MANILA, Philippines -- The Freedom from Debt Coalition on Wednesday took budget secretary Rolando Andaya Jr. to task for saying that the debt service cuts made by lawmakers in the 2008 national budget was contrary to law and to the government?s bid for a balanced budget this year.

FDC secretary general Milo Tanchuling said that Andaya was ?deceiving? the public when he said the entire P25.9-billion cut in the interest payment allocations was a violation of the automatic debt service provision in the Revised Administrative Code of 1987.

?Only P5 billion of this amount is covered by the automatic appropriations law on debt servicing. This P5 billion is embodied in the special provision in the ratified budget suspending interest payments on loans tainted with fraud and anomalies pending renegotiation or condonation,? Tanchuling said in a statement.

Lawmakers justified the reduction in the debt servicing budget, saying the appreciation of the peso against the US dollar has resulted in P15.9 billion in savings.

At the same time, Tanchuling scored the government for chronic ?underspending.?

Andaya had said that ?[i]t?s our policy to have a balanced budget this year so we will have to reckon (budget realignments) with the existing policy. At the very least, we would have to control that kind of an expenditure. We will not spend it, even if it is provided for, for it will affect our fiscal position. . . . It?s as good as vetoing it.?

Tanchuling countered: ?It is lamentable that Secretary Andaya uses a deceitful information strategy in the name of a ?balanced budget? while hiding the policy of underspending on much needed services just to appease credit-rating agencies as well as lending institutions.?

FDC said even some of President Gloria Macapagal-Arroyo?s key economic managers did not agree with such a policy. Last year, the group recalled, both Finance Secretary Margarito Teves and National Economic and Development Authority chief Romulo Neri recognized that underspending was a serious problem. Jerome Aning