Asian crisis spoils RP's exit from IMF tutelage<\/p>\n
MANILA (AFP): The Philippines completed its final
\nInternational Monetary Fund (IMF) program on Friday, but quickly
\nentered into a \"precautionary arrangement\" because of the Asian
\nfinancial crisis, officials said Saturday.<\/p>\n
Completion of the program called the Extended Fund Facility,
\nwhich started in 1994, technically marks the Philippines' exit
\nfrom 36 years of IMF supervision.<\/p>\n
With the successful review, the Philippines will draw the
\nfinal tranche of the program totaling US$331.4 million plus a
\nparallel financing from the Japan Export-Import Bank to boost
\ninternational reserves, a presidential palace statement said.<\/p>\n
It said the IMF board meeting in Washington on Friday
\n\"approved the completion of the final review of the program\"
\nwhich officials have said will be the last under the IMF.<\/p>\n
Completion of the program came after the Philippines met all
\nthe IMF requirements for a successful review such as the passage
\nby Congress of a sweeping tax reform law and the deregulation of
\nthe oil industry.<\/p>\n
The Philippines was supposed to bow out of the current program
\nin June 1997 but delay in the passage of the two vital laws
\nforced Manila to defer it.<\/p>\n
\"This is what we've been waiting for and what we've been
\nworking for during the last three years,\" Central Bank of the
\nPhilippines governor Gabriel Singson told reporters.<\/p>\n
\"This will give the international community more confidence on
\nthe Philippines.\"<\/p>\n
However, news of the review completion was tempered by
\nManila's move to enter into a precautionary arrangement for a
\nstandby facility with the IMF effective April 1. The IMF also
\napproved the new program on Friday.<\/p>\n
The palace statement and Singson avoided using the word
\n\"exit\", choosing instead to stick to the phrase \"completion of
\nthe final review of the program. \"<\/p>\n
The new two-year precautionary program will allow the country
\naccess to a 1.371 billion-dollar standby fund from the IMF in
\ncase of an emergency, the statement said.<\/p>\n
Manila will tap the standby facility \"only when it is
\nnecessary and that depends on us,\" Singson said.<\/p>\n
The program however will bind the country to fiscal and
\nmonetary targets set by the IMF, officials admitted.<\/p>\n
Singson said he will travel to Washington on May 8 \"to discuss
\nwith the IMF some details of the program\" and an IMF team will
\narrive in Manila later that month to conduct the first review
\nunder the new program.<\/p>\n
He said the next government taking over after presidential
\nelections in May can review the terms.<\/p>\n
Under the precautionary program, the Philippines committed to
\nthe IMF a gross national product (GNP) growth target of three
\npercent this year, 4 to 5 percent in 1999 and 6 percent in 2000.<\/p>\n
Average inflation rate was set at 7.5 percent in 1998, 8.5
\npercent in 1999, six to seven percent in 2000 and five percent
\nafter that. It also pledged to reduce external current account
\ndeficit to 3.1 percent of GNP and increase international reserves
\nto around two months of imports.<\/p>\n
The new program aims to \"restore confidence in the peso and
\ncontain the impact of the Asian crisis on the economy,\" the
\nstatement said.<\/p>\n
The Philippines entered its first program in April 1962 and
\nhad 22 programs since then.<\/p>",
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