BRIONES: $1-B LOAN TO IMF, PASIKAT', 'PANGYABANG' / BSP: 'FIREWALL FUND'
MANILA, JUNE 26, 2012 (ABS-CBN) By David Dizon - Former National Treasurer Leonor Briones on Monday described as “pasikat and pangyabang” the government’s $1-billion contribution to the International Monetary Fund (IMF) to assist other nations in financial distress.
Speaking to radio dzMM, Briones said she sees no need for the Philippines to lend out money to the IMF when it is still heavily in debt to other multilateral agencies such as the World Bank and the Asian Development Bank.
“Kanino ba tayo napgpapasikat, nagpapayabang? Naniniwala ba ang ibang bansa na creditor na ang Pilipinas dahil tayo ay nagpautang?” she asked.
She said the Philippines is not even considered a middle-income country compared to members of G20. She said other rich countries such as the United States, Australia and Germany have not lifted a finger to commit to the IMF eurozone fund.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. earlier said the $1 billion pledge to the IMF will earn interest while helping other countries beset with financial problems.
Briones, however, said she does not believe the country should touch its $76 billion reserves to lend to the IMF.
“I am not sure if we should touch our own reserves, which are for the protection of our economy, in order to protect huge economies whose responsibility led to their own problem,” she said.
She added: “I don’t think we are obligated because out economy is not that big. We are a heavy debtor country. Hindi maganda na we are borrowing money and then lend it out to the IMF.”
She also denied that the $1 billion pledge will make the Philippines “famous” and entice foreign investors. She said the biggest come-on for foreign investors is to remove corruption, fix governance, ensure a level playing field and improve accountability in the country.
BSP exec: PH not 'showing off' with $1B loan By David Dizon, ABS-CBNnews.com Posted at 06/25/2012 7:48 PM | Updated as of 06/25/2012 7:48 PM
[PHOTO- FINANCE SEC PURISIMA AND IMF CHIEF STRAUSS-KHAN]
MANILA, Philippines – The deputy governor of the Bangko Sentral ng Pilipinas (BSP) on Monday said it is no big deal that the Philippines pledged $1 billion to the International Monetary Fund (IMF) to help troubled European economies.
“There is no big deal in our lending $1 billion. The BSP has the power to handle our international reserves,” Deputy Governor Diwa Guinigundo told radio dzMM.
He also refuted former National Treasurer Leonor Briones’ statement that the $1 billion is the Philippines’ way of “showing off” even though it is still heavily in debt. He said that since the $1 billion is a loan that will be paid with interest, the Philippines actually stands to gain from the transaction.
“Wala po tayong nais na ipagyabang. Ito po ay isang gawa ng pagpapakumbaba. Sinasabi natin na we recognize that we could be vulnerable to any spillover effect from Europe…It is now showing off but an action to stop the spread of the problem into emerging markets,” he said.
He added: “We are not giving the $1 billion just because we want to be called a creditor country.”
The Philippines currently has $77 billion in gross international reserves, which are invested in different financial instruments such as US treasuries or Japanese bonds.
Guinugundo said under the BSP Charter, the central bank can give loans to international financial institutions such as the IMF. He said the IMF asked the Philippines to invest in a “firewall fund”, estimated to reach $460 billion, to quench any spillover effect of the European crisis to other nations.
He also noted that Europe is an important market for the country’s exports. He said at least 17% of overseas remittances come from Europe, which could be affected if some European countries go under.
“Europe is on fire now. The IMF is asking other countries not affected by the crisis to help put out the fire to prevent it from spreading to other nations including the Philippines,” he said.
Greece may tap fund first
Guinugundo said the $1 billion loan is an investment that will earn 0.3% interest “although it varies periodically.” He said Greece may be first to seek help from the IMF.
“We didn’t give the money. It’s a loan. Our international reserves are still at $77 billion because the money is not lost. Our foreign exchange in total reserves went lower but our reserve position in the IMF went higher. We can encash it anytime because the loan to the IMF is considered liquid and is part of our gross international reserves,” he said.
He said Thailand and Malaysia also pledged $1 billion each, Singapore pledged $5 billion, China $43 billion and Japan $60 billion.
PH commits $1B to beef up IMF coffers By Lawrence Agcaoili, The Philippine Star Posted at 06/20/2012 7:50 AM | Updated as of 06/20/2012 3:49 PM
MANILA, Philippines - The Philippines has contributed $1 billion to the latest lending facility of multilateral lender International Monetary Fund (IMF) that has already reached $456 billion to address financial crises including the sovereign debt debacle in Europe.
The commitment was made by the Philippines during the G-20 Leaders’ Summit in Los Cabos, Mexico wherein 12 member-countries including the Philippines committed additional funds to beef up the facility.
“Countries large and small have rallied to our call for action, and more may join. I salute them and their commitment to multilateralism. As a result, total pledges have risen to $456 billion, almost doubling our lending capacity,” IMF managing director Christine Legarde said in a statement.
During the summit, countries that pledged additional amounts include China with $43 billion, Brazil with $10 billion, India with $10 billion, Russia with $10 billion, Mexico with $10 billion, Turkey with $5 billion, South Korea with $2 billion, Columbia with $1.5 billion, Malaysia with $1 billion, New Zealand with $1 billion, Thailand with $1 billion, and the Philippines $1 billion.
“With today’s announcements by an additional 12 countries, a total of 37 IMF member countries, representing about three-fifths of total quota in the organization, have joined this collective effort, demonstrating the broad commitment of the membership to ensure the IMF has access to adequate resources to carry out its mandate in the interests of global financial stability,” Lagarde said.
She pointed out that the resources would be made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members.
“They will be drawn only if they are needed as a second line of defense after resources already available from quota and the existing New Arrangements to Borrow are substantially used. If drawn, they will be repaid with interest,” she explained.
According to her, the IMF is committed to assuring members’ interests and resources are safeguarded.
The IMF has been advocating the need to build a stronger global firewall of additional resources to contain any further financial crises as the global economy has entered a “timid” recovery and still faces high risks.
Since the start of the global economic crisis in 2007, the IMF has committed more than $300 billion in loans to its member countries. Since then, the fund has reached $456 billion.
The G-20 commitment shows the resolve of the international community to have available tools to defend against crisis.
The Philippines used to be a net borrower as far as its membership with the IMF was concerned. But in 2006, the country prepaid all its outstanding debts with the IMF given its much-improved external liquidity position.
In 2010, the Philippines became a lending IMF member by participating in the Financial Transaction Plan (FTP) as a creditor country.
It contributed more than $125 million as of end-2011 to the pool of money disbursed by the IMF to help address the financial crisis confronting economies in Europe. In all, the Philippines has made available about $251.5 million to the IMF to finance the assistance program.
Of the amount, more than half was actually disbursed by the IMF to European countries battling the financial crisis, including Ireland, Portugal and Greece.
Chief News Editor: Sol Jose Vanzi
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