BSP says no threat of PH defaulting on loans

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(FILE PHOTO)

Metro Manila (CNN Philippines, September 30) — The country is not in any danger of being unable to pay back its loans amid the pandemic, the Bangko Sentral ng Pilipinas assured on Wednesday.

Speaking at the Laging Handa briefing, BSP Governor Ben Diokno said the country had enough reserves to keep it safe from defaulting, unlike the scenario from previous crises.

"Everytime nagkakaroon tayo ng krisis, nauubusan tayo ng dolyar sa pagbabayad natin ng utang...nade-depreciate yung peso natin... Ngayon iba itong crisis na ito, although it's unprecedented, napaganda nung...to the extent na napakadami nating dolyar. We have close to $100 billion in gross international reserves so walang threat na hindi tayo makakabayad ng utang," he said.

[Translation: Everytime a crisis came, we would exhaust ur dollar reserves...the peso would depreciate. This crisis is different, although it's unprecedented...to the extend that we have enough dollars. We have close to $100 billion in gross international reserves so there is no threat of being unable to pay loans.]

Diokno added there was strong confidence in the peso as it continued to appreciate in value.

"In fact it is the second strongest currency in the world, and number one in Asia," he said, adding the peso's value is expected to remain steady, moving between ₱48.50 to ₱48.70 to the dollar.

Financial analysts have earlier said the fall in imports as the economy weakened during the world's longest lockdown have subdued demand for foreign currency, boosting the peso's strength,

Finance Secretary Carlos Dominguez III earlier rejected the call of Senator Imee Marcos for a debt moratorium amid the pandemic so the government can extend more subsidies to struggling families and companies forced out of business due to lockdowns.

"Debt moratorium has not crossed our mind. It was never entertained or will ever be a part of our crisis response measures," Dominguez said in a statement in April, adding that doing this would put the country's track record in peril. 

In the 1980s, towards the end of the regime of Senator Marcos' father, the late strongman Ferdinand Marcos, the bankrupt government had to declare moratoriums on its debts.