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11/06/2012: PHL Eligible for $23M Debt Conversion Under US Tropical Forest Conservation Act

11 June 2012, Washington DC. United States Treasury Secretary Timothy Geithner confirmed last June 8 in a meeting with Philippine Finance Secretary Cesar V. Purisima and Philippine Ambassador to the U.S. Jose L. Cuisia, Jr. that the Philippines is eligible for a second round of debt conversion under the U.S. Tropical Forest Conservation Act of 1988.

A letter from Under Secretary Lael Brainard stated that “a provisional allocation of up to $23 million will be set aside by the Treasury in U.S. appropriated funds for the treatment of certain eligible debt owed by the Philippines to the U.S. Government.”

Debt conversion involves the exchange of debt for equity or counterpart domestic currency funds to be used to finance a particular project or policy.  In this case, the U.S. Government has approved the utilization of debt owed by the Philippine Government for the environmental project.

Secretary Purisima was in Washington as part of the official delegation of President Benigno S. Aquino III, who met with President Barack Obama at the Oval Office also on June 8.

The Philippine Government’s proposal for a second debt-reduction agreement has been developed in collaboration with the Philippine Tropical Forest Conservation Foundation (PTFCF). The first debt reduction agreement was entered into on 19 September 2002, in partnership with USAID Philippines.

Under the new proposal, the Philippine Government will be scaling up implementation of the Philippine National Reduce Emissions from Deforestation and Degradation Plus Strategy (PNRPS), 2010-2020.

Key investment areas across the Philippines, covered by the PNRPS, have been identified as critical forests where biodiversity and ecological services matter most (i.e., Luzon Montane Forests, the island province of Palawan, Samar Island, and Eastern Mindanao Biodiversity Corridor).

The said scheme will continue to repay the converted/treated loans based on their original amortization schedules by depositing the payments to the Philippine Tropical Forest Conservation Fund, managed by the PTFCF.  (END)