Gov't to pay $3-million maturing debts of MRTC

The Philippine government will pay this year anywhere from $2.5 million to $3 million in maturing obligations incurred by the Metrorail Transit Corp., according to Economic Planning Secretary Felipe Medalla.

Medalla said the Economic Coordinating Council (ECC), after reviewing all the pertinent documents, contracts and performance undertaking signed by then Finance Secretary Roberto F. de Ocampo, has determined that the MRTC loans guaranteed by the government are indeed "valid obligations of the government."

For this year, Medalla said the government has to pay $2.5 million to $3 million. Preferrably, the government will try to source payment of MRTC's maturing obligation from the budget, he added.

But to meet the MRTC obligation, Medalla said, government may have to cut other expenditures.

Finance Secretary Jose T. Pardo had revealed that MRTC's maturing obligations this July include an $8.22-million foreign currency deposit unit (FCDU) loan; a $7.7-million export credit from a Czech export credit agency and a $20.88-million loan from the Japan Export-Import Bank.

Medalla revealed that the MRTC is trying to get its creditor consortium to release another $21 million. But the creditor consortium is refusing to release the amount until the MRTC settles its maturing obligations this July. Medalla admitted that the creditors have a letter of credit which they can encash.

However, the government would prefer that the L/C is not encashed and that payment of MRTC's obligation be sourced from the government budget next year, if not this year.

The MRT project is handled by a consortium that include Fil-Estate, Ayala Land Inc., Anglo-Phils. Holding Corp., Greenfield Development Corp. Allante Realty and Development Corp., DBH Corp. and Ramcar Inc.

Medalla reiterated that the government would not renege or renegotiate the agreeent with MRTC. However, he admitted that continuation of the phase II of the project appears cloudy at the moment even though the project is still expected to be viable once all the radial routes are completed. -