October 3, 2009 / 6:49 AM / 9 years ago

Manila moves to boost liquidity after storm wreckage

(Adds central bank statement)

MANILA, Oct 3 (Reuters) - Philippine President Gloria Macapagal Arroyo ordered on Saturday a one-year deferment in repayment of loans provided by state pension funds, part of liquidity-boosting measures to protect the economy following massive typhoon devastation.

Arroyo said at a disaster briefing that the one-year postponement of salary and housing loans can free up to 32 billion pesos ($679 million) in liquidity.

She said she would ask the central bank to set up a five-year special rediscounting window to help lenders refinance loans to small and medium-scale businesses, a proposal the central bank said it would study.

"We will not be deterred in our effort to maintain growth," Arroyo said. "We are very hard at work to keep liquidity, to keep investment."

Arroyo said the government was also planning to extend an extra 150,000-peso individual home improvement loan to help typhoon-hit victims rebuild houses.

Central bank deputy governor Nestor Espenilla said monetary authorities would study the proposal for a five-year rediscounting window, as the maturity of its existing facility is only less than one year.

But Espenilla stressed government banks have more flexibility in extending loan assistance, given the legal limitations under the central bank charter.

On Friday, the central bank approved measures for banks allowing them to grant some reprieve to borrowers. The measures include the grant of a two-month grace period for payments of rediscounting loans and the restructuring of such debt.

(To read central bank statement, click on www.bsp.gov.ph)

Some lenders, such as the Philippine National Bank (PNB) (PNB.PS), waived fees for the entire month of October for remittances of donations from overseas Filipinos to help typhoon victims. PNB is one of largest remittance banks in the country.

Philippine money transfer firm I-Remit (I.P) made a similar offer but extended it to include all types of remittances during a five-day period until Oct. 5.

The local unit of Citibank N.A. (C.N) offered a 30-day payment holiday on personal loans and credit card debt. It said in a statement it made a similar offer in Australia and Indonesia in the aftermath of a calamity.

Lawmakers are currently deliberating on a proposal for an extra 10 billion pesos budget this year to fund reconstruction efforts. The additional spending would likely push this year's budget gap to a record 260 billion pesos, and Finance department officials said Manila may resort to more borrowings to fund the shortfall.[ID:nMAN365461]

Officials said on Tuesday the destruction from last weekend's massive flooding in and around Manila may trim economic growth this year to 0.7 to 1.7 percent against the government's forecast of 0.8 to 1.8 percent. [ID:nMAN414052]

Residents in the capital and nearby areas, where thousands were still inundated a week after Typhoon Ketsana dumped heavy rains, feared a repeat of flash floods as a "super typhoon" approached the northern Philippine mainland on Saturday.

But Typhoon Parma, packing winds of 175 kph (108 mph), gusting to 210 kph, changed course slightly and was expected to only clip the far north of the archipelago later in the day. [ID:nSP491084] [ID:nSP4611]

($1 = 47.10 pesos)

(Reporting by Manolo Serapio Jr.; Editing by Rosemarie Francisco and Bill Tarrant)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below