Govt negotiates with creditors for pre-payment plan

THE government is currently talking with foreign creditors for the size and extent of its pre-payment plan to take advantage of a strong local currency, a finance official said yesterday.

Finance Undersecretary Leah de Leon said the government is still determining which of its existing dollar-denominated debts would be paid before their maturities are up.

“We’re looking what to prepay and we are still seeking advice of our creditors,” De Leon said in an interview.

She nevertheless said most of the debt load is tied with overseas development assistance (ODA) loans.

De Leon said the government is likewise making a cost-benefit analysis to establish the size of savings to be generated should a foreign debt is paid in advance.

She said their pre-payment plan is also one way of tempering the continued appreciation of the peso, which is now starting to hurt exports.

Finance Undersecretary Gil Beltran said the government is increasing its revenue stream by as much P5.4 billion for every peso appreciation of the peso.

Finance Secretary Cesar Purisima said the government would continue to pursue the reduction in its foreign exposure and lengthening debt maturities through regular bond swaps.

He said the government would launch “in the next two weeks” its new peso bond swap. Dino Ng

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