US, RP ink P75-M debt-for-nature swap

The US and Philippine governments have reached an agreement on a P75-million debt-for-nature swap involving the shift of funds from interest payments on US loans to the Arroyo administration’s Tropical Forest Conservation Program.

Acting Finance Secretary Juanita Amatong told reporters yesterday that the US government had agreed to waive interest payments on certain US loans to the Philippines and the proceeds would instead be spent on the conservation program.

Amatong said the amount was only the initial contribution of the US government and it was possible for the debt-for-nature swap to be expanded sometime in the future.

According to Amatong, however, the government would continue to pay for the principal amount although she did not disclose which particular loans were covered by the debt swap.

She said the government planned to create a foundation that would act as a conduit for funds to the conservation program. This would be the main conduit for funds of future contributions to the program.

Amatong said the debt-for-nature swap would free up some funds of the Department of Environment and Natural Resources and this would allow the government to channel the proceeds directly to the program.

"Its not much but it’s a good start," Amatong said.

She said the foundation to be created would have representations from five non-government organizations, two representatives from the US government and two representatives from the Philippine government.

The foundation could then raise funds for the conservation program instead of depending on government funding. – Des Ferriols