The Department of Finance said US and Philippine officials are now reconciling their records to determine exactly how much the Philippines still owes the US and which of these debts would be covered in the swap.
Following the terrorist bombing of the US last year, the Arroyo administration’s declaration of alliance with the US made the country eligible for a debt treatment program under the US Tropical Forest Conservation Act, more commonly known as the debt-for-nature swap.
The swap provides for the cancellation of a portion of concessional debt owed to the US in exchange for the commitment to use the local currency payments to fund domestic foreign conservation activities.
According to Finance Undersecretary Juanita Amatong, there are three mechanisms defined in the Tropical Forest Conservation Act. The first stage of preparation is the reconciliation of debt records to determine which of the obligations will be eligible for the swap.
Amatong said Philippine authorities have tallied $400 million to $450 million worth of outstanding obligations with the US government. She said the bulk of these obligations were incurred under the US Public Law 480 known as the US Farm Bill. — Des Ferriols