RP to ask for bigger share of ¥ loan package

The government intends to ask for a higher allocation from the Japanese government's annual yen loan package such as the Miyazawa Fund and the Obuchi Fund, Finance Secretary Jose T. Pardo said yesterday.

"The government would want to get more than the $1 billion to $1.5 billion that the country annually gets from the Japanese government under the yen loan package," Pardo said.

He said the government is preparing a number of projects for possible funding under the said package.

Pardo said the government will ask for another $500 million under the Miyazawa Fund while projects are being drawn up that can be funded under the Obuchi Fund.

Japanese official development assistance (ODA) is concessional, carrying below market rates and has a long-term maturity.

The government normally prefers the cheaper concessional funds instead of having to tap the international financial market to raise funds.

Funds raised through the flotation of sovereign bonds carry market rates on top of the cost paid to the underwriters or dealers.

The government recently raised about $1.6 billion through a Global bond offering, but spreads on Philippine debt papers have recently widened due to a spate of negative economic and political developments in the country.

The Japanese government has now become the country's major source of ODA funds, replacing the US. Japanese investments have also exceeded US investments.

Pardo also admitted that following the successful $1.6-billion Global bond float, the government can afford to wait before entering again the international capital market.

The government still plans to launch a Samurai bond offering and a Euro bond float. -