Carpio corrects DOF: PHL defaulted on debt payments in 1983

Correcting Finance Secretary Carlos Dominguez III, Supreme Court Senior Associate Justice Antonio Carpio on Tuesday said the Philippines had defaulted on its debt in 1983.

Dominguez earlier claimed the Philippines has "no history of defaulting on its loans" and downplayed concerns that the country may drown in Chinese debt.

But Carpio said the Philippines "declared a moratorium on its foreign debt repayments" in 1983 "because the Central Bank did not have sufficient foreign exchange to service its foreign debts."

The New York Times reported on Oct. 15, 1983 that the Philippines agreed to a 90-day moratorium on payments of its foreign debt.

Reportedly requested by the then-prime minister Cesar Virata and then-central bank governor Jaime Laya, the moratorium was said to have covered "principal payments coming due" the rest of 1983.

Carpio, the most senior justice in the High Court, has earlier raised concern that the Philippines may have to give up oil and gas in Reed Bank in case it defaults in its payment of a loan from China for the Chico River irrigation project.

In a message to reporters, Carpio said a provision in the loan agreement states that there is an "event of default" when "the borrower stops or suspends repayment to its creditors generally."

"So, it is not correct to say that the Philippines never defaulted on its debt because the mere suspension of repayment, like declaring a debt moratorium, is already an 'event of default,'" he said. —NB, GMA News