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Wednesday, September 10, 2003
Manila may pay more on its debt after Argentina default: official (12:04 pm)
MANILA -- The Philippines may have to pay higher interest rates on its foreign debt following Argentina's default on an International Monetary Fund (IMF) repayment, Central Bank Gov. Rafael Buenaventura said Wednesday.
"The price of debt will probably go up because of the (expected) contagion effect but it will be temporary," Buenaventura told reporters.
Investors will soon realize that the Philippines' debt profile is different from that of Argentina even though the two countries are counted in the same investment basket as emerging markets, he said.
"The government will borrow by October or November, at which point, even Argentina will have found a way to a compromise," Buenaventura said.
Argentina has failed to make a three-billion-dollar payment to the IMF, pushing the Latin American country into an overall default on its foreign debt.
Officials there said, however, that they are determined to work out some arrangement with the IMF to refinance its debt and said the decision was meant to preserve Argentina's foreign exchange reserves. AFP
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