P.M. BRIEFING : Manila, Bankers Near Deal on Loans

The Philippines and its foreign bank lenders are on the brink of agreeing to a deal that would provide the country with new loans and the opportunity to buy back some of its $7.3-billion commercial debt, bankers said today.

“We’ll have an agreement in principle tonight unless there is something unexpected,” said a banker involved in the talks.

The deal is expected to be worth slightly less than the $1.7 billion the Philippines requested, the bankers said. They added that because the banks involved are not obliged to participate, it is hard to determine the deal’s exact value. They estimated that it would include between $750 million and $1 billion in new loans.

“The numbers are guesses right now. We won’t know how much the whole thing is worth until we get commitments on what everyone is willing to contribute,” another banker said.

The Philippines and the committee of bankers negotiating on behalf of the country’s international bank lenders have already agreed to a lower interest rate of 13/16% above the floating London Interbank offer rate on the new money, bankers said. The Philippines currently pays 7/8% above that rate, a main international benchmark.

Bankers also said they agreed to reschedule $925 million of loans provided to the Philippines in 1985.