MANILA, Philippines?President Gloria Macapagal-Arroyo ordered on Saturday a one-year deferment in repayment of loans provided by state pension funds, part of liquidity-boosting measures to protect the economy following massive typhoon devastation.
Arroyo said at a disaster briefing that the one-year postponement of salary and housing loans can free up to P32 billion ($679 million) in liquidity.
Arroyo said the government was also planning to extend an extra P150,000 individual home improvement loan to help typhoon-hit victims rebuild houses.
She said she would ask the central bank to set up a five-year special rediscounting window to help lenders refinance loans to small and medium-scale businesses.
"We will not be deterred in our effort to maintain growth," Arroyo said. "We are very hard at work to keep liquidity, to keep investment."
Some lenders, such as the Philippine National Bank waived fees for remittances of donations from overseas Filipinos to help typhoon victims. The local unit of Citibank N.A. offered a 30-day payment holiday on personal loans and credit card debt.
Lawmakers are currently deliberating on a proposal for an extra 10 billion pesos budget this year to fund reconstruction efforts. The additional spending would likely push this year's budget gap to a record P260 billion, and Finance department officials said Manila may resort to more borrowings to fund the shortfall.
Officials said on Tuesday the destruction from last weekend's massive flooding in and around Manila may trim economic growth this year to 0.7 to 1.7 percent against the government's forecast of 0.8 to 1.8 percent.
Residents in the capital and nearby areas, where thousands were still inundated a week after Typhoon Ketsana dumped heavy rains, feared a repeat of flash floods as a "super typhoon" approached the northern Philippine mainland on Saturday.
But Typhoon Parma, packing winds of 175 kilometers per hour, gusting to 210 kph, changed course slightly and was expected to only clip the far north of the archipelago later in the day.
($1 = 47.10 pesos)
