Loan prepayments up 55%

MANILA, Philippines - Total prepayments of medium and long-term loans by public and private companies went up 55 percent to $2.8 billion in 2013 from $1.8 billion in 2012, data from the Bangko Sentral ng Pilipinas showed.

While prepayments of public or government-owned companies dropped to $471.7 million for the period from $641.2 million in 2012, private firms, meanwhile, prepaid $2.34 billion, more than doubled the $1.17 billion in 2012.

Monetary authorities have been encouraging the prepayment of dollar-denominated debts of private and public firms especially when the peso is strong.

Last year, the peso-dollar exchange rate averaged 44 to the dollar against 41 in 2012.

The peso’s strengthening was brought about by the country’s continued favorable economic performance.

Bank of Philippine Islands (BPI) economist Emilio Neri Jr. earlier said having a smaller foreign currency debt actually shields the debtor from foreign exchange movements which could alter the amount of their liabilities, either upwards or downwards.