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PIA Press Release

Feature: Foreign debt reduction and the economy

Tacloban City (April 4) -- The country's economic specialists say that the Philippines' foreign debt has been reduced very significantly because of advance payments on foreign loan obligations.

Common mortals like the author will not realize the significance of this act if no one will explain that the advance payment of foreign loan obligations does not only reduce the country's foreign debt but this increased the value of the Philippine Peso and stabilized the prices of basic commodities. The funds saved could then be used to increase the salaries of government employees.

An indicator that the country is not deeply in debt is the lowered debt to the Gross Domestic Product ratio, which according to NEDA, the decreased from 78 percent in 2004 to only 64 percent. This makes the country not far behind when compared to its neighbors with strong economies.

Interest rates are also expected to lower by 29 percent in 2007 because of the reduced foreign obligations. The reduction in interest payments is expected to generate about P30 billion peso-savings for the country which will give the government an elbow room to invest in socio-development projects.

What is more interesting to note is that these development increased remarkably the confidence of the foreign investors in the country.

This growing level of confidence of the international business community in the country could be attested by the coming in of many call centers investors in the country, not only in Luzon but also in the Visayas and Mindanao areas.

Another clear vote of confidence is the fact that the world's 13th richest person, Prince Alwaleed from the Middle East, has his group's investment in the Philippines to put up Raffles and Fairmonts Hotels.

These victories will not make the government rest in its latest laurels. The government will continue to appeal for more investments from the Arab nations and will match the growing confidence in the country with stronger action to build infrastructure, generate incentives and promulgate law and order.

This is a boon, not for the government alone, but for the Filipino people who will continue to reap the returns of growth, confidence and jobs because after all and in the end, the Filipino people remains to be the targets and the beneficiaries of this country's developments. (PIA 8) [top]

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