[ Manila Bulletin Online ] March 12, 2008
By LEE C. CHIPONGIAN
Finance Secretary Margarito B. Teves said the government through Development Bank of the Philippines (DBP) is paying off its $ 865-million MRT-3 loans after March 31.
Teves has confirmed that the deadline for the implementation of the Memorandum of Agreement (MoA) with the Department of Transportation and Communication (DoTC) and the stockholders of Metro Rail Transit Corp. (MRTC) is the end of this month.
"We are moving towards the implementation phase. (The) signing of the MoA is March 31 (so the) refinancing will take place after this date," said Teves. Including interests on the loan, the total amount that would have to be raised by the DBP is $ 900 million.
DBP and other institutions will be sourcing this amount from local banks. "That is our preference (that) the entire amount will be sourced locally," the DoF chief said. Teves announced in August last year that the government might borrow a portion or all of the $ 865 million abroad.
Previous reports said DBP is planning to issue 10-year bonds in the local currency.
The MRT3loan MOU for its refinancing was signed last August 2007. It took the DOF, the DOTC and MRTC six months to resolve technical and legal issues surrounding the loan refinancing.
DOF Undersecretary and Acting National Treasurer Roberto Tan said they have agreed to tap the National Development Co., the investment arm of the Department of Trade and Industry, as the agency to work with DBP.
Some of the legal and ownership issues hounding the government’s plan to buyout and refinance the $ 865 million MRT3 loan has been renegotiated. The loan carries an interest of 12.5 percent until fully paid by the National Government.
DBP has proposed to underwrite the loan. As underwriter the bank will partner with other investment banks to assume the risks and the NG credit
DBP President Reynaldo David said earlier that buying out the full MRT3 loan is good for the government because of interest savings worth $ 380 million.
The DOF received other proposals from investment banks and financial institutions for the refinancing of the loan.
One of those interested is Metropolitan Bank & Trust Co. subsidiary First Metro Investment Corp. (FMIC), which is planning to bid for the refinancing of MRT3.
