Manila c bank says no need to print more money

PHILIPPINES - There was no danger that monetary authorities would be forced to print more money to pay for government debts, Philippine central bank governor Rafael Buenaventura said on 31 July.
PHILIPPINES - There was no danger that monetary authorities would be forced to print more money to pay for government debts, Philippine central bank governor Rafael Buenaventura said on 31 July.

"We will not print new money to pay debts and I don't think government will ask us to do that," Buenaventura told reporters.

Buenaventura was commenting on media reports that a foreign investment bank had warned in a study that the country's widening budget deficit, depreciation of the peso and weak economy would prompt the central bank to print more money.

Last week, the Department of Finance said the government was programmed to pay this year a total of 100.1 billion pesos for both its local and foreign debts as against the 86.9 billion pesos it paid last year.

The Philippines aims to contain its budget deficit to 145 billion pesos this year against the 136.11 billion pesos posted in 2000.

In the first six months of this year, the deficit reached 79.559 billion pesos, slightly lower compared with the government target of 80 billion for the period.

The peso on 31 July closed weaker at 53.54 to the dollar from 30 July's 53.37 on lower volume totalling $67.70 million from the previous $106.7 million.

On 27 July, the central bank raised commercial banks' liquidity reserve requirements by two percentage points to nine percent and reduced the amount of over-the-counter dollar sales of commercial banks to $5,000 from $10,000 per undocumented transaction.

The measures were aimed at moderating liquidity that could be used to speculate against the peso, which touched a six-month intraday low of 54.335 to the dollar on 18 July.

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