Casiño: PHL $1B ‘loan’ to IMF is a PR job
PARTYLIST Rep. Teddy Casiño today said the much ballyhooed $1 billion “loan” of the Philippines to the International Monetary Fund (IMF) appears to be a “disastrous PR (public relations) spin that is making the Aquino government look ridiculous to its own people.”
The Aquino administrations announcement that we are now a creditor country is ridiculous and misleading. The fact is, we are still a net debtor country, with total debt and national government debt at an all-time high of $62.9 billion and P5.1 trillion, respectively,” he said.
“In their statements, Central Bank officials make it appear that this is a new development when in fact, we have been placing our dollar reserves in the IMF and other foreign banks and countries for decades through interest-earning deposits and foreign securities placements. Apparently, the Aquino administration is spinning a normal, standard practice into a supposedly exceptional gesture by the government,” he said.
The first impression given to the public is that this is surplus money that we are lending money in the usual sense. The reality is that these are reserves that are of limited use and are there simply by the operation of monetary policy. Apparently it has little to do with our being a creditor or debtor country. It has little to do with whether our economy is improving or not,” Casiño said.
“I don’t know why the BSP presented it that way. My guess is that they want to give the President something to crow about in his next State of the Nation Address. The problem is that it showed that the government was favoring the IMF over our own credit-hungry citizens,” he added.
The lawmaker said he would still push through with a congressional inquiry to get to the bottom of the BSP’s confusing statements. “We want to know the terms of these transactions involving our international reserves. Is this a prudent investment? What happens if crisis countries default on the payment of the loan? How is the income from these reserves being utilized?”
The said 0.3% interest seems extremely low as compared to the interest rates of the government’s unpaid loans to the ADB and the World Bank. Casino pointed out that this might be risky, especially given the country’s debt and budget problems.