[Reuters]

Published date: 28th Jul 1988

28 July 1988

Reuters News

English

(c) 1988 Reuters Limited

MANILA, July 28, Reuter – The Philippines plans to approach its creditor banks for a new-money loan package and the International Monetary Fund (IMF) for a new funding program this autumn, central bank governor Jose Fernandez said on Thursday.

He told a news conference that he and Finance Secretary Vicente Jayme had discussed Manila’s projected financing gap with a 12-bank advisory committee in New York and IMF officials in Washington earlier this month.

“There will be a (financing) gap that will emerge starting 1989,” he said, but declined to give figures.

The Philippines last received a 925 million dollar new money package from its bank creditors in May 1985. The country’s foreign debt stood at 28.4 billion dollars at end-January.

Fernandez said “definitive negotiations” with the advisory committee, chaired by Manufacturers Hanover, might start after the IMF-World Bank annual meeting in West Berlin in September.

He said Manila also planned to negotiate a rescheduling of about one billion dollars of official debt.

The official debt is owed to the informal Paris Club group of 14 creditor governments. Fernandez said the rescheduling would cover an 18-montl:, period from last month.

He said the Paris Club was likely to require that Manila first conclude an IMF lending program, adding that an IMF review mission would visit Manila on August 22 to discuss the program.

He said he and Jayme had discussed with the banks the details involved in recent restructuring agreements with Brazil, Chile and Yugoslavia — options that provide either interest relief, exit vehicles, or debt reduction.

“The menus are getting longer and longer,” he said.

An economic team from the advisory committee was scheduled to visit Manila immediately after the IMF team for preliminary talks on the new-money package, Fernandez said.

But with some large U.S. banks trying to reduce their Third World loan exposures, he said, negotiations with Manila’s 483 creditor banks would be difficult.

“The prevailing mood is fatigue — debtor fatigue, creditor fatigue. It is not going to be a picnic, but we have to try and do our best,” he said.