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$1 Billion To IMF Needs Congress’ Approval

27 June 2012 No Comment

June 25, 2012, 8:39pm

MANILA, Philippines — The government’s plan to lend $1 billion to the International Monetary Fund (IMF) continues to draw criticism in the House of Representatives, with one lawmaker describing the move as “plain crazy” and must first be sanctioned by Congress.

Representatives Teddy Casiño (Bayan Muna) and Antonio Tinio (ACT Partylist) chided the Aquino administration for its decision to draw $1 billion from government’s dollar reserves as the Philippines’ contribution to the IMF’s $400 billion bail plan for European countries on the verge of economic collapse.

“The Aquino government’s plan to lend $1 billion to the IMF is plain crazy,” said Casiño, pointing out that there is no logic in granting the loan when the national debt “just breached the P5-trillion level early this year.”

This report, he said, shows that Filipinos are “more in debt than ever.” “Why on earth lend money when we ourselves need it?” asked Casiño.

He pointed to the fact that more than 700,000 micro, small and medium enterprises in the country are denied access to proper credit facilities.

“This plan is not sanctioned by Congress and has never been discussed in our budget deliberations. Only Congress has the power to allocate such a huge amount for this purpose,” Casiño added.

Tinio shared the same view, saying it would be insensitive on the part of government to pursue its plan when the education sector is in dire need of cash to improve its facilities and train teachers.

“Why would our President extend loans to countries whose Kinder teachers are paid around five times more than ours receive, whose class sizes are sometimes 15 to a teacher?” he asked.

Tinio added: “The pledge could have answered the budgetary requirements for increasing the salaries of public school teachers from Salary Grade 11 to 15—about P40 B for some 520,000 teachers already in DepEd’s payroll.”

The Revolutionary Council of Trade Unions-Southern Tagalog (RCTU-ST) also condemned the Aquino administration’s $1-billion pledge, describing it as “showing off” and “dreamy.”

RCTU-ST Spokesman Fortunato Magtanggol said the announcement made by Bangko Sentral ng Pilipinas (BSP) Governor Armando Tetangco Jr. during the Group of 20 meeting was a shocker.

“This pretentious move by the Aquino government is a clear display of incompetence; a slur in the face of millions of Filipinos dying from hunger,” said Magtanggol.

“While the Aquino administration declared an end to the Philippines’ borrower status to the IMF (as a result of implementing lopsided economic reforms), the BSP recently admitted that the country’s foreign debts increased to $62.9 billion as of the end of the first quarter (due to the increase in foreign investments, initiated by the same economic reforms).” he added.

Earlier, Reps. Ben Evardone (LP, Eastern Samar) and Teodorico Haresco (Ang Kasangga Partylist) defended the government’s decision.

Evardone, chairman of the House Committee on Public Information, said the move is not only aimed at helping the IMF save some European economies, but also to show the world that the Philippine economy is healthy.

“That loan will send a positive signal to international investors that the Philippine economy is stable. The mere fact that we have graduated (to) a creditor nation is already a milestone,” Evardone said.

“With a healthy economy, the government can focus in allocating more resources for infrastructure and social services,” he said.

On the other hand, Haresco welcomed the decision as he noted that Aquino has “put the country on the global financial radar.”

“P-Noy showed to the rest of the world solidarity and amity with the developed world,” Haresco said. –with a report from Chito A. Chavez


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