WASHINGTON, DC – The Philippines, which now has a creditor nation status in the International Monetary Fund (IMF), is expected to contribute more to the global community as it enters a phase of continuous economic growth, IMF officials said.
While the country can pledge more funds and share its experience, the Philippines should still work with the IMF as numerous reforms are needed, they added.
“The Philippines can contribute a lot more. It is now the Philippines’ time to contribute to the global economy and I am sure it can do that,” Masahiko Takeda, deputy director for Asia and Pacific Department of the IMF, told The STAR.
“The Philippines had one of the longest histories of using IMF resources,” he said.
In 2006, the Bangko Sentral ng Pilipinas (BSP) pre-paid all outstanding debts with the IMF, resulting in an early exit from the fund’s Post-Program Monitoring Arrangement.
For Anoop Singh, director of the IMF’s Asia and Pacific department, the country’s pledges “should go up.”
In February, the BSP said it attained a creditor status with its $251.5-million contribution to the IMF as of December 2011. Half of the funds were tapped to help European countries like Ireland, Portugal and Greece ease the impact of the debt crisis in the euro zone.
Takeda said the Philippines is now a “highly respectable member” of the Southeast Asian nation bloc.
At the end of the spring meetings in Washington last week, the IMF secured firm commitments from numerous member-countries to increase the organization’s resources by more than $430 billion. Commitments came from countries like Japan, Korea, United Kingdom, Australia, Singapore and China.
Since 2010, the Philippines has been a participant in the Financial Transactions Plan (FTP) of the IMF. The FTP is the mechanism by which the IMF finances its lending and repayment operations through transfer of foreign exchange from members with strong external position to borrowing members.
The Philippines can also share its experience of getting out of debts.
“That experience should be broadly shared to the rest of the world. If there is a political will and resolute implementation, you can do it,” Takeda said.
He said the Philippines was able to address of its fiscal woes because of the implementation of the 12-percent value-added tax.
But the country should continue working with the IMF to fasttrack economic growth.
“We are trying to help them a lot. We have consultations, we have missions...we try to help them in the the macro sector,” Singh told The STAR.
“IMF can still help a lot. You still have revenue problems and big agenda on how to enhance investments and how to create growth policy framework,” Takeda said.
Takeda added that he is hoping that local authorities are still finding it useful to exchange views with the IMF on how to improve the welfare of the poor and how to improve tax administration.
The IMF is offering continuous technical assistance and policy advice for local authorities, he said.
Singh said increasing potential growth require building up the fiscal space that will create infrastructure spending.
In its latest World Economic Outlook, the IMF said the Philippines’ economic growth is seen to pick up to 4.7 percent this year and 4.2 percent next year.
Growth in gross domestic product – the value of goods and services produced by the economy – hit 3.7 percent last year, slower compared with the 7.6 percent record in 2010 given a decline in public construction. It was also short of the government’s 5-6 percent target and 4.5-5.5 percent forecast.