Philippines to extend $1B to IMF

THE Philippines will extend $1-billion loan to the International Monetary Fund (IMF) to support the global efforts to stabilize the world economy and maintain it on a growth path, the central bank said on Wednesday.

"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," said Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr.

The Philippines is a member of the IMF, which uses the contributions from its members to provide loans to countries going through financial difficulties to minimize its adverse impact on their people.

For nearly 40 years until 2006, the Philippines itself was a net borrower from the IMF.

The Philippines fully paid its loans to IMF in December 2006 as the implementation of continuing reforms have made the local economy stronger, Tetangco said.

He said the country's economic fundamentals are now sound, the local banks are able to meet domestic credit needs, and the central bank is capable of lending $1 billion from its international reserves to the IMF.

"This is a loan to the IMF and we will get our money back with interest. In effect, by extending a loan to the IMF that will earn money for the Philippines we are also able to help other nations saddled with financial problems. Other nations have also committed to help IMF address the current financial crisis," Tetangco said. (SDR/Sunnex)