IMF SUPPORTS RP'S DECISION NOT TO IMPOSE NEW TAXES
MANILA, AUGUST 4, 2007 (STAR) Friday, August 3, 2007 The International Monetary Fund (IMF) is supporting the Philippines’ decision not to impose new taxes, according to Speaker Jose de Venecia Jr.
De Venecia said IMF managing director Rodrigo de Rato also gave “positive reactions” to the country’s improving economy in a recent meeting.
“We will focus our efforts on enhancing tax collection, particularly by the Bureau of Customs and Bureau of Internal Revenue,” De Venecia said in a statement.
Last June, President Arroyo announced the legislative would not propose any new taxes. De Venecia seconded this pronouncement after opening the 14th Congress last month.
According to the President, the Department of Finance (DOF) would be given ample room to implement these tax administration reforms short of measures that would require specific executive orders.
De Venecia described as “very constructive” his meeting with De Rato at the Speaker’s Forbes Park residence in Makati City.
De Rato also assured the Philippine government that he would work on the Speaker’s proposal for a debt-for-equity swap, which is intended to “finance anti-poverty programs of the Philippines and 102 other heavily-indebted countries.”
According to De Venecia, the debt-for-equity program is aimed at “diverting 50 percent” of Third World countries’ debt service payments into “equity for reforestation, clean water, irrigation and food production.”
The Speaker vowed to encourage the new economic team of the House of Representatives “to explore all possible avenues to enhance tax collection without imposing additional tax burden on the people.”
In praising the country’s performance, the IMF official also stressed the “need to enlarge the inflow of investments by promoting political stability, mobilizing local government units as partners in development and continuity in advancing the economy.”
De Rato, a former vice president for economic affairs and minister of economy of Spain, said the Philippines is a “model among Third World countries in the management of its economy.”
The Speaker earlier proposed the creation of an Asian IMF “that will not compete (with) but complement the IMF.” Such proposal “needs an extra push” to bring it to the attention of the Paris Club and the G-8 countries, which are in a position to act on it.
In pushing for an Asian Monetary Fund, De Venecia said “this is a long-felt need” by the governments of Asia. “The recent successes of Asian bonds and swap arrangements among some Asian central banks are movements toward an Asian monetary vehicle.”
The Speaker sought IMF endorsement of his debt-for-equity program to the Paris Club and the G-8 countries – the world’s richest democracies – following approval of the proposal by the UN General Assembly in December 2006.
He said the huge foreign currency reserves of many Asian nations far exceed the reserves of the G-8 countries.
De Venecia said that upon his request, the Bangko Sentral ng Pilipinas sent a representative to attend the meeting of experts in Tehran two weeks ago “to prepare the ground for the creation of an Asian Monetary Fund.”
The Speaker said the idea of an Asian IMF began with Japan.
“At every opportunity I have tried to push the idea, even before the East Asian financial crisis of 1997, and much more after the debacle, whose after effects lingered for a number of years,” De Venecia said. – Delon Porcalla
Chief News Editor: Sol Jose Vanzi
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