BSP: Phl $1-B loan to IMF supports world economy

"The Philippines is supporting the global efforts to stabilize the world economy and maintain it on a growth path."

This was how Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. defended the $1 billion loan extended by the Philippine government to the International Monetary Fund.

In a BSP statement, Tetangco said the Philippines, being a member of the IMF, also has a responsiblity to provide assistance to fellow members in their time of need.

He said the IMF uses the contributions from its members to provide loans to countries going through financial difficulties to minimize their adverse impact on their people.

"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. For about 40 years until 2006, the Philippines itself had been a net borrower from the IMF," Tetangco said.

"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," he said.

"This is a loan to the IMF and we will get our money back with interest. In effect, by extending a loan to the IMF that will earn money for the Philippines, we are also able to help other nations saddled with financial problems. Other nations have also committed to help IMF address the current financial crisis," he added. - PIA — ARA