Wednesday, January 20, 2021

BSP eyes settlement of $754-M IMF loan in ’08


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THE Bangko Sentral ng Pilipinas wants to settle its $754-million debt to the International Monetary Fund by 2008.

BSP data show that the programmed principal payments to the IMF will reduce this debt to $468 million in December.

The central bank expects to fully pay its obligation to the IMF in March 2008, and will source the payment from its reserves.

The country’s reserves are used in financing the debt service requirements of the national government and the BSP.

The country’s gross international reserves stood at $15.876 billion as of end-October, lower by 0.4 percent compared to September’s $15.941 billion.

The October dollar cache is adequate to cover about 4.3 months of imports of goods and payments of services and income.

Since Thursday the IMF has been conducting a postprogram monitoring, reviewing in particular the country’s fiscal and economic situation.

“We are monitored in terms of achievements and targets, but there’s no talks yet to borrow from the IMF,” a central bank official said. “In terms of outstanding obligations, we only have SDR516 million, or $754 million, as of end-September. We expect to fully pay the debt in March 2008.”

One of the IMF’s concerns is the government’s success in passing tax measures.

The proposed legislative tax measures include the indexation of the excise tax on sin products, two-step increase in the value-added tax rate, excise tax on telecommunications, reduction of fiscal incentives, gross income tax system for corporations and the self-employed, general tax amnesty with submission of statements and liabilities (SAL), and the lateral attrition system.

The IMF is also assessing the domestic impact of rising international oil prices.

The multilateral lender also has included in its agenda the BSP’s financial and banking reforms. The Senate is scheduled to conduct its first hearing on the amendment of the BSP charter Tuesday as part of the government’s banking reforms.

A government official said the government is not looking at borrowing again from the IMF next year but the Department of Finance will push for several program loans with the Asian Development Bank, the World Bank and the Japan Bank for International Cooperation next year.

Under the government’s financing, the country’s gross foreign borrowing program amounts to P122.460 billion in 2005 from P107.4 billion in 2004.

Program loans amounting to P8.4 billion are being eyed in 2005 consisting of loans from the three multilateral developmental lenders.

For its project loans, the national government programmed P30.060 billion in 2005 from P24.819 billion in 2004.

Net borrowings are expected to drop by 6.4 percent next year as more short-term debts are retired, along with the other objective of lengthening the maturity profile of the national government debt stock.

The estimated borrowing mix is 22 percent external and 78 percent domestic.

–Maricel E. Burgonio



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