(1) Debt-to-Equity
Program. — To expand the volume and coverage of the Central Bank
Debt-to-Equity
Swap Program by converting $5 billion, more or less, in the Philippine
foreign debt instruments into equity investments in Philippine
agriculture
and industry under a 5-year program of $1 billion, more or less, per
year
with emphasis on new foreign exchange-earning and labor-intensive
productive
projects in various parts of the country, including factories operating
below rated capacity or which have been closed down for lack of
capital,
under terms that will not unduly trigger inflation; chanrobles virtuallaw libraryred(2) Debt-for-Bonds
Swap. — To retire $1.5 billion to $2 billion, more or less, of foreign
debt by Philippine issuance of $1 billion, more or less, of Philippine
dollar bonds collateralized by 20-year Zero Coupon U.S. Treasury Bonds
or other suitable U.S. Government Bonds. The amount of $1 billion in
Zero
Coupon U.S. Treasury Bonds with twenty (20) years maturity can be
purchased
by using $200 million, more or less, from Philippine international
reserves
or anticipated inflows from foreign aid;
(3) Partial
Use of U.S. Facilities Compensation. — To utilize a portion of the
possible
U.S. Facilities Compensation Package to acquire more U.S. Treasury
Bonds
or accept part-payment for the U.S. Facilities in U.S. Treasury Bonds
for
further exchange with Philippine debt instruments as indicated in Item
(2) above; chanrobles virtuallaw libraryred
(4) Japanese
Bonds and other Foreign Currency Denominated Bonds. — To utilize a
portion
of Japanese and other foreign economic development assistance funds to
acquire Japanese and other foreign currency denominated bonds to
collateralize
issuance of Philippine currency denominated bonds similar to the U.S.
Bonds
formula, as explained in Items (2) and (3) above;
(5) Use
of Official Aid. — To use a portion of official aid from other sources
to fund Philippine purchases of U.S. Treasury Bonds or Japanese Bonds
to
further enlarge the Debt-for-Bonds Swap Program; chanrobles virtuallaw libraryred
(6) Co-Guarantors.
— To request the World Bank or other official multilateral financial
institution
to co-guarantee the coupon rate or interest rate of Philippine dollar
bonds
in support of the Debt-for-Bonds Swap Program. Foreign buyers are then
assured of payments not only on the principal but also on the interest;
(7) Interest
Cap. — To reduce interest rate payments to four percent (4%) to five
percent
(5%) of principal, more or less, per year on the loans granted by the
foreign
commercial banks to the Philippines;
(8) Capitalization
of Interest Balance. — Under the Interest Rate Reduction Scheme in Item
(7), the unpaid interest portion in this proposal, shall be added to
the
principal amount to be repaid when the loan matures. Further, the
Philippines
may issue to international creditors a new dollar-denominated
instrument
corresponding to the unpaid interest balance with incentive features;
(9) Interest
Waivers. — In lieu of or complementary to Items (7) and (8), to
negotiate
with the foreign commercial banks for interest waivers of two percent
(2%)
to four percent (4%), which the World Bank is considering to endorse;chan
robles virtual law
(10) Condonation
of a Portion of Commercial Loan. — To request the foreign commercial
banks
to condone at least fifteen percent (15%) of their loans to the
Philippines
since some of these institutions have already announced loan-loss
provisions
of twenty percent (20%) to thirty-five percent (35%);
(11) Restructuring
Terms of the Paris Club Debt. — To lengthen the payment period of the
Paris
Club debt from ten (10) years to twenty (20) years, considering that
the
foreign commercial banks have already agreed to restructure their loans
to the Philippines to seventeen (17) years;chanrobles virtuallaw libraryred
(12) Converting
a Portion of the Paris Club Debt to Grants. — To convert a portion of
the
Paris Club debt to grants, considering as an example that a significant
segment of the Philippine official debt to Japan was caused by Japanese
yen revaluation;
(13) Conversion
of Foreign Military Sales to Grants. — To convert Foreign Military
Sales
(FMS) credits to the Philippines under bilateral agreements,
principally
with the United States, into grants;
(14) Debt-for-Nature
Swap Program. — To convert limited amounts of Philippine foreign debt
into
grants for nature, environment and wildlife conservation projects in
the
Philippines to be undertaken by international conservation groups;
(15) International
Institute of Debt and Development. — To support the establishment of an
International Institute of Debt and Development or any international
finance
organization that will acquire the debt instruments of the Philippines
and other Third World countries at substantial discount, which benefits
shall be shared by the debtor countries;
(16) Selective
Debt Repudiation. — To consider the option of selective debt
repudiation
on foreign loans attended by fraud, bribery, and corruption between
foreign
lenders and Philippine borrowers; chanrobles virtuallaw libraryred
(17) Moratorium.
— To consider the option declaring a moratorium for a temporary and
limited
period of payment of principal and interest; Provided, That foreign
exchange
savings shall be utilized exclusively for productive, labor-intensive
and
dollar-earning export industries. Fifty percent (50%) of export
earnings
created by this forced savings shall be escrowed in interest-earning
deposits
to be earmarked for foreign debt service upon expiry of the moratorium
thus increasing further the nation's debt service capability and
helping
project an image of a good debtor. Such options shall include selective
moratorium on debts or obligations which are under litigation;
(18) Merchandise
Export Receipts. — To negotiate that the debt service per annum shall
not
exceed fifteen percent (15%) of merchandise export receipts of the
previous
year;
(19) Repeal
of Automatic Appropriations. — Repeal of automatic appropriations for
foreign
debt service except for new loans or other credit accommodations; chanrobles virtuallaw libraryred
(20) Debt-for-Commodities
Program. — For the Philippines to consider paying part of its foreign
debt
with Philippine products at levels from $250 million to $500 million,
more
or less, per year;
(21) Mixed
Credits. — Negotiate for "mixed credits" that will include a long-term
cash portion, long-term export credits, low interest and grants
equivalent
to five percent (5%), more or less, of project cost. Maturity should be
between twenty-five (25) to thirty (30) years. New money facilities
should
only be used for purposes of economic growth and development, unless
otherwise
specified;
(22) Petroleum
Credits. — Negotiate a program of petroleum credits with
petroleum-exporting
states with twenty-five (25) to thirty (30) years maturity, more or
less,
linked to the United States bases support for oil tanker traffic in the
Persian Gulf. The proceeds of this petroleum credits shall be
exclusively
used for southern Philippines, including the establishment of an oil
refinery
there. In addition, the Philippines should also target $100 million per
year of oil-exporting states' investment in the Philippines including
their
support for the proposed Philippine Islamic Bank.chanrobles virtuallaw libraryred
Undertake
bilateral agreements for skilled Philippine manpower programs with
friendly
oil-exporting states to generate labor-related foreign exchange
earnings
of US$ 1 billion to US$ 1.5 billion, more or less, per year;
(23) Investments
Policy and the Philippine Assistance Program. — Without prejudicing
Filipino
entrepreneurs in certain industrial sectors, establish a liberal
foreign
investments program aimed at attracting to the Philippines the four (4)
newly industrializing economies of South Korea, Taiwan, Singapore and
Hongkong.
Further,
support simultaneously multilateral programs of the United States,
Japan,
Canada, Australia, European Economic Community (EEC), Association of
Southeast
Asian Nations (ASEAN) and other countries for Philippine economic
reconstruction
under the proposed Philippine Assistance Program (PAP) involving a
mixture
of equity investments, debt-to-equity conversions, long-term loans,
aid,
and grants; chanrobles virtuallaw libraryred
(24) Countertrade.
— Organize a countertrade program of up to US$1 billion a year, more or
less, with the Union of Soviet Socialist Republics, People's Republic
of
China, the Socialist States of Eastern Europe, and any other country
with
centrally-planned economies to balance and diversify Philippine foreign
trade and move non-traditional products with a view to ensuring
incremental
exports and reducing the Philippine need for trade credits;
(25) International
Debt Conferences. — Actively join and participate in Latin America,
African,
Socialist and other international conferences dealing with foreign
debt; chanrobles virtuallaw libraryred
(26) Diplomatic
and Information Campaign. — Launch a diplomatic and information
campaign
outlining the Government's economic program for the international and
financial
community to illustrate Philippine will to face up to its debt
problems;
(27) Other
Options. — The foregoing shall not preclude the formulation and
consideration
of other options and principles in dealing with the Philippine external
debt, consistent with the national interest.