Palace thumbs down Marcos’ proposal for deferment of debt payments

April 16, 2020

Malacanang rejected on Thursday proposal of Senator Imee Marcos to suspend government's debt payments amid the coronavirus disease crisis.

In a virtual press briefing, Presidential Spokesperson Harry Roque said that deferring debt interest payments could result to a more serious repercussion.

"It's (moratorium on interest rate payment) is not an option that the government is considering now, because the repercussion will be greater," he said.

He noted that in the government's debt contracts, there are "cross default provisions."

"It will be more bloody if all the lenders will collect from us at almost the same time," he added.

Marcos suggested that the Philippines ask  for one-year postponement of interest payments from its lenders.

"What do we lose by asking for a one-year postponement of interest payments, a mere delay after decades of punctual payments? Certainly not the default on debt that the Department of Finance dreads," she said in a statement.

"Already the message is clear: the world's richest nations and the world's top lenders like the International Monetary Fund, World Bank, and Asian Development Bank have called for a debt moratorium for the poorer nations, and the Philippines is included in last night's list of 75 countries," added Marcos, the eldest daughter of late President Ferdinand Marcos, who declared Philippine bankruptcy in 1983 and sought a 90-day moratorium on its debt payments after incurring huge foreign debts.

Roque said the government has enough funds.

"And if it's not sufficient, the government will sell first its assets before we default in our obligations," Roque stressed.

Even before the COVID-19 pandemic, the government has been trying to auction the pieces of jewelry confiscated from the Marcos family when the Marcos regime fell in 1986. Celerina Monte/DMS