Miyazawa funding studied

People’s Journal

Thursday, December 17, 1998

HANOI (Via PLDT) – President Estrada yesterday said he will study the proposal to tap Japan’s Miyazawa Fund in rehabilitating the debt-ridden Philippine Airlines.

In a press briefing at the Daewoo Hotel here past midnight Tuesday, the President stressed PAL’s importance to the Philippine economy, saying its permanent closure would deal a “big blow” to domestic businesses heavily dependent on air transport.

“Well, if that’s possible,” the President said when asked whether he would propose the PAL rescue plan to Japan.

“As you all know, PAL plays a very important role as far as business is concerned in the Philippines. It will affect all business sectors, big or small,” he added.

The Miyazawa Fund initiative is a $30-billion Japanese grant to aid crisis-hit economies in East Asia. It was named after its proponent, Japanese Finance Minister Kiichi Miyazawa.

Mr. Estrada is here to attend the 6th Leader’s Summit of the Association of Southeast Asian Nations from December 14-16. He will remain here after the summit for a two-day state visit on December 17-18.

Last Monday, Finance Secretary Edgardo Espiritu said the government is eyeing the possible use of Miyazawa Fund in its bid to keep PAL aloft.

Espiritu said PAL may get up to $150 million from Miyazawa Fund if Japanese creditors and donor organizations approve the terms of the loan under this grant.

He said the Estrada administration may take this option if there continues to be no progress in negotiations by PAL for a strategic partnership with a foreign airline.

Espiritu said tapping the Miyazawa Fund for PAL’s rehabilitation is a valid proposal since corporate debt restructuring using this Japanese loan grant has been done in other Southeast Asian countries such as Thailand and Indonesia.