RP to receive $490m from Japan Export-Import Bank

RP to receive $490m from Japan Export-Import Bank

MANILA (AFP): The Philippines will soon receive US$490 million from the Japan Export-Import Bank partly to augment foreign exchange reserves depleted in a failed defense against currency speculators, an official said yesterday.

Central Bank of the Philippines external debt director Cristina Orbeta said $490 million would be released within 10 days.

She said $340 million of this amount would represent 85 percent of a "parallel" Japanese financing facility tied to an existing extended fund facility provided by the International Monetary Fund (IMF).

The remaining $150 million represents half of the $300 million offered by Japan as a special augmentation facility which is also tied to an IMF facility offered to member countries facing a currency crisis.

The Philippines has already drawn $490.6 million from the extended fund facility with the IMF and $221.7 million from the IMF's special augmentation facility following a series of speculative attacks on the Philippine peso.

The augmentation funds are expected to boost the country's international reserves which fell to about $10.4 billion after the central bank tried to defend the peso against speculators in July.

The remaining $60 million of the parallel financing facility and the second half of $150 million of Japan's augmentation fund are expected to be released in November, Orbeta said.

Sources said here yesterday that IMF will start a one-week review of the Philippines' economic performance in the first half of this year.

The sources said the review, due to start today, will cover discussions on adjustments in the ceilings of key economic indicators such as base money levels.

Monetary officials will seek adjustments in some of the ceilings due to recent measures taken to fight off a series of speculative attacks against the Philippine peso which began in July.

The review will also include discussions of the country's economic projections for 1997 and 1998 including the impact of the depreciation of the Philippine peso in recent weeks as a result of the speculative attacks.

This will include changes in interest rates, reserve requirements and developments in the banking sector as well as updates on the country's fiscal situation.

However, unlike in past years, the review of the country's economic performance is not aimed at getting IMF approval for any economic program, the sources said.

The Philippines plans to exit from over two decades of economic stewardship under the IMF this year as soon as it passes a crucial package of tax reforms.