PH enters IMF creditor list, lends to EU countries

ABS-CBN News

Posted at Feb 21 2012 07:49 PM | Updated as of Feb 22 2012 03:49 AM

MANILA, Philippines - Gone are the days when the Philippines could only borrow from the International Monetary Fund (IMF).

With record foreign exchange reserves, the country became a creditor in the IMF system in 2010, lending to troubled nations in Europe, the Bangko Sentral ng Pilipinas (BSP) reported Tuesday.

As of end-2011, the country infused $251.1 million in the IMF's Financial Transactions Plan (FTP), a mechanism by which foreign exchange from members with strong external position are lent to borrowing members.

More than half of the amount made available by the Philippines went to European countries such as Ireland, Portugal and Greece, in an effort to adderss the financial crisis impacting the euro zone, the BSP said.

"By virtue of their participation in the FTP, emerging market economies like the Philippines have joined international cooperation efforts to mitigate the spillover effects of Europe's sovereign debt crisis by enhancing global financial safety nets," the central bank noted.

The Philippines' gross international reserves reached $63.4 billion in 2010, helping reverse its IMF membership status from borrower to creditor-country. This came four years after the country prepaid all its outstanding debt to the IMF, ending nearly 45 years of its use of the multilateral lender's resources.

As of January this year, the Philippines' reserves hit a historic high of $77.36 billion.

In the region, the BSP said the Philippines is also a contributor to the Chiang Mai Initiative Multilateralization (CMIM) facility, a $120 billion pooling arrangement among ASEAN countries that aims to provide quick liquidity access in case of balance of payments difficulties. The Philippines has committed to contribute $4.552 billion to the CMIM.