IMF PROGRAM OBJECTIVES
Manila, April 10, 1998
- Finance Secretary Salvador Enriquez, Jr who had previously opposed IMF prescriptions,
announced that he and Governor Gabriel Singson of the Bangko Sentral ng
Pilipinas approved and signed the Memorandum For Economic and Financial
Policies (MEFP).
The three broad objectives
of the program were:
- To contain the slowdown of
real gross national product growth to 3% in 1998, followed by 4 to 5 per
cent in 1999 and a rise to 6% thereafter.
- To limit average inflation
in 1998 to 7.5 to 8.5 per cent in 1998, 6 to 7 per cent in 1999 and 5%
in subsequent years; and,
- To increase the reserve cover
to 1.9% worth of imports.
This economic program was to
be discussed before the end of March after which the Philippines had already
completed its exit and started implementation of new program reforms, particularly
in banking reforms.
Some of the reforms are are:
- Raising capital and encouraging
some consolidation.
- Reducing bank risks by tightening
provisioning requirement and strengthening regulatory oversight.
- Levelling the playing field
between different types of institutions and instruments especially reducing
dis-incentives to peso disintermediation; and,
- The twin objectives of dealing
expeditiously with any problem bank while safeguarding the soundness of
the banking system.
(with files from the Philipipne Daily Inquirer)