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.