UN survey praises RP financial reform accord<\/p>\n
UNITED NATIONS (AP): Restructuring the Philippine central bank
\nfive years ago enabled the country to weather the worst of the
\nAsian financial crisis, a UN study says.<\/p>\n
The Economic and Social Survey of Asia and the Pacific noted
\nthat -- unlike Indonesia, Thailand and South Korea -- the
\nPhilippines had made it through the crisis \"without any incidence
\nof a failed bank or financial institution.\"<\/p>\n
The report, released here Monday, said the Philippines'
\nrelative success was due primarily to the 1993 restructuring of
\nthe country's central bank.<\/p>\n
\"The enactment of a new Central Bank in 1993 created a new
\nindependent monetary institution with large capitalization,\" the
\nreport said. \"The new Central Bank... has emerged as a much
\nstronger institution with more effective supervision of the
\ncountry's financial system.\"<\/p>\n
The Philippines has not escaped the Asian crisis altogether.<\/p>\n
President Fidel Ramos, whose six-year term expires in June,
\nhas ordered all government agencies to reduce expenses by at
\nleast 25 percent this year to avoid a budget deficit prompted by
\nrecent declines in Asian currencies, including the Philippine
\npeso.<\/p>\n
That has forced delays in many government development
\nprojects. Furthermore, the regional drought brought about by the
\nEl Nino phenomenon has led to food shortages in poor parts of the
\ncountry.<\/p>\n
Nevertheless, the country has come through the Asian crisis in
\nbetter shape than many other East Asian countries.<\/p>\n
The UN report also praised the Philippines for a series of
\nother reforms instituted by Ramos and his predecessor, Corazon
\nAquino. These included limits on loans to directors, officers and
\nmajor stockholders, controls on interlocking directorships and
\nstrict standards for capital adequacy and minimum risk-asset
\nratios.<\/p>\n
A series of increases over the years raised the minimum
\ncapital requirements and mandated other measures to assure the
\nstrength of the Philippine banking system, the report said.<\/p>\n
The Philippine Congress approved the creation of a new central
\nbank in June 1993, allowing the government to restructure the
\nUS$11.4 billion debt of the old institution.<\/p>\n
Approval of the bill triggered the release of $450 million in
\nloans by the World Bank and the Japan Export-Import Bank.<\/p>\n
The old central bank built a huge debt following the 1983
\nassassination of opposition Sen. Benigno Aquino, then President
\nFerdinand Marcos' archfoe and President Aquino's husband.<\/p>\n
Aquino's killing triggered a massive capital flight and
\nstrengthened an opposition movement that culminated in the ouster
\nof Marcos in February 1986 and the rise of Corazon Aquino to the
\npresidency.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/un-survey-praises-rp-financial-reform-accord-1447893297",
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