$1 billion loaned to IMF ‘not from national government’-A A +A
Sunday, July 15, 2012
THE Bangko Sentral ng Pilipinas (BSP) clarified on Wednesday that the $1 billion it loaned to the International Monetary Fund (IMF) was not sourced from the budget of the National Government.
BSP deputy governor Diwa Guinigundo said the amount was taken from the gross international reserves (GIR) for the BSP and not a not from the national government's fund.
It was reported earlier that the Philippines extended loan to IMF to help debt-stricken European countries, including Greece, Portugal, Italy, and Spain.
The move immediately drew severe criticisms and put government at the receiving end the past few weeks for lending such huge amount while many among Filipinos suffer from poverty.
"When people talk about what kind of priority does the government have? We have so many poor, we don't have enough credit, we don’t have enough roads and bridges. They are barking up the wrong tree," Guinigundo said in an interview with Davao reporters last week.
He said funds from the National Government, which is taken from taxes, cannot be co-mingled with the international reserves of the BSP.
Guinigundo said lending such an amount to IMF will not reduce the budget of the government for infrastructures and other budget allocations for projects.
"You cannot mix the two. We don't ask funds from the National Government," he said.
Guinigundo added that the GIR of the BSP cannot be used to pay up the Philippine's foreign debt pegged at $62.9 billion today, saying the debt of the National Government is not a debt of the central bank.
The official said the reserves are for the importation of the good and services of the country's firms and for contingency purposes to assist other countries, or even the Philippines, from any possibility of economic meltdown.
"We can sell dollars to oil companies or we can sell dollars to the government for debt-servicing requirements," Guinigundo said.
The BSP's international reserves are pegged at $76 billion. "We have comfortable level of reserves," he said.
Guinigundo said BSP has been authorized to manage its own reserves according to its own charter. (ALC)
Published in the Sun.Star Davao newspaper on July 16, 2012.