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Saturday, October 02, 2004
Boncodin allays fears on interest rate increase
BUDGET Secretary Emilia Boncodin has asserted that any increase in interest rates would not have a major impact onn the budget as well as in the payment of the country's debts.
In the continuation of budget deliberations in the Senate Friday, Boncodin said a one percent increase would result to P6.2 billion in additional interest payments on existing foreign and local loans.
But Sen. Manuel Villar insisted that the increase would require the government to increase its loan payments by P25 billion.
"We will validate that figure, hindi kasi namin alam kung paano ang computation nila sa (we do not know how their computation) P25 billion. I think that is big enough, ours is smaller," Boncodin said.
Boncodin said an interest rate increase has minimal impact even on foreign exchange, budget allocations and oil importation by next year because most of the government's loans are in fixed rates and that the government would have additional revenues.
However, in a separate interview, Villar said although the increase in interest rates would not affect this year's budget and debt payment, it might give an additional burden to government in succeeding years.
He said some of the government loans vary in maturity as he projected an additional P25 billion of debt payments.
To date, the total interest payment of the government pegged to P301 billion. JPM
(October 2, 2004 issue)
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