Magazine article American Banker

A Green Light for the Philippines

Magazine article American Banker

A Green Light for the Philippines

Article excerpt

MANILA -- The Philippines, with IMF approval of its economic program now virtually in hand, will move ahead on a plan to restructure $5.3 billion of its debt to commercial banks, officials said.

Michel Camdessus, managing director of the International Monetary Fund, on Monday approved a resumption of lending to the Philippines by endorsing the country's economic program to the IMF board, officials said. The board is expected to approve it late this month.

Success Predicted

"This clears the last hurdle for finalizing the agreement on the foreign debt reduction initiative that had been tentatively forged in early September 1991," Finance Secretary Jesus Estanislao told reporters. "We now expect the initiative to be carried forward to its successful conclusion."

Philippine central bank Governor Jose Cuisia will fly to the United States this weekend and meet commercial bankers in New York next week to discuss the restructuring package, designed to reduce Philippine debt servicing and retire some debt through a buyback.

The program would restrict the Philippines' consolidated public-sector deficit to 2.7% of gross national product.

A Deal by May?

Bankers were awaiting the IMF's seal of approval before going ahead with the plan to restructure $5.3 billion of commercial debt.

The country has around $29 billion in external debt, of which around $11 billion is owed to commercial banks.

Mr. Cuisia has said he hopes to sign the restructuring agreement with the banks by May. …

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