PHILIPPINE DEBT PACT SEEN AS GOOD FOR ECONOMY
The Philippines' restructuring of 13.2
billion dlrs of foreign debt will provide a welcome boost for
the economy, but last Friday's accord with the country's
12-bank advisory committee does not imply an overnight boom,
bankers and businessmen polled by Reuters said.
    "The successful negotiations form an important piece in the
mosaic," Christian Roeher, Secretary-General of the European
Chamber of Commerce, said. "Now is really the time for the
government to start implementing its ideas. There has been a
lot of talking and loud thinking."
    Business leaders said the 17-year rescheduling of
commercial bank debt would give President Corazon Aquino some
badly-needed breathing space, but warned her government was
still in the midst of political consolidation.
    "There is a lot of interest among foreign investors in the
country, but now they are waiting to see what happens in the
congressional and local elections later this year," said
American Chamber of Commerce president George Drysdale.
    The government is serious about getting down to work, but
there are many individual agendas for growth and no consensus.
But each step brings a unanimity of opinion closer, he said.
    Aurelio Periquet, President of the Philippine Chamber of
Commerce and Industry, told Reuters the debt accord had
positively translated the international banking community's
confidence in the country's economy and Aquino's government.
    "This government needs less pressure and more time and
happily our creditors seem to see it that way," he said. "This
accord may not result in an immediate boom, but at least it
enhances the image of the country for foreign investors."
    But Periquet said domestic and foreign investments fell
short of targets in 1986. "The accord does not solve all our
problems," he added.
    Periquet said the question of political stability no longer
worried Filipino businessmen, who had already started expanding
existing businesses or investing in new areas.
    "A number of us have already put in new money and there are
plans for the export market," he said. "President Aquino has
shown her ability to pull the nation out of one crisis after
another."
    Roeher said foreign investment would probably be held back
until after the congressional polls in May and the local
elections in August. "The two elections will probably have a
more decisive effect on the way business reacts," he said.
    "Some foreign companies are not waiting, but they are more
the exception than the rule," Roeher said.
    He said it was important the government ensure the creation
of more jobs was not just a transitory development.
    "The absorption of enormous aid given to the Philippines is
also poor. A lot of it has not been put to use. The government
should act without further delay to absorb the 1.7 billion dlrs
of development aid it will receive in 1987," he said.
    A foreign banker close to the debt negotiations said he did
not foresee any real boom until 1989.
    "The problem is that Aquino has inherited her political
system from (former President Ferdinand) Marcos," the banker
said. "There is still a clamour for the sharing of benefits,
different sectors claiming their rights and duties. If they go
too fast there could be another bust two years down the road."
    Businessman Raul Concepcion, whose brother Jose is the
country's trade and industry minister, said everyone could
heave a sigh of relief. "Now that the debt agreement is out of
the way, our economic and financial officials can concentrate
on their work, like increasing government revenue and
efficiency," he said.
 REUTER
