SE Asia told to deal with IMF together

SE Asia told to deal with IMF together

MANILA (AFP): Crisis-hit Southeast Asian economies should deal with the International Monetary Fund (IMF) collectively to ease stringent loan conditions as they battle the regional financial turmoil, the newly appointed Philippine finance chief said yesterday.

Finance Secretary Salvador Enriquez said the burden of bearing the crisis should be shared between the creditor and debtor, developed and developing countries.

"The Philippines, Indonesia, Thailand and Malaysia should deal with the IMF collectively as a group," Enriquez said in a statement.

These countries, which are among the most affected by the crisis, should "adopt a common stance to share the burden of adjustments between the creditors and the debtors."

Enriquez, the former budget secretary, was recently appointed as finance secretary to replace Roberto de Ocampo, who quit to run for senator.

He suggested that governments of lender nations "should allow some of their banks to take the hit in cases of loan defaults" and "encourage debt restructuring, moratorium agreements, or outright debt reduction for both public and private debts."

Enriquez said such moves would "reduce pressure on the banking system of crisis-hit economies."

The Filipino official also said the four countries should "exert collective pressure on the IMF" to ease the conditionalities imposed on Thailand and Indonesia tied to more than US$40 billion in bailout fund to help steer them out of the turbulence.

The IMF should allow these countries to shore up foreign reserves and be allowed to adopt "less stringent" budgetary and monetary targets as well as lower interest rates.

Instead of requiring budget surpluses, the IMF should be satisfied with a balanced budget, he said, appealing to the IMF to "be more sensitive to what are doable as against what will cause disintegration/meltdown on their economies."