[Reuters]

Published date: 7th Aug 1987

7 August 1987

Reuters News

English

(c) 1987 Reuters Limited

MANILA, Aug 7, Reuter – The growing call in the Philippines for a repudiation of some of the country’s 28.4 Billion dollar foreign debt was strongly attacked today by the finance minister and the leader of an influential business group. Finance Secretary Jaime Ongpin told reporters a repudiation or a freeze on repayments, proposals which are being considered by the new Philippines Congress, would cause the economy to collapse.

After President Corazon Aquino lashed out at the country’s creditors in a speech to Congress on July 27, legislators have also introduced bills limiting debt repayments to 10 per cent of export earnings and freezing all interest payments.

They have attacked what they describe as questionable loans incurred by former president Ferdinand Marcos.

“I hope it (the move) does not prosper because if it does, there would be many consequences which none of us would be able to control,” Ongpin said.

He said the effects of a debt repudiation would isolate the country in the international financial community and cripple the government’s economic recovery program.

“Do we want to take that risk, do the people advocating repudiation want the responsibility of having the economy collapse again?” he said. “I wouldn’t want that on my shoulder.”

He said he had Aquino’s backing when he signed the accord with creditor banks to reschedule 10.3 billion dollars of debt over a 17-year period on July 17.

Aurelio Periquet, President of the Philippine Chamber of Commerce and Industry, said in a statement that there was much to be done at home to improve growth and the ability to repay the debt.

“For instance the government has yet to answer for the agonizingly slow pace at which its touted privatisation and rural infrastructure programs are proceeding,” Periquet said.

“These delays are costing the country a fortune in opportunities and perhaps one or two percentage point’s in our annual gross national product growth rate,” he added.

Periquet said growing inefficiency in government, corruption and labour militancy had made businessmen react with “relative coolness and even cynicism” to Aquino’s outburst.

“What guarantee is there that, given more room for growth through more lenient debt repayment terms, we will not again squander the opportunity through lack of discipline and cohesiveness in our own backyard?” he said.