MANILA, Philippines (UPDATED) – The Philippines–once a borrower and now a lender to ailing economies–has pledged to pump US$1 billion to the International Monetary Fund’s (IMF) resources meant to help distressed economies, including those in the eurozone.
This pledge was announced at the recent G20 meeting in Los Cabos in Mexico where the IMF said it has received the additional $95.5 billion commitments from China and other emerging powers, bringing its war chest to $456 billion.
“The Philippines is supporting the global efforts to stabilize the world economy and maintain it on a growth path…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,” BSP Governor Amando M. Tetangco, Jr. said in a statement on Wednesday, June 20.
IMF has been rallying member countries to help beef up its “resources to tackle crises and to promote global economic stability in the interests of all our members,” IMF director Christine Lagarde has once said.
The Philippines joins the 37 countries that have offered money to the fund. These countries and their additional contributions include:
- China – $43 billion
- Brazil – $10 billion
- India – $10 billion
- Russia – $10 billion
- Mexico – $10 billion
- Turkey – $5 billion
- South Korea – $2 billion
- Colombia – $1.5 billion
- Malaysia – $1 billion
- New Zealand – $1 billion
- Thailand – $1 billion
- Philippines – $1 billion
Since it was the emerging economies that helped prop IMF’s crisis-fighting fund pool — which was far from its target of $430 billion before the new pledges were announced — the message that IMF had to change after being long dominated by the now troubled economic powers of Europe and the United States is loud and clear.
The US itself has not contributed to the firewall, while eurozone member countries’ economies are suffering from the IMF-led austerity measures.
Legarde said at the G20 meeting that these additional resources would only be tapped as a second line defense after quotas have been exhausted and the New Arrangements to Borrow facility have already been used up.
The Philippines, which has a strong external position, has also been contributing to the IMF’s New Arrangements to Borrow facility when it became a “creditor” country to the global lender’s Financial Transactions Plan (FTP) in 2010.
That was years since the Philippines paid off in December 2006 all its outstanding debts that saddled it for almost 45 years. These transactions earn interest and the funds can still be technically counted as part of the Philippines’ international reserves.
In 2011, the Philippines has committed about US$524 million to the FTP facility, where the IMF drew down some $149 million to help other member countries. By April, the IMF used up another $53.5 million to extend assistance to Portugal and Greece. – Rappler.com