PHL now a creditor nation, helps troubled Europe cope with debt – BSP

With its record-level foreign exchange reserves, the Philippines since 2010 was a lender to Greece, Portugal, Ireland and other troubled economies of Europe to the tune of $251.5 million, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

The country also committed to contribute $4.55 billion to the $120-billion Chiang Mai Initiative Multilateralization (CMIM) fund put together by China, Japan, Korea, Hong Kong, and the Association of Southeast Asian Nations.

CMIM is a reserve designed to quickly address balance of payments difficulties.

At the end of last year, the Philippine gross international reserves (GIR) stood at $75 billion.

The Bangko Sentral expects Philippine reserves to reach $79 billion by December 2012, it was at $62.37 billion as of end-December 2010.

Creditor status is a reversal of fortunes for the Philippines.

Six years ago, the Bangko Sentral prepaid all outstanding Philippine debts to the IMF

and the multilateral lender’s aid programs after 45 years as a borrower.

The BSP said the country became a creditor nation in 2010 when it joined the International Monetary Fund (IMF) Financial Transactions Plan (FTP) through which emerging market economies took part in international cooperation efforts to lessen the impact of the euro debt crisis on the rest of the global economy.

Among the gains the Philippines got from joining the FTP was access to the New Arrangements to Borrow (NAB) facility, which the IMF established to help its members cope with serious international financial crises.

“The participation in the NAB would be a significant step in strengthening international cooperation. This would also demonstrate the BSP’s strong commitment to global efforts to help address threats to the international monetary system,” the BSP said. — ELR/VS, GMA News