RP to seek extension of IMF supervision

RP to seek extension of IMF supervision

MANILA (AFP): The Philippines may have to delay its planned exit from International Monetary Fund (IMF) economic supervision for three months until around September, economic officials said here yesterday.

Finance Secretary Roberto De Ocampo said the delay would be required if Congress failed to pass by August a key tax bill that has become a precondition for the country's exit from IMF supervision.

The Philippines has been under the IMF's conditional lending program for the past 35 years under 23 program loans, where the disbursement of trenches hinges on Manila meeting key monetary targets.

The government of President Fidel Ramos had set a June 23 target for exiting from IMF supervision, to coincide with the end of a three-year, 650 million-dollar extended fund facility from the IMF.

By that time Manila had hoped Congress would have passed all components of a series of bills comprising the government's comprehensive tax reform program aimed at widening the country's base for recurring revenues.

However, De Ocampo admitted that "the likelihood that the (tax package) will be passed this June is getting smaller," since Congress was due to go into recess on June 5 and would return only in the third week of July.

Although the lower house of Congress, the House of Representatives, has passed its version of the bill, the Senate has not yet finished with its version.

Both De Ocampo and Gabriel Singson, governor of the Central Bank of the Philippines frowned on the idea of simply ending the IMF program without complying with all the conditions.

"We would rather have a graceful exit, certified with honors," said Singson.

At his weekly media conference, President Fidel Ramos said he was still hopeful that Congress might pass the tax package before the recess.

Exit from the IMF program is seen here as a seal of good housekeeping by the Philippine economic managers, enabling Manila to make better use of the international capital markets for much- needed funds at lower spreads.