aling Dolores Dilay , BUBI Junkshop
BUBI Junkshop
Our Partners
“Because of the loan for banca improvement, we now have a bigger catch because our banca has become sturdier. And because of the project, I am able to provide for my students’ needs unlike before when we were finding it difficult to fulfill their needs” -Aling Susan Bandojo - Carles MPC
Carles MPC
Our Partners “Increasing organic production to provide steady supply in Isabela and direct support to 238 farmer-members” -Kapatagan MPC
Kapatagan MPC
Why Debt Swap? • Opportunity to finance needed development services • BUT not a solution to the debt problem • Debt swaps… – must not legitimize dubious debts – not a substitute on international commitments on debt cancellations
• KEY: Long-term debt management
Contact Us:
# 46 E., Samar Avenue corner Eugenio Lopez St, South Triangle Quezon City 1103 Tel No: [632] 928-8671 [632] 9288422 [632] 4114702-03
www.fssi.com.ph [email protected]
Our Roots Just and sustainabl e society!
Product of a debt relief program as a result of a participative, crosssectoral, multi-level campaign 50% Payment Cancelled
Philippine Debt to the Swiss Government
50% Counterpart Fund Three-years completion
FSSI Endowment Facility
Product of successful negotiations at different levels Swiss NGOs and Swiss Government Swiss NGO and Phil NGOs Phil NGOs and Phil Government Swiss Government and Philippine Government
How it began.. •
•
Broad based national debt campaign led by Swiss NGOs was launched in 1989 6 major organizations and 18 smaller organizations formed an alliance Campaign Objectives Obtain substantial reduction of bilateral debt between Switzerland and poorer developing countries To raise public awareness on the consequences of debt problem to people of poorer countries
Basic Proposition
“Development requires debt relief”
The Petition Establish a fund to write-off both official debt owed to government and to private banks by low-income countries That part of the funds be converted into local currency to finance local development programmes For the Swiss government to promote debt relief in the international level To advocate fair economic relations with the underdeveloped and developing countries
The Response • 250,000 (4% of Swiss population) individuals signed the petition • Passage of debt relief bill in March 1991 • Establishment of the Swiss Debt Reduction Facility (SRDF)
Eligibility of Potential Beneficiaries for the Debt Swap 2. 3. 4.
Highly indebted low-income countries All least developed country Country with major bilateral development cooperation programmes 5. Debtor country must: Practice good governance Engaged in a medium-term economic reform programme Have an effective debt management, including a comprehensive program for obtaining debt reduction & consolidation with different creditors 6. Volume of debt relief should be sufficiently large so as to have significant impact on the country’s growth and development prospects
Creative Debt Relief Concept • Redemption of external debt in local currency into a “Counterpart Fund (CPF)” for development programmes Macroeconomic benefits derived from debt reduction are passed on to the micro-level Focuses on creating long-term financial instruments (capital or trust funds) Substantial participation of & benefits to NGOs & citizen’s group
Elements to a Creative Debt Relief Scheme 2.Bilateral debt relief agreement 3.Body responsible for the management of the Counterpart Fund (CPF) 4.Projects and programs to be submitted for funding 5.Development Partnership
PHILIPPINES: The Processes that Took Place....
Establishment of Development Partnership • 1992 – initial contact of the Debt for Development Unit (DDU) of the Swiss Coalition with Phil NGOs • Swiss Coalition – CODE-NGO partnership • Data gathering pertinent to Philippine bilateral debt to Switzerland • Study of existing Philippine NGO-managed Fund Mechanism –PCHRD, PDAP, UNDP-GEF-SGP and
PHILIPPINES: The Processes that Took Place....
Program Preparation Series of consultations among Phil NGOs and POs regarding the design of the CPF
As endowment fund –only interest will be used for grants and loan
Criteria for projects to be supported – environment friendly, gender sensitive, for disadvantaged sectors, improve social, ecological and economic status
Support shall be open to all NGOs and POs
PHILIPPINES: The Processes that Took Place....
Fact Finding Mission
(May-June’93)
Amount: Sfr15-20 million CPF payment will be in the form of treasury bills by the Central Bank FSSI submitted a letter on behalf of the Philippine NGOs urging the Swiss government to sign the agreement Jan-Feb ’95 – the two Governments finally met in Manila. PHIL – Department of Finance and Central Bank of the Philippines SWISS- Swiss Federal Office of Foreign Economic
PHILIPPINES: The Processes that Took Place....
Final Negotiation Swiss government cancels all its bilateral rescheduled non-official debt against the payment by the Philippines of an amount in local currency to FSSI CPF will be 50% of the external debt to be used to support sustainable production projects New foundation shall be created to manage the fund, thus FSSI The two Governments will sit as ex-officio
FINALLY AFTER THREE YEARS, THE PHILIPPINE GOVERNMENT AND THE SWISS GOVERNMENT SIGNED THE DEBT SWAP AGREEMENT ON AUGUST 11, 1995
Our Vision Sustainable Economic Development of Marginalized Poor Communities in the
Our Mission
To be the leading eco-enterprise resource institution for the empowerment of marginalized communities in the Philippines
Our People • • • • • • • • • •
AF APPEND CONVERGENCE FDC FPSDC GREEN FORUM HELVETAS HEKS MASS-SPECC MINCODE
• • • • • • • • • •
NASSA NATCCO NCCP NCSD PBSP PHILDHRRA PHILNET-RDI PHILSSA VCF WAND
SSI is able to reach the poor… Coco-coir Business Integration and Development Program Fund for Sustainable Civil Society Program Micro Finance for Eco-Enterprises Program Sustainable Partnership for EcoEnterprise Development Program Sustainable Waste Management Eco-Enterprise Program
Increased social investments
Over Php443 million in social investments provided to more than 183 ecoenterprises.
Leaning towards community-managed enterprises
47 percent or P174 million supports democratized ownerships via primary cooperatives, cooperative banks and federations.
Reaching the entrepreneurial poor Some 10,700 individuals have derived income as microenterprise owners, workers, suppliers or sub-contractors More than 104,000 poor, mostly women received support through the
Our Partners Cabauata n Junk Shop
“Hardwork and perseverance are keys to entrepreneurial success. I am not ashamed of my work. There is decent income and I also help others earn in a way that is also good to the environment” Illumida Cabauatan, junk shop owner
Our Partners “My income has become better compared with commercial farming techniques. My breathing problems from using chemicalbased inputs have disappeared. Our lives have truly improved!” Agnes Sayucop Philip,
LaTOP Cooperative
Our Partners 3KJ Chicharon
“I used to work in a factory that is farther from here. Now, I am happy to have enough earnings while I can do my household chores.”
Our Partners Greenminds “We now produce, manufacture and sell our peanuts without the help of a middleman” -Datu Makadinding Greenminds Manager
Our Partners
“We are now able to sustain our daily needs. I am able to gradually improve my house. Our entire family now sees opportunity in every trash that is considered worthless for others.” Aling Dolores Dilay , BUBI Junkshop
BUBI Junkshop
Our Partners
“Because of the loan for banca improvement, we now have a bigger catch because our banca has become sturdier. And because of the project, I am able to provide for my students’ needs unlike before when we were finding it difficult to fulfill their needs” -Aling Susan Bandojo - Carles MPC
Carles MPC
Our Partners “Increasing organic production to provide steady supply in Isabela and direct support to 238 farmer-members” -Kapatagan MPC
Kapatagan MPC
Why Debt Swap? • Opportunity to finance needed development services • BUT not a solution to the debt problem • Debt swaps… – must not legitimize dubious debts – not a substitute on international commitments on debt cancellations
• KEY: Long-term debt management
Contact Us:
# 46 E., Samar Avenue corner Eugenio Lopez St, South Triangle Quezon City 1103 Tel No: [632] 928-8671 [632] 9288422 [632] 4114702-03
www.fssi.com.ph [email protected]
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