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Monday, May 16, 2005
RP's finances in good shape: Arroyo aide
MANILA -- A spokesman of President Gloria Macapagal-Arroyo said Sunday the country's finances are much better than Argentina's in 2001.
Press Secretary Ignacio Bunye, also the presidential spokesman, was reacting to the statement of Thomas Byrne, Moody's Investors Service senior sovereign analyst, that the RP's finances are in worse shape than Argentina's before it defaulted on its bonds in December 2001.
Byrne had told the Bloomberg news agency that the Philippines' debt of US$75 billion was equivalent to 525 percent of its revenue last year or almost double the ratio for Argentina before its US$95 billion default.
"If you compare all the key fiscal ratios that we look at, the Philippines is much worse now than Argentina was in 2001," Byrne said.
He also said the country's budget deficit of almost four percent in 2004 was wider than Argentina's 3.2 percent deficit in 2001.
Byrne said the Philippine government's debt accounted for 77 percent of gross domestic product last year, higher than Argentina's ratio of 54 percent in 2001.
He said the government's payment of US$22.3 billion of foreign-currency bonds will hinge on its ability to maintain a surplus in the current account and a "fairly comfortable level" of foreign-exchange reserves.
Byrne said Moody's is also concerned about the government's difficulty in implementing proposals to raise taxes.
National Treasurer Omar Cruz has told Bloomberg the longer maturity of the Philippine government's debt puts it in a stronger position than Argentina.
The Philippines, the biggest overseas debt seller in Asia, is selling bonds with longer maturities to spread out payments on its record P4.08 trillion (US$75 billion) debt. It sold 25-year bonds in January, the longest maturity for the first time since 2000.
Bunye said Malacañang takes "strong exceptions to these doomsayers," adding, "the Philippines-Argentina comparison is faulty and based on the wrong premises."
He said the government should be given a credit for the "overall gains" in the economy despite the tough times. "We have hurdled phase one of our agenda by passing key revenue measures."
The budget is in place, revenue collections are up, there is renewed investor interest in the mining sector and progress is being made in Arroyo's social agenda, Bunye added.
"The President is being pilloried for making the right decisions but her vindication will come soon enough as our economy grows," he said. (JMR)
(May 16, 2005 issue)
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