Senators Slam $1-B Lending To IMF

MANILA, Philippines --- Senators criticized on Friday the government's decision to lend $1 billion from its reserves to the International Monetary Fund (IMF), ostensibly to help other countries in need of funding, while the Philippines is not even financially well-off.

Malacañang had already defended the move, saying it was time for the Philippines to help other countries after having been a recipient of IMF assistance for the past 40 years.

"I'm not in favor (of lending to the IMF). We are a poor country pretending to be rich," said Senate Majority Leader Vicente Sotto III.

"Wala ngang makain ang mga mahihirap sa atin, magpapautang pa tayo (Why lend when our poor hardly eat)?" Sotto said.

Quite surprised over this development, Senate President Jose "Jinggoy" Estrada said "charity should begin at home."

"Ang daming kulang sa mga silid aralan sa ating bansa. Ang daming kulang na tulay; ang daming nagugutom; madaming mga pulis at military na walang sariling bahay, tapos magpapautang tayo sa IMF para ipang-tulong sa mga mahihirap na bansa (Our classrooms are wanting. We have a big shortage in bridges; many are going hungry; so many of our police and soldiers don't have housing, yet we will lend money to the IMF to help poor nations)?" Estrada asked.

He said corruption in the police and military establishments may be reduced if government solves their housing problems.

"Dapat unahin ng ating gobyerno ang pagresolba sa napakaraming problema ng bansa bago magpautang para makatulong sa ibang mga mahihirap na bansa (Government should resolve the many problems in the country before it attempts to lend money to the IMF for relending to poorer countries.)," said Estrada.

"There is no problem in the Philippines lending if it has enough foreign currency reserves to help other nations but we have not yet attained the economic status of Japan," he said further in Tagalog.

Sen. Aquilino "Koko" Pimentel III, president of PDD-Laban party, said the government should have used the $1 billion to retire a portion of the principal of the national debt.

For his part, Sen. Gregorio Honasan II pointed out that the $1 billion comes from the country's dollar reserves which are not convertible into pro-poor or infrastructure projects.

Honasan said the government move may be part of its international commitments based on the historical bailouts from the IMF "that we also benefited from when we were in need."

"But what are the transparent conditionalities for this loan?" Honasan asked.

Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said that instead of criticizing the government, Filipinos should be proud that the Philippines is now a lender.

"We have been a member of the IMF since it was found. The IMF has helped us and as a member of good standing, we are no longer borrowing but contributing," he said.

He also said the Philippines has also contributed to other international organizations of which it is a member, including the Association of Southeast Asian Nations (ASEAN).

"I don't think it's an issue that we contribute to the IMF," Carandang said.

He said the Philippines does not profit from contributing to the IMF, saying that the interest paid by countries that borrow from the IMF would go to the IMF pool of fund.

He added that the funding source for the country's contribution could "come from a number of sources," noting dollar reserves.

The Philippines has pledged to beef up its contribution to the IMF to help countries in Europe experiencing economic crisis, including Portugal, Ireland and Greece.

Other neighboring countries that have pledged $1-billion to the IMF include Thailand and Malaysia.

In 2011, the Philippines infused $251.1-million in the IMF's Financial Transactions Plan, which enabled financial aid to European countries like Ireland, Portugal and Greece.

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