RP to end economic stewardship by IMF

RP to end economic stewardship by IMF

CEBU, Philippines (AFP): The Philippines hopes to end more than two decades of economic stewardship by the International Monetary Fund (IMF) by the end of June, President Fidel Ramos said over the weekend.

The presidential palace issued a statement in Manila quoting IMF managing director Michel Camdessus as congratulating the Philippines for its imminent exit from its stewardship.

Ramos told a press conference that he hoped the Philippines would no longer be under IMF monitoring by the end of June.

"We are given all the encouragement and high marks from the IMF but there is one missing piece of the reform program which we must put in place," Ramos said, referring to an income tax reform package still being debated in congress.

The Philippines has already carried out other key conditions for ending the IMF stewardship, such as the deregulation of the oil industry earlier this year, Ramos noted.

He added he was assured that congress was working to have the income tax reform package passed by May 1, Labor Day, as a gesture to the workers who would benefit from the tax reforms.

Ramos and Camdessus met late Friday, the palace said. Camdessus was also quoted as saying: "I can't recognize the Philippines today, compared with six years ago."

Meanwhile Japan also urged the Philippines over the weekend to revise its domestic law to facilitate the use of Japanese loans in the country, finance ministry officials said.

Finance Minister Hiroshi Mitsuzuka made the request during talks with President Ramos on the sidelines of Asia Pacific Economic Cooperation (APEC) finance ministers' meeting in Cebu, the officials said.

Mitsuzuka demanded a revision of the law designed to provide favorable conditions for Philippine firms when orders are issued in official development assistance (ODA) projects, they said.

"We want the Philippines to revise the ODA law," Mitsuzuka was quoted by a finance ministry official as telling Ramos.

Mitsuzuka said the law blocked smooth implementation of Japanese official loans.

Philippine Finance Secretary Roberto De Ocampo, who attended the meeting with Ramos, was quoted as responding that Manila was doing its utmost to revise the law.

De Ocampo said the government would immediately deliver the Japanese request to parliament, which passed the law in June last year.

A senior official of the Japanese finance ministry said the law was apparently against the non-binding principle of Japan's ODA, saying that it may affect Tokyo's decision to offer loans for the country.

Japanese loans are the largest financial support for the Philippines, accounting for 47 percent of all overseas aid to the country, followed by the World Bank amounting to 40 percent.

In mid-March, Japan and the Philippines signed an accord under which Japan extended an official loan of 124.38 billion yen (US$1 billion) to the Philippines for various infrastructure projects.