$1B loan to IMF: not all to P-Noy’s credit

Methinks Sen. Ralph Recto is not exactly right in saying that the country’s planned extension of a $1-billion loan to the International Monetary Fund must first pass legislative approval (Inquirer, 6/27/12). Maybe, just maybe, the good senator refers not as much to Congress as to the Monetary Board, whose formal endorsement must indeed be the thing first secured under the General Banking Law of 2000, before such loan can be granted.  Of course, I haven’t yet heard that the Monetary Board has met for this purpose.

Even so, the apparent public clamor against the loan is moot and academic.  For one thing, the Bangko Sentral ng Pilipinas, otherwise known as the “banker of the government,” is really the government’s duly authorized representative in all such affairs, dealings, negotiations and transactions with the IMF, which may result from the country’s membership in, or operations with, the financial institution. Secondly, the seven-man Monetary Board is made up of the BSP governor as chair, a Cabinet official (usually the finance secretary) and five representatives from the private sector, all of whom are appointed by, and totally beholden to, the president.  The loan is thus good as granted!

Be that as as it may, there is certainly nothing particularly objectionable about it.  As things are,  BSP Governor Amando Tetangco Jr. is saying that our economic fundamentals are sound and that our banks are able to meet their credit needs. (Well, except the Export Bank which has just been closed.) And so, the planned loan to the IMF is truly the Philippines’ opportune way of reciprocating the world’s so-called “lender of last resort” after it helped this country to address our financial distress for close to four decades.

Anyway, the $1-billion loan will be sourced from our foreign reserves, not from the national treasury. Therefore, contrary to claims, it will not considerably affect our local financial needs and vital economic-performance variables as a nation.

That said, I have just one very simple wish to ask of President Aquino: With all honesty and candor, and with all due respect, Sir, in your forthcoming State of the Nation Address, please do not shout so boldly to the four winds that your administration should go down in this country’s history as the first-ever to have granted a loan to the IMF.  Or, if you must, please be a bit fair and honest by also saying that had not your predecessor succeeded in settling all our IMF debts in 2006, then this truly monumental achievement of yours today, Sir, would not have been a reality.

—RUDY L. CORONEL,

[email protected]