[PHOTO FROM BULATLAT ONLINE -Members of KMU and Piston hold picket in front of BSP Jun 25 to protest Aquino’s “pledge” to IMF and austerity measures.(Photo by Marya Salamat /]

, JUNE 29, 2012 (TRIBUNE) Written by Fernan J. Angeles and Angie M. Rosales The Aquino administration’s decision to plunk in $1 billion in the so-called firewall fund of the International Monetary Fund (IMF) worth $450 billion for relending to European countries caught in a debt crisis widely earned brickbats yesterday, including from senators who are demanding explanations over the move.

Senators Gregorio Honasan and Ralph Recto made identical demands for explanation from the Bangko Sentral ng Pilpinas’ (BSP) decision to allocate $1 billion to the fund, with Recto pointing out that the BSP, as a creation of Congress, cannot claim sole propriety rights over the country’s dollar reserves and should seek consensus first or secure appropriation cover from the legislature to make such a commitment.

“The issue here is transparency because the taxpayers have a say on this,” Honasan, for his part, told reporters in an interview.

“Transparency is a basic constitutional principle. That is why a number of people were surprised to hear of this (pledge to IMF). We were also surprised and that’s all we want to know. We’re not objecting to the (provision of funds for the) loan. That loan (to financially ailing countries) might be justifiable,” he added.

Recto, likewise emphasized that he’s not opposed to the move especially since the BSP underscored the fact that the Philippines, as a member of the global community of nations, has an obligation to ensure economic and financial stability across the globe.

He stressed that he was willing to listen to the “gameplan” of the BSP and why it would risk denying the Filipino people its sovereign claim to $1 billion worth of projects and programs that could “change their lives even for a little bit.”

President Aquino’s spokesman Edwin Lacierda, instead of issuing an expalanation rattled off with the credentials of BSP Gov. Amando Tetangco Jr. in justifying the BSP move.

“Tetangco has been acknowledged last year as one of the best Central Bank governors. So it shows the prudent management and the able fiscal stewardship of Bangko Sentral under Governor Tetangco. And I am certain that he will not place the money of the Philippines in an investment that is not consistent with making sure that our money are fiscally preserved,” Lacierda said.

Lacierda also bared figures which seemed yielding surprising figures apparently dwarfing the one billion dollar pledge as compared to the total gross international reserves of $77 billion.

“How much are we loaning out to IMF? $1 billion over $77 billion. Look at the ratio... The $77 billion, we’re able to conserve through the year and that’s because of prudent and prudent stewardship of Bangko Sentral. I think, we should acknowledge the fact that they have done a good job of increasing our reserves as well,” Lacierda said.

Admittedly though, Lacierda said that they can’t stop opposition congressmen from investigating the move while assuring government’s sustained program designed to alleviate poverty. He cited the Conditional Cash Transfer (CCT) program for the poor which has reached P45 billion, as one of them.

Lacierda reiterated the IMF loan is also meant to benefit overseas Filipinos, who work in European nations struggling under the debt crisis.

“Overall, around $17 billion to $18 billion (in remittances enter the country each year) and remittances from our OFW in Europe stand at $4-billion. We’re investing $1 billion to the fund which will help provide global stability,” he said.

Honasan, however, insisted on an explanation from the BSP as to how it handles the country’s foreign currency reserves.
“Can we convert these national reserves into poverty allevation measures? Can we build roads from our reserves? This was not transparent, that was the point. If we are under obligation, what are the terms and conditions of that loan?,” he added.
“That does not erase the point we are raising. What standards were applied? Why just now? All of a sudden, we provide these funds (to the IMF). There are more questions than answers (raised by this issue). These are public funds, how come they were not told of this plan?,” Honasan further asked.

Honasan expressed belief that Malacanang has an obligation to address the public on this matter.

“I agree with that, the point raised by the Palace that we are capable of giving loans to other countries. But try telling that to those who are hungry. That could buy a number of sacks of rice,” he said.

He said BSP’s Congress-enacted mandate is glaringly affirmed by the P40-billion infusion approved by Congress for its recapitalization when it repudiated its old self, P20 billion of which had already been appropriated in the past national budgets.

[PHOTO COURTESY OF BULATLAT.COM- Playacting: Aquino’s make-believe, protesters’ lampoon (Photo by Marya Salamat /]

Recto said the people must also be made to understand why the government is lending out to IMF while it continuously borrows from international lending and multilateral institutions for budgetary support and deficit spending.

He stressed the $1-billion loan to IMF could be better used to bankroll projects that have mass impact such as schoolbuildings, hospitals and other key infrastructures.

Bayan Muna Rep. Teddy Casiño also called for changes in the BSP charter to prohibit the president and finance officials from dipping into the foreign currency reserves and lending public funds to foreign banks and financial institutions like the International Monetary Fund (IMF) to the prejudice and detriment of local enterprises.

Calling the plan a “harebrained idea” and the “handiwork of Ivy-league bright boys in the BSP who are salivating for positions in the IMF, World Bank (WB) and the Asian Development Bank (ADB),” Casiño said the .3 percent interest to be earned from the IMF exposure is miniscule compared to rates normally lent to local enterprises, government agencies or local government units.

“The reserve fund can also be used to finance common production facilities for industries, postharvest facilities, manufacturing facilities, even renewable energy systems that would boost the local economy,” added the lawmaker.

“If we lend the money to our local enterprises or to the government, the BSP would get higher returns plus help boost the local economy. Its really more sensible, if not more fun, to lend to our fellow Filipinos,” he said.

He pledged to lead efforts in the House to amend the BSP Charter to make it “more responsive to the needs of the local economy.”

Another militant solon, Gabriela Rep. Emmi de Jesus describes Aquino’s $1 billion pledge as the height of insensitivity and hypocrisy.

The multisectoral group Freedom from Debt Coalition (FDC) said the government extending a $l-billion loan to the IMF is an “arrogant pretension of a country very much in debt”.

In a protest action outside the BSP building along East Ave, FDC members lambasted the government for “being fast in allowing the IMF to manage our money, yet being slow in allocating funds for basic social and economic services.”

FDC sees this move as way of the government to impress lender countries and credit rating agencies. With the $1 billion pledge, the government is in effect “flaunting the liquidity of its coffers and seeking higher credit rating’’ from Fitch, Standard a Poor and Moody’s.

Earlier, FDC had warned the public of misleading statements issued by Tetangco and Lacierda who tried to make an impression upon the Filipino people that the Philippines has now turned from a debtor country to a creditor country.

Chief News Editor: Sol Jose Vanzi

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