RP may give guarantees for infrastructure loans

MANILA, Philippines – The Philippine government may agree to pay for debts of companies implementing infrastructure projects if these fail to settle their obligations, a cabinet secretary said.

The government may guarantee 85 percent of the loans incurred by private and state-led companies that will build roads, bridges, and schools as part of economic pump-priming efforts.

If approved, a proposal will make it easy for private companies to secure loans from banks and other financial institutions since these debts will carry a sovereign guarantee. The said guarantee gives an assurance that loans will be paid by the government if private companies fail to do so.

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