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."
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