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."