MANILA, Philippines - The Philippines had an important visitor on Thursday as the head of the International Monetary Fund (IMF), Christine Lagarde, started the second of her three-country visit across Asia with consultations with Philippine officials, including President Aquino and the governor of the Bangko Sentral ng Pilipinas (BSP).
Lagarde, a lawyer, arrived at 2:30 p.m. aboard Malaysian Airlines Flight MH 704.
On July 5, 2011, she became the first woman to head the IMF.
Among those who welcomed her at the Ninoy Aquino International Airport were BSP Deputy Governor Diwa Guinigundo and four other central-bank officers.
Lagarde’s visit comes at a time when Asian economies have weathered the global economic slowdown and the region posted strong growth rates instead, when the United States and some of the largest and most advanced countries in Europe struggled with sovereign-debt and growth issues.
For Filipinos who remember the IMF prescriptions imposed in the wake of the 1997 Asian financial crisis, the IMF chief’s visit is presumably especially welcome.
The Philippines has since recovered its economic footing, has paid back all loans owed the IMF and has, in fact, become a net creditor country.
As its external sector steadily strengthens, with its gross international reserves of $82 billion far larger than its foreign debt of just $60 billion, the country’s fiscal sector steadily improves as well.
Public-sector debt approaching 75 percent of local output or the gross domestic product (GDP) in those years under IMF tutelage has been reduced in 2011 to only 40 percent of GDP.
Monetary and fiscal-sector reforms instituted since the 1990s have taken roots, allowing revenues to rise and put the government in a better position to deliver critical services in education, defense and health.
Lagarde’s visit is seen by most as a wooing mission designed to solicit not just financial contribution to the IMF kitty but advice on the handling of economies in crisis such as those struggling ones of some members of the European Union.
The IMF chief has just concluded her visit to Malaysia, a country like the Philippines that has refused to accept financial assistance that the multilateral lender offered in the wake of the global financial crisis in 2007.
Malaysia and the Philippines have instead boosted their contributions to the Chiang Mai Initiative, an alternative reserve fund from which members draw balance-of-payments financing in the event of a crisis, while, at the same time, boosting their own foreign-currency reserves.
These and other confidence-building measures have allowed many IMF member-countries in Asia to rely less on the fund’s largesse and depend more on their own internal capacity to sustain growth in the face of a global economic slowdown. - with Recto Mercene