RP seeking postponement, substitution of IMF plan

RP seeking postponement, substitution of IMF plan

MANILA (AFP): The Philippine Finance Department said here yesterday it was seeking the postponement of four reform measures sought by the International Monetary Fund (IMF) and was hoping in the meantime to substitute them with other reforms.

The four reforms the IMF had wanted implemented, most of them by September, were a one percent gross corporate tax, a minimum three percent import duty, attainment of a base money target level and automatic pricing of oil products.

However the department said the tax was delayed because congress was too busy to pass required legislation while the import duty was left out of the 1994 investment program.

The country also failed to keep base money levels within a ceiling of about 300 billion pesos (US$12 billion) as planned and was seeking instead a new ceiling for the end of November, which they did not specify.

The automatic oil pricing reform was delayed because the executive found that this might require certain legislation although they added that the matter was still under study.

The Philippines is instead offering to remove all restrictions on current account transactions, including the outflow of foreign exchange, and further liberalize rules governing outward investment by Filipinos within six months.

Manila is committed to phasing out a special foreign exchange allocation to fund the importations of oil companies by November.

IMF director-general Michel Camdessus, during his visit to this country last month, accepted in principle the postponement of the reform measures and their substitution but the matter must still be decided by the IMF board, the department said.

The IMF has warned that the Philippines must further control inflation if it wishes to sustain its economic recovery.