PHL pledges $1B to raise IMF resources against financial crises
The Philippines pledged $1 billion to beef up the coffers of multilateral lender International Monetary Fund in addressing global financial crises that include the raging sovereign debt crisis in single currency Europe.
“Countries large and small have rallied to our call for action, and more may join,” IMF Managing Director Christine Lagarde said in a statement Tuesday.
The Philippine commitment was made during the G-20 Leaders’ Summit in Los Cabos in Mexico on Monday, June 18. Twelve IMF member countries made commitments to support the multilateral facility.
“I salute them and their commitment to multilateralism,” said Lagarde.
“As a result, total pledges have risen to $456 billion, almost doubling our lending capacity,” she added.
Also pledging additional money were China with $43 billion, Brazil with $10 billion, India with $10 billion, Russia with $10 billion, Mexico with $10 billion, Turkey with $5 billion, South Korea with $2 billion, Columbia with $1.5 billion, Malaysia with $1 billion, New Zealand with $1 billion, and Thailand with $1 billion.
“With today's announcements by an additional 12 countries, a total of 37 IMF member countries, representing about three-fifths of total quota in the organization, have joined this collective effort, demonstrating the broad commitment of the membership to ensure the IMF has access to adequate resources to carry out its mandate in the interests of global financial stability,” said Lagarde.
The money would used for crisis prevention and resolution and to meet the potential financing needs of all IMF members.
“They will be drawn only if they are needed as a second line of defense after resources already available from quota and the existing New Arrangements to Borrow are substantially used. If drawn, they will be repaid with interest,” Lagarde noted.
IMF is committed to assuring members’ interests and resources are safeguarded, according to its managing director.
Since the start of the global economic crisis in 2007, the IMF has committed more than $300 billion in loans to its member countries. The fund has, since then, reached $456 billion.
Until 2006, the Philippines was a net borrower with the IMF. It had, since then, prepaid all its outstanding debts with the IMF– a reflection of its much-improved external liquidity position.
The Southeast Asian nation became an IMF lending member in 2010, participating in the Financial Transaction Plan (FTP) as a creditor country.
As of end2011, it contributed more than $125 million to the pool of money disbursed by the IMF to help address the financial crisis confronting economies in Europe.
It made available $251.5 million to the IMF to finance the assistance program. More than half of the amount was actually disbursed by the IMF to European countries battling the financial crisis, including Ireland, Portugal and Greece. —VS, GMA News