Airlines get government loans
The Executive Yuan yesterday decided to offer NT$11.5 billion in loans to six domestic airlines to help them weather the fallout from the SARS epidemic, Council for Economic Planning and Develop-ment Vice Chairwoman Ho Mei-yueh (何美玥) announced last night.
The government will offer a credit-guaranteed loan of NT$4.5 billion to China Airlines Co (華航) and NT$3.6 billion to EVA Airways Corp (長榮), Ho said.
The other four airlines will be offered loans worth NT$2.5 billion, with NT$1.04 billion going to Far Eastern Air Transport Co (遠東) and NT$8 million to UNI Airways Corp (立榮), she said.
More public spending urged
The government should pump more public spending into the economy in the face of SARS impact and deflation threat, Wu Rong-i (吳榮義), president of the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday at a press conference.
To achieve the goal, the government may need to consider selling up to NT$100 billion (US$2.86 billion) in new bonds each year over the next three to four years, Wu said.
The government can consider amendments to laws that would allow it to raise the ceiling limit on the amount of outstanding debt it is allowed to source funds to cover increased public expenses, he said.
According to the Public Debt Law (公共債務法), the total annual debt recorded by the central bank through the issuance of government bonds cannot exceed 15 percent of its annual expenditure budget.
Government debts currently account for 30 percent of the nation's GDP, which is relatively low compared with Singapore's 95 percent and Japan's 104 percent, Wu said.
Yulon's rating raised
Yulon Motor Co's (裕隆汽車) debt rating outlook was revised to positive from stable by the Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor's said in a statement yesterday.
Taiwan Ratings said the outlook revision reflects the company's "sustained strong balance sheet, underpinned by its ample cash on hand and almost no debt leverage."
The agency also attributed the automaker's upward outlook to its "remarkable increase in positive free cash flow generation and improving operating earnings."
Yulon Motor reported total revenues of NT$14.2 billion in the first quarter of the year, a 33-percent growth from year earlier. The automaker announced a company organizational restructuring plan last week, under which it will be divided into two separate entities.
Money supply growth slows
Taiwan's money supply growth slowed last month because Taiwanese shifted more money into bond funds and overseas financial assets, the central bank said.
M2, the broadest measure of money supply, rose 2.1 percent from a year earlier, following a 2.2 percent increase in March, the bank said in a statement. M2 measures currency in circulation, checking and savings accounts, and money-market funds.
M1B money supply, which excludes time deposits and foreign-currency deposits included in M2 money supply, rose at a faster pace of 6.0 percent last month from a year earlier, after rising 5.8 percent in March.
M1A, which tracks net currency in circulation plus checking accounts and passbook deposits, rose 8.5 percent following a 7.6 percent increase in March, the statement said.
NT dollar slips
The New Taiwan dollar yesterday traded lower against its US counterpart, dropping NT$0.020 to close at NT$34.709 on the Taipei foreign exchange market.