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.” — ELR, GMA News