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.