Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura said the National Government will just have to look for other funding sources in view of its decision to cancel the remaining $400 million of the $600-million BSRL.
The NG decided to cancel the balance of the $600-million BSRL after it failed to meet specific condition such as legislating anti-money laundering measures and implementing the full privatization and rehabilitation of the Philippine National Bank (PNB).
"Government will allow the loan to lapse and just look at other programs available from the World Bank since there is little time to get the loan’s legislative agenda done," Buenaventura said.
With a new Congress resuming sessions only by June or early July, Buenaventura said the legislative body won’t be fully operational until the third quarter. The BSRL expires on June 30.
"Extending the loan will be more problematic, so it will be easier to start with a clean slate," Buenaventura said on the earlier option which government sought – to seek an extension of the loan for another year after it lapses.
"When you include legislation measures, this takes time because the executive body has no control over the phase of deliberations on the anti-money laundering bill," Buenaventura added.
Earlier, outgoing Finance Secretary Alberto Romulo said the government will wait for the loan to lapse and then negotiate for a new plan with less stringent conditionalities.
Several condionalities required prior to the release of the second and third tranches of the loan, mostly banking reform measures, were not met by the government.