$740-M loan to boost RP’s foreign reserves

The country’s gross international reserves (GIR) will increase to about $14.9 billion when the Bangko Sentral ng Pilipinas (BSP) receives today its $740-million syndicated loan from 19 domestic and foreign banks.

The GIR stood at about $14.18 billion as of end February, lower than the end-January level of $14.39 billion. The lower GIR was partly a result of the BSP’s move to use a portion of its dollar reserves to retire $400 million in loans that matured in mid-February. Another $470 million in BSP loans will be retired by next month.

"I expect the money to come in today," BSP Governor Rafael Buenventura said following the signing yesterday for the three-year credit facility.

Buenaventura noted in his brief remarks that the lenders’ enthusiastic response to the BSP’s call for them to participate in the loan was a "vote of confidence" of the local and international financial community in the Arroyo administration.

He said the syndicated loan could be the last for the year as there are no more maturing loans after next month.

Buenaventura said the BSP still needs about $130 million, the remainder of its total maturing loans of $870 million for the year, but this is likely to be acquired through a private placement sometime in the next semester.

The $740-million syndicated loan is the first sovereign deal under the Arroyo administration.

While the BSP initially invited only 12 banks, the deal was oversubscribed, prompting the central bank to accommodate other lenders based in Asia, the United States and Europe.

The following banks will be lending $50 million each; Banco de Oro/JP Morgan, Bank of the Philippine Islands, BNP Paribas, Deutsche Bank AG, Hong Kong Shanghai Banking Corp. ING Bank, Metropolitan Bank and Trust Co., Rizal Commercial Banking Corp. and Standard Chartered Bank.

Another group of banks will lend $30 million each to BSP. These are the Bank of Tokyo-Mitsubishi, KBC Bank N.V., Australia and New Zealand Banking Group, China Trust, Sanwa Bank, Sumitomo Bank, Development Bank of Singapore and Fiji Bank. – Rocel Felix