Miriam says $1-B loan to IMF legal, hits critics as 'illiterate'

Senator Miriam Defensor-Santiago on Thursday hit critics of the $1-billion loan pledged by Philippines to the International Monetary Fund (IMF), which she described as constitutional.   Santiago said questions of legality being raised by some sectors against the IMF loan “have no basis” since the Constitution provides the President with the power to contract foreign loans on behalf of the country.   “Ang dami-daming pinagsasasabi pero hindi naman nagbabasa. The main problem with some of our politicians is that they are illiterate,” the senator said in a speech before members of the Credit Management Association of the Philippines.   Santiago particularly cited Article VII, Section 20 of the 1987 Constitution which states, “the President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board.”   Last week, the IMF announced that many countries, including the Philippines made fund commitments in various amounts to the multilateral lender to curtail the raging financial crisis in Europe.    The decision was met with opposition by various sectors. Bayan Muna party-list Rep. Teodoro Casiño even proposed that the Bangko Sentral ng Pilipinas (BSP) be permanently banned from giving out foreign loans.    Malacañang stood firm on the commitment to IMF, saying it can indirectly help overseas Filipino workers in economically troubled states.   No need to consult Congress   Philippine government lending to foreign entities need not be approved by Congress, Santiago likewise said.   “At present, there is no such law that requires the President to consult Congress. If the Senate wishes to participate in the foreign loan process, then it should pass a bill to that effect,” she said.   The senator added she is personally not in favor of passing a law that will ensure Senate participation, since it might “tie the President’s hands” in the lending process.   “We can never tell the magnitude of a financial crisis in the future. Let’s give him [the President] enough leeway,” she said in a separate interview after the event.   Santiago dismissed suggestions to allocate the $1 billion to social services for poor Filipinos.   “Our country’s international reserves are invested in accordance with the investment guideline that only investment-grade and highly-rated financial instruments of non-residents should qualify,” she added. —VS, GMA News