IMF to discuss US$1b aid to RP

IMF to discuss US$1b aid to RP

WASHINGTON (Reuter): The International Monetary Fund, using emergency procedures introduced after Mexico's financial crisis, will discuss support to the Philippines today, international monetary sources said on Wednesday.

One source said an aid package of around $1 billion was possible. This would include $600 million already offered to the Philippines under an existing loan arrangement, but not yet disbursed.

"Hopefully, this will be discussed on Friday using the so- called Emergency Financing Mechanism," said the source, who asked not to be identified. "The total amount could be about $1 billion."

The Emergency Financing Mechanism was introduced as a way for the international financial community to respond to issues like the Mexico crisis of early 1995.

The financial problems in the Philippines -- Manila effectively devalued the peso last week after a massive speculative attack -- will be the first time that the IMF has looked at using these new regulations.

IMF Managing Director Michel Camdessus said last week that he would recommend the IMF board make additional financial resources available to the Philippines to help Manila cope with the currency crisis.

The central bank had spent some $2 billion in a futile effort to defend the currency, which came under pressure after Thailand devalued the baht.