RP expects to exit IMF pact this year

RP expects to exit IMF pact this year

Ditas Lopez, Dow Jones, Manila

The Philippines expects to end its post-program monitoring arrangement with the International Monetary Fund (IMF) later this year, but Finance Secretary Jose Isidro Camacho said the exit won't mean abrupt changes to the country's economic program.

Camacho told a teleconference arranged on Wednesday by JP Morgan that the amount of the country's obligations against its contributions to the IMF will be at a balance in September, which would allow it to exit the Fund's post-program monitoring arrangement.

The Philippines can't leave the IMF's post-loan arrangement until its outstanding obligations fall below its quota, expressed in special drawing rights, or SDRs, the unit of account of the IMF.

"We see ourselves graduating from the IMF by the end of this year or early next year," said Camacho. "However, I'd like to assure that the policy direction won't change," he added.

The Philippines' IMF quota is equivalent to 879.9 million SDRs, each roughly equal to one U.S. dollar. The quota dictates a member country's voting power in the IMF. The quota is determined by the relative size of the member's economy.

The Philippines was the IMF's first case in Asia and has tapped some 20 program loans. Manila exited its last economic program with the Fund in early 2001 without tapping the last tranche of the available standby facility due to its failure to comply with the fiscal conditions set out by the Fund.

The Philippines entered its post-program monitoring arrangement with the IMF two years ago.