NATIONAL GOVERNMENT PLANS P6.8-BILLION NOTES TO COVER ITS IMF DUES

MANILA,  March 1, 2004 (STAR) By Des Ferriols - With no disposable cash to pay the Bangko Sentral ng Pilipinas (BSP), the National Government (NG) is planning to issue another promissory note to cover its P6.8-billion obligation representing membership dues to the International Monetary Fund (IMF) that the BSP has been advancing on behalf of the government.

The BSP said the Department of Finance (DOF) might issue the promissory note, junking an earlier plan to issue perpetual bonds to pay for the country’s membership duties or subscription quota to the IMF.

The government earlier said it would issue P6.8-billion worth of perpetual bonds to raise funds needed to pay for the country’s membership duties or subscription quota to the IMF.

But the BSP is suggesting a more diversified bond float after it rejected the government’s proposal for the BSP to assume the country’s membership obligations with the IMF.

DOF documents showed that the NG owed the IMF a total of P6.8 billion when the Fund increased its quota subscriptions under its 9th General Review of Quotas.

Documents showed that the BSP advanced the payment of the quota subscription as the government transferred to the BSP the responsibility of assuming the financial obligations arising from the country’s membership to the IMF.

To pay back the BSP, the DOF had proposed the issuance of perpetual bonds or 25-year sovereign bonds.

The BSP made a counter-proposal for the issuance of bonds with multiple denominations and varied maturities, saying that this would facilitate the ease in the liquidation of the bonds by the NG when they mature, since it would not burden the government with a one-time disbursement of a substantial amount.

The BSP explained that the NG could make 12 individual bond issues amounting to P500 million each. These bonds would mature every year starting from the 13th year until the 24th year from the date of issue.

To conclude the settlement of the promissory note, Buenaventura said the government could issue one P800-million bond that would mature at the end of the 25-year period.


Reported by: Sol Jose Vanzi

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