Germany proposes debt swap agreement with RP

MANILA, Philippines- Germany is proposing to provide funds to the Philippines in the form of debt swap supporting health projects in the country, particularly in the areas of HIV/AIDS, malaria and tuberculosis. In a meeting with Ralph Recto, Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) Director-General, Josef Füllenbach, head of the Southeast Asian Unit of the the German Ministry for Economic Cooperation and Development, said that as a part of their country’s reformed process for debt servicing, the Philippines will no longer have to pay their incurred loan, but instead use the unpaid debt to finance RP’s health programs. Germany at they may provide 25 million euros or about P1.5 billion under the debt swap proposal. This debt swap will serve as the country’s contribution to the global fund on health, and to address the needs stated in the Millennium Development Goals. Recto welcomed this development and expressed appreciation for the proposal. He said that the NEDA will await the proposals from the concerned agencies about the debt swap. To undertake the debt swap agreement, the Philippines will submit a proposal for the health sector which will benefit from the swap proceeds to be approved by the German government. This will then go through the German Ministry of Finance, to be cleared by their Budget Parliament. After which, the Philippines will be given a go-signal to invest the written-off loan amounts in health sector projects. NEDA officials said once Manila complies with the requirements, Germany may even extend some 65 million euros for additional loans and grants. GMANews.TV