20
Countries Pledges to Boost IMF (International Monetary Fund) to save Europe
- Belgium - $13.2 Billion
- Brazil - $10 Billion
- Britain (UK)- $15 Billion
- China - $43 Billon
- France - $41.4 Billion
- Germany - $54.7 Billion
- India - $10 Billion
- Italy - $31 Billion
- Japan - $60 Billion
- Mexico - $10 Billion
- Netherlands - $18 Billion
- Philippines - $1 Billion
- Russia - $10 Billion
- Saudi Arabia - $15 Billion
- Spain - $ 19.6 Billion
- Sweden - $10 Billion
- Switzerland - $10 Billion
- Singapore - pledged smaller undisclosed amount
- South Africa - $2 Billion
- South Korea - $15 Billion
- USA - refused to pledge
President
Aquino administration's pledge to lend $1 billion USD to the International
Monetary Fund (IMF) on Friday drew mixed reactions.
A
militant labor group slammed the administration's pledge, saying the funds
should be spent for Filipinos suffering from widespread unemployment, poverty,
malnutrition and hunger.
On
the other hand, an administration ally in the House praised the government for
agreeing to pitch in to the IMF's fund-raising efforts to bail out tumbling
economies in Europe.
"Planet
Earth to the Aquino government: The Philippines is still a poor country," the
Kilusang Mayo Uno (KMU) said in a statement.
But
Valenzuela Rep. Magtanggol "Magi" Gunigundo said the move to lend $1 billion
from the country's gross international reserves to the IMF would "actually hit
two birds with one stone."
KMU
said the pledge, which was announced at the recent Group of 20 meeting in Mexico
by Bangko Sentral ng Pilipinas governor Amando M. Tetangco Jr., would most
likely be sourced from taxpayers' money and go to the IMF's "war chest" for
helping economies distressed by the current severe economic
crisis.
"What
were they thinking? That amount can be used to improve social services such as
education, health, and housing and build basic industries to generate
employment," KMU chair Elmer Labog said.
"Where
will the Aquino government get this huge amount? From a new tax measure, which
will worsen the poverty and hunger being experienced by workers and the people?"
he asked.
"We
will earn interest and help our kababayans or overseas Filipino workers in
Europe to keep their jobs by helping their economies survive the current
turmoil," said Gunigundo. "If Europe's economy falls, our OFWs in the region
will lose their jobs not to mention our exports will also
fall."
Gunigundo
said that while the Philippines does have its own problems, "we should have a
global perspective considering that what happens in Europe will be felt in other
regions such as Asia and the US."
Philippines
with other 19
The
country is one of an additional 12 that contributed to new crisis-fighting funds
now amounting to $456 billion, the IMF said in a statement. The latest level is
up from the $430 billion committed last April.
"Countries
large and small have rallied to our call for action, and more may join," the
statement quoted IMF Managing Director Christine Lagarde as
saying.
The
Bangko Sentral ng Pilipinas (BSP) said the country wanted to help promote global
economic and financial stability.
"The
BSP's commitment to the Fund's bilateral borrowing facility is the Philippines'
show of support...," central bank Governor Amando M. Tetangco, Jr., said in a
text message.
The
new pledges to boost IMF resources were made during a recent G20 meeting in Los
Cabos, Mexico, although the Philippines is not part of the group of major
economies.
"Having
facilities such as this in place does not indicate -- one way or the other --
that the view is such that the situation can worsen," Mr. Tetangco
noted.
"Rather,
prudence dictates that the best time to have safety nets in place is when you
don't need them yet. The facility is there when it is needed," he
added.
The
Philippines is a participant in the IMF's Financial Transactions Plan (FTP).
From the country's contributions, the IMF drew down 96.4 million special drawing
rights (SDR) or approximately $148.9 million as of the end of last
year.
Participation
in the FTP since 2010 paved the way for the country' admission to the IMF's New
Arrangements to Borrow (NAB) facility. The Philippines' commitment under this
facility amounts to 340 million SDRs or about $524 million.
As
of April, the IMF had drawn 34.7 million SDRs or $53.5 million from the NAB
commitment to extend assistance to Portugal and Greece.
Dennis
Botman, IMF resident representative, also welcomed the Philippines' new
commitment.
"The
[Philippine] government has made a generous contribution to the global firewall
and the IMF is impressed by, and indeed grateful for, the strong support
demonstrated by the Philippines," he said in an e-mail.
"This
commitment will greatly help the collective endeavor to rekindle growth, restore
confidence, and create jobs to put the global economy on the path of sustained
recovery." Earlier this year, IMF made the call for additional resources to deal
primarily with the euro zone debt crisis and its possible
spillover.
BSP
chief: $1B loan to IMF will earn interest, goodwill
Having
near record-high foreign reserves of $76 billion, the Philippines is "capable of
lending $1 billion" that will earn interest while helping other countries beset
with financial problems, Bangko Sentral ng Pilipinas Governor Amando Tetangco
Jr. pointed out Wednesday.
"The
Philippines is supporting the global efforts to stabilize the world economy and
maintain it on a growth path. This is the reason why the Philippines is
extending a $1 billion loan to the IMF," Tetangco said in a
statement.
"We
are a member of the global community of nations and it is also in our interest
to ensure economic and financial stability across the globe," he
added.
This
pledge to the IMF fund marks the third time that the country has extended a
helping hand to other countries that were in troubled fiscal waters. In the past
months, the country pitched in for a fund to assist troubled European economies
and another buffer fund, the Chiang Mai Multilateral
Initiative.
Getting
used to being a creditor nation
Tetangco
recalled that the Philippines was an IMF borrower for 40 years until
2006.
"We
finally fully paid our loans to IMF in December 2006 as the implementation of
continuing reforms have made our economy stronger. Today, our economic
fundamentals are sound, our banks are able to meet domestic credit needs, and we
are capable of lending $1 billion from our international reserves to the IMF,"
the BSP chief noted.
At
the G20 Leaders' Summit in Los Cabos, Mexico, IMF managing director Christine
Lagarde thanked the countries " large and small (that) "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 US$456 billion, almost doubling our lending capacity," she
said.
Lagarde
explained that "(t)hese resources are being 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, and if drawn, will be refunded with
interest."
