The world banking community, the International Monetary Fund, and the government of the Philippines are wrapping up final details on a comprehensive plan to stretch out the Philippines' $26 billion foreign debt - and enable Manila to obtain a quick infusion of billions of dollars in new loans.
The importance of the debt payment stretch-out - and new loans - is hardly lost on any of the participants involved. The Philippine economy has been troubled this past year by high inflation and unemployment. Public discontent can be found in every region of the island-nation. Communist insurgency is a worrisome and increasing challenge. Thus, for the short-term, financial assistance from abroad - represented by a new IMF-loan agreement - is an absolute necessity.
A quick loan ''fix'' is not likely to turn the Philippine economy around. The IMF and world banking community recognize as much - hence their emphasis on their usual insistence that a new loan agreement be based on reforms within the government. That means curbing the cronyism and corruption so prevalent in the corridors of power in the Philippines. Unstated, perhaps, but clearly a backdrop to the financial negotiations under way lately, is the continuing unease over the assassination of opposition leader Benigno Aquino Jr. over a year ago. A Philippine commission investigating the shooting has reportedly concluded that Mr. Aquino was killed as a result of a military conspiracy.
The long-range economic well-being of the Philippines is surely related to the political well-being of that nation. The IMF and world banking community are correct in insisting on structural reforms within the government and economy as a precondition to new loans. At the same time, the United States and other nations with ties to the Philippines must maintain private pressures on the government of President Ferdinand Marcos to loosen its tight political and military grip and allow the Philippine people to resume their march toward a more democratic society. Only that will ensure the deeper economic stability sought by all.