The Manila Times
Wednesday, December 23, 1998
SOCIO-ECONOMIC Planning Secretary Felipe Medalla yesterday opposed a Department of Finance proposal to help ailing Philippine Airlines (PAL) get $150 million in soft-term foreign loans from Japan's $30 billion Miyazawa Aid Plan.
Using the Miyazawa funds for PAL, which is controlled by Lucio Tan, a controversial taipan facing a P25-billion tax evasion case, will send the "wrong signals" to the Japanese government, said Medalla.
Medalla, who is concurrent Director-General of the National Economic and Development Authority, is the first member of Estrada's Cabinet to speak openly against the proposal, hatched by Finance Secretary Edgardo Espiritu. Tan was a major campaign supporter of Estrada in the last Presidential election.
Medalla’s opposition came just a day after PAL's European creditors and aircraft lessors rejected the ailing national flag carrier's proposed rehabilitation plan, because of PAL's failure to get a strategic partner.
According to Espiritu, the opposition of PAL’s creditors and lessors imperils the Estrada administration's bid to tap the Miyazawa funds for Tan's ailing airline.
"'The (proposed) financing for PAL is subject to a lot of conditionalities," Espiritu said. "Without these elements, the loan from the Miyazawa fund will not come in.”
The most important conditions are the approval of its rehabilitation plan by its creditors and the entry of a new management team.
Medalla stressed that the Japanese government has identified the specific uses of the Miyazawa Initiative, which has two components: the quick disbursing loan and medium term assistance package.
According to Medalla, the quick disbursing portion of the fund will be used to co-finance program loans from multilateral institutions like the Asian Development Bank and World Bank. The Bangko Sentral ng Pilipinas also wants to use a portion of the quick-disbursing loans to beef up its gross international reserves.
The second component of the fund will be used to finance various pipeline projects of the government.
Medalla said PAL’s proposal cannot be channeled through the Miyazawa fund’s quick disbursing facility. It was not clear if PAL can try the other loan window. Medalla admitted, however, that the Estrada administration has yet to receive an official reaction from Tokyo on the proposal.
Meanwhile, Espiritu said the issue raised by PAL’s European creditors is not insurmountable.
According to him, the Securities and Exchange Commission (SEC), which is hearing PAL’s petition for debt suspension and rehabilitation, has created a committee tasked to deal with the problem.
PAL’s rehabilitation plan calls for $150 million in fresh funds and the restructuring of its $2 billion debts.
In another development Philippine Commercial International Bank (PCIBank ) has asked the SEC to shorten from 15 to 10 years PAL’s proposed new repayment for its debts.
In a comment filed with the SEC PCIBank Corporate Secretary Martial O.T. Balgos said the shortened maturity period must include a five-year grace period for PAL’s huge loans.
Balgos also branded as "onerous" a suggestion of PAL's interim rehabilitation receiver, requiring the creditors to waive loan penalties that PAL continues to incur even after it filed the SEC petition. Marvin Sy, with reports from Jun Ebias and Carmina Reyes
No comments:
Post a Comment